/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080117.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, January 17, 2008, Vol. 12, No. 14 Headlines 20/20 FASHIONS: Voluntary Chapter 11 Case Summary AARDVARK ABS: Moody's Junks Rating on $47 Million Senior Notes ABN AMRO: Fitch Affirms 'BB' Rating on Class B-4 Certificates AFC Automobile: Voluntary Chapter 11 Case Summary AEP INDUSTRIES: Earnings Drop to $30 Mil. in Year Ended Oct. 31 AMBAC FIN'L: To Raise $1 Bil. Capital; Cuts Common Stock Dividend AMBAC FIN'L: Appoints Michael Callen as Chairman and Interim CEO AMBAC FINANCIAL: Moody's Reviews Rating and May Downgrade ANALYTICAL SURVEYS: Malone & Bailey Raises Going Concern Doubt ATHERTON-NEWPORT: Case Summary & 20 Largest Unsecured Creditors ATLAS MARKETING: File Voluntary Chapter 11 Case Summary BEAR STEARNS: Eight Tranches Acquire Moody's Low-B Ratings BEAR STEARNS: Poor Performance Cues S&P's Six Rating Downgrades BECKERMAN KITCHENS: Gets $3.1 Mil. Buy Offer from Ludvik Capital BOSQUE POWER: Moody's Rates $412.5 Million Credit Facility at B1 CABLEVISION CORP: S&P Maintains 'BB' Corporate Credit Rating CHARMING SHOPPES: Investor Group Moves for Three New Directors CITIGROUP MORTGAGE: Fitch Retains Junk Ratings on Four Classes CREDIT SUISSE: Fitch Cuts Rating to CC from CCC on $9.9MM Certs. CREDIT SUISSE: Moody's Cuts 27 Tranches' Ratings on Delinquency DELPHI CORP: Obtains "Broad-Based" Support on Plan DELTA AIR: S&P Says Merger Talks Has No Effect on Ratings DENVER RADIO: Wants to Hire Media Venture as Financial Advisor DENVER RADIO: Wants to Employ Kagan Media as Appraiser DIEGO INC: To Cut Workforce by 50%, WSJ Says DIOGENES CDO: Moody's Junks Rating on Eight Notes Classes DUNMORE HOMES: Court Orders Transfer of Venue to California DUNMORE HOMES: Morrison & Foerster Okayed as Committee's Counsel DUNMORE HOMES: Panel Taps Mesirow Financial as Financial Advisors DURA AUTOMOTIVE: Gets Lenders Consent to Amend DIP Financing Terms DURA AUTOMOTIVE: Seeks Approval of 2008 Management Incentive Plan EAGLE MEADOWS: Section 341(a) Meeting Scheduled for January 29 FALCON RIDGE: Moore & Associates Raises Going Concern Doubt FEDERAL MOGUL: Board Appoints C. Icahn as Non-Executive Chairman FIRST MAGNUS: Countrywide Wants Examination on Chapter 11 Plan FIRST MAGNUS: Seeks Approval of Piaggio Settlement Proposal FIRST MAGNUS: Snell & Wilmer Wants WNS' Disqualify Motion Trashed FIRST REPUBLIC: Fitch Holds 'BB+' Ratings on Two Loan Classes GE CAPITAL: Fitch Holds 'B' Rating on $12.5MM Class L Certs. GE CAPITAL: Fitch Junks Rating on $5.3 Million Class I Certs. GOODMAN GLOBAL: Stockholders OKs Acquisition by Hellman & Friedman GOODMAN GLOBAL: Unit Launches Tender Offer for $579MM Senior Notes GOODMAN GLOBAL: S&P Assigns B+ Corp. Rating with Stable Outlook GOODMAN GLOBAL: S&P Places Unit's B+ Rating on Negative Watch HARRAH'S ENT: High Leverage Cues S&P's B2 Corporate Rating INDEPENDENCE COUNTY: S&P Places BB+ Rating on $29.3 Mil. Bonds INTERSTATE BAKERIES: No Alternative Funding Proposals Received KELLWOOD CO: Urges Shareholders to Defer Action on Tender Offer KENNETH KUNES: Voluntary Chapter 11 Case Summary LENOX GROUP: Explores Strategic Options, Board OKs Rights Plan MAAX HOLDINGS: Reports $76.6 Mil. Loss in 3rd Qtr. Ended Nov. 30 MARCAL PAPER: Lambasts Creditors' Panel for Trying to Delay Sale MARCOTTE PROPERTIES: Files Voluntary Chapter 11 Case Summary MASHANTUCKET WESTERN: S&P Ratings Not Affected by 17% Decline MASTR ADJUSTABLE: Moody's Downgrades Ratings on Nine Tranches MICHAEL HOLOKA: Case Summary & 11 Largest Unsecured Creditors MONEYGRAM INTERNATIONAL: In Negotiations for Recapitalization MONEYGRAM INT'L: Gets January 31 Waiver from Lenders MONEYGRAM INT'L: Incurs Additional Net Unrealized Losses of $571MM MONEYGRAM INT'L: Losses Spur S&P to Cut Rating to BB from BBB MONEYGRAM INT'L: Weak Portfolio Cues Moody's to Cut Corp. Rating MONEYGRAM INTERNATIONAL: Fitch Lowers Issuer Default Rating to BB- MORGAN STANLEY: Nine Tranches Obtains Moody's Junk Ratings MORGAN STANLEY: S&P Puts BB- Note Rating on Developing Watch MORTGAGE CAPITAL: Fitch Revises DRR on 'CCC' Rated Cert. to DR3 MORTGAGE LENDERS: Four Lenders Want Automatic Stay Terminated MORTGAGE LENDERS: Sovereign Bank Wants Automatic Stay Lifted MORTGAGE LENDERS: Says Arizona Property Not a Bankruptcy Estate MORTGAGEIT SECURITIES: Moody's Lowers Ratings on Six Tranches MOVIE GALLERY: Court Okays Procedures to Determine Cure Amounts MOVIE GALLERY: Wants CIO Seth Levy's Employment Terms Approved NITROMED INC: Plans to Reduce Work Force from 90 to 20 Positions OCWEN FINANCIAL: Proposed Buy-Out Cues Moody's Rating Reviews OCWEN FINANCIAL: S&P Ratings Unmoved by Going Private Plan OMI MEDICAL: Files for Chapter 11 Protection in Florida PACIFIC LUMBER: BoNY Asks Court to Appoint Chapter 11 Trustee PACIFIC LUMBER: Court Okays Terms of Log Purchase Pact with MAXXAM PACIFIC LUMBER: Wants to Sell Scotia School & Recreation Center PAETEC HOLDING: Moody's Maintains B2 Corporate Family Rating PHH MORTGAGE: Fitch Rates Series 2006-2 Class B-5 Certs. at B PIONEER NATURAL: Prices $440MM Offering of Conv. Senior Notes PIONEER NATURAL: S&P Puts BB+ Rating on Proposed $400MM Notes PNM RESOURCES: Moody's Puts Ratings Under Review & May Downgrade REGENCY ENERGY: Moody's Keeps Ba3 Rating After $655MM CDM Deal RIVER ROCK: Wants to Hire Shuford Hunter as General Bankr. Counsel RIVER ROCK: Section 341(a) Meeting Scheduled for January 30 QUEBECOR WORLD: Accepts CDN$400 Mil. Rescue Financing Proposal SCAN INTERNATIONAL: Taps Whiteford Taylor as Bankruptcy Counsel SCAN INTERNATIONAL: U.S. Trustee Appoints 4-Member Creditors Panel SCAN INTERNATIONAL: Section 341(a) Meeting Scheduled for Jan. 30 SEA CONTAINERS: Court Extends Plan-Filing Period to February 20 SEA CONTAINERS: Sopris Capital Reports Ownership of SCL Shares SHAW GROUP: Increases Credit Facility to $1 Bil. from $850 Mil. SOLUTIA INC: Reaches Settlement with Senior Secured Noteholders SPECIALTY UNDERWRITING: S&P Affirms Ratings on All Cert. Classes STRATUS SERVICES: Gruber & Company Raises Going Concern Doubt STRUCTURED ASSET: Moody's Downgrades Ratings on 18 Tranches TAHERA DIAMOND: Obtains Protection Under CCAA Until February 14 TANGER FACTORY: Closes $100 Mil. Unsecured Credit Line Expansion TERADYNE INC: FTC Okays Early Termination on Merger Waiting Period UBS COMMERCIAL: Moody's Assigns Definitive Ratings to Securities UBS MORTGAGE: Fitch Affirms Low-B Ratings on Five Loan Classes VALMONT INDUSTRIES: S&P Upgrades Corp. Rating to BB+ from BB WACHOVIA AUTO: Fitch to Put 'BB-' Rating on $14.97 Mil. Trust WACHOVIA AUTO: S&P Puts Preliminary BB Ratings on Two Sub Notes WACHOVIA BANK: Stable Performance Cues Fitch to Affirm Ratings YOUNG BROADCASTING: Selling Largest TV Station; Hires Moelis & Co. YOUNG BROADCASTING: Sept. 30 Balance Sheet Upside-Down by $216MM * S&P Puts Ratings on 162 Tranches Under Negative CreditWatch * Standard and Poor's Cuts Ratings on 13 Synthetic CDO Tranches * Debtwire Unveils 2008 Distressed Debt Outlook for North America * Delaware Bankruptcy Court is Preferred "Emergency Room" * Mortgage Values in Colorado Would Have Cost More, Bankers Say * Rockford Area's Bankruptcy Filings Up by 20% in 2007 * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* 20/20 FASHIONS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: 20/20 Fashions, Inc. dba Fashions For Her 1150 El Camino Real, #224 San Bruno, CA 94066 Bankruptcy Case No.: 08-30054 Type of Business: The Debtor sells clothes for women. Chapter 11 Petition Date: January 14, 2008 Court: Northern District of California (San Francisco) Judge: Dennis Montali Debtors' Counsel: Iain A. Macdonald, Esq. Macdonald and Associates 221 Sansome Street San Francisco, CA 94104 Tel: (415) 362-0449 http://www.macdonaldlawsf.com/ Estimated Assets: Less than $10,000 Estimated Debts: $100,000 to $1 million The Debtor did not file a list of 20 largest unsecured creditors. AARDVARK ABS: Moody's Junks Rating on $47 Million Senior Notes -------------------------------------------------------------- Moody's Investors Service downgraded ratings of three classes of notes issued by AArdvark ABS CDO 2007-1, and left on review for possible further downgrade the rating of one of these classes. Moody's also announced that the rating of another class of Notes issued by Aardvark ABS CDO 2007-1 is no longer on review for possible downgrade. The notes affected by this rating action are: Class Description: $1,320,000,000 Class A1 Senior Secured Floating Rate Notes Due October 2008 -- Prior Rating: P-1, on review for possible downgrade -- Current Rating: P-1 Class Description: $78,000,000 Class A2 Senior Secured Floating Rate Notes Due July 2047 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Class Description: $47,000,000 Class B Senior Secured Floating Rate Notes Due July 2047 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Ca Class Description: $23,500,000 Class C Senior Secured Floating Rate Notes Due July 2047 -- Prior Rating: Caa3 -- Current Rating: Ca The rating downgrade actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence on Dec. 27, 2007, as reported by the Trustee, of an event of default caused by the occurrence of a Senior Overcollateralization Default as described in Section 5.1(i) of the Indenture dated March 1, 2007. AArdvark ABS CDO 2007-1 is a collateralized debt obligation backed primarily by a portfolio of RMBS securities and CDO securities. Recent ratings downgrades on the underlying portfolio caused ratings-based haircuts to affect the calculation of overcollateralization. Thus, a Senior Overcollateralization Default occurred. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by certain Noteholders. Because of this uncertainty, the ratings assigned to Class A2 Notes remain on review for possible further action. ABN AMRO: Fitch Affirms 'BB' Rating on Class B-4 Certificates ------------------------------------------------------------- Fitch Ratings affirms ABN AMRO 2002-10 mortgage pass-through certificates as: -- Class A at 'AAA'; -- Class M at 'AAA'; -- Class B-1 at 'AA'; -- Class B-2 at 'A'; -- Class B-3 at 'BBB'; -- Class B-4 at 'BB'. The affirmations reflect a stable relationship between credit enhancement and expected losses, and affect approximately $141.9 million in outstanding certificates. The pool factor is approximately 20%, and the transaction is 60 months seasoned. The amount of loans in the 60+ buckets is approximately 0.69% of the current collateral balance, and cumulative losses are approximately 0.02%. AFC Automobile: Voluntary Chapter 11 Case Summary ------------------------------------------------- Lead Debtor: A.F.C. Automobile Receivables Funding II, L.L.C. 3237 Virginia Beach Blvd. Virginia Beach, VA 23452 Bankruptcy Case No.: 08-70140 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Auto Finance Co., L.L.C. 08-70139 Chapter 11 Petition Date: January 15, 2008 Court: Eastern District of Virginia (Norfolk) Debtors' Counsel: Michael Gregory Wilson, Esq. Hunton & Williams, L.L.P. 951 East Byrd Street Richmond, VA 23219 Tel: (804) 788-8200 Fax: (804) 788-8218 Estimated Assets Estimated Debts ---------------- --------------- A.F.C. Automobile $10 Million to $10 Million to Receivables Funding II, $50 Million $50 Million L.L.C. Auto Finance Co., L.L.C. $1 Million to $1 Million to $10 Million $10 Million The Debtors did not file lists of their 20 largest unsecured creditors. AEP INDUSTRIES: Earnings Drop to $30 Mil. in Year Ended Oct. 31 --------------------------------------------------------------- AEP Industries Inc. reported $30.05 million net income for fiscal year ended Oct. 31, 2007, compared to $62.93 million net income for fiscal 2006. "During 2007 we increased Adjusted EBITDA, a key metric used for measuring operating performance in our industry, by 11% to $87.4 million; returned $49 million to shareholders in repurchasing 1,129,100 shares of our common stock; increased sales volumes 5% in a very competitive marketplace; and effectively continued to control our operating expenses and resin cost spreads," Brendan Barba, chairman and chief executive officer of the company stated. "We are well capitalized and believe we can deal effectively with any adverse situation that may result from the financial markets," Mr. Barba continued. "Our focus will continue to be directed toward growth and improving the fundamentals of our business." Liquidity and Capital Resources The company ended fiscal 2007 with a net debt position or current bank borrowings plus long term debt less cash and cash equivalents of $194.9 million, compared with $192.6 million at the end of fiscal 2006. During fiscal 2007, in addition to its normal operating activities, the company: -- repurchased a total of 1,129,100 shares of its common stock for an aggregate purchase price of $49 million, utilizing cash on hand coupled with borrowings under its credit facility; -- completed the sale of its land and building located in Sydney, Australia for $7.8 million; -- had the U.S. company repay in November 2006 its intercompany loan to the UK operation in the amount of $2.4 million, which is currently being held in escrow awaiting transfer to the UK Pension Protection fund to fund the UK defined contribution plan; and -- incurred approximately $15.6 million of capital expenditures during fiscal 2007 related to a new 10-color print press installed in its Kentucky plant with production expected to commence in March 2008, a 50,000 square foot expansion of its Pennsylvania plant, two co- extruded film lines with a combined capacity of twenty million pounds, a new PVC line in its Georgia plant with production expected to commence in January 2008, and a new specialty line installed in its North Carolina plant with production expected to commence in February 2008. The company's working capital amounted to $86.2 million at Oct. 31, 2007, compared to $92.8 million at Oct. 31, 2006. The decrease in working capital of $6.6 million was due to: a) the sale of its land and building in Sydney, Australia with the proceeds from the sale used to pay down its long term borrowings; b) a decrease in the company's current deferred tax asset, resulting from the utilization of the US net operating loss carryforwards; and c) an increase in accounts payable due to timing of resin purchase payments, partially offset by an increase in accounts receivable, resulting from an increase in sales during the fourth quarter of fiscal 2007 as compared to the fourth quarter of fiscal 2006. At Oct. 31, 2007, the company has an aggregate of approximately $125.2 million available under its various credit facilities. At Oct. 31, 2007, the company's balance sheet showed total assets of $329.03 million, total liabilities of $286.66 million and total shareholders' equity $42.37 million. About AEP Industries Inc. Based in South Hackensack, New Jersey, AEP Industries Inc. (NASDAQ:AEPI) -- http://www.aepinc.com/-- manufactures plastic packaging films in North America and markets a line of polyethylene, polyvinyl chloride and polypropylene flexible packaging products, with consumer, industrial and agricultural applications used in a variety of industries, including the packaging, transportation, chemical, electronics, agricultural and textile industries. It operates in two geographical segments: North America and Europe. In February 2006, the company acquired Mercury Plastic Inc.'s Bowling Green, Kentucky facility. In May 2006, the company liquidated its remaining interest in AEP Industries (Australia) Pty Limited. * * * Moody's Investors Service placed AEP Industries Inc.'s long term corporate family rating at 'Ba3' on September 2006. The Rating still holds to date with a stable outlook. AMBAC FIN'L: To Raise $1 Bil. Capital; Cuts Common Stock Dividend ----------------------------------------------------------------- Ambac Financial Group Inc. disclosed in a regulatory filing with the Securities and Exchange Commission that its Board of Directors has approved a plan to strengthen its capital base through the issuance of at least $1 billion of equity and equity-linked securities. The plan may also include additional capital from reinsurance or issuance of debt securities. Ambac also said that as part of its capital initiative, it will reduce the quarterly dividend on its common stock from $0.21 per share to $0.07 per share. With regards to the results of its fourth quarter fair value review of its outstanding credit derivative contracts, Ambac's estimate of the fair value or "mark-to-market" adjustment for its credit derivative portfolio for the quarter ended Dec. 31, 2007 amounted to an estimated loss of $5.4 billion, pre-tax, $3.5 billion, after tax. Of the estimated $5.4 billion pre-tax mark-to-market loss, approximately $1.1 billion represents estimated credit impairment related to certain collateralized debt obligations of asset-backed securities transactions. Ambac said it expects to report a loss provision amounting to approximately $143 million, pre-tax. The loss provision relates primarily to underperforming home equity line of credit and closed-end second lien RMBS securitizations. As a result of the losses, Ambac expects to report a net loss per share of up to $32.83 for the fourth quarter ended Dec. 31, 2007. Earnings measures reported by research analysts are on an operating basis and exclude the net income impact of mark-to- market gains and losses on credit derivative contracts internally rated investment grade, as well as certain other items. Ambac expects to report operating losses per share of up to $5.80 for the fourth quarter primarily as a result of the losses on CDOs and home equity line of credit transactions. In addition, book value per share is expected to be approximately $21.00 per share at Dec. 31, 2007. Ambac moved the reporting of its fourth quarter results to Tuesday, Jan. 22, 2008 at 6:00 a.m. (ET), from the originally scheduled date of Wednesday, Jan. 30, 2008. Just recently, Karen Richardson of The Wall Street Journal reports that investors gave a thumbs down to Ambac's $1 billion capital-raising plan after it warned of a big fourth-quarter loss. About Ambac Financial Headquartered in New York City, Ambac Financial Group Inc. (NYSE: ABK) -- http://www.ambac.com/-- through its subsidiaries, provides financial guarantee products and other financial services to clients in the public and private sectors worldwide. Ambac's principal operating subsidiary, Ambac Assurance Corporation, is a guarantor of public finance and structured finance obligations. AMBAC FIN'L: Appoints Michael Callen as Chairman and Interim CEO ---------------------------------------------------------------- Ambac Financial Group Inc. disclosed in a regulatory filing with the Securities and Exchange Commission that its Board of Directors has named Michael A. Callen as Chairman and Interim Chief Executive Officer. Mr. Callen has been Presiding Director and a member of the Audit; Compensation; and Governance committees of Ambac's Board of Directors. He succeeds Robert J. Genader, who will retired from the company effective Jan. 16, 2008. Mr. Callen will be receiving a base salary at an annualized rate of $650,000 per year. On Jan. 13, 2008, Mr. Genader informed Ambac of his intention to retire as its Chairman, President and CEO and Director, effective Jan. 16, 2008. Mr. Genader does not serve on any of the committees of the Board of Directors. Mr. Genader stated that his decision to retire was prompted, in part, by his disagreement with aspects of the Board's capital raising plan. Also on the same date, W. Grant Gregory, a member of the Board of Directors of Ambac, informed Ambac that he would be resigning from the Board of Directors effective immediately. He informed the company that in doing so, he wanted to concentrate on his professional responsibilities as the President of Cerberus Operations and Advisory Company LLC, an affiliate of Cerberus Capital Management L.P., and it was not in relation to any disagreement with the company. About Ambac Financial Headquartered in New York City, Ambac Financial Group Inc. (NYSE: ABK) -- http://www.ambac.com/-- through its subsidiaries, provides financial guarantee products and other financial services to clients in the public and private sectors worldwide. Ambac's principal operating subsidiary, Ambac Assurance Corporation, is a guarantor of public finance and structured finance obligations. AMBAC FINANCIAL: Moody's Reviews Rating and May Downgrade --------------------------------------------------------- Moody's Investors Service placed the Aaa insurance financial strength ratings of Ambac Assurance Corporation and Ambac Assurance UK Limited on review for possible downgrade. In the same rating action, Moody's also placed the ratings of the holding company, Ambac Financial Group, Inc. (senior debt at Aa2), and related financing trusts on review for possible downgrade. Moody's stated that this rating action follows Ambac's announcement of record losses, a capital raising plan, and the retirement of its CEO. As a result of this review, the Moody's-rated securities that are "wrapped" or guaranteed by Ambac are also placed under review for possible downgrade, except those with higher public underlying ratings. Ambac has announced that it expects to record a $5.4 billion pre- tax ($3.5 billion after-tax) mark-to-market loss on its credit derivative portfolio for the quarter ended Dec. 31, 2007. Of this amount approximately $1.1 billion represents expected credit- related impairment on certain ABS CDO transactions. This is a significant change in Ambac's view of the ultimate losses to be realized from these transactions. According to James Eck, a Moody's VP-Senior Analyst, "This loss significantly reduces the company's capital cushion and heightens concern about potential further volatility within Ambac's mortgage and mortgage-related CDO portfolios." Ambac also announced that it intends to augment its claims-paying resources through the issuance of at least $1 billion of equity and equity-linked securities, as well as explore the use of other sources of capital. The company will also decrease its common share dividend by 67%. Moody's also said that the departure of the chief executive, at a time of severe turbulence in the credit markets and in the financial guaranty industry, was a consideration in the decision to review the rating. Moody's review of Ambac's ratings will focus on risk in the company's insured portfolio and execution of its capital plan, as well as new management's ability to formulate and execute strategic and operational plans in the rapidly evolving market for financial guaranty insurance. Jack Dorer, Managing Director, added, "The market stresses contributing to Ambac's recent financial and organizational announcements are also evident at other financial guarantors, particularly those with significant mortgage and mortgage-related CDO exposures." Moody's will be evaluating, in the near term, the degree to which these issues -- including the extent of customer and investor support -- affect the ratings of other firms in the industry and communicate with the market as appropriate. These ratings have been placed on review for possible downgrade: -- Ambac Assurance Corporation: insurance financial strength at Aaa; -- Ambac Assurance UK Limited -- insurance financial strength at Aaa; -- Ambac Financial Group, Inc.: senior unsecured debt at Aa2, junior subordinated debt at Aa3 and provisional rating on preferred stock at (P)A1; -- Anchorage Finance Sub-Trusts I-IV: contingent capital securities at Aa2; and -- Dutch Harbor Finance Sub-Trusts I-IV: contingent capital securities at Aa2. The most recent rating action on Ambac occurred on Dec. 14, 2007, when Moody's affirmed Ambac's insurance financial strength and debt ratings with a stable outlook. Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provide financial guarantees and financial services to clients in both the public and private sectors around the world. For the nine months ended Sept. 30, 2007, Ambac reported net income of $26 million. As of Sept. 30, 2007, Ambac had shareholders' equity of approximately $5.65 billion. ANALYTICAL SURVEYS: Malone & Bailey Raises Going Concern Doubt -------------------------------------------------------------- Houston-based Malone & Bailey PC expressed substantial doubt about the ability of Analytical Surveys Inc. to continue as a going concern after it audited the company's financial statements for the year ended Sept. 30, 2007. The auditing firm reported that the company has suffered significant operating losses in 2007 and prior years and does not currently have external financing in place to fund working capital requirements The company posted a net loss of $4,534,000 on total revenues of $586,000 for the year ended Sept. 30, 2007, as compared with a net loss of $335,000 on total revenues of $4,320,000 in the prior year. At Sept. 30, 2007, the company's balance sheet showed $1,176,000 in total assets and $2,274,000 in total liabilities, and $1,098,000 stockholders' deficit. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?270a About Analytical Surveys Based in San Antonio, Tex., Analytical Surveys Inc. (Nasdaq: ANLT) -- http://www.asienergy.com/-- provides utility-industry data collection, creation, and management services for the geographic information systems markets. The company has recently transitioned its focus toward the development of oil and gas exploration and production opportunities. ASI's Energy Division is focused on high-quality exploratory and developmental drilling opportunities, as well as purchase of proven reserves with upside potential attributable to behind-pipe reserves, infill drilling, deeper reservoirs, and field extension opportunities. ATHERTON-NEWPORT: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Atherton-Newport Investments, L.L.C. 4 Park Plaza, Suite 1050 Irvine, CA 92694 Bankruptcy Case No.: 08-10230 Type of Business: The Debtor is a real estate investment and development company based in Irvine, California. Formed in 2001, it has expertise in the acquisition, rehabilitation, repositioning and management of multi-family investments, as well as the entitlement and development of infill residential sites. Its investments are focused on two major segments of the residential real estate market, namely apartment assets with value-added potential and land to be entitled for residential development. See http://www.atherton-newport.com Chapter 11 Petition Date: January 16, 2008 Court: Central District Of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: Joseph A. Eisenberg, Esq. Jeffer, Mangels, Butler & Marmaro, L.L.P. 1900 Avenue of the Stars, 7th Floor Los Angeles, CA 90067 Tel: (310) 203-8080 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Greenover Managers $2,000,000 Attention: Kelly Williams 2030 Eastover Drive Jackson, MS 39211 Nikolai Khabibulin $1,250,000 Attention: M.T.X. Wealth 7475 Wisconsin Avenue, Suite 600 Bethesda, MD 20814 A.L.& Shiela Ross $1,225,000 3535 East Coast Highway, Suite 362 Corona del Mar, CA 92625 The Ross Family Trust $1,210,000 3535 East Coast Highway, Suite 362 Corona del Mar, CA 92625 Harry & Brandy Halladay $1,100,000 Attention: M.T.X. Wealth 7475 Wisconsin Avenue, Suite 600 Bethesda, MD 20814 Vladimir Guerrero $1,100,000 Attention: M.T.X. Wealth 7475 Wisconsin Avenue, Suite 600 Bethesda, MD 20814 Buckweitz Investments $700,000 Attention: J. Buckweitz 9173 Pinnacle Court Naples, FL 34113 Robert & Candace Ryan $700,000 Attention: M.T.X. Wealth 7475 Wisconsin Avenue, Suite 600 Bethesda, MD 20814 Brian Leetch $600,000 Attention: M.T.X. Wealth 7475 Wisconsin Avenue, Suite 600 Bethesda, MD 20814 Kiritkumar Patel $580,000 30138 Villa Alturas Temecula, CA 92592 Tim Bryant $560,000 25391 Spotted Pony Lane Laguna Hills, CA 92653 Sergei Zubov $500,000 Attention: M.T.X. Wealth 7475 Wisconsin Avenue, Suite 600 Bethesda, MD 20814 Erubiel Durazo $500,000 Attention: M.T.X. Wealth 7475 Wisconsin Avenue, Suite 600 Bethesda, MD 20814 Ethan Thomas $500,000 Attention: M.T.X. Wealth 7475 Wisconsin Avenue, Suite 600 Bethesda, MD 20814 Antonio Cagnolo $480,000 2949 Cliff Drive Newport Beach, CA 92663 Henry Weingarten Trust $450,000 Attention: H. Weingarten 4611 Westchester Drive Woodland Hills, CA 91364 S.P.E.P. Investments $440,000 Attention: J. Klaff 1150 Summer Street Stamford, CT 06905 Steven Di Mercurio $425,000 1060 Crest Avenue Pacific Grove, CA 93950 Maly Trust $400,000 Attention: Life Wealth 27441 Tourney Road, Suite 240 Valencia, CA 91355 Christeen Brown Irrevocable $400,000 Trust Attention: Life Wealth 27441 Tourney Road, Suite 240 Valencia, CA 92355 ATLAS MARKETING: File Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Atlas Marketing Group, L.C. 6063 Olympiad Lane Harriman, UT 84043 Tel: (801) 592-5900 Bankruptcy Case No.: 08-20225 Type of Business: The Debtor manufactures communication and geostationary satellites. Chapter 11 Petition Date: January 15, 2008 Court: District of Utah (Salt Lake City) Debtors' Counsel: Ronald S. George, Esq. Ronald S. George P.A. 218 W. Paxton Avenue Salt Lake City, UT 84101 Tel: (208) 232-2515 Fax: (208) 232-9467 http://www.hostidaho.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of 20 largest unsecured creditors. BEAR STEARNS: Eight Tranches Acquire Moody's Low-B Ratings ---------------------------------------------------------- Moody's Investors Service downgraded the ratings of twenty four tranches and has placed under review for possible downgrade the ratings of seven tranches from five transactions issued by Bear Stearns Mortgage Funding Trust in 2007. Three downgraded tranches remain on review for possible downgrade. The collateral backing these classes primarily consists of first lien, adjustable-rate negatively amortizing Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. In its analysis Moody's has also applied its published methodology updates to the non delinquent portion of the transactions. Complete rating actions are: Bear Stearns Mortgage Funding Trust 2007-AR1 -- Cl. I-B-7, Downgraded to Baa1, previously A2, -- Cl. I-B-8, Downgraded to Baa2, previously Baa1, -- Cl. I-B-9, Downgraded to Baa3, previously Baa2, -- Cl. II-B-1 Currently Aa1, on review for possible downgrade, -- Cl. II-B-2 Currently Aa3, on review for possible downgrade, -- Cl. II-B-3, Downgraded to Baa2, previously A3, -- Cl. II-B-4, Downgraded to Ba1, previously Baa1, -- Cl. II-B-5, Downgraded to B3 on review for possible further downgrade, previously Ba2, Bear Stearns Mortgage Funding Trust 2007-AR2, Mortgage Pass- Through Certificates, Series 2007-AR2 -- Cl. B-1 Currently Aa1, on review for possible downgrade, -- Cl. B-2 Currently Aa3, on review for possible downgrade, -- Cl. B-3, Downgraded to Baa2, previously A3, -- Cl. B-4, Downgraded to Ba1, previously Baa1, -- Cl. B-5, Downgraded to B3 on review for possible further downgrade, previously Ba2, Bear Stearns Mortgage Funding Trust 2007-AR3 -- Cl. I-B-7, Downgraded to Baa1, previously A2, -- Cl. I-B-8, Downgraded to Baa2, previously Baa1, -- Cl. I-B-9, Downgraded to Baa3, previously Baa2, -- Cl. II-B-2 Currently Aa3, on review for possible downgrade, -- Cl. II-B-3, Downgraded to A3, previously A2, -- Cl. II-B-4, Downgraded to Baa1, previously A3, -- Cl. II-B-5, Downgraded to Baa3, previously Baa1, -- Cl. II-B-6, Downgraded to B1, previously Ba2, Bear Stearns Mortgage Funding Trust 2007-AR4 -- Cl. II-B-1 Currently Aa1, on review for possible downgrade, -- Cl. II-B-2 Currently Aa3, on review for possible downgrade, -- Cl. II-B-3, Downgraded to Baa1, previously A2, -- Cl. II-B-4, Downgraded to Baa2, previously A3, -- Cl. II-B-5, Downgraded to Ba1, previously Baa1, -- Cl. II-B-6, Downgraded to B3 on review for possible further downgrade, previously Ba2, Bear Stearns Mortgage Funding Trust 2007-AR5 -- Cl. I-B-9, Downgraded to Baa3, previously Baa2, -- Cl. II-B-4, Downgraded to Baa2, previously A2, -- Cl. II-B-5, Downgraded to Baa3, previously A3, -- Cl. II-B-6, Downgraded to Ba1, previously Baa1. BEAR STEARNS: Poor Performance Cues S&P's Six Rating Downgrades --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on six classes of mortgage pass-through certificates from Bear Stearns Asset Backed Securities Trust's series 2006-3 and 2006-SD3. Concurrently, S&P affirmed its ratings on 37 classes from these two deals as well as series 2006-SD2. The downgrades of four classes from series 2006-3 reflect the deteriorating performance of the collateral pools. The current loss levels for series 2006-3 and 2006-SD3 indicate that current and projected credit support percentages are not sufficient to support the ratings at their previous levels. As of the December 2007 remittance period, severely delinquent loans (90-plus days, foreclosures, and REOs) for series 2006-SD3 were 34.73% of the current pool balance, which represents an increase of 30.76% from six months ago and an increase of 83.27% year-over-year. Cumulative realized losses, as a percentage of the original pool balance, were 0.58%. Moreover, as of the December 2007 remittance period, severely delinquent loans for series 2006-SD3 were 8.88% of the current pool balance for structure group 1, which represents an increase of 17.77% from six months ago and 89.33% from one year ago. Likewise, severely delinquent loans were 13.21% of the current pool balance for structure group 2, which represents a 52.54% increase from six months ago and over a 100% increase from a year ago. Cumulative realized losses, as a percentage of the original pool balance, were 0.41% for structure group 1 and 0.04% for structure group 2. Notwithstanding the downgrades of the aforementioned classes from series 2006-3 and 2006-SD3, the remaining classes from these series have adequate credit support for the current ratings. A combination of subordination, excess spread, and overcollateralization (O/C) provides credit support for series 2006-3 and subordination provides credit support for series 2006- SD3. The affirmations reflect loss coverage percentages that are sufficient to maintain the current ratings. As of the December 2007 remittance period, severely delinquent loans for series 2006-SD2 were 8.81% of the current pool balance. Cumulative realized losses, as a percentage of the original pool balance, were 0.53%. The affirmations for this series are based on loss coverage percentages that are sufficient to maintain the current ratings. Subordination, O/C, and excess spread provide credit support for this deal. These transactions are 13 to 17 months seasoned and have outstanding pool factors of approximately 80.00% or lower. The underlying collateral for these deals originally consisted of first-lien, scratch & dent, fixed- and adjustable-rate mortgage loans on residential properties. Ratings Lowered Bear Stearns Asset Backed Securities Trust Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2006-3 M-4 BBB A- 2006-3 M-5 BB+ BBB+ 2006-3 M-6 BB BBB 2006-3 M-7 BB- BBB- 2006-SD3 I-B-5 CCC B 2006-SD3 II-B-5 CCC B Ratings Affirmed Bear Stearns Asset Backed Securities Trust Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2006-3 A-1 AAA 2006-3 A-2 AAA 2006-3 A-3 AAA 2006-3 M-1 AA 2006-3 M-2 AA- 2006-3 M-3 A 2006-SD2 A-1 AAA 2006-SD2 A-2 AAA 2006-SD2 A-3 AAA 2006-SD2 M-1 AA 2006-SD2 M-2 A 2006-SD2 M-3 BBB 2006-SD2 M-4 BBB- 2006-SD3 I-A-1A AAA 2006-SD3 I-A-1B AAA 2006-SD3 I-A-1C AAA 2006-SD3 I-PO AAA 2006-SD3 I-A-2A AAA 2006-SD3 I-A-2B AAA 2006-SD3 I-A-3 AAA 2006-SD3 I-X AAA 2006-SD3 I-B-1 AA 2006-SD3 I-B-2 A 2006-SD3 I-B-3 BBB 2006-SD3 I-B-4 BB 2006-SD3 II-1A-1 AAA 2006-SD3 II-1A-2 AAA 2006-SD3 II-2A-1 AAA 2006-SD3 II-2A-2 AAA 2006-SD3 II-3A-1 AAA 2006-SD3 II-X-1 AAA 2006-SD3 II-3A-2 AAA 2006-SD3 II-X-2 AAA 2006-SD3 II-B-1 AA 2006-SD3 II-B-2 A 2006-SD3 II-B-3 BBB 2006-SD3 II-B-4 BB BECKERMAN KITCHENS: Gets $3.1 Mil. Buy Offer from Ludvik Capital ---------------------------------------------------------------- Ludvik Capital, Inc. has made an offer to buy Beckermann Kitchens. Ludvik made the offer for all the assets of Beckermann for $3.1 million in cash and securities to acquire the company from bankruptcy. Ludvik intends to form a new manufacturing company that will initially focus on producing kitchens for distribution in the United States and Canada. The company will also evaluate opportunities for international partnerships. "We have partners with more than 25 years industry experience that are willing to participate with us on this acquisition and we look forward to working with them and Beckermann on this transaction," said Frank Kristan, President of Ludvik Capital Inc. Ludvik Capital, Inc. -- http://www.ludvikcapital.com/-- makes investments in public and private companies. It provides long- term equity and debt investment capital to fund growth, acquisitions and recapitalizations of small and middle-market companies in a variety of industries. Located in Canada, Beckermann Kitchens was founded in 1896 and has been setting the standard for fine quality kitchens from European tradition of craftsmanship for many years. Beckermann manufactures and distributes Cabinetry throughout Canada and into the United States Market. BOSQUE POWER: Moody's Rates $412.5 Million Credit Facility at B1 ---------------------------------------------------------------- Moody's Investors Service assigned a definitive B1 rating to Bosque Power Company, LLC's $412.5 million first lien credit facility, which was initially rated B1 on a provisional basis based upon preliminary draft documentation. The rating carries a stable outlook. The definitive rating assignment follows Moody's receipt and review of substantially final documentation, the terms and conditions of which are not materially different from those previously conveyed to Moody's. CABLEVISION CORP: S&P Maintains 'BB' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on Bethpage, Long Island-based cable operator Cablevision Corp. and removed the ratings from CreditWatch where they were placed on May 2, 2007 with negative implications. The outlook is negative. At the same time, Standard & Poor's affirmed its 'B+' senior unsecured debt rating for Cablevision, intermediate holding company CSC Holdings Inc., and subsidiary Rainbow National Services LLC, and also affirmed the 'B+' subordinated debt rating, the 'BBB-' senior secured rating and the '1' recovery ratings on Rainbow National Services. In addition, the rating on CSC Holdings Inc.'s $5.5 billion of secured bank facilities was raised to 'BB+' from 'BB' and the '2' recovery rating was affirmed. All ratings were removed from CreditWatch. The upgrade for this bank loan reflects Standard & Poor's revised bank loan methodology, adopted in June 2007, which was not applied to CSC Holding's bank loan because it was on CreditWatch at that time. The ratings were placed on CreditWatch with negative implications following the announcement that Cablevision's board of directors had accepted a buyout offer by the Dolan Family Group. Shareholders subsequently rejected the buyout in October 2007, but the ratings remained on CreditWatch pending S&P's review of the company's financial policy and financial and operating plans. As of Sept. 30, 2007, the company had about $11.3 billion of total funded debt outstanding, excluding collateralized debt obligations. Cablevision's ratings reflect the attractive demographics of the area served by the company's cable TV systems in the metro New York/New Jersey/Connecticut area, which comprise about 3.1 million basic cable customers. This has contributed to very good broadband penetration relative to the industry of 71%, and high overall subscriber average revenue per user in excess of $120, one of the highest levels in the industry, as well as healthy cable EBITDA margins of