T R O U B L E D C O M P A N Y R E P O R T E R Friday, January 18, 2008, Vol. 12, No. 15 Headlines 3700 ASSOCIATES: Receives Notice of Default from Deutsche Bank ACE SECURITIES: S&P Cuts 53 Classes' Ratings on Monthly Losses AEGIS ASSET: Moody's Cuts Ratings on Six Classes from Two Deals AMERICA'S FIRST: Asks Seminole Court's Okay to Liquidate Assets AMERICAN HOME: Moody's Cuts 16 Tranches' Ratings on Delinquency AMR CORP: Posts $69 Million Net Loss in 2007 Fourth Quarter ASARCO LLC: Wants to Hire Halpering Battaglia as Consulting Expert ASARCO LLC: Wants to Sell Perth Amboy Property for $19.8 Million ASPEN EXECUTIVE: Wants to Extend Plan-Filing Deadline to May 12 ATLANTIS PLASTICS: Weak Liquidity Spurs Moody's to Junk Rating BON-TON STORES: S&P Revises Outlook to Negative & Holds Ratings BROTMAN MEDICAL: Alvarez & Marsal Approved as Panel's Advisor BTC: Increased Credit Enhancement Cues Fitch to Lift Ratings CABLEVISION CORP: S&P Maintains BB Corporate Credit Rating CAPCO AMERICA: Fitch Holds 'B-' Rating on $24.9MM Cl. B-4 Certs. CENTRO NP: Moody's Slashes Senior Debt Rating to B3 From B1 CENTRO PROPERTIES: Bracewell & Giuliani Represents Noteholders CHARTERHOUSE BOISE: Developer Given Chance to Avoid Foreclosure CHESAPEAKE CORP: Amends Fourth Quarter 2007 Credit Covenants CHESAPEAKE CORP: Moody's Puts Ratings on Review & May Downgrade CHICAGO H&S: February 4 Deadline Set for Proofs of Claim Filing CLASS V FUNDING: Poor Credit Quality Cues Moody's Rating Cuts COMSTOCK HOME: Has Until July 7 to Comply with Nasdaq Rules CONSECO/GREEN TREE: Fitch Affirms Ratings on 54 Classes COOKSON SPC: S&P Junks Rating on 2007-1LAC Notes CREDIT SUISSE: Moody's Affirms Junk Ratings on Two Classes CWALT INC: Moody's Lowers Ratings on Nine Tranches to Low-B CWALT INC: Moody's Reviews 10 Tranches' Ratings for Likely Cuts CYGNAL TECHNOLOGIES: Amends Terms of Nov. 2007 DIP Facility Pact CYGNAL TECHNOLOGIES: Wants Further Extension of Stay Under CCAA DELPHI CORP: Gets $44.2 Mil. Bearing Biz Bid from ND Acquisition DELTA AIR: Commences Merger Negotiations with Northwest and UAL EDGEWATER FOODS: Posts $913,315 Net Loss in 1st Qtr. Ended Nov. 30 FBR SECURITIZATION: Losses Cues S&P's Rating Cuts on 20 Classes FREMONT INVESTMENT: S&P Confirms Mortgage Servicer Ranking FIRST RC: Voluntary Chapter 11 Case Summary GENERAL MOTORS: Outlines Turnaround Progress and 2008 Priorities GENESIS PHARMACEUTICALS: Sherb & Co. Raises Going Concern Doubt GLOBAL CREDIT: S&P Places BB- Rating Under Negative Watch GRAFTECH INTL: S&P Ratings Unmoved by $125MM Notes' Redemption GREENPOINT MORTGAGE: Moody's Downgrades Ratings on 11 Tranches GREENWICH CAPITAL: Stable Performance Cues Fitch to Hold Ratings GSC INVESTMENT: S&P Puts Preliminary BB Rating on $22MM Notes HANOVER INSURANCE: Moody's Reviews Ba1 Rating for Possible Cut HARBORVIEW MORTGAGE: Moody's Downgrades Ratings on 18 Tranches HAVEN HEALTHCARE: Committee Hires Pepper Hamilton as Counsel HEARTLAND AUTO: Gets Initial OK to Use Lenders' Cash Collateral HOVNANIAN ENT: S&P Cuts Preferred Stock's Rating to D from CCC+ IKONA GEAR: Nov. 30 Balance Sheet Upside-Down by $51,380 INDUSTRIAL DEV'T: Fitch Cuts Rating on Series 1997A Bonds to B+ ING RE (UK): Chap. 15 Petition Hearing Set for January 30 INPHONIC INC: Wants Court to Set February 28 as Claims Bar Date IWT TESORO: Withdraws Exclusive Periods Extension Plea JOHN CHEZIK: Punitive Damages Double Initial Verdict of $8.4 Mil. JOHNSON RUBBER: Court Approves Benesch Friendlander as Counsel JOHNSON RUBBER: Development Specialists OK'd as Financial Advisor JOHNSON RUBBER: Court Defers DIP Facility Final Hearing to Jan. 29 JP MORGAN: Moody's Holds Low-B Ratings on Six Certificates KATONAH 2007-I: S&P Puts Preliminary BB Rating on $10.5MM Notes KELLWOOD CO: Sun Capital Offer Prompts Moody's to Revise Outlook LAKE AT LAS VEGAS: S&P Cuts Then Withdraws Ratings LANDMARK FBO: Moody's Junks Rating on $120 Million 2nd Lien Loan LAS VEGAS SANDS: Completes Initial Funding of Credit Facility LB COMMERCIAL: Moody's Maintains Junk Ratings on Two Classes LEHMAN XS: Moody's Cuts Ratings on Five Tranches on Delinquency LEOPOLDO TREVINO: Case Summary & Three Largest Unsecured Creditors LEVITZ FURNITURE: Can Use GECC's Cash Collateral on Final Basis LEVITZ FURNITURE: Can Hire Rodman & Renshaw as Financial Advisor LIBERTY MEDIA: Discloses Semi-Annual Payment to Debenture Holders LUMINENT MORTGAGE: Receives NYSE Non-Compliance Notice LUMINENT MORTGAGE: Moody's Downgrades Ratings on Six Tranches MAXJET AIRWAYS: Committee Wants to Hire Morris James as Co-Counsel MGM MIRAGE: Raises Tender Offer to 15 Million Shares MGM MIRAGE: Launches Sale of CityCenter's Harmon Hotel MONEYGRAM INTL: $860 Mil. Losses Cues S&P to Cut Rating to BB MORGAN STANLEY: Fitch Affirms 'BB+' Rating on $14MM Certs. MORGAN STANLEY: S&P Keeps B+ Rating on $3 Mil. Class A-3 Notes MTI TECHNOLOGY: Thomas Raimondi Resigns as Chairman of the Board NATIONAL FARM: Files Schedules of Assets and Liabilities NATIONAL FARM: Files List of Two Largest Unsecured Creditors NEPTUNE CDO: Weak Credit Quality Cues Moody's to Lower Ratings NEW CENTURY: Court Amends XRoads Appointment Order NEW CENTURY: Jamie Lisac Appointed as New CFO NEW CENTURY: Wants Bid Procedures for Sale of Mortgage Loans OK'd NEWPAGE CORP: Closes Plants & Cuts Jobs as Restructuring Continues OCWEN FINANCIAL: Gets $7/Share in Cash Proposal from Investors OCWEN FINANCIAL: Investor Proposal Cues Fitch's Evolving Watch OPEN MAGNETIC: Case Summary & 425 Largest Unsecured Creditors ORIGEN FINANCIAL: Fitch Retains Junk Ratings on Two Classes OWNIT MORTGAGE: Two Trust Classes Acquire S&P's Junk Ratings PAETEC HOLDING: S&P Holds B Corporate Credit Rating PIERRE FOODS: Posts $7.5 Mil. Net Loss in Qtr. Ended December 1 PORTOLA PACKAGING: S&P Junks Corporate Credit Rating PRESIDENT CASINOS: Earns $223,000 in Third Quarter Ended Nov. 30 PUBLICARD INC: Court Confirms Amended Plan of Reorganization QLT INC: Board Gives "Go" Signal to Sell Unit and Cut Jobs QUEBECOR WORLD: Fails to Obtain $125 Mil. Financing by Jan. 15 QUEBECOR WORLD: Moves Rescue Financing Term Compliance Deadline QUEBECOR WORLD: Interest Nonpayment Spurs S&P to Give D Ratings RADNOR HOLDING: Wants Plan Solicitation Period Extended to Apr. 21 RALI SERIES 2007: Moody's Downgrades Ratings on 17 Tranches REGAL ENTERTAINMENT: Fitch Holds 'B+' Issuer Default Rating REMOTE MDX: Hansen Barnett Raises Going Concern Doubt RENAISSANCE HOME: Public Auction of Securities Set for Feb. 15 RESIDENTIAL ACCREDIT: Moody's Downgrades Ratings on 25 Tranches RESIDENTIAL ACCREDITED: Fitch Chips Ratings on 90 Loan Classes RESIDENTIAL ASSET: S&P Downgrades Ratings on Three Classes RISKMETRICS GROUP: Planned IPO Cues Moody's Rating Review ROUNDY'S SUPERMARKETS: S&P Revises Outlook from Negative to Stable SAFEVEST GLOBAL: Voluntary Chapter 11 Case Summary SALOMON BROTHERS: Moody's Junks Rating on $13.7MM Cert. SCAN INTERNATIONAL: Can Hire ARG LLC as Liquidation Consultants SCAN INTERNATIONAL: Panel Can Hire Tydings & Rosenberg as Counsel SCAN INTERNATIONAL: Taps Keen Consultant as Real Estate Advisor SHORT-TERM ASSET: S&P Puts BB Rating on CreditWatch Negative SLI MANAGEMENT: Case Summary & Five Largest Unsecured Creditors SPATIALIGHT INC: Files Voluntary Chapter 7 Petition SPONGETECH DELIVERY: Earns $8,668 in Second Quarter Ended Nov. 30 STRUCTURED ASSET: Fitch Rates $11.2 Mil. Class B Certs. at BB+ SUN MICROSYSTEMS: Expects Revenue of $3.6 Bil. in FY 2008 2nd Qtr. SUN MICROSYSTEMS: Signs $1 Billion Pact to Acquire MySQL SUN MICROSYSTEMS: S&P Ratings Unaffected by $1 Bil. MySQL Deal SUSAN JOHNSON: Case Summary & Ten Largest Unsecured Creditors TCO FUNDING: Moody's Holds B2 Rating with Stable Outlook TELEPACIFIC HOLDINGS: S&P Revises Outlook to Negative TEXHOMA ENERGY: GLO CPA's Raises Going Concern Doubt TEXAS WESLEYAN: Moody's Keeps Ba2 Rating on Series 1997A Bonds THOMPSON CREEK: Moody's Maintains Corporate Family Rating at B3 THORNBURG MORTGAGE: Fitch Holds 'BB' Rating on Class B-5 Certs. TIBERIAS INC: Voluntary Chapter 11 Case Summary TIMBERSTAR TRUST: Fitch Holds 'BB' Rating on $130MM Cl. F Certs. TOUSA INC: Misses Jan. 15 Interest Payment for 7.5% Sr. Notes UNICO INC: Nov. 30 Balance Sheet Upside-Down by $6.9 Million VPI ACQUISITION: Case Summary & Two Largest Unsecured Creditors WR GRACE: Court Commences Asbestos Estimation Trial WACHOVIA BANK: Moody's Maintains Low-B Ratings on Six Classes WASHIGNTON MUTUAL: Discloses $1.87BB Loss After $1.6BB Writedown WCI COMMUNITIES: Amends Credit Deals to Waive Loan Covenants XIOM CORP: Michael Studer Expresses Going Concern Doubt YCL MILFORD: Case Summary & 19 Largest Unsecured Creditors * Arizona Bankruptcy Filing Rose 60% in 2007 * U.S. Economy Experiences Modest Growth in 2007, Fed Reserve Says * BOOK REVIEW: American Commercial Banking: A History ********* 3700 ASSOCIATES: Receives Notice of Default from Deutsche Bank -------------------------------------------------------------- 3700 Associates LLC, construction developer of Cosmopolitan Resort & Casino in Las Vegas, Nevada, was issued a foreclosure notice by Deutsche Bank AG Wednesday, various reports say. The development project, valued at $3 billion, was partly funded by a $760 million construction loan from Deutsche Bank that has become due and