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 31, 2008, Vol. 12, No. 26 Headlines ABFS MORTGAGE: S&P Junks Rating on 2002-3 Class B Trust ADVAL-ITE INC: Wants Judge Carey to Dismiss Chapter 11 Cases AIRTRAN HOLDINGS: Earns $52.7 Million in Year Ended Dec. 31 AMERICAN CASINO: Extends Tender Offer Expiry Until February 5 AMERICAN HOME: Court Approves DoveBid as Auctioneer AMERICAN HOME: Wants to Hire CB Richard as Real Estate Broker AMERICAN HOME: Wants to Hire Deloitte Tax to Give Tax Services AMERICAN LAFRANCE: Taps Haynes and Boone as Lead Counsel AMERICAN LAFRANCE: Taps CRG Partners as Financial Advisors AMERISOURCEBERGEN CORP: Moody's Places Ba1 Rating Under Review ARGUE AUTOMOTIVE: Case Summary & 20 Largest Unsecured Creditors ARVINMERITOR: Expected Neg. Cash Flow Cues Fitch to Cut Ratings ASSET BACKED: Moody's Junks Rating on Class B Certificates AVADO BRANDS: Exclusive Plan Filing Period Extended to May 2 BAYOU GROUP: Former CFO Gets 20 Years Prison Term for Fraud BEXAR COUNTY: Moody's Chips Rating on $12.8 Million Bonds to Ba2 BOMBAY COMPANY: Court Approves Sale of Trademarks for $2 Million BUFFETS HOLDINGS: Wants to Hire Young Conaway as Bankr. Counsel BUFFETS HOLDINGS: Wants Paul Weiss as Special Corporate Counsel CENTRO NP: Earns $11.7 Million in Third Quarter Ended Sept. 30 CHAMPION PARTS: Judge Mixon Converts Case to Chapter 7 Liquidation CHIQUITA BRANDS: Moody's Holds Ratings on Capital Structure Review CLAYMONT STEEL: S&P Retains 'B' Rating Under Positive CreditWatch CLEAR CHANNEL: Pending $19 Bil. Buyout Unaffected by Market Frets COMEDRES LLC: Voluntary Chapter 11 Case Summary COMUNITY LENDING: Can Hire Omni Management as Claims Agent CONSOL ENERGY: Mulls Offer to Acquire Remaining Shares of CNX Gas CRII LLC: Section 341(a) Meeting Scheduled for February 26 CRII LLC: Wants to Hire Allan NewDelman as Bankruptcy Counsel CSFB HOME: Moody's Downgrades Ratings on 58 Tranches CWABS INC: Moody's Junks Ratings on Six Certificate Classes DELTA AIR: Merger Talks with Northwest Hit Snag, Source Says DELTA PETROLEUM: Special Stockholders Meeting Set for Feb. 19 DURA AUTOMOTIVE: Wants To Sell 9 Properties to IRG for $19.2 Mil. DURA AUTOMOTIVE: Jacksonville Property Buyer Withdraws Offer EL POLLO: Moody's Confirms B3 Corp. Family Rating w/ Neg. Outlook ENRON CORP: Citigroup Seeks Summary Judgment on Claims ENRON CORP: Court Okays Stipulation with Avaya FIRST MAGNUS: Hughes Dev't Wins Bid for $5.25MM Construction Loans FIRST MAGNUS: UBS Real Estate Wants to Vote on Liquidation Plan FLEETWOOD ENT: Weak Performance Prompts Moody's to Junk Ratings FLEXTRONICS INTERNATIONAL: Completes Acquisition of Avail FORBES ENERGY: Moody's Assigns B2 Ratings with Stable Outlook FORBES ENERGY: Low Operating Leverage Cues S&P's 'B' Credit Rating GARY GERTLER: Case Summary & 13 Largest Unsecured Creditors GLOBAL PAYMENT: Eisner LLP Expresses Going Concern Doubt GOODMAN GLOBAL: Earns $43.1 Million in 2007 Third Quarter GREATER FELLOWSHIP: Voluntary Chapter 11 Case Summary HARRAH'S ENTERTAINMENT: Completes Merger Deal with Hamlet HH DISTRIBUTION: Voluntary Chapter 11 Case Summary IAC/INTERACTIVECORP: Refutes Liberty Media's "Preposterous" Claims INTELSAT LTD: Increased Leverage Cues Moody's to Cut CFR to Caa1 ITC^DELTACOM: Gets $30.1 Million Proceeds from Rights Offering JETBLUE AIRWAYS: Posts $4MM Net Loss in Qtr. Ended December 31 KIDS CONNECTION: Section 341(a) Creditors' Meeting Set for Feb. 12 LAKE AT LAS VEGAS: Payment Failure Prompts Moody's Default Rating LAS VEGAS MONORAIL: Moody's Junks Rating on $445.8MM Revenue Bonds LEDCO LIMITED: CAW to Protest vs. Government's Complacency Today LEDCO LIMITED: CAW Rep Says Lead Client Agrees to Pay $120,000 LEVITT AND SONS: Court Gives Interim Nod on Wachovia DIP Financing LEVITT AND SONS: BofA Wants to Foreclose on Collateral LIBERTY MEDIA: IAC Chair Calls Allegations as "Preposterous" LINDA MCCLURE: Case Summary & 15 Largest Unsecured Creditors LORENZO PILEGGI: Case Summary & Seven Largest Unsecured Creditors MAJESTIC STAR: Halts Development of Indiana Gaming Facilities MAXJET AIRWAYS: Wants to Set Auction of Assets on February 15 MBS MANAGEMENT: Case Summary & 254 Largest Unsecured Creditors MORTGAGE LENDERS: Has Until February 22 to File Chapter 11 Plan NATIONWIDE MATTRESS: To Be Placed Under Liquidation NCO GROUP: Moody's Rates $139 Million Add-on Term Loan at Ba3 NEW YORK RACING: IRS to Cut Tax Claim by 90%; Negotiations Ongoing NORTH FOREST: May Go Bankrupt Absent State's Aid, Auditor Says NBTY INC: Earnings Slide to $46 Mil. in Qtr. Ended December 31 NORTHWEST AIRLINES: Net Loss Drops to $8MM in 2007 4th Quarter PACIFIC LUMBER: BoNY Requests for Due Diligence Information PACIFIC LUMBER: Court Gives Final OK to MAXXAM Log Purchase Pact PACIFIC LUMBER: Expects Submission of Four Competing Plans PATRIOT'S POINTE: Case Summary & 20 Largest Unsecured Creditors PILAR HOME: Case Summary & 20 Largest Unsecured Creditors POST PROPERTIES: Moody's Revises Outlook to Developing PPT VISION: Losses Cue Virchow Krause to Raise Going Concern Doubt RADIATION THERAPY: Moody's to Remove Ratings on Buyout Completion RADIATION THERAPY: Increased Debt Leverage Cues S&P to Cut Rating RAINIER CBO: Notes Redemption Prompts S&P to Withdraw Ratings ROCK-TENN: Moody's Confirms Ba2 Corporate Family Rating RTS MERGERCO: Moody's Puts Corporate Family Rating at B2 SALANDER-O'REILLY: Intends to Sell 35,000 Art Books Worth $4 Mil. SALLY CAPP: Voluntary Chapter 11 Case Summary SIX FLAGS: To Cut Expenses by $60 Million Under 2008 Plan SPORTSSTUFF INC: Taps Blackwell Sanders as Bankruptcy Counsel SPORTSSTUFF INC: Taps Fraser Stryker as Special Litigation Counsel SPORTSSTUFF INC: U.S. Trustee Appoints Six-Member Creditors Panel STEEL DYNAMICS: Earnings Drop to $98 Mil. in Qtr. Ended Dec. 31 SUMMIT GLOBAL: Files for Chapter 11 Protection in New Jersey SUMMIT GLOBAL: Case Summary & 20 Largest Unsecured Creditors SUPERCLICK INC: Bedinger & Co Expresses Going Concern Doubt TEKNI-PLEX INC: Inks Forbearance Pact with Senior Notes Holders TOUSA INC: Wants Court Nod to Secure $650 Million DIP Financing TOUSA INC: Wants Court to Authorize Use of All Cash Collateral TP EMERALD: Case Summary & 20 Largest Unsecured Creditors TRANSWITCH CORP: Has Until July 23 to Comply with Nasdaq Rules UAP HOLDING: Posts $19.0 Million Net Loss in Quarter Ended Nov. 25 US ENERGY: Chancery Ct. Defers Stockholders Meeting to Feb. 5 US STEEL: Earnings Drop to $35 Mil. in Quarter Ended December 31 UPSNAP INC: Traci Anderson Raises Going Concern Doubt Over Losses VICORP RESTAURANTS: Delayed 10K Filing Cues Moody's to Cut Ratings VITALTRUST BUSINESS: Alex Edwards Resigns as Chief Exec. Officer VOLANS FUNDING: Poor Credit Quality Cues Moody's to Lower Ratings WACHOVIA AUTO: Moody's Rates $14.97 Million Class E Notes at Ba3 WACHOVIA BANK: S&P Affirms Ratings on 19 Certificate Classes WELLCARE HEALTH: Officers' Resignation Cues S&P to Cut Rating WESTSHORE GLASS: Case Summary & 20 Largest Unsecured Creditors YRC WORLDWIDE: Incurs $638,381,000 Net Loss in Full-Year 2007 ZVUE CORP: Posts $4.2 Million Net Loss in 2007 Third Quarter * Brown Rudnick Launches Structured Resolution Group * Fitch Says Real Estate Investment Trusts Faces Pivotal Year * IMF Sees World Growth Slowing, With U.S. Marked Down * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* ABFS MORTGAGE: S&P Junks Rating on 2002-3 Class B Trust ------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class M-2 and B mortgage pass-through certificates from ABFS Mortgage Loan Trust 2002-3. Concurrently, S&P affirmed its ratings on the remaining two classes from this deal. The downgrades reflect collateral performance that has eroded available credit support during recent months. As of the January 2008 remittance period, cumulative losses were $14.765 million, or 3.99% of the transaction's original principal balance. Serious delinquencies were $19.62 million. Losses have consistently outpaced excess interest for seven out of the 12 most recent months. The affirmations reflect stable collateral performance as of the January 2008 remittance period. Current and projected credit support percentages are sufficient to support the ratings at their current levels. Subordination, excess interest, and overcollateralization provide credit support for the transaction. The certificates represent nonrecourse obligations of the trust estate consisting of fixed-rate, business- and consumer-purpose home equity loans secured by first- or second-lien mortgages or deeds of trust on residential properties. Ratings Lowered ABFS Mortgage Loan Trust 2002-3 Rating ------ Class To From ----- -- ---- M-2 BBB- A B CCC B Ratings Affirmed ABFS Mortgage Loan Trust 2002-3 Class Rating ----- ------ A AAA M-1 AA ADVAL-ITE INC: Wants Judge Carey to Dismiss Chapter 11 Cases ------------------------------------------------------------ Adva-lite Inc. and its debtor-affiliates ask the Honorable Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware to dismiss their Chapter 11 bankruptcy cases. The Debtors tell the Court that the purpose of the request is to eliminate any further expenses and delay. The Debtors listed grounds as to why the cases should be dismissed including, among other things: -- minimal assets, no employees and no ongoing business operations; -- no likelihood of rehabilitation of their operations or their reorganization as a group concern; -- substantially all of their assets have been liquidated; and -- any avoidance actions in these cases would not result in a meaningful distribution to creditors. The Debtors say that their cases no longer serve any reorganization or other purpose under the Bankruptcy Code. Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor LLP in Wilmington, Delaware, relates that the Debtors propose to reserve funds specifically to deal with remaining wind-down issues, including: a) $25,000 to retain an account to complete audits of the Debtors' 401(k); b) $100,000 to retain an accountant to complete the Debtors' consolidated tax return for the years 2006, 2007 and 2008; c) $150,000 for the fees and expenses that may be incurred in connection with the completion of the wind-down; and d) $4,000 to reimburse Kurtzman Carson Consultants for fees and expenses. The Debtors further propose, Mr. Nestor adds, that Corvest Group Inc. will collect the proceeds of the partial assignment as stated in the stipulation regarding payments rights agreement between the Debtors. Mr. Nestor says that the dismissal of these cases provide for the discharge and release of: i) Gulf Atlantic Capital Corporation, which is serving as chief restructuring officer of the Debtors; and ii) Kurtzman Carson Consultants LLC. A hearing has been set on Feb. 12, 2008, at 10:00 a.m., to consider approval of the Debtors' request. Objections are due Feb. 5, 2008. Headquartered in Largo, Fla., Adva-Lite Inc., together with Corvest Promotional Products Inc., and four other affiliates, sought chapter 11 protection on February 28, 2007 (Bankr. D. Del. Lead Case Nos. 07-10264). The four affiliates filing separate chapter 11 petitions are Toppers LLC, CGI Inc., It's All Greek To Me Inc., and Corvest Group Inc. Adva-Lite, It's All Greek, and Toppers are subsidiaries of Corvest Promotional. Adva-Lite manufactures and markets personal lighting gizmos, writing instruments, beverageware, and tools. It's All Greek provides custom plush products. Toppers offers sports bags, totes, luggage, caps, and other business accessories. Paul S. Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors. Michael R. Nestor, Esq., Kara Hammond Coyle, Esq., at Young Conaway Stargatt & Taylor, LLP, is the Debtors co-counsel. Houlihan Lokey Howard & Zukin Capital, Inc. serve as financial advisor and investment banker to the Debtors. Kurtzman Carson Consultants LLC acts as the Debtors' claims and noticing agent. Lowenstein Sandler PC represent the Official Committee of Unsecured Creditors while Reed Smith LLP is the Committee's Delaware counsel. Mahoney Cohen & Company, CPA P.C. is the financial advisor to the Committee. In amended schedules filed with the Court, Adva-Lite disclosed total assets of $7,033,526 and total debts of $48,897,227. AIRTRAN HOLDINGS: Earns $52.7 Million in Year Ended Dec. 31 ----------------------------------------------------------- AirTran Holdings, Inc., the parent company of AirTran Airways Inc., reported Tuesday net income of $52.7 million for the full year 2007. For the fourth quarter, AirTran reported a net loss of $2.2 million. Included in the full year results is a charge associated with the termination of AirTran's exchange offer for Midwest Air Group and a gain on the sale of two aircraft. The combined impact of these two items resulted in a reduction of earnings of $2.8 million, net of tax. For the full year and fourth quarter of 2006, AirTran reported net income of $14.7 million and a $3.6 million loss, respectively. "We finished the year with very strong revenue performance reflecting the high quality of our service and diversified network, which was especially important given the challenging operating environment and record high fuel costs in 2007," said Bob Fornaro, AirTran Airways' president and chief executive officer. "We are proud of our improved profitability, and our dedicated, hard-working Crew Members deserve all the credit. Their loyalty and outstanding customer service have taken AirTran Airways to new heights, and I look to our future performance with optimism." During the fourth quarter, capacity grew by 15.1% and traffic rose by 25.5%, resulting in a load factor of 75.3%, a 6.3 point increase year over year. Revenues for the fourth quarter grew 26.5% to $583.8 million and passenger unit revenue increased 9.4%. For the full year, capacity increased by 19.4% and traffic rose 25.0%, which resulted in a load factor of 76.2%. Total revenues grew by 22.1% to $2.3 billion. Commenting on the fourth quarter, Kevin Healy, senior vice president of marketing and planning for AirTran Airways, said, "With double-digit capacity growth and seven new destinations added to our growing network in 2007, we're pleased to report very strong unit revenue performance." He added, "While we remain in a very challenging business environment in 2008 our advance bookings and demand look strong, and I am optimistic about our revenue performance going forward." AirTran Airways reduced its total operating unit costs for the year by 1.7% despite a 2.8% increase in the price of fuel. Non- fuel unit operating costs declined by 2.6% for the year. During the fourth quarter, non-fuel unit costs increased 2.2% due to significant weather events, increased maintenance, and distribution costs related to higher passenger traffic and revenues. Commenting on the fourth quarter performance, AirTran Airways' senior vice president and chief financial officer Stan Gadek said, "I am very pleased that we have continued to lower our non-fuel unit costs for the sixth consecutive year. AirTran's ability to deliver a high quality product with an industry leading cost structure has enabled us to report a significant increase in profits." Select Balance Sheet Disclosure Cash, cash equivalents, and investments at Dec. 31, 2007, were $355.9 million, of which $29.6 million was restricted. Net aircraft deposits with Boeing at Dec. 31, 2007, were $119.8 million. Current and long-term debt balance at Dec. 31, 2007, was $1.06 billion, which reflects debt financing for aircraft purchases, pre-delivery deposit financing, and capital leases for spare engines. All but $125.0 million of the company's total debt is secured by aircraft or delivery positions. As of Dec. 31, 2007, the number of aircraft in the company's fleet that are leased or owned included, 79 leased B717 aircraft and 22 leased B737 aircraft and 8 owned B717 aircraft and 28 owned B737 aircraft. About AirTran Holdings Headquartered in Orlando Florida, AirTran Holdings Inc. (NYSE: AAI) -- http://www.airtran.com/-- a Fortune 1000 company, is the parent company of AirTran Airways, which offers more than 700 daily flights to 56 U.S. destinations. * * * To date, AirTran Holdings Inc. carries Moody's Investors Service 'B3' long-term corporate family and 'Caa2' senior unsecured debt ratings. Outlook is Stable. AMERICAN CASINO: Extends Tender Offer Expiry Until February 5 ------------------------------------------------------------- American Casino & Entertainment Properties LLC has extended the expiration date for its previously announced tender offer to purchase all of the $215 million principal amount of the outstanding 7.85% Senior Secured Notes due 2012 co-issued by ACEP and American Casino & Entertainment Finance Corp. Pursuant to the terms of the Offer to Purchase and Consent Solicitation Statement dated Dec. 28, 2007, the Tender Offer was scheduled to expire at 8:00 a.m., New York City time, on Jan. 29, 2008, unless extended. The expiration date for the Tender Offer has been extended to 8:00 a.m., New York City time, on Feb. 5, 2008, unless further extended. According to the company, the expiration date is being extended to coincide with the anticipated closing date of the previously announced acquisition of ACEP by W2007/ACEP Holdings LLC, an affiliate of Whitehall Street Real Estate Funds, a series of real estate investment funds sponsored and managed by The Goldman Sachs Group Inc. and its affiliates. Holders who have already tendered their Notes do not have to re- tender their Notes or take any other action as a result of the extension. ACEP previously received valid tenders and consents from holders of $215 million aggregate principal amount of the Notes, representing 100% of the Notes outstanding as of 5:00 p.m., New York City time, on Jan. 11, 2008. The right to withdraw the tendered Notes and to revoke delivered consents terminated on the Consent Date. The exclusive dealer manager and solicitation agent for the Tender Offer is Bear, Stearns & Co. Inc. Questions regarding the Tender Offer may directed to Bear Stearns at (877) 696-BEAR (toll free) or (212) 272-5112 (collect). The information agent and tender agent for the Tender Offer is D.F. King & Co. Inc. Requests for the Statement may be directed to D.F. King & Co. Inc., as information agent, at 48 Wall Street, 22nd Floor, New York, New York 10005. The information agent may be contacted at (212) 269-5550 (for banks and brokers only) and (800) 628-8208 (for all others toll free). About American Casino Headquartered in Las Vegas, Nevada, American Casino & Entertainment Properties LLC -- http://www.acepllc.com/-- owns and operates four gaming and entertainment properties in southern Nevada. The four properties are the Stratosphere Casino Hotel & Tower, which is located on the Las Vegas Strip and caters to visitors to Las Vegas, two off-Strip casinos, Arizona Charlie's Decatur and Arizona Charlie's Boulder, which cater primarily to residents of Las Vegas and the surrounding communities, and the Aquarius Casino Resort which caters to visitors to Laughlin. * * * American Casino & Entertainment Properties LLC continues to carry Moody's "B2" probability of default and long-term corporate family ratings with a developing outlook. In addition, the company also carries Standard & Poor's "B+" long- term local and foreign issuer credit ratings with a negative outlook. AMERICAN HOME: Court Approves DoveBid as Auctioneer --------------------------------------------------- American Home Mortgage Investment Corp. and its debtor- affiliates obtained permisssion from the U.S. Bankruptcy Court for the District of Delaware to employ DoveBid Inc. as auctioneer. The Debtors stated that it intended to sell certain assets, including furniture, fixtures, office equipment and other personal property, which they no longer need due to the closure of their loan origination business. The retention and employment of DoveBid will allow the Debtors to auction and sell the Assets in an efficient and expeditious manner because of DoveBid's specialized auction experience, related James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware. DoveBid will advertise and market each Sale and the Debtors will provide DoveBid with an allowance for the advertisement and marketing. DoveBid may offer the Assets for sale by piece or lot, provided, that the Assets will not be commingled with any third parties' assets. It may also sell all Assets at auction to the highest bidder, provided, no officer, director or affiliate of the Debtors will be entitled to purchase any Assets. Mr. Patton discloses that DoveBid will not (i) guarantee the consummation of any sale and is not responsible if a purchaser fails to complete a purchase, and (ii) permit any purchaser to take possession of any Assets without full payment. He notes that DoveBid assumes the risk of collection for any equipment it allows to be removed. DoveBid will collect from the buyers the gross proceeds of each Plan, including any applicable sales taxes and deposit the funds into a bank depository account maintained by DoveBid. The Debtors has agreed to pay DoveBid on a percentage-fee basis for each Plan and that DoveBid is entitled to reimbursement for the actual and necessary expenses it incurred from the gross proceeds of each Plan. DoveBid will collect payment a buyer's premium from the buyers of any Assets at