about 38%. This business is therefore considered to have a satisfactory business position. However, the attractive nature of the subscriber base has also prompted aggressive competition from Verizon's FiOS television/broadband services over the last year, which could accelerate even further in 2008 as Verizon increasingly receives video franchise relief from local regulators in Cablevision's markets. "We note that it would likely take several years for Cablevision to demonstrate that it can minimize losses to FiOS. Even if the FiOS impact can be blunted, a revision to a stable outlook would also require a tempered financial policy," said Standard & Poor's credit analyst Catherine Cosentino. CHARMING SHOPPES: Investor Group Moves for Three New Directors -------------------------------------------------------------- A group of Charming Shoppes Inc. investors lead by Crescendo Partners II, L.P., Series Q, has nominated a slate of three director nominees for election to the Board of Directors of Charming Shoppes Inc. at the company's 2008 Annual Meeting of Shareholders. The members of the group beneficially own an aggregate of 9,276,805 shares, or approximately 7.9% of the outstanding shares, of common stock of the company. The group has nominated these individuals as independent directors: -- Michael Appel, a Managing Director of Quest Turnaround Advisors, with significant retail experience; -- Arnaud Ajdler, a Managing Director of Crescendo Partners II, L.P.; and -- Robert Frankfurt, the President of Myca Partners. The group also sent a letter to the company on Jan. 15, 2008, highlighting its significant concerns with the company's current business strategy, its capital allocation process and its poorly performing stock price. In the letter the group outlined various measures to re-focus the company's business operations and unlock the true intrinsic value of the company. The group suggested, among others: * exploring the sale of non-core assets to simplify the business and focus management on improving its underperforming retail operations; and * slowing store expansion to focus management on fixing the current mix of businesses and increasing free cash flow by reducing capital expenditures. The group also noted that the company's current stock price is 6% lower than where the stock price was more than 12 years ago when Ms. Dorrit Bern became Chief Executive Officer compared to a 154% increase in the S&P 500 Index during the same period. Company Confirms Nomination Charming Shoppes Inc. confirmed that it has received notice that Crescendo Partners intends to nominate three individuals, including two hedge fund representatives, for election to Charming Shoppes' Board of Directors at the company's 2008 Annual Meeting of Shareholders. The company's Board is currently comprised of eight directors, seven of whom are independent. "We have had extensive conversations with the group and are prepared to have continuing conversations with them as long as they are constructive. However, the Board of Directors will not be distracted from its focus on the best interests of all Charming Shoppes shareholders by the threat of a proxy contest from a dissident shareholder group," the company said in a press statement. In a letter to employees dated Jan. 15, 2008, Charming Shoppes' Chief Executive Officer Dorrit J. Bern stated that "[a]lthough the industry as a whole is facing challenging economic and industry factors, we are confident in our direction for Charming Shoppes. We must continue to build our brands and provide our customers with superior products to create value, both for our shareholders and our customers." About Charming Shoppes Inc. Headquartered in Bensalem, Pennsylvania, Charming Shoppes Inc. (NASDAQ:CHRS) - http://www.charmingshoppes.com/-- is a multi- brand, multi-channel specialty apparel retailer specializing in women's plus-size apparel. The company operates 2,455 retail stores in 48 states. * * * As reported in the Troubled Company Reporter on Oct. 24, 2007, Moody's Investors Service placed the Ba3 Corporate family rating and Ba3 Probability of default rating of Charming Shoppes Inc. on review for possible downgrade following another downward revision in earnings and sales estimates for the year by the company on Oct. 11, 2007. The review for downgrade reflects the increase in the company's debt level combined with a deterioration in operating performance which has resulted in a material weakening of the company's overall credit profile. As reported in the Troubled Company Reporter on Oct. 18, 2007, Standard & Poor's Ratings Services revised its outlook on Charming Shoppes Inc. to negative from stable. At the same time, S&P affirmed the 'BB-' corporate credit rating on the company. CITIGROUP MORTGAGE: Fitch Retains Junk Ratings on Four Classes -------------------------------------------------------------- Fitch Ratings has taken rating actions on these Citigroup Mortgage Securities Inc., Trust issues: Series 1999-5: -- Class A-4 affirmed at 'AA'; -- Class A-5 affirmed at 'A+'; -- Class M-1A affirmed at 'B'; -- Class M-1B affirmed at 'B'; -- Class M-2 remains at 'C/DR5'. Series 2000-1: -- Class A-3 affirmed at 'A-'; -- Class A-4 affirmed at 'B'; -- Class A-5 affirmed at 'B'; -- Class M-1 remains at 'C/DR5;' -- Class M-2 revised to 'C/DR6' from 'C/DR5'. Series 2000-3: -- Class I A affirmed at 'B'; -- Class I M-1 remains at 'C/DR5'. The affirmations, affecting approximately $325.1 million of the outstanding certificates, reflect a stable relationship between credit enhancement and expected loss. The collateral supporting the above transactions consists of adjustable-rate and fixed-rate contracts secured by manufactured homes. All of the contracts were either originated or purchased by GreenPoint Credit, LLC and are currently serviced by GreenTree, rated 'RPS3+' by Fitch. Fitch makes a distinction in credit risk between the senior classes by taking into account payment priority and time to pay off. The classes within the senior tranches of the above series are paying sequentially. Fitch deems those senior classes which are expected to pay off sooner to be of lower credit risk than those senior classes which will be outstanding for a longer period of time. Series 1999-5 currently has a pool factor of 30% and is seasoned 96 months. All classes, except for class B, which was written down to $0 in July 2005 as a result of losses, have the benefit of a letter of credit provided by First Union National Bank to absorb future losses. To date, the $32 million LOC has been drawn down by 38% of its original value, or $12 million. Series 2000-1 currently has a pool factor of 34% and is seasoned 92 months. Originally all classes had the benefit of an LOC provided by GreenPoint, one supporting class B-2 and one supporting all other classes. However, class B-2 was paid off in October 2002, the senior LOC was drawn down to $0 in May 2003, and class B-1 was written down to $0 in August 2004. Series 2000-3 currently has a pool factor of 29% and is seasoned 90 months. Originally only class I B-2 had the benefit of an LOC provided by GreenPoint and that class paid off in May 2003. Class I B-1 was written down to $0 in November 2004. Fitch only rates certificates in Group 1. CREDIT SUISSE: Fitch Cuts Rating to CC from CCC on $9.9MM Certs. ---------------------------------------------------------------- Fitch Ratings has downgraded two classes, lowered the Distressed Recovery Rating on one class and affirmed 13 classes of Credit Suisse First Boston Mortgage Securities Corp.'s commercial mortgage pass-through certificates, series 2001-CK3 as: -- $12.7 million class L downgraded to 'B' from 'B+'; -- $9.9 million class M downgraded to 'CC/DR3' from 'CCC/DR1'. These classes are affirmed: -- $66.0 million class A-3 at 'AAA'; -- $582.4 million class A-4 at 'AAA'; -- Interest-only class A-X at 'AAA'; -- $42.3 million class B at 'AAA'; -- $56.3 million class C at 'AAA'; -- $11.3 million class D at 'AAA'; -- $14.1 million class E at 'AAA'; -- $25.4 million class F at 'AA+'; -- $8.0 million class G-1 at 'A+'; -- $11.7 million class G-2 at 'A+'; -- $14.1 million class H at 'A-'; -- $24.8 million class J at 'BBB-'; -- $9.0 million class K at 'BB'. Fitch does not rate the $21,000 class N or zero balance class O certificates. Classes A-1 and A-2 have paid in full. The downgrade to class M is due to the Fitch projected losses on the specially serviced loan. In November 2007 one loan transferred to special servicing due to nonpayment default. MBS Cos. is the current borrower and the loan is a 128-unit multifamily property in Houston, Texas (0.4%) that reported December 2007 occupancy of 19%. As of the December 2007 distribution date, the transaction has been reduced by 21% since issuance, to $887.9 million from $1.13 billion. In addition, 34 loans, 37.8% of the pool, have defeased. At issuance two loans were considered to have investment grade shadow ratings. The 888 Seventh Avenue loan has paid in full. The Atrium Mall is a 215,000 square foot retail center located in Chestnut Hill, Massachussetts. Occupancy as of June 2007 was 93.6% compared to 92% at issuance. The loan maintains its investment grade shadow rating. CREDIT SUISSE: Moody's Cuts 27 Tranches' Ratings on Delinquency --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 27 tranches and has placed under review for possible downgrade the ratings of 10 tranches from 5 deals issued by Credit Suisse in 2007. The collateral backing these classes consists of primarily first lien, fixed and adjustable-rate, Alt-A mortgage loans. The ratings were downgraded and placed under review for downgrade based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. In its re-rating Moody's has also applied its published methodology updates to the non delinquent portion of the transactions. Complete list of rating actions: Issuer: CSAB Mortgage-Backed Trust Series 2007-1 -- Cl. 1-M-1, Currently Aa2 on review for possible downgrade, -- Cl. 1-M-2, Downgraded to Baa2, previously A2, -- Cl. 1-M-3, Downgraded to Ba2, previously Baa2, -- Cl. 1-M-4, Downgraded to Ba3, previously Baa3, -- Cl. 1-M-5, Downgraded to Caa1, previously Ba1. Issuer: CSFB Adjustable Rate Mortgage Trust 2007-1 -- Cl. C-B-1, Currently Aa2 on review for possible downgrade, -- Cl. C-B-2, Downgraded to Baa3, previously A2, -- Cl. C-B-3, Downgraded to B3, previously Baa2, -- Cl. 5-A-4, Currently Aaa on review for possible downgrade, -- Cl. 5-M-1, Currently Aa1 on review for possible downgrade, -- Cl. 5-M-2, Currently Aa2 on review for possible downgrade, -- Cl. 5-M-3, Currently Aa3 on review for possible downgrade, -- Cl. 5-M-4, Downgraded to Baa2, previously A1, -- Cl. 5-M-5, Downgraded to Ba1, previously A2, -- Cl. 5-M-6, Downgraded to Ba2, previously A3, -- Cl. 5-M-7, Downgraded to B1, previously Baa1, -- Cl. 5-M-8, Downgraded to Caa1, previously Baa2, -- Cl. 5-M-9, Downgraded to Caa3, previously Baa3. Issuer: CSFB Adjustable Rate Mortgage Trust 2007-2 -- Cl. 2-M-1, Currently Aa2 on review for possible downgrade, -- Cl. 2-M-2, Currently Aa3 on review for possible downgrade, -- Cl. 2-M-3, Downgraded to Baa3, previously A2, -- Cl. 2-M-4, Downgraded to Ba1, previously A3, -- Cl. 2-M-5, Downgraded to Ba3, previously Baa1, -- Cl. 2-M-6, Downgraded to B3, previously Baa2, -- Cl. 2-M-7, Downgraded to Caa2, previously Baa3. Issuer: CSMC Mortgage-Backed Trust Series 2007-1 -- Cl. 1-M-1, Currently Aa2 on review for possible downgrade, -- Cl. 1-M-2, Downgraded to Baa2, previously A2, -- Cl. 1-M-3, Downgraded to Baa3, previously A3, -- Cl. 1-M-4, Downgraded to Ba3, previously Baa2, -- Cl. 1-M-5, Downgraded to B3, previously Baa3, -- Cl. 1-B-1, Downgraded to Caa3, previously Ba2. Issuer: CSMC Mortgage-Backed Trust Series 2007-3 -- Cl. 1-M-1, Currently Aa2 on review for possible downgrade, -- Cl. 1-M-2, Downgraded to Ba3, previously A2, -- Cl. 1-M-3, Downgraded to B1, previously A3, -- Cl. 1-M-4, Downgraded to B3, previously Baa2, -- Cl. 1-M-5, Downgraded to Caa3, previously Baa3, -- Cl. 1-B-1, Downgraded to Ca, previously Ba2. DELPHI CORP: Obtains "Broad-Based" Support on Plan -------------------------------------------------- Delphi Corp. reported the voting results for its First Amended Joint Plan of Reorganization to the U.S. Bankruptcy Court for the Southern District of New York. Voting by classes of creditors and holders of interests, including shareholders, entitled to vote on the Plan illustrates broad-based support for the Plan, the company said in a news release. Of the more than 4,000 ballots cast by general unsecured creditors voting on the Plan, 3,329 or 81% of all voting creditors aggregated across classes voted to accept the Plan -- excluding ballots cast by GM, plaintiffs in the multi-district litigation and holders of interests. Of the total amount voted by all general unsecured creditor classes, 78% or $2,083,647,859.13 voted to accept the Plan. 100% of the ballots cast in the GM and MDL classes voted to accept the Plan in the respective amounts of $2.57 billion and $57.2 million. Of the approximately 217,000,000 shares voted by shareholders, 78% or 170,297,851 shares voted to accept the Plan. The broad-based support expressed by creditors and shareholders of Delphi Corporation and its principal subsidiaries holding its US and global businesses was reflected in the votes of each of the principal segments of the general unsecured creditor class of the Delphi-DAS Debtors (Class 1C). More than 70% of the ballots cast and 70% of the total dollar amount voted by Delphi's senior note claims, TOPrS claims, and all other claims, including trade claims, segments each voted separately to accept the Plan. The company noted that one of the classes in one of the subsidiary debtors (Delphi Diesel Systems Corp. - Class 6C) rejected the Plan because less than two-thirds in amount of the ballots cast supported the Plan. In addition, depending on whether the Bankruptcy Court allows certain other contested ballots to be counted, one additional class in each of two additional subsidiary debtors (Connection System Debtors - Class 3C and Delco Electronics Overseas Corporation - Class 5C) will have rejected the Plan based on a reduction in the percentage of dollar amounts voted in favor of the Plan below the statutory threshold. Although no assurances can be made, Delphi believes that the Plan satisfies the requirements of the Bankruptcy Code and is confirmable notwithstanding the rejection of the Plan by certain classes. A confirmation hearing on the Plan is scheduled to begin on Jan. 17, 2008. Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed $11,446,000,000 in total assets and $23,851,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court will convene the hearing to consider confirmation of the Plan on Jan. 17, 2008. (Delphi Bankruptcy News, Issue No. 107; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELTA AIR: S&P Says Merger Talks Has No Effect on Ratings --------------------------------------------------------- Standard and Poor's says media sources reported that Delta Air Lines Inc. (B/Positive/--) has entered into merger talks with UAL Corp. (B/Stable/--) and Northwest Airlines Corp. (B+/Stable/--). Standard & Poor's Ratings Services said that this report has no effect on its ratings or outlook on Delta, but that confirmed merger negotiations would result in S&P's placing ratings of Delta and other airlines involved on CreditWatch, most likely with developing or negative implications. Although Delta has not confirmed the merger discussions, the head of the airline's pilots' union (which has a seat on Delta's board of directors) told the pilots in an internal (but widely reported) letter last week that industry consolidation may be very close. Delta had stated earlier that it is conducting an internal review regarding the desirability of pursuing a merger. Similarly, the CEO of Northwest is reported to have recently told that airline's employees that the company would carefully consider any merger proposal, and that the right transaction could be favorable for Northwest. UAL's CEO has been outspoken in favor of consolidation since the airline emerged from bankruptcy in early 2006. The credit implications of any merger would depend on Standard & Poor's evaluation of the competitive and operating opportunities and risks involved, and on how the merger was to be financed. An all-equity transaction, in which shareholders of one airline receive shares of the other, would clearly be more favorable, as it would not involve adding debt. S&P believes that it is likely that an announced merger agreement between Delta and either Northwest or UAL would trigger negotiations between the remaining airline and Continental Airlines Inc. (B/Stable/B-3). UAL's CEO has in the past stated that he believes a merger of UAL and Continental would have considerable benefits. At present, Northwest can block a merger involving Continental in most circumstances, but if Northwest itself enters into a merger with another large airline, that blocking right would end. DENVER RADIO: Wants to Hire Media Venture as Financial Advisor -------------------------------------------------------------- Denver Radio Company, LLC and its debtor-affiliates ask authority from the U.S. Bankruptcy Court for the District of Colorado to employ Media Venture Partners, LLC as its financial advisor and investment banker. Media Venture will: a) advise and assist the Debtor in connection with finding new interim financing, including identifying, analyzing, structuring, negotiating and effecting a financing transaction to provide for the working capital needs and administrative expenses, including legal fees, associated with a Chapter 11 reorganization; b) advise and assist the Debtor in connection with finding new debt or equity financing, including identifying, analyzing, structuring, negotiating and effecting a refinancing of the Debtor's existing indebtedness pursuant to a rights offering or other offering of private securities (whether in the form of debt, equity or equity-linked securities), or any other similar transaction or series of transactions or any combination; and c) advise and assist the Debtor in connection with identifying, analyzing, structuring, negotiating and effecting potential purchasers in connection with the potential sale of the Debtor or all or a portion of its assets through any structure, vehicle or form of transaction, including, but not limited to direct or indirect acquisition, sale of assets, merger, consolidation, restructuring, transfer or securities or any similar or related transaction. Pursuant to an engagement agreement entered into between the Debtors and Media Venture, the Debtors will pay the firm a: -- Monthly Retainer Payment. MVP will continue to receive a monthly retainer payment of $15,000 for the Debtors collectively on each monthly anniversary of the execution of the engagement letter. 50% of such monthly retainers will be credited against a transaction fee or capital raise fee; -- DIP Financing Fee. MVP will receive a cash fee upon closing of a DIP financing transaction, whether on a stand alone basis or to consummate any other transaction, equal to 2% for any debt security pari passu or senior to the Debtors' existing pre-petition indebtedness; -- Capital Raise Fee. MVP will receive a cash fee in conjunction with a Capital Raise in an amount equal to 1% for any such senior or subordinated debt, 3% for all convertible debt and mezzanine debt, and 5% for all convertible preferred, common equity, and any other equity or equity-listed securities; and -- M&A Transaction Fee. At the closing of any M&A transaction, MVP will be paid a cash fee out of proceeds as a cost of sale at the closing of an M&A transaction, equal to 1% of the total consideration paid, with a minimum transaction fee of $400,000. The Debtor tells the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. Based in Aurora, Colorado, Denver Radio Co., LLC -- http://www.sassymartini.com/-- owns and manages radio stations. The company and its affiliates filed for Chapter 11 protection on Dec. 26, 2007 (Bankr. D. Colo. Lead Case No. 07-25039). Michael J. Pankow, Esq., at Brownstein Hyatt Schreck, P.C., represents the Debtors in their restructuring efforts. The Debtors' schedules of assets and liabilities reflect total assets of $48,289,050, and total debts of $24,959,175. DENVER RADIO: Wants to Employ Kagan Media as Appraiser ------------------------------------------------------ Denver Radio Company, LLC and its debtor-affiliates ask permission from the U.S. Bankruptcy Court for the District of Colorado to employ Kagan Media Appraisals as their appraiser. Kagan Media will provide appraisal services in connection with a fair market valuation of the Debtors' two radio stations, operating under the call letters KTNI-FM and KSYY-FM. The Debtors tell the Court that Robin Flynn of Kagan Media will charge the Debtors an hourly rate of $750 for appraisal services. The Debtors assure the Court that the firm does not hold or represent any interest adverse to their bankruptcy estates. Based in Aurora, Colorado, Denver Radio Co., LLC -- http://www.sassymartini.com/-- owns and manages radio stations. The company and its affiliates filed for Chapter 11 protection on Dec. 26, 2007 (Bankr. D. Colo. Lead Case No. 07-25039). Michael J. Pankow, Esq., at Brownstein Hyatt Schreck, P.C., represents the Debtors in their restructuring efforts. The Debtors' schedules of assets and liabilities reflect total assets of $48,289,050, and total debts of $24,959,175. DIEGO INC: To Cut Workforce by 50%, WSJ Says -------------------------------------------- Digeo Inc. is cutting its workforce to 80 from 160 employees, Don Clark of The Wall Street Journal reports citing a company spokesman. According to WSJ, the company will be concentrating on developing fewer products, primarily on a next-generation consumer model of media recorders. Based in Kirkland, Wash., Digeo Inc. manufactures TV set-top boxes. DIOGENES CDO: Moody's Junks Rating on Eight Notes Classes --------------------------------------------------------- Moody's Investors Service downgraded ratings of eleven classes of notes issued by Diogenes CDO III, Ltd., and left on review for possible further downgrade ratings of five of these classes of notes. The notes affected by this rating action are: Class Description: Up to $360,000,000 Class A-1a Floating Rate Notes Due August 2046 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class Description: $120,000,000 Class A-1b Floating Rate Notes Due August 2046 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $34,400,000 Class A-1c Floating Rate Notes Due August 2052 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $72,000,000 Class A-2 Floating Rate Notes Due August 2052 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Class Description: $36,800,000 Class B-1 Floating Rate Notes Due August 2052 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Class Description: $26,400,000 Class B-2 Deferrable Floating Rate Notes Due August 2052 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ca Class Description: $36,000,000 Class C-1 Deferrable Floating Rate Notes Due August 2052 Prior Rating: Ba2, on review for possible downgrade Current Rating: Ca Class Description: $26,400,000 Class C-2 Deferrable Floating Rate Notes Due August 2052 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca Class Description: $24,000,000 Class D-1 Deferrable Floating Rate Notes Due August 2052 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: Ca Class Description: $8,000,000 Class D-2 Deferrable Floating Rate Notes Due August 2052 -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: Ca Class Description: $8,000,000 Class E Deferrable Floating Rate Notes Due August 2052 -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: Ca The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence, as reported by the Trustee on Dec. 11, 2007, of an event of default caused by a failure of the Class A Overcollateralization Ratio to be greater than or equal to the required amount pursuant Section 5.1(h) of the Indenture dated Aug. 3, 2007. Diogenes CDO III, Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS securities and CDO securities. Recent ratings downgrades on the underlying portfolio caused ratings-based haircuts to affect the calculation of overcollateralization. Thus, the Class A Overcollateralization Ratio failed to meet the required level. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by certain Noteholders. Because of this uncertainty, the ratings assigned to Class A-1a, Class A-1b, Class A-1c Notes, Class A-2 Notes, and the Class B-1 Notes remain on review for possible further action. DUNMORE HOMES: Court Orders Transfer of Venue to California ----------------------------------------------------------- The Hon. Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York has ordered the transfer of the venue of Dunmore Homes Inc.'s Chapter 11 case to the U.S. Bankruptcy Court for the Eastern District of California, Sacramento Division. The Debtor originally filed its voluntary bankruptcy petition in the U.S. Bankruptcy Court for the Southern District of New York in November 2007. As reported in the Troubled Company Reporter on Nov. 29, 2007, Cal Sierra Construction Inc., Pacific Paving Co. Inc., and Valley Utility Services Inc., sought for a venue transfer of the Debtor's case to California. Certain parties, including Teichert Construction, Travelers Bond and the Official Committee of Unsecured Creditors, joined in the venue transfer request. The Debtor and two creditors, Bank of New York Trust Company, N.A., and KeyBank National Association opposed the Venue Transfer Motion. Dunmore New York, the Debtor, was recently incorporated in New York to facilitate the purchase of its predecessor, Dunmore California, for nominal consideration. Judge Glenn acknowledges that the Debtor was incorporated in New York and would be considered domiciled there. "Therefore, the venue selected by the Debtor is proper under [Section] 1408 [of the Judicial and Judiciary Procedures Code]," he opines. Judge Glenn, however, finds that Cal Sierra and the Joinder Parties have met their burden of demonstrating that venue transfer is warranted in the Debtor's case under both the standards of the "interests of justice" and "convenience of the parties." In evaluating the economic and efficient administration of the case, the Bankruptcy Court looked at the Debtor's need to obtain postpetition financing and financing to fund reorganization, and the location of the sources of financing and the management personnel in charge of obtaining it. Judge Glenn asserts that in the Debtor's case, the factors support the transfer of venue because postpetition financing has already been obtained from Sidney Dunmore, a California resident. "Further financing for a purchase of assets or a wind down of the business is just as likely to come from California as [opposed to] New York since the Debtor's main assets are the California real estate owned by its Subsidiaries," Judge Glenn adds. Judge Glenn notes that the Debtor's only offices, management and employees are located in California; and its sole shareholder resides in California. The Debtor's counsel, while having a New York office, is based in California. The Debtor's financial advisor, Alvarez & Marsal North America LLC, and its investment banker, Alvarez & Marsal Securities LLC, are based in California and Arizona. The sources of the Debtor's funding are likely in California and the location of the professionals and management personnel in charge of obtaining that funding are in California or Arizona, the Bankruptcy Court opines. Thus, Judge Glenn maintains, the efficient administration of the case is heavily in favor of transfer to California. Judge Glenn says that both the New York Court and the California Court have the capacity to handle the Debtor's case and provide a fair proceeding. However, because cases are already pending in California state courts against some of the Debtor's subsidiaries and many issues in the case are likely to be governed by California law, judicial economy would be better served if all cases were pending in California, Judge Glenn concludes. Moreover, it does not appear that the Debtor's interests will be harmed or that the estate will suffer a diminution in value if the case is transferred to California because its employees and professionals are located in California, the Bankruptcy Court avers. With respect to its creditors, the Debtor is a co-borrower or guarantor of loans from 10 large institutional national lenders representing over $200,000,000 in debt; while the remaining creditors in the Debtor's top 30 creditors list, except one, are located in California and represent over $12,000,000 in debt. Judge Glenn points out that considering the number of creditors and the amounts owed, changing the venue is not advisable unless consideration is given to the quality of participation available to the creditors. "A California venue would not be more inconvenient to the creditors as most would have to travel to appear in New York or California," Judge Glenn says. "However, the majority of trade creditors would not have to travel very far if venue was transferred to California." In addition, the Bankruptcy Court points out that the Debtor is already in the process of liquidating. "Marketing and selling the Debtor's California real estate assets can best be overseen by a California bankruptcy court with greater familiarity with the market," Judge Glenn avers. A full-text copy of the Dunmore Venue Transfer Order is available for free at http://researcharchives.com/t/s?270e About Dunmore Homes Headquartered in Granite Bay, California, Dunmore Homes Inc. is a privately-owned homebuilder. The company filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. S.D.N.Y. Case No. 07-13533). Maria A. Bove, Esq., and Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors has selected Morrison & Foerster LLP as its counsel in this bankruptcy proceeding. When the Debtor filed for protection against its creditors, it listed assets and liabilities of more than $100 million. The Debtor's exclusive period to file a plan expires on March 7, 2008. (Dunmore Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DUNMORE HOMES: Morrison & Foerster Okayed as Committee's Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has approved the request of the Official Committee of Unsecured Creditors in Dunmore Homes Inc.'s bankruptcy case for authority retain Morrison & Foerster LLP as its counsel effective as of Nov. 26, 2007. As reported in the Troubled Company Reporter on Jan. 4, 2008, the Committee said that it sought the employment of Morrison & Foerster to represent it and perform services on its behalf in connection with carrying out its fiduciary duties and responsibilities under the Bankruptcy Code consistent with Section 1103(c) and certain other provisions of the Bankruptcy Code. Committee member Bank of New York Trust Company N.A., said that Morrison & Foerster will: (a) advise the Committee with respect to its rights, powers, and duties in Dunmore Homes, Inc.'s case; (b) assist and advise the Committee in its consultations with the Debtor relative to the administration in the case; (c) assist the Committee in analyzing the claims of the Debtor's creditors and in negotiating with those creditors; (d) assist with the Committee's investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtor and of the operation of the Debtor's business; (e) assist the Committee in its analysis of, and negotiations with, the Debtor or any third party concerning matters related to, among other things, the terms of a plan of reorganization or liquidation; (f) assist and advise the Committee with respect to its communications with the general creditor body regarding significant matters in this case; (g) represent the Committee at all hearings and other proceedings; (h) review and analyze all applications, orders, statements of operations, and schedules filed with the Court; (i) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interest and objectives; and (j) perform other legal services as may be required and are deemed to be in the interests of the Committee in accordance with the Committee's powers and duties as set forth in the Bankruptcy Code. J. Chris Matthews of the Bank of New York Trust Company related that MF is an internationally recognized law firm with extensive experience and expertise in bankruptcy and reorganization proceedings. The attorneys at MF have broad-based experience and a national reputation in bankruptcy and reorganization proceedings as well as extensive experience and knowledge practicing before the Court. Through MF, Mr. Matthews added, the Committee will have the benefit of knowledge and experience, as well as the ability to call upon the attorneys within MF with expertise in other specialized areas of law as may be needed. MF will charge the Committee for its legal services on an hourly basis in accordance with its ordinary and customary rates. The Committee related that the firm's current hourly rates, which will be charged in respect of the primary members of the MF engagement team for the Committee, are: Attorney Position Rate -------- -------- ---- Karen Ostad Partner $750 Adam Lewis Partner $650 Alexandra Steinberg Barrage Associate $515 Vincent J. Novak Associate $375 From time to time, other MF attorneys may be involved in the Debtor's case, as needed, the hourly rates of which are: Professional Hourly Rate ------------ ----------- Partners and counsel $520 to $850 Associates $225 to $540 Legal Assistants $105 to $270 In addition to the hourly rates, MF charges clients for actual and necessary costs of support services the firm provides in connection with a representation, including court reporters, transcripts, computerized research, filing fees, photocopying charges, and long-distance telephone calls. MF will charge the cost of these expenses in a manner and at rates consistent with charges generally made to the firm's other clients. All charges for which MF seeks payment are subject to Court approval. Karen A. Ostad, Esq., a partner at MF, assured the Court that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. MF does not hold any interest adverse to the Debtor's estate or its creditors in the matters upon which the firm is to be engaged, Ms. Ostad maintained. While employed by the Committee, MF told the Court that it will not represent any person having an adverse interest in connection with the Debtor's case. Ms. Ostad noted that in 2006, MF represented Alleghany Properties, a Delaware LLC in a real estate matter involving properties sold to Dunmore Croftwood LLC, which is not a debtor in this case. MF says it is unaware of any claim Alleghany has against the Debtor. However, in the event Alleghany has any claim, MF will promptly notify the Debtor, the Court and the U.S. Trustee of any matter that impacts the disclosures noted, according to Ms. Ostad. In addition, MF currently represents Dunmore Capital Fund LP, providing advice regarding real estate investment fund formation, Ms. Ostad noted. Sidney Dunmore Jr. is a principal of Dunmore Capital. Upon information and belief, Dunmore Jr. is the son of Sidney B. Dunmore and otherwise is wholly unrelated to the Debtor's case, Ms. Ostad related. Moreover, Dunmore Capital is unaffiliated with the Debtor, she averred. About Dunmore Homes Headquartered in Granite Bay, California, Dunmore Homes Inc. is a privately-owned homebuilder. The company filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. S.D.N.Y. Case No. 07-13533). Maria A. Bove, Esq., and Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors has selected Morrison & Foerster LLP as its counsel in this bankruptcy proceeding. When the Debtor filed for protection against its creditors, it listed assets and liabilities of more than $100 million. The Debtor's exclusive period to file a plan expires on March 7, 2008. (Dunmore Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DUNMORE HOMES: Panel Taps Mesirow Financial as Financial Advisors ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in Dunmore Homes Inc.'s bankruptcy cases asks the U.S. Bankruptcy Court for the Southern District of New York for authority to retain Mesirow Financial Consulting LLC as its financial advisors nunc pro tunc to Dec. 28, 2007. The Bank of New York Trust Company N.A., a member of the Committee, asserts that the services of MFC will benefit all parties and parties-in-interest by improving creditor recoveries and maximizing the value of the estate of Dunmore Homes Inc. Specifically, as the Committee's financial advisors, MFC will: (a) assist in the review of reports or filings as required by the Bankruptcy Court or the Office of the United States Trustee, including, but not limited to, schedules of assets and liabilities, statements of financial affairs and monthly operating reports; (b) review the Debtor's financial information, including, but not limited to, analyses of cash receipts and disbursements, financial statement items and proposed transactions for which Bankruptcy Court approval is sought; (c) review and analyze reports regarding cash collateral and any debtor-in-possession financing arrangements and budgets; (d) analyze assumption and rejection issues regarding executory contracts and leases; (e) review and analyze the business and financial condition of the Debtor generally; (f) assist in evaluating alternatives available to the creditors; (g) review and critique the Debtor's financial projections and assumptions; (h) review and critique real estate asset and liquidation valuations; (i) assist in preparing documents necessary for confirmation; (j) advice and assist the Committee in negotiations and meetings with the Debtor and the bank lenders; (k) advice and assist on certain tax issues; (l) assist with the claims resolution procedures, including, but not limited to, analyses of creditors' claims by type and entity; (m) provide litigation consulting services and expert witness testimony regarding confirmation issues, avoidance actions or other matters; and (n) provide other functions as requested by the Committee or its counsel. According to the Committee, it has selected MFC because of the firm's diverse experience and extensive knowledge in finance, bankruptcy, and real estate. MFC also has considerable experience with rendering services to creditors' committees and other parties in numerous Chapter 11 cases, the Committee notes. MFC will be paid for its services based on the firm's customary hourly rates for financial advisory services: Level Hourly Rates ----- ------------ Sr. Managing Director $650 to $690 Managing Director and Director $650 to $690 Senior Vice-President $550 to $620 Vice President $450 to $520 Senior Associate $350 to $420 Associate $190 to $290 Paraprofessional $150 MFC will also be reimbursed for actual and necessary expenses the firm incurred or will incur in the course of providing services to the Committee. The Committee further asks the Court to require the Debtor and its bankruptcy estate to indemnify MFC. Leon Szlesinger of Mesirow Financial assures the Court that his firm is a disinterested person as the term is defined in Section 101(14) of the Bankruptcy Code. MFC does not hold nor represent any adverse interest to the bankruptcy estate of the Debtor with respect to the matter on which MFC will be employed, he adds. About Dunmore Homes Headquartered in Granite Bay, California, Dunmore Homes Inc. is a privately-owned homebuilder. The company filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. S.D.N.Y. Case No. 