payable, reports relate, citing 3700 Associates owner Ian Bruce Eichner. Mr. Eichner, according to the reports, said he was not shocked at the foreclosure notice and added that he was currently in collaboration with Deutsche Bank and Merrill Lynch & Co. in search for interested investors. The developer's financial problems spurred from the crisis in the housing and financial markets, which is beyond its ability, reports say, citing Mr. Eichner. Spokesman of the project said that about 84% of the hotel units were already sold out and added that Global Hyatt will manage the hotel as a Grand Hyatt, the reports relate. According to Mr. Eichner, 3700 Associates is currently engaged in several discussions with parties, based on the reports. Undisclosed lenders stated they will extend loan to complete the project at Cosmopolitan Resort only if 3700 Associates can raise its equity by 10%, the reports reveal. Meanwhile, Deutsche Bank and Merrill Lynch refused to comment on the issue. Perini Confirms Delivery of Default Notice Perini Corporation confirmed that Deutsche Bank, on Jan. 16, 2008, delivered a notice of loan default to 3700 Associates. Perini Building Company, Inc., a wholly-owned subsidiary of Perini Corporation, is the general contractor for the project which is scheduled for completion in December of 2009. Currently, Perini is in discussions with developer, 3700 Associates and lender, Deutsche Bank, to facilitate an orderly continuation of construction of the project. Pending the outcome of the discussions, the company is unable to determine the financial impact, if any, at this time. Meanwhile, construction work continues and all current amounts due to Perini have been paid pursuant to the terms of the construction contract. As of Dec. 31, 2007, work remaining to be performed under the construction contract totaled approximately $1.4 billion. About Perini Corporation Perini Corporation (NYSE: PCR) -- http://www.perini.com/-- is a construction services company offering diversified general contracting, construction management and design/build services to private clients and public agencies throughout the world. It provided construction services since 1894. It offers general contracting, preconstruction planning and comprehensive project management services, including the planning and scheduling of the manpower, equipment, materials and subcontractors required for a project. It also offers self-performed construction services including sitework, concrete forming and placement and steel erection. It is known for our hospitality and gaming industry projects, sports and entertainment, educational, transportation, healthcare, biotech, pharmaceutical and high-tech facilities, as well as large and complex civil construction projects and construction management services to U.S. military and government agencies. About 3700 Associates The 3700 Associates LLC is a real estate developer owned by Ian Bruce Eichner. It is currently developing Cosmopolitan Resort & Casino, a 3,000-room high-rise casino and hotel due to open in late 2009 between the Bellagio casino resort and the CityCenter casino complex. The project cost, initially valued at $1.8 billion, has ballooned to $3 billion. On Oct. 11, 2005, 3700 Associates signed a $1 billion construction contract with Perini Corporation's subsidiary, Perini Building Company, Inc. ACE SECURITIES: S&P Cuts 53 Classes' Ratings on Monthly Losses -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 53 classes of asset-backed pass-through certificates from nine Ace Securities Corp. Home Equity Loan Trust deals. Twenty-six of the classes were downgraded to speculative-grade from investment- grade. Concurrently, S&P affirmed its ratings on all of the remaining classes of mortgage pass-through certificates from these nine series. The table below shows the current performance data of the nine series. Performance Data Cum. realized Severe Series losses(i) delinq.(ii) ------ ------------- ----------- 2002-HE2 1.87% 11.67% 2004-HE4 1.17% 32.06% 2004-HS1 1.68% 24.54% 2005-AG1 0.95% 27.93% 2005-HE1 1.48% 29.02% 2005-HE2 1.14% 39.87% 2005-HE5 1.87% 35.90% 2005-HE6 1.78% 32.45% 2005-HE7 1.98% 27.32% (i )As a percentage of original pool balance. (ii) As a percentage of current pool balance. Current pool bal. Months Series (orig. pool bal.) seasoned ------ ----------------- -------- 2002-HE2 5.48% 61 2004-HE4 15.78% 36 2004-HS1 15.93% 45 2005-AG1 49.11% 25 2005-HE1 18.26% 34 2005-HE2 23.07% 32 2005-HE5 36.47% 27 2005-HE6 46.89% 26 2005-HE7 51.91% 24 The downgrades reflect adverse collateral performance that has caused monthly losses to exceed excess interest. This trend has led to the deterioration of overcollateralization (O/C) and credit support from subordination. As shown in the lists above, cumulative realized losses as a percentage of original pool balance for the downgraded transactions range from 0.95% (series 2005-AG1) to 1.98% (series 2005-HE7). Class B-3 from series 2005- HE5 has taken principal write-downs, and as a result, S&P lowered its rating on this class to 'D' from 'CCC'. The delinquency pipeline in many of the transactions strongly suggests that the trend of monthly losses exceeding excess interest will continue, further compromising credit support. As of the January 2008 remittance period, severe delinquencies (90- plus days, foreclosures, and REOs) for the downgraded transactions ranged from 11.67% (series 2002-HE2) to 39.87% (series 2005-HE2). S&P affirmed its ratings on the remaining classes from these series based on loss coverage percentages that are sufficient to maintain the current ratings despite the negative trends in the underlying collateral of many of the deals. Subordination, O/C, and excess spread provide credit support for all of the affected deals. The collateral for these transactions primarily consists of subprime, adjustable-, and fixed-rate mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered Ace Securities Corp. Home Equity Loan Trust Asset-backed pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2002-HE2 M-3 CCC B 2002-HE2 M-4 CCC B- 2004-HE4 M-5 A- A+ 2004-HE4 M-6 BB+ A 2004-HE4 M-7 BB A 2004-HE4 M-8 BB- A- 2004-HE4 M-9 B BB 2004-HE4 M-10 B- BB- 2004-HE4 M-11 CCC B 2004-HS1 M-1 A- AA+ 2004-HS1 M-2 BB AA- 2004-HS1 M-3 B BBB 2004-HS1 M-4 B- BBB- 2004-HS1 M-5 CCC B 2004-HS1 M-6 CCC B- 2005-AG1 M-4 A+ AA+ 2005-AG1 M-5 BBB AA 2005-AG1 M-6 BB AA 2005-AG1 B-1 BB- AA- 2005-AG1 B-2 B+ A+ 2005-AG1 B-3 B A 2005-AG1 B-4 B- BB 2005-AG1 B-5 CCC B 2005-HE1 M-7 BB+ BBB+ 2005-HE1 M-8 B BBB 2005-HE1 M-9 B- BBB- 2005-HE1 B-1 CCC BB 2005-HE2 M-7 BB BBB+ 2005-HE2 M-8 BB- BBB+ 2005-HE2 M-9 B BBB 2005-HE2 M-10 B- BB+ 2005-HE2 B-1 CCC B 2005-HE5 M-5 BBB+ A+ 2005-HE5 M-6 BB A 2005-HE5 M-7 BB- A- 2005-HE5 M-8 B+ BBB 2005-HE5 M-9 B BB 2005-HE5 M-10 B- B 2005-HE5 B-1 CCC B 2005-HE5 B-3 D CCC 2005-HE6 M-5 BBB+ A+ 2005-HE6 M-6 BB+ A+ 2005-HE6 M-7 BB A 2005-HE6 M-8 BB- BBB 2005-HE6 M-9 B BB 2005-HE6 M-10 B- B 2005-HE6 M-11 CCC B 2005-HE7 M-6 A- A+ 2005-HE7 M-7 BB+ A 2005-HE7 M-8 BB A 2005-HE7 M-9 B+ BBB+ 2005-HE7 M-10 B BBB 2005-HE7 M-11 CCC BB Ratings Affirmed Ace Securities Corp. Home Equity Loan Trust Asset-backed pass-through certificates Series Class Rating ------ ----- ------ 2002-HE2 M-1 AAA 2002-HE2 M-2 BBB 2004-HE4 M-1, M-2 AA+ 2004-HE4 M-3, M-4 AA 2004-HE4 B CCC 2004-HS1 A-2, A-3 AAA 2005-AG1 A-1A, A-1B1, A-1B2 AAA 2005-AG1 A-2A, A-2B, A-2C AAA 2005-AG1 A-2D, M-1, M-2 AAA 2005-AG1 M-3 AA+ 2005-HE1 A-1A, A-1B AAA 2005-HE1 M-1 AA+ 2005-HE1 M-2 AA 2005-HE1 M-3 AA- 2005-HE1 M-4 A+ 2005-HE1 M-5 A 2005-HE1 M-6 A- 2005-HE1 B-2 CCC 2005-HE2 A-1, A-2C AAA 2005-HE2 M-1 AA+ 2005-HE2 M-2 AA 2005-HE2 M-3 AA- 2005-HE2 M-4, M-5 A+ 2005-HE2 M-6 A 2005-HE2 B-2 CCC 2005-HE5 A-1, A-2A, A-2B AAA 2005-HE5 A-2C AAA 2005-HE5 M-1 AA+ 2005-HE5 M-2, M-3 AA 2005-HE5 M-4 AA- 2005-HE5 B-2 CCC 2005-HE6 A-1, A-2A, A-2B AAA 2005-HE6 A-2C, A-2D AAA 2005-HE6 M-1 AA+ 2005-HE6 M-2, M-3 AA 2005-HE6 M-4 AA- 2005-HE6 B-1 CCC 2005-HE6 B-2 CCC 2005-HE7 A-1A, A-1B1, A-1B2 AAA 2005-HE7 A-2A, A-2B, A-2C AAA 2005-HE7 A-2D AAA 2005-HE7 M-1, M-2 AA+ 2005-HE7 M-3, M-4 AA 2005-HE7 M-5 AA- AEGIS ASSET: Moody's Cuts Ratings on Six Classes from Two Deals --------------------------------------------------------------- Moody's Investors Service downgraded six classes of certificates from two deals issued by Aegis Asset-Backed Securities Trust in 2003. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to expected losses. Both deals have already stepped down. Erosion of overcollateralization (OC) and subordination levels due to stepdown and losses has left the rated bonds less protected against expected remaining losses. As of December 2007, Aegis Asset Backed Securities Trust, Mortgage Pass-Through Certificates, Series 2003-1 has a pool of factor of less than 7% and no OC for a required OC of $1.4 million. Class B-1 has taken $1,312,207 of cumulative losses and has a current tranche balance of $842,142, from an original face amount value of $8,591,321. As of December 2007, Aegis Asset Backed Securities Trust, Mortgage Pass-Through Certificates, Series 2003-2 has a pool of factor of 9%. OC was below target, providing $316,683 protection against $5,927,790 worth of loans in Foreclosure and REO. The deals are backed by subprime, fixed and adjustable-rate mortgage loans. Complete rating actions are: Issuer: Aegis Asset-Backed Securities Trust, Mortgage Pass-Through Certificates, Series 2003-1 -- Class M-1, downgraded from Aa2 to A3; -- Class M-2, downgraded from Baa2 to B3; -- Class B-1, downgraded from Caa2 to C; Issuer: Aegis Asset-Backed Securities Trust, Mortgage Pass-Through Certificates, Series 2003-2 -- Class M-1, downgraded from Aa2 to A2; -- Class M-2, downgraded from A2 to Baa3; -- Class B, downgraded from B2 to Caa2. AMERICA'S FIRST: Asks Seminole Court's Okay to Liquidate Assets --------------------------------------------------------------- America's First Home asked the Seminole County Court for permission to dispose its assets, Dick Hogan writes for The News Press. The company intends to use the proceeds to pay its creditors. The homebuilder requested the appointment of Lewis Freeman, a Miami accountant, as its receiver, News Press relates. Creditors must submit by April 20, 2008, their proofs of claims with the Court, News Press reports. Among the creditors is Randy Krise, managing member of Miracle Plaza FM LLC, who is owed owed $23,000 in rent, News Press Altamonte Springs-based America's First Home -- http://www.americasfirsthome.net/-- went from building 92 houses in 1999 statewide to more than 1,000 in 2005, according to its Web site, which is currently under construction. It was formed by Bill Frey, the founder of Frey & Son. His son, Barry Frey is Frey & Son's current president. AMERICAN HOME: Moody's Cuts 16 Tranches' Ratings on Delinquency --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of sixteen tranches and has placed under review for possible downgrade the ratings of five tranches from four transactions issued by 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: American Home Mortgage Assets Trust 2007-1 -- Cl. M-7, Downgraded to Baa1, previously A3, -- Cl. M-8, Downgraded to Ba1, previously Baa1, American Home Mortgage Assets Trust 2007-4 -- 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 Ba3, previously Baa1, American Home Mortgage Assets Trust 2007-5 -- Cl. M-4 Currently Aa3, on review for possible downgrade, -- Cl. M-5, Downgraded to A2, previously A1, -- Cl. M-6, Downgraded to A3, previously A1, -- Cl. M-7, Downgraded to Baa2, previously A3, -- Cl. M-8, Downgraded to Ba1, previously Baa1, -- Cl. M-9, Downgraded to Ba3, previously Baa2, American Home Mortgage Investment Trust 2007-1 -- Cl. M-5 Currently Aa3, on review for possible downgrade, -- Cl. M-6, Downgraded to A2, previously A1, -- Cl. M-7, Downgraded to Baa1, previously A2, -- Cl. M-8, Downgraded to Baa2, previously A3, -- Cl. M-9, Downgraded to Ba1, previously Baa1, -- Cl. B-1, Downgraded to B3, previously Ba2, -- Cl. B-2, Downgraded to Caa2, previously B3. AMR CORP: Posts $69 Million Net Loss in 2007 Fourth Quarter ----------------------------------------------------------- AMR Corporation, the parent company of American Airlines Inc., reported Wednesday a net loss of $69 million for the fourth quarter of 2007. The results for the fourth quarter of 2007 include the impact of several special items that amounted to a cumulative positive impact of approximately $115 million. These items include: a $138 million gain on the sale of AMR's stake in ARINC; a $39 million gain to reflect the positive impact of the previously announced change to an 18-month expiration of Aadvantage(R) miles; and a $63 million charge associated with the retirement of 24 MD- 80 aircraft that previously had been temporarily stored. The current quarter results compare to a net profit of $17 million for the fourth quarter of 2006. For all of 2007, AMR posted a net profit of $504 million. In addition to the special items from the fourth quarter, the full- year 2007 results also include the impact of a $30 million charge, disclosed in the third quarter, to reflect an adjustment for additional salary and benefit expense accruals related to years 2003 through 2006. AMR's full-year 2007 results compare to a net profit of $231 million net profit, or $0.98 per diluted share, for all of 2006. In the fourth quarter of 2007, total operating revenues were $5.68 billion, a 5.3% increase from total operating revenues of $5.4 million in the corresponding period in 2006. For the year ended Dec. 31, 2007, total operating revenues were $22.94 billion, compared with total operating revenues of $22.56 billion in 2006. "Our employees overcame enormous challenges from unprecedented weather disruptions, air traffic control problems and record fuel prices to help our company take another important step forward in 2007. We earned our second straight annual profit, achieving our first back-to-back profitable years since 1999-2000, and made progress in many areas, including strengthening our balance sheet, focusing on customers, renewing our fleet, bolstering our network and investing in products and services," said AMR chairman and chief executive officer Gerard Arpey. "While record fuel prices contributed significantly to our fourth quarter loss - our first quarterly loss after six straight profitable quarters - they are a reminder of the challenges we must continue to overcome as we strive for consistent and adequate profitability. As we thank our employees for their efforts in 2007, it is also clear that we have more work ahead as we seek to maintain momentum in 2008 and beyond." Operational Performance American's mainline passenger revenue per available seat mile, excluding special items, increased by 4.5% in the fourth quarter compared to the year-ago quarter. Mainline capacity, or total available seat miles, in the fourth quarter increased 0.4% compared to the same period in 2006. The year-over-year increase in capacity was largely the result of previously announced aircraft density initiatives, mitigated somewhat by weather-related cancellations. Fourth quarter mainline departures declined slightly year over year. American's mainline load factor - or the percentage of total seats filled - was 80.2% during the fourth quarter, compared to 78.8% in the fourth quarter of 2006. American's fourth-quarter yield, which represents average fares paid, excluding special items, increased 2.6% compared to the fourth quarter of 2006, its 11th consecutive quarter of year-over-year yield increases. Excluding special items, AMR reported fourth quarter consolidated revenues of approximately $5.64 billion, an increase of 4.6% year over year. American's mainline cost per available seat mile in the fourth quarter, excluding special items, increased 8.6% year over year. The largest contributor to the year-over-year increase in unit costs was fuel. In the fourth quarter, American paid $367 million more than it would have paid at fourth quarter 2006 fuel prices. Consolidated fuel expense in the fourth quarter was $412 million higher than it would have been at fourth quarter 2006 fuel prices. Excluding fuel and special items, mainline unit costs in the fourth quarter increased by 0.6% year over year, largely reflecting a $44 million accrual in the fourth quarter for a one- time payment to eligible employees under the company's broad-based variable compensation plans. For the full year, the accrual for the one-time payment totaled $67 million. Arpey said the company's Board of Directors had approved the one- time payment "in recognition of the collective effort of our employees and the special circumstances that existed in 2007." Each eligible American Airlines employee is expected to receive a payment of $800 under the Customer Service Component of the company's Annual Incentive Plan (AIP). "This is a tangible way of saying 'thank you' for all that our employees did for our company in a challenging year," he said. Balance Sheet Improvement AMR ended the fourth quarter with $5.0 billion in cash and short- term investments, including a restricted balance of $428 million, compared to a balance of $5.2 billion in cash and short-term investments, including a restricted balance of $468 million, at the end of the fourth quarter of 2006. AMR paid off $865 million in debt in the fourth quarter, including scheduled debt payments and an unscheduled $545 million aircraft debt prepayment. Of the company's $2.3 billion in debt payments for all of 2007, approximately $1 billion of those were prepayments. AMR reduced Total Debt, which it defines as the aggregate of its long-term debt, capital lease obligations, the principal amount of airport facility tax-exempt bonds, and the present value of aircraft operating lease obligations, to $15.6 billion at the end of the fourth quarter of 2007, compared to $18.4 billion a year earlier. AMR reduced Net Debt, which it defines as Total Debt less unrestricted cash and short-term investments, from $13.6 billion at the end of the fourth quarter of 2006 to $11.0 billion in the fourth quarter of 2007. As a result of scheduled principal payments as well as prepayments, refinancings and other efforts to strengthen its balance sheet, AMR's net interest expense for 2007 was $174 million lower than in 2006, a 23.2% reduction. As announced in October, AMR met its projected 2007 commitment to fund its defined benefit pension plans for employees by contributing $380 million to these plans through the first three quarters of the