T R O U B L E D C O M P A N Y R E P O R T E R Monday, February 4, 2008, Vol. 12, No. 29 Headlines ADAPTEC INC: Posts $10MM Net Loss for Nine Months Ended Dec. 31 AGILYSYS INC: Extends Employment Contract of CEO Arthur Rhein AEROMED SERVICES: Case Summary & 20 Largest Unsecured Creditors AFFILIATED COMPUTER: Earns $81.6M in 2nd Qtr. Ended Dec. 31 ALL AMERICAN: February 13 Disclosure Statement Hearing Canceled AMERICAN LAFRANCE: Files Plan of Reorganization AMERIQUEST MORTGAGE: Three Classes Get S&P's Rating Downgrades ANN TAYLOR: S&P Says Ratings Unaffected by Restructuring Program ASSOCIATED ESTATES: Paying $0.54375/Share Dividend on March 14 BEAR STEARNS: Moody's Maintains Low-B Ratings on Six Cert. Classes BEAR STEARNS: Three Classes Obtains S&P's Junk Ratings on Losses BEAZER HOMES: to Exit Mortgage Origination Business BELO CORP: Moody's Keeps Ratings, Closing Proposed Spin-off Review BEXAR COUNTY: Moody's Downgrades Ratings on Housing Revenue Bonds BLACKBOARD INC: Completes $182 Million Acquisition of NTI Group BRIDGETECH HOLDINGS: Sept. 30 Balance Sheet Upside-Down by $6.9 M. BUFFETS HOLDINGS: Wants to Hire Houlihan Lokey as Bankers BUFFETS HOLDINGS: To Delay Filing of 4th Qtr. 2007 Results BUSINESS INNOVATIONS: Case Summary & 17 Largest Unsec. Creditors CABALLERO HOLDINGS: Voluntary Chapter 11 Case Summary CANAL CAPITAL: Todman & Co. Expresses Going Concern Doubt CATHOLIC CHURCH: Davenport Files Ch. 11 Plan of Reorganization CHIQUITA INTERNATIONAL: Inks New Banana Pact with C.I. Banacol CHIQUITA BRANDS: Posts $28.2 Million Net Loss in 2007 3rd Quarter CINRAM INT'L: S&P Chips Corporate Rating to B+ on Weak Performance CITICORP RESIDENTIAL: S&P Reinstates Six Classes' Ratings From CCC CLACKAMAS COUNTY: S&P Upgrades Ratings on Revenue Bonds From 'BB+' COUNTRYWIDE FIN'L: Major Stakeholder Threatens BofA Merger Deal COUNTRYWIDE FIN'L: Suit Vs. KB Home Venture Meant to Alarm BofA CSK AUTO: Gets $845MM Buyout Offer from O'Reilly Automotive DAYTON SUPERIOR: Moody's Attaches B1 Rating on $100 Mil. Sr. Loan DELPHI CORP: Anticipates Chapter 11 Emergence by March 31 DELTA FINANCIAL: Can Hire FTI Consulting as Financial Advisor DELTA FINANCIAL: Court Approves Auction of Unencumbered Loans DELTA FINANCIAL: Wants Revision in Proposed Sale and Procedures DERCO INC: Manasian & Rougeau Approved as Committee's Counsel EASTERN ENERGY: S&P Puts BB+ Issue-Level Rating on $75 Mil. Loan EDDIE BAUER: Cuts 123 Corporate Staff Positions on Three Units EXOPACK HOLDING: Moody's Holds 'B2' Corporate Family Rating FINANCIAL ASSET: Adverse Performance Cues S&P's Rating Downgrades FORTUNOFF: Inks $100 Million Sale Agreement with Lord & Taylor FULVIO FIERIMONTE: Case Summary & Nine Largest Unsecured Creditors GEORGE MAIER: Voluntary Chapter 11 Case Summary GLOBAL MOTORSPORT: Files Ch. 11 Petition, Sells Assets to Dae-Il GO FIG: Court Fixes May 23 as Deadline for Filing Proofs of Claim GO FIG: Seeks Court Nod on ATEC Inc. as Liquidator GO FIG: Wants to Hire Lee & Associates as Leasing Agent GOODYEAR TIRE: Will Redeem $650 Million in Senior Secured Notes HARMONY HOLDINGS: Case Summary & 21 Largest Unsecured Creditors HERCULES INC: Earnings Drop to $28MM in Qtr. Ended December 31 IAC/INTERACTIVECORP: Legal War with Liberty Media Jeopardizes Biz INERGY LP: Improved Credit Metrics Cues S&P to Up Rating to 'BB-' JAMES ALFRED ROSE: Voluntary Chapter 11 Case Summary JOHN JACOBS: Case Summary & 16 Largest Unsecured Creditors JOHNSON RUBBER: Committee Taps FTI Consulting as Financial Advisor KANAWHA INSURANCE: Fitch Withdraws 'BBq' Quantitative FS Rating KB HOME: Former Worker Sues Joint Venture with Countrywide LAWRENCE SALANDER: Fraud Complaint Hearing Scheduled for Feb. 14 LB-UBS COMMERCIAL: Moody's Confirms Low-B Ratings on Nine Classes LEAH MAYERS: Case Summary & Nine Largest Unsecured Creditors LIBERTY MEDIA: B. Diller Says Legal War Jeopardizes IAC's Biz LOAN DEVELOPMENT: Voluntary Chapter 11 Case Summary MACKLOWE PROPERTIES: Fin'l Woes to Impact $2.5BB COMM 2007-FL14 MACKLOWE PROPERTIES: Inks Tentative Agreement with Deutsche Bank MAGNETITE ASSET: Moody's Withdraws Low-B Ratings on Two Classes MARINER ENERGY: Completes Acquisition of Hydro Gulf's Affiliate MBS MANAGEMENT: To Auction Texas Apartment for $9.6MM MH 7 PROPERTIES: Case Summary & Two Largest Unsecured Creditors MORGAN STANLEY: Moody's Retains Low-B Ratings on Six Cert. Classes MOUNT AIRY: Moody's Chips Corp. Rating to B3 on License Suspension MQ ASSOCIATES: Completes Tender Offer for 12-1/4% Senior notes MUSICLAND HOLDING: Liquidation Plan Declared Effective January 30 NATALIE LOERA: Voluntary Chapter 11 Case Summary NEW CENTURY: Wants Exclusivity Period Extended to Feb. 21 NEW CENTURY: Court Approves GRP Loan Sale Procedures NEW CENTURY: Missal's 1st Interim Report Now Part of Public Record NORTH AMERICAN: Oct. 31 Balance Sheet Upside-Down by $2.91 Mil. PACIFIC LUMBER: Competing Plans Filed for Pacific Lumber PACIFIC LUMBER: Schwarzenegger Voices Concern on PALCO Bankruptcy PAETEC HOLDING: Extends Exchange Offer of Notes to February 6 PFP HOLDINGS: Case Summary & 122 Largest Unsecured Creditors PINNACLE LAB: Case Summary & 20 Largest Unsecured Creditors PLASTECH ENGINEERED: Files Chapter 11 Over Canceled Chrysler Order PLASTECH ENGINEERED: Case Summary & 20 Largest Unsecured Creditors PLASTECH ENGINEERED: S&P Junks Corporate Credit Rating From 'B-' POST PROPERTIES: Various Companies Interested to Make Bid Offers QUEBECOR WORLD: U.K. Unit Placed into Administration QUEBECOR WORLD: Union Sees Job Cuts with Corby Unit Receivership REDDY ICE: To Receive $21 Mil. Cash for Merger Deal Termination RICHARD HATFIELD: Case Summary & 20 Largest Unsecured Creditors SALANDER GALLERIES: Fraud Complaint Hearing Scheduled for Feb. 14 SANMINA-SCI: Fitch Holds Issuer Default Rating at B+ Neg SANMINA-SCI: Elects John P. Goldsberry to Board of Directors SCOTTISH RE: Eroding Capitalization Prompts S&P to Cut Rating to B SECURAMERICA HOLDING: Case Summary & 20 Largest Unsec. Creditors SOVEREIGN COS: Case Summary & 33 Largest Unsecured Creditors STRATOS GLOBAL: Moody's Changes Outlook to Stable; Holds B1 Rating STRUCTURED ASSET: 26 Classes Acquire S&P's Rating Confirmations SUMMIT GLOBAL: Taps Donlin Recano as Claims and Balloting Agent SUMMIT GLOBAL: Wants to Access Fortress' $5 Million DIP Facility SUMMIT GLOBAL: Wants Until March 17 to File Schedules & Statements TECHALT INC: Defers Closing of EV Parts Merger to Early February TEMBEC INC: Gets Terms of Recapitalization Proposal from Jolina TILLIM LLC: Case Summary & Eight Largest Unsecured Creditors TREASURE ISLAND: Case Summary & Eight Largest Unsecured Creditors TRIBUNE COMPANY: Buying TMCT LLC's Real Estate for $175 Million UNITED RUBBER: Case Summary & 10 Largest Unsecured Creditors UMMA RESOURCES: Voluntary Chapter 11 Case Summary VICTOR PLASTICS: Given Interim OK to Obtain DIP Financing WACHOVIA BANK: Moody's Downgrades Ratings on Four Cert. Classes WACHOVIA BANK: Moody's Slashes Ratings on Three Classes to Low-B WATERFORD EQUITIES: Seeks Court Nod to Obtain DIP Financing WERNER LADDER: Creditors Sue Former Owners Insiders for $1 Billion WEST CORP: Dec. 31, 2007 Balance Sheet Upside Down by $2.2 Million WILLIAM SCALES: Voluntary Chapter 11 Case Summary * Fed Reserve Banks Board OKs Move to Cut Discount Rate to 3.5% * Fitch Says U.S. Auto Loan ABS in for a Bumpy Ride in 2008 * Fitch Says High Operating Cost to Extend Pressures on Food Cos. * Fla. Amendment 1 to Affect Local Govt. Issuer Credit, Fitch Says * Fitch Ends Review of Closed-end Funds' Share Issue Ratings * Fitch Says Net Loss on U.S. Auto Loan Rose to 1.34% in Dec. 2007 * S&P Takes Action on 6,389 Subprime RMBS and 1,953 CDO Ratings * Credit Manager's Index Opens 2008 in a Slump * BOND PRICING: For the Week of Jan. 28 -- Feb. 1, 2008 ********* ADAPTEC INC: Posts $10MM Net Loss for Nine Months Ended Dec. 31 --------------------------------------------------------------- Adaptec Inc. reported its financial results for the third quarter of fiscal 2008, which ended on Dec. 31, 2007. Net income for three months ended Dec. 31, 2007, was $1.11 million, compared to net income of $6.38 million for the same period in the previous year. For nine months ended Dec. 31, 2007, the company