07-13533). Maria A. Bove, Esq., and Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors has selected Morrison & Foerster LLP as its counsel in this bankruptcy proceeding. When the Debtor filed for protection against its creditors, it listed assets and liabilities of more than $100 million. The Debtor's exclusive period to file a plan expires on March 7, 2008. (Dunmore Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Gets Lenders Consent to Amend DIP Financing Terms ------------------------------------------------------------------ DURA Automotive Systems, Inc., said in a filing with the Securities and Exchange Commission that it received the necessary consents from its lenders to amend the terms of the Revolving DIP Credit Agreement and the Term Loan DIP Credit Agreement to, among other things, (i) extend their final maturity dates from Dec. 31, 2007 to Jan. 31, 2008, (ii) restrict outstandings under the Revolving DIP Credit Agreement to a maximum amount of $48 million, (iii) waive the minimum EBITDA covenant under the Revolving DIP Credit Agreement during January 2008 and extend the capital expenditure covenant set forth in the Term Loan DIP Credit Agreement, (iv) incorporate a new minimum excess availability covenant in the Revolving DIP Credit Agreement and (v) increase the interest rate set forth in the Term Loan DIP Credit Agreement by 2.00%. Debtors Obtain Reduction of Carve-Out Cap Marc Kieselstein, P.C., Esq., at Kirkland & Ellis, LLP, in Chicago, Illinois, tells the Court that the Amended DIP Documents contemplate the reduction of the Carve-Out Cap and provided specific consent of the Postpetition Secured Parties to the reduction. Mr. Kieselstein says reduction of the Carve-Out Cap will provide the Debtors with enhanced access to working capital to fund ongoing operations. In this regard, the Debtors submitted an amended Final DIP Order to add a paragraph implementing the reduction in the Carve-Out Cap, consistent with the DIP Amendments. The Court's order approving the request provides that Carve-Out Cap is reduced from $10 million to $5 million. Copies of the Amendment No. 4 and Waiver with Respect to Revolving DIP Credit Agreement and Amendment No. 5 and Waiver with Respect to Term Loan DIP Credit Agreement are available at: http://ResearchArchives.com/t/s?270f http://ResearchArchives.com/t/s?2710 The company expects that it will need to obtain additional amendments to further extend the final maturity dates of the Revolving DIP Credit Agreement and the Term Loan DIP Agreement or refinance the Term Loan DIP Agreement. About DURA Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Seeks Approval of 2008 Management Incentive Plan ----------------------------------------------------------------- Dura Automotive Systems Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve a key management incentive plan for the year 2008, which will cover 220 participants consisting of middle and senior management positions in North America and globally, including their chief executive officer. The 2008 KMIP will be effective for six months, from Jan. 1, 2008 to June 30, 2008. The KMIP proposes a two three-month performance measurement and pay-out periods: * Threshold pay-out: If the Debtors achieve 90% of adjusted EBITDA goals, participants will receive 50% of their individual target bonus opportunities; and * Maximum pay-out: If the Debtors achieve 120% of adjusted EBITDA goals, participants will receive 150% of their individual target bonus opportunities. Under the 2008 KMIP, participants' target bonus opportunities range from 5% to 80% of each participant's base salary. Target bonus opportunities for participants in the previous KMIP were reduced in the 2008 KMIP to allow greater number of participants, Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, tells the Court. The Debtors' CEO will be awarded a $2.5 million bonus if the Debtors emerge from Chapter 11 by June 30, 2008. If Debtors do not emerge from Chapter 11 by July 30, the CEO's bonus will be reduced by $250,000 per month through and including December 31. Furthermore, if the Debtors will not emerge from Chapter 11 by December 31, the CEO's bonus will be reduced to zero. The Debtors anticipate to pay approximately $6 million at the achievement of target EBITDA. The Debtors will make payments on completion of each of the three-month performance periods, as dictated by the company's achieved EBITDA at that time and as determined by the company's board of directors. The CEO's Bonus will be paid on the Debtors' exit from Chapter 11. Mr. DeFranceschi says the 2008 KMIP aims to properly incentivize those key employees who have worked diligently towards -- and were highly focused on -- the Debtors' exit from Chapter 11 by Dec. 31, 2007. Recent developments in the Debtors' bankruptcy cases have "engendered uncertainty among the Debtors' key employees," he tells the Court. As previously reported, the Debtors were unable to get the Court's approval of their plan of reorganization after they failed to obtain a favorable exit financing. "It is important that these key employees remain engaged and properly incentivized to maximize the Debtors' financial and operational performance, thereby maximizing the Debtors' value and creditor recoveries," he further asserts. Toward this end, the Debtors retained Watson Wyatt Worldwide as their compensation consultant to craft an appropriate key employee incentive plan. Mr. DeFranceschi tells the Court that the 2008 KMIP is fundamental to motivating key employees to achieve or exceed the Debtors' financial and operational restructuring goals. The Debtors' previously Court-approved KIMP expired on Dec. 31, 2007, and the Debtors' compensation structure continues to be below the medial level of compensation provided by comparable companies in the marketplace, he adds. About DURA Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). EAGLE MEADOWS: Section 341(a) Meeting Scheduled for January 29 -------------------------------------------------------------- The U.S. Trustee for Region 17 will convene a meeting of Eagle Meadows of Pixley, LLC's creditors on Jan. 29, 2008, at 10:00 a.m., at the Fresno Meeting Room 1452 in Fresno, California. 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. Based in Stockton, California, Eagle Meadows of Pixley, LLC filed for Chapter 11 protection on Dec. 20, 2007 (Bankr. E.D. Calif. Case No. 07-14304). Gustavo M. Rios, Esq. represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and liabilities of $1 million to $100 million. FALCON RIDGE: Moore & Associates Raises Going Concern Doubt ----------------------------------------------------------- Moore & Associates Chartered in Las Vegas, Nevada expressed substantial doubt about the ability of Falcon Ridge Development Inc. to continue as a going concern after it audited the company's financial statements for the year ended Sept. 30, 2007. The auditor pointed to Falcon Ridge's accumulated operating losses during 2007 and 2006. The company posted a net loss of $1,290,190 on net sales of $32,017 for the year ended Sept. 30, 2007 as compared with a net income of $417,974 on net sales of $0 in the prior year. At Sept. 30, 2007, the company's balance sheet showed $3,283,292 in total assets and $3,628,400 in total liabilities, resulting in $345,108 stockholders' deficit. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?270b About Falcon Ridge Development Headquartered in Albuquerque, N.M., Falcon Ridge Development Inc. acquires tracts of raw land and develops them into residential lots for sale to homebuilders. Falcon Ridge also plans to expand its operations in the City of Rio Rancho, New Mexico, and Belen, New Mexico. Since inception, the company has developed one property known as Sierra Norte. FEDERAL MOGUL: Board Appoints C. Icahn as Non-Executive Chairman ---------------------------------------------------------------- The Board of Directors of Federal-Mogul Corporation has elected Carl Icahn as its non-executive Chairman. The Federal-Mogul Board will be composed of, among others, Mr. Icahn and three of his associates, the Associated Press reports. The company's confirmed Plan of Reorganization provides an affiliate of Mr. Icahn an option to purchase certain shares of common stock of Reorganized Federal-Mogul held by the Asbestos Trust. Thornwood Associates is one of Mr. Icahn's affiliates. Mr. Icahn has a 75.24% stake in the class A common stock of Federal-Mogul, according to Reuters. "I am very pleased that a financially strong Federal-Mogul has finally emerged from the bankruptcy process. Additionally and most importantly, Federal-Mogul will no longer be hampered by asbestos litigation. I wish to thank and congratulate all those who have worked with me throughout the last six years to accomplish this. I also wish to extend my thanks to Jose Maria Alapont, our President and CEO, who has so successfully guided the operations of Federal-Mogul during the last three years," Mr. Icahn said in a press release. Federal-Mogul President and Chief Executive Officer Jos� Maria Alapont said, "We have very positive relations with Carl Icahn and we welcome him as non-executive Chairman. We remain committed to our strategy for sustainable global profitable growth in all areas of our business and to create value for our customers, shareholders and employees." Federal-Mogul shares were down 10 cents in recent trading at $19.50, AP relates. About Federal-Mogul Federal-Mogul Corporation -- http://www.federal-mogul.com/-- (OTCBB: FDMLQ) is a global supplier, serving the world's foremost original equipment manufacturers of automotive, light commercial, heavy-duty, agricultural, marine, rail, off-road and industrial vehicles, as well as the worldwide aftermarket. Founded in Detroit in 1899, the company is headquartered in Southfield, Michigan, and employs 45,000 people in 35 countries. Aside from the U.S., Federal-Mogul also has operations in other locations which includes, among others, Mexico, Malaysia, Australia, China, India, Japan, Korea, and Thailand. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl & Jones, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan. They submitted a Disclosure Statement explaining that plan on April 21, 2003. They submitted several amendments and on June 6, 2004, the Bankruptcy Court approved the Third Amended Disclosure Statement for their Third Amended Plan. On July 28, 2004, the District Court approved the Disclosure Statement. The estimation hearing began on June 14, 2005. The Debtors submitted a Fourth Amended Plan and Disclosure Statement on Nov. 21, 2006, and the Bankruptcy Court approved that Disclosure Statement on Feb. 6, 2007. The Fourth Amended Plan was confirmed by the Bankruptcy Court on Nov. 8, 2007, and affirmed by the District Court on Nov. 14. * * * As reported in the Troubled Company Reporter on Jan. 10, 2008, Moody's Investors Service confirmed the ratings of the reorganized Federal-Mogul Corporation -- Corporate Family Rating, Ba3; Probability of Default Rating, Ba3; and senior secured bank credit facilities, Ba2. The outlook is stable. The financing for the company's emergence from Chapter 11 bankruptcy protection has been funded in line with the structure originally rated by Moody's in a press release dated Nov. 28, 2007. As reported in the Troubled Company Reporter on Jan. 7, 2008, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Southfield, Michigan-based Federal-Mogul Corp. following the company's emergence from Chapter 11 on Dec. 27, 2007. The outlook is stable. FIRST MAGNUS: Countrywide Wants Examination on Chapter 11 Plan -------------------------------------------------------------- Countrywide Warehouse Lending and Countrywide Home Loans Inc., seek the U.S. Bankruptcy Court for the District of Arizona's authority to examine First Magnus Financial Corporation pursuant to Rule 2004(d) of the Federal Rules of Bankruptcy Procedures. In connection with the examination, Countrywide Warehouse and Countrywide Home want the Debtor to produce on or before Jan. 17, documents relating to: (1) the liquidation analysis the Debtor attached to its disclosure statement and the chart contained in the disclosure statement; (2) the actual or potential claims the Debtor held against the companies; (3) the proposed and actual sales, and the valuation of the property the Debtor pledged to Countrywide Warehouse as collateral under the Revolving Credit and Security Agreement dated June 8, 2007, from June 1, 2007 to the present; (4) the Debtor's servicing of the mortgage loans it pledged to Countrywide Warehouse as collateral under the Revolving Credit and Security Agreement, from June 1, 2007 to the present; (5) the Debtor's intended disposition of the mortgage loans; (6) the payments and proceeds the Debtor received from Jan. 1, 2007 to the present and not subsequently remitted to Countrywide House under or in connection with the mortgage loans purchased by Countrywide House from the company under the loan purchase agreement dated Aug. 27, 1996, together with all commitments, addenda, amendments, and assignments; and (7) the cash funds the Debtor held on Aug. 21, 2007. Countrywide also wants the Debtor to produce (i) reports prepared by any person the company expects to provide testimony in connection with the confirmation of its Chapter 11 Plan of Liquidation; and (ii) the documents and the identity of witnesses, which the company reserves the right to use at any deposition or hearing in connection with Plan's confirmation. Countrywide asks the Court to direct the Debtor, by and through its designee, to appear for deposition regarding the materials and documents requested. Countrywide proposes that the Rule 2004 examination be conducted at the law office of Bryan Cave LLP, in Phoenix, Arizona, on January 24 at 9:00 a.m., or as agreed upon by the parties. About First Magnus Based in Tucson, Arizona, First Magnus Financial Corporation -- http://www.firstmagnus.com/-- purchases and sells prime and Alt-A mortgage loans secured by one-to-four unit residences. The company filed for chapter 11 protection on Aug. 21, 2007 (Bankr. D. Ariz. Case No.: 07-01578). John R. Clemency, Esq., at Greenberg Traurig LLP serves as the counsel for the Debtor. The Official Committee of Unsecured Creditors has selected the firm Warner Stevens LLP as its counsel. When the Debtor filed for bankruptcy, it listed total assets of $942,109,860 and total debts of $812,533,046. The Debtor's exclusive period to file a plan expired on Dec. 19, 2007. The confirmation hearing on the Debtor's liquidation plan will commence on Feb. 7, 2008. (First Magnus Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). FIRST MAGNUS: Seeks Approval of Piaggio Settlement Proposal ----------------------------------------------------------- First Magnus Financial Corporation asks the U.S. Bankruptcy Court for the District of Arizona to approve its settlement agreement with Piaggio America Inc. The settlement agreement dated Nov. 29, 2007, seeks to release both parties from any liability under the contract they reached in 2005 for the purchase of an aircraft. Pursuant to an Aircraft Purchase Agreement, entered into on August 12, 2005, First Magnus agreed to pay, in installments, a total of $6,050,000, for the Aircraft. Prepetition, First Magnus made payments to Piaggo totaling $350,000 since executing the APA. First Magnus has not made a payment under the APA since Jan. 15, 2007. Piaggo has not delivered the Aircraft to First Magnus. Piaggo has paid a total of $57,625 in commissions under the APA. After the Petition Date, a dispute arose between the parties over the remaining payments, the completion of the Aircraft and the Debtor's proposal to assign the APA to a third party. The settlement agreement specifically provides for the refund of $292,375 to the Debtor, the termination of the APA after the payment, and the release of both companies from claims under the contract. About First Magnus Based in Tucson, Arizona, First Magnus Financial Corporation -- http://www.firstmagnus.com/-- purchases and sells prime and Alt-A mortgage loans secured by one-to-four unit residences. The company filed for chapter 11 protection on Aug. 21, 2007 (Bankr. D. Ariz. Case No.: 07-01578). John R. Clemency, Esq., at Greenberg Traurig LLP serves as the counsel for the Debtor. The Official Committee of Unsecured Creditors has selected the firm Warner Stevens LLP as its counsel. When the Debtor filed for bankruptcy, it listed total assets of $942,109,860 and total debts of $812,533,046. The Debtor's exclusive period to file a plan expired on Dec. 19, 2007. The confirmation hearing on the Debtor's liquidation plan will commence on Feb. 7, 2008. (First Magnus Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). FIRST MAGNUS: Snell & Wilmer Wants WNS' Disqualify Motion Trashed ----------------------------------------------------------------- Snell & Wilmer LLP asks the Hon. James M. Marlar of the U.S. Bankruptcy Court for the District of Arizona to deny the request of WNS North America Inc., to prohibit the firm from intervening in First Magnus Financial Corporation's chapter 11 case. Andrew M. Jacobs, Esq., at Snell & Wilmer, asserts that it complied with Rule 2019 of the Federal Rules of Bankruptcy Procedure by disclosing in its statement the (i) names and addresses of the creditors it represents; (ii) the nature and amounts of the claims of the creditors; and (iii) recital of what the firm believes to be the pertinent facts and circumstances in connection with its employment. Mr. Jacobs admits that the statement "did not specifically assert the fact that Snell & Wilmer held no claim against or interest in the Debtor at the time of its employment though the statement is true if it is something about which WNS wished further disclosure." According to Mr. Jacobs, WNS' proposal to disqualify the firm is like "a discovery motion, in which it has failed to meet and confer, and has failed to request the information that is the supposed point of the motion." He further says that the firm is ready to supplement its statement to specifically disclose the absence of any claim against or interest in the Debtor. To the extent that the Court finds that Snell & Wilmer's disclosures under Bankruptcy Rule 2019 are inadequate, the appropriate remedy is for the Court to order Snell & Wilmer to make additional disclosure, Mr. Jacobs argues. "Disqualification, however, is an extraordinary remedy that is without legal precedent, completely out of proportion with the issues raised in WNS' request, and inappropriate in light of the lack of any prior consultation by WNS' counsel with Snell & Wilmer to seek any further disclosure," he further contends. WNS Talks Back WNS contends that the arguments raised by Snell & Wilmer and the Official Committee of Unsecured Creditors failed to address the conflict as a result of the firm's representation of the National Bank of Arizona and First Magnus Capital, Inc. Nancy J. March, Esq., at DeConcini McDonald Yetwin & Lacy PC, in Tucson, Arizona, says that the issue is not about a single law firm representing two creditors, one of which is a member of the Creditors Committee while the other is not. "It is well understood that attorneys should not represent clients with two different characters or types of claims and interests in the Debtor," Ms. March says. She points out that the bank is primarily an unsecured creditor while FMC is an insider claimant and equity holder, whose claim may be subject to subordination to the general unsecured creditors' claims. Committee Denies Snobbing the Issue As reported in the Troubled Company Reporter on Jan. 10, 2008, the Official Committee of Unsecured Creditors informed the Court that it acted immediately on the issue about Snell & Wilmer's representation of the National Bank of Arizona and First Magnus Capital Inc. "The Creditors Committee knew of the representation and addressed the matter immediately upon its formation by the Office of the United States Trustee," says Michael D. Warner, Esq., at Warner Stevens LLP, in Forth Worth, Texas. "It is important to inform the Court of these facts, since WNS North America Inc., seeks to create the impression in its request that the Creditors Committee has ignored the issue." About First Magnus Based in Tucson, Arizona, First Magnus Financial Corporation -- http://www.firstmagnus.com/-- purchases and sells prime and Alt-A mortgage loans secured by one-to-four unit residences. The company filed for chapter 11 protection on Aug. 21, 2007 (Bankr. D. Ariz. Case No.: 07-01578). John R. Clemency, Esq., at Greenberg Traurig LLP serves as the counsel for the Debtor. The Official Committee of Unsecured Creditors has selected the firm Warner Stevens LLP as its counsel. When the Debtor filed for bankruptcy, it listed total assets of $942,109,860 and total debts of $812,533,046. The Debtor's exclusive period to file a plan expired on Dec. 19, 2007. The confirmation hearing on the Debtor's liquidation plan will commence on Feb. 7, 2008. (First Magnus Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). FIRST REPUBLIC: Fitch Holds 'BB+' Ratings on Two Loan Classes ------------------------------------------------------------- Fitch Ratings has affirmed these First Republic Mortgage Loan Trust classes: Series 2000-FRB1 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AAA'; -- Class B-3 affirmed at 'AA'; -- Class B-4 affirmed at 'A'; -- Class B-5 affirmed at 'BB+'. Series 2000-FRB2 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AA+'; -- Class B-3 affirmed at 'AA'; -- Class B-4 affirmed at 'A'; -- Class B-5 affirmed at 'BB+'. The affirmations reflect a stable relationship between credit enhancement and future loss expectations and affect approximately $66.5 million of outstanding certificates. As of the December distribution date, all of the loans remaining in the pools are current, and the deals have not taken any principal losses to date. At issuance, the collateral consisted of 28.5% negative amortization Cost of Funds Index adjustable-rate mortgages and fully amortizing COFI, LIBOR, Constant Maturity Treasury Rates, and Prime-based adjustable-rate first lien, residential mortgage loans on one- to four-family homes. As of the December 2007 distribution date, the transactions are seasoned 92 months and 86 months respectively and the pool factors are approximately 8% and 14%, respectively. At issuance, approximately 87% of the loans resided in California, and approximately 79% had unpaid principal balances greater than $600,000. GE CAPITAL: Fitch Holds 'B' Rating on $12.5MM Class L Certs. ------------------------------------------------------------ Fitch Ratings affirms GE Capital Corp's commercial mortgage pass- through certificates, series 2001-2 as: -- $22.2 million class A-2 at 'AAA'; -- $35.5 million class A-3 at 'AAA'; -- $519.5 million class A-4 at 'AAA'; -- $40.1 million class B at 'AAA'; -- $45.1 million class C at 'AAA'; -- $12.5 million class D at 'AAA'; -- $10 million class E at 'AAA'; -- Interest-only classes X-1 and X-2 at 'AAA'; -- $18.8 million class F at 'AA+'; -- $11.3 million class G at 'AA-'; -- $21.3 million class H at 'A-'; -- $18.8 million class I at 'BBB'; -- $5 million class J at 'BBB-'; -- $7.5 million class K at 'BB+', -- $12.5 million class L at 'B'. Fitch does not rate the $7.5 million class M and the $5.7 million class N. Class A-1 has been paid in full. The rating affirmations reflect stable performance of the pool since Fitch's last rating action. As of the January 2008 distribution date, the pool's aggregate certificate balance has decreased 20.9% to $792.9 million from $1,002.9 million at issuance. In total, 25 loans (25.1%) have defeased. There are currently no delinquent or specially serviced loans. The largest loan in the pool (5.3%) is secured by Holiday Inn West 57th street, a 596-room full service hotel located in New York, New York. As of Sept. 30, 2007, RevPar was $168.59 with occupancy at 88%, compared to RevPar of $122.85 with the same occupancy rate at issuance. Fitch has identified eleven loans (6.7%) as Fitch loans of concern due to declined performance. The largest Fitch loan of concern is an office property located in Santa Monica, California and had a 2Q07 servicer reported DSCR of 0.80x. GE CAPITAL: Fitch Junks Rating on $5.3 Million Class I Certs. ------------------------------------------------------------- Fitch Ratings downgrades 3 classes form GE Capital Commercial Mortgage Corp.'s commercial mortgage pass-through certificates, series 2000-1, as: -- $6.2 million class H to 'B' from 'B+'; -- $5.3 million class I to 'CCC' from 'B-' and assigned a distressed recovery rating of 'DR2'; -- $4.8 million class J to 'C/DR6' from 'C/DR5'. In addition, Fitch affirms these classes: -- $414.7 million class A-2 at 'AAA'; -- Interest only class X at 'AAA'; -- $28.3 million class B at 'AAA'; -- $31.8 million class C at 'AAA'; -- $8.8 million class D at 'AAA'; -- $23 million class E at 'AA-'; -- $8.8 million class F at 'A-'; -- $23.9 million class G at 'BB+'. Class A-1 has been paid in full while classes K through M have been reduced to zero due to realized losses. The downgrades and lowered distressed recovery ratings are due to increased loss expectations on the current specially serviced loan and potential future defaults. The affirmation of the senior classes is due to additional pay down and scheduled amortization, as well as the additional defeasance of four loans (9.5%) since the last Fitch rating action. As of the December 2007 distribution date, the total pool balance has been reduced 21.4% to $555.7 million from $707.3 million at issuance. Thirty-two loans (38.9%) have defeased since issuance. Eleven loans (12.9%) have been identified as Fitch loans of concern due to declines in occupancy and performance, including one specially serviced asset (1.5%). The specially serviced asset is collateralized by a 292-unit multifamily property located in Dallas, Texas and is in foreclosure. Fitch-projected losses on the specially serviced loan are expected to be absorbed by class J. The largest Fitch loan of concern (5.3%) is secured by a hotel in downtown New Orleans, Louisiana. As of September 2007, occupancy was 57% and net cash flow debt service coverage ratio has declined from year-end 2006. As of September 2007, revenue per available room was $78.02 compared to $89.53 at YE 2006. Fitch will continue to closely monitor the performance of this loan. The second largest Fitch Loan of Concern (1.9%) is secured by an office property in Denver, Colorado and is current. As of June 2007, occupancy was 76% and net cash flow DSCR has increased from YE 2006. The Equity Inns Portfolio loan (5.8%), a Fitch investment grade shadow-rated obligation, defeased since Fitch's last formal review. GOODMAN GLOBAL: Stockholders OKs Acquisition by Hellman & Friedman ------------------------------------------------------------------ Goodman Global, Inc.'s stockholders approved the merger agreement with affiliates of the private equity firm Hellman & Friedman LLC. Goodman will also satisfy the closing condition set forth in its merger agreement that requires Goodman to achieve EBITDA of at least $255 million for the fiscal year ended Dec. 31, 2007. While Goodman has not yet completed its financial statements for the 2007 fiscal year, it confirms that, for the fiscal year ended Dec. 31, 2007, EBIDTA, on a consolidated basis, will not be less than $255 million. As reported in the Troubled Company Reporter on Oct. 24, 2007, Goodman Global, Inc. and affiliates of Hellman & Friedman entered into a definitive merger agreement in an all-cash transaction valued at approximately $2.65 billion. Pursuant to the merger agreement, an affiliate of Hellman & Friedman would acquire all of the outstanding common stock of Goodman for $25.60 per share in cash, without interest. Subject to the satisfaction or waiver of the remaining closing conditions, the transaction is expected to be completed in the first quarter of 2008. About Goodman Global Headquartered in Houston, Texas, Goodman Global, Inc. (NYSE: GGL) -- http://www.goodmanglobal.com/-- manufactures heating, ventilation and air conditioning products for residential and light-commercial use. Goodman's products are predominantly marketed under the Goodman(R), Amana(R) and Quietflex(R) brand names, and are sold through company-operated and independent distribution networks with more than 800 distribution points throughout North America. GOODMAN GLOBAL: Unit Launches Tender Offer for $579MM Senior Notes ------------------------------------------------------------------ Goodman Global Holdings, Inc., a wholly-owned subsidiary of Goodman Global, Inc., has commenced a cash tender offer for any and all of its outstanding $179.3 million aggregate principal amount Senior Floating Rate Notes due 2012 and $400.0 million aggregate principal amount 7-7/8% Senior Subordinated Notes due 2012 on the terms and subject to the conditions set forth in its Offer to Purchase and Consent Solicitation Statement dated Jan. 10, 2008, and the related Consent and Letter of Transmittal. The company is also soliciting consents to certain proposed amendments to the indentures governing the Notes to eliminate most of the restrictive covenants and certain events of default. The tender offer documents more fully set forth the terms of the tender offer and consent solicitation in respect of each series of Notes. The tender offer will expire at 8:00 a.m., New York City time, on Feb. 8, 2008, unless extended or earlier terminated by the company. The company reserves the right to terminate, withdraw or amend the tender offer and consent solicitation in respect of each series of Notes at any time subject to applicable law. The consideration for each $1,000 principal amount of Floating Notes tendered and accepted for purchase pursuant to the tender offer shall be $1,010, minus $20 per $1,000 principal amount of the Floating Notes, which is equal to the consent payment. The consideration for each $1,000 principal amount of Fixed Notes tendered and accepted for purchase pursuant to the tender offer will be determined as specified in the tender offer documents and will be equal to the sum of: (a) the present value on the applicable payment date for the tender of Fixed Notes of: (i) $1,039.38 (which is equal to the redemption price on Dec. 15, 2008, the earliest possible redemption date and (ii) the remaining scheduled interest payments on such Notes to and including the Fixed Note Redemption Date, determined on the basis of a yield to the Fixed Note Redemption Date equal to the sum of (A) the yield on the 3.375% U.S. Treasury Security due Dec. 15, 2008, based on the bid side price for the Reference Treasury Security on the Fixed Note price determination date, in each case as calculated by Barclays Capital Inc. in accordance with standard market practice, as described in the tender offer documents, plus (B) a fixed spread of 50 basis points; minus (b) accrued and unpaid interest on such Fixed Notes up to, but not including, the applicable payment date; minus (c) $20.00 per $1,000 principal amount of such Fixed Notes, which is equal to the consent payment. The company will pay accrued and unpaid interest up to, but not including, the applicable payment date. Each holder who validly tenders its Notes of either series and delivers consents on or prior to 5:00 p.m., New York City time, on Jan. 24, 2008 shall be entitled to a consent payment, which is included in the total consideration above, of $20 for each $1,000 principal amount of Notes tendered by such holder if such Notes are accepted for purchase pursuant to the tender offer. Holders who tender Notes of either series are required to consent to the proposed amendments to the applicable indenture. Any tender of Notes on or prior to the consent date may be validly withdrawn and consents may be validly revoked at any time on or prior to the consent date, but not thereafter unless the tender offer and the consent solicitation are terminated without any Notes being purchased. Holders who tender Notes after the consent date will not receive the consent payment. The company intends to finance the purchase of the Notes and related fees and expenses with a combination of available cash, equity contributions by the investors in Chill Holdings, Inc. and/or debt financing received by Purchaser and its subsidiary Chill Acquisition, Inc., in connection with a Merger Agreement entered into on Oct. 21, 2007. Pursuant to the Merger Agreement, Merger Sub will merge with and into the Company. The company has retained Barclays Capital Inc. to act as Dealer Manager in connection with the tender offer and Solicitation Agent in connection with the consent solicitation. Questions about the tender offer and consent solicitation may be directed to Barclays Capital Inc. at (866) 307-8991 (toll free) or (212) 412-4072 (collect). Copies of the tender offer documents and other related documents may be obtained from Global Bondholder Services Corporation, the information agent for the tender offer and consent solicitation, at (866) 470-4200 (toll free) or (212) 430- 3774 (collect). About Goodman Global Headquartered in Houston, Texas, Goodman Global, Inc. (NYSE: GGL) -- http://www.goodmanglobal.com/-- manufactures heating, ventilation and air conditioning products for residential and light-commercial use. Goodman's products are predominantly marketed under the Goodman(R), Amana(R) and Quietflex(R) brand names, and are sold through company-operated and independent distribution networks with more than 800 distribution points throughout North America. GOODMAN GLOBAL: S&P Assigns B+ Corp. Rating with Stable Outlook --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Goodman Global Inc., the parent company of Goodman Global Holdings Inc. (B+/Watch Neg/--). The outlook is stable. At the same time, S&P assigned its 'BB' and '1' recovery ratings to Goodman's proposed $800 million senior secured term loan B bank facility. This facility is secured by a first-priority security interest in substantially all the assets of the company except for the receivables and inventory, in which it holds a second-priority interest after the $300 million asset-based revolving credit facility. The 'BB' bank loan rating is two notches higher than Goodman's corporate credit rating. The '1' recovery rating indicates S&P's opinion that lenders can expect very high recovery of principal (90% to 100%) in the event of a payment default. These ratings are based on preliminary terms and conditions. Pro forma for the proposed financing, Houston-based Goodman will have approximately $1.4 billion in consolidated debt outstanding. Proceeds of the proposed term loan B, in addition to about $600 million of other debt and nearly $1.3 billion of equity, will be used to fund the $2.65 billion purchase of Goodman by an affiliate of Hellman & Friedman LLC. "We expect Goodman's earnings and cash flow to continue to benefit from stable demand in the repair and remodeling markets, increased operating efficiencies, and continued leveraging of its distribution network," Mr. Nadramia said. "We expect the company to improve its financial profile over the next few years through a combination of earnings growth and debt reduction, resulting in credit measures more appropriate for the rating. We could revise the outlook to negative if markets weaken and cash flow is not sufficient to reduce leverage to expected levels. We are unlikely to revise the outlook to positive in the near term given the high debt burden and weak credit measures for the rating." GOODMAN GLOBAL: S&P Places Unit's B+ Rating on Negative Watch ------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'B+' corporate credit and other ratings on Goodman Global Holdings Inc., a subsidiary of Goodman Global Inc., remain on CreditWatch with negative implications. The ratings were placed on CreditWatch on Oct. 22, 2007, following the company's announcement that affiliates of Hellman & Friedman LLC agreed to acquire it in an all-cash transaction for $2.65 billion. "After our initial analysis, however, we have determined that if H&F completes its acquisition as proposed, we would affirm Goodman's ratings. We expect that the outlook would be stable," said Standard & Poor's credit analyst Thomas Nadramia. The likely affirmation would primarily reflect the expectation that pro forma credit measures will improve to a level more appropriate for the rating over the next few years despite the increased debt associated with the acquisition. S&P expect that the company will reduce debt with operating cash flow over the next few years in an effort to improve its financial profile, which is what occurred after its 2004 acquisition by Apollo Management LP. In resolving the CreditWatch listing, S&P will monitor the progress that the parties make toward closing the transaction, including regulatory approvals. HARRAH'S ENT: High Leverage Cues S&P's B2 Corporate Rating ---------------------------------------------------------- Moody's Investor Service assigned a B2 Corporate Family Rating and Speculative Grade Liquidity Rating of SGL-3 to Harrah's Entertainment, Inc. Moody's also assigned ratings to the following new debt to be issued by Harrah's Operating Company, Inc. (HOC): senior secured guaranteed bank revolving credit facility at Ba2, senior secured guaranteed term loans at Ba2, and senior unsecured guaranteed notes at B3. HOC is a wholly-owned direct subsidiary of HET. Proceeds of these facilities will be used by the company to finance its going private transaction. The rating outlook is stable. The existing unsecured senior and subordinated notes issued by HOC remain on review for possible downgrade. Moody's expects to downgrade these senior and subordinated ratings to Caa1 from Baa3 and Ba1, respectively, when the LBO closes later this month. When the LBO closes, HOC will transfer the real estate associated with six casino properties (Paris Las Vegas, Harrah's Las Vegas, Rio, Flamingo Las Vegas, Harrah's Atlantic City, Harrah's Laughlin) to indirect wholly-owned unrestricted special purpose subsidiaries of HET (Propcos). These properties will be operated by separate indirect wholly-owned unrestricted subsidiaries of HET. A new CMBS loan will be issued by these special purpose subsidiaries and will be secured by the real estate underlying the six transferred properties, and the related operating leases. The CMBS loans will be serviced by rent due under the operating leases and will be guaranteed by HET. HOC will continue to own and operate the remaining 46 owned or managed properties. Moody's ratings are based upon a consolidated assessment of HET because, in Moody's view, it is unlikely management would jeopardize the loss of the real estate pledged to the CMBS lenders, HET will continue to manage the consolidated company on a centralized basis, and HET and HOC will be managed by one board of directors, and one management team. The B2 CFR reflects very high pro-forma leverage and low interest coverage, as well as a reliance on earnings growth to improve credit metrics because capital spending for several expansion projects will exceed internally generated cash flow for the next two years. Despite the very high financial leverage, ratings are supported by HET's large scale, geographic and segment diversification, its gaming revenue focused strategy, and low regulatory risk profile that has contributed to stable consolidated earnings growth historically. The rating also considers adequate liquidity and HET's successful development and operational track record. Using Moody's Global Gaming Rating Methodology and pro-forma credit metrics, HET's