the rate of 16% of the purchase price for each Asset. Mr. Patton notes that the Buyer's Premium will be reduced by 1% of the purchase price of any Asset for which a purchaser pays by cash, cashier's check, company check or wire transfer, provided payment in full is received by DoveBid within 72 hours from receipt of invoice. In addition, the Buyer's Premium will be 0% and DoveBid will receive no compensation for any Asset, where the purchaser is a Debtors' employee and the Asset is purchased for personal use or consumption. DoveBid will also remit to the Debtors a rebate amount, which is a percentage of the aggregate gross proceeds realized as a result of the sale of Assets. The Rebate will be calculated as: Aggregate Gross Proceeds Rebate ------------------------ ------ between $0 and $1,000,000 2% between $1,000,001 and $2,000,000 3% in excess of $2,000,000 4% John Carroll, DoveBid's senior vice president, assures the Court that the firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on March 3, 2008. (American Home Bankruptcy News, Issue No. 24, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Wants to Hire CB Richard as Real Estate Broker ------------------------------------------------------------- American Home Mortgage Investment Corp. and its debtor-affiliates seek permisssion from the U.S. Bankruptcy Court for the District of Delaware to employ CB Richard Ellis as a real estate broker, nunc pro tunc to Jan. 10, 2008, pursuant to an engagement agreement and in connection with the Debtors' sale of certain real property located at 538 Broadhollow Road, in Melville, New York. The Debtors have selected CBRE based on its experience and expertise in providing corporate real estate services. In addition, in anticipation of its retention, CBRE has become familiar with the Broadhollow Property and the issues related to sale, including the relevant agreements with respect to the Broadhollow Property. The Debtors also request that the information requirements of Local Rule 2016-2(d) be modified and waived to the extent necessary to permit CBRE to submit time records in rendering services on behalf of the Debtors. In accordance with the terms of the Engagement Agreement, the Debtors also seek approval of CBRE's fee structure pursuant to Section 328(a) of the Bankruptcy Code. The Debtors relate that the fee structure is fair and reasonable in light of industry practice and CBRE's extensive experience. Among the key terms of the Engagement Agreement are: -- The Debtors will grant CBRE the exclusive right to sell or dispose of the Broadhollow Property for a period commencing Jan. 10, 2008 and ending midnight of July 31, 2008, which term may be terminated by either party with or without cause upon 30 days written notice; -- CBRE agrees to use reasonable efforts to effect a sale or transfer of the Broadhollow Property, which will be marketed without a formal asking price; -- The Debtors agree to pay CBRE, together with any co- broker, an aggregate sales commission equal to 1.5% of the gross sales price up to $35 million, and 5% of the gross sales price that exceeds $35 million, which will include any existing mortgage that is assumed. The Commission will be earned and payable at the time of the closing for services rendered if, during the Term: * the Broadhollow Property is sold to a purchaser procured by CBRE, the Debtors or anyone else; and * the Debtors contribute or convey the Broadhollow Property to a business entity or pursuant to a stock sale; and -- The Debtors agree to reimburse CBRE for all its reasonable out-of-pocket expenses up to a maximum of $7,500. Phillip Heilpern, CBRE's senior vice president, assures the Court that the firm (i) is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, and (ii) does not hold an interest adverse to the Debtors. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on March 3, 2008. (American Home Bankruptcy News, Issue No. 24, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Wants to Hire Deloitte Tax to Give Tax Services -------------------------------------------------------------- American Home Mortgage Investment Corp. and its debtor-affiliates seek permisssion from the U.S. Bankruptcy Court for the District of Delaware to employ Deloitte Tax LLP as tax services providers, nunc pro tunc to Jan. 14, 2008. The Debtors also ask the Court to approve the engagement letter between them and Deloitte Tax, dated Jan. 11, 2008, pursuant to which Deloitte Tax will perform various tax compliance and tax consulting services. James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, informs the Court that Deloitte Tax has rendered tax services to the Debtors for several years, and as a result, has considerable knowledge concerning the Debtors, and is already familiar with their business affairs to the extent necessary for the scope of the proposed and anticipated services. The Debtors relate that Deloitte Tax is well suited and qualified to serve as their tax services providers in a cost-effective, efficient, and timely manner. As tax services provider, Deloitte Tax will: -- review calculations of taxable income for the year ended December 31, 2007, and the subsequent year ending in 2008 for American Home Mortgage Investment Corp.; -- prepare or review Form 1120 REIT or Form 1120 for American Home Mortgage Holdings, Inc., and AHM Investment Corp. and their subsidiaries for the year ended Dec. 31, 2007, and the subsequent year ending in 2008; -- research and consult on tax return filing issues with respect to trust preferred securities, amortization of mortgage servicing rights and tax accounting with respect to inter-company transactions; -- prepare federal and state partnership income tax returns for Bayliss Trust; -- research and consult on federal and state income tax issues regarding multi-series joint ventures or other joint ventures of AHM Investment Corp. or AHM Holdings Inc., and subsidiaries; -- research and prepare responses with respect to federal, state and local income tax notices received from taxing authorities; -- represent and research potential loan and securities sales and income tax audits; and -- research and file claims for refund with respect to the New York State Mortgage recording tax. The scope of services that Deloitte Tax anticipates to provide is limited to more significant services, Mr. Patton says. However, when specific tax assistance desired by the Debtors from Deloitte Tax is identified, and that assistance involves either (i) contemplated fees in excess of $1,000,000, or (ii) a potential tax liability in excess of $5,000,000, the Debtors and Deloitte Tax will execute a separate work order, which will be filed with the Court. Deloitte Tax's professionals will be paid in their reasonable hourly rates: Designation Hourly Rate ----------- ----------- Partner/Principal/Director $490 Tax Senior Manager $405 Tax Manager $305 Tax Senior $255 Tax Staff $195 Tax Administrative Staff $75 Deloitte Tax will also be reimbursed for reasonable and necessary expenses incurred in connection with the services performed for the Debtors. Mr. Patton discloses that Deloitte Tax and its affiliate, Deloitte & Touche LLP, have worked for the Debtors and received payments in the 90 days prior to the bankruptcy filing. As of the bankruptcy filing, the Debtors owed certain payments to Deloitte Tax and Deloitte & Touche: Name of Firm Received Amt. Amount Owed ------------ ------------- ----------- Deloitte & Touche $201,000 $389,750 Deloitte Tax LLP 98,423 75,000 Subject to the Court's approval of the employment application, Deloitte Tax has agreed not to seek recovery of the owed amounts. John Niemiec, a director at Deloitte Tax, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on March 3, 2008. (American Home Bankruptcy News, Issue No. 24, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN LAFRANCE: Taps Haynes and Boone as Lead Counsel -------------------------------------------------------- American LaFrance LLC, asks the United States Bankruptcy Court for the District of Delaware for authority to employ Haynes and Boone LLP, as its lead counsel, nunc pro tunc to Jan. 28, 2008. According to William Hinz, president and chief executive officer of ALF, Haynes and Boone is a full-service law firm with extensive experience and knowledge in the field of debtors and creditor's rights and business reorganizations under Chapter 11. The firm was engaged to provide advice concerning financial restructuring and pre-bankruptcy planning to the Debtor. Haynes and Boone will render specialized legal services to the Debtor as needed throughout ALF's Chapter 11 case. The firm's duties include: (a) advising ALF of its rights, powers and duties as debtor- in-possession under the Bankruptcy Code; (b) advising ALF concerning, and assisting in, the negotiation and documentation of financing agreements and debt restructurings; (c) counseling the Debtor in connection with the formulation, negotiation, and consummation of a possible sale of ALF or its assets, and a plan of reorganization and related documents or other liquidation of the estates; (d) reviewing the nature and validity of agreements relating to ALF's interests in real and personal property and advising the Debtor of its corresponding rights and obligations; and (e) advising ALF concerning preference, avoidance, recovery or other actions that they may take to collect and to recover property for the benefit of the estates and their creditors, whether or not arising under Chapter 5 of the Bankruptcy Code. ALF will pay Haynes and Boone in accordance to its hourly rates, and will reimburse the firm's actual and necessary expenses. The firm's rates are subject to adjustments on October 1 each year to reflect economic and other conditions. The primary attorneys and paralegal who will represent the Debtor, and their rates are: Robert D. Albergotti, partner $625 Ian T. Peck, associate $440 Abigail Ottmers, associate $370 John Middleton, associate $245 Dian Gwinnup, paralegal $160 Mr. Hinz informs the Court that Haynes and Boone received a retainer of $100,000 for work to be performed by the firm in connection with ALF's Chapter 11 case, which retainer has been placed in Haynes and Boone's trust account. Ian T. Peck, Esq., a senior associate at Haynes and Boone, tells the Court that the firm has not represented ALF's creditors, equity security holders, or any other interested parties, or their respective attorneys and accountants or the United States Trustee in any matters relating to the Debtor or its estate. Mr. Peck discloses the firm's current or prior representations of parties-in-interest in matters unrelated to ALF's Chapter 11 case: -- Bank of America; and -- various unsecured creditors, including IBM Corporation and certain of its affiliates; Daimler Chrysler and certain of its affiliates; General Motors Corporation and certain of its affiliates; Ferguson Enterprises, Inc., and certain of its affiliates; and The Travelers Companies and certain of its affiliates. The firm has also represented, in matters wholly unrelated to ALF, clients in which these professionals were involved: -- Gardere Wynne Sewell; -- CRG Partners Group, LLC; and -- William K. Snyder. Mr. Peck asserts that Haynes and Boone is a disinterested person, as the term is defined in Section 101(14) of the Bankruptcy Code. About American LaFrance LLC Headquartered in Summerville, South Carolina, American LaFrance LLC -- http://www.americanlafrance.com/-- is one of the oldest fire apparatus manufacturers and one of the top six suppliers of emergency vehicles in North America. Thee company filed for Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No. 08-10178). Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, is the Debtor's proposed local counsel. When the Debtor filed for protection against its creditors, it listed assets and liabilities between $100 Million and $500 Million. The Debtor's exclusive period to file a plan expires on May 27, 2008. (American LaFrance Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN LAFRANCE: Taps CRG Partners as Financial Advisors ---------------------------------------------------------- American LaFrance LLC seeks permission from the United States Bankruptcy Court for the District of Delaware to: (a) employ CRG Partners Group LLC, as its financial advisors; and (b) designate William K. Snyder, managing partner of CRG, as chief restructuring officer of ALF to assist in its restructuring efforts. CRG is a leading financial and corporate restructuring advisory firm, which has extensive experience and an excellent reputation for the services it has rendered in Chapter 11 cases, Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, proposed co-counsel for ALF, tells the Court. Mr. Snyder has served as a chief restructuring officer, examiner, or independent professional in other cases, including In re McCommas LFG Processing Partners, LP, Case No. 07-32219 (Bankr. N.D. Tex.2007) and In re Mirant Corporation, Case No. 03-46590 (Bankr. N.D. Tex. 2003), Mr. Ward continues. The current management of ALF believes that the Debtor's estate will benefit from having a seasoned reorganization professional who is not affiliated with ALF to evaluate its options for maximizing the value of the Debtor's assets. ALF and CRG have entered into an Engagement Letter to govern the relationship between them, and by which CRG and Mr. Snyder will provide their services to the Debtor. According to Mr. Ward, by the Engagement Letter, CRG will provide Mr. Snyder, as chief restructuring officer as well as qualified personnel at various levels. As chief restructuring officer of the Debtor, Mr. Snyder will assist ALF: -- in its operations with an objective of evaluating the Debtor's options for maximizing the value of its assets; -- in connection with the formulation, negotiation and consummation of a possible sale of the Debtor or its assets; and -- in connection with the formulation, negotiation, and promulgation of a plan of reorganization and related documents or other liquidation of the estate. ALF will pay Mr. Snyder and additional CRG personnel according to their hourly rates: Professional Hourly Rate ------------ ----------- William Snyder $500 Matt Donnell $400 Managing Partners $425 - $535 Partners $325 - $450 Directors $275 - $425 Associates $200 - $275 Administrative Assistants $100 Regardless of the hours expended, CRG and Mr. Snyder have agreed that the charges for Mr. Snyder's services as chief restructuring officer will be capped at $19,500 per week, and $16,000 per week for Matt Donnell. Mr. Ward discloses that CRG received a $100,000 retainer to be applied against the compensation, including expenses specific to the engagement. CRG will not hold the retainer for application in accordance with the Engagement Letter. Any unearned portion of the retainer will be returned to the Debtor upon termination of the engagement. ALF paid CRG $102,258 before the Petition Date, he adds. CRG will provide monthly invoices to ALF. Out of an abundance of caution, the Debtor asks the Court to approve the compensation arrangement and authorize ALF to pay, in the ordinary course of its business, the amount invoiced by CRG for fees and expenses. Because CRG and Mr. Snyder are not being employed by ALF as a professional under Section 327 of the Bankruptcy Code, CRG will not submit regular fee applications pursuant to Sections 330 and 331 of the Bankruptcy Code. CRG will, however, file a notice of total compensation earned and provide notice to interested parties. Mr. Snyder, managing partner at CRG, assures the Court that CRG has not represented ALF's creditors, or any other parties-in- interest, or its respective attorneys and accountants or the United States Trustee in any matters relating to the Debtor or its estate. He asserts that CRG is a disinterested person, as the term is defined in Section 101(14) of the Bankruptcy Code. Mr. Snyder discloses that CRG's past or present representations or relationships with these parties-in-interest are in matters wholly unrelated to ALF's Chapter 11 case: -- Gardere Wynne Sewell; -- Haynes and Boone LLP; -- Patriarch Partners, ALF's prepetition secured lender; and -- Bank of America. According to Mr. Snyder, CRG has worked in 11 cases in which Patriarch Partners was a lender, including 180's Corporation; MD Helicopters; Dana Classics; Oasis; BankVest; Omni; Scan Optics; ASI Robicon; and Galey and Lord. CRG also provided services to Patriarch Partners in Ansaldo Systeme Industriale based in the European Union, he says. It is possible that one or more managing partners, partners, directors, associates or staff members of CRG may have personal or social connections with interested parties, Mr. Snyder relates. However, CRG submits that individual affiliations with interested parties will not in any way affect the services that CRG proposes to provide to the Debtor. About American LaFrance Headquartered in Summerville, South Carolina, American LaFrance LLC -- http://www.americanlafrance.com/-- is one of the oldest fire apparatus manufacturers and one of the top six suppliers of emergency vehicles in North America. Thee company filed for Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No. 08-10178). Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at Haynes and Boone LLP, is the Debtor's proposed Lead Counsel. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, is the Debtor's proposed local counsel. When the Debtor filed for protection against its creditors, it listed assets and liabilities of between $100 Million and $500 Million. The Debtor's exclusive period to file a plan expires on May 27, 2008. (American LaFrance Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERISOURCEBERGEN CORP: Moody's Places Ba1 Rating Under Review -------------------------------------------------------------- Moody's Investors Service placed the ratings of AmerisourceBergen Corporation under review for possible upgrade (Ba1 Corporate Family Rating) based on the company's continued adherence to a conservative financial policy that has resulted in credit ratios consistent with an investment grade rating. Moody's rating review will primarily consider: (1) the likelihood that management will not pursue debt-funded initiatives; (2) prospects for revenue growth during 2008; (3) the extent to which core pharmaceutical distribution operating margins can recover; (4) sustainable levels of operating cash flow following one-time working capital benefits; and (5) any additional developments related to changes in benchmark pricing. Ratings placed under review for possible upgrade: AmerisourceBergen Corporation: -- Corporate Family Rating at Ba1 -- Senior unsecured debt at Ba1 If the ratings are upgraded, Moody's expects to withdraw the Ba1 Corporate Family Rating, the Ba1 Probability of Default Rating, the SGL-1 rating and the current LGD assignments. AmerisourceBergen Corporation, headquartered in Chesterbrook, Pennsylvania, is one of the nation's leading wholesale distributors of pharmaceutical products and related services. ARGUE AUTOMOTIVE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Argue Automotive Accessories L.L.C. 3670 131st Street North Clearwater, FL 33762 Bankruptcy Case No.: 08-01011 Type of Business: The Debtor sells automotive supplies and parts. Chapter 11 Petition Date: January 28, 2008 Court: Middle District of Florida (Tampa) Judge: Catherine Peek McEwen Debtors' Counsel: Harley E. Riedel, Esq. and Scott A. Stitcher, Esq. Stichter, Riedel, Blain & Prosser 110 East Madison Street, #200 Tampa, FL 33602 Tel: (813) 229-0144 http://www.srbp.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Consolidated Debtors' List of 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Modern Plastics Corporation $315,145 135 South LaSalle Street Chicago, IL 60674 Dupon Coating Solution $131,903 P.O. Box 2323 Carol Stream, IL 60132 McDiver Corporation $100,459 Corporate Office Elkhart, IN 46516 A.B.'s Glove & Abrasives Inc. $43,463 American Express $36,264 Spartech $35,652 Futurex $29,131 Welch Packaging Elkart Inc. $28,604 XPEDX Grand Rapids $20,350 Stewart Products Co. $16,539 Orbis Corporation $15,470 Forge Industrial Staffing $15,380 Kent Manufacturing Co. $13,874 Midstates Bolt and Screw $13,312 Pixco Fasteners $13,193 NIPSCO $12,631 Alvan Motor Freight Inc. $11,787 Piolax Corporation $11,754 Lee's Wood Products $11,141 R&L Carriers Inc. $10,383 ARVINMERITOR: Expected Neg. Cash Flow Cues Fitch to Cut Ratings --------------------------------------------------------------- Fitch Ratings has taken these actions on ArvinMeritor's credit ratings: -- Issuer Default Rating downgraded to 'B' from 'B+'; -- Senior secured revolver affirmed at 'BB/RR1; -- Senior unsecured notes downgraded to 'B/RR4' from 'B+/RR4. The ratings affect approximately $1.1 billion of outstanding debt. The Rating Outlook is Stable. The downgrades reflect ARM's expectation of negative cash flow in an amount greater than previously expected, which along with economic conditions and uncertain progress on its restructuring plan, will defer any return to positive free cash flow. Although Fitch previously projected negative cash flow for fiscal 2008, changes to ARM's working capital position will require a greater use of cash and result in higher