has $10.16 million net loss, compared to $34.17 million net income for the same period in the previous year. At Dec. 31, 2007, the company's balance sheet showed total assets of $695.54 million, total liabilities of $275.39 million and total stockholders' equity of $420.15 million. "Although we are not satisfied with the current revenue trajectory, we are very pleased with our product development efforts during the past few quarters," S. "Sundi" Sundaresh, president and CEO of Adaptec, said. We have a broad array of award-winning products which we will expand further during our next fiscal quarter. Furthermore, we remain focused on improving our operating model and maintaining the strength of our balance sheet. I am happy to note that the entire team is working diligently to brighten Adaptec's future." About Adaptec Inc. Based in Milpitas, California, Adaptec Inc. (NASDAQ: ADPT) -- http://www.adaptec.com/-- provides storage solutions that move, manage, and protect critical data and digital content. Adaptec's software and hardware-based solutions are delivered through Original Equipment Manufacturers and channel partners to provide storage connectivity, data protection, and networked storage to enterprises, government organizations, medium and small businesses worldwide. * * * Moody's Investor Services placed Adaptec Inc.'s long-term corporate family rating at 'B1' and equity linked rating at 'B3' in April 2001. The ratings still hold to date with a negative outlook. AGILYSYS INC: Extends Employment Contract of CEO Arthur Rhein ------------------------------------------------------------- Agilysys Inc. has extended its existing employment agreement with Arthur Rhein, the company's chairman, president and chief executive officer, consistent with the execution of the company's strategic plan and communicated financial goals. Mr. Rhein's employment agreement was extended for an additional year, from April 1, 2009, to March 31, 2010, at his current salary, and includes a grant of 70,000 performance shares vesting solely on the achievement of financial targets established for the executive officer long-term incentive plan. The board of directors said the extension demonstrates its strong endorsement of Mr. Rhein's leadership, and the track record of the management team, in strategically transforming the business and profitably redeploying the company's asset base to seize growth opportunities and generate shareholder value. Mr. Rhein was named president and chief executive officer in April 2002 and chairman in April 2003. Under his leadership, the company has implemented a series of acquisitions and divestitures to move higher up the IT value scale where it can further differentiate itself and realize higher margins. In March 2007, the company divested its KeyLink Systems Distribution Business. Management has made significant progress toward its aggressive financial goals stated at the time of the divestiture. These goals include doubling sales to $1 billion by the end of fiscal 2009, which ends March 31, 2009, and tripling sales to $1.5 billion by fiscal 2010, achieving gross margins in excess of 20% and EBITDA margins of 6%. As a result of strong organic growth and the four acquisitions the company has completed since January 2007, its annual revenue run rate is now approximately $850 million. Interested parties can review details of the extension agreement by consulting the Form 8-K filed with the Securities and Exchange Commission. About Agilysys Inc Based in Mayfield Heights, Ohio, Agilysys Inc. (Nasdaq: AGYS) -- http://www.agilysys.com/-- is one of the distributors and resellers of enterprise computer technology solutions. The company is delivering complex server and storage hardware, software and services to resellers, large and medium-sized corporate customers, well as public-sector clients across a diverse set of industries. In addition, the company provides customer-centric software applications and services focused on the retail and hospitality markets. Agilysys has sales offices throughout the United States and Canada. * * * Standard and Poor's placed Agilysys Inc.'s long-term foreign and local issuer credit ratings at "BB-" in October 2004. The ratings still hold to date. AEROMED SERVICES: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Aeromed Services Corp. GPO Box 70344 San Juan, PR 00936 Bankruptcy Case No.: 08-00518 Type of Business: The Debtor offers air ambulance services. See: http://www.aeromedems.com/ Chapter 11 Petition Date: January 31, 2008 Court: District of Puerto Rico (Old San Juan) Debtors' Counsel: Alexis Fuentes Hernandez P.O. Box 9022726 San Juan, PR 00902-2726 Tel: (787) 607-3436 Estimated Assets: $1 million to $100 million Estimated Debts: $1 million to $100 million Consolidated Debtors' List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Banco De Desarrolo Economico working capital $1,785,689 P.O. Box 2134 San Juan, PR 00922-2134 Air Methods Corp. helicopter services $1,020,000 7301 South Peoria provider Englewood, CO 80112 Era Med LLC helicopter services $508,206 1 Earhardt Drive, Suite provider Coatesville, PA 19320 Adm. Servicios Medicos De PR medical control and $215,773 ancillary Cuerros de Emergencias Medicas paramedics services $80,720 Maria Teresa Barrera legal services $35,000 JAC Premium Financing insurance lease $21,990 Department of Treasury of PR taxes; interest & $15,400 penalties O'Neill & Borges professional services $13,352 Popular Auto Inc. lease $8,616 Progressive Medical Inc. medical equipment $6,907 Municipio De San Juan municipal business $5,218 license Cingular cellular telephone $4,958 services Emergency Response ground ambulance $3,540 provider Axesa Servicios de Informacion yellow pages $2,900 advertising Trailer Van Corp. trailer rental $1,900 World Net Telecommunication Telephone & Fax $1,500 service Blanco A/C and Refrigeration maintenance services $760 GM Paramedical ground ambulance $600 provider Parvel Ambulance ground ambulance $600 AFFILIATED COMPUTER: Earns $81.6M in 2nd Qtr. Ended Dec. 31 ----------------------------------------------------------- Affiliated Computer Services Inc. reported net income of $81.6 million for second quarter ended Dec. 31, 2007, compared to net income of $72.1 million for the same period in the previous year. "I am very pleased with our second quarter results," said Lynn Blodgett, ACS president and chief executive officer. "With the uncertainty of ownership behind us we were able to focus on selling more business, collecting our cash and growing earnings per share. Our financial goal is to deliver consistent, good growth in revenue, signings and earnings." "I feel we made very positive progress toward those goals this quarter. We need to continue improving our revenue growth rates and I am confident that our improved signings this quarter and in the future will be the main catalyst for accelerating our growth. We also demonstrated we can manage our collections and capital expenditures. I'm proud of the results our great team delivered this quarter." For six months ended Dec. 31, 2007, the company reported net income of $147.7 million, compared to net income of $133.5 million for the same period in the previous year. Key highlights from ACS' fiscal year 2008 second quarter: -- Cash flow from operations during the second quarter was approximately $323 million. Free cash flow during the quarter was $248 million. This quarter's cash flow results benefited from improved collections on accounts receivable. Capital expenditures and additions to intangible assets were approximately $74 million. -- During the quarter, the company's board of directors endorsed a $1 billion share repurchase program and authorized a $200 million share repurchase program. The company used free cash flow to complete the $200 million share repurchase program during the second quarter, purchasing approximately 4.5 million shares at an average price of $44 per share. Key year-to-date highlights for fiscal 2008: -- Cash flow from operations for year-to-date fiscal 2008 was approximately $331 million and free cash flow was $181 million. Capital expenditures and additions to intangibles were approximately $150 million. At Dec. 31, 2007, the