rating maps to a low Ba rating as compared to the actual B2 Corporate Family Rating assigned. The lower assigned rating reflects the company's vulnerability to a significant deterioration in credit metrics if earnings fail to grow as anticipated. HOC's new senior secured bank facilities and senior unsecured notes will be guaranteed by HET and material domestic subsidiaries of HOC. Pursuant to Moody's Loss Given Default methodology, the Ba2 rating of senior secured guaranteed bank facilities is rated above the Corporate Family Rating reflecting the support it receives from the significant level of legally and effectively subordinated debt in the capital structure, including $6.775 billion of senior unsecured notes guaranteed by material domestic subsidiaries of HOC and HET, and HOC's existing senior unsecured notes ($3.9 billion) and senior subordinated notes ($725 million) that are only guaranteed by HET. The B3 rating of the new senior unsecured notes is notched down from the CFR reflecting the significant level of senior ranking bank debt (up to $9.25 billion) and junior ranking existing debt ($4.6 billion). The Caa1 rating that likely will be assigned to the existing senior unsecured debt reflects the weaker position it has due to its lack of upstream guarantees from operating subsidiaries. The Caa1 that will likely be assigned to the existing senior subordinated debt reflects its junior position relative to $20 billion of debt with a superior position and priority of claim. HOC's Speculative Grade Liquidity rating of SGL-3 reflects adequate liquidity, based on the company's expected negative free cash flow position of nearly $1.0 billion on a cumulative basis over the next four quarters, offset by the existence of a $2.0 billion revolving credit facility that is expected to remain fully available to the company. However, solid initial head room under the senior secured leverage covenant could shrink if earnings do not grow as anticipated. Given that HOC's assets will be fully encumbered, the company cannot quickly sell assets to raise alternate liquidity. Ratings assigned: Harrah's Entertainment, Inc. -- Corporate Family Rating at B2 -- Probability of default rating at B2 -- Speculative Grade Liquidity at SGL-3 -- Rating Outlook: Stable Harrah's Operating Company, Inc. -- $2.0 billion senior secured guaranteed revolving credit facility at Ba2 (LGD 2, 19%) -- $7.25 billion senior secured guaranteed term loans at Ba2 (LGD 2, 19%) -- $6.775 billion senior unsecured guaranteed notes at B3 (LGD 4, 63%) -- Rating Outlook: Stable Ratings remaining under review for possible downgrade: Harrah's Operating Company, Inc. -- Senior unsecured debt at Baa3 -- Senior unsecured bank credit facilities at Baa3 -- Senior subordinated notes at Ba1 Ratings for any debt repaid as part of Harrah's going-private transaction will be withdrawn at closing. Harrah's Entertainment, Inc., through its wholly-owned subsidiary, Harrah's Operating Company, Inc., owns or manages approximately 50 casinos that comprise around 40,000 hotel rooms, three million square feet of gaming space and two million square fee of convention center space. HET generated consolidated revenues of $10.6 billion for the last twelve months ended Sept. 30, 2007. Affiliates of Apollo LLC and Texas Pacific Group (the Sponsors) are expected to close the $31 billion leverage buy-out of HET within the next month or so. The transaction will be financed with equity, new bank and bond issuance, roll-over of existing debt and issuance of a CMBS loan. INDEPENDENCE COUNTY: S&P Places BB+ Rating on $29.3 Mil. Bonds -------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB+' rating on Independence County, Ark.'s $29.3 million power revenue bonds, on CreditWatch with developing implications. Independence County Hydroelectric is the obligor. Standard & Poor's will meet in the near term with management to review financials and construction status with the goal of resolving the CreditWatch in the first quarter of 2008. INTERSTATE BAKERIES: No Alternative Funding Proposals Received -------------------------------------------------------------- Interstate Bakeries Corporation confirmed that it has not received any qualifying alternative proposals for funding its plan of reorganization in accordance with the Alternative Proposal Procedures previously approved by the Bankruptcy Court and, as a result, no auction will be held on Jan. 22, 2008 as would have been required under those procedures. The deadline for submission of alternative proposals was Jan. 15, 2008. The company also confirmed that it has not received a joint plan of reorganization from Yucaipa Companies and the International Brotherhood of Teamsters. On Dec. 13, 2007, Yucaipa Companies and the Teamsters submitted a preliminary indication of interest describing a possible plan of reorganizations, but IBC said it has not had any substantive communication with the parties since that time. A hearing is currently scheduled before the Bankruptcy Court in Kansas City on Jan. 29, 2008, during which IBC will be seeking permission to send its Disclosure Statement to its creditors to solicit votes on its plan of reorganization. The company is in working with certain of its constituent groups regarding additional disclosures and anticipates filing an amended Disclosure Statement prior to the hearing and believes the Disclosure Statement, as amended, will contain adequate information sufficient to permit the Court to approve its dissemination to the company's constituents. As reported in the Troubled Company Reporter, the company must achieve a mutually acceptable agreement with its unions on modifications to its collective bargaining agreements to be able to implement its business plan and meet the requirements of the plan funding agreement. The company has achieved agreement with the Bakery, Confectionery, Tobacco Workers & Grain Millers International Union and the majority of its remaining unions except the Teamsters, which has refused to hold any discussions with the Company since mid-October. The company continues to explore all other alternative strategies in the event that such agreement is not reached, including the sale of all or parts of its operations. About IBC Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and seven of its debtor-affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04- 45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. Their exclusive period to file a chapter 11 plan expired on November 8. The Debtors have been been actively seeking higher and better offers to the proposed financing and plan support agreements and received interest from multiple parties regarding the opportunity to invest in the company. The deadline for investors to submit initial bids was on Nov. 28, 2007, and deadline to submit final bids is on Jan. 15, 2008. (Interstate Bakeries Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) KELLWOOD CO: Urges Shareholders to Defer Action on Tender Offer --------------------------------------------------------------- Kellwood Company advised its shareholders to defer taking any action at this time in response to Sun Capital Securities Group LLC's statement that it has commenced an unsolicited tender offer for all the outstanding shares of Kellwood other than those shares which it already owns at a price of $21 per share in cash. The company's board of directors will review Sun Capital's offer and make a recommendation to shareholders in due course. Kellwood noted that the offer received is for the same price as the unsolicited proposal the company received from Sun Capital on Sept. 18, 2007 and again on Nov. 12, 2007. Kellwood's board of directors determined that Sun Capital's unsolicited $21 proposal was not in the best long-term interests of Kellwood and its shareholders. Banc of America Securities LLC is acting as financial advisor, and McDermott Will & Emery LLP is serving as legal counsel, to Kellwood. About Kellwood Company Headquartered in St. Louis, Missouri, Kellwood Company (NYSE: KWD) -- http://www.kellwood.com/-- markets apparel and consumer soft goods. The company specializes in branded as well as private label products, and markets to all channels of distribution with product specific to a particular channel. Smart Shirts is a manufacturer, marketer, seller and distributor of woven and knit garments - men's shirts. While a manufacturer for private brands, this business also designs, makes, and sells licensed brands of men's shirts including Nautica, Claiborne, Axcess A Claiborne Company, Concepts by Claiborne, O Oscar, an Oscar de la Renta Company, and Perry Ellis. Smart Shirts has 14 manufacturing facilities located in the People's Republic of China, Hong Kong, Sri Lanka and the Philippines. * * * As reported in the Troubled Company Reporter on Jan 7, 2008, Standard & Poor's Ratings Services said that its long-term corporate credit rating 'BB-' on Kellwood Co. would remain on CreditWatch with negative implications after Kellwood's report that it has entered into an $80 million accelerated share repurchase program. KENNETH KUNES: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtors: Kenneth Oscar Kunes Lauri May Kunes dba Flying K. Orchard 952 South Laguna Street Moses Lake, WA 98837 Bankruptcy Case No.: 08-00131 Chapter 11 Petition Date: January 15, 2008 Court: Eastern District of Washington (Spokane/Yakima) Debtors' Counsel: Kevin Orourke, Esq. Southwell & O'Rourke 421 West Riverside Avenue Suite 960 Spokane, WA 99201 Tel: (509) 624-0159 Fax: (509) 624-9231 Total Assets: $1,520,211 Total Debts: $1,635,295 The Debtors did not file a list of their 20 largest unsecured creditors. LENOX GROUP: Explores Strategic Options, Board OKs Rights Plan -------------------------------------------------------------- Lenox Group Inc. will explore strategic alternatives aimed at enhancing shareholder value. The board has also adopted a Stockholder Rights Plan. The Rights Plan is designed to reduce the likelihood that a potential acquirer would gain control of Lenox by open market accumulation or other coercive takeover tactics without paying a premium for the company's shares. "It is our belief that the current stock price does not reflect the underlying value of our brands, our business or the full impact of our continuing business improvements," Marc Pfefferle, interim chief executive officer said. "We have been approached by several parties who have expressed an interest in recapitalizing, combining with or acquiring Lenox or parts of Lenox. While our financial and operational performance and working capital has been improving, we continue to face challenging business and economic conditions." "Additional financial resources would be a significant benefit to our company, giving us the opportunity to increase our business scale and strength," Mr. Pfefferle continued. "Therefore, our board has concluded that it is in the best interests of all Lenox shareholders to conduct an orderly and comprehensive review and evaluation of strategic, operational and financial alternatives available to us including, but not limited to, a potential sale or merger of the company, a potential sale of part of the company, or raising additional equity capital to enhance the growth prospects of the business." The strategic review process is expected to take approximately six months but timing is flexible. There can be no assurance that strategic alternatives will be available or that the company will elect to consummate any such alternatives. The company does not intend to provide updates or make any further comment until the outcome of the process is determined or until there are significant developments. Berenson & Company, LLC is providing financial advice and Dorsey & Whitney LLP is providing legal advice to the company in connection with this review process. Liquidity Position "We have made progress in reducing inventory levels and working capital requirements and are pleased to disclose that Lenox Group Inc. ended fiscal 2007 with $66.9 million of borrowing availability under its revolving loan agreement," Mr. Pfefferle also said. "This compares favorably to the company's borrowing availability of $47.6 million at the end of fiscal 2006 and the 2007 year-end budget of $48.4 million." The company is in the process of finalizing its financials for fiscal 2007 and anticipates that it will have complete audited results filed in a 10-K on or about March 13, 2008. Sales in 2007 are expected to be lower than budgeted, but the company's sales results will be partially offset by substantial cost reductions and margin improvements made in 2007. "As we begin fiscal 2008, we remain concerned about the state of the economy and retail environment," Mr. Pfefferle added. "We intend to meet the challenges of 2008 with improved product offerings, which have already received positive responses from the trade, excellence in execution and a continuing focus on improving efficiencies and reducing costs." Stockholder Rights Plan Under the Rights Plan adopted by the board, one right will be distributed for each share of Lenox common stock outstanding at the close of business on Jan. 28, 2008. If any person or group acquires 15% or more of the outstanding shares of Lenox common stock, there will be a triggering event under the Rights Plan causing substantial dilution to such person or group. Any person or group who currently owns in excess of 15% of the outstanding shares of Lenox common stock will not trigger the Rights Plan until such person or group acquires additional shares of common stock. At any time prior to the date of a public disclosure of a triggering event, the board may redeem the rights in whole, but not in part, at a price of $0.001 per right. In addition, the Rights Plan includes a provision that the exercise of rights will not be triggered by a qualifying offer, if holders of at least 10% of shares of common stock outstanding, excluding shares of common stock owned by the party making the offer, request that a special meeting of Lenox stockholders be convened, and, at such meeting, a majority of shares of common stock outstanding, excluding shares of common stock owned by the party making the offer, votes to redeem all of the outstanding rights. The Rights Plan will be in effect for three years, until Jan. 14, 2011. A committee of independent directors of the Lenox Board will assess annually whether the Rights Plan remains in the best interests of all Lenox stockholders. Director Resignation Cesar A. Baez resigned effective Jan. 8, 2008, for personal reasons as a member of the board of directors and as a member of the board's audit committee and executive committee. Upon Mr. Baez's resignation, the agreement between Lenox and Clinton Group Inc., effective as of April 13, 2007, expired by its terms, including Clinton Group's obligation under that agreement to not exceed an 18% ownership interest in the company. About Lenox Group Headquartered in Eden Prarie, Minnesota, Lenox Group Inc (NYSE: LNX) -- http://www.lenoxgroupinc.com/-- sells tabletop, collectible and giftware products under the Lenox, Department 56, Gorham, and Dansk brand names. The company sells its products through wholesale customers who operate gift, specialty and department store locations in the United States and Canada, company-operated retail stores, and direct-to-the-consumer through catalogs, direct mail, and the Internet. Going Concern Doubt Deloitte & Touche, LLP, in Minneapolis, Minnesota, raised substantial doubt about Lenox Group Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's difficulties in meeting its loan agreement covenants and financing needs. MAAX HOLDINGS: Reports $76.6 Mil. Loss in 3rd Qtr. Ended Nov. 30 ---------------------------------------------------------------- MAAX Holdings Inc. reported Monday results for its third quarter ended Nov. 30, 2007. The company reported loss continuing operations of $76.6 million in the third quarter of FY 2008 compared to loss from continuing operations of $9.7 million in the same period of FY 2007. Nnet sales decreased 8.0% to $104.2 million for the third quarter of FY 2008 from net sales of $113.2 million for the third quarter of FY 2007. Operating loss of $2.8M for the third quarter of FY 2008 compares to an operating profit of $1.0M in the third quarter of FY 2007. The company said that results of its Bathroom sector continue to be affected by adverse market conditions in the United States. Net sales decreased by $5.0 million, or 4.9%, compared to the third quarter of fiscal 2007, to reach $96.4 million. This decrease is principally from the US market. Sales for the company's Spa Sector were $7.8M, which is $4.0 million or 34.1% lower than for the third quarter of FY 2007, and is a result of soft markets conditions. Financial Position Free cash flow for the third quarter of FY 2008 was $1.2 million compared with $17.9 million for the same period last year. The company attributed the decrease in cash flow compared to last year to lower cash contributions from both operations and working capital. Total net debt of $508.6 million at Nov. 30, 2007, increased from Aug. 31, 2007, levels of $499.1 million, due to the stronger Canadian dollar and the accretion of the Senior Discount Notes. Covenant Defaults As of Nov. 30, 2007, the company is in default on its debt covenants under its Credit Agreement with its senior secured lenders. Accordingly, the company may be required to repay entirely the amounts outstanding on its senior credit facility. Consequently the long term debts subject to demand have been reclassified as short term liability. As reported in the Troubled Company Reporter on Jan. 11, 2008, the company entered into a forbearance agreement in which its senior secured lenders agreed, until at least Feb. 1, 2008, to not pursue the potential event of default. The company also has an option under certain conditions to extend this Forbearance Agreement until Mar. 19, 2008. Under the Forbearance Agreement, the company will have full access to its revolving credit facility. The Forbearance Agreement also allows the company to continue to explore and pursue all alternatives and solutions relating to the restructuring of its existing debt obligations. About Maax Holdings Headquartered in Brooklyn Park, Minnesota, MAAX Holdings Inc. -- http://www.maax.com/-- is a North American manufacturer of bathroom products, and spas for the residential housing market. MAAX offerings are available through plumbing wholesalers, bath, and spa specialty boutiques and home improvement centers. The company currently operates 18 manufacturing facilities and independent distribution centers throughout North America and Europe. MAAX Corporation is a subsidiary of Beauceland Corporation, itself a wholly owned subsidiary of the company. * * * As reported in the Troubled Company Reporter on Dec. 27, 2007, Moody's Investors Service downgraded MAAX Holdings Inc.'s corporate family rating to Ca from Caa2, and its senior unsecured discount notes to C from Caa3, and also downgraded MAAX Corporation's senior subordinated notes to Ca from Caa3. The downgrades were prompted by MAAX Corporation's failure to make the Dec. 15, 2007 interest payment on its 9.75% senior subordinated notes due 2012. MAAX Holdings has an SGL-4 speculative grade liquidity rating. The rating outlook is stable. MARCAL PAPER: Lambasts Creditors' Panel for Trying to Delay Sale ---------------------------------------------------------------- Marcal Paper Mills Inc. berated CEO Nicholas Marcalus and the Official Committee of Unsecured Creditors in its bankruptcy case, for asking the U.S. Bankruptcy Court for the District of New Jersey to deny the proposed sale of substantially all of the Debtor's assets, the Associated Press reports. As reported in the Troubled Company Reporter on Jan. 11, 2008, the Committee argued that the sale does not provide any real or tangible benefit to the Debtor's unsecured creditors, which disposes the assets without the protection of a plan of reorganization. The Committee also opposed NexBank SSB's stalking horse $35 million credit bid. NexBank is the administrative agent to the Debtor's DIP lender Heartland Financial Corp. According to the Committee, NexBank should be denied of its right to credit bid because it skewed and manipulated the flow of information on the process of the sale against other potential bidders. According to the AP, Marcalus insisted that any company who buys the Debtor's assets should remove his family's name on all the products. The Debtor complained to the Court that Marcalus and the Committee are trying to "blow up" the sale, which was crucial in helping its current employees keep their jobs. "The continued operation of the business -- through the sale -- is not just 'dollars and cents' to these people, it is their livelihood and the ability to provide for their families," the AP cites the Debtor in its Court filings. About Marcal Paper Mills Based in Elmwood Park, New Jersey, Marcal Paper Mills Inc. -- http://www.marcalpaper.com/-- is a privately-held, fourth generation family business. Founded in 1932, it employs over 900 people in its Elmwood Park, New Jersey and Chicago, Illinois manufacturing operations. The company produces over 160,000 tons of finished paper products, including bath tissue, kitchen towels, napkins and facial tissue, distributed to retail outlets for home consumption and to distributors for away-from- home use in hotels, restaurants, hospitals, offices and factories. The Debtor filed for chapter 11 protection on Nov. 30, 2006 (Bankr. D. N.J. Case No. 06-21886). Gerald H. Gline, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard P.A. represent the Debtor. Kenneth Rosen, Esq., and Mary E. Seymour, Esq., at Lowenstein Sandler PC represent the Official Committee of Unsecured Creditors. In its schedules filed with the Court, the Debtor disclosed total assets of $178,626,436 and total debts of $178,890,725 The Debtor filed an Amended Plan and Disclosure Statement on July 31, 2007. The Court approved the adequacy of the Amended Disclosure Statement on August 1, 2007. The confirmation hearing was originally set for Sept. 26, 2007, and later moved to Oct. 19, 2007. However on Oct. 2, 2007, the Debtor gave notice that it was going to sell its assets. MARCOTTE PROPERTIES: Files Voluntary Chapter 11 Case Summary ------------------------------------------------------------ Debtor: Marcotte Properties, Inc. 1119 S. Mission Road, #102 Fallbrook, CA 92028 Bankruptcy Case No.: 08-00226 Chapter 11 Petition Date: January 14, 2008 Court: Southern District of California (San Diego) Judge: Peter W. Bowie Debtors' Counsel: Marcy E. Kaye, Esq. 11770 Bernardo Plaza Court, Suite 305 San Diego, CA 92128 Tel: (858) 485-1569 Total Assets: $825,000 Total Debts: $3,120,057 The Debtor does not have any creditors who are not insiders. MASHANTUCKET WESTERN: S&P Ratings Not Affected by 17% Decline ------------------------------------------------------------- Standard & Poor's Ratings Services said that its rating on the Mashantucket Western Pequot Tribe (BB+/Negative/--) is not affected by the news that net slot win in December declined 17% and that John O'Brien, president of Foxwoods, has resigned. S&P believes the decline in operating performance is largely due to one-time events relating to challenges associated with the execution of a direct-mail campaign and a lower-than-usual hold percentage. However, this announcement comes at a time when Foxwoods is undergoing an expansion and pro forma credit measures are somewhat weak for the current rating. Plans are for the expansion, which includes 825 hotel rooms and 50,000 square feet of gaming space, to open in May. S&P continues to expect leverage to peak in fiscal 2008 (ended Sept. 30), and believes that the tribe will restore credit measures to levels more in line with the current rating in fiscal 2009. Still, there is now very little cushion in the rating for additional operating challenges or market weakness beyond current expectations in the coming quarters. MASTR ADJUSTABLE: Moody's Downgrades Ratings on Nine Tranches ------------------------------------------------------------- Moody's Investors Service downgraded the ratings of seven tranches and has placed under review for possible downgrade the ratings of five tranches from two transactions issued by MASTR Adjustable Rate Mortgages Trust in 2007. The collateral backing these classes primarily consists of first lien, adjustable-rate negatively amortizing Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. In its analysis Moody's has also applied its published methodology updates to the non delinquent portion of the transactions. Complete rating actions are: MASTR Adjustable Rate Mortgages Trust 2007-1 -- Cl. I-M4 Currently Aa2, on review for possible downgrade, -- Cl. I-M5 Currently Aa3, on review for possible downgrade, -- Cl. I-M6, Downgraded to Baa2, previously A1, -- Cl. I-M7, Downgraded to B2, previously A3, MASTR Adjustable Rate Mortgages Trust 2007-3 -- Cl. 1-M1 Currently Aa1, on review for possible downgrade, -- Cl. 1-M2 Currently Aa2, on review for possible downgrade, -- Cl. 1-M3 Currently Aa3, on review for possible downgrade, -- Cl. 1-M4, Downgraded to Ba1, previously A1, -- Cl. 1-M5, Downgraded to B2, previously A2, -- Cl. 2-M6, Downgraded to A2, previously A1, -- Cl. 2-M7, Downgraded to Baa3, previously A3, -- Cl. 2-M8, Downgraded to B1, previously Baa1. MICHAEL HOLOKA: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------- Debtors: Michael Charles Holoka JoAnn Marlene Holoka 6958 Wicksbury Lane Rockford, IL 61114 Bankruptcy Case No.: 08-50016 Chapter 11 Petition Date: January 15, 2008 Court: Northern District of Florida (Panama City) Debtors' Counsel: Charles M. Wynn, Esq. Charles M. Wynn Law Offices, P.A. P.O. Box 146 Marianna, FL 32447 Tel: (850) 526-3520 Fax: (850) 526-5210 Total Assets: $2,816,626 Total Debts: $3,752,380 Debtors' list of their 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Amtrust Bank property located at: $38,659 P.O. Box 94712 10901 Front Beach ($299,000 Cleveland, OH 44101 Road #1605 - secured) CitiMortgage is the ($319,200 mortgage holder. senior lien) Mark and Virginia Taylor personal loan - this $28,000 10612 Ftont Beach Road debt is a joint debt P.O. Box 27346 with debtors business Panama City Beach, FL 32407 partner. Peggy C. Brannon Majestic Beach Towers $4,968 Tax Collector Unit #2202 - Indymac ($482,000 P.O. Box 2285 Bank is the mortgage secured) Panama City, FL 32402 holder. ($623,895 senior lien) property located at: $3,093 10901 #10605 - ($299,000 CitiMortgage is the secured) mortgage holder. ($357,859 senior lien) Condo. located at: $2,658 5115 Gulf Drive Unit ($239,167 #1705 on Panama City secured) Beach, FL. Regions (369,911 Bank is the senior lien) mortgage holder. Rhonda Skipper, Tax Collector Unit D-305 in the $5,963 Adagio Condo. ($715,000 Complex - located secured) in Walton County, ($895,679 Florida. senior lien) Countrywide Home Loans in the mortgage holder. Lot 45 - Watersound $3,221 Beach Phase 4 - ($399,000 Mortgage holder is secured) Whitney bank - ($900,00 Property is senior lien) foreclosure - Carver, Darden, Koretzky, Tessier, Finn, Blossman Hsbc/Bstby Charge Account - $7,769 Citi Credit Card $5,456 Majestic Beach Resort Majestic Beach Towers $2,174 Unit $2202 - Indymac ($482,000 Bank is the mortgage secured) holder. ($628,863 senior lien) property located at: $1,184 10901 Front Beach ($299,000 Road #10605 - secured) CitiMortgage is the ($360,952 mortgage holder. senior lien) Bank of America Credit Card $2,772 Seychelles Homowners Condo located at: $1,364 Associated Inc. 5115 Gulf Drive Unit ($239,167 #1705 on Panama City secured) Beach, FL. Regions ($372,569 Bank is the senior lien) mortgage holder. Watersound Beach Comm. Lot 45 - Watersound $947 Associations Inc. Beach Phase 4 - ($399,000 Mortgage holder is secured) Whitney Bank - ($903,221 Property is senior lien) foreclosure Nicor Gas Other Utility Company $280 MONEYGRAM INTERNATIONAL: In Negotiations for Recapitalization ------------------------------------------------------------- MoneyGram International Inc. said it is engaged in exclusive negotiations with an investment group led by Thomas H. Lee Partners L.P. concerning a comprehensive recapitalization of the company. The negotiations, the company said in a regulatory filing, currently contemplate a transaction pursuant to which the company would receive a capital infusion of both equity and debt capital, comprised of approximately $750-850 million of equity from the Investors and approximately $550-750 million of new debt facilities from third parties. The company also expects to have $350 million outstanding or available under its existing credit agreement. The investment would be conditioned upon, among other things, liquidation by the company of a significant portion of its existing investment portfolio. The company would expect to recognize losses in connection with that liquidation, if it occurs, which, in light of losses recognized on the securities sold in January, 2008, are likely to be substantially higher than the losses reflected in its Nov. 30, 2007 valuation. According to the company, the securities that would be acquired by the Investors in the transaction under discussion would currently be expected to give the Investors an initial equity interest in the company ranging from 60 to 65%, depending upon the amount of capital invested and the ultimate size of the losses realized upon the sale of certain assets within the company's securities portfolio. Given the nature of the securities comprising the company's current investment portfolio, the amount of capital required to be infused into the company and the initial equity interest may fall outside the ranges previously noted. The transaction is designed to provide sufficient capital to support realignment of the company's portfolio away from the risk associated with the asset-backed security market that it has faced in the recent past and to provide sufficient financial flexibility to support the long term needs of the business after the realignment. It is anticipated that the realigned portfolio will be comprised predominantly of government, government agency and municipal securities. As a result, the company anticipates that its profit margin will be adversely affected on a going forward basis by the lower yields in its realigned portfolio. The company anticipates that the negotiations will lead to execution of definitive documents this month, and to a funding in February. The company expects that any transaction agreement with the Investors would permit the board of directors to seek alternative investors and to terminate the transaction prior to funding to accept an offer that is superior for the shareholders subject to a customary break-up fee. The company also noted that its exclusive discussions with the Investors do not preclude discussions between the company and Euronet Worldwide Inc. or discussions with third parties pursuant to superior written offers. The company said it has executed a confidentiality agreement with Euronet and has provided confidential information to and engaged in discussions with representatives of Euronet. MoneyGram clarifies that neither the company nor any of the Investors has committed to the proposed transaction and no assurances can be given that the conditions necessary to reach a definitive agreement will be satisfied or that the company will enter into or consummate a transaction with any of the Investors or any other party. About MoneyGram International MoneyGram International, Inc. -- http://www.moneygram.com/-- (NYSE: MGI) is a payment services company. The company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram had $1.16 billion in revenue in 2006 and approximately 143,000 global money transfer agent locations in 170 countries and territories. MONEYGRAM INT'L: Gets January 31 Waiver from Lenders ---------------------------------------------------- MoneyGram International Inc. has obtained certain amendments and waivers until Jan. 31, 2008, under its bank lending agreements and a primary clearing agreement, the company said in a regulatory filing with the Securities and Exchange Commission. The company's bank lenders under its $350 million credit agreement and JPMorgan Chase, the lender under its $150 million 364-day credit facility, have each agreed to an amendment to those agreements through the end of the month. Pursuant to the amendments, the lenders have agreed to waive certain events of default arising by virtue of the investment portfolio losses expected to be reflected as impairments in the company's financial statements at year end, and certain related matters. A primary clearing bank has entered into a similar waiver. The amendments provide that the waivers are effective for net securities losses up to $1.5 billion. The company and the lenders also agreed to certain amendments to covenants and an increase in the interest rates payable during the waiver period. Conclusion of Strategic Review of the Payment Systems Segment The Board of Directors of MoneyGram has conducted a comprehensive review of the Payment Systems segment with the assistance of J.P. Morgan. As a result of the review, the company will restructure its Official Check business model by changing its commission structure, enabling the company to continue providing essential services by focusing on small to mid-sized institutions and exiting certain large customer relationships. The company expects to exit contracts with most of its top ten Official Check customers, who together account for approximately $2 billion of the company's Official Check payment obligations. Global Funds Transfer Segment Update According to the company, its Global Funds Transfer segment, which consists of money transfer (including urgent bill payment) and retail money orders, continues to experience strong growth driven by global migration trends. Money transfer transaction volume grew 25% in the fourth quarter of 2007. The money transfer agent network grew to 143,000 agent locations at the end of 2007, an increase of 30% from the prior year. The Global Funds Transfer segment continues to generate strong cash flow enabling it to fund investments in marketing, infrastructure and agent growth. About MoneyGram International MoneyGram International, Inc. -- http://www.moneygram.com/-- (NYSE: MGI) is a payment services company. The company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram had $1.16 billion in revenue in 2006 and approximately 143,000 global money transfer agent locations in 170 countries and territories. MONEYGRAM INT'L: Incurs Additional Net Unrealized Losses of $571MM ------------------------------------------------------------------ MoneyGram International Inc. disclosed in a regulatory filing with the Securities and Exchange Commission that it has completed the valuation of its investment portfolio as of Nov. 30, 2007, and has experienced additional net unrealized losses of $571 million from Sept. 30, 2007, bringing cumulative net unrealized losses to $860 million. According to the company, the additional losses largely result from deterioration in the value of the company's holdings of asset-backed securities, which were negatively impacted by changes in the credit ratings of the securities or the underlying collateral supporting these securities. The company said it has commenced a process to realign the portfolio away from asset-backed securities and into highly liquid assets. In January, 2008, the company sold $1.3 billion of securities, resulting in a realized loss of approximately $200 million, which was an incremental loss of approximately $100 million from the unrealized losses reflected as of November 30 as to these securities. The company said it is in the process of performing its year end pricing analysis and quarterly impairment review. It anticipates that significant additional losses will be recorded in December, and that a substantial charge for other-than- temporarily impaired securities will be taken against earnings in the fourth quarter. Investors are advised not to rely upon previously given guidance for 2007 results. The company explains that the losses in the portfolio do not immediately impact its cash flow but rather create a need for long-term capital to off-set the anticipated significant realized and unrealized losses in the investment portfolio. Moreover, the company said it currently has sufficient daily liquidity which comes primarily from settlements with customers supplemented by liquid portfolio assets, including cash and cash equivalents of $1.5 billion, and does not anticipate any issues related to daily liquidity provided its current customer relationships remain substantially in place. About MoneyGram International MoneyGram International, Inc. -- http://www.moneygram.com/-- (NYSE: MGI) is a payment services company. The company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram had $1.16 billion in revenue in 2006 and approximately 143,000 global money transfer agent locations in 170 countries and territories. MONEYGRAM INT'L: Losses Spur S&P to Cut Rating to BB from BBB ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its long-term counterparty credit rating on MoneyGram International to 'BB' from 'BBB'. The rating will remain on CreditWatch Negative, where it was placed on Dec. 13, 2007. "The downgrade follows MoneyGram's announcement that it has experienced significant, additional unrealized losses on its float investment portfolio, bringing cumulative net unrealized losses to $860 billion as of Nov. 30, 2007," said Standard & Poor's credit analyst Rian Pressman. As the company moves to restructure its Payment Systems business and the associated float investment portfolio, these losses, which heretofore have been recorded as adjustments to shareholder's equity, will be realized. Given that the realized loss on a $1.3 billion portion of the securities portfolio that was sold in January 2008 was double the unrealized loss reflected as of Nov. 30, 2007, the resulting effect on earnings may be more than $1.5 billion,"a large amount considering that net income for the first nine months of 2007 was $96 million. Earnings will be affected in fourth-quarter 2007, as MoneyGram takes permanent impairments on its subprime mortgage, CDO, and other ABS investments. Earnings could also be affected in subsequent quarters if the realized losses on these securities exceed the previously booked unrealized losses. MoneyGram also announced that it is in discussions with Thomas H. Lee Partners L.P., a private equity firm, regarding recapitalizing the company. The downgrade reflects the increased debt associated with this recapitalization, as this will increase leverage substantially above a level that is acceptable for an investment- grade rating. In addition, given the magnitude of the losses that S&P expects, it is unclear if the expected equity infusion would leave MoneyGram with an adequate level of tangible capital. Lastly, S&P is uncertain about what the expected 60%-65% initial ownership percentage by Thomas H. Lee Partners will mean for MoneyGram's strategy. The current plan calls for approximately $750 million-$850 million of equity to be invested, and MoneyGram would raise an additional $550 million-$750 million of new debt facilities from third parties. The funds would be used to buy government, agency, and municipal securities to rebuild its float portfolio (which, per clearing bank and regulatory agreements, must exceed its payment obligations associated with official check and money orders). MoneyGram also plans to shrink its Payment Systems business