year. AMR has contributed nearly $2 billion to these plans since 2002, as the company continues to meet this important commitment to employees. The company's 2007 pension contributions, along with strong investment returns, higher market discount rates and legislative changes to the mandatory pilot retirement age, helped to improve the accumulated benefit obligation funded status of AMR's pension plans to 96%, up from 84% at the end of 2006. About AMR Corporation Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. * * * As reported in the Troubled Company Reporter on Nov. 30, 2007, following the announcement by AMR Corp. that it intends to divest its American Eagle Holding Corp. subsidiary in 2008, Fitch expects no near-term impact on the debt ratings of AMR and its principal operating subsidiary, American Airlines Inc. Fitch affirmed both entities' Issuer Default Ratings at 'B-' on Nov. 13, 2007, while revising the Rating Outlook for AMR to Positive. ASARCO LLC: Wants to Hire Halpering Battaglia as Consulting Expert ------------------------------------------------------------------ ASARCO LLC and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Texas to employ Halperin Battaglia Raicht, LLP, as its consulting expert and potential witness in connection with the fraudulent transfer complaint against Americas Mining Corporation, nunc pro tunc Nov. 2, 2007. Halperin will assist ASARCO in the ongoing development and analysis of the many issues involved in the AMC Litigation; and will testify at trial to facilitate the orderly, unified presentation and expert analysis of the various aspects of evidence supporting ASARCO's position in the Litigation. ASARCO will pay for Halperin's services according to the firm's customary hourly rates: Professionals Hourly Rate ------------- ----------- Attorneys $425 - $175 Law Clerks $125 - $100 Para-professionals $95 - $75 ASARCO will also reimburse Halperin for any necessary out-of- pocket expenses the firm incurs. Alan D. Halperin, Esq., a partner at Halperin Battaglia Raicht, LLP, in New York, assures the Court that his firm does not represent any interest adverse to ASARCO and its estate, and is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The AMC Litigation, which is currently pending in the U.S. District Court for the Southern District of Texas, is likely the single largest asset of ASARCO's estate, Eric A. Soderlund, Esq., at Baker Botts, L.L.P., in Dallas, Texas, says. Through the AMC Litigation, ASARCO seeks the return of its ownership interest in Southern Peru Copper Corporation, which, Mr. Soderlund says, is worth billions of dollars, along with the present value of dividends paid on the stock since the fraudulent transfer, believed to be worth more than $1,400,000,000. "The multi-billion dollar value represented by the AMC Litigation will only be realized if ASARCO can ultimately succeed on the merits of the case, which success will be affected by the quality and timeliness of the necessary expert retentions," Mr. Soderlund contends. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Debtors' exclusive period to file a plan expires on Feb. 11, 2008. (ASARCO Bankruptcy News, Issue No. 62; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Wants to Sell Perth Amboy Property for $19.8 Million ---------------------------------------------------------------- ASARCO LLC and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Texas to: (i) sell its 67-acre real property located in Perth Amboy, New Jersey, to Emerald Bay Equity, LLC, for $19,800,000, free and clear of all liens, claims and other interests; and (ii) assume certain permits and contracts related to the Property. Pursuant to a purchase and sale agreement, dated Dec. 10, 2007, ASARCO and Emerald Bay agreed that Emerald Bay will: -- pay ASARCO $19,800,000 in cash for the Perth Amboy Property; -- assume ASARCO's environmental obligations relating to the Property, which ASARCO estimates to have a present value of approximately $9,000,000; -- release, defend, and indemnify ASARCO for any environmental liabilities relating to the Property; and -- execute an Administrative Consent Order with the New Jersey Department of Environmental Protection for remediation of the Property. Emerald Bay has given a $495,000 deposit to General Land Abstract Co., Inc., ASARCO's escrow agent, Tony M. Davis, Esq., at Baker Botts, L.L.P., in Houston, Texas, tells the Court. Mr. Davis says that in 1997, the city government of Perth Amboy designated the Property as a redevelopment zone. In 2004, the Perth Amboy Redevelopment Agency entered into a redevelopment agreement with a designated redeveloper, PA-PDC Perth Amboy, LLC, for the acquisition and redevelopment of the properties in the designated zone. Mr. Davis says that if PA-PDC is not able to acquire the Property consensually, then the Redevelopment Agency may file a condemnation action to acquire the Property. Any legal action to acquire title of the Property through condemnation is subject to defenses ASARCO may have and is currently subject to the automatic stay imposed by Section 362 of the Bankruptcy Code. Although there have been inquiries concerning the acquisition of the Property, the redevelopment status has limited the ability to market it, Mr. Davis tells the Court. ASARCO has delivered the proposed Bidding Procedures to several entities that had previously expressed a bona fide interest in the Property, including PA-PDC. Bidding Procedures To maximize the value of the Property, ASARCO asks the Court to approve uniform bidding procedures to govern an auction for the sale of the Property: (a) Any entity that wishes to participate in the bidding process will deliver a competing offer for the Property to Tom Aldrich, Ruth Kern, Baker Botts, L.L.P., and Reed Smith, LLP, on a date still to be determined. (b) To be considered a "Qualifying Bidder," a Competing Offer must, among other things, be accompanied by a $750,000 good faith deposit; confirm that the bidder has completed due diligence and has met with the U.S. Environmental Protection Agency and the NJDEP; and must demonstrate that the bidder understands the environmental issues associated with the Property. The Competing Offer must create a value that is at least $1,000,000 greater than the Purchase Price. (c) If one or more Qualifying Bids are received, ASARCO will conduct an auction at a time and place still to be decided on. (d) Bidding will begin initially with the highest Qualifying Bid and subsequently continue in minimum increments of at least $250,000 higher than the previous bid. (f) If ASARCO selects a buyer other than Emerald Bay, ASARCO will pay a $750,000 break-up fee to Emerald Bay. (g) If no Qualifying Bid is received, a hearing to consider the sale of the Property to Emerald Bay will be held on a date still to be decided on. Feasibility Period Mr. Davis further relates that the PSA provides Emerald Bay with a "feasibility period" of 180 days after the Court approves the proposed bidding procedures. During the Feasibility Period, Emerald Bay will have the opportunity to: -- inspect and investigate the physical and environmental condition of the Property, its land use, zoning and developments rights, and its permits, contracts and leases; and -- determine to its satisfaction the condition, quality, merchantability or suitability of the Property for its own purposes. Emerald Bay will notify ASARCO, on or before the expiration of the Feasibility Period, as to whether it approves or disapproves of the Property. If Emerald Bay provides timely notice of disapproval, the Agreement will terminate. Otherwise, Emerald Bay will be deemed to have approved of the Property. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Debtors' exclusive period to file a plan expires on Feb. 11, 2008. (ASARCO Bankruptcy News, Issue No. 62; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASPEN EXECUTIVE: Wants to Extend Plan-Filing Deadline to May 12 --------------------------------------------------------------- Aspen Executive Air LLC asks the U.S. Bankruptcy Court for the District of Delaware to extend its exclusive right to file for a Plan of Liquidation until May 12, 2008, Bill Rochelle of the Bloomberg News reports. Mr. Rochelle relates the Debtor recently closed its sale of assets to John P. Calamos, Pinnacle Air LLC's controlling shareholder. Based in Basalt, Colorado, Aspen Executive Air, L.L.C., aka AEXJet -- http://www.aexjet.com/-- is a private jet travel company. The company filed for chapter 11 protection on Sept. 14, 2007 (Bankr. D. Del. Case No. 07-11341). Laura Davis Jones, Esq., Bruce Grohsgal, Esq., and Curtis A. Hehn, Esq., at Pachulski Stang Ziehl & Jones LLP represent the Debtor. The Debtors have selected Administar Services Group LLC as claims, noticing and balloting agent. Donald J. Bowman, Jr., Esq., and Michael R. Nestor, Esq., at Young, Conaway, Stargatt & Taylor represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection form its creditors, it listed assets between $1 million and $100 million. The Debtor's list of 20 largest unsecured creditors showed claims of more than $20 million. ATLANTIS PLASTICS: Weak Liquidity Spurs Moody's to Junk Rating -------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating and other instrument ratings of Atlantis Plastics, Inc. to Ca. The outlook was changed to negative due to the continued poor liquidity. This concludes the review for downgrade initiated Sept. 20, 2007. Moody's took these rating actions: -- $25 million revolving credit facility due 2011, downgraded to Caa3 (LGD 3, 42%) from Caa1 (LGD 3, 41%) -- $120 million senior term loan due 2011, downgraded to Caa3 (LGD 3, 42%) from Caa1 (LGD 3, 41%) -- $75 million junior term loan due 2012, downgraded to C (LGD 5, 89%) from Caa3 (LGD 5, 80%) -- Corporate Family Rating, downgraded to Ca from Caa2 -- Probability of Default Rating, downgraded to Ca from Caa2 The outlook is changed to negative from under review for downgrade. The downgrade of Atlantis's Corporate Family Rating to Ca reflects the company's lack of success to date in negotiating a waiver and amendment to its Credit Facilities for the breach of financial covenants, lack of liquidity and likely impairment of the debt instruments on an enterprise value basis. Atlantis's liquidity is severely impaired given the lack of availability under its revolver, little cash on hand and negative free cash flow. Moody's believes that the company's value is less than its debt and that each class of debt will realize losses in an event of default. Atlantis has defaulted upon its covenants and received amendments twice in the last two years. Atlantis Plastics, Inc., headquartered in Atlanta, Georgia, is a manufacturer of specialty polyethylene films and molded and extruded plastic components used in a variety of industrial and consumer applications. Atlantis has 15 manufacturing plants located throughout the United States. Revenues for the twelve months ended Sept. 30, 2007 were $398 million. BON-TON STORES: S&P Revises Outlook to Negative & Holds Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on York, Peensylvania-based Bon-Ton Stores Inc. to negative from stable. At the same time, Standard & Poor's affirmed its existing ratings on the company, including the 'B' corporate credit and 'CCC+' senior unsecured credit ratings. The outlook revision follows the company's disclosure that its results for all of fiscal 2007 will be much weaker than expected. Bon-Ton said that comparable-store sales for the combined months of November and December were down 4%. "This was far worse than the department store peer group, which averaged a 1% increase," said Standard & Poor's credit analyst Gerald A. Hirschberg. Furthermore, Bon-Ton said that it was lowering full-year EBITDA guidance to a range of $245 million to $253 million. "This is also much lower than we had anticipated," said Mr. Hirschberg. "We now expect that leverage for 2007 could be as high as 5.7x, and EBITDA coverage of interest may be approximately only 1.9x." Although these ratios are characteristic of a 'B' rating for retailers in general, Standard & Poor's believes that economic fundamentals and a weakening retail environment will continue to pressure sales, margins, and credit measures for a good part of 2008. BROTMAN MEDICAL: Alvarez & Marsal Approved as Panel's Advisor ------------------------------------------------------------- The United States Bankruptcy Court for the Central District of California gave the Official Committee of Unsecured Creditors of Brotman Medical Center Inc. authority to employ Alvarez & Marsal Healthcare Industry Group as its financial advisor. Alvarez & Marsal is expected to review and evaluate the current and prospective financial, and operational condition of the Debtor, including but not limited to: a) cash receipts and disbursement forecasts; b) various plan of reorganization that may be considered or pursued by the Debtor; c) appraisals of assets prepared by the Debtor; d) assets and liabilities, generally; In addition, the firm will: a) assist the committee in evaluating DIP or other financings for the Debtor; b) assist the Committee to analyze and evaluate potential transactions or other plans and effort to sell assets, recapitalize or reorganize the Debtor; c) assist the Committee and its counsel in evaluating and responding to various developments or motions during the course of the Debtor's Chapter 11 including providing expert testimony as may be acceptable to A&M. d) represent and assist the Committee counsel in representing the Committee in negotiations with the Debtor and third parties; e) provide other services that may be requested by the Committee and as may also be acceptable to the firm. The firm's professionals and their compensation rates are: Designation Hourly Rate ----------- ----------- Managing Directors $525 - $650 Directors $425 - $500 Associates $325 - $400 Analysts $200 - $300 Ronald Winters, Esq., the managing director of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Headquartered in Culver City, California, Brotman Medical Center Inc. -- http://www.brotmanmedicalcenter.com/-- provides range of inpatient and outpatient services, as well as rehabilitation, psychiatric care and chemical dependency. The company filed for Chapter 11 protection on Oct. 25, 2007 (Bankr. C.D. Calif. Case No. 07-19705). Courtney E. Pozmantier, Esq., and Stacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff & Stern, L.L.P., represent the Debtor. The Debtor selected Kurtzman Carson Consultants LLC as its claims and noticing agent. The Official Committee of Unsecured Creditors has selected Benjamin S. Seigel, Esq., and Paul S. Arrow, Esq., at Buchalter Nemer, as its counsel. When the Debtor filed for bankruptcy, it listed assets and debts between $1 million and $100 million. BTC: Increased Credit Enhancement Cues Fitch to Lift Ratings ------------------------------------------------------------ BTC's commercial mortgage pass-through certificates, series BTR Trust 1999-S1, are upgraded by Fitch Ratings as: -- $3 million class G to 'AAA' from 'B+'; -- $5.6 million class H to 'AAA' from 'B-'. Classes B, C, D, E and F are paid in full. The $40.2 million class I certificates are not rated by Fitch. The upgrades reflect the increased credit enhancement as a result of loan payoffs and amortization. As of the April 2006 distribution date, the pool's aggregate principal balance has been reduced by 89.1% to $48.8 million from $447 million at issuance. Although, the transaction has limited loan diversity with only two loans remaining in the pool, the credit enhancement levels were sufficient to merit the upgrades. The transaction has no realized losses to date. The two remaining loans (100%) in the transaction are currently in specially servicing and are both real-estate owned. The largest specially serviced asset (83.8%) is a portfolio of office properties located in Dallas, Texas. The special servicer is continuing with their leasing efforts to increase occupancy before marketing the properties for sale. Significant losses are expected to be absorbed by the non-rated class I certificates. The other specially serviced asset is a hotel located in San Francisco, California, which originally transferred to the special servicer as a result of a maturity default. The property lacks a franchise affiliation and the special servicer is currently marketing it for sale. Minimal losses are expected and should be absorbed by class I. 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 its 'B+' subordinated debt rating and 'BBB- ' senior secured rating and its '1' recovery rating on Rainbow National Services. In addition, the rating on intermediate holding company CSC Holdings Inc.'s $5.5 billion of secured bank facilities was raised to 'BBB-' from 'BB' and the recovery rating was revised to '1'. All ratings have been 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. CAPCO AMERICA: Fitch Holds 'B-' Rating on $24.9MM Cl. B-4 Certs. ---------------------------------------------------------------- Fitch Ratings lowers the Distressed Recovery rating on CAPCO America Securitization Corp.'s commercial mortgage pass-through certificates, series 1998-D7 as: -- $15.6 million class B-5 to 'CC/DR4' from 'CC/DR3'. In addition, Fitch affirms these classes: -- $629.3 million class A-1B at 'AAA'; -- Interest-only class PS-1 at 'AAA'; -- $62.3 million class A-2 at 'AAA'; -- $68.5 million class A-3 at 'AAA'; -- $59.2 million class A-4 at 'AAA'; -- $21.8 million class A-5 at 'AAA'; -- $31.1 million class B-1 at 'AA-'; -- $28 million class B-2 at 'BBB+'; -- $15.6 million class B-3 at 'BB+'; -- $24.9 million class B-4 at 'B-'; Fitch does not rate the $1.6 million class B-6 and B-6H certificates. The class A-1A class has been paid in full. Class B-5 remains at 'CC' and the DR rating is being lowered due to increased loss expectations associated with the two specially serviced assets. The rating affirmations are due to defeasance and paydown since Fitch's last ratings action being moderated by increased loss expectations on the specially serviced assets and an increase in Fitch Loans of Concern. Fitch Loans of Concern include the Specially Serviced loans and loans with low occupancy, debt service coverage ratio's and other performance issues. Fifty-five loans (33.8%) have defeased since issuance, including two of the top five loans (9.6%). As of the March 2007 distribution date, the pool has paid down 23.1% to $958 million from $1.25 billion