company's balance sheets showed total assets of $6.03 billion, total liabilities of $3.98 billion and total stockholder's equity of $2.05 billion. About Affiliated Computer Services Inc. Headquartered in Dallas, Texas, Affiliated Computer Services Inc. (NYSE:ACS) -- http://www.acs-inc.com/-- provides business process outsourcing and information technology services to commercial and government clients. The company has two segments based on the clients it serves: commercial and government. The company provides services to a variety of clients including healthcare providers and payers, manufacturers, retailers, wholesale distributors, utilities, entertainment companies, higher education institutions, financial institutions, insurance and transportation companies. * * * As reported in the Troubled Company Reporter on Jan. 30, 2008, Moody's Investors Service confirmed Affiliated Computer Services' Ba2 corporate family rating with a stable rating outlook. This rating confirmation concludes a review for possible downgrade initiated on March 20, 2007. The ratings of ACS remained under review for possible downgrade. ALL AMERICAN: February 13 Disclosure Statement Hearing Canceled --------------------------------------------------------------- The Honorable Laurel M. Isicoff of the United States Bankruptcy Court for the Southern District of Florida canceled the hearing set for Feb. 13, 2008, to consider the adequacy of the Official Committee of Unsecured Creditors of All American Semiconductor Inc.'s proposed disclosure statement explaining its plan of reorganization for the Debtor. Judge Isicoff also canceled the proposed deadline for submitting objections, which was presently scheduled for Feb. 6, 2008. Moreover, Judge Isicoff has set no hearing date to consider approval of the Committee's proposed disclosure statement. According to Judge Isicoff, the Debtor should file with the Court the monthly operating reports for the period through and including Oct. 31, 2007, on or before Feb. 4, 2008. As reported in the Troubled Company Reporter on Jan. 10, 2008, the Debtor's Committee delivered to the Court a Chapter 11 Plan of Liquidation and a Disclosure Statement explaining that Plan. Overview of the Plan The proposed Plan contemplates the liquidation of all of the Debtor's assets and to investigate and prosecution of all litigation claims of the estate. The Plan intends to maximize the value of recoveries to all valid creditors of the Debtors on an equitable basis. The Committee says it will select Kenneth A. Welt as liquidating trustee who is expected to liquidate and distribute the proceeds in accordance with the Plan. Treatment of Claims Under the Plan, these claims are unimpaired and will be paid in full: -- Super-Priority Claims totaling $8,526,060; -- Administrative Claims totaling $3,227,818; -- Priority Tax Claims totaling $321,443; and -- Priority Claims totaling $468,580. The Debtor relates that holders of Allowed General Unsecured Claims, totaling $34,205,920, will receive at least 32.93% of their respective claims plus a pro rata share of the initial distribution amount. Holders of Allowed Lender Deficiency Claims, totaling $9,361,650, is also expected to recover at least 32.93% of their claims. Equity Interests will be canceled on the effective date and holders will not receive anything under the Plan. About All American Semiconductor Based in Miami, Florida, All American Semiconductor Inc. (Pink Sheets: SEMI.PK) -- http://www.allamerican.com/-- distributes electronic components manufactured by others. The company distributes a full range of semiconductors including transistors, diodes, memory devices, microprocessors, microcontrollers, other integrated circuits, active matrix displays and various board- level products. All American also distributes passive components such as capacitors, resistors and inductors; and electromechanical products such as power supplies, cable, switches, connectors, filters and sockets. The company also offers complete solutions for flat panel display products. In total, the company offers approximately 40,000 products produced by approximately 60 manufacturers. The company has 36 strategic locations throughout North America and Mexico, as well as operations in China and Western Europe. The company and its debtor-affiliates filed for Chapter 11 protection on April 25, 2007 (Bankr. S.D. Fla. Lead Case No. 07-12963). Craig D. Hansen, Esq., Tina M. Talarchyk, Esq., and Stephen D. Lerner, Esq., at Squire, Sanders & Dempsey L.L.P., represent the Debtors. Mesirow Financial Consulting, LLC serve as financial advisor to the Committee. William Hawkins, Esq., at Loeb & Loeb, LLP, is the Official Committee of Unsecured Creditors general bankruptcy counsel. Jerry M. Markowitz, Esq., at Markowitz, Davis, Ringel & Trusty, P.A., is the Committee's local counsel. As of Feb. 28, 2007, the Debtors' balance sheet showed total assets of $117,634,000 and total debts of $106,024,000. AMERICAN LAFRANCE: Files Plan of Reorganization ----------------------------------------------- American LaFrance, LLC filed its Plan of Reorganization and supporting Disclosure Statement on February 3, 2008. The court has set March 3, 2008 to approve the Disclosure Statement and April 9, 2008, to consider confirmation of the Plan. Contemporaneously, the Company filed a motion to sell the assets of the Company if the Plan is not approved by creditors and confirmed by the bankruptcy court. The Company's related motion to establish bidding procedures is set for hearing on February 21, 2008. The Company has secured an agreement with Patriarch Partners Agency Services to serve as the stalking horse bidder for the asset sale. The Plan contemplates satisfaction in full of all senior secured debt, administrative claims, and priority claims. To address the $84 million of contingent and non-contingent general unsecured debt, the Plan provides for the assumption by the reorganized company of approximately $27 million of such claims and establishing a fund of assets including $5 million of cash and litigation assets with an estimated value of $17 million for the remainder of the claimants to share pro-rata. Unsecured creditors with balances $2,500 or below (or those willing to reduce the claim to $2,500) will be paid in full without interest. William K. Snyder, the proposed CRO, stated, "This Plan allows the Company to clear the deck of contentious litigation, clean up its balance sheet and quickly exit bankruptcy; it is anticipated the unsecured creditors would much prefer reorganization with a significant return than a quick asset sale followed by liquidation of the old company." The Plan will allow the Company to reject leases and unprofitable contracts so that it may be profitable and to restructure its debt for long term success. The Company has announced the closure of its Sanford, FL; Lake Mary, FL; Hanahan, SC; Lebanon, PA; Jedburg, SC and Portland, OR facilities in order to consolidate and reduce overhead expenses. 