substantially by refocusing on small and midsize bank relationships; however, S&P believes this may take up to one year or longer to fully implement. S&P expects the resulting Payment Systems business to operate at substantially reduced profitability, and this reduced earnings power is also a factor in S&P's downgrade. Offsetting these concerns to a certain extent is the continuing strength of MoneyGram's money transfer business and adequate, short-term liquidity position. The company has $1.5 billion of cash available to meet the ongoing cash needs associated with the Payment Systems business and other operations. The CreditWatch Negative listing reflects the potential for further negative ratings action as events unfold. For example, the recapitalization agreement may not be implemented as currently envisioned because, for instance, the closing conditions are not met. Additional factors that may trigger further downgrades include higher-than-expected losses, an inability to obtain further amendments and waivers to bank lending agreements and a primary clearing agreement after Jan. 31, 2007, and adverse regulatory actions by state regulatory bodies. Any agreement with Thomas H. Lee Partners will allow MoneyGram's board to consider alternative offers, which may be consummated after the payment of a break-up fee. This includes ongoing discussions with Euronet Worldwide Inc. (BBB/Watch Pos/--), with whom MoneyGram recently signed a confidentiality agreement. The initial CreditWatch Negative listing was predicated on Euronet potentially acquiring MoneyGram. Although both entities are currently rated the same, the rating on a combined entity may differ. MONEYGRAM INT'L: Weak Portfolio Cues Moody's to Cut Corp. Rating ---------------------------------------------------------------- Moody's Investors Service downgraded the corporate family rating of MoneyGram International to Ba3 from Ba1. The rating remains under review for further possible downgrade. The downgrade reflects the company's continued deterioration in its investment portfolio due to exposure to subprime securities, including collateralized debt obligations, the risk that the company may have to take additional mark downs to its investment portfolio, as well as the additional financial leverage the company is expected to add to its balance sheet following MGI's announcement yesterday of a pending transaction with an investment group led by Thomas H. Lee. Management expects that the investment group will provide a capital infusion of both equity and debt capital, comprised of approximately $750-850 million of equity and $550-750 million of new debt facilities from third parties. The company also expects to have $350 million outstanding or available under its existing credit agreements. The company is required by state regulation and client contracts to maintain at least one-to-one coverage of its payment service obligations with assets that include these investments. The downgrade considers the continued decline in the value of the of the remaining ABS investments, as evidenced by the recent poor performance of the traded Asset Backed Index, as well as the uncertainty over further deterioration in the already weak residential housing market. The review for possible downgrade will continue to focus on the company's prospects to withstand further potential unrealized losses or writedowns of subprime and CDO securities within its investment portfolio, the financial flexibility provided by its internal and external liquidity sources, the potential outcome of the recapitalization negotiations with Thomas H. Lee, and whether its existing customer relationships remain substantially in place. Located in Minneapolis, Minnesota, MoneyGram International is a transaction processor of official check, money order, and money transfer services. MONEYGRAM INTERNATIONAL: Fitch Lowers Issuer Default Rating to BB- ------------------------------------------------------------------ Fitch Ratings has downgraded these ratings for MoneyGram International Inc.: -- Issuer Default Rating to 'BB-' from 'BBB-'; and -- Senior unsecured credit facility to 'BB-' from 'BBB-'; These ratings remain on Rating Watch Negative. Fitch's actions affect approximately $350 million of debt. Additionally, Fitch has withdrawn its short-term IDR rating of 'F3'. The downgrade and continuation of the Rating Watch Negative status reflect the following considerations: -- MoneyGram announced a planned recapitalization of the company due to significant losses in the company's investment portfolio. The recapitalization plan, which is not yet final, is expected to include an equity investment from Thomas H. Lee Partners of $750 million to $850 million in the form of convertible preferred shares as well as $550 million to $750 million of new debt. THL's investment is expected to represent a 60% to 65% equity stake in MoneyGram. -- Fitch estimates pro forma leverage for MoneyGram will range from approximately 6.0 times to 8.0x dependent upon the final amount of capital raised as well as the determination of equity credit for the preferred share issuance. As of Sept. 30, 2007, Fitch estimated leverage at 1.5x. -- The new financing is contingent upon MoneyGram divesting its portfolio of asset backed securities investments resulting in a significant operating loss and permanent decline in equity. As of Sept. 30, 2007, MoneyGram had approximately $4 billion in ABS investments. The size of the planned financing of $1.3 billion to $1.6 billion reflects the approximate size of the expected loss on the portfolio, an amount which is expected to be based on the final sale price of the ABS investments sold by MoneyGram, in addition to long-term capital needed to restructure the Official Check business. -- MoneyGram is altering the business model of its Official Check business which is expected to negatively impact profitability at the company over the next several quarters. The company intends to limit investments to government backed securities on a go forward basis resulting in lower yields on its portfolio. -- MoneyGram's planned recapitalization is expected to require amendments to or refinancing of the company's credit facility agreements which currently have financial covenant limitations as well as limitations on additional debt financing. Currently, MoneyGram has drawn the full amount of its $350 million credit facility, which expires in 2010. The company has received waivers of the debt to total capital requirement in its bank facilities through Jan. 31, 2008. -- MoneyGram's Global Funds Transfer business remains strong with December quarter transaction growth up 25% over the prior year period. Fitch estimates that the GFT business provides the majority of MoneyGram's EBITDA and should be largely unaffected by the losses in the Official Check business. However, the expected higher leverage resulting from the planned financing could impact MoneyGram's ability to compete for agent contracts longer term. Resolution of the Rating Watch Negative status is dependent upon these items: -- Final determination of the amount and terms and conditions of the recapitalization plan including the split between debt and convertible preferred shares. -- A new or amended credit facility to provide liquidity for the company beyond the $350 million currently outstanding on the company's bank facility. Fitch believes pro forma debt for MoneyGram will include the $350 million currently outstanding on the company's $350 million credit facility, the $550 million to $750 million in expected debt issuance plus the $750 million to $850 million in convertible preferred shares less a portion given equity credit. MORGAN STANLEY: Nine Tranches Obtains Moody's Junk Ratings ---------------------------------------------------------- Moody's Investors Service downgraded the ratings of 46 tranches and has placed under review for possible downgrade the ratings of 32 tranches from 9 deals issued by Morgan Stanley Mortgage Loan Trust in 2007. The collateral backing these classes consists of primarily first lien, fixed and adjustable-rate, Alt-A mortgage loans. The ratings were downgraded and placed under review for downgrade based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. In its re-rating Moody's has also applied its published methodology updates to the non delinquent portion of the transactions. Complete list of rating actions: Issuer: Morgan Stanley Mortgage Loan Trust 2007-10XS -- Cl. M-3, Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to A2, previously A1, -- Cl. M-5, Downgraded to A3, previously A2, -- Cl. M-6, Downgraded to Baa1, previously A3, -- Cl. B-1, Downgraded to Baa3, previously Baa1, -- Cl. B-2, Downgraded to Ba1, previously Baa2, -- Cl. B-3, Downgraded to Ba2, previously Baa3. Issuer: Morgan Stanley Mortgage Loan Trust 2007-11AR -- Cl. 1-A-2, Currently Aaa on review for possible downgrade, -- Cl. 2-A-2, Currently Aaa on review for possible downgrade, -- Cl. 2-A-4, Currently Aaa on review for possible downgrade, -- Cl. 2-A-6, Currently Aaa on review for possible downgrade, -- Cl. B-1, Currently Aa2 on review for possible downgrade, -- Cl. B-2, Downgraded to B3, previously A2, -- Cl. B-3, Downgraded to Caa2, previously Baa2, -- Cl. B-4, Downgraded to Caa3, previously Ba2. Issuer: Morgan Stanley Mortgage Loan Trust 2007-1XS -- Cl. M-3, Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to A2, previously A1, -- Cl. M-5, Downgraded to A3, previously A2, -- Cl. M-6, Downgraded to Baa1, previously A3, -- Cl. B-1, Downgraded to Baa2, previously Baa1, -- Cl. B-2, Downgraded to Ba1, previously Baa2, -- Cl. B-3, Downgraded to Ba3, previously Baa3. Issuer: Morgan Stanley Mortgage Loan Trust 2007-2AX -- Cl. 1-A, Currently Aaa on review for possible downgrade, -- Cl. 2-A-3, Currently Aaa on review for possible downgrade, -- Cl. 2-A-4, Currently Aaa on review for possible downgrade, -- Cl. M-1, Currently Aa1 on review for possible downgrade, -- Cl. M-2, Currently Aa2 on review for possible downgrade. -- Cl. M-3, Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to Baa2, previously A1, -- Cl. M-5, Downgraded to Ba1, previously A2, -- Cl. M-6, Downgraded to Ba2, previously A3, -- Cl. B-1, Downgraded to B1, previously Baa1, -- Cl. B-2, Downgraded to B3, previously Baa2, -- Cl. B-3, Downgraded to Caa3, previously Baa3. Issuer: Morgan Stanley Mortgage Loan Trust 2007-3XS -- Cl. M-2, Currently Aa2 on review for possible downgrade, -- Cl. M-3, Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to A2, previously A1, -- Cl. M-5, Downgraded to A3, previously A2, -- Cl. M-6, Downgraded to Baa1, previously A3, -- Cl. B-1, Downgraded to Baa3, previously Baa1, -- Cl. B-2, Downgraded to Ba1, previously Baa2, -- Cl. B-3, Downgraded to Ba3, previously Baa3. Issuer: Morgan Stanley Mortgage Loan Trust 2007-5AX -- Cl. 1-A, Currently Aaa on review for possible downgrade, -- Cl. 2-A-3, Currently Aaa on review for possible downgrade, -- Cl. 2-A-4, Currently Aaa on review for possible downgrade, -- Cl. M-1, Currently Aa1 on review for possible downgrade, -- Cl. M-2, Currently Aa2 on review for possible downgrade, -- Cl. M-3, Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to Ba2, previously A1, -- Cl. M-5, Downgraded to B3, previously A2, -- Cl. M-6, Downgraded to Caa1, previously A3, -- Cl. B-1, Downgraded to Caa3, previously Baa1, -- Cl. B-2, Downgraded to Ca, previously Baa2, -- Cl. B-3, Downgraded to C, previously Baa3. Issuer: Morgan Stanley Mortgage Loan Trust 2007-6XS -- Cl. B-3, Downgraded to Ba1, previously Baa3, Issuer: Morgan Stanley Mortgage Loan Trust 2007-7AX -- Cl. 1-A, Currently Aaa on review for possible downgrade, -- Cl. 2-A-3, Currently Aaa on review for possible downgrade, -- Cl. 2-A-4, Currently Aaa on review for possible downgrade, -- Cl. 2-A-5, Currently Aaa on review for possible downgrade, -- Cl. 2-A-6, Currently Aaa on review for possible downgrade, -- Cl. M-1, Currently Aa1 on review for possible downgrade, -- Cl. M-2, Currently Aa2 on review for possible downgrade, -- Cl. M-3, Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to B1, previously A1, -- Cl. M-5, Downgraded to B3, previously A2, -- Cl. M-6, Downgraded to Caa1, previously A3, -- Cl. B-1, Downgraded to Caa2, previously Baa1, -- Cl. B-2, Downgraded to Caa3, previously Baa2, -- Cl. B-3, Downgraded to C, previously Baa3. Issuer: Morgan Stanley Mortgage Loan Trust 2007-8XS -- Cl. M-1, Currently Aa1 on review for possible downgrade, -- Cl. M-2, Currently Aa2 on review for possible downgrade, -- Cl. M-3, Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to Baa1, previously A1, -- Cl. M-5, Downgraded to Baa3, previously A2, -- Cl. M-6, Downgraded to Ba1, previously A3, -- Cl. B-1, Downgraded to Ba2, previously Baa1, -- Cl. B-2, Downgraded to Ba3, previously Baa2, -- Cl. B-3, Downgraded to B3, previously Baa3. MORGAN STANLEY: S&P Puts BB- Note Rating on Developing Watch ------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'BB-' rating on the $3 million class A-11 secured fixed-rate notes from Morgan Stanley ACES SPC's series 2006-8 on CreditWatch with developing implications. The rating action reflects the Jan. 11, 2008, placement of the ratings on Rock-Tenn Co.'s senior unsecured debt on CreditWatch developing. Series 2006-8 is a $46 million credit-linked note transaction. The rating on each class of notes from this series is based on the lowest of -- (i) the ratings on the respective reference obligations for each class (with respect to class A-11, the senior unsecured notes issued by Rock-Tenn Co., {'BB-/Watch Dev'}); (ii) the rating on the guarantor of the counterparty to the credit default swap, the interest rate swap and the contingent forward agreement, (in each instance, Morgan Stanley {'AA-'}); and (iii) the rating on the underlying securities, BA Master Credit Card Trust II's class A certificates from series 2001-B due 2013 ('AAA'). MORTGAGE CAPITAL: Fitch Revises DRR on 'CCC' Rated Cert. to DR3 --------------------------------------------------------------- Fitch Ratings revises the Distressed Recovery rating of Mortgage Capital Funding, Inc.'s commercial mortgage pass-through certificates, series 1998-MC1, as: -- $20.5 million class M to 'CCC/DR3' from 'CCC/DR2'. In addition, Fitch affirms these classes: -- Interest-only class X at 'AAA'; -- $64.7 million class E at 'AAA'; -- $12.9 million class F at 'AAA'; -- $38.8 million class G at 'AAA'. Fitch does not rate the $51.8 million class H, $12.9 million class J, $12.9 million class K, $32.4 million class L, or $6.8 million class N certificates. The class A-1, A-2, B, C and D certificates have paid in full. The class M DR rating is revised to 'CCC/DR3' from 'CCC/ DR2' based on actual and anticipated losses The affirmations of classes E, F and G are based on the expectation that these classes will pay in full. Currently, 16 loans (33.6%) are defeased, including three of the top five loans (25.2%). All but two (1.9%) of the defeased loans have matured and the payoffs are expected to be reflected in the January 2008 distribution date. At that time, classes E, F and G will be paid in full. As of the December 2007 distribution date, the pool has paid down 85.1% to $193.2 million from $1.29 billion at issuance. All of the remaining loans mature by March 2008. There was one loan (1.6%), a non-performing balloon asset, in special servicing as of the December 2007 distribution. The loan is secured by a multifamily property in Jackson, Michigan. The property was paid off at a discount in late December 2007 and proceeds and realized losses will be reflected in the January 2008 distribution. A second loan (2.1%), secured by a retail center in Columbus, OH, was transferred to special servicing in January 2008 due to maturity default and losses are possible. Realized and expected losses from the specially serviced loans are expected to impact class M. Additional losses are possible if the remaining loans are unable to refinance at their upcoming maturity dates. MORTGAGE LENDERS: Four Lenders Want Automatic Stay Terminated ------------------------------------------------------------- Four creditors in Mortgage Lenders Network USA Inc. separately ask the U.S. Bankruptcy Court for the District of Delaware to lift the automatic stay imposed, including defaults under certain notes and superior liens in connection with 10 real properties located at: 1) 40 Hoopa Court, in Sacramento, California 95820; 2) 106 Eldert Street, in Brooklyn, New York 11206; 3) 193 Martin Road, in Huguenot, New York 12746; 4) 236 Sunny Acre Drive, in Mount Juliet, Tennessee 37122; 5) 389 Green Hollow Road, in Plainfield, Connecticut 06239; 6) 1444 South Main Street, in Orem, Utah 84058; 7) 2303 North 75 E., in Layton, Utah 84041; 8) 2305 Pacific Street, in Brooklyn, New York 11233; 9) 3630 SW 32 Avenue, in West Park, Florida 33023 and 10) 130-04 160th Street, in Jamaica, New York 11434. Avelo Mortgage LLC, Countrywide Home Loans Inc., Lehman Brothers Inc., and Wilshire Credit Corp. ask the Court to terminate the automatic stay to exercise their rights, including foreclosures on the Properties. Adam Hiller, Esq., at Draper & Goldberg, PLLC, in Wilmington, Delaware, relates that Avelo Mortgage, et al., are the current holders of the Properties' mortgages and notes. He adds that review of the Properties' titles shows that Mortgage Lenders Network USA, Inc., may hold a lien junior to the Mortgages. Mr. Hiller informs the Court that the obligors of the Properties are in default under the Notes, thus, Avelo Mortgage, et al., seek to exercise their non-bankruptcy rights and remedies with respect to the Notes, including the enforcement of their rights against the Mortgages. Because the Debtor's Junior Mortgages are subordinate to Avelo Mortgage, et al.'s Mortgages, the Debtor has no equity in the Properties, Mr. Hiller says. In addition, because the Junior Mortgages add little or no value to the bankruptcy estate, the Properties are not necessary for the Debtor's reorganization, Mr. Hiller tells the Court. Hence, Mr. Hiller contends, relief from the automatic stay is appropriate to permit Avelo Mortgage, et al., to exercise their rights and remedies with respect to the Mortgages. A continued stay of Avelo Mortgage, et al.'s action against the Obligors and the Properties will cause significant prejudice to Avelo Mortgage, et al., Mr. Hiller notes. Therefore, he asserts, "cause" exists to terminate the automatic stay. Middletown, Connecticut-based Mortgage Lenders Network USA Inc. -- http://www.mlnusa.com/-- is a privately held company offering a full range of Alt-A/Non-Conforming and Conforming loan products through its retail and wholesale channels. The company filed for chapter 11 protection on Feb. 5, 2007 (Bankr. D. Del. Case No. 07- 10146). Pachulski Stang Ziehl & Jones LLP represents the Debtor. Blank Rome LLP represents the Official Committee of Unsecured Creditors. In the Debtor's schedules of assets and liabilities filed with the Court, it disclosed total assets of $464,847,213 and total debts of $556,459,464. The Debtor's exclusive period to file a chapter 11 plan of reorganization is set to expire on Jan. 22, 2008. (Mortgage Lenders Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). MORTGAGE LENDERS: Sovereign Bank Wants Automatic Stay Lifted ------------------------------------------------------------ Sovereign Bank, a creditor in Mortgage Lenders Network USA Inc., asks the U.S. Bankruptcy Court for the District of Delaware to terminate the automatic stay to allow it to exercise its rights against a parcel of real property located at 1303 Alton Road, in Lawrenceburg, Kentucky 40342. Robert T. Aulgur, Jr., Esq., at Whittington and Aulgur, in Middletown, Delaware, relates that borrowers Mark and Julie Templeton executed a note in favor of Mortgage Lenders Network USA Inc., in the principal sum of $77,200. Note 1 is secured by a first priority perfected lien against the Property, and the mortgage was assigned to BankBoston, NA, who subsequently assigned Note 1 and the Mortgage to Chase Manhattan Bank, as trustee for the BankBoston Home Equity Loan Trust. Mr. Aulgur further relates that the Borrowers also executed a second note in favor of the Debtor in the principal sum of $19,300, which is secured by a second priority perfected lien against the Property. The Debtor still holds the Mortgage for Note 2 on the Property. On March 22, 2007, the servicing of the First Mortgage was transferred to Sovereign Bank, Mr. Aulgur says. He adds that the Borrowers are contractually delinquent on the First Mortgage and a foreclosure proceeding is pending. Sovereign Bank's Broker Price Opinion lists the market value of the Property as $124,000, before deducting costs of sale, broker's fees, and other fees, which might be incurred in the liquidation of the Property, Mr. Aulgur relates. He notes that the payoff on the First Mortgage is $79,174, as of Dec. 19, 2007. He further relates that in addition to the Second Mortgage held by the Debtor, there are a number of open tax liens, including a federal tax lien of $28,352. He contends that based upon the additional encumbrances, there appears to be no equity in the Property. Because the Debtor's junior Mortgage adds little or no value to the bankruptcy estate, the Property is not necessary for Debtor's reorganization, Mr. Aulgur tells the Court. Hence, the sought relief from the automatic stay of Section 362 of the Bankruptcy Code is appropriate to permit Sovereign Bank to exercise its non- bankruptcy rights and remedies with respect to the Property, Mr. Aulgus asserts. Sovereign Bank does not know if the Property is insured or if it is being maintained, therefore, its interest in not adequately protected, Mr. Aulgur tells Judge Walsh. Middletown, Connecticut-based Mortgage Lenders Network USA Inc. -- http://www.mlnusa.com/-- is a privately held company offering a full range of Alt-A/Non-Conforming and Conforming loan products through its retail and wholesale channels. The company filed for chapter 11 protection on Feb. 5, 2007 (Bankr. D. Del. Case No. 07- 10146). Pachulski Stang Ziehl & Jones LLP represents the Debtor. Blank Rome LLP represents the Official Committee of Unsecured Creditors. In the Debtor's schedules of assets and liabilities filed with the Court, it disclosed total assets of $464,847,213 and total debts of $556,459,464. The Debtor's exclusive period to file a chapter 11 plan of reorganization is set to expire on Jan. 22, 2008. (Mortgage Lenders Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). MORTGAGE LENDERS: Says Arizona Property Not a Bankruptcy Estate --------------------------------------------------------------- Mortgage Lenders Network USA Inc. tells the the U.S. Bankruptcy Court for the District of Delaware that the request of Bayview Loan Servicing LLC, is based on the mistaken belief that the junior mortgage, in connection with a real estate property at 2142 East Orangewood Avenue, in Phoenix, Arizona 85020, is property of the Debtor's bankruptcy estate. Previously, Bayview Loan asked the Court to lift the automatic stay imposed, including defaults under certain notes and superior liens in connection with a real estate property at Phoenix, Arizona. Bayview Loan wanted to foreclose on its mortgage against the Property, in which Mortgage Lenders, has a possible junior security interest. Bayview Loan has recorded a "Notice of Trustee's Sale" in the Superior Court of the state of Arizona, for the sale of the Property. Bayview Loan asked the Court to lift the stay and allow it, or any other purchaser at Sheriff's sale, to take legal action for enforcement of its right to possession of the Premise. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, contended that the Debtor has not had any equitable interest in the Junior Mortgage since it was assigned to Asset Management Holdings LLC, and any possible legal interest was transferred when a new servicer was assigned. Thus, the Junior Mortgage is not property of the estate, she asserts. Bayview Loan does not need to seek the Court's approval to foreclose on a property, in which the Debtor holds no interest, Ms. Jones noted. She added that proposed actions against properties that are not part of the bankruptcy estate are not prohibited by the automatic stay, and the Court is not required to consider requests that are not related to the estate property. As the Junior Mortgage is held and serviced by Asset Management, Bayview would provide notice to Asset Management of the intent to foreclose on the Senior Mortgage, Ms. Jones said. She noted that the Debtor has no interest in any foreclosure action related to the Senior or Junior Mortgage, hence, there is no need for the Court to enter an order to provide comfort for Bayview Loan's exercise of its rights not related to the case. Ms. Jones declared that the Debtor does not oppose Bayview Loan's ability to foreclose on the Property to the extent that Bayview Loan's recovery is limited to the Property itself. However, the Debtor reserves its right to challenge any future liability or obligation alleged by Bayview Loan related to either the Senior Mortgage or Junior Mortgage. Middletown, Connecticut-based Mortgage Lenders Network USA Inc. -- http://www.mlnusa.com/-- is a privately held company offering a full range of Alt-A/Non-Conforming and Conforming loan products through its retail and wholesale channels. The company filed for chapter 11 protection on Feb. 5, 2007 (Bankr. D. Del. Case No. 07- 10146). Pachulski Stang Ziehl & Jones LLP represents the Debtor. Blank Rome LLP represents the Official Committee of Unsecured Creditors. In the Debtor's schedules of assets and liabilities filed with the Court, it disclosed total assets of $464,847,213 and total debts of $556,459,464. The Debtor's exclusive period to file a chapter 11 plan of reorganization is set to expire on Jan. 22, 2008. (Mortgage Lenders Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945- 7000). MORTGAGEIT SECURITIES: Moody's Lowers Ratings on Six Tranches ------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 6 tranches and has placed under review for possible downgrade the ratings of 3 tranches from MortgageIT Securities Corp. Mortgage Loan Trust, Series 2007-1. Additionally, one downgraded tranche remains on review for possible further downgrade. The collateral backing these classes consists of primarily first lien, fixed and adjustable-rate, Alt-A mortgage loans. The ratings were downgraded and placed under review for downgrade based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. In its re-rating Moody's has also applied its published methodology updates to the non delinquent portion of the transactions. Complete list of rating actions: Issuer: MortgageIT Securities Corp. Mortgage Loan Trust, Series 2007-1 -- Cl. M-1, Currently Aa1 on review for possible downgrade, -- Cl. M-2, Currently Aa2 on review for possible downgrade, -- Cl. M-3, Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to A3, previously A1, -- Cl. M-5, Downgraded to Baa2, previously A2, -- Cl. M-6, Downgraded to Baa3, previously A3, -- Cl. M-7, Downgraded to Ba3, previously Baa1, -- Cl. M-8, Downgraded to B1, previously Baa2, -- Cl. M-9, Downgraded to B3 on review for possible further downgrade, previously Baa3. MOVIE GALLERY: Court Okays Procedures to Determine Cure Amounts --------------------------------------------------------------- The Honorable Douglas O. Tice of the U.S. Bankruptcy Court for the Eastern District of Virginia approved Movie Gallery Inc. and its debtor-affiliates' cure procedures to determine the amounts that arose under prepetition leases that are not subject to postpetition audit or adjustment. The Debtors are allowed, in their sole discretion, to resolve any disputes related to cure amounts by mutual agreement with the Lessor and without further Court order. Furthermore, any party-in-interest that fails to file and serve a Cure Statement in a timely manner will be forever barred, estopped and enjoined from asserting, collecting or seeking any amounts on account of the cure amounts in excess of the amounts in the Cure Notice. In the same manner, the Debtors will be forever discharged from any and all related indebtedness or liability. Any determination of cure amounts will apply to prepetition amounts only and will not be deemed to have established the total applicable default amounts that must be cured or compensation payable for any resulting pecuniary loss. "The Order is not deemed to affect the right of any Lessor to contest the Debtors' statement of postpetition amounts due at the time of assumption or to object to assumption on other non- monetary grounds," Judge Tice clarified. Actions by any party-in-interest taken in accordance with Cure Procedures will not be deemed as an assumption, adoption, rejection or termination of any Lease or an acceptance that any Lease is executory or unexpired. Moreover, the Debtors explicitly reserve their rights, in their sole discretion, to reject or assume any Lease pursuant to Section 365(a) of the Bankruptcy Code. Judge Tice further ruled that the Order does not: (i) alter the prepetition nature of the Leases or the validity, priority or amount a Lessor's against the Debtors under the Leases; (ii) create a postpetition contract or agreement; or (iii) elevate to administrative expense priority any claims of a Lessor against the Debtors under the Leases. A full text copy of the Cure Amount Procedures is available for free at: http://researcharchives.com/t/s?2706 About Movie Gallery Based in Dothan, Alabama, Movie Gallery Inc. -- http://www.moviegallery.com/-- is a home entertainment specialty retailer. The company owns and operates 4,600 retail stores that rent and sell DVDs, videocassettes and video games. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak Rock LLP, is the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. When the Debtors' filed for protection from their creditors, they listed total assets of $891,993,000 and total liabilities of $1,419,215,000. The Official Committee of Unsecured Creditors has selected Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B. Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at Miles & Stockbridge PC, as its local counsel. The Debtors' spokeswoman Meaghan Repko said that the company does not expect to exit bankruptcy protection before the second quarter of 2008. The Debtors have asked the Court to extend their plan- filing exclusive periods to June 13, 2008. (Movie Gallery Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) MOVIE GALLERY: Wants CIO Seth Levy's Employment Terms Approved -------------------------------------------------------------- Movie Gallery Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Virginia to approve the employment agreement it entered into with Seth Levy as chief information officer to manage their operations with respect to information technology. Upon Court approval, the employment agreement will become effective and will continue for 12 months with annual one-year extensions. Peter J. Barrett, Esq., at Kutak Rock LLP, in Richmond, Virginia, recounts that the Debtors' chief information officer resigned in April 2007, and was replaced by John Rossman from Alvarez & Marsal Business Consulting, LLC, on an interim basis. Mr. Rossman, however, resigned in October 2007. The Debtors determined that Mr. Levy's extensive experience in managing information technology projects for large retail companies qualifies him to manage the Debtors' related operations. Notably, Mr. Levy served as senior vice president for Logistics, chief information officer for Electronic Boutique Holdings, president of EB Games Online, and director for Systems and Programming in May Department Stores Company, Mr. Barrett discloses. Pursuant to the Agreement, Mr. Levy will perform his duties as chief information officer, as assigned by the chief executive officer of Movie Gallery, Inc. He will also receive an annual salary of $325,000, and a sign-on bonus of $75,000. Additionally, Mr. Levy will be entitled to participate in Movie Gallery, Inc.'s executive officer bonus program and other incentives, cash and equity compensation plans as determined by the Board of Directors. In the event that Mr. Levy is terminated, he agrees not to compete with the Debtors for a period of one year from his termination. The Debtors and Mr. Levy have also agreed, notwithstanding anything to the contrary in the Agreement, that Mr. Levy is not entitled to the severance benefits upon his termination. About Movie Gallery Based in Dothan, Alabama, Movie Gallery Inc. -- http://www.moviegallery.com/-- is a home entertainment specialty retailer. The company owns and operates 4,600 retail stores that rent and sell DVDs, videocassettes and video games. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak Rock LLP, is the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. When the Debtors' filed for protection from their creditors, they listed total assets of $891,993,000 and total liabilities of $1,419,215,000. The Official Committee of Unsecured Creditors has selected Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B. Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at Miles & Stockbridge PC, as its local counsel. The Debtors' spokeswoman Meaghan Repko said that the company does not expect to exit bankruptcy protection before the second quarter of 2008. The Debtors have asked the Court to extend their plan- filing exclusive periods to June 13, 2008. (Movie Gallery Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) NITROMED INC: Plans to Reduce Work Force from 90 to 20 Positions ---------------------------------------------------------------- NitroMed Inc. has implemented a restructuring plan that will eliminate approximately 70 positions over the next month, reducing headcount from approximately 90 to 20. The company anticipates that headcount may be further reduced over the next several months. The company is discontinuing its sales and promotional activities for BiDil, although the company intends to keep BiDil available and on the market for patients. The company estimates that it will record restructuring charges in a range of approximately $2.5 million to $3.0 million in the first quarter of 2008. The company has engaged an investment banking firm, Cowen and Company, to advise on strategic alternatives. Minutes of December 2007 FDA Meeting NitroMed also said it received minutes of its Dec. 10, 2007 meeting with the U.S. Food and Drug Administration during which the development plan of an extended release formulation of BiDil aka BiDil XR, was discussed. The agency agreed that NitroMed's clinical development plan to conduct bioequivalence and pharmacodynamic studies comparing an extended release formulation of BiDil to the current commercial immediate release formulation of BiDil is acceptable. The plan could support FDA approval to commercialize BiDil XR, if bioequivalence is demonstrated. The bioequivalence study design compares the pharmacokinetics of the XR formulation to the pharmacokinetics of the immediate release formulation. The adequacy of the results will ultimately be determined during the regulatory review period. BiDil is an orally-administered medicine approved in the United States for the treatment of heart failure in self-identified black patients. BiDil is presently dosed three times daily and the company is seeking to develop a once-a-day formulation. Management Comments NitroMed's Chief Executive Officer Kenneth M. Bate said, "We are very pleased with both the FDA's reaction to our proposed program for BiDil XR and with the results we achieved in our pharmacokinetic studies. We believe that our ability to successfully advance the goal of commercializing BiDil XR is now within reach, especially because our successes with formulation prototypes developed to date suggest bioequivalence may be demonstrated. Mr. Bate continued, "We find ourselves at an important strategic juncture. We believe that BiDil is promotionally sensitive, and we have seen new prescriptions for BiDil increase by approximately 8-9% from the third quarter to the fourth quarter in 2007 as we heightened our marketing efforts and increased our field force. However, we believe that in order for BiDil to achieve its full potential, a larger marketing and sales effort than we can presently generate is required. In addition, NitroMed also faces a challenging capital market environment. "Discussions with the FDA were productive and we remain optimistic about our ability to continue on schedule with our clinical work on BiDil XR," said Mr. Bate. "We anticipate that a formulation could be finalized in 2008, with a goal of initiating pivotal bioequivalence trials in 2009, and a planned filing of the New Drug Application in 2010. In light of the operational considerations we currently face with regard to both BiDil and BiDil XR, we retained Cowen and Company to advise us on exploring strategic options to maximize shareholder value. Furthermore, in order to conserve cash, NitroMed is today suspending sales and marketing activities for BiDil and is implementing a plan to significantly reduce headcount over the next several months. NitroMed intends to continue to sell BiDil, but we are maintaining only essential functions. As part of our ongoing commitment to patients currently taking BiDil, NitroMed will be working with distributors and health care providers to ensure the availability of BiDil." About NitroMed Inc. Lexington, Massachusetts-based NitroMed Inc. (NASDAQ: NTMD) -- www.nitromed.com/ -- is an emerging pharmaceutical company and the maker of BiDil(R) (isosorbide dinitrate/hydralazine hydrochloride), an orally administered medicine available in the United States for the treatment of heart failure in self- identified black patients. BiDil is indicated for the treatment of heart failure as an adjunct to current standard therapy, to improve survival, prolong time to hospitalization for heart failure and improve patient-reported functional status. There is little experience in patients with New York Heart Association class IV heart failure. Most patients in the clinical trial supporting effectiveness, referred to as A-HeFT, received, in addition to BiDil or placebo, a loop diuretic, an angiotensin converting enzyme inhibitor or an angiotensin II receptor blocker, and a beta blocker, and many also received a cardiac glycoside or an aldosterone antagonist. OCWEN FINANCIAL: Proposed Buy-Out Cues Moody's Rating Reviews ------------------------------------------------------------- Moody's Investors Service placed all ratings of Ocwen Financial Corp. (Senior Unsecured Shelf (P)B2) on review with direction uncertain. The review was prompted by Ocwen's announcement that its Board of Directors has received an offer from an investor group to acquire all of the outstanding common stock of the company. The investor group is comprised of Ocwen's current chairman and CEO and investment funds managed by Oaktree Capital Management, L.P. and Angelo, Gordon, and Co., L.P. The review will focus on the proposed acquisition that could represent a change in the capital structure of the company, if approved and closed. Given an initial review of the transaction, Moody's notes that leverage could decline from its current levels (as stated in the offer letter); if the transaction is executed, the credit profile could improve. However, Moody's review with direction uncertain is based upon the uncertainty regarding the final capitalization of the enterprise. In addition, depending on the decision by Ocwen's Board, it is possible the company could receive and evaluate other strategic alternatives. This brings added uncertainty to the ultimate capital structure