net financing costs. Ancillary one-off items related to warranty reserves, discontinued operations, a modest acquisition and ongoing restructuring costs will exacerbate outflows. Capital expenditures will also increase in 2008 from the restrained levels of the past several years. Although segment operating margins showed modest progress in the first fiscal quarter, low Light Vehicle Systems margins demonstrate that any progress from the company's restructuring efforts has been largely offset by pricedowns and other negative industry trends. The working capital intensity of the business indicates that any volatility in production or financial flows can have material operating and cash flow repercussions. Fitch is concerned that economic weakness, production volatility and second-tier supplier stresses have not yet peaked in 2008, leading to potential further cash flow reductions. Commercial Vehicle Systems operations should continue to rebound from 2007 cyclical trough levels, although economic concerns have muted the pace and extent of the rebound. European operations have experienced higher than expected demand but ARM was unable to capitalize on the higher volume due to capacity and production inefficiencies. ARM will be increasing capital investment in CVS Europe in 2008 to increase operational flexibility. ARM's LVS operations will be affected by domestic volume declines, although Detroit Three light-vehicle sales in North America only account for 8% of total consolidated revenue. Unlike recent economic cycles, Fitch expects the domestic manufacturers to be much more aggressive in cutting production in order to better manage inventory levels, in part due to greater flexibility gained in the recent UAW contract. The cyclical upturn in heavy duty trucks, although likely to be moderated by economic weakness, could return ArvinMeritor to positive free cash flow in fiscal 2009. Limited margin improvement in LVS indicates that any free cash generation on a consolidated basis is likely to be modest, with limited capacity to reduce expanded debt levels. ArvinMeritor maintains good liquidity, with $164 million in cash as of Dec. 31, 2007, and substantial undrawn bank and receivables facilities. With the exception of the company's $700 million revolver (which expires in 2011), the company has no substantial maturities in the next five years. The company's recently amended and downsized its revolver, leaving adequate flexibility under its financial covenant. Total debt, including outstanding securitizations and factoring, declined slightly in fiscal 2007 due to asset sales, offsetting negative operating cash flow. The company has also expanded its utilization of European securitizations and factoring. The Recovery Ratings and associated notching in the debt structure reflect Fitch's recovery expectations in a scenario in which distressed enterprise value is allocated to the various debt classes. The assignment of the 'RR1' recovery rating to the senior secured revolving credit facility indicates an expectation of full recovery. The secured facility benefits from first-lien status on certain U.S. assets and a 15% carve-out of consolidated net tangible assets. The 'B/RR4' rating on ARM's unsecured debt reflects an expectation that unsecured debtholders would receive, after administrative, priority, trade creditor and secured claims, 31% to 50% of their investment, which is about average recovery in a distressed scenario. ASSET BACKED: Moody's Junks Rating on Class B Certificates ---------------------------------------------------------- Moody's Investors Service has downgraded one tranche and placed on review for possible downgrade twelve tranches from three Asset Backed Securities Corp. Deals. The subprime mortgage loan backed transactions closed in 2002, 2003, and 2005. The rating actions are based on the respective tranches' current credit enhancement levels compared to current projected pool losses. The complete rating actions are: Issuer: Asset Backed Securities Corporation, Series 2002-HE1 -- Cl. M-1; Currently Aaa, under review for possible downgrade. -- Cl. M-2; Currently A2, under review for possible downgrade. -- Cl. B; Downgraded to Caa3 from B3. Issuer: Asset Backed Securities Corporation Home Equity Loan Trust 2003-HE2 -- Cl. M-1; Currently Aaa, under review for possible downgrade. -- Cl. M-2; Currently Aa3, under review for possible downgrade. -- Cl. M-3; Currently A3, under review for possible downgrade. -- Cl. M-4; Currently Baa2, under review for possible downgrade. -- Cl. M-5; Currently Ba2, under review for possible downgrade. Issuer: Asset Backed Securities Corporation Home Equity Loan Trust 2005-HE2 -- Cl. M-4; Currently A3, under review for possible downgrade. -- Cl. M-5; Currently Baa1, under review for possible downgrade. -- Cl. M-6; Currently Baa2, under review for possible downgrade. -- Cl. M-7; Currently Baa3, under review for possible downgrade. -- Cl. M-8; Currently Ba1, under review for possible downgrade. AVADO BRANDS: Exclusive Plan Filing Period Extended to May 2 ------------------------------------------------------------ The Honorable Mary J. Walrath of the United States Bankruptcy Court for the District of Delaware further extended Avado Brands Inc. and its debtor-affiliates' exclusive periods to: a) file a Chapter 11 plan until May 2, 2008; and b) solicit acceptances of that plan until July 1, 2008. According to the Debtors' request, they need enough time complete the 363 sale process, and properly evaluate an appropriate exit strategy for these cases. 363 Sale Process On Nov, 2 2007, the Debtors say that they filed with the Court a request to approve the sale of substantially of their assets to the highest and best bidders at the auction. The Court approved the sale of certain of the Debtors' assets to five different buyers. As reported in the Troubled Company Reporter on Jan. 14, 2008, Judge Walrath approved the sale of the Debtors' 61 restaurants to Rita Acquisition Corp., a company set up by DDJ Capital Management LLC for the transaction. The sale will facilitate the termination of at least $23 million of the Debtors' debt against DDJ Capital. The Debtors say that they do not anticipate the Rita Acquisition transaction to close until early February 2008. The Debtors tell the Court that the sale process could take at least a few more months to complete and the disruption to this process could pose a threat to their ability to successfully sell their assets. In addition, The Debtors say that are currently exploring other options for bringing these cases to a conclusion, including a chapter 11 plan of liquidation, a chapter 7 conversion or structured dismissal. The Debtors' exclusive period to file a plan expired on Jan. 3, 2008. About Avado Brands Madison, Georgia-based Avado Brands Inc., aka Applesouth, -- http://www.avado.com/-- operates about 120 casual dining restaurants under the banners Don Pablo's Mexican Kitchen and Hops Grillhouse & Brewery. The restaurants are located in 22 states in the U.S. As of Sept. 5, 2007, the Debtors employed about 9,970 people. For the year ended July 31, 2007, the Debtors generated about $227.8 million in revenues and a negative EBITDA of $7.8 million. The Debtor filed for chapter 11 protection on Feb. 4, 2004 (Bankr. N.D. Tex. Case No. 04-1555). On April 26, 2005, Judge Steven Felsenthal confirmed Avado's Modified Plan of Reorganization and that Plan became effective on May 19, 2005. On Sept. 5, 2007, Avado filed a voluntary chapter 22 petition (Bankr. D. Del. Case No. 07-11276) to complete an orderly sale of its assets, via Section 363 of the Bankruptcy Code. About 10 of Avado's affiliates also filed for bankruptcy protection on the same date (Bankr. D. Del. Case Nos. 07-11277 through 07-11286). Michael Tuchin, Esq., and Stacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, represent the Debtors. Donald J. Detweiler, Esq., at Greenberg Traurig, LLP, is the Debtors' local counsel. Kurtzman Carson Consultants LLC acts as the Debtors claims and noticing agent. The U.S. Trustee for Region 3 has appointed creditors to serve on an Official Committee of Unsecured Creditors to this cases. Greenberg Traurig LLP represents the Committee. In their second filing, the Debtors disclosed estimated assets and debts between $1 million to $100 million. BAYOU GROUP: Former CFO Gets 20 Years Prison Term for Fraud ----------------------------------------------------------- The Hon. Colleen McMahon of the U.S. District Court in Manhattan sentenced former chief financial officer of Bayou Group LLC, Daniel Marino, to 20 years in prison for his role in conspiring to deceive investors out of more than $400 million, several papers disclose. The judge will also announce a "nine-figure" penalty within 90 days. In September 2005, Mr. Marino and co-founder Samuel Israel III pleaded guilty to conspiracy, investment adviser fraud and other complaints stemming from false disclosure of the value of Bayou's funds, according Chad Bray of Dow Jones. Mr. Israel is awaiting sentencing. Last week, Bayou co-founder James Marquez was sentenced to 4 and a half years jail term and was ordered to pay $6.2 million in damages, Bill Rochelle of the Bloomberg News relates. Mr. Marquez pleaded guilty to conspiracy charges in December 2006. Judge McMahon said that Mr. Marquez, who left Bayou in 2001, was less accountable than Mr. Marino, who was an accounting professional and should have protected the fund's investors, Martha Graybow of Reuters reports. Mr. Marino, instead, created a phony accounting firm, Richmond-Fairfield Associates, to provide false financial statements. Based in Chicago, Illinois, Bayou Group LLC operates and manages hedge funds. The company and its affiliates filed for chapter 11 protection on May 30, 2006 (Bankr. S.D.N.Y. Case No. 06-22306). Elise Scherr Frejka, Esq., at Dechert LLP, represents the Debtors in their restructuring efforts. Joseph A. Gershman, Esq., and Robert M. Novick, Esq., at Kasowitz, Benson, Torres & Friedman, LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. BEXAR COUNTY: Moody's Chips Rating on $12.8 Million Bonds to Ba2 ---------------------------------------------------------------- Moody's Investors Service has downgraded these ratings on Bexar County Housing Finance Corporation Multifamily Revenue Refunding Bonds (American Opportunity for Housing - Cinnamon Creek Apartments); $12.8 million Series 2002 A to Ba2 from Ba1 and $1.3 million Series 2002 B to Ba3 from Ba2. The rating downgrades are based upon Moody's review of audited financial statements for 2006, interim financial statements for 2007 and occupancy reports. The