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; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERIQUEST MORTGAGE: Three Classes Get S&P's Rating Downgrades -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class M-5, M-6, and M-7 asset-backed pass-through certificates from Ameriquest Mortgage Securities Inc.'s series 2004-R3. Concurrently, S&P affirmed its ratings on the remaining seven 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 $25.710 million, or 2.57% of the original principal balance. Serious delinquencies (90-plus days, foreclosures, and REOs) were $28.23 million, about 9.6x greater than the current amount of overcollateralization (O/C), which is $3.66 million below its $6.62 million target. Losses have consistently outpaced excess interest for 11 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, O/C, and excess spread provide credit support for this series. The loan pool consists of conventional, one- to four-family, adjustable- and fixed-rate mortgage loans secured by first liens on residential properties. Ratings Lowered Ameriquest Mortgage Securities Inc. Asset-backed Pass-through Certificates Series 2004-R3 Rating ------ Class To From ----- -- ---- M-5 BB BBB M-6 B BBB- M-7 CCC BB+ Ratings Affirmed Ameriquest Mortgage Securities Inc. Asset-backed Pass-through Certificates Series 2004-R3 Class Rating ----- ------ A-1A, A-1B, A-4 AAA M-1 AA M-2 A M-3 A- M-4 BBB+ ANN TAYLOR: S&P Says Ratings Unaffected by Restructuring Program ---------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Ann Taylor Inc. (BB-/Stable/--) remain unchanged after the company's announcement of a restructuring program to be completed over the next three years. The New York City-based company expects to save approximately $50 million annually on a pretax basis by closing 117 underperforming stores, reducing corporate staff by 13%, and undergoing a productivity initiative that will include improving procurement of non-merchandise goods and services. The closed stores contribute approximately $210 million to sales but have little impact on profits. Management expects the restructuring program to cost about $40 million to $45 million, with approximately $25 million in non-cash expenses related to store closures. Fiscal 2007 costs are expected to be about $29 million and will primarily be non-cash. S&P expects credit metrics to remain satisfactory for the rating, with debt to EBITDA staying below 3x and interest coverage of more than 4x for fiscal 2007. ASSOCIATED ESTATES: Paying $0.54375/Share Dividend on March 14 -------------------------------------------------------------- Associated Estates Realty Corporation disclosed that a quarterly dividend of $0.54375 per one-tenth depositary share has been declared on the company's 8.70% Class B Series II Cumulative Redeemable Preferred Shares, payable on March 14, 2008 to shareholders of record on Feb. 29, 2008. Each depositary share represents one-tenth of a share of the Company's 8.70% Class B Series II Cumulative Redeemable Preferred Shares. Based in Richmond Heights, Ohio, Associated Estates Realty Corporation (NYSE: AEC) -- http://www.aecrealty.com/-- is a real estate investment trust and is a member of the Russell 2000 Index. The company directly or indirectly owns, manages or is a joint venture partner in 98 properties containing a total of 19,909 units located in 10 states. * * * Moody's Investor Service placed Associated Estates Realty Corporation's long term foreign and local issuer credit rating at 'B+' on July 2007. The rating still holds to date with a stable outlook. BEAR STEARNS: Moody's Maintains Low-B Ratings on Six Cert. Classes ------------------------------------------------------------------ Moody's Investors Service affirmed these ratings of all classes of Bear Stearns Commercial Mortgage Securities Trust, Commercial Mortgage Pass-Through Certificates, Series 2006-TOP22: -- Class A-1, $63,055,558, affirmed at Aaa -- Class A-2, $212,000,000, affirmed at Aaa -- Class A-3, $95,100,000, affirmed at Aaa -- Class A-AB, $81,500,000, affirmed at Aaa -- Class A-4, $563,831,000, affirmed at Aaa -- Class A-1A, $192,494,512, affirmed at Aaa -- Class A-M, $170,469,000, affirmed at Aaa -- Class A-J, $125,722,000, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $31,963,000, affirmed at Aa2 -- Class C, $12,785,000, affirmed at Aa3 -- Class D, $25,570,000, affirmed at A2 -- Class E, $14,917,000, affirmed at A3 -- Class F, $14,916,000, affirmed at Baa1 -- Class G, $14,916,000, affirmed at Baa2 -- Class H, $8,523,000, affirmed at Baa3 -- Class J, $10,655,000, affirmed at Ba1 -- Class K, $2,131,000, affirmed at Ba2 -- Class L, $6,392,000, affirmed at Ba3 -- Class M, $2,131,000, affirmed at B1 -- Class N, $2,131,000, affirmed at B2 -- Class O, $4,262,000, affirmed at B3 As of the Jan. 14, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 2.1% to $1.67 billion from $1.70 billion at securitization. The Certificates are collateralized by 223 loans ranging in size from less than 1.0% to 7.2% of the pool, with the top 10 loans representing 29.6% of the pool. The pool consists of a shadow rated component, representing 27.3% of the pool, and a conduit component, representing 72.7% of the pool. No loans have defeased. There have been no loans liquidated from the pool and there are no loans in special servicing. Fourteen loans, representing 6.3% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2006 operating results for 98.6% of the loans. Moody's weighted average loan to value ratio for the conduit component is 92.1%, compared to 89.6% at securitization. The largest shadow rated loan is the Chesterbrook/Glenhardle Office Portfolio Loan ($120.0 million - 7.2%), which is secured by 17 office properties located in Wayne, Pennsylvania. There is also a subordinate B note of $55 million held outside the trust. The loan is interest only for the entire term. Moody's current shadow rating is Baa3, the same as at securitization. The second largest shadow rated loan is the Alderwood Mall Loan ($100.5 million -- 6.0%), which is secured by the borrower's interest in a 1.3 million square foot regional mall (565,000 square feet is collateral) located approximately 20 miles north of Seattle in Lynnwood, Washington. The mall is anchored by Macy's (formerly Bon Marche), Sears, J.C. Penney and Nordstrom. The loan is structured as a pari passu note with a total balance of balance of $205.3 million. There is also a subordinate B note of $54 million and mezzanine debt of $35 million held outside the trust. Moody's current shadow rating is Baa1, the same as at securitization. The third largest shadow rated loan is the Mervyn's Portfolio Loan ($64.2 million -- 3.8%), which is secured by 25 retail properties leased to Mervyn's through September 2025. The properties are located in California (23) and Texas (2). The loan is interest only for the entire term and is structured as a pari passu note with a total balance of $131.0 million. Moody's current shadow rating is Baa3, the same as at securitization. The fourth shadow rated loan is the 60 Thompson Street Loan ($29.0 million -- 1.7%), which is secured by a 98-room luxury boutique hotel located in New York City. Performance has improved due to increased NOI. Moody's current shadow rating is Baa1, compared to Baa3 at securitization. The fifth, sixth, seventh and eighth shadow rated loans comprise 4.5% of the pool. Moody's current shadow ratings for these loans are the same as at securitization. The Embassy Suites Sacramento Loan ($21.3 million -- 1.3%) and the Federal Express Facility Loan ($15.6 million -- 0.9%) are shadow rated Baa3. The Chambers Hotel Loan ($19.5 million -- 1.2%) is shadow rated Ba1 and the Blakely Hotel Loan ($18.5 million -- 1.1%) is shadow rated A1. The ninth shadow rated loan is the Marriott Courtyard -- Fort Lauderdale Loan ($12.2 million -- 0.7%), which is secured by a 174-room full service hotel located in Dania Beach, Florida. The loan has benefited from amortization as well as increased NOI. Moody's current shadow rating is A1, compared to A2 at securitization. The tenth shadow rated loan is the Tamarack Garden Apartments Loan ($11.7 million -- 0.7%), which is secured by a 194-unit multifamily complex located in Orange County, California. Performance has been impacted by increased expenses. Moody's current shadow rating is Aa3, compared to Aa2 at securitization. The eleventh shadow rated loan is the Oak Ridge Estates Loan ($11.0 million -- 0.7%), which is secured by a 621-site manufactured home community located in Monroe, Michigan. Performance has been impacted by increased expenses. Moody's current shadow rating is A3, compared to A2 at securitization. The twelfth shadow rated loan is the Rudgate Silver Springs MHC Loan ($9.9 million -- 0.6%), which is secured by a 547-site manufactured home community located in Clinton Township, Michigan. Performance has improved due to increased revenue. Moody's current shadow rating is Aaa, compared to Aa1 at securitization. The remaining six shadow rated loans ($21.9 million -- 1.3%) are secured by multifamily co-ops located in Manhattan (3), Brooklyn (1) and Rockland County (1). Moody's current shadow ratings for these loans are all Aaa, the same as at securitization. The top three conduit loans represent 6.2% of the outstanding pool balance. The largest conduit loan is the Olympic Plaza Loan ($39.1 million -- 2.3%), which is secured by a 244,448 square