of the company. Moody's stated that it will also evaluate the terms and the structure of the transaction. Moody's recognizes that there are "change of control" provisions in the Junior Subordinated Debentures due 2027 (rated Caa1) that allow the holders of the securities to require the company to repurchase the debentures. These ratings were placed on Review with direction uncertain: Ocwen Financial Corporation -- Senior Unsecured Shelf(P)B2 -- Junior Subordinated Shelf(P)Caa1 -- Preferred Shelf(P)Caa2 Ocwen Capital Trust I -- Backed Preferred StockCaa1 Ocwen Capital Trust II -- Backed Preferred Shelf(P)Caa1 Ocwen Financial Corporation is a financial services company with headquarters in West Palm Beach, Florida. The company reported assets of $2.1 billion as of Sept. 30, 2007. OCWEN FINANCIAL: S&P Ratings Unmoved by Going Private Plan ---------------------------------------------------------- Standard & Poor's Ratings Services said that Ocwen Financial Corp.'s (B-/Stable/--) plan to take the company private will not have an impact on the rating or outlook. In general, S&P views transactions that remove the scrutiny of public attention and transparency in disclosure as negative. Nevertheless, broad shifts in strategy, like this transaction, are accounted for in S&P's current rating on OCWEN. In addition, S&P views OCWEN's plan to complete the transaction without increasing debt levels as a positive. OMI MEDICAL: Files for Chapter 11 Protection in Florida ------------------------------------------------------- OMI Medical Imaging, Inc., and certain affiliated companies filed for Chapter 11 protection with the U.S. Bankruptcy Court for the Southern District of Florida on Jan. 15, 2008. Since the Deficit Reduction Act reimbursement cuts took effect on Jan. 1, 2007, the company has been unable to meet certain financial obligations to its secured lenders. OMI operates 21 free standing imaging centers, providing MRI and CT procedures. The centers are primarily located in Dade, Broward and Palm Beach counties. During the bankruptcy proceedings, OMI will maintain normal business operations for their referring physicians, patients and employees. The company will continue to focus its efforts on providing quality service to its patients. "We are very optimistic about the future of our business," Chief Executive Officer Nelson Acosta stated. "The Chapter 11 filing will allow us to reorganize and restructure our operations so that we can fine tune our business and focus on providing the best possible service to our referring physicians and their patients. This is a very positive step to ensure the future viability of our company in a very challenging time for the medical imaging industry." OMI has retained the services of GlassRatner Advisory & Capital Group, LLC to assist in restructuring its operations during the Chapter 11 proceeding. Thomas Santoro, a principal with GlassRatner, has been named Chief Restructuring Officer and will work with Mr. Acosta and the existing management team to develop and execute a plan to emerge from Chapter 11. Mr. Santoro has extensive experience leading companies through reorganizations and has held senior executive positions with several healthcare companies that successfully dealt with financial and operational challenges. OMI's legal advisors are Shutts & Bowen, LLP. About OMI Medical Imaging OMI Medical Imaging provides MRI and CT diagnostic services in Florida, with 21 convenient outpatient facilities. OMI operates nine open MRI units, eight high-field, short bore units and four CT units. OMI makes MRI and CT available and comfortable for all patients. PACIFIC LUMBER: BoNY Asks Court to Appoint Chapter 11 Trustee ------------------------------------------------------------- Pursuant to Section 1104 of the Bankruptcy Code, the Bank of New York Trust Company N.A., as Indenture Trustee for the Timber Notes, asks the United States Bankruptcy Court for the Southern District of Texas to appoint a Chapter 11 trustee in The Pacific Lumber Company/Scotia Pacific Company LLC and its debtor- affiliates' bankruptcy proceedings. On the Indenture Trustee's behalf, Toby L. Gerber, Esq., at Fulbright and Jaworski L.L.P., in Houston, Texas, contends that from the outset of the Debtors' jointly administered case, the officers and directors of Scopac have repeatedly violated the fundamental duties of a debtor-in-possession. Mr. Gerber asserts that the persons entrusted with managing the business and financial affairs of Scopac have abdicated their independent control of Scopac, have failed to preserve the corporate independence of Scopac, and have engaged in financial and business activities which have caused substantial harm to the Scopac estate and its creditors. While management was violating its duties as a debtor-in- possession, the Scopac officers and directors repeatedly assured the Court that Scopac was financially sound; had sufficient liquidity to last well into 2008; and could and would promptly propose a confirmable plan of reorganization, Mr. Gerber points out. "We now know that those assurances were false," Mr. Gerber contends. Instead of fostering the financial rehabilitation of Scopac, Mr. Gerber notes, Scopac's management instead sought to transfer value to the Pacific Lumber Company, seriously jeopardized Scopac's ability to survive as a going concern. Mr. Gerber further notes that in acquiescing to MAXXAM and PALCO- imposed business practices, Scopac's management: (a) permitted PALCO to breach the contractual relationship between PALCO and Scopac; (b) depleted much of Scopac's working capital; (c) deprived Scopac of cash from the immediate sale of harvested logs; (d) shifted from PALCO to Scopac the risk of maintaining the inventory of logs; (e) caused the loss of the additional growth, and, thus, the additional value, of trees harvested long before PALCO bought them; and (f) bound Scopac to make an involuntary, non-interest bearing DIP loan to PALCO. The liquidity problems caused by Scopac's management, Mr. Gerber tells the Court, are evidenced by Scopac's most recent budget which shows that by the end of March 2008, Scopac will be nearly $7,000,000 short of the cash position its Vice President of Finance & Administration and Chief Financial Officer projected only three months ago. Moreover, he adds, from September 2007 through December 2007, Scopac burned through the $8,100,000 of cash collateral it had on hand. Even Scopac's management's recent projections indicate that the company will have depleted its Scheduled Amortization Reserve Account by as much as $3,900,000 in mid-March 2008. Scopac now claims to need postpetition financing to meet its administrative obligations, Mr. Gerber notes. In addition, Scopac's management has disclosed it will need to pay Bank of America, a lender with comprehensive knowledge of Scopac's financial condition, $150,000 merely to consider making a new loan -- thus for all intents and purposes admitting that Scopac may be administratively insolvent as a result of management's actions, he points out. For these reasons, the Indenture Trustee believes that the appointment of a Chapter 11 Trustee is necessary. "Until independent management is installed, Scopac will continue to intentionally transfer value to PALCO thereby sustaining unnecessary and substantial losses, and its ability to successfully reorganize will be severely prejudiced," Mr. Gerber asserts. About Pacific Lumber Based in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co- counsel. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors filed their Joint Plan of Reorganization on Sept. 30, 2007, which was amended on Dec. 20, 2007. The Debtors' exclusive plan filing period expires on Feb. 29, 2008. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 41, http://bankrupt.com/newsstand/or 215/945-7000). PACIFIC LUMBER: Court Okays Terms of Log Purchase Pact with MAXXAM ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Texas has approved the terms of a log/lumber purchase agreement between the Pacific Lumber Company and MAXXAM, under which PALCO agrees to sell, and MAXXAM agrees to purchase, redwood logs. The Hon. Richard S. Schmidt held that once the the Purchase Agreement is consummated, the Parties will be entitled to the full protections of the Court's Approval Order, regardless of whether the Order is later stayed, modified or vacated, and regardless of whether PALCO's request is later approved on a final basis. Indenture Trustee Objects The Bank of New York Trust Company, N.A., as Indenture Trustee for the Timber Notes, has an approximately $900,000,000 secured claim against Scotia Pacific Company LLC, Zack A. Clement, Esq., at Fulbright and Jaworski L.L.P., in Houston, Texas, states. The logs and lumber which are the subject of the proposed sales from PALCO to MAXXAM were acquired by PALCO from Scopac. From time to time PALCO remains obligated to Scopac for unpaid logs and lumber. In fact, pursuant to agreements with Scopac, PALCO has ongoing obligations to cut Scopac's timber at PALCO's expense, and to buy timber from Scopac at least at SBE prices. Thus, the Indenture Trustee objects to any sale of the redwood logs to MAXXAM until PALCO provides sufficient evidence that Scopac has been fully paid for the property being transferred to MAXXAM. The Indenture Trustee says it is also concerned as to whether PALCO is financially viable enough to carry out its continuing contractual duties. The Indenture Trustee notes that PALCO is proposing to sell logs to its parent, MAXXAM, at a time when log prices are extremely low, raising the need for substantial scrutiny of the nature of the proposed transaction, and the proposed use of the funds. Moreover, PALCO's principal secured creditor, Marathon Structured Finance Fund L.P., will not extend any more credit to PALCO, Mr. Clement tells the Court. "As a result, PALCO apparently has no other access to cash and now proposes these sales, which appear to be not true sales at all, but rather a disguised financing that Marathon is apparently willing to tolerate," he says. If, as it appears, MAXXAM is attempting to provide PALCO with funding for a confirmation dispute to assert an equity interest in Scopac, MAXXAM should be required to provide the funding as an equity contribution, not as an asset sale, Mr. Clement asserts. For these reasons, the Indenture Trustee asks the Court to: (a) require PALCO to provide it with proper and timely written notice of all future sales under the Purchase Agreement; (b) require PALCO to substantiate that Scopac has been paid in full for any assets being transferred to MAXXAM; (c) provide that the Indenture Trustee has a right to be heard and to object to any future sales to MAXXAM; and (d) require PALCO to disclose the intended use of the funds before permitting any sale. Nathaniel Peter Holzer, Esq., at Jordan, Hyden, Womble, Culbreth & Holzer, P.C., in Corpus Christi, Texas, said that to provide liquidity to PALCO as needed, MAXXAM agreed, but it is not obligated, to purchase Redwood logs and lumber from PALCO at prevailing market prices. The MAXXAM Log Purchase Agreement also provides for PALCO's repurchase rights, Mr. Holzer noted. Under the Agreement, MAXXAM grants PALCO the exclusive right to repurchase some or all of the Redwood Logs, at the same price, for a period of 60 days after closing of a particular sale. At the end of a Call Period for a particular sale, MAXXAM is entitled to sell the items into the market, but must first offer them to PALCO. In the event PALCO declines the repurchase and MAXXAM closes a sale to the market, MAXXAM must remit any net profit received on that sale to PALCO within five days of the end of the transaction. However, in the event the sale by MAXXAM result in a loss to MAXXAM, MAXXAM bears the loss. Thus, MAXXAM will make no profit on any purchase from PALCO under the Purchase Agreement. About Pacific Lumber Based in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co- counsel. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors filed their Joint Plan of Reorganization on Sept. 30, 2007, which was amended on Dec. 20, 2007. The Debtors' exclusive plan filing period expires on Feb. 29, 2008. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 41, http://bankrupt.com/newsstand/or 215/945-7000). PACIFIC LUMBER: Wants to Sell Scotia School & Recreation Center --------------------------------------------------------------- The Pacific Lumber Company asks the U.S. Bankruptcy Court for the Southern District of Texas for permission to sell the Stanwood A. Murphy Elementary School, recreation center building and its related facilities to Scotia USD, free and clear of all liens, claims, encumbrances and interests. Since the 1880s, the Pacific Lumber Company has owned and operated the town of Scotia, California. It has 274 homes, all of which are owned by PALCO and rented principally to current and former PALCO employees. The School Facilities and Scotia Recreation Center Facilities constitute approximately 5.86 acres of real property in Humboldt County, California, which is leased by the Scotia Union School District since its construction 30 years ago, for an annual fee of $1. The School Facilities remain leased by Scotia USD under the same lease terms, but the Scotia Recreation Center Facilities is now leased to Body Works Fitness. The Body Works Lease includes conditions of use for Scotia USD, and will terminate on the earliest of Dec. 31, 2008, or the date of any sale of the property. Additionally, the Body Works Lease requires that Body Works bear all costs to operate and maintain the Scotia Recreation Center Facilities in exchange for relief from rent. This arrangement eliminates an operating loss of approximately $6,000 per month previously incurred by PALCO. Kevin J. Franta, Esq., at Jordan, Hyden, Womble, Culbreth, & Holzer, P.C., in Corpus Christi, Texas, relates that Scotia USD has proposed to buy the Property. However, with very few financial resources, Scotia USD has to obtain funding from the Office of Public School Construction, an agency within the State of California whose purpose is usually to fund new construction or modernize existing schools. OPSC though has never funded the purchase of existing facilities. "The unique use of the real property as a school limits the number of interested buyers," Mr. Franta admits. "Realistically, Scotia USD is PALCO's only buyer." PALCO says that it worked diligently with its advisors and Scotia USD, from April through October 2007, to ensure that the state of California's various funding application requirements were met. If Scotia USD's application for school district funding is approved by the Court, the sale transaction will probably happen sometime in April 2008, according to Mr. Franta. Mr. Franta discloses that the purchase price for the Property is is expected to be no less than $3,130,000 -- the amount of the maximum funding available from the relevant state agencies for the purchase of the School Facilities and Recreation Center Facilities. Mr. Franta informs the Hon. Richard S. Schmidt that the Scotia Recreation Center Facilities are not in compliance with California's Field Act, which governs the planning, design, and construction of California public school facilities. "It is believed that the State of California will not fund payment for a structure that is not Field Act compliant. Therefore, as it relates to the Property, it is believed that California will only fund the lesser of the agreed purchase price or the appraised values of the School Facilities -- real property and improvements -- and the Scotia Recreation Center -- real property only." The Property has been appraised as having an aggregate fair market value of $4,651,429. The $3,130,000 Purchase Price reflects the potential ineligibility of the acquisition of the Scotia Recreation Center Facilities' improvements for State funding due to California's Field Act criteria, Mr. Franta relates. Both parties have agreed to use their best efforts to work with the relevant state agencies funding the transaction to realize the maximum additional funding possible for the acquisition of the Scotia Recreation Center Facilities. Once the site acquisition funding takes place, PALCO will no longer be liable for any other outstanding issues related to the Property, including any additional improvements and modernization Scotia USD may be required to undertake to meet California state regulations. About Pacific Lumber Based in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co- counsel. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors filed their Joint Plan of Reorganization on Sept. 30, 2007, which was amended on Dec. 20, 2007. The Debtors' exclusive plan filing period expires on Feb. 29, 2008. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 41, http://bankrupt.com/newsstand/or 215/945-7000). PAETEC HOLDING: Moody's Maintains B2 Corporate Family Rating ------------------------------------------------------------ Moody's upgraded PAETEC Holding Corp.'s speculative grade liquidity rating to SGL-1 from SGL-2, and affirmed the B2 corporate family rating and the positive outlook, following the announcement that the Company will exercise an accordion option in its credit agreement for up to $125 million. As a result of the upsize, the ratings on the senior secured facilities were downgraded to B1 -- LGD3 -- 33%, due to the larger proportion of first lien senior secured debt in the capital structure. The proceeds of the additional borrowings will be used for general corporate purposes, most likely to tender for the $104 million McLeod senior secured notes, and replenish the cash balances following the closing of the $25 million acquisition of Allworx Corp. The ratings outlook remains positive due to the immediate deleveraging as a result of the McLeod transaction, coupled with the enhancement of the national footprint, the acquisition of significant fiber-rich facilities, and the potential for EBITDA growth driven by merger synergies, leading to further free cash flow growth. Moody's has taken these rating actions: Issuer: PAETEC Holding Corp. -- Speculative Grade Liquidity: Upgraded to SGL1 -- Corporate Family Rating: Affirmed B2 -- Probability-of-Default Rating: Affirmed B2 -- Senior Secured Revolving Credit Facility, due 2012: Downgraded to B1 from Ba3 (LGD changed to LGD3 - 33% from LGD3 - 31%) -- Senior Secured Term Loan, due 2013: Downgraded to B1 from Ba3 (LGD changed to LGD3 - 33% from LGD3 - 31%) -- Senior Unsecured Notes, due 2015: Affirmed Caa1 (LGD changed to LGD5 - 86% from LGD5 - 84%) -- Outlook: Positive The SGL-1 rating reflects PAETEC's very good liquidity over the coming 12 months as Moody's expects the company to meet its obligations through internal sources consisting of cash-on-hand and cash flow from operations. Pro forma for the add-on financing, PAETEC will retain about $120 million of unrestricted cash, which Moody's projects will grow to about $150 million at 4Q 2008. Moody's expects PAETEC to generate $190 million in cash flow from operations over the next four quarters; however, increased debt service and capital investments of $145 million (roughly 12% to 14% of its revenues) to grow its business and integrate McLeod will erode much of the Company's free cash flow generating capacity. Nevertheless, Moody's projects the Company to generate nearly $45 million in free cash flow over the next four quarters, and combined with the ample cash balances and full access to the $50 million revolving credit facility, PAETEC should have very good liquidity. However, PAETEC's SGL-1 liquidity rating could come under pressure if the Company were to announce material share repurchases or dividends, or fund future acquisitions using available liquidity. PAETEC's credit facilities contain a total leverage covenant at 5.0x trailing twelve months' consolidated cash flow, under which the Company is expected to have ample cushion. With the acquisition of McLeod, PAETEC will add a cluster of discrete assets, including colocations, fiber and switches, which can be sold to raise cash without disrupting its core operations, as McLeod has large network assets that remain underutilized. PAETEC, headquartered in Fairport, New York, and McLeod, headquartered in Hiawatha, Iowa, are competitive local exchange carriers. Pro forma for the merger, the combined company will generate revenue of over $1.6 billion. PHH MORTGAGE: Fitch Rates Series 2006-2 Class B-5 Certs. at B ------------------------------------------------------------- Fitch Ratings has taken rating actions on these PHH Mortgage Corporation mortgage pass-through certificates: Series 1994-1 -- Class M15 affirmed at 'AA'; -- Class R30 affirmed at 'AA'. Series 2005-2 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. Series 2005-3 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. Series 2005-4 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. Series 2005-5 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. Series 2005-6 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. Series 2006-1 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. Series 2006-2 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 rated 'B', placed on Rating Watch Negative. The affirmations reflect a stable relationship between credit enhancement and expected losses, and affect approximately $899.44 million in outstanding certificates. In addition, approximately $303,124 is placed on Rating Watch Negative. The pool factors range from approximately 1% to 90%, and the transactions are seasoned in a range of 18 months and 167 months. The amount of loans in the 60+ buckets range from approximately 0% to 0.29%, and cumulative losses range from 0% to 0.09%. PIONEER NATURAL: Prices $440MM Offering of Conv. Senior Notes ------------------------------------------------------------- Pioneer Natural Resources Company has priced an offering of $440 million aggregate principal amount of convertible senior notes due 2038 pursuant to a registration statement filed with the Securities and Exchange Commission. In addition, Pioneer has granted the underwriters a 13-day option to purchase up to an additional $60 million of the convertible notes solely to cover over-allotments. The notes will be convertible, under certain circumstances, using a net share settlement process, into a combination of cash and Pioneer common stock pursuant to a formula. The initial base conversion price is approximately $72.60, subject to adjustment in certain circumstances, which is equivalent to an initial base conversion rate of 13.7741 common shares per $1,000 principal amount of convertible notes. In general, upon conversion of a note, the holder of such note will receive cash equal to the principal amount of the note and Pioneer common stock for the note's conversion value in excess of such principal amount. If at the time of conversion the applicable price of Pioneer's common stock exceeds the base conversion price, holders will receive up to an additional 8.9532 shares of Pioneer common stock per $1,000 principal amount of notes. The notes will bear interest at a rate of 2.875% per annum, subject to reduction in certain circumstances as set forth in the indenture for the notes. The notes will mature on Jan. 15, 2038, and may not be redeemed by Pioneer prior to Jan. 15, 2013, after which they may be redeemed at 100% of the principal amount plus accrued interest. Holders of the convertible notes may require Pioneer to repurchase some or all of their convertible notes for cash on Jan. 15, 2013, 2018, 2023, 2028 and 2033, or in the event of certain change of control transactions, at 100% of the principal amount plus accrued interest. The notes will be senior unsecured obligations of Pioneer. The offering is expected to close on Jan. 22, 2008, subject to customary closing conditions. Pioneer plans to use the net proceeds to repay a portion of its outstanding bank debt. Credit Suisse Securities (USA) LLC and UBS Securities LLC were Joint Book-Running Managers for the offering. A copy of the prospectus and prospectus supplement may be obtained from the offices of: Credit Suisse Securities (USA) LLC Prospectus Department One Madison Avenue New York, NY 10010 Tel 1-800-221-1037 or UBS Securities LLC Prospectus Department 29th Floor, 299 Park Avenue New York, NY 10071 Tel (212) 821-3000 About Pioneer Natural Resources Company Based in Irving, Texas, Pioneer Natural Resources Company (NYSE:PXD) -- http://www.pxd.com/-- is an oil and gas exploration and production company with operations in the United States, Canada, Equatorial Guinea, Nigeria, South Africa and Tunisia. It explores, develops and produces oil, natural gas liquid and gas reserves. Its asset base is anchored by the spraberry oil field located in west Texas, the hugoton gas field located in southwest Kansas, the raton gas field located in southern Colorado and the west Panhandle gas field located in the Texas panhandle. The company has exploration and development opportunities and/or oil and gas production activities in the Gulf of Mexico, the onshore Gulf Coast area and Alaska, and internationally in Canada, Equatorial Guinea, Nigeria, South Africa and Tunisia. PIONEER NATURAL: S&P Puts BB+ Rating on Proposed $400MM Notes ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' senior unsecured rating to the proposed $400 million convertible senior notes offering of Pioneer Natural Resources Co. (BB+/Stable/--). The proposed notes will mature in 2038, and have call and put features beginning in 2013. The company will use proceeds to repay borrowings under its bank facility. As of Sept. 30, 2007, Irving, Texas-based Pioneer had $2.7 billion of debt outstanding. "The ratings on Pioneer are based on a satisfactory business risk profile incorporating participation in the exploration and production sector of the oil and gas industry, coupled with an aggressive financial risk profile," said Standard & Poor's credit analyst Ben Tsocanos. Ratings List Pioneer Natural Resources Co. Corporate credit rating BB+/Stable/-- New Rating $400 million convertible senior notes BB+ PNM RESOURCES: Moody's Puts Ratings Under Review & May Downgrade ---------------------------------------------------------------- Moody's Investors Service placed the long-term and short-term ratings of PNM Resources, Inc. (PNMR: Baa3 senior unsecured, P-3 commercial paper) and its subsidiary Public Service Company of New Mexico (PSNM: Baa2 senior unsecured, P-2 commercial paper) under review for possible downgrade. The ratings of PNMR's Texas transmission and distribution utility, Texas-New Mexico Power (TNMP: Baa3 senior unsecured), are affirmed and the outlook remains negative. The review follows PNMR's announcement that it has entered into agreements to sell its local gas distribution business in New Mexico for $620 million, and to buy Cap Rock Holdings Corporation and its subsidiary Cap Rock Energy, a Texas electric transmission and distribution utility, for $202.5 million. The review is prompted by the financial profiles of the companies which remain weak for their rating categories and Moody's opinion that credit metrics are not likely to return to levels commensurate with the ratings over the near-to-medium term. Over the longer term, Moody's views PNMR's plan to exit its gas business and to increase its exposure to the regulated electric utility sector as generally having no material impact on its business risk profile, or, based on management's projections, its financial metrics. Nevertheless, in the near-to-medium term Moody's expects this proposed divestiture and acquisition will further prolong the weakened financial conditions of the companies as anticipated debt repayment at PSNM is delayed, and consolidated debt levels are generally maintained. Moody's also note that, in general, the implementation of any type of regulated business combination/separation strategy can result in unanticipated costs and/or delays which could impact the longer term prospects of the transaction. As a result, Moody's believes any potential improvement in financial credit metrics will likely be further delayed. The potential for financial stability remains, to a significant extent, dependent on a favorable outcome in PSNM's pending electric rate case, which has also been delayed. Moody's notes that there is currently a very large disparity between the company's requested 14% increase along with the implementation of a recovery mechanism for increases in the cost of fuel and purchased power, and the commission staff's recommended 2% increase without any fuel cost recovery mechanism. PNMR and PSNM's cash flow credit metrics have continued to be depressed for some time. Although PNMR has reduced its consolidated debt level by approximately $250 million since June 2006, cash flow coverage remains weak. As of Sept. 30, 2007, the ratio of twelve month trailing cash from operations before changes in working capital, including Moody's standard adjustments (CFO- pre WC) to adjusted debt was approximately 12% at both PNMR and PSNM. These metrics are below the range of 13-25% outlined in Moody's Rating Methodology for Global Regulated Electric Utilities for Baa rated utility companies within the medium risk category. The companies have been challenged by increased costs for fuel, operations and maintenance and higher capital expenditures while continuing to operate in a fixed rate environment. In addition, below expectations performance at PSNM's core base load facilities has contributed to higher operating costs and increased the utility's costs for fuel and purchased power. Most recently, cash flows have also been depressed by weather conditions and lower earnings at First Choice, PNMR's unregulated Texas retail energy provider. While it is possible credit metrics may improve over time, any improvement is dependent on a number of factors including, a favorable outcome in PSNM's pending electric rate, improved operating performance, effective expense management and/or a material reduction in debt. The review will consider the ultimate outcome of PSNM's pending electric rate case, as well as prospects for improved operating performance, progress on its ongoing cost reduction efforts as well as PNMR's intended use of proceeds from the sale of the gas business, and its plans for financing future capital expenditures. Any downgrade occurring as a result of the review would likely not be for more than one rating notch. The negative outlook at TNMP reflects its currently weak financial metrics and its position as subsidiary on PNMR. As of Sept. 30, 2007, TNMP's ratio of CFO-pre WC to adjusted debt was approximately 6%. This ratio is impacted by a one time payment related to retail competition that occurred in the fourth quarter of 2006. Headquartered in Albuquerque, New Mexico, PNMR is a holding company which has as its primary subsidiaries, PSNM, TNMP, and First Choice Power, a Texas retail energy provider. PNMR also owns a 50% interest in EnergyCo, LLC a joint venture through which PNMR conducts unregulated energy operations in the Southwest. Ratings on Review for Possible Downgrade: Issuer: PNM Resources, Inc. -- Senior Unsecured Bank Credit Facility, currently Baa3 -- Senior Unsecured Conv./Exch. Bond/Debenture, currently Baa3 -- Multiple Seniority Shelf: Senior Unsecured currently (P) Baa3, Preferred Stock currently (P) Ba2 -- Commercial Paper, currently P-3 Issuer: Public Service Company of New Mexico -- Issuer Rating, currently Baa2 -- Senior Unsecured Bank Credit Facility, currently Baa2 -- Senior Unsecured Regular Bond/Debenture, currently Baa2 -- Senior Unsecured Shelf, currently (P) Baa2 -- Preferred Stock, currently Ba1 -- Commercial Paper, currently P-2 Outlook Actions: Issuer: PNM Resources, Inc. -- Outlook, Changed To Rating Under Review From Negative Issuer: Public Service Company of New Mexico -- Outlook, Changed To Rating Under Review From Negative REGENCY ENERGY: Moody's Keeps Ba3 Rating After $655MM CDM Deal -------------------------------------------------------------- Moody's Investors Service confirmed Regency Energy Partners LP ratings (Ba3 Corporate Family Rating). The rating action ends a review for possible downgrade initiated on Dec. 13, 2007 following Regency's announcement that it had agreed to acquire CDM Resource Management, Ltd. for $655 million, subject to working capital adjustments, and which followed an earlier announcement by the company that it would acquire FrontStreet Hugoton LLC from its general partner sponsor GE Energy Financial Services for $139 million. The rating outlook is negative. The ratings confirmation is based on the expectation that Regency will reduce its financial leverage (as measured by debt/EBITDA) over the near term, in line with Regency's intention to maintain credit-supportive financial policies. Since GE acquired a controlling stake in Regency's general partner sponsor and about a third of its LP units in June of 2007, Regency has stated a goal of attaining investment-grade status over the next few years and has indicated that it intends to follow appropriate financial policies to that end. The negative outlook reflects a degree of execution risk in order for Regency to successfully reduce leverage to a range more consistent with a Ba3 CFR, as well as integrate and realize expected earnings from its acquisitions, namely CDM. Inability to reduce debt/EBITDA to less than 4x over the near term could result in a ratings downgrade. In addition, per Moody's Loss Given Default rating methodology, Regency's B1 rated senior unsecured notes could face negative ratings pressure if revolver outstandings are not materially reduced over the near-term. Stabilization of the rating outlook is dependent upon Regency achieving sustained debt/EBITDA meaningfully below 4x. The CDM acquisition was primarily debt financed (68%) and represents Regency's largest acquisition to date. With a purchase price of 18x annualized EBITDA for the nine months ending Sept. 30, 2007, CDM appears fully valued. Moody's notes the annualized trailing EBITDA is reduced by $3 million in operating lease expenses that will be retired at closing. The CDM acquisition is expected to close Jan. 16, 2008. Regency's acquisition of FrontStreet, which closed on Jan. 7, 2008, was financed with about $127 million of LP units issued to GE and about $9 million in debt. On a pro forma basis, Regency's debt/EBITDA is over 4x for the LTM period ended Sept. 30, 2007. Regency should have an adequate level of liquidity. The company upsized its credit facility to $750 million from $500 million to finance the acquisitions and expects to further increase the facility size over the near-term. While the CDM acquisition represents an expansion of Regency's strategic parameters into the highly competitive, capital intensive natural gas compression services business, the acquisition does reduce Regency's overall direct exposure to commodity price risk. CDM is expected to account for approximately 30% of Regency's gross margin, and approximately 80% of CDM's revenues in the first nine months of 2007 were generated under turnkey contracts. Under CDM's turnkey contracts, fees are paid based on a guaranteed level of mechanical availability as opposed to volume levels, which can provide a degree of relative earnings durability, assuming effective management of costs and operations. Natural gas compression services are more tied to the production cycle than the highly price sensitive drilling cycle. While the North American conventional natural gas production market is mature, there has been growth in the development of unconventional reserves of natural gas. CDM should benefit from both its focus on field-wide compression services and its presence in the Barnett and Fayetteville shales, notwithstanding a prolonged commodity price downturn. Regency expects to realize cost savings on its own compression fleet as a result of the CDM acquisition, as well as potential growth opportunities in producing basins where Regency does not currently have operations. Over the last several years, CDM has undertaken a substantial capital investment program in order to expand its horsepower capacity, spending around $100 million a year over the last three years. CDM's capital budget for 2008 is expected to be about $119 million, with the bulk of the new units targeted for the Barnett and Fayetteville shales. While the company's horsepower capacity has grown significantly as a result, with about 567,000 in horsepower capacity at year-end 2007 and 741,671 of horsepower expected by year-end 2008, the large spending program entails execution risk and the inability for CDM to maintain high utilization rates on its new equipment could result in lower than expected earnings. FrontStreet, which represents an expansion of Regency's core gas gathering and processing business, owns a BP operated natural gas gathering system in Kansas. Under a life of field contract, FrontStreet receives a tariff payment from BP based on the costs of service plus a predetermined equity return. The potential for GE to drop down FrontStreet had been factored into Moody's upgrade of Regency's ratings in September 2007. Based on the acquisition's modest size, the high proportion of equity financing, and the relative stability of its cash flows, the transaction is, by itself, ratings neutral. The ratings confirmation strongly factors in GE's ownership, as Regency's recent historical results are still of the single-B quality. The company reported net losses in each of the last three quarters, generating very modest net earnings after adjusting for unusual items, and its most recent quarterly results were below expectations. Furthermore, Regency's operating record is short and the performance of its acquisitions and organic investments has yet to be proven. Moody's notes that Regency's track record under GE's sponsorship remains limited and Regency's future growth and business mix under GE's sponsorship will likely continue to evolve. Regency has shown a greater willingness than some of its midstream peers to make a series of significant changes in rapid succession, and the CDM acquisition is a testament to this. The potential for more event risk in the near future is raised by Regency's MLP model and GE's interest in using Regency as its primary vehicle for its energy investments. The CDM acquisition indicates a willingness to make much larger acquisitions with GE's backing in the energy sector, potentially in areas outside the company's historical gathering, processing and transport focus. Nevertheless, it is Moody's understanding that GE intends to have a longer investment horizon than Regency's past sponsors and that Regency's financial policies are targeted toward achieving investment-grade status. The ratings also consider GE's longstanding interest in the energy industry. Two positive signals to date include Regency's $354 million net equity issuance in July 2007, proceeds of which were used to reduce debt, and the high degree of equity financing used in the first dropdown from GE, FrontStreet. The full list of ratings affected are: Downgrades: Issuer: Regency Energy Partners LP -- Senior Unsecured Regular Bond/Debenture, Downgraded to 81 - LGD5 from 79 - LGD5 Outlook Actions: Issuer: Regency Energy Partners LP -- Outlook, Changed To Negative From Rating Under Review Confirmations: Issuer: Regency Energy Partners LP -- Probability of Default Rating, Confirmed at Ba3 -- Speculative Grade Liquidity Rating, Confirmed at SGL-3 -- Corporate Family Rating, Confirmed at Ba3 -- Senior Unsecured Regular Bond/Debenture, Confirmed at B1 Headquartered in Dallas, Texas, Regency Energy Partners LP is a publicly traded master limited partnership engaged in natural gas gathering, processing, and transportation. RIVER ROCK: Wants to Hire Shuford Hunter as General Bankr. Counsel ------------------------------------------------------------------ River Rock Cottages, LLC asks permission from the U.S. Bankruptcy Court for the Western District of North Carolina to employ Shuford, Hunter & Brown, P.A. as its bankruptcy counsel. The Debtor says that it requires immediate legal advice concerning its rights, duties, and obligations concerning the Chapter 11 case. Documents submitted to the Court did not disclose the firm's specific legal services to be rendered to the Debtor. Burton Shuford, Esq., at Shuford Hunter, tells the Court that the firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners $275 Associates $200 Paraprofessionals $125 Mr. Shuford assures the Court that the firm is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. Mr. Shuford can be contacted at: Burton Shuford, Esq. Shuford, Hunter & Brown, P.A. 301 South McDowell Street, Suite 1012 Charlotte, NC 28204 Tel: (704) 377-0280 Fax: (704) 377-8666 http://www.shblawyers.com/ Based in Charlotte, North Carolina, River Rock Cottages, LLC filed for Chapter 11 protection on Dec. 27, 2007 (Bankr. W.D. N.C. Case No. 07-32532). A. Burton Shuford, Esq., at Shuford Hunter & Brown P.A., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $13, 216,707, and total liabilities of $3,333,153. RIVER ROCK: Section 341(a) Meeting Scheduled for January 30 ----------------------------------------------------------- The U.S. Trustee for Region 4 will convene a meeting of River Rock Cottages, LLC's creditors on Jan. 30, 2008, at 2:00 p.m., at the 3-Charlotte First Meeting Room, 402 West Trade Street, Suite 200 in Charlotte, North Carolina. 