outlook remains negative, reflecting market research, which projects occupancy declines in the project's submarket. The 278 unit garden style complex was built in 1974 and is composed of 58, one and two-story buildings located approximately twelve miles northwest of downtown San Antonio. The property is located near major employer such as South Texas Medical Center, University of Texas at San Antonio and USAA World Headquarters. Recent Developments Occupancy at the project is weak at 90.7% (Dec. 2007), which is well below the 95% average in the Northwest San Antonio submarket as reported by Torto Wheaton Research. TWR forecasts submarket occupancy will decline slightly in 2008 to 94% and then dip further to 93.2% in 2009. Debt service coverage for 2006 weakened to 1.15x for senior debt and 1.03x for subordinate. Interim 2007 finances indicate coverage of 1.19x senior debt, and 1.06x subordinate debt. Interim statements may indicate some stabilization; however, Moody's views this improvement cautiously because audited NOI is frequently less than that obtained from interim statements. TWR forecasts rents in the submarket will grow an average of 2.3% in 2008 and 2.0% in 2009. As this growth is likely to be less than growth in expenses, the debt service coverage ratio may decline. Moody's takes some comfort from American Opportunity for Housing's willingness to transfer cash to the project - $238,637 was transferred for capital improvements in 2006. Outlook The outlook on the bonds remains negative. This reflects Torto Wheaton market research that indicates moderate rent growth and increases in vacancies in Northwest San Antonio over the medium term. BOMBAY COMPANY: Court Approves Sale of Trademarks for $2 Million ---------------------------------------------------------------- The Hon. Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas approved the sale of Bombay Company's trademarks, trade names and other intellectual property for $2 million and a 25% share of future licensing proceeds to Bombay Brands LLC, a joint venture of Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC, according to various reports. As reported in the Troubled Company Reporter on Dec. 26, 2007, Hilco Consumer Capital will assume day-to-day brand management responsibilities and will immediately undertake a strategic brand rebuilding program designed to leverage the intrinsic value of the Bombay name. Through licensing strategies with retailers, wholesalers and franchisees, a broad-range of new consumer products will be created and marketed internationally. The initial cash price offer, which was $1.25 million, increased to $2 million at an auction with competing bids, Bill Rochelle of Bloomberg News reports. The buyer also consented to a capital infusion necessary to exploit the names. About Hilco Consumer Capital Hilco Consumer Capital - http://www.hilcocc.com/-- was formed in 2006 to make private equity investments in consumer brands and build significant, additional value in them through innovative product development, creative marketing and licensing strategies. HCC is a unit of The Hilco Organization -- http://www.hilcotrading.com/-- a privately-held, diversified financial services firm specializing in appraising, purchasing, selling, financing and enhancing the performance of tangible and intangible business assets through a platform of 22 integrated business units located in North America and the European Union. About Gordon Brothers Gordon Brothers Group -- http://www.gordonbrothers.com/-- is an advisory, restructuring and investment firm specializing in the retail, consumer products, real estate and industrial sectors. Founded in 1903, Gordon Brothers provides asset valuations and appraisals, dispositions, real estate consulting, lending and advisory services. About Bombay Company Based in Fort Worth, Texas, The Bombay Company Inc., (OTC Bulletin Board: BBAO) -- http://www.bombaycompany.com/-- designs, sources and markets a unique line of home accessories, wall d,cor and furniture through 384 retail outlets and the Internet in the U.S. and internationally, including Cayman Islands. The company and five of its debtor-affiliates filed for Chapter 11 protection on Sept. 20, 2007 (Bankr. N.D. Tex. Lead Case No. 07-44084). Robert D. Albergotti, Esq., John D. Penn, Esq., Ian T. Peck, Esq., and Jason B. Binford, Esq., at Haynes and Boone, LLP, represent the Debtors. Attorneys at Cooley, Godward, Kronish LLP act as counsel for the Official Committee of Unsecured Creditors. Forshey & Prostok LLP is the Committee's local counsel. As of May 5, 2007, the Debtors listed total assets of $239,400,000 and total debts of $173,400,000. BUFFETS HOLDINGS: Wants to Hire Young Conaway as Bankr. Counsel --------------------------------------------------------------- Buffets Holdings Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware for authority to hire Young Conaway Stargatt & Taylor LLP as their their general reorganization and bankruptcy counsel, nunc pro tunc to the Petition Date. According to A. Keith Wall, executive vice-president and chief financial officer of Buffets Holdings, Inc., the Debtors choose Young Conaway because of the firm's extensive experience and knowledge in the field of debtors' and creditors' rights and business reorganizations under Chapter 11 of the Bankruptcy Code. Mr. Wall notes that Young Conaway's experience and knowledge practicing before the Court will be cost effective for the Debtors because the firm has become familiar with the Debtors' businesses and affairs and many of the potential legal issues which may arise in the Chapter 11 cases. As counsel for the Debtors, Young Conaway will: -- provide legal advice with respect to the Debtors' powers and duties as debtors-in-possession in the continued operation of their business and management of their properties; -- prepare and pursue confirmation of a plan and approval of a disclosure statement; -- prepare necessary applications, motions, answers, orders, reports and other legal papers; -- appear in Court, and to protect the interests of the Debtors before the Court; and -- perform all other legal services for the Debtors, which may be necessary and proper in the Chapter 11 proceedings. Young Conaway will be paid based on the firm's current standard hourly rates: Designation Hourly Rates ----------- ------------ Partners $485-$560 Associates $240-$390 Paralegals $115-$215 Mr. Wall notes that Young Conaway received a retainer of $400,000 in connection with the planning and preparation of initial documents and its proposed postpetition representation of the Debtors. Mr. Wall further notes that a part of the retainer has been applied to outstanding balances existing as of the Petition Date and the remainder will constitute a general retainer as security for postpetition services and expenses. In addition, Young Conaway also received $245,303 for fees and recorded expenses incurred through January 11, 2008, Mr. Wall says. Pauline K. Morgan, a partner at Young Conaway, assures the Court that her firm has no connection with the Debtors and is a "disinterested person" as the phrase is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Eagan, Minnesota, Buffets Holdings Inc. -- http://www.buffet.com/-- is the parent company of Buffets, Inc., which operates 626 restaurants in 39 states, comprised of 615 steak-buffet restaurants and eleven Tahoe Joe's Famous Steakhouse restaurants, and franchises sixteen steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain brands. Buffets, Inc. employs approximately 37,000 team members and serves approximately 200 million customers annually. The company and all of its subsidiaries filed Chapter 11 protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). The Debtors' balance sheet as of Sept. 19, 2007, showed total assets of $963,538,000 and total liabilities of $1,156,262,000. (Buffets Holdings Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000) BUFFETS HOLDINGS: Wants Paul Weiss as Special Corporate Counsel --------------------------------------------------------------- Buffets Holdings Inc. and its debtor-affiliates seek the United States Bankruptcy Court for the District of Delaware's authority to hire Paul Weiss Rifkind Wharton & Garrison LLP as their special corporate counsel in connection with securities law issues, nunc pro tunc to the Petition Date. Paul Weiss has performed work for the Debtors since October 2000; has been their corporate counsel since; and accordingly has become familiar with the Debtors and the Debtors' corporate securities. Thus, the Debtors have requested that Paul Weiss continue to represent them in connection with issues related to the Debtors' securities, which may arise during their Chapter 11 cases, A. Keith Wall, executive vice-president and chief financial officer of Buffets Holdings, Inc., explains. Mr. Wall submits that the Debtors' Chapter 11 cases are likely to be complex and will require counsel with extensive, specialized and substantial expertise in the area of corporate securities law. Paul Weiss will be paid based on its ordinary and customary rates: Designation Hourly Rate ----------- ------------ Partners $725 - $975 Counsel $665 - $700 Associates $375 - $625 Para-professionals $85 - $225 The firm will also be reimbursed for reasonable out-of-pocket expenses. Mr. Wall notes that Paul Weiss has received an aggregate of $789,103 as payment in connection with the firm's representation of the Debtors 90 days before the Petition Date. To the extent Paul Weiss has outstanding time charges for prepetition services performed for the Debtors, the firm has agreed to waive its claim. Alan K. Kornberg, Esq., a member at Paul Weiss, assures the Court that his firm does not hold or represent any interest adverse to the Debtors or their estates in the matters upon which it is to be engaged. Headquartered in Eagan, Minnesota, Buffets Holdings Inc. -- http://www.buffet.com/-- is the parent company of Buffets, Inc., which operates 626 restaurants in 39 states, comprised of 615 steak-buffet restaurants and eleven Tahoe Joe's Famous Steakhouse restaurants, and franchises sixteen steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain brands. Buffets, Inc. employs approximately 37,000 team members and serves approximately 200 million customers annually. The company and all of its subsidiaries filed Chapter 11 protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). The Debtors' balance sheet as of Sept. 19, 2007, showed total assets of $963,538,000 and total liabilities of $1,156,262,000. (Buffets Holdings Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000) CENTRO NP: Earns $11.7 Million in Third Quarter Ended Sept. 30 -------------------------------------------------------------- Centro NP LLC fka. New Plan Excel Realty Trust Inc. reported net income of $11.7 million on total revenues of $140.0 million for the third quarter ended Sept. 30, 2007, compared with net income of $33.2 million on total revenues of $114.6 million in the same period in 2006. Rental income was $101.9 million for the three months ended Sept. 30, 2007 and $81.5 million for the three months ended Sept. 30, 2006. Increased amortization of below market leases increased rental income by approximately $10.5 million. Acquisitions in 2007 and 2006 increased rental income by approximately $5.9 million. Fee income was $7.9 million for the three months ended Sept. 30, 2007, and $4.0 million for the three months ended Sept. 30, 2006. Fee income is derived from services provided to the company's joint ventures and other managed projects. The material changes in the fee income of the company were primarily a result of an increase in asset management fee revenue, which increased fee income by approximately $2.4 million. Depreciation and amortization was $54.4 million for the three months ended Sept. 30, 2007, and $22.0 million for the three months ended Sept. 30, 2006. Interest expense was $30.1 million for the three months ended Sept. 30, 2007, and $23.5 million for the three months ended Sept. 30, 2006. Liquidity and Capital Resources As of Sept. 30, 2007, the company had approximately $28.2 million in available cash, cash equivalents and marketable securities. The company had approximately $304.0 million outstanding under its floating rate July 2007 Revolving Facility. As of Sept. 30, 2007, the company had approximately $830.2 million of indebtedness outstanding, excluding the impact of unamortized premiums, under three indentures, having a weighted average interest rate of 5.82%. In addition to the July 2007 Revolving Facility and indentures, as of Sept. 30, 2007, the company had approximately $418.7 million of mortgage debt outstanding, excluding the impact of unamortized premiums, having a weighted average interest rate of 7.1% per annum. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $6.30 billion in total assets, $2.38 billion in total liabilities, $87.5 million in minority interest in consolidated partnership and joint ventures, and $3.83 billion in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?277d About Centro NP LLC Headquartered in Lexington, New York, Centro NP LLC was formed in February 2007 to succeed the operations of New Plan Excel Realty Trust Inc. The principal business of the company is the ownership and management of community and neighborhood shopping centers throughout the United States. * * * As reported in the Troubled Company Reporter on Jan. 18, 2008, 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. CHAMPION PARTS: Judge Mixon Converts Case to Chapter 7 Liquidation ------------------------------------------------------------------ The Honorable James G. Mixon of the U.S. Bankruptcy Court for the Western District of Texas converted Champion Parts Inc.'s Chapter 11 bankruptcy case to a Chapter 7 liquidation proceeding on Jan. 25, 2008. Documents submitted to the Court did not disclose any substantial reason for the conversion of the case. As reported in the Troubled Company Reporter on Nov. 23, 2007, the U.S. Trustee for Region 16 was unable to appoint creditors to serve on an Official Committee of Unsecured Creditors in the Debtor's Chapter 11 case due to lack of interest at a meeting held on Nov. 19, 2007. About Champion Parts Based in Hope, Arkansas, Champion Parts Inc. (OTC:CREBQ) -- http://www.championparts.net/-- remanufactures fuel system components, air conditioning compressors, front wheel drive assemblies, and other underhood electrical and mechanical products for the passenger car and light truck, agricultural, heavy-duty truck and marine parts aftermarket. The company filed for chapter 11 bankruptcy protection on Oct. 10, 2007 (Bankr. W.D. Ark. Case No. 07-73253). James F. Dowden, Esq. represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed total assets of $26,389,000 and total debts of $25,251,000. CHIQUITA BRANDS: Moody's Holds Ratings on Capital Structure Review ------------------------------------------------------------------ Moody's Investors Service affirmed the ratings of Chiquita Brands International, Inc., including its B3 corporate family rating and B3 probability of default rating, following the company's announcement that it is reviewing its capital structure. The rating outlook remains negative. Ratings affirmed Chiquita Brands International, Inc. -- Corporate family rating at B3 -- Probability of default rating at B3 -- $250 million 7.5% senior unsecured notes due 2014 at Caa2 (LGD5, 89%) -- $225 million 8.875% senior unsecured notes due 2015 at Caa2 (LGD5, 89%) Chiquita Brands, LLC -- $200 million senior secured revolving credit agreement at B1(LGD2,26%) -- Senior secured Term Loan C at B1(LGD2,26%) Rating withdrawn (debt repaid) Chiquita Brands, LLC -- Senior unsecured Term Loan B at B1 (LGD2, 26%) Chiquita is considering a potential amendment or refinancing of its senior secured bank agreement and is also considering a convertible senior unsecured note offering at the holding company level. Proceeds from the potential new convertible issue will be used for the partial repayment of Term Loan C. Upon issuance of convertible notes and application of proceeds to Term Loan C, Moody's may upgrade the ratings of the company's existing senior secured revolving credit and Term Loan C; upon issuance of a senior unsecured convertible note at the holding company, the amount of debt that is effectively subordinated to the senior secured bank facility will increase while the amount of senior secured bank debt will decline, resulting in a lower expected loss on the bank debt. The affirmation of the company's ratings is based on the fact that fiscal year 2007 reported EBIT is expected to stabilize at a level close to that of fiscal 2006, adding back certain non-recurring charges in both years; and that the 2007 restructuring is expected to generate cost savings of $60 million to $80 million in fiscal 2008. Chiquita's B3 corporate family rating incorporates the company's weak credit metrics and challenged operating performance. Ratings also reflect continued uncertainty with regard to long term structural changes occurring in the company's key European Union banana market such as greater competition following the elimination of volume restrictions under a tariff only import fee regime effective Jan. 1, 2006; the need to improve results at the company's salads and healthy snacks to historical levels; and continued pressure from rising input costs. Ratings are supported by Chiquita's solid franchise as one of the largest global fresh fruit and vegetable companies with strong market shares and good diversification in terms of product offerings, geographic reach, and raw material supply. Chiquita Brands International, Inc. is a global producer and marketer of bananas, other fresh fruit and vegetables with revenues of approximately $4.7 billion for the fiscal year ended Dec. 31, 2007. CLAYMONT STEEL: S&P Retains 'B' Rating Under Positive CreditWatch ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Claymont Steel Inc., including its 'B' corporate credit rating, remain on CreditWatch with positive implications. The ratings were initially placed on CreditWatch on Dec. 10, 2007, following Claymont's announcement that it had agreed to be acquired by Evraz Group S.A. (BB-/Positive/--) in a transaction valued at about $565 million, including the assumption of debt. With the closing of the acquisition on Jan. 25, 2008, Claymont is now an indirect wholly owned subsidiary of Evraz Group. However, given that the companies have yet to disclose a definitive capital structure, the impact on Claymont's outstanding debt holders remains uncertain. S&P will resolve the CreditWatch listing as more details become available. Ratings List CreditWatch Update Claymont Steel Inc. Corporate Credit Rating B/Watch Pos/-- CLEAR CHANNEL: Pending $19 Bil. Buyout Unaffected by Market Frets ----------------------------------------------------------------- Private investment firms, Thomas H. Lee Partners LP and Bain Capital Partners LLC, remained undaunted in their plans to buy Clear Channel Communications Inc. for $39.20 per share amid market's worries, various reports relate. Days before, investors were stirred when the buyers refused to comment on the pending buyout deal worth around $19.5 billion that led to speculation that deal will not push through, reports say. THL co-president Anthony DiNovi cleared out the issue at Tuesday's conference by explaining he would violate Securities and Exchange Commission rules if he commented on the pending deal, reports reveal. Some news disclose that the buyout firms provided personnel to Clear Channel to help execute steps to reduce expenses. This report led investors to believe that the would-be buyers have not given up, according to the report. Clear Channel told reporters Tuesday that the pending deal will be completed by March 2008, as previously planned. FCC Publication on the Sale Deal The Federal Communications Commission published in its Web site that Clear Channel Communications Inc., Thomas H. Lee Equity Fund VI LP and Bain Capital (CC) IX LP have jointly submitted applications to the Commission. The applications seek consent to transfer control of certain subsidiaries of Clear Channel that are the holders of various Commission licenses and other authorizations. Clear Channel, through its subsidiaries, controls 1172 broadcast radio stations and 35 broadcast television stations. The applications seek Commission consent to the proposed transfer of control of Clear Channel from its shareholders to the Transferees. After the transfer, the company would continue to operate under the name "Clear Channel Communications Inc." under the control of the Transferees. About Clear Channel Communications Based in San Antonio, Texas, Clear Channel Communications Inc. (NYSE:CCU) -- http://www.clearchannel.com/-- is a media and entertainment company specializing in "gone from home" entertainment and information services for local communities and premiere opportunities for advertisers. The company's businesses include radio, television and outdoor displays. Outside U.S., the company operates in 11 countries -- Norway, Denmark, the United Kingdom, Singapore, China, the Czech Republic, Switzerland, the Netherlands, Australia, Mexico and New Zealand. * * * As