at issuance. There are currently two assets (1.8%) in special servicing, both of which are real estate owned. The largest specially serviced asset (1%) is an office property located in Dayton, Ohio. The property is listed for sale and the special servicer is currently evaluating purchase offers. The other specially serviced asset (0.6%) is an industrial property located in Baltimore, Maryland and is currently listed for sale. Based on recent appraised values, losses are expected on both assets. The fourth largest asset in the pool (4.5%) is a retail mall located in Charlotte, North Carolina and is considered a Fitch Loan of Concern. Although the loan is current, a non-collateral anchor tenant vacated at the end of 2006. Fitch will continue to monitor the performance of this asset. CENTRO NP: Moody's Slashes Senior Debt Rating to B3 From B1 ----------------------------------------------------------- Moody's Investors Service downgraded the senior unsecured debt ratings of Centro NP LLC to B3, from B1, as the company moves closer to its Feb. 15, 2008 refinancing deadline and its parent, Centro Properties Group, discloses additional liquidity and accounting issues. The ratings remain on review for downgrade. These ratings actions reflect the continued financial difficulties, accounting issues, increased exposure to currency rate fluctuations, and potential Australian Securities & Investments Commission disclosure investigation. Moody's also expects that Centro NP LLC will have heightened leverage and secured debt following the take-out of the bridge financing, and significant property sales to fund debt. Moody's review will focus on the final capital structure and strategic profile of the company in light of Centro NP's and Centro Properties Group's short-term pressure to refinance debt. Moody's will continue to monitor Centro NP's compliance with its bond covenants and the quality and composition of its portfolio as it works though these financings. Moody's acknowledges that Centro NP has a defensive portfolio with a $6.3 billion market value that may afford opportunities for asset sales or financing to pay off debt. Since the acquisition, the bridge loan has been reduced to approximately $1.75 billion due to a $300 million CMBS issuance and the conversion of $400 million to a one-year term loan. Centro Properties Group is operating its US community and neighborhood shopping center portfolio from Centro NP's New York City headquarters, utilizing New Plan's nationwide operating infrastructure and staff as its base. Glenn Rufrano, the CEO of Centro NP, was appointed the CEO of Centro Properties Group this week. He brings greater independence to the restructuring process and a deep knowledge of financing availability in the US, where two-thirds of Centro's 810 property portfolio is situated. Upwards rating movement would be contingent upon Centro NP refinancing the bridge facility by Feb. 15, 2008 without materially pressuring their leverage, secured debt, the value of their portfolio, and other credit metrics, while complying with bond covenants, in addition to a viable plan to restructure Centro Properties Group's debt. A confirmation of the B3 rating would result from Centro NP reaching a financing plan to which the debt holders agree, with a strategic plan in place to restructure Centro Properties Group's debt. A downgrade to the Caa range or lower would most likely reflect Centro NP's continued issues refinancing its line and/or Centro Properties Group's inability to finance its debt, noncompliance with bond covenants at the Centro NP level, acceleration of bond payments, a firesale of assets or a bankruptcy filing. Although the maturity date of both the bridge facility and the line of credit were extended to Feb. 15, 2008, this date may be extended by the bank group. These ratings were lowered to B3, and placed under review for downgrade: Centro NP LLC -- senior unsecured debt to B3, from B1; -- medium-term notes to B3, from B1. Centro NP LLC, headquartered in New York City, owns and operates 465 community and neighborhood shopping centers in 38 states. The company had assets of $6.3 billion and equity of $3.8 billion at Sept. 30, 2007. Centro Properties Group, headquartered in Melbourne, Victoria, Australia, is an Australian Listed Property Trust that specializes in the ownership, management and development of retail shopping centers in Australia, New Zealand and the USA with A$26.6 billion in assets under management. CENTRO PROPERTIES: Bracewell & Giuliani Represents Noteholders -------------------------------------------------------------- The U.S. noteholders of Centro Properties Group are being represented by Bracewell & Giuliani LLP, according to Bloomberg News. According to Bloomberg, the U.S. law firm confirmed a report in the Australian Financial Review that it is acting for the Centro Properties investors. Bracewell & Giuliani LLP is an international law firm with more than 400 lawyers in Texas, New York, Washington DC, Connecticut, Dubai, Kazakhstan and London. The firm serves clients concentrated in the energy and financial services sectors worldwide. Looming Refinancing Deadline As reported in the Troubled Company Reporter on Jan. 16, 2008, Centro Properties received advice from its U.S. Private Placement Noteholders who are collectively owed $450 million, which suggested that one or more events of default under the relevant Note Purchase Agreements may have arisen under some or all of the Notes. Centro has not conceded that there are any such defaults. However, Centro has entered into an agreement with the Noteholders through to Feb. 15, 2008 (or such later date as may be agreed) for the Noteholders not to act on the events, consistent with its arrangements with the lenders who are parties to the extension agreements. Both the Australian and U.S. lenders have concurred with the arrangements. Centro said it is in regular dialogue with the lenders who are parties to the Australian Extension Deed dated Dec. 17, 2007, and is expected to continue. According to Centro, the lenders are currently considering extending the arrangements under the Extension Deed beyond Feb. 15, 2008. The U.S. lenders are also considering an extension of their current maturities beyond Feb. 15, 2008, Centro noted. CEO Quits Amid trouble in the company's finances, Andrew Scott resigned as Chief Executive Officer and as a director of Centro Properties Group. Glenn Rufrano has been appointed as Chief Executive Officer effective immediately. Since the acquisition of New Plan by Centro, Mr. Rufrano has been Chief Executive Officer of Centro US. Mr. Rufrano was formerly the Chief Executive Officer of New Plan, prior to its acquisition by Centro in April 2007. About Centro Properties Centro Properties Group is a retail investment organisation specialising in the ownership, management and development of retail shopping centres. Centro manages both listed and unlisted retail property and has an extensive portfolio of shopping centres across Australia, New Zealand and the United States. Centro has funds under management in excess of $26.6 billion. CHARTERHOUSE BOISE: Developer Given Chance to Avoid Foreclosure --------------------------------------------------------------- Chapter 11 trustee Ilene Lashinsky and bankruptcy attorney John Woodbery, Esq., agreed to give Charterhouse Boise Downtown Properties' owner Gary Rogers an opportunity to avoid foreclosure of the property, the Associated Press reports. Mr. Woodbery is Charhouse Boise's local counsel in its bankruptcy proceedings. As reported in the Troubled Company Reporter on Aug. 8, 2007, Rogers had planned to construct a 34-story tower project dubbed "Boise Place." Financial problems however prompted Mr. Rogers to redesign and build a shorter tower. Rodgers had already defaulted on a $2.6 million loan while his architect filed a $500,000 lien against the project. Rogers filed for bankruptcy to reorganize and keep the project going. However, according to court documents, Rogers failed to file the Debtor's monthly operating reports -- from August to December 2007 -- and pay overdue bankruptcy fees, says the AP. As a result, the Chapter 11 Trustee asked the Court to convert the Debtor's case into a Chapter 7 liquidation proceeding. Early this week however, Mr. Woodbery and Ms. Lashinsky agreed to let Rogers pay the fees and file the Debtor's much-delayed MOR's, the AP relates. The developer was given until January 22 to rectify the problem. If the deadline is not met, the AP says, the Trustee will ask the Court again to convert the case which would pavie the way for the Debtor's largest secured creditor, Robert Capps Homes Inc., to foreclose on the building. Based in Boise, Idaho, Charterhouse Boise Downtown Properties LLC develops real estate. The company filed for Chapter 11 protection on Aug. 1, 2007 (Bankr. D. Idaho Case No. 07-01199). Thomas James Angstman, Esq. at Angstman, Johnson & Associates, represents the Debtor in its restructuring efforts. The Debtor also chose John E. Woodbery, Esq., at Woodbery Law Group, P.S., as its local counsel. The Debtor's schedules of assets and liabilities showed total assets of $10,735,293, and $12,369,052 in total debts. CHESAPEAKE CORP: Amends Fourth Quarter 2007 