foot office building located in Los Angeles, California. Loan performance has benefited from amortization. Moody's LTV is 95.5% compared to 98.1% at securitization. The second largest conduit loan is the 12601 Fair Lakes Circle Loan ($35.0 million -- 2.1%), which is secured by a 264,000 square foot office building, located in Fairfax, Virginia. The building is 100.0% leased to CGI Group Inc. until February 2011, which is also when the loan is due. The loan is interest only for the entire term. Moody's LTV is 73.0%, essentially the same as at securitization. The third largest conduit loan is the 234 West 48th Street Loan ($30.0 million -- 1.8%), which is secured by the leased fee position on a 9,550 square foot land parcel located in the Theater District of New York City. The land parcel is leased to the owners of a 334-room Best Western President full service hotel. The loan is interest only for the entire term. Moody's LTV is 91.9% compared to 94.0% at securitization. BEAR STEARNS: Three Classes Obtains S&P's Junk Ratings on Losses ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on eight classes of asset-backed certificates issued by three Bear Stearns Asset Backed Securities Trust deals. Concurrently, S&P affirmed its ratings on the remaining 14 classes from these transactions. The downgrades reflect a reduction in credit enhancement as a result of monthly realized losses. As of the December 2007 remittance date, cumulative realized losses, as a percentage of the original pool balances, were 1.21% (series 2004-FR1), 1.17% (series 2004-HE3), and 2.40% (series 2004-HE4), while severe delinquencies (90-plus days, foreclosures, and REOs), as a percentage of the current pool balances, were 18.66%, 12.05%, and 20.81%, respectively. Losses have outpaced excess interest over the past six months by 3.81x (series 2004-FR1), 5.53x (series 2004-HE3), and 5.68x (series 2004-HE4). Overcollateralization (O/C) is below its target for all three transactions, at 11 basis points (bps), 35 bps, and 43 bps below target for series 2004-FR1, 2004-HE3, and 2004-HE4. The affirmations reflect sufficient credit enhancement available to support the ratings at their current levels. The classes with affirmed ratings have actual and projected credit support percentages that are in line with their original levels. Subordination, O/C, and excess spread provide credit support for these transactions. The collateral for these series originally consisted primarily of conventional, fixed- and adjustable-rate mortgage loans secured by first and second liens on one- to four- family residential properties. Ratings Lowered Bear Stearns Asset Backed Securities Trust Rating ------ Series Class To From ------ ----- -- ---- 2004-FR1 M7 BB BBB+ 2004-FR1 M8A, M8B CCC B 2004-HE3 M6 B BBB- 2004-HE3 M7 CCC BB 2004-HE4 M4 BBB A 2004-HE4 M5 B A- 2004-HE4 M6 CCC BB Ratings Affirmed Bear Stearns Asset Backed Securities Trust Series Class Rating ------ ----- ------ 2004-FR1 M1 AA+ 2004-FR1 M2 AA 2004-FR1 M3 A+ 2004-FR1 M4, M5 A 2004-FR1 M6 A- 2004-HE3 M2 A 2004-HE3 M3 A- 2004-HE3 M4 BBB+ 2004-HE3 M5 BBB 2004-HE4 M1 AA+ 2004-HE4 M2 AA- 2004-HE4 M3 A+ 2004-HE4 M7 CCC BEAZER HOMES: to Exit Mortgage Origination Business --------------------------------------------------- Beazer Homes USA, Inc. has discontinued its mortgage origination services through Beazer Mortgage Corporation and established a new marketing services arrangement with Countrywide Financial Corporation. Beazer also announced conclusions from its previously announced comprehensive review of the Company's markets, and provided certain unaudited and preliminary first quarter financial and operating data. "We remain disciplined in our operating approach, responding to what has been and what we expect will continue to be a challenging environment for homebuilding," said Ian J. McCarthy, President and Chief Executive Officer. "We continue to make reductions in direct costs, overhead expenses and land spending, as well as unsold home inventories and believe the actions we have taken to preserve liquidity and generate cash will enable us to successfully weather the downturn. At the same time, we believe the strategic actions we are announcing today will position us well to take advantage of opportunities that will arise when our markets begin to recover. We continue to focus on differentiating Beazer Homes in the eyes of the consumer and allocating capital and resources in order to enhance long term shareholder value." The Company announced that it will discontinue mortgage origination services through Beazer Mortgage Corporation effective immediately and has ended its related mortgage services relationship with Homebuilders Financial Network, LLC. The Company has entered into a new marketing services arrangement with Countrywide Financial Corporation, whereby Beazer Homes will market Countrywide as the preferred mortgage provider to Beazer Homes' customers. Under the agreement, Countrywide's comprehensive array of mortgage products and services will be made available to Beazer Homes' homebuyers through dedicated Countrywide loan counselors serving all of Beazer Homes' communities. "We are pleased to enter into this arrangement with Countrywide, whose broad capabilities in the mortgage financing business make it uniquely qualified to serve our customers across the country," said McCarthy. "Through this agreement, we can continue to focus on what we do best, providing our customers with homes of superior quality and value. At the same time, given the increasing complexities in mortgage financing today, we believe working with an established leader in mortgage lending makes the most sense for our homebuyers and our business." Beazer's decision to close Beazer Mortgage Corporation and end its relationship with HFN will result in related charges and expenses. The Company does not believe that the amounts and timing of such expenses will be determinable until the Company is able to resolve the previously disclosed mortgage origination issues identified by the Audit Committee's investigation. As previously announced in July 2007, the Company has undertaken a comprehensive review of each of its markets in order to refine its overall investment strategy and optimize its capital and resource allocation to enhance both its financial position and shareholder value. This review entailed an evaluation of both external market factors and the Company's position in each market to determine how to optimize and prioritize investment across the Company's existing and potential geographic footprint. As a result of this review, the Company has decided that it will exit its homebuilding operations in Charlotte, NC, Cincinnati and Dayton, OH, Columbia, SC, Columbus, OH, and Lexington, KY. While specific plans and timetables for an orderly transition will vary according to the market, the Company intends to complete all homes under construction and is committed to maintaining customer care resources to provide ongoing warranty service to homeowners through their warranty periods. The Company is evaluating its current land holdings and inventory in each of these markets to determine the appropriate methods and timing for disposition. Over the next twelve months, the Company expects to generate incremental cash as a result of the decision to withdraw from these markets. At December 31, 2007, the Company expects to reclassify certain assets in these markets as property held for sale, and to recognize impairment charges to reduce their carrying value to estimated proceeds less costs to sell. The Company also expects to recognize abandonment charges related to land option positions. In addition, over the next few months, the Company will incur other shut down costs associated with the wind down of operations. Due to the ongoing restatement, the Company will not be able to quantify the financial impact of these decisions until restated financial statements are finalized. At June 30, 2007, approximately 5% of the Company's homebuilding assets were invested in the markets affected by today's announcement. In addition, the Company has confirmed plans to enter the Northwest Florida market in cooperation with The St. Joe Company. The