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. Based in Charlotte, North Carolina, River Rock Cottages, LLC filed for Chapter 11 protection on Dec. 27, 2007 (Bankr. W.D. N.C. Case No. 07-32532). A. Burton Shuford, Esq., at Shuford Hunter & Brown P.A., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $13, 216,707, and total liabilities of $3,333,153. QUEBECOR WORLD: Accepts CDN$400 Mil. Rescue Financing Proposal -------------------------------------------------------------- Quebecor World Inc. has accepted a CDN$400 million rescue financing proposal submitted jointly by Quebecor Inc. and Tricap Partners Ltd., a private equity fund managed by Brookfield Asset Management Inc. After a careful review of the proposal, a special committee composed of the independent directors of Quebecor World has concluded that accepting the proposal is in the best interests of the company and its stakeholders. The proposal contemplates an interim financing facility of CDN$200 million, which will be made available to the company in accordance with its cash flow needs, subject to receipt or waiver on Jan. 16, 2008, of the required consents and certain other agreements of the company's lenders and the sponsors of its securitization programs. There is no assurance all the consents and approvals will be received on a timely basis. The rescue proposal further contemplates that on or prior to March 31, 2008, the CDN$200 million interim facility will be replaced by a recapitalization plan comprised of an aggregate CDN$400 million issuance of Senior Secured Notes due 2012 to Quebecor Inc. and Tricap Partners well as the issuance to Quebecor Inc. and Tricap Partners of a number of the company's subordinate voting shares representing 75% of the aggregate equity of Quebecor World on a fully diluted basis, assuming the proposed conversion of all outstanding preferred shares into subordinate voting shares. Completion of the recapitalization plan is subject to a number of conditions, including, but not limited to, the approval of the financing plan by holders of certain debt securities issued by Quebecor World, the conversion of all Series 5 preferred shares and Series 3 preferred shares into subordinate voting shares and receipt of all required regulatory and other approvals and settlement of definitive documentation. In addition, the rescue proposal specifically contemplates that the consent of the holders of the company's debt securities maturing in 2008, 2013 and 2027 must be obtained and Quebecor Inc. and Tricap Partners have informed Quebecor World that they intend to commence discussions with these holders immediately. As the transaction involves a related party, namely Quebecor Inc., and the aggregate number of subordinate voting shares issuable in connection with the recapitalization plan will exceed the maximum number of securities issuable without security holder approval under the rules of the Toronto Stock Exchange, Quebecor World intends to rely on an exemption from the security holder approval requirements and formal valuation requirements provided for under applicable securities laws and the rules of the TSX on the basis of the company's financial situation. Upon the recommendation of the special committee of independent directors, who are free from any interest in the transactions and are unrelated to any of the parties involved in the transactions, the board of directors of Quebecor World has made the required determination based on Quebecor World's financial situation, that the transactions are designed to improve its financial situation and are reasonable in the circumstances, and it has authorized Quebecor World to make the necessary applications to the TSX in order to benefit from such exemption and to list the shares issuable to Quebecor Inc. and Tricap Partners. Quebecor World also disclosed today that in connection with the waivers obtained from its banking syndicate and the sponsors of its North American securitization program disclosed on Dec. 31, 2007, it has requested a further waiver from such lenders and sponsors extending to Jan. 21, 2008, the date by which it must obtain $125 million of new financing. About Quebecor World Inc. Headquartered in Montreal, Quebec, Quebecor World Inc. (TSX: IQW)(NYSE:IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. In Canada it has 17 facilities in five provinces, through which it offers a mix of printed products and related value-added services to the Canadian market and internationally. The company is an independent commercial printer in Europe with 19 facilities, operating in Austria, Belgium, Finland, France, Spain, Sweden, Switzerland and the United Kingdom. In March 2007, it sold its facility in Lille, France. Quebecor World (USA) Inc. is its wholly owned subsidiary. * * * As reported in the Troubled Company Reporter on Nov. 29, 2007, Standard & Poor's Ratings Services lowered its preferred stock rating on Quebecor World Inc. two notches to 'C' from 'CCC-'. The company's other ratings, including the 'B-' long-term corporate credit rating, remain unchanged. All ratings are on CreditWatch with negative implications, where they were initially placed Aug. 9, 2007. SCAN INTERNATIONAL: Taps Whiteford Taylor as Bankruptcy Counsel --------------------------------------------------------------- Scan International, Inc. asks permission from the U.S. Bankruptcy Court for the District of Maryland to employ Whiteford, Taylor & Preston LLP, as its bankruptcy counsel. Whiteford Taylor will: a) provide the Debtor legal advice with respect to its powers and duties as a debtor-in-possession and in the operation of its business and management of its property; b) represent the Debtor in defense of any proceedings instituted to reclaim property or to obtain relief from the automatic stay; c) prepare any necessary applications, answers, orders, reports and other legal papers, and appearing on the Debtor's behalf in proceedings instituted by or against the Debtor; d) assist the Debtor in the preparation of schedules, statement of financial affairs, and any amendments thereto which the Debtor may be required to file in this case; e) assist the Debtor in the preparation of a plan and a disclosure statement; f) assist the Debtor with other legal matters, including, among others, securities, corporate, real estate, tax, intellectual property, employee relations, general litigation, and bankruptcy legal work; and g) perform all of the legal services for the Debtor which may be necessary or desirable herein. Stephen F. Fruin, Esq., a partner at Whiteford Taylor, tells the Court that the firm's professionals bill: Designation Hourly Rate ----------- ----------- Attorneys $215 - $450 Parelegals $175 Mr. Fruin assures the Court that the firm is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. Mr. Fruin can be contacted at: Stephen F. Fruin, Esq. Whiteford, Taylor & Preston LLP Seven St. Paul Street Baltimore, MD 21202-1626 Tel: (410) 347-8700 Fax: (410) 752-7092 http://www.wtplaw.com/ Based in Columbia, Maryland, S.C.A.N. International Inc. aka S.C.A.N. Contemporary Furniture -- http://www.scanfurniture.com/- - sells furniture. It filed for Chapter 11 protection on Dec. 26, 2007 (Bankr. D. M.D. Case No. 07-23153). Stephen F. Fruin, Esq., at Whiteford, Taylor & Preston LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts between $1 million and $100 million. SCAN INTERNATIONAL: U.S. Trustee Appoints 4-Member Creditors Panel ------------------------------------------------------------------ W. Clarkson McDow, Jr., the U.S. Trustee for Region 4, appoints four members to the Official Committee of Unsecured Creditors in the Chapter 11 case of S.C.A.N. International Inc. The Creditors Committee members are: (a) Jasper Office c/o Steven Richmon, Esq. Duane, Morris LLP 100 American Metro Boulevard Hamilton, NJ 08619 (b) Becker Designed, Inc. c/o Karen H. Allen, Vice President 14954 Bogle Drive Chantilly, VA 20151 (c) Ekornos, Inc. c/o Robert S. Underhill, Esq. Greenbaum, Rowe, Smith & Davis LLP Metro Corporate Campus One P.O. Box 5600 Woodbridge, NJ 07095-0988 (d) KSL Manufacturing c/o Chris Hollen, General Manager 15 Victoria Cres Brampton, Ontario L6T 1E2 Pursuant to Section 1103 of the Bankruptcy Code, the Creditors Committee may: -- consult with the Debtors concerning the administration of the bankruptcy case; -- investigate the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' business and the desirability of the continuance of the business, and any other matter relevant to the case or to the formulation of a plan of reorganization for the Debtors; -- participate in the formulation of a plan, advise its constituents regarding the Committee's determinations as to any plan formulated, and collect and file with the Court acceptances or rejections of the plan; -- request the appointment of a trustee or examiner; and -- perform other services as are in the interest of its constituents. The Creditors Committee may retain counsel, accountants, or other agents, to represent or perform services for the group. Based in Columbia, Maryland, S.C.A.N. International Inc. aka S.C.A.N. Contemporary Furniture -- http://www.scanfurniture.com/- - sells furniture. It filed for Chapter 11 protection on Dec. 26, 2007 (Bankr. D. M.D. Case No. 07-23153). Stephen F. Fruin, Esq., at Whiteford, Taylor & Preston LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts between $1 million and $100 million. SCAN INTERNATIONAL: Section 341(a) Meeting Scheduled for Jan. 30 ---------------------------------------------------------------- The U.S. Trustee for Region 4 will convene a meeting of S.C.A.N. International inc.'s creditors on Jan. 30, 2008, at 9:00 a.m., at the 341 Meeting Room, Suite 2650, 101 West Lombard Street in Baltimore, Maryland. Additionally, the Trustee fixed April 29, 2008 as the deadline for filing proofs of claim against the Debtor. 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. Based in Columbia, Maryland, S.C.A.N. International Inc. aka S.C.A.N. Contemporary Furniture -- http://www.scanfurniture.com/- - sells furniture. It filed for Chapter 11 protection on Dec. 26, 2007 (Bankr. D. M.D. Case No. 07-23153). Stephen F. Fruin, Esq., at Whiteford, Taylor & Preston LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts between $1 million and $100 million. SEA CONTAINERS: Court Extends Plan-Filing Period to February 20 --------------------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware extended, until Feb. 20, 2008, the exclusive period wherein Sea Containers Ltd. and its debtor-affiliates can file a plan of reorganization. Additionally, Judge Carey fixed April 19, 2008 as the deadline for the Debtors to solicit acceptances of that plan. About Sea Containers Based in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. The Court gave the Debtors until Feb. 20, 2008 to file a plan of reorganization. (Sea Containers Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SEA CONTAINERS: Sopris Capital Reports Ownership of SCL Shares -------------------------------------------------------------- Sopris Capital Advisors LLC disclosed in a regulatory filing with the Securities and Exchange Commission dated Dec. 6, 2007, that it: (a) indirectly owns: -- 503,180 shares of Class A common stock of Sea Containers Ltd., through mananged accounts; -- 2,472,800 shares of Class A common stock through a partnership and managed accounts; and (b) directly owns 55,000 shares of Class A common stock. All of the 503,180 shares, which represent 1.9% of the isssued and outstanding Sea Containers Class A common stock, are owned by private institutional accounts managed by Aspen Advisors LLC, a Delaware limited liability company. Aspen Advisors disclaim any beneficial interest in the securities owned by the Aspen Managed Accounts. By virtue of Nikos Hecht's position as a managing member of Aspen Advisors, he may be deemed the beneficial owner of the securities held by the Aspen Managed Accounts under Regulation 13D-G under the Exchange Act. Mr. Hecht disclaims any beneficial interest in the securities owned by the Aspen Managed Accounts. Of the 2,472,800 shares that represent 9.5% of the isssued and outstanding Sea Containers Class A common stock, Sopris Partners Series A, of Sopris Capital Partners, L.P., a Delaware limited partnership, owns 1,779,700 shares and private institutional accounts managed by Sopris Capital Advisors LLC, a Delaware limited liability company own 693,100 shares. The 1,779,700 shares represent 6.8% of Sea Containers shares outstanding. Sopris Capital LLC is the general partner of the Sopris Partnership. The Sopris Partnership and the Sopris General Partner disclaim any beneficial interest in the securities owned by the Sopris Managed Accounts, and the Sopris General Partner disclaims any beneficial interest in the securities owned by the Sopris Partnership in excess of a 0.70% pecuniary interest, calculated in accordance with Rules 16(a)-1(a)(2) and (a)(3) under the Exchange Act. Sopris Advisors disclaims any beneficial interest in the securities owned by the Sopris Partnership and the Sopris Managed Accounts. Mr. Hecht is the sole managing member of the Sopris General Partner and the managing member of Sopris Advisors. By virtue of that status, he may be deemed the beneficial owner of the securities held by the Sopris Partnership and the Sopris Managed Accounts under Regulation 13D-G under the Exchange Act. Mr. Hecht disclaims any beneficial interest in the securities owned by the Sopris Partnership other than a 0.60% pecuniary interest in the shares, calculated in accordance with rules 16(a)-1(a)(2) and (a)(3). He disclaims any beneficial interest in the securities owned by the Sopris Managed Accounts. Mr. Hecht directly owns all of the 55,000 shares. Mr. Hecht has the sole power to vote or to direct the vote on -- as well as dispose or direct the disposition of -- the 55,000 shares. In a separate filing with the Securities and Exchange Commission, Mr. Hecht disclosed that he owns an aggregate of 3,030,980 shares representing 11.6% of the isssued and outstanding Sea Containers Class A common stock. About Sea Containers Based in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. The Court gave the Debtors until Feb. 20, 2008 to file a plan of reorganization. (Sea Containers Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SHAW GROUP: Increases Credit Facility to $1 Bil. from $850 Mil. --------------------------------------------------------------- The Shaw Group Inc. has increased its existing credit facility to $1 billion from $850 million. Shaw also has received approval from its lenders to seek additional commitments that could increase the credit facility to $1.25 billion without further amendment. "We appreciate the confidence and the continued support of our lenders evidenced by the increase in our credit facility," Brian K. Ferraioli, executive vice president and chief financial officer of Shaw, said. "Shaw has nearly $500 million of cash on hand and the increased facility will be used primarily for letters of credit to support our continued business growth. Our fiscal 2007 revenues of $5.7 billion were 20 percent higher than in 2006, and we forecast our 2008 revenues to increase by an additional 20 percent to approximately $7 billion." The amended credit facility retains its original maturity date of April 25, 2010, and other substantive terms of the original agreement remain unchanged. No borrowings are outstanding under the facility, which is currently being utilized for the issuance of letters of credit frequently required in the engineering and construction industry. About Shaw Group Based in Baton Rouge, Louisiana, The Shaw Group Inc. (NYSE: SGR) -- http://www.shawgrp.com/-- provides services to the environmental, infrastructure and homeland security markets, including consulting, engineering, construction, remediation and facilities management services to governmental and commercial customers. It is also a vertically integrated provider of engineering, procurement, pipe fabrication, construction and maintenance services to the power and process industries. The company segregates its business activities into four operating segments: Environmental & Infrastructure; Energy & Chemicals; Maintenance, and Fabrication, Manufacturing & Distribution. In January 2005, the company sold substantially all of the assets of its Shaw Power Technologies, Inc. and Shaw Power Technologies International, Ltd. units to Siemens Power Transmission and Distribution Inc., a unit of Siemens AG. The company has operations in Chile, China, Malaysia, the United Kingdom and, Venezuela, among others. * * * Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on The Shaw Group Inc. and removed it from CreditWatch, where it was placed with negative implications in October 2006. S&P said the outlook is stable. In addition, 'BB' senior secured debt rating was affirmed after the $100 million increase to the company's revolving credit facility. SOLUTIA INC: Reaches Settlement with Senior Secured Noteholders --------------------------------------------------------------- Solutia Inc. has reached a settlement with the Bank of New York, as indenture trustee for Solutia's 11.25% senior secured notes due 2009, and holders of the 2009 notes representing the requisite principal amount needed to direct the trustee to enter into the settlement terms. Under the terms of the settlement, the noteholders will receive $220.5 million in cash plus all accrued but unpaid interest through the effective date of Solutia's plan of reorganization. Solutia anticipates the effective date of its plan of reorganization will be later this month. This settlement is subject to approval by the U.S. Bankruptcy Court for the Southern District of New York. Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) - - http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP, in New York, as lead bankruptcy counsel, and David A. Warfield, Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St. Louis Missouri, as special counsel. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. The Official Committee of Retirees of Solutia, Inc., et al., is represented by Daniel D. Doyle, Esq., Nicholas A. Franke, Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne, LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E. Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, in Birmingham, Alabama. On Feb. 14, 2006, the Debtors filed their Reorganization Plan & Disclosure Statement. On May 15, 2007, they filed an Amended Reorganization Plan and on July 9, 2007, filed a 2nd Amended Reorganization Plan. The Bankruptcy Court approved the Debtors' amended Disclosure Statement on Oct. 19, 2007. On Oct. 22, 2007, the Debtor re-filed a Consensual Plan & Disclosure Statement and on November 29, 2007, the Court confirmed the Debtors' Consensual Plan. (Solutia Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SPECIALTY UNDERWRITING: S&P Affirms Ratings on All Cert. Classes ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on all classes of certificates issued by Specialty Underwriting and Residential Finance Trust's series 2005-AB2 and 2005-BC3. The affirmations reflect current and projected credit support percentages that are sufficient to maintain the current ratings. As of the December 2007 remittance report, credit support for these classes, on average, was 16.32%. In comparison, current credit enhancement for these classes, on average, was 2.15x. As of December 2007, total delinquencies for these transactions were 16.83% (series 2005-AB2) and 30.45% (series 2005-BC3) of the current pool balances, with severe delinquencies (90-plus days, foreclosures, and REOs) of 12.49% (series 2005-AB2) and 21.22% (series 2005-BC3). Cumulative realized losses were 0.57% (series 2005-AB2) and 1.10% (series 2005-BC3) of the original pool balances. A combination of subordination, excess interest, and overcollateralization provide credit enhancement for these transactions. The collateral supporting these series consists of subprime pools of fixed- and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Ratings Affirmed Specialty Underwriting and Residential Finance Trust Series Class Rating ------ ----- ------ 2005-AB2 A-1A, A-1B AAA 2005-AB2 A-1C, A-1D AAA 2005-AB2 M1 AA+ 2005-AB2 M2 AA 2005-AB2 M3 AA- 2005-AB2 M4 A+ 2005-AB2 M5 A 2005-AB2 M6 BBB 2005-AB2 B1 BB 2005-AB2 B2 B 2005-AB2 B3 CCC 2005-BC3 A-1A, A-2B AAA 2005-BC3 A-2C, M-1 AAA 2005-BC3 M-2 AA+ 2005-BC3 M-3 AA 2005-BC3 M-4 AA- 2005-BC3 M-5 A+ 2005-BC3 M-6 A 2005-BC3 M-7 BBB 2005-BC3 B-1 B 2005-BC3 B-2 B 2005-BC3 B-3 CCC 2005-BC3 B-4 CCC STRATUS SERVICES: Gruber & Company Raises Going Concern Doubt ------------------------------------------------------------- Gruber & Company LLC in Lake Saint Louis, Mississippi expressed substantial doubt about the ability of Stratus Services Group Inc. to continue as a going concern after it audited the company's financial statements for the year ended Sept. 30, 2007. The auditor pointed to the company's recurring losses from operations and net capital deficit. The company posted a net loss of $283,843 on revenues of $8,209,564 for the year ended Sept. 30, 2007.as compared with a net income of $1,441,661 on revenues of $5,131,081 in the prior year. As of Sept. 30, 2007, the company had strained liquidity with total current assets of $1,749,528 to pay its total current liabilities of $9,787,281. At Sept. 30, 2007, the company's balance sheet showed $3,805,407 in total assets, $11,038,152 in total liabilities, $547,135 in minority interest, and $7,779,880 stockholders' deficit. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?270c About Stratus Services Headquartered in Shrewsbury, N.J., Stratus Services Group Inc. (OTC BB: SSVG.OB) -- http://www.stratusservices.com/-- offers all the traditional staffing services. Stratus has developed a one- of-a-kind labor management program which focuses on the performance parameters defined by the client's productivity goals. This program, which is the backbone of the company's services, is known as "Smart Solutions(TM)". STRUCTURED ASSET: Moody's Downgrades Ratings on 18 Tranches ----------------------------------------------------------- Moody's Investors Service downgraded the ratings of eighteen tranches and has placed under review for possible downgrade the ratings of thirteen tranches from three transactions issued by Structured Asset Mortgage Investments II Trust in 2007. One downgraded tranche remains on review for possible downgrade. The collateral backing these classes primarily consists of first lien, adjustable-rate negatively amortizing Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. In its analysis Moody's has also applied its published methodology updates to the non delinquent portion of the transactions. Complete rating actions are: Structured Asset Mortgage Investments II Trust 2007-AR1 -- Cl. I-B-2 Currently Aa1, on review for possible downgrade, -- Cl. I-B-3 Currently Aa1, on review for possible downgrade, -- Cl. I-B-4 Currently Aa2, on review for possible downgrade, -- Cl. I-B-5 Currently Aa3, on review for possible downgrade, -- Cl. I-B-6, Downgraded to Baa1, previously A1, -- Cl. I-B-7, Downgraded to Baa3, previously A2, -- Cl. I-B-8, Downgraded to Ba2, previously Baa1, -- Cl. I-B-9, Downgraded to Ba3, previously Baa2, -- Cl. II-B-1 Currently Aa1, on review for possible downgrade, -- Cl. II-B-2 Currently Aa3, on review for possible downgrade, -- Cl. II-B-3, Downgraded to Ba1, previously A3, -- Cl. II-B-4, Downgraded to Ba3, previously Baa1, -- Cl. II-B-5, Downgraded to Caa2, previously Ba2, Structured Asset Mortgage Investments II Trust 2007-AR2 -- Cl. I-B-1 Currently Aa1, on review for possible downgrade, -- Cl. I-B-2 Currently Aa3, on review for possible downgrade, -- Cl. I-B-3, Downgraded to Baa2, previously A3, -- Cl. I-B-4, Downgraded to Ba1, previously Baa1, -- Cl. I-B-5, Downgraded to B3 on review for possible further downgrade, previously Ba2, Structured Asset Mortgage Investments II Trust 2007-AR3 -- Cl. I-B-3 Currently Aa1, on review for possible downgrade, -- Cl. I-B-4 Currently Aa2, on review for possible downgrade, -- Cl. I-B-5 Currently Aa3, on review for possible downgrade, -- Cl. I-B-6, Downgraded to A3, previously A1, -- Cl. I-B-7, Downgraded to Baa2, previously A3, -- Cl. I-B-8, Downgraded to Ba1, previously Baa2, -- Cl. I-B-9, Downgraded to Ba2, previously Baa3, -- Cl. II-B-1 Currently Aa1, on review for possible downgrade, -- Cl. II-B-2 Currently Aa3, on review for possible downgrade, -- Cl. II-B-3, Downgraded to Baa3, previously A2, -- Cl. II-B-4, Downgraded to Ba2, previously A3, -- Cl. II-B-5, Downgraded to Ba3, previously Baa1, -- Cl. II-B-6, Downgraded to Caa2, previously Ba2. TAHERA DIAMOND: Obtains Protection Under CCAA Until February 14 --------------------------------------------------------------- Tahera Diamond Corporation said it has obtained an order from the Ontario Superior Court of Justice granting Tahera and its subsidiary protection pursuant to the provisions of the Companies' Creditors Arrangement Act. The Court has granted CCAA protection for an initial period of 30 days expiring on Feb. 14, 2008, to be extended or terminated thereafter as the Court deems appropriate. While under CCAA protection management will remain responsible for the day-to-day operations, under the supervision of a Court appointed monitor, PricewaterhouseCoopers Inc., who will be responsible for monitoring Tahera's ongoing operations, assisting management with the development and filing of a restructuring plan, liaising with creditors and other stakeholders and reporting to the Court. Tahera sought protection under CCAA, as its current cash flows and cash on hand would not allow it to meet its current obligations and its obligations with respect to the 2008 winter road resupply. The CCAA filing followed a review of the company's options by Tahera's board of directors. It was determined by the board of directors that, as a result of insufficient indications of interest in Tahera's best efforts equity offering and the absence of any viable strategic alternatives at the time, seeking CCAA protection would be in the best interest of all stakeholders. The CCAA process will stay creditors and others from enforcing rights against Tahera and its subsidiaries and will allow Tahera to restructure its operations and find the alternative that will be in the best interest of all stakeholders. The implications of the CCAA filing for Tahera shareholders are less clear and will not be able to be determined until the end of the restructuring process and will depend upon the terms of the restructuring plan approved by the affected stakeholders. The company will withdraw its amended and restated preliminary prospectus filed in connection with its best efforts units offering. Tahera Diamond Corporation (TSX: TAH) -- http://www.tahera.com/-- is a Canadian owned diamond mining company. Tahera's wholly-owned Jericho project, commencing commercial production in early 2006, represents Canada's third, and Nunavut's first, diamond mine. TANGER FACTORY: Closes $100 Mil. Unsecured Credit Line Expansion ---------------------------------------------------------------- Tanger Factory Outlet Centers, Inc. has closed on a $100 million expansion to its existing unsecured lines of credit. The company has also received commitments for an additional $25 million, which once closed, will bring its total credit facilities to $325 million. The terms are identical to those included within the existing credit facilities. Tanger's interest rate currently ranges from LIBOR plus 75 basis point to LIBOR plus 85 basis points under its various credit facilities which contain maturity dates on or about June 30, 2011. Tanger currently maintains credit facilities with these banks (amounts shown include the additional $25 million in commitments): Bank of America ($100 million), Wells Fargo Bank ($100 million), Sun Trust Bank ($40 million), Branch Bank & Trust Company ($35 million), Citicorp North America ($25 million) and Wachovia Bank ($25 million). "We are very pleased that our banks are providing us with this additional liquidity, which will be beneficial in funding our development pipeline as well as helping with our upcoming debt maturities," Stanley K. Tanger, Chairman of the Board and Chief Executive Officer stated. On Feb. 15, 2008, the company's $100 million unsecured senior notes, with a 9-1/8% coupon rate, mature. Tanger currently expects to refinance these notes in the short term with amounts available under its unsecured lines of credit. On July 10, 2008 the company's only remaining secured mortgage loan with a principal balance of $172.7 million and bearing interest at a rate of 6.59% will become payable at Tanger's option. At that time, the company can decide to repay the loan in full, or continue to make monthly payments on the loan at a revised interest rate of 8.59%. Tanger can then repay the loan in full at any time without penalty. The final maturity date on the loan is July 10, 2028. Tanger is currently analyzing its options for refinancing this mortgage. About Tanger Factory Headquartered in Greensboro, North Carolina, Tanger Factory Outlet Centers, Inc. (NYSE: SKT) -- http://www.tangeroutlet.com/-- is a fully integrated, self-administered and self-managed publicly traded REIT. The company presently owns 29 outlet centers in 21 states coast to coast, totaling approximately 8.4 million square feet of gross leasable area. Tanger also manages for a fee and owns a 50% interest in two outlet centers containing approximately 667,000 square feet. * * * Tanger Factory Outlet Centers Inc. carries Moody's Ba1 preferred stock rating. TERADYNE INC: FTC Okays Early Termination on Merger Waiting Period ------------------------------------------------------------------ The Federal Trade Commission has granted Teradyne Inc. and Nextest Systems Corporation early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, with respect to Teradyne's tender offer for the outstanding shares of Nextest Systems Corporation. As reported in the Troubled Company Reporter on Dec. 21, 2007, Teradyne Inc. and Nextest Systems Corp. have signed a definitive agreement under which Teradyne will acquire Nextest for an aggregate purchase price of approximately $325 million in cash. NAC Equipment Corporation, a direct subsidiary of Teradyne, commenced a tender offer to acquire all outstanding shares of common stock of Nextest, at a price of $20 per share, in cash, pursuant to a Agreement and Plan of Merger among Teradyne, NAC, and Nextest dated Dec. 11, 2007. The tender offer and any withdrawal rights to which Nextest's stockholders may be entitled will expire at midnight, New York City time at the end of Jan. 23, 2008, unless the offer is extended. About Nextest Systems Corp. Headquartered in San Jose, California, Nextest Systems Corp. (NASDAQ:NEXT) -- http://www.nextest.com/-- is a designer and manufacturer of automatic test equipment for Flash memory and System-On-Chip semiconductors. Nextest's products address the demand from manufacturers for ATE with increased throughput, functionality and reliability, while reducing time to market and cost of test. Nextest has shipped over 1,900 systems to more than 70 semiconductor companies worldwide. About Teradyne Inc. Headquartered in North Reading, Massachussetts, Teradyne Inc. (NYSE: TER) -- http://www.teradyne.com/-- is a supplier of Automatic Test Equipment used to test complex electronics used in the consumer electronics, automotive, computing, telecommunications, and aerospace and defense industries. Teradyne employs about 3,600 people worldwide. * * * Teradyne Inc. still carries S&P's "B+" long term foreign issuer credit and long term local issuer credit ratings which was placed on Dec. 13, 2002. UBS COMMERCIAL: Moody's Assigns Definitive Ratings to Securities ---------------------------------------------------------------- Moody's Investors Service assigned definitive ratings to securities issued by UBS Commercial Mortgage Trust 2007-FL1. The provisional ratings issued on Dec. 7, 2007 have been replaced with these definitive ratings: -- Class Cl. A-1, $928,578,000, rated Aaa -- Class Cl. A-2, $309,526,000, rated Aaa -- Class Cl. B, $57,309,000, rated Aa1 -- Class Cl. C, $31,074,000, rated Aa2 -- Class Cl. D, $27,190,000, rated Aa3 -- Class Cl. E, $27,191,000, rated A1 -- Class Cl. F, $27,190,000, rated A2 -- Class Cl. G, $27,190,000, rated A3 -- Class Cl. H, $29,132,000, rated Baa1 -- Class Cl. J, $27,190,000, rated Baa2 -- Class Cl. K, $27,190,000, rated Baa3 -- Class Cl. O-HW, $5,000,000, rated Baa3 -- Class Cl. O-WC, $4,500,000, rated Baa3 -- Class Cl. O-MD, $1,900,000, rated Ba1 -- Class Cl. O-SA, $2,000,000, rated Baa3 -- Class Cl. O-HA, $1,500,000, rated Baa3 -- Class Cl. X, $1,553,719,358*, rated Aaa * Approximate notional amount UBS MORTGAGE: Fitch Affirms Low-B Ratings on Five Loan Classes -------------------------------------------------------------- Fitch has affirmed these three UBS Mortgage Asset Securitization Transactions Specialized Loan Trust mortgage pass-through certificates: Series 2006-1 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class M-4 affirmed at 'BBB+'; -- Class M-5 affirmed at 'BBB'; -- Class M-6 affirmed at 'BBB-'; -- Class M-7 affirmed at 'BB+; -- Class M-8 affirmed at 'BB'. Series 2006-2 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class M-7 affirmed at 'BBB+; -- Class M-8 affirmed at 'BBB'; -- Class M-9 affirmed at 'BBB-; -- Class B-1 affirmed at 'BB+'. Series 2006-3 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class M-7 affirmed at 'BBB+; -- Class M-8 affirmed at 'BBB'; -- Class M-9 affirmed at 'BBB-; -- Class B-1 affirmed at 'BB+'; -- Class B-2 affirmed at 'BB'. The affirmations affect approximately $464 million of the outstanding certificates and reflect a stable relationship between credit enhancement and expected loss. The collateral of the above transactions primarily consists of fixed-rate and adjustable-rate mortgage loans secured by first and second liens on one- to four-family residential properties. The loans were acquired by UBS from various originators. The collateral initially included delinquent loans, performing bankruptcy loans, foreclosure loans, and loans that have had prior delinquencies. Wells Fargo Bank, N.A., rated 'RMS1' by Fitch, is the master servicer for all of the above transactions. The pool factors range from 53% (2006-1) to 75% (2006-3). The transactions are seasoned from 14 months (2006-3) to 22 months (2006-1). VALMONT INDUSTRIES: S&P Upgrades Corp. Rating to BB+ from BB ------------------------------------------------------------ Standard & Poor's Ratings Services raised its ratings on metal products fabricator Valmont Industries Inc. and removed them from CreditWatch, where they were placed with positive implications on Nov. 20, 2007. The corporate credit rating was raised to 'BB+' from 'BB'. The outlook is stable. "The upgrade reflects the company's continued strong operating performance as a result of steady growth in revenues and improvement in operating margins," said Standard & Poor's credit analyst Thomas Nadramia. "This has resulted in a meaningful improvement to credit measures that we would consider to be more appropriate for the higher rating. In addition, current spending levels in the highway and infrastructure sectors, as well as strong farm income underlying the company's irrigation business, should continue to support Valmont's good operating momentum." Valmont produces fabricated metal products, such as lighting and traffic poles, utility poles for electricity transmission, communication towers, agricultural irrigation equipment, and other tubular products. Standard & Poor's believes that bank lenders will fare the same as other senior unsecured creditors in the event of a default. "We aren't likely to revise the outlook to positive, given the company's relatively narrow product focus in cyclical niche markets, somewhat limited geographic diversity, and modest but increasing size," Mr. Nadramia said. "We could revise the outlook to negative if there is a sustained reduction in demand or aggressive growth spending over the intermediate term." WACHOVIA AUTO: Fitch to Put 'BB-' Rating on $14.97 Mil. Trust ------------------------------------------------------------- Fitch Ratings expects to assign these ratings to Wachovia Auto Loan Owner Trust 2008-1: -- $107,000,000 class A-1 'F1+'; -- $204,000,000 class A-2 'AAA'; -- $189,000,000 class A-3 'AAA'; -- $22,455,000 class B 'AA'; -- $26,946,000 class C 'A'; -- $34,431,000 class D 'BBB-'; -- $14,970,000 class E 'BB-'. WACHOVIA AUTO: S&P Puts Preliminary BB Ratings on Two Sub Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Wachovia Auto Loan Owner Trust 2008-1's $598.80 million asset-backed notes series 2008-1. The preliminary ratings are based on information as of Jan. 15, 2008. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The credit enhancement in the form of subordination, a reserve fund, overcollateralization, and excess spread; -- The collateral characteristics of the securitized pool of auto loans; -- The sequential payment structure, which features a reprioritization mechanism under which subordinate interest can be used to cover senior principal; and -- The transaction's sound legal structure. Preliminary Ratings Assigned Wachovia Auto Loan Owner Trust 2008-1 Amount Legal final Class Rating Type (million)** maturity ----- ------ ---- ----------- ----------- A-1 A-1+ Sr. Fixed $107.000 January 2009 A-2 AAA Sr. Fixed/fltg $204.000 March 2011 A-3 AAA Sr. Fixed/fltg $189.000 October 2012 B AA Sub Fixed $22.455 December 2012 C A Sub Fixed $26.946 April 2013 D BB Sub Fixed $34.431 October 2013 E BB- Sub Fixed $14.970 August 2015 * The interest rates on each class will be determined on the pricing date. ** The actual size of these tranches will be determined on the pricing date. WACHOVIA BANK: Stable Performance Cues Fitch to Affirm Ratings -------------------------------------------------------------- Fitch Ratings affirms these classes of Wachovia Bank Commercial Mortgage Trust, Series 2005-C20, commercial mortgage pass-through certificates as: -- $ 303.4 Million class A-3SF at 'AAA'; -- $ 218.5 Million class A-4 at 'AAA'; -- $ 121.1 Million class A-5 at 'AAA'; -- $ 218.8 Million class A-6A at 'AAA'; -- $ 50.0 Million class A-6B at 'AAA'; -- $ 176.1 Million class A-PB at 'AAA'; -- $ 861.8 Million class A-7 at 'AAA'; -- $ 315.3 Million class A-1A at 'AAA'; -- $ 100.0 Million class A-MFL at 'AAA'; -- $ 266.4 Million class A-MFX at 'AAA'; -- $ 274.8 Million class A-J at 'AAA'; -- Interest-only class X-P at 'AAA'; -- Interest-only class X-C at 'AAA'; -- $ 77.9 Million class B at 'AA'; -- $ 27.5 Million class C at 'AA-'; -- $ 68.7 Million class D at 'A'; -- $ 41.2 Million class E at 'A-'; -- $ 41.2 Million class F at 'BBB+'; -- $ 32.1 Million class G at 'BBB'; -- $ 41.2 Million class H at 'BBB-'; -- $ 22.9 Million class J at 'BB+'; -- $ 13.7 Million class K at 'BB'; -- $ 13.7 Million class L at 'BB-'; -- $ 9.2 Million class M at 'B+'; -- $ 9.2 Million class N at 'B'; -- $ 9.2 Million class O at 'B-'; The $50.4 million Class P is not rated by Fitch. Classes A-1 and A-2 have paid in full. The rating affirmations are the result of stable performance and minimal paydown since issuance. As of the December 2007 remittance report, the transaction has paid down 8.2% to $3.36 billion from $3.66 billion at issuance. There are currently no delinquent or specially serviced loans in the transaction. Five loans, Americas Mart (5.9%), 60 Hudson Street (4.8%), Westfield San Francisco Centre (1.8%), 101 Avenue of the Americas (1.7%), and JCS Studios (0.6%) maintain investment grade shadow ratings due to stable performance since issuance. Americas Mart, a 4.1 million square foot merchandise mart property in Atlanta, Gseorgia, was 100% occupied as of September 2007 compared to 95.9% at issuance. 60 Hudson Street, a 1.1 million sf office property located in New York City was 77% occupied as of June 2007, compared to 78.8% at issuance. Westfield San Francisco Centre, a 498,103 sf regional mall located in San Francisco, California, was 93.9% occupied as of December 2006, compared to 99.2% at issuance. 101 Avenue of the Americas, a 411,097 sf office property located in New York, was 100% occupied as of September 2007 and JCS Studios, a 95,870 sf industrial property located in Brooklyn, New York was 100% occupied as of June 2007, both unchanged from issuance. YOUNG BROADCASTING: Selling Largest TV Station; Hires Moelis & Co. ------------------------------------------------------------------ Young Broadcasting Inc. has retained prominent financial advisors Moelis & Company to conduct a process leading to the sale of the company's largest station, KRON-TV, based in San Francisco, California. San Francisco is the sixth largest television market in the United States. Young Broadcasting stated that its goal was to conclude an agreement for the sale of KRON-TV before the end of the first quarter. In addition to the station's considerable assets the buyer will benefit from certain favorable tax attributes. "When we purchased KRON-TV in 2000 we believed we had acquired a jewel and we still feel that is the case. KRON-TV is one of the most valuable television stations in the country", stated Vincent Young, Chairman of Young Broadcasting. "Our decision to sell is based on the high level of interest in the property that we have received. It is purely a strategic economic decision, allowing us to benefit from the proceeds of the sale to further our future corporate initiatives." Moelis & Company is a relationship-based investment bank that provides advice on mergers and acquisitions, restructurings and other corporate finance matters and manages investment funds which integrate capital solutions with the firm's advisory expertise. Moelis & Company serves a broad client base through its offices in Los Angeles, New York and Boston. About Young Broadcasting Headquartered in New York City, Young Broadcasting Inc. -- http://www.youngbroadcasting.com/-- owns ten television stations and the national television representation firm, Adam Young Inc. Five stations are affiliated with the ABC Television Network, three are affiliated with the CBS Television Network, one is affiliated with the NBC Television Network, and one is affiliated with MyNetwork. In addition, KELO-TV-Sioux Falls, SD is also the MyNetwork affiliate in that market through the use of its digital channel capacity. * * * As reported in the Troubled Company Reporter on Jan. 15, 2008, Moody's Investors Service downgraded Young Broadcasting Inc.'s Corporate Family Rating to Caa1 from B3, its Probability of Default Rating to Caa2 from B3 and its $370 million secured credit facility ($20 million revolver, $350 million term loan) to B1 from Ba3. In addition, Moody's downgraded Young's 10% Senior Subordinated Notes due 2011 and 8 _% Senior Subordinated Notes due 2014 to Caa2 from Caa1. The ratings outlook is negative. Standard & Poor's Ratings Services affirmed the ratings on Young Broadcasting Inc., including the 'CCC+' corporate credit rating, and revised the outlook to developing from stable. YOUNG BROADCASTING: Sept. 30 Balance Sheet Upside-Down by $216MM ---------------------------------------------------------------- Young Broadcasting Inc. reported results for the three and nine months ended Sept. 30, 2007. At Sept. 30, 2007, the company's balance sheet total assets of $737.0 million and total liabilities of $953.8 million, resulting in a stockholders' deficit of $216.8 million. Net revenue for the quarter was $47.5 million, down from the $53.6 million reported for the same period in 2006, primarily reflecting a $4.3 million decrease in net political revenue. In a year not featuring a major election cycle, YBI saw political revenue for the quarter more than double over the third quarter of 2005 to $2.8 million from $1.3 million. Operating expenses in the third quarter of 2007 were 8.2% lower than operating expenses in the same quarter of 2006. The quarter's SOP declined to $5.8 million from $8.1 million for the same period last year. For the nine months ended Sept. 30, 2007, net revenues were $146.3 million, or 7.8% lower than the same period in 2006. Operating expenses during the nine months ended Sept. 30, 2007 decreased 4.3% to $128.7 million. SOP for the nine months ended Sept. 30, 2007 was $27.4 million. The company's cost-saving initiatives once again resulted in a reduction of its operating expenses. YBI has significantly reduced its operating expenses in recent years. The last time that quarterly operating expenses were lower than the $42.2 million reported for the quarter ended Sept. 30, 2007 was in the third quarter of 2003. The Company believes that its costs will remain stable or decline for the next few quarters. "The strength of the newscasts airing on our local stations continues to be a magnet for political advertising even during an off-cycle year such as the one we're currently in," said Vincent Young, Chairman of Young Broadcasting Inc. He added, "While confronted by the economic weakness in some of our markets and the downturn in the automotive and financial institution sectors, our group has continued to positively position itself in the marketplace through our innovative 3rd Leg sales campaigns. We are also encouraged by the positive ratings trends in prime time at KRON-TV in San Francisco as a result of the new programming line-up being employed by MyNetwork TV." "I am optimistic about our prospects in 2008," Mr. Young continued. "Successful new sales programs, political revenues, possible retransmission fees and the expense reductions described above should result in strong growth." About Young Broadcasting Headquartered in New York City, Young Broadcasting Inc. -- http://www.youngbroadcasting.com/-- owns ten television stations and the national television representation firm, Adam Young Inc. Five stations are affiliated with the ABC Television Network, three are affiliated with the CBS Television Network, one is affiliated with the NBC Television Network, and one is affiliated with MyNetwork. In addition, KELO-TV-Sioux Falls, SD is also the MyNetwork affiliate in that market through the use of its digital channel capacity. * * * As reported in the Troubled Company Reporter on Jan. 15, 2008, Moody's Investors Service downgraded Young Broadcasting Inc.'s Corporate Family Rating to Caa1 from B3, its Probability of Default Rating to Caa2 from B3 and its $370 million secured credit facility ($20 million revolver, $350 million term loan) to B1 from Ba3. In addition, Moody's downgraded Young's 10% Senior Subordinated Notes due 2011 and 8 _% Senior Subordinated Notes due 2014 to Caa2 from Caa1. The ratings outlook is negative. Standard & Poor's Ratings Services affirmed the ratings on Young Broadcasting Inc., including the 'CCC+' corporate credit rating, and revised the outlook to developing from stable. * S&P Puts Ratings on 162 Tranches Under Negative CreditWatch ------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on 162 tranches from 33 U.S. cash flow and hybrid collateralized debt obligations of asset-backed securities on CreditWatch with negative implications. The CDO tranches with ratings placed on CreditWatch negative have a total issuance amount of $5.369 billion, and all are backed in part by recent-vintage residential mortgage-backed securities either by directly holding notes from the RMBS transactions or by holding notes from other CDO transactions that are in turn collateralized by RMBS. Fourteen of these 33 transactions are high-grade structured finance CDOs of ABS (CDOs of ABS collateralized at origination primarily by 'AAA', 'AA', and some 'A' rated tranches of RMBS and other SF securities), and eight transactions are mezzanine SF CDOs of ABS (collateralized by 'A' and 'BBB' rated tranches of RMBS and other SF securities). The other 11 transactions are CDO of CDO transactions that were collateralized at origination primarily by notes from other CDOs, as well as by tranches from RMBS and other SF transactions. Standard & Poor's is continuing its review of cash flow and hybrid CDO transactions with exposure to downgraded RMBS and will take action on the CDO ratings where appropriate. Ratings Placed on CreditWatch Negative Rating ------ Transaction Tranche To From ----------- ------- -- ---- Ayresome CDO I Ltd. A-2 AAA/Watch Neg AAA Ayresome CDO I Ltd. A-3 AAA/Watch Neg AAA Ayresome CDO I Ltd. B AA/Watch Neg AA Ayresome CDO I Ltd. C A/Watch Neg A Ayresome CDO I Ltd. Combo secs BBB-/Watch Neg BBB- Ayresome CDO I Ltd. D BBB/Watch Neg BBB Broderick CDO 2 Ltd. B AA/Watch Neg AA Broderick CDO 2 Ltd. C A/Watch Neg A Broderick CDO 2 Ltd. D BBB/Watch Neg BBB Broderick CDO 2 Ltd. E BB+/Watch Neg BB+ Centre Square CDO Ltd. A-1 AAA/Watch Neg AAA Centre Square CDO Ltd. A-2A AAA/Watch Neg AAA Centre Square CDO Ltd. A-2B AAA/Watch Neg AAA Centre Square CDO Ltd. A-3 AAA/Watch Neg AAA Centre Square CDO Ltd. B AA/Watch Neg AA Centre Square CDO Ltd. C AA-/Watch Neg AA- Centre Square CDO Ltd. D A/Watch Neg A Class V Funding II Ltd. A-1 AAA/Watch Neg AAA Class V Funding II Ltd. A-2A AAA/Watch Neg AAA Class V Funding II Ltd. A-2B AAA/Watch Neg AAA Class V Funding II Ltd. B AA/Watch Neg AA Class V Funding II Ltd. C AA-/Watch Neg AA- Class V Funding II Ltd. D BBB/Watch Neg BBB Durant CDO 2007-1 Ltd. A-1 AAA/Watch Neg AAA Durant CDO 2007-1 Ltd. A-2 AAA/Watch Neg AAA Durant CDO 2007-1 Ltd. B AA/Watch Neg AA Durant CDO 2007-1 Ltd. C AA-/Watch Neg AA- Forge ABS High Grade CDO I Ltd. A3 AAA/Watch Neg AAA Forge ABS High Grade CDO I Ltd. A4 AAA/Watch Neg AAA Forge ABS High Grade CDO I Ltd. B AA/Watch Neg AA Forge ABS High Grade CDO I Ltd. C AA-/Watch Neg AA- Forge ABS High Grade CDO I Ltd. D A/Watch Neg A Forge ABS High Grade CDO I Ltd. E BBB/Watch Neg BBB Highgate ABS CDO Ltd. A-2 AAA / Watch Neg AAA Highgate ABS CDO Ltd. B AA/Watch Neg AA Highgate ABS CDO Ltd. C A/Watch Neg A Highgate ABS CDO Ltd. D BBB/Watch Neg BBB HSPI Diversified CDO Fund I Ltd. A-1 AAA/Watch Neg AAA HSPI Diversified CDO Fund I Ltd. A-2 AAA/Watch Neg AAA HSPI Diversified CDO Fund I Ltd. A-3 AA/Watch Neg AA HSPI Diversified CDO Fund I Ltd. B A/Watch Neg A HSPI Diversified CDO Fund I Ltd. C BBB/Watch Neg BBB HSPI Diversified CDO Fund I Ltd. S AAA/Watch Neg AAA HSPI Diversified CDO Fund II Ltd A-2 AAA/Watch Neg AAA HSPI Diversified CDO Fund II Ltd A-3 AAA/Watch Neg AAA HSPI Diversified CDO Fund II Ltd A-4 AA/Watch Neg AA HSPI Diversified CDO Fund II Ltd B-1 A+/Watch Neg A+ HSPI Diversified CDO Fund II Ltd C BBB/Watch Neg BBB HSPI Diversified CDO Fund II Ltd Comp Oblig BBB/Watch Neg BBB HSPI Diversified CDO Fund II Ltd D BB+/Watch Neg BB+ IMAC CDO 2007-2 Ltd A-2 AAA/Watch Neg AAA IMAC CDO 2007-2 Ltd A-3 AAA/Watch Neg AAA IMAC CDO 2007-2 Ltd B AA/Watch Neg AA IMAC CDO 2007-2 Ltd C AA-/Watch Neg AA- IMAC CDO 2007-2 Ltd D A/Watch Neg A IMAC CDO 2007-2 Ltd E A-/Watch Neg A- IMAC CDO 2007-2 Ltd F BBB+/Watch Neg BBB+ IMAC CDO 2007-2 Ltd G BBB-/Watch Neg BBB- Inman Square Funding II Ltd I AAA/Watch Neg AAA Inman Square Funding II Ltd II AA/Watch Neg AA Inman Square Funding II Ltd III-Fltg A/Watch Neg A Inman Square Funding II Ltd III-Fxd A/Watch Neg A Inman Square Funding II Ltd IV BBB/Watch Neg BBB Inman Square Funding II Ltd V BB+/Watch Neg BB Jupiter High-Grade CDO IV Ltd D A-/Watch Neg A- Jupiter High-Grade CDO IV Ltd E BBB+/Watch Neg BBB+ Jupiter High-Grade CDO IV Ltd F BBB/Watch Neg BBB Jupiter High-Grade CDO VI Ltd A-4 AAA/Watch Neg AAA Jupiter High-Grade CDO VI Ltd B AA/Watch Neg AA Jupiter High-Grade CDO VI Ltd C AA-/Watch Neg AA- Jupiter High-Grade CDO VI Ltd D A/Watch Neg A Jupiter High-Grade CDO VI Ltd E BBB/Watch Neg BBB Le Monde CDO I LLC D BBB/Watch Neg BBB Le Monde CDO I LLC E BB/Watch Neg BB Longshore CDO Funding 2006-1 Ltd D BBB/Watch Neg BBB Mars CDO I Ltd A-2 AAA/Watch Neg AAA Mars CDO I Ltd A-3 AAA/Watch Neg AAA Mars CDO I Ltd B AA/Watch Neg AA Mars CDO I Ltd C AA-/Watch Neg AA- Mars CDO I Ltd D A/Watch Neg A Mars CDO I Ltd F BBB/Watch Neg BBB Maxim High Grade CDO I Ltd A4 AAA/Watch Neg AAA Maxim High Grade CDO I Ltd A5 AAA/Watch Neg AAA Maxim High Grade CDO I Ltd B AA/Watch Neg AA Maxim High Grade CDO I Ltd C AA-/Watch Neg AA- Maxim High Grade CDO I Ltd D A/Watch Neg A Maxim High Grade CDO I Ltd E1 BBB/Watch Neg BBB Maxim High Grade CDO I Ltd E2 BBB/Watch Neg BBB Millstone II CDO Ltd. A-2 AAA/Watch Neg AAA Millstone II CDO Ltd. B AA/Watch Neg AA Millstone II CDO Ltd. C A/Watch Neg A Millstone II CDO Ltd. D BBB/Watch Neg BBB MKP Vela CBO Ltd. A AAA/Watch Neg AAA MKP Vela CBO Ltd. B AA/Watch Neg AA MKP Vela CBO Ltd. C A/Watch Neg A MKP Vela CBO Ltd. D BBB/Watch Neg BBB MKP Vela CBO Ltd. X-1 BBB-/Watch Neg BBB- MKP Vela CBO Ltd. X-2 BBB-/Watch Neg BBB- Ridgeway Court Fndg I Ltd. A3 AAA/Watch Neg AAA Ridgeway Court Fndg I Ltd. A4 AA/Watch Neg AA Ridgeway Court Fndg I Ltd. B A-/Watch Neg A- Ridgeway Court Fndg I Ltd. C BBB/Watch Neg BBB Ridgeway Court Fndg I Ltd. Q A/Watch Neg A Ridgeway Court Fndg II Ltd. A3 AAA/Watch Neg AAA Ridgeway Court Fndg II Ltd. A4 AAA/Watch Neg AAA Ridgeway Court Fndg II Ltd. A5 AA/Watch Neg AA Ridgeway Court Fndg II Ltd B A+/Watch Neg A+ Ridgeway Court Fndg II Ltd. C A-/Watch Neg A- Silver Elms CDO II Ltd A-3 AAA/Watch Neg AAA Silver Elms CDO II Ltd B AA/Watch Neg AA Silver Elms CDO II Ltd C A/Watch Neg A Silver Elms CDO II Ltd D BBB/Watch Neg BBB Silver Elms CDO plc A-2 AAA/Watch Neg AAA Silver Elms CDO plc A-3 AAA/Watch Neg AAA Silver Elms CDO plc B AA/Watch Neg AA Silver Elms CDO plc C A/Watch Neg A Silver Elms CDO plc D-1 BBB/Watch Neg BBB Silver Elms CDO plc D-2 BBB/Watch Neg BBB Squared CDO 2007-1 Ltd. A-1 AAA/Watch Neg AAA Squared CDO 2007-1 Ltd. A-2a AAA/Watch Neg AAA Squared CDO 2007-1 Ltd. A-2b AAA/Watch Neg AAA Squared CDO 2007-1 Ltd. B AA/Watch Neg AA Squared CDO 2007-1 Ltd. C A/Watch Neg A Squared CDO 2007-1 Ltd. D A-/Watch Neg A- Squared CDO 2007-1 Ltd. E BBB/Watch Neg BBB Stillwater ABS CDO 2006-1 Ltd. A-3 AAA/Watch Neg AAA Stillwater ABS CDO 2006-1 Ltd. B AA/Watch Neg AA Stillwater ABS CDO 2006-1 Ltd. C A-/Watch Neg A- Stillwater ABS CDO 2006-1 Ltd. D BBB/Watch Neg BBB Stockbridge CDO Ltd. A-3 AA/Watch Neg AA Stockbridge CDO Ltd. B A-/Watch Neg A- Synthetic Residential Asset Hybrid CDO 2004-10 Ltd. B AA/Watch Neg AA Synthetic Residential Asset Hybrid CDO 2004-10 Ltd. C A/Watch Neg A Synthetic Residential Asset Hybrid CDO 2004-10 Ltd. D BBB/Watch Neg BBB TABS 2005-3 Ltd. A-1 AAA/Watch Neg AAA TABS 2005-3 Ltd. A-2 AAA/Watch Neg AAA TABS 2005-3 Ltd. B AA/Watch Neg AA TABS 2005-3 Ltd. C A/Watch Neg A TABS 2005-3 Ltd. D BBB/Watch Neg BBB TAHOMA CDO II Ltd. A-2 AAA/Watch Neg AAA TAHOMA CDO II Ltd. B AA/Watch Neg AA TAHOMA CDO II Ltd. C A/Watch Neg A TAHOMA CDO II Ltd. D BBB/Watch Neg BBB TAHOMA CDO II Ltd. E BB+/Watch Neg BB+ TAHOMA CDO III Ltd. A-2 AAA/Watch Neg AAA TAHOMA CDO III Ltd. B AA/Watch Neg AA TAHOMA CDO III Ltd. C A/Watch Neg A TAHOMA CDO III Ltd. D BBB/Watch Neg BBB Tasman CDO Ltd. A2 AA/Watch Neg AA Tasman CDO Ltd. A3 A/Watch Neg A Tasman CDO Ltd. B BBB/Watch Neg BBB Tasman CDO Ltd. C BB+/Watch Neg BB+ Western Springs CDO Ltd. A-2 AAA/Watch Neg AAA Western Springs CDO Ltd. A-3 AAA/Watch Neg AAA Western Springs CDO Ltd. B AA/Watch Neg AA Western Springs CDO Ltd. C AA-/Watch Neg AA- Western Springs CDO Ltd. D A/Watch Neg A Western Springs CDO Ltd. E BBB/Watch Neg BBB Western Springs CDO Ltd. F BBB-/Watch Neg BBB- Zais Investment Grade Ltd. IX C A-/Watch Neg A- Zais Investment Grade Ltd. IX D BBB-/Watch Neg BBB- * Standard and Poor's Cuts Ratings on 13 Synthetic CDO Tranches --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 13 U.S. synthetic collateralized debt obligation tranches and placed its ratings on 22 U.S. synthetic CDO tranches on CreditWatch with negative implications. At the same time, S&P placed one tranche rating on CreditWatch with positive implications, and affirmed eight tranche ratings and removed them from CreditWatch negative. In addition, S&P withdrew one tranche rating after the notes were terminated. The negative CreditWatch placements and downgrades reflect negative rating migration in the respective portfolios, as well as synthetic rated overcollateralization ratios that fell below 100% as of the December month-end run. The classes with affirmed ratings had SROCs at 100% at their current rating levels. The one rating that S&P placed on CreditWatch positive had an SROC that was at or above 100% at the next higher rating level. The downgrades of the LBSPK 2007-1 SPC transactions reflect the direct link that the note ratings have to the rating on Lancer Funding II Ltd.'s class A1J notes, which were downgraded Jan. 14, 2007, to 'CCC-'. The rating on these notes remains on creditwatch negative. Ratings List Abacus 2005-1 CB1 Ltd. Rating ------ Class To From ----- -- ---- E-1 BBB- BBB Abacus 2006-8 Ltd. Rating ------ Class To From ----- -- ---- A-2 AA- AA ABSpoke 2005-X Ltd. Rating ------ Class To From ----- -- ---- VFRN BBB BBB+ Calculus HG CDO Trust Series 2006-1 Rating ------ Class To From ----- -- ---- VarDisTrUn AA- AA Calculus HG CDO Trust Series 2006-2 Rating ------ Class To From ----- -- ---- VarDisTrUn BB+ BBB- Credit Default Swap Swap Risk Rating-Protection Buyer, Markov Chain II C Rating ------ Class To From ----- -- ---- Tranche A+srb AA-srb ECO 2007-1 SPC Series 2007-V Rating ------ Class To From ----- -- ---- Notes BBB/Watch Neg BBB ECO 2007-1 SPC Series 2007-IV Rating ------ Class To From ----- -- ---- Notes BBB+/Watch Neg BBB+ ECO 2007-1 SPC Series 2007-III Rating ------ Class To From ----- -- ---- Notes A/Watch Neg A ECO 2007-1 SPC Series 2007-II Rating ------ Class To From ----- -- ---- Notes AA+/Watch Neg AA+ Infiniti SPC Ltd. Series CPORTS 2006-2 Rating ------ Class To From ----- -- ---- B-1 A-/Watch Neg A- B-2 A-/Watch Neg A- Infiniti SPC Ltd. Series Solar IV 2007-4 Rating ------ Class To From ----- -- ---- B AA AA/Watch Neg Iridal Public Ltd. Co. Series 5 Rating ------ Class To From ----- -- ---- Cr link Nt BBB-/Watch Neg BBB- LBSPK 2007-1 SPC LBSPK 2007-1 SPC I Rating ------ Class To From ----- -- ---- Notes CCC-/Watch Neg AAA/Watch Neg LBSPK 2007-1 SPC LBSPK 2007-1 SPC II Rating ------ Class To From ----- -- ---- Notes CCC-/Watch Neg AAA/Watch Neg LBSPK 2007-1 SPC LBSPK 2007-1 SPC III Rating ------ Class To From ----- -- ---- Notes CCC-/Watch Neg AAA/Watch Neg LBSPK 2007-1 SPC LBSPK 2007-1 SPC IV Rating ------ Class To From ----- -- ---- Notes CCC-/Watch Neg AAA/Watch Neg LBSPK 2007-1 SPC LBSPK 2007-1 SPC V Rating ------ Class To From ----- -- ---- Notes CCC-/Watch Neg AAA/Watch Neg Magnolia Finance II PLC 2006-5A Rating ------ Class To From ----- -- ---- A AA+ AAA Magnolia Finance II PLC Series 2006-9B Rating ------ Class To From ----- -- ---- Notes A+ AA- Maple 2004-1789 Rating ------ Class To From ----- -- ---- Tranche D A- A-/Watch Neg Morgan Stanley ACES SPC Series 2006-7 Rating ------ Class To From ----- -- ---- IIA BBB BBB/Watch Neg Morgan Stanley ACES SPC Series 2006-24 Rating ------ Class To From ----- -- ---- II BBB BBB/Watch Neg Morgan Stanley ACES SPC Series 2007-13 Rating ------ Class To From ----- -- ---- IV B+/Watch Neg B+ PARCS Master Trust Series 2007-18 Piedmont Units Rating ------ Class To From ----- -- ---- Trust Unit AA AA/Watch Neg PARCS Master Trust Series 2007-24 SAVOY Units Rating ------ Class To From ----- -- ---- Units AA AA/Watch Neg Primus Managed PRISMs 2004-1 Ltd. Rating ------ Class To From ----- -- ---- A-F A-/Watch Neg A- B-2L BBB/Watch Neg BBB REPACS Trust Series: CAT 2005-1 Rating ------ Class To From ----- -- ---- Debt units A/Watch Neg A REPACS Trust Series Triple M2 Rating ------ Class To From ----- -- ---- Debt units AAA/Watch Neg AAA REPACS Trust Series 2006 Mount Ventoux Rating ------ Class To From ----- -- ---- Debt units BBB+/Watch Neg BBB+ REVE SPC Dryden XVII Series 2007-1 Rating ------ Class To From ----- -- ---- A Series19 N.R. AAA Rutland Rated Investments Series Rumson 2007-2 (42) Rating ------ Class To From ----- -- ---- A1-L1 AAA/Watch Neg AAA Series 2006-1 Segregated Portfolio of Stowe CDO SPC Rating ------ Class To From ----- -- ---- A A A/Watch Neg Strata 2005-19 Limited Floating Rate Notes Rating ------ Class To From ----- -- ---- FRN BBB-/Watch Neg BBB- STRATA Trust Series 2006-17 Rating ------ Class To From ----- -- ---- Notes AA-/Watch Pos AA- Structured Investment Corp. Series 66 Rating ------ Class To From ----- -- ---- A BB BB/Watch Neg Terra CDO SPC Ltd. 2007-1 segregated port Rating ------ Class To From ----- -- ---- B1 A-/Watch Neg A- TIERS Montana Floating Rate Credit Linked Trust Series 2007-3 Rating ------ Class To From ----- -- ---- Certificate AA-/Watch Neg AA- Toronto-Dominion Bank CAD 48,031,000 Portfolio Credit Linked Notes Rating ------ Class To From ----- -- ---- Prt Cr Lnk BB-/Watch Neg BB- Tribune Ltd. Series 28 Rating ------ Class To From ----- -- ---- Aspen 2006-1 A-3 A-/Watch Neg A- Tribune Ltd. Series 39 Rating ------ Class To From ----- -- ---- Tranche A+/Watch Neg A+ UBS AG $9,000,000 AMP AA CDO 4.5-9.0 Rating ------ Class To From ----- -- ---- Notes AA/Watch Neg AA UBS AG $16,000,000 AMP AA CDO 2.5-4.5 Rating ------ Class To From ----- -- ---- Notes A/Watch Neg A * Debtwire Unveils 2008 Distressed Debt Outlook for North America ----------------------------------------------------------------- Debtwire reported the findings of its 2008 Distressed Debt Market Outlook for North America survey. The study, published in conjunction with Bingham McCutchen LLP, FTI Consulting Inc. and Macquarie Securities (USA) Inc., highlights major issues and trends facing the North American distressed debt market in 2008 and includes the expectations of market participants. While most traditional investors look for companies on a growth track, distressed specialists focus on the darker side of the economy. They track industries and corporations that are poised for collapse or those that have already fallen and are undervalued as a result. Nearly three-quarters of respondents said they plan to place more of their assets in distressed debt in 2008. Debtwire interviewed 101 of the largest distressed-debt market participants to gauge their outlook for 2008. Continued market decline is one of the major trends of study, with 70 percent of proprietary trading desks predicting a recession, and none ruling one out. Fifty-seven percent of hedge funds said they expect a recession, and 43 percent of institutional investors agreed. "We've already seen a brisk pick-up in the fourth quarter of 2007 of commercial loan and bond restructurings beyond the subprime and asset-backed defaults we saw all summer," said Michael Reilly, co- leader of Bingham's Financial Restructuring Practice Group. "Distressed debt momentum is building rapidly because lenders who were hammered in the asset-backed markets in 2007 are now forced to be more conservative in the commercial markets in 2008." According to Ken Meehan, Editor of Debtwire, North America, "The days of easy corporate credit and wide-spread issuer friendly concessions aren't coming back anytime soon. Refinancing opportunities and economic growth are both expected to erode in 2008, prompting expectations of a substantial increase in the amount of capital distressed debt investors plan to allocate to the asset class. However, unlike the beginning of past cycles when distressed securities were abundant and specialized investors were relatively few, this time around there promises to be much more competition among a wider pool of prepared professionals." "The potential fallout from a sustained contraction in corporate credit markets could be worse than in previous cycles because many more large U.S. companies have borrowed aggressively and are financially vulnerable, judging by the overall distribution of corporate credit ratings and the preponderance of "deep junk" issuers, commented DeLain Gray, leader of FTI Consulting's Corporate Finance Practice. "Borrowers will still have access to capital, but many of the more highly leveraged credits will be shut out of traditional borrowing channels. For distressed investors, such a scenario spells opportunity," adds Gray. Mick Solimene, Managing Director, Macquarie Securities (USA) Inc., added, "There is clearly a sizeable and growing interest in distressed debt investing going into 2008. The euphoria we've seen in the buyout market over the past few years is clearly muted at the present time. As the liquidity chill takes longer to thaw, distressed debt investors will have greater capital to work their way through an increasing supply of distressed opportunities in 2008." Among the other survey findings: -- The ratings agency predicts a spike in the default rate over the next 12 months to 4.2 percent, while survey participants expect a moderate climb, with 39 percent of respondents anticipating a default rate between2-3 percent by the end of 2008, and 47 percent of respondents expecting a 3-4 percent rate. -- Three-quarters of those surveyed believe that hedge fund liquidations will increase in 2008, with roughly 10 percent of respondents to the 2008 Outlook predicting a 50-75 percent risk of systematic shock, compared to zero in last year's study. -- Two-thirds of participants picked financial services as one of the top three sectors offering the greatest distressed investing opportunities in 2008. Almost three-quarters listed first-lien loans among the three most attractive instruments for the next year. Only 17 percent singled out the loans as one of the three least attractive investment opportunities. The full survey is available for free at: http://ResearchArchives.com/t/s?2709 About Bingham McCutchen LLP Bingham McCutchen LLP -- http://www.bingham.com-- is a national law firm with global capabilities. The firm represents clients in financial restructuring, high-stakes litigation, complex financing and regulatory matters, government affairs, and a wide variety of sophisticated corporate and technology transactions. About Macquarie The Headquartered in Sydney, Australia, Macquarie Group (ASX: MQG) (Macquarie) is a diversified international provider of banking, financial, advisory and investment services, with approximately $200 billion of total assets under management as of Sept. 30, 2007. Macquarie Group Limited is a top 20 company listed on the Australian Securities Exchange with a current market capitalization of over $19 billion. Macquarie has been active in the Americas for over a decade, establishing its first office in New York in 1994. Macquarie has more than 1,500 staff in 25 locations in North and South America. Macquarie continues to grow its North and South American activities by expanding existing businesses, forming joint ventures with local partners and making niche acquisitions About FTI Consulting FTI Consulting (NYSE: FCN) -- http://www.fticonsulting.com/-- is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. With more than 2,400 professionals located in most major business centers in the world, we work closely with clients every day to anticipate, illuminate, and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management and restructuring. About Debtwire Debtwire -- http://www.debtwire.com-- publishes real-time news and data for financial professionals in the distressed debt and leveraged finance markets across the world. Debtwire is part of the Mergermarket Group which has more than 400 employees worldwide and regional head offices in New York, London and Hong Kong. The Mergermarket Group -- http://www.mergermarket.com-- is a division of the Financial Times Group, publisher of the Financial Times newspaper, FT.com, Expansion and FT Deutschland. The FT Group is a division of Pearson plc, the international media group. * Delaware Bankruptcy Court is Preferred "Emergency Room" --------------------------------------------------------- Troubled companies continue to prefer the U.S. Bankruptcy Court for the District of Delaware as their venue for filing bankruptcies, Maureen Milford writes for The News Journal. Almost 80% of large companies ending in bankruptcy filed in Wilmington, Delaware last year, News Journal relates, citing data compilation of Prof. Lynn LoPucki at UCLA School of Law. Among the large, public companies that filed in Delaware are American Home Mortgage Investment Corp. and New Century Financial Corp., and Tweeter Home Entertainment Group Inc., AP notes. According to experts, the surge of large cases in Delaware is due to the four judges added in 2006, which allowed the state to become "Bankruptcy Capital" again, AP says. Bankruptcy Court Clerk at Delaware, David Bird, told AP that filings in 2007 went up from 179 to 220, a 23% increase, in which most of the filings were "mega-cases" done in the later part of the year. The surge of bankruptcy filings in Delaware is continuing in 2008, Mr. Bird told AP. Bankruptcies provide at least $50 million every year to the treasury of Delaware, AP reveals. Currently, the state has about 200 lawyers and six judges in place to attend to the anticipated flood of bankruptcies brought by the financial crunch, AP reports. These data indicate that Delaware being the Bankruptcy Capital "is both permanent and complete," AP adds, citing Prof. LoPucki. * Mortgage Values in Colorado Would Have Cost More, Bankers Say --------------------------------------------------------------- A bankers group based in Washington, D.C. said that the new bankruptcy law passed in 2007 would have made mortgage values in Colorado higher by $2,204, if it was passed in 2006, the Denver Business Journal reports. The Mortgage Bankers Association warned that the Emergency Home Ownership and Mortgage Equity Protection Act of 2007 (HR 3609), which would give bankruptcy judges the power to change home mortgage values, could in fact, create more difficulty on the home buyers' part, the Journal reports. The MBA explained that as Congress gives more authority to federal judges in dictating home prices, homebuilders could express uncertainty over home values, and would try to raise downpayments, interest rates, and closing payments on home mortgages, says the Journal. "Congress is, quite laudably, attempting to help consumers who face difficulties paying their mortgages... but this law will, ironically, create future difficulties by increasing mortgage costs," MBA Chairman-elect David Kittle told the Journal. He further said that Congress should work to provide uniform protection to consumers and not to make laws to increase mortgage expenses. * Rockford Area's Bankruptcy Filings Up by 20% in 2007 ------------------------------------------------------ Rockford, Illinois experienced a 20% climb in its bankruptcy filings in 2007, Alex Gary of BusinessRockford.com reports. According to Heidi Berardi, an education director at a Rockford counseling service, most of Rockford bankruptcies have always been caused by medical debts, says BusinessRockford. But now, she relates, bankruptcy filings caused by home mortgage issues appear to be the trend in 2007. Bankruptcy filings surged in 2005 before the Bankruptcy Abuse Prevention and Consumer Protection Act was ratified. Berardi told BusinessRockford that the 22.8% increase in bankruptcy filings was still a bit "misleading". Bankruptcy filings in 2007 had "caught up", in that there was a low rate of filings in 2006 following the new law, Berardi implied to BusinessRockford. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent Chapter 11 cases filed with assets and liabilities below $1,000,000: In Re Beyond Imagination, Inc. Bankr. N.D. Ala. Case No. 08-40027 Chapter 11 Petition filed January 8, 2008 See http://bankrupt.com/misc/alnb08-40027.pdf In Re H.H.B.T., Inc. Bankr. D. Mass. Case No. 08-10157 Chapter 11 Petition filed January 8, 2008 See http://bankrupt.com/misc/mab08-10157.pdf In Re L.&Y. Trucking, Inc. Bankr. S.D. Ala. Case No. 08-10073 Chapter 11 Petition filed January 9, 2008 See http://bankrupt.com/misc/alsb08-10073.pdf In Re S.A. Management Service, Inc. Bankr. M.D. Fla. Case No. 08-00154 Chapter 11 Petition filed January 9, 2008 See http://bankrupt.com/misc/flmb08-00154.pdf In Re P.S.F.C., L.L.C. Bankr. D. Md. Case No. 08-10405 Chapter 11 Petition filed January 9, 2008 See http://bankrupt.com/misc/mdb08-10405.pdf In Re Deangelis Brothers, Inc. Bankr. E.D. N.C. Case No. 08-00169 Chapter 11 Petition filed January 9, 2008 See http://bankrupt.com/misc/nceb08-00169.pdf In Re Hudson Burrito Corp. Bankr. S.D. N.Y. Case No. 08-10051 Chapter 11 Petition filed January 9, 2008 See http://bankrupt.com/misc/nysb08-10051.pdf In Re Institut Sportswear, Inc. Bankr. S.D. N.Y. Case No. 08-10059 Chapter 11 Petition filed January 9, 2008 See http://bankrupt.com/misc/nysb08-10059.pdf In Re Paul Bartok Bankr. W.D. Penn. Case No. 08-20174 Chapter 11 Petition filed January 9, 2008 See http://bankrupt.com/misc/pawb08-20174.pdf In Re Jorge C. Zamora-Quezada Bankr. S.D. Tex. Case No. 08-70008 Chapter 11 Petition filed January 9, 2008 See http://bankrupt.com/misc/txsb08-70008.pdf In Re Clark Contracting Services, Inc. Bankr. W.D. Tex. Case No. 08-50046 Chapter 11 Petition filed January 9, 2008 See http://bankrupt.com/misc/txwb08-50046.pdf In Re Habitex, Inc. Bankr. W.D. Tex. Case No. 08-50047 Chapter 11 Petition filed January 9, 2008 See http://bankrupt.com/misc/txwb08-50047.pdf In Re Venus Day Spa Bankr. E.D. Va. Case No. 08-10096 Chapter 11 Petition filed January 9, 2008 See http://bankrupt.com/misc/vaeb08-10096.pdf In Re Discount Medical Supply of Florida, Inc. Bankr. M.D. Fla. Case No. 08-00295 Chapter 11 Petition filed January 10, 2008 See http://bankrupt.com/misc/flmb08-00295.pdf In Re Family Security Door & Window, Inc. Bankr. N.D. Ill. Case No. 08-00502 Chapter 11 Petition filed January 10, 2008 See http://bankrupt.com/misc/ilnb08-00502.pdf In Re Delmar Restaurant, Inc. Bankr. E.D. Mich. Case No. 08-40569 Chapter 11 Petition filed January 10, 2008 See http://bankrupt.com/misc/mieb08-40569.pdf In Re T.M.R.J., Inc. Bankr. D. Nev. Case No. 08-10194 Chapter 11 Petition filed January 10, 2008 See http://bankrupt.com/misc/nvb08-10194.pdf In Re J.W.A.E. Management, L.L.C. Bankr. C.D. Calif. Case No. 08-10427 Chapter 11 Petition filed January 10, 2008 Filed as Pro Se In Re R.T.A. Home and Office, Inc. Bankr. W.D. Mo. Case No. 08-60034 Chapter 11 Petition filed January 11, 2008 See http://bankrupt.com/misc/miwb08-60034.pdf In Re L.M.B. Enterprises Bankr. D. N.M. Case No. 08-10075 Chapter 11 Petition filed January 11, 2008 See http://bankrupt.com/misc/nmb08-10075.pdf In Re 531 Franklin Street Revocable Trust Bankr. W.D. N.Y. Case No. 08-10118 Chapter 11 Petition filed January 11, 2008 See http://bankrupt.com/misc/nywb08-10118.pdf In Re Tremont Land Co., Ltd. Bankr. N.D. Ohio Case No. 08-10188 Chapter 11 Petition filed January 11, 2008 See http://bankrupt.com/misc/ohnb08-10188.pdf In Re Roundhouse Enterprises Bankr. E.D. Penn. Case No. 08-20061 Chapter 11 Petition filed January 11, 2008 See http://bankrupt.com/misc/paeb08-20061.pdf In Re Funny Bone Comedy Club of Boise, L.L.C. Bankr. D. Idaho Case No. 08-00053 Chapter 11 Petition filed January 11, 2008 Filed as Pro Se In Re Investors Property Corp. Bankr. M.D. Fla. Case No. 08-00156 Chapter 11 Petition filed January 11, 2008 Filed as Pro Se In Re Smoky Mountain Cabins, L.L.C. Bankr. E.D. Tenn. Case No. 08-30131 Chapter 11 Petition filed January 11, 2008 See http://bankrupt.com/misc/tneb08-30131.pdf In Re Harvey Contractors, L.L.C. Bankr. M.D. Tenn. Case No. 08-00212 Chapter 11 Petition filed January 11, 2008 See http://bankrupt.com/misc/tnmb08-00212.pdf In Re Learning T.R.A.C., L.L.C. Bankr. E.D. Va. Case No. 08-10150 Chapter 11 Petition filed January 12, 2008 See http://bankrupt.com/misc/vaeb08-10150.pdf In Re Robert Ramp Diesel Service, Inc. Bankr. D. N.J. Case No. 08-10568 Chapter 11 Petition filed January 13, 2008 See http://bankrupt.com/misc/njb08-10568.pdf In Re Douglas William Begg Bankr. W.D. Wash. Case No. 08-10155 Chapter 11 Petition filed January 13, 2008 See http://bankrupt.com/misc/wawb08-10155.pdf In Re Rolling, Inc. Bankr. N.D. Ala. Case No. 08-80102 Chapter 11 Petition filed January 14, 2008 See http://bankrupt.com/misc/alnb08-80102.pdf In Re Sunrise Pools & Spas, Inc. Bankr. M.D. Penn. Case No. 08-50079 Chapter 11 Petition filed January 14, 2008 See http://bankrupt.com/misc/pamb08-50079.pdf In Re Ronald Brooks Miller Bankr. E.D. Calif. Case No. 08-20436 Chapter 11 Petition filed January 14, 2008 Filed as Pro Se In Re North Shore Tanning, L.L.C. Bankr. M.D. Fla. Case No. 08-00451 Chapter 11 Petition filed January 15, 2008 See http://bankrupt.com/misc/flmb08-00451.pdf In Re Stanula & Sons Building Management Bankr. N.D. Ill. Case No. 08-70099 Chapter 11 Petition filed January 15, 2008 See http://bankrupt.com/misc/ilnb08-70099.pdf In Re Malbern Holding Corp. Bankr. E.D. N.Y. Case No. 08-70197 Chapter 11 Petition filed January 15, 2008 See http://bankrupt.com/misc/nyeb08-70197.pdf In Re R.R.G. Cleaners, Inc. Bankr. E.D. Penn. Case No. 08-10344 Chapter 11 Petition filed January 15, 2008 See http://bankrupt.com/misc/paeb08-10344.pdf In Re Teraca Corp. Bankr. D. Colo. Case No. 08-10415 Chapter 11 Petition filed January 15, 2008 Filed as Pro Se In Re Springs Ranch, L.L.C. Bankr. E.D. Calif. Case No. 08-20454 Chapter 11 Petition filed January 15, 2008 Filed as Pro Se In Re Al's Commercial Cleaning, Inc. Bankr. E.D. Va. Case No. 08-70136 Chapter 11 Petition filed January 15, 2008 See http://bankrupt.com/misc/vaeb08-70136.pdf ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, Philline P. Reluya, Joseph Medel C. Martirez, and Peter A. Chapman, Editors. Copyright 2008. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***