reported in the Troubled Company Reporter on Jan. 30, 2008, Standard & Poor's Ratings Services said its ratings on Clear Channel Communications Inc., including the 'B+' corporate credit rating, remain on CreditWatch with negative implications. S&P originally placed them on CreditWatch on Oct. 26, 2006, following the company's announcement that it was exploring strategic alternatives to enhance shareholder value. COMEDRES LLC: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Comedres, LLC 1896 Rear Mapledale Road 81 Hershey Road Elizabethtown, PA 17022 Bankruptcy Case No.: 08-00275 Chapter 11 Petition Date: January 29, 2008 Court: Middle District of Pennsylvania (Harrisburg) Debtor's Counsel: Craig A. Diehl, Esq. Law Offices of Craig A. Diehl 3464 Trindle Road Camp Hill, PA 17011-4436 Tel: (717) 763-7613 Fax: (717) 763-8293 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. COMUNITY LENDING: Can Hire Omni Management as Claims Agent ---------------------------------------------------------- ComUnity Lending Inc. and its debtor-affiliate obtained permission from the U.S. Bankruptcy Court for the Northern District of California to employ Omni Management Group LLC as their noticing and claims agent. Omni Management is expected to: a) prepare and serve required notices; b) after mailing of a particular notice, file with the clerk's office a certificate or declaration of service; c) maintain copies of all proofs of claim and proofs of interest filed; d) maintain official claims' registers; e) implement necessary security measures to ensure the completeness and integrity of the claims registers; f) transmit to the clerk's office a copy of the claims registers on a weekly basis; g) maintain an up-to-date mailing list for all entities that have filed a proof of claim or interest; h) provide access to the public for examination of claims without charge during regular business hours; i) record all transfers of claims pursuant and provide notice of such transfers; j) comply with applicable federal, state, municipal, and local statutes and other requirements; k) provide temporary employees to process claims, as necessary; l) provide such other claims processing, noticing, and related administrative services as may be requested from time to time by the Debtors; and m) promptly comply with further conditions and requirements as the clerk or the Court may prescribe. Eric Schwarz, a member at Omni Management, tells the Court that the firm bills: Services Hourly Rate -------- ----------- Technical/Consulting and $95 - $285 Executive Support Programming $100 - $200 Clerical Support $35 - $85 Preparation of Schedules/ $65 - $285 Financial Affair Statement Mr. Schwarz assures the Court that the firm does not represent any interest adverse to the Debtor, its estates, or any other parties- in-interest. Based in San Jose, California, ComUnity Lending, Inc. -- http://www.comunitylending.com-- is a mortgage lender, with mortgage programs of up to $1,500,000. The company and its affiliate, L.E.S. Liquidation Inc., filed for Chapter 11 protection on Jan. 4, 2008 (Bankr. N.D. Calif. Case Nos. 08-50030 and 08-50031). John Walshe Murray, Esq. represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, ComUnity Lending listed estimated assets and liabilities of $10 million to $50 million. CONSOL ENERGY: Mulls Offer to Acquire Remaining Shares of CNX Gas ----------------------------------------------------------------- CONSOL Energy Inc. intends to offer to acquire all of the outstanding shares of CNX Gas Corporation that it does not currently own in a stock-for-stock transaction. CONSOL Energy currently owns approximately 81.7% of the approximately 151 million shares of CNX Gas common stock outstanding. CONSOL Energy will offer CNX Gas stockholders 0.4425 shares of CONSOL Energy common stock for each outstanding share of CNX Gas common stock that CONSOL Energy does not own, the equivalent of $33.70 per share for CNX Gas common stock, or a 12% premium based upon the closing stock price of CNX Gas on Jan. 28, 2008. The transaction is valued at approximately $932 million. CONSOL Energy's offer will be made directly to the CNX Gas stockholders and will not be conditioned upon any requirement for recommendation of its offer by the independent directors of CNX Gas. The CONSOL Energy exchange offer will be conditioned upon, among other things, the tender of a majority of the outstanding shares of CNX Gas common stock not owned by CONSOL Energy, without regard to any shares of CNX Gas that are owned by the directors or management of either CONSOL Energy or CNX Gas. This condition will be irrevocable. The exchange offer will also be subject to other customary terms and conditions and is intended to be tax-free to the shareholders of CNX Gas. Assuming that the conditions to CONSOL Energy's exchange offer are satisfied and that the offer is completed, consistent with the requirements of Delaware law, CONSOL Energy intends to effect a "short form" merger of CNX Gas with a subsidiary of CONSOL Energy promptly thereafter. In the subsequent merger, the remaining CNX Gas public stockholders will be entitled to receive the same consideration as is paid in the exchange offer. Under Delaware law, appraisal rights will also be available to the former stockholders of CNX Gas as a result of the merger. CONSOL Energy does not intend to take any retributive action should its exchange offer be unsuccessful. "We have always believed that a diversified energy portfolio of coal and gas, which combined account for two-thirds of fuel for U.S. electricity generation, is a winning combination," said J. Brett Harvey, president and chief executive officer. "The acquisition of the remaining outstanding shares of CNX Gas will give us the greatest flexibility in the access, allocation and utilization of our capital in growing that diversified portfolio." Mr. Harvey said a number of factors have changed since CNX Gas went public. "Two years ago, financial markets did not understand or properly value the gas assets and operations of CONSOL Energy," he said. "In the two years since we established CNX Gas as a public company, its visibility and transparency have improved, and financial markets appear to have a greater appreciation for its value, as evidenced by the significant growth in the market value of CNX Gas." Mr. Harvey went on to explain that as the majority owner of CNX Gas, CONSOL Energy had to make a decision regarding the gas company's future. CONSOL Energy concluded that it has no interest in selling or otherwise divesting itself of the shares of CNX Gas that it currently owns. "We chose to stick to our strategy of energy asset diversification, and hence to offer to re-acquire the remaining shares of the gas company." Mr. Harvey also said that energy markets over the next ten years will be affected increasingly by public policy issues, both in the United States and globally. "It is becoming increasingly apparent," he said, "that carbon constraints will become a part of energy regulation in the United States. Such constraints pose challenges for all fossil fuels, but would affect gas to a lesser extent than coal or petroleum." Mr. Harvey said neither the United States nor the world will turn its back on coal because the energy produced from coal is vital to raising the prosperity of people around the world. "But substantially reducing carbon dioxide emissions produced when coal is consumed will become an essential predicate to its continued use," he argued. "From the CONSOL Energy stockholders' perspective, increasing the portion of gas in our energy portfolio is a prudent step to manage the risk associated with carbon controls, because with its lower emissions, gas will become more valuable in the near term." Mr. Harvey added, however, that CONSOL Energy expects its coal portfolio to perform well during the transition period when the impacts of carbon constraints begin to be felt. "Coal will not be eliminated from the U.S. energy mix because we need the energy," he said. "But there could be some winnowing of coal producers if carbon constraints shrink the market for coal in the short run. Most of our major mining operations are well capitalized and have a substantial reserve base. Existing coal mines with that type of profile will do very well." Mr. Harvey said the integration of CNX Gas into CONSOL Energy is expected to result in cost savings and certain business synergies. "We expect there to be a significant reduction in administrative costs, particularly those imposed on any public enterprise for compliance and reporting," he said. Mr. Harvey said CONSOL Energy is in the process of preparing the necessary documentation to file its exchange offer and related documentation with the Securities and Exchange Commission. "We intend to launch our offer in the coming days and expect to complete this transaction in the first half of 2008," he concluded. About CNX Gas CNX GAS CORPORATION is an independent natural gas exploration, development, production and gathering company operating in the Appalachian and Illinois basins of the United States. CONSOL Energy currently owns approximately 81.7 percent of the approximately 151 million shares of CNX Gas common stock outstanding. About CONSOL Energy Inc. CONSOL Energy Inc. (NYSE: CNX) -- http://www.consolenergy.com/-- a high-Btu bituminous coal and coal bed methane company, is a member of the Standard & Poor's 500 Equity Index and has annual revenues of $3.7 billion. It has 17 bituminous coal mining complexes in six states and reports proven and probable coal reserves of 4.5 billion tons. * * * CONSOL Energy Inc. continues to carry Moody's "Ba2" probability of default and long-term corporate family ratings with a stable outlook. In addition, the company carries Standard & Poor's "BB" long- term local and foreign issuer credit ratings. CRII LLC: Section 341(a) Meeting Scheduled for February 26 ---------------------------------------------------------- The U.S. Trustee for Region 14 will convene a meeting of CRII LLC's creditors on Feb. 26, 2008, at 2:00 p.m., at the U.S. Trustee Meeting, 230 North First Avenue, Suite 102, in Phoenix, Arizona. 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. Glendale, Arizona-based C.R.I.I., LLC filed for Chapter 11 protection on Jan. 7, 2008 (Bankr. D. Ariz. Case No. 08-00135). Allan D. Newdelman, Esq. represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $25,000,081 and total debts of $19,052,507. CRII LLC: Wants to Hire Allan NewDelman as Bankruptcy Counsel ------------------------------------------------------------- CRII LLC seeks permission from the U.S. Ba