two companies entered into a long-term relationship in 2006 under which St. Joe entitles and sells home sites in a number of the region's markets to Beazer Homes. The two companies work together on several projects and together plan to identify new opportunities as market conditions in the region improve. Preliminary First Quarter Financial and Operating Data The Company is in the process of restating certain prior periods' financial statements including interim periods of fiscal 2007 and 2006. As such, comparisons of preliminary financial and operating data for the quarter ended December 31, 2007 to the financial and operating data for the quarter ended December 31, 2006 are prior to the effect of any restatement and, as this data is preliminary and unaudited, is subject to change. Other than cash balances, the Company does not expect to release financial data until the restatements are complete. The Company is working expeditiously to complete the restatements and report financial results for the year ended September 30, 2007 and the quarter ended December 31, 2007 as soon as practicable. The Company currently believes such restatements can be completed prior to May 15, 2008. As previously announced on January 23, 2007, home closings for the quarter ended December 31, 2007, totaled 2,010, a 24% decline from the same period in the prior fiscal year. This resulted in a backlog conversion ratio of 67%, as the Company remained focused on converting its existing backlog for cash generation. Net new home orders totaled 1,260, a decline of 29% from the prior fiscal year. At 46%, the cancellation rate for the quarter was comparable to the 43% rate experienced for the same period in the prior fiscal year and significantly improved from the unusually high rate of 68% in the fourth quarter of fiscal 2007. Also as previously announced, at December 31, 2007, the Company had a cash balance in excess of $325 million, compared to $155 million at December 31, 2006 and $460 million at September 30, 2007. As previously reported, during the quarter, the Company repaid approximately $75 million in secured debt, and paid a consent fee to holders of its Senior Notes and Senior Convertible Notes and related expenses totaling $21 million. The cash balance at December 31, 2007 includes approximately $92 million of restricted cash pledged to collateralize the Company's outstanding letters of credit. The Company is continuing the process of replacing this pledged cash with real property in the collateral pool under its secured revolving credit facility. Due to seasonal patterns, the Company generally experiences a net use of cash in its first fiscal quarter, as was the case this year, although the Company continues to expect that for the whole of fiscal 2008, it will generate net cash from operations. The Company continues to reduce its land position and unsold home inventories. The Company controlled approximately 58,000 lots at December 31, 2007, reflecting reductions of 6% and 31%, respectively from previously reported levels as of September 30, 2007 and December 31, 2006. As of December 31, 2007, unsold finished homes and unsold homes under construction declined by 49% and 37%, respectively, from year-ago levels. The Company remains committed to aligning its land supply and inventory levels to current expectations for home closings, and continues to exercise caution and discipline with respect to investment in inventory. The Company continues to expect that land spending in fiscal 2008 will be reduced compared to fiscal 2007, based on current market conditions. The Company currently expects its results for the first quarter of fiscal 2008 to include material charges to abandon land option contracts and to recognize inventory impairments. As the Company is in the process of restating prior periods' financial statements, it is unable to quantify the amount of these charges at this time. About Beazer Homes Headquartered in Atlanta, Beazer Homes USA Inc., (NYSE: BZH) -- http://www.beazer.com/-- is a single-family homebuilder with operations in Arizona, California, Colorado, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia. The company also provides mortgage origination and title services to its homebuyers. * * * As reported in the Troubled Company Reporter on Nov. 1, 2007, Standard & Poor's Ratings Services ratings on Beazer Homes USA Inc. (B+/Watch Neg/--) will remain on CreditWatch with negative implications until the extent of pending restatements tied to its recently completed internal investigation are finalized and the company files all financial statements with the SEC. As reported in the Troubled Company Reporter on Oct. 16, 2007, Fitch Ratings downgraded Beazer Homes USA Inc.'s Issuer Default Rating to 'BB-' from 'BB'. BELO CORP: Moody's Keeps Ratings, Closing Proposed Spin-off Review ------------------------------------------------------------------ Moody's Investors Service confirmed Belo Corp.'s Ba1 Corporate Family rating, Ba1 Probability of Default Rating, and Ba1 senior unsecured note ratings, concluding the review of the proposed spin-off of the newspaper operations initiated on Oct. 1, 2007. The confirmation reflects Moody's belief that Belo's strong local market positions, solid profit margins and good cash flow generation from the television stations provide sufficient flexibility within the Ba1 CFR to absorb the increase in debt-to- EBITDA leverage expected to result from the spin-off of the newspaper operations. All of the existing debt will remain at Belo Corp. and will be supported by the broadcast operations. Moody's considers the loss of free cash flow to be modest as the reductions in capital expenditures, taxes and dividends largely offset the absence of the newspaper EBITDA while the company will also benefit in 2008 from political advertising including the U.S. presidential election. Moody's lowered the liquidity rating to SGL-3 from SGL-2 due to the clear reliance on a bank facility with a MAC clause to cover the $350 million November 2008 note maturity. The rating outlook is stable. Confirmations: Issuer: Belo Corp. -- Corporate Family Rating, Confirmed at Ba1 -- Probability of Default Rating, Confirmed at Ba1 -- Senior Unsecured Bond, Confirmed at Ba1, LGD4-53% (from LGD4- 54%) -- Senior Unsecured Shelf, Confirmed at (P)Ba1, LGD4-53% (from LGD4-54%) Downgrades: Issuer: Belo Corp. -- Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Outlook Actions: Issuer: Belo Corp. -- Outlook, Changed To Stable From Rating Under Review The SGL-3 speculative-grade liquidity rating reflects Belo's limited free cash flow and reliance on its $600 million revolver to fund the $350 million November 2008 note maturity. Moody's believes Belo has sufficient cushion under financial covenants to absorb a moderate cyclical downturn in advertising, but the downgrade reflects the rating agency's cautious view on continued revolver access given the uncertain nature of the U.S. advertising and credit markets in 2008 and the broadly defined MAC provision in the credit agreement. The stable rating outlook is based on Moody's expectation that Belo will utilize free cash flow largely to reduce debt over the intermediate term and will refrain from material acquisitions and share repurchases, leading to free cash flow-to-debt in a 6-7% range through 2009 and debt-to-EBITDA maintained below 4.75x. Belo Corp. is a Dallas-based media company with operations in television broadcasting (owns 20 stations including six in top 15 markets), cable news, (owns/operates six cable news channels) and interactive media in the United States. The television stations account for the bulk of the company's approximate $770 million of annual revenue. BEXAR COUNTY: Moody's Downgrades Ratings on Housing Revenue Bonds ----------------------------------------------------------------- Moody's Investors Service has downgraded the rating on Bexar County Housing Finance Corporation's (Honey Creek/Austin Point Apartments) Multifamily Housing Revenue Bonds Series 2000A to Ba2 from Baa3 and downgraded Series 2000C to B1 from Ba2. The outlook is changed to negative from positive. The rating downgrades are based upon Moody's review of audited financial