Credit Covenants ------------------------------------------------------------ Chesapeake Corporation has agreed with its lenders on the amendment of certain fourth quarter 2007 covenants of its Senior Revolving Credit Facility in anticipation of the lower than expected fourth quarter 2007 operating results. Lower than expected fourth quarter volumes, notably in the South African beverage business and certain areas within the pharmaceutical and healthcare packaging business, combined with higher than expected startup expenses for a new product line in the alcoholic drinks packaging business, are the primary reasons for the shortfall. In addition, the company had expected to receive the cash proceeds from the sale of its tobacco packaging facility in Bremen, Germany before year end, but the cash proceeds were not received until the first week of January. Preliminary 2007 operating earnings, excluding special items, are now expected to be approximately $41 million compared to $45 million for 2006. The company's Senior Revolving Credit Facility was amended for the fourth quarter of 2007 to increase the total leverage ratio from 5.00 to 5.30 and decrease the interest coverage ratio from 2.25 to 2.15. The credit facility lending group is led by Wachovia Bank, N.A., as administrative agent. "We appreciate the continued support of our bank group," said Andrew J. Kohut, Chesapeake president & chief executive officer. "Business conditions in our industry remain competitive, and we face short-term challenges. However, we are encouraged by several successes with new orders. We are also focused on exploring alternatives for non-core or redundant assets to improve our operating results and reduce debt." About Chesapeake Corporation Headquartered in Richmond, Virginia, Chesapeake Corporation (NYSE:CSK) -- http://www.cskcorp.com/-- is a supplier of specialty paperboard packaging products in Europe and an international supplier of plastic packaging products to niche end-use markets. Chesapeake has 47 locations in France, Ireland, United Kingdom, North America, China, HongKong, among others and employs approximately 5,500 people. CHESAPEAKE CORP: Moody's Puts Ratings on Review & May Downgrade --------------------------------------------------------------- Moody's Investors Service placed all the credit ratings of Chesapeake Corporation on review for possible downgrade. This rating action follows Chesapeake's public revision downward of its 2007 earnings guidance, primarily due to a shortfall in expected fourth quarter volumes combined with startup expenses for a new product line. On Jan. 16, 2008, the company announced that it had received financial covenant relief from its bank group for its senior secured (stock pledge only) revolver for the fourth quarter of 2007. The maximum total leverage ratio permitted for the period was increased to 5.3x from 5.0x and the minimum interest coverage ratio was decreased to 2.15x from 2.25x. Despite this amendment, Moody's remains concerned about the company's ability to comply with financial covenants over the near term. The review for possible downgrade will primarily focus on the company's run-rate operations and expected liquidity profile. Notably, the review will explore Moody's concerns surrounding the company's ability to maintain compliance with the financial covenants contained in the existing amended senior secured credit facility, for which the thresholds adjust to considerably tougher levels as of the first quarter of 2008. The maximum total leverage ratio permitted will decrease to 4.25x and the minimum interest coverage ratio permitted will increase to 2.5x. Moody's placed these ratings of Chesapeake Corporation on review for possible downgrade: -- $50 million senior unsecured revenue bonds due 2019, B1 (LGD 3, 48%) -- GBP67.1 million 10.375% senior subordinated notes due 2011, B3 (LGD 5, 87%) -- EUR100 million 7.0% senior subordinated eurobonds due 2014, B3 (LGD 5, 87%) -- Corporate Family Rating, B1 -- Probability of Default Rating, B1 Headquartered in Richmond, Virginia, Chesapeake Corporation is a leading international supplier of specialty paperboard and plastic packaging. Revenues for the twelve month period ended Sept. 30, 2007 were $1.034 billion. CHICAGO H&S: February 4 Deadline Set for Proofs of Claim Filing --------------------------------------------------------------- The United States Bankruptcy Court for the Northern District of Illinois set Feb. 4, 2008, as the final date for creditors of Chicago H&S Hotel Property LLC to file proofs of claim. The Court also established April 28, 2008, for governmental units to file proofs of claim. The Debtor said that it has yet to determine the nature, extend and amount of the claims its creditors asserted against the Debtor. About Chicago H&S Based in Chicago, Illinois, Chicago H&S Hotel Property, LLC, dba Hotel 71, owns and operates a 40-story, 437 guestroom full service hotel. The company filed for Chapter 11 protection on Oct. 29, 2007 (Bankr. N.D. Ill. Case No. 07-20088). Charles R. Gibbs, Esq. at Akin Gump Strauus Hauer & Feld LLP, and Daniel A. Zazove, Esq., and Jason d. Horwitz, Esq., at Perkins Coie LLP, represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors in the Debtor's case chose Polsinelli Shalton Flanigan Suelthaus P.C. as their counsel. The Debtor's schedules reflected total assets of $133,553,529, and total liabilities of $106,862,713. CLASS V FUNDING: Poor Credit Quality Cues Moody's Rating Cuts ------------------------------------------------------------- Moody's Investors Service downgraded ratings of six classes of notes issued by Class V Funding III, Ltd., and left on review for possible further downgrade ratings of two of these classes of notes. The notes affected by this rating action are: Class Description: $39,200,000 Class S Notes due 2015 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $500,000,000 Class A1 Floating Rate Notes due 2052 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Class Description: $200,000,000 Class A2 Floating Rate Notes due 2052 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ca Class Description: $120,000,000 Class A3 Floating Rate Notes due 2052 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca Class Description: $75,000,000 Class A4 Floating Rate Notes due 2052 -- Prior Rating: B2, on review for possible downgrade -- Current Rating: Ca Class Description: $50,000,000 Class B Deferrable Floating Rate Notes due 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 on Nov. 13, 2007, as reported by the Trustee, of an event of default caused by a failure of the Principal Coverage Ratio of Class A Notes to be greater than or equal to the required amount pursuant Section 5.1(d) of the Indenture dated Feb. 28, 2007. Class V Funding III, Ltd. is a collateralized debt obligation backed primarily by a portfolio of CDO securities. Recent ratings downgrades on the underlying portfolio caused ratings-based haircuts to affect the calculation of overcollateralization. Thus, the Principal Coverage Ratio of Class A Notes failed to meet the required level. As provided in Section 5.2 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 S and to the Class A1 Notes remain on review for possible further action. COMSTOCK HOME: Has Until July 7 to Comply with Nasdaq Rules ----------------------------------------------------------- Comstock Homebuilding Companies Inc. received notice from The NASDAQ Stock Market stating that for 30 consecutive business days the company's common stock has closed below the minimum $1 per share requirement for continued inclusion under Marketplace Rule 4450(a)(5). The notice has no effect on the listing of the company's securities at this time, and its common stock will continue to trade on the NASDAQ Global Market under the symbol "CHCI." In accordance with Marketplace Rule 4450(e)(2), the company has 180 calendar days, or until July 7, 2008, to regain compliance. The notice states that if, at any time before July 7, 2008, the bid price of the company's common stock closes at $1 per share or more for a minimum of 10 consecutive business days, NASDAQ staff will provide written notification that the company has achieved compliance with the minimum bid price requirement. No assurance can be given that the company will regain compliance during that period. If the company does not regain compliance with the minimum bid price requirement by July 7, 2008, NASDAQ staff will provide the company with written notification that its securities will be delisted. At that time, the company may appeal the delisting determination to a Listings Qualifications Panel. Alternatively, the company may apply to transfer its securities to the NASDAQ Capital Market if it satisfies the requirements for initial inclusion set forth in Marketplace Rule 4310(c), other than the minimum bid price requirement of Marketplace Rule 4310(c)(4). In the event of such a transfer, the company will be afforded an additional 180 calendar days to comply with the minimum bid price requirement while listed on the NASDAQ Capital Market. No assurance can be given that the company will be eligible for the additional 180-day compliance period, or, if applicable, that it will regain compliance during any additional