statements for 2006, interim financial statements for full-year 2007 and occupancy reports. The negative outlook reflects forecasts for declining occupancy and negative rent growth for the submarket in the near term. The bonds are limited obligations payable solely from the revenues, receipts and security pledged in the Trust Indenture. Recent Developments & Results Occupancy continues to be challenged. January 2008 occupancy was 90%, which is below the average of 94.4% for the North Central San Antonio submarket, according to Torto Wheaton Research. TWR forecasts occupancy in the submarket will decline to 91.2% in 2008 and rent growth will be relatively slow at 1.9%. In 2006, the property received a transfer for its owner, Community Housing Corporation of America, for painting the exterior of the building. The transfer was not included as income in the audited financial statements, but the expense was included. When adjusting expenses downward by the $242,617 used for the painting, Moody's obtains a debt service coverage ratio of 1.15x maximum annual debt service for senior debt, and 1.03 for subordinate debt. Interim statements for the entire year of 2007 produce similar MADS DSCR's; 1.13x for senior debt and 1.01 for subordinate. The downgrades reflect the weak DSCR for 2006 and the continued weakness in 2007. Outlook The outlook for the bonds is negative based upon declining occupancy and rent forecasts, as well as weak 2007 MADS DSCR's derived from unaudited financial statements. BLACKBOARD INC: Completes $182 Million Acquisition of NTI Group --------------------------------------------------------------- Blackboard Inc. has completed the acquisition of privately-held The NTI Group Inc. for $182 million in cash and stock, subject to certain adjustments. The final purchase price included approximately $132 million in cash and 1.45 million shares of Blackboard's common stock, subject to certain adjustments. In addition, up to $17 million in consideration may be paid in stock based on attainment of certain financial targets over the two years afte the close of the acquisition. The acquisition of the NTI Group moves Blackboard into the fast- growing alert and notification market, forecast by Yankee Group to grow to an estimated $1.2 billion in revenue in the United States by 2011, representing a five-year compounded average annual growth rate of over 30%. The company relates that the combination of Blackboard and NTI adds another mission-critical offering to Blackboard's existing enterprise products and fulfills a key education technology priority. The addition of NTI's Connect-ED(R) offering, to be rebranded as Blackboard Connect(TM), will allow Blackboard to extend its presence in North American higher education and establish a much more significant presence with U.S. K-12 institutions where NTI has already established a significant client base. Blackboard retained Wachovia Securities as its financial advisor and Dewey & LeBoeuf as its legal advisor. NTI retained UBS Investment Bank as its financial advisor and Latham and Watkins LLP as its legal advisor. About Blackboard Inc. Headquartered in Washington D.C., Blackboard Inc. (Nasdaq: BBBB) -- http://www.blackboard.com/-- is a provider of enterprise software applications and related services to the education industry. Founded in 1997, Blackboard's software applications are used by colleges, universities, K-12 schools and other education providers, well as textbook publishers and student-focused merchants that serve education providers and their students. * * * As reported in the Troubled Company Reporter on Jan, 16, 2008, Standard & Poor's Ratings Services said its ratings and outlook on Blackboard Inc. (B+/Positive/--) would not be affected by the company's disclosed acquisition of The NTI Group Inc. BRIDGETECH HOLDINGS: Sept. 30 Balance Sheet Upside-Down by $6.9 M. ------------------------------------------------------------------ Bridgetech Holdings International Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $1,498,967 in total assets, and $8,367,455 in total liabilities, resulting in a $6,868,488 total stockholders' deficit. At Sept. 30, 2007, the company's consolidated balance sheet also showed strained liquidity with $733,918 in total current assets available to pay $8,347,130 in total current liabilities. The company reported a net loss of $4,109,771 on revenues of $44,665 for the third quarter ended Sept. 30, 2007, compared with a net loss of $1,766,355 on revenues of $127,487 in the same period of 2006. Cost of goods sold was $117,448 for the three months ended September 2007, up from cost of goods sold of $68,953 in the comparable three months of 2006. Operating loss increased to $3,078,588 for the three months ended Sept. 30, 2007, versus an operating loss of $1,642,299 in the comparable three months of 2006. 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?27a2 Going Concern Doubt Jewett, Schwartz, Wolfe & Associates, in Hollywood, Fla., expressed substantial doubt about Bridgetech Holdings International Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of the years ended Dec. 31, 2006, and 2005. The auditing firm reported that the company has operating and liquidity concerns, has incurred an accumulated deficit of approximately $17.2 million through the period ended Dec. 31, 2006, and current liabilities exceeded current assets by approximately $2.3 million at Dec. 31, 2006. About Bridgetech Holdings Headquartered in San Diego, Bridgetech Holdings International Inc. (Other OTC: BGTH.PK) -- http://www.bridgetechholdings.com/-- engages in the transfer of medical drugs, devices, and diagnostics from the United States to China, with a primary focus on oncology. The company also offers medical technology transfer, nurse recruitment and training, medical imaging, and healthcare radio frequency identification solutions. It operates its own clinical research organization in Hong Kong. The company has offices in Hong Kong and Beijing. BUFFETS HOLDINGS: Wants to Hire Houlihan Lokey as Bankers --------------------------------------------------------- Buffets Holdings Inc. and its debtor-affiliates seek authority from the United States Bankruptcy Court for the District of Delaware to employ Houlihan Lokey as their investment banker. As the Debtors' investment banker, Houlihan Lokey will: -- assist in the development, preparation and distribution of selected information, documents and other materials in an effort to create interest and to consummate any transactions, including, if appropriate, assisting the Debtors in the preparation of an offering memorandum; -- solicit and evaluate indications of interest and proposals regarding any transaction from current and potential equity investors, acquirers and strategic partners; -- assist the Debtors with the development, structuring, negotiation and implementation of any transaction, including, among others, assisting the Debtors with due diligence investigation and participating as a representative of the Debtors in negotiations with creditors and other parties involved in any transaction; -- assist in valuing the Debtors' companies and, as appropriate, value the Debtors' assets or operations, provided that any real estate or fixed asset appraisals will be undertaken by outside appraisers, separately retained and compensated by the Debtors; -- provide fair opinions with respect to a transaction where Houlihan Lokey received or is entitled to receive a transaction fee; -- provide expert advice and testimony regarding financial matters related to any transaction; -- advise and attend meetings of the Debtors' Board of Directors, creditor groups, official constituencies and other interested parties, as the Debtors determine to be necessary; and -- provide other financial advisory and investment banking services as may be agreed upon by Houlihan Lokey and the Debtors. In addition, the Debtors agree to consider in good faith engaging Houlihan Lokey for any sales and financing transactions pursued during the term of the engagement. Any engagement would be pursuant to a separate written agreement between the Debtors and the firm setting forth the services to be provided and the compensation to be