compliance period. The company has not determined what action, if any, it will take in response to this notice, although the companyintends to monitor the closing bid price of its common stock between now and July 7, 2008, and to consider available options if its common stock does not trade at a level likely to result in the company regaining compliance with the NASDAQ minimum closing bid price requirement. About Comstock Homebuilding Based in Reston, Virginia, Comstock Homebuilding Companies Inc. (Nasdaq: CHCI) -- http://www.comstockhomebuilding.com/-- is a diversified real estate development firm with a focus on moderately priced for-sale residential products. Established in 1985, Comstock builds and markets single-family homes, townhouses, mid-rise condominiums, high-rise condominiums, mixed-use urban communities and active adult communities. The companycurrently markets its products under the Comstock Homes brand in the Washington, D.C., Raleigh, North Carolina, and Atlanta, Georgia metropolitan areas. Comstock develops mixed-use, urban communities and active-adult communities under the Comstock Communities brand. * * * On Oct. 25, 2007, the company entered into loan modification agreements which extended maturities and provided for a forbearance agreement with respect to all financial covenants. The forbearance runs until March 31, 2008. As of Sept. 30, 2007, the company had $11.1 million outstanding to M&T Bank, and is not in compliance with the tangible net worth covenant. CONSECO/GREEN TREE: Fitch Affirms Ratings on 54 Classes ------------------------------------------------------- Fitch has downgraded 5 classes ($95.2 million), upgraded 11 classes ($174.6 million), and affirmed 54 classes ($387.2 million) from the 70 Conseco/Green Tree Finance Home Equity and Home Improvement transactions listed below. The outstanding rated class balances total $457.0 million. Of the rated classes, 21 ($159.8 million) have Distressed Recovery Ratings. Green Tree Home Improvement 1996-C -- Class HI B-2 affirmed at 'CCC/DR1'. Green Tree Home Equity 1996-C -- Class HE M-2 affirmed at 'AAA'; -- Class HE B-1 affirmed at 'AA-'; -- Class HE B-2 affirmed at 'C/DR2'. Green Tree Home Improvement 1996-D -- Class HI B-2 affirmed at 'CCC/DR1'. Green Tree Home Equity 1996-D -- Class HE M-2 affirmed at 'AAA'; -- Class HE B-1 affirmed at 'A+'; -- Class HE B-2 affirmed at 'CCC/DR1'. Green Tree Home Improvement 1996-E -- Certificate affirmed at 'C/DR5'. Green Tree Home Improvement 1996-F -- Class HI B-1 affirmed at 'AAA'; -- Class HI B-2 affirmed at 'CCC/DR2'. Green Tree Home Equity 1996-F -- Class HE B-1 affirmed at 'AA'; -- Class HE B-2 affirmed at 'CCC/DR1'. Green Tree Home Equity 1997-B -- Class M-2 affirmed at 'AAA'; -- Class B-1 upgraded to 'AA-' from 'A+'; -- Class B-2 affirmed at 'CCC/DR1'. Green Tree Home Improvement 1997-C -- Class HI B-2 affirmed at 'CCC/DR1'. Green Tree Home Equity 1997-C -- Class HE M-2 affirmed at 'AAA'; -- Class HEB1 upgraded to 'AA-' from 'A+'; -- Class HEB2 affirmed at 'CCC/DR1'. Green Tree Home Improvement 1997-D -- Class HI B-1 affirmed at 'AAA'; -- Class HI B-2 affirmed at 'CCC/DR1'. Green Tree Home Equity 1997-D -- Class HE M-2 affirmed at 'AAA'; -- Class HE B-1 upgraded to 'A+' from 'A-'; -- Class HE B-2 affirmed at 'CCC/DR1'. Green Tree Home Improvement 1997-E -- Class HI B-1 affirmed at 'AAA'; -- Class HI B-2 affirmed at 'CCC/DR1'. Green Tree Home Equity 1997-E -- Class HE M-2 affirmed at 'AAA'; -- Class HE B-1 upgraded to 'A' from 'BBB+'; -- Class HE B-2 affirmed at 'CC/DR2'. Green Tree Home Improvement 1998-B -- Class HI B-1 upgraded to 'AA-' from 'A+'; -- Class HI B-2 affirmed at 'CCC/DR1'. Green Tree Home Equity 1998-B -- Class HE B-1 upgraded to 'AA-' from 'A+'; -- Class HE B-2 affirmed at 'CC/DR1'. Green Tree Home Equity 1998-C -- Class B-1 upgraded to 'AA-' from 'A+'; -- Class B-2 downgraded to 'CC/DR2 from 'CCC/DR1'. Green Tree Home Equity 1999-C -- Class M-2 affirmed at 'AAA'; -- Class B-1 upgraded to 'A+' from 'A'; -- Class B-2 downgraded to 'C/DR6' from C/DR2'. Green Tree Home Equity 1999-D -- Class M-1 affirmed at 'AAA'; -- Class M-2 upgraded to 'AA-' from 'A+'; -- Class B-1 affirmed at 'BB+'; -- Class B-2 downgraded to 'C/DR4' from 'CCC/DR1'. Conseco Home Equity 2000-C -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class B-1 affirmed at 'A+'. Conseco Home Improvement 2000-E -- Class A-5 affirmed at 'AAA'; -- Class M-1 affirmed at 'AA-'; -- Class M-2 affirmed at 'BBB-'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'CC/DR3'. Conseco Home Equity 2001-B Group 1 -- Classes I-A-1A & I-A-5 affirmed at 'AAA'; -- Class I-M-1 affirmed at 'AA-'; -- Class I-M-2 affirmed at 'A+'; -- Class I-B-1 affirmed at 'BB+'. Conseco Home Equity 2001-B Group 2 -- Class II-M-2 upgraded to 'AAA' from 'AA+'; -- Class II-B-1 upgraded to 'AA-' from 'A+'. Conseco Home Equity 2001-B B2 -- Class B-2 downgraded to 'B+' from 'BB'. Conseco Home Equity 2001-D -- Class A-5 affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'BBB'; -- Class B-1 downgraded to 'B' from 'BB-'; -- Class B-2 affirmed at 'CC/DR3'. Conseco Home Equity 2002-B -- Class A-3 affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 affirmed at 'BB+'. The downgrades are taken as a result of a deteriorating relationship between credit enhancement and expected loss. In addition, the B-2 classes in transactions prior to Conseco 2000-C originally had the benefit of a Limited Guarantee provided by the issuer. When Conseco filed for Chapter 11 bankruptcy protection in December 2002, the guarantee was terminated. Because the transactions were originally structured to include the Limited Guarantee support, many of the B-2 classes have been unable to maintain their original ratings. The upgrades are taken as a result of a strengthening relationship between credit enhancement and expected loss and the affirmations are taken as a result of a stable relationship between credit enhancement and expected loss. The rating actions incorporate Fitch's analysis regarding loan modification practices used by GreenTree Servicing on the Conseco/Green Tree HE and HI portfolios. For borrowers who have met certain criteria, the modifications primarily involve deferring delinquent payments until the end of the loan term and changing the borrower's payment status from delinquent to current. Management indicated that the company has recently tightened up the eligibility criteria for modifications. While Fitch believes modifications can provide the benefit of maintaining cash flow on a low-recovery asset and can potentially reduce cumulative losses to the trust, Fitch assumes the loan modifications affect the timing of losses by generally allowing for weaker borrowers to remain in the loan pool longer and for a greater percentage of defaults to be incurred later in the pool's life than would have been incurred otherwise. As a result, Fitch amended the projected default curve to account for the impact of the modifications to the timing of losses. The projected loss that Fitch expects on the remaining collateral balances range from 5.1% to 20.1% for the HE portfolio and 3.8% to 18.9% for the HI portfolio. When added to cumulative losses to date, which range between 3.7% (Conseco 2000-C) and 9.4% (Conseco 2001-B Group 2) for the HE portfolio and 3.7% (Green Tree 1997-D) and 8.8% (Green Tree 1998-B) for the HI portfolio, the overall losses that Fitch expects, as a percentage of the original collateral balances, generally range from 5.0% to 12.4% for the HE portfolio and 3.8% to 9.4% for the HI portfolio. The collateral of the above transactions consists of fixed- and adjustable-rate, closed-end mortgage loans secured by first or second liens on one- to four-family residential properties. The loans were originated by Green Tree Financial Corp. or Conseco Finance Corp. Conseco 2001-B B2 is a resecuritization of the B-2 class from Conseco 2001-B with the additional benefit of a reserve fund. The reserve fund was depleted in July 2004. All of the above transactions are serviced by GreenTree Servicing, which is rated 'RPS3+' by Fitch. The pool factors of the above transactions range from 0.1% (Green Tree 1996-E) to 17.7% (Conseco 2002-B). In addition, the seasoning of the above transactions ranges from 49 months (Conseco 2002-B) to 119 months (Green Tree 1996-C). COOKSON SPC: S&P Junks Rating on 2007-1LAC Notes ------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on the notes issued by Cookson SPC's series 2007-1LAC and 2007-2LAC and removed them from CreditWatch negative. The rating actions reflect the Jan. 11, 2008, lowering of the ratings on the class B floating-rate deferrable interest secured notes due 2046 and the class C floating-rate deferrable interest secured notes due 2046 issued by Lacerta ABS CDO 2006-1 Ltd. and their removal from CreditWatch negative. Cookson SPC series 2007-1LAC is a credit-linked note transaction and the rating on the notes issued by the trust is based on the lower of: (i) the reference obligations, Lacerta ABS CDO 2006-1 Ltd.'s class C floating-rate deferrable interest secured notes due 2046 ('CCC- '); and (ii) the rating on the swap counterparty, Citibank N.A. (AA/A-1+). Cookson SPC series 2007-2LAC is a credit-linked note transaction and the rating on the