paid. The Debtors will pay Houlihan Lokey in advance, without notice or invoices, a nonrefundable cash fee of $150,000 per month. In addition, upon the effective date of a confirmed plan of reorganization, the Debtors will pay Houlihan Lokey a cash fee of $6,250,000 less 25% of the Monthly Fees paid during the relevant Chapter 11 cases, excluding the first three Monthly Fee payments. The Firm will also be reimbursed for reasonable out-of-pocket expenses incurred. The Debtors have also agreed to indemnify and hold Houlihan Lokey harmless against any claims, liabilities and obligations arising out of its retention in the Debtors' Chapter 11 cases. Houlihan Lokey has already received payments from the Debtors 90 days before the Petition Date. The Payments are: Date Monthly Fees Expenses ---- ------------ -------- November 14, 2007 $150,000 $5,705 December 13, 2007 150,000 2,120 January 16, 2008 150,000 14,940 With regards to Rule 2016-2 of the Local Rules of Bankruptcy Practice and Procedure of the U.S. Bankruptcy Court for the District of Delaware, which require professionals to submit detailed time entries, the Debtors ask the Court to modify the Rule due to the nature of Houlihan Lokey's engagement and fixed- rate compensation structure. The Debtors submit that detailed time entries are unnecessary. The Debtors, however, propose that Houlihan Lokey will file interim and final fee applications, including detailed descriptions of the expenses for which Houlihan Lokey has requested reimbursement. The Debtors note that Houlihan Lokey will only provide reasonable descriptions of its work in one hour increments. Houlihan Lokey will submit a separate application of any transaction fee when it becomes payable or combine any request for payment of transaction fees with its interim or final fee applications. Saul Burian, a managing director at Houlihan Lokey, assures the Court that his firm is a "disinterested person" as that term 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 are represented by Young Conaway Stargatt & Taylor, LLP, as proposed legal advisor and Kroll Zolfo Cooper LLC as proposed financial advisors. 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: To Delay Filing of 4th Qtr. 2007 Results ---------------------------------------------------------- Buffets Holdings Inc. and its debtor-affiliates have informed the U.S. Securities and Exchange Commission that it will be unable to timely file its quarterly results on Form 10-Q for the period ended Dec. 12, 2007. Due to the additional critical demands that the Chapter 11 filing has placed on the time and attention of Buffets' senior management, the company is unable to file the Form 10-Q by the prescribed filing date without incurring unreasonable effort and additional expense, Buffets' chief financial officer, A. Keith Wall, explained. He said the company needs additional time to prepare financial statements that fairly present the financial position and results of operations. Mr. Wall disclosed that Buffets' Chapter 11 filing significantly impacts the disclosures in Buffets' Form 10-Q for the period. It is "anticipated that a significant change in results of operations from the corresponding period for the last fiscal year will be reflected by the earnings statements," Mr. Wall told the SEC. Specifically, Mr. Wall said, Buffets recorded a consolidated net loss of $34.6 million for the second fiscal quarter of 2008 ended December 12, 2007, compared to a consolidated net loss of $34.9 million for the second fiscal quarter of 2007 ended December 13, 2006. The second quarter 2008 net loss includes: * a $2.8 million charge related to lease termination costs and obligations, employee termination costs, changes in reserve estimates related to previously closed stores, and other associated costs for closed restaurants; and * $6.4 million in asset impairments related to assets classified as held for sale on the consolidated balance sheets and a 19.6% increase in interest expense over the prior year period, on a pro-forma basis, giving effect to the Ryan's Merger as if it had occurred at the beginning of the period, or a 140 basis point increase as a percent of sales. Second quarter fiscal 2007 net loss included a $2.5 million loss on sale leaseback transactions and a $40 million loss related to refinancing efforts, both in connection with the November 1, 2006 merger of Buffets, Inc., with Ryan's Restaurant Group, Inc. Operating Revenues Mr. Wall noted that operating revenues totaled $348.1 million for the 12 weeks ended December 12, 2007, representing a 7.5% decrease from the prior year same period, on a pro-forma basis, giving effect to the Ryan's Merger as if it had occurred at the beginning of the period. This decrease in revenue is due to a 9.7% decrease in guest counts, offset by a 2.2% increase in average check, Mr. Wall explained. The decrease in guest counts reflects the economic strain affecting Buffets' customer base due to increasing gas and energy prices as well as increasing consumer mortgage payments and defaults. On a year-to-date basis, giving effect to the Ryan's Merger as if it had occurred at the beginning of the period, operating revenues totaled $724.6 million as of December 12, 2007, representing a 5.8% decrease from the prior year. This decrease is due to an 8.1% decrease in guest counts, offset by a 2.3% increase in average check, Mr. Wall added. Restaurant Costs Restaurant costs totaled $324.7 million for the 12 weeks ended December 12, 2007, representing a 5.9% decrease from the prior year same period, on a pro-forma basis, giving effect to the Ryan's Merger as if it had occurred at the beginning of the period. Total restaurant costs increased 170 basis points during the second quarter of fiscal 2008 as a percentage of sales from the prior year same period. "These increases are due to a 50 basis point increase in food costs and a 150 basis point increase in direct and occupancy costs, offset by a 30 basis point decrease in labor costs," said Mr. Wall. The 50 basis point increase in food costs is primarily due to increases in the price of certain commodities like chicken and dairy products. These increases were partially offset by synergies realized on vendor procurement and production of certain food items in conjunction with the Ryan's Merger. The 30 basis point decrease in labor costs is due primarily to synergies realized on labor mix changes in connection with the Ryan's Merger, partially offset by wage inflation as a result of minimum wage increases in several states effective January 1, 2007, federal minimum wage increases effective July 24, 2007 and other modest wage increases. The 150 basis point increase in direct and occupancy costs is primarily due to increases in rents paid on sale leaseback properties in connection with the Ryan's Merger, higher repairs and maintenance and utilities costs, as well as tightened sales leverage resulting from the fixed-cost nature of these costs over a declining sales base. On a year-to-date basis, giving effect to the Ryan's Merger as if it had occurred at the beginning of the period, restaurant costs totaled $664.2 million as of December 12, 2007, representing a 5.1% decrease from the prior year. Total restaurant costs increased 60 basis points as a percentage of sales as of Dec. 12, 2007, compared to the prior year. These increases are due to a 20 basis point increase in food costs and a 110 basis point increase in direct and occupancy costs, offset by a 70 basis point decrease in labor costs. Advertising Costs According to Mr. Wall, advertising costs totaled $8.8 million for the 12 weeks ended December 12, 2007, representing an 11.6% increase from the same prior year period, on a pro-forma basis, giving effect to the Ryan's Merger as if it had occurred at the beginning of the period. Total advertising costs increased 40 basis points during the second quarter of fiscal 2008 as a percentage of sales from the same prior year period. This increase in primarily due to the fact that, prior to the merger, Ryan's Restaurant Group Inc. spent very little in advertising expense. Once the merger was finalized, advertising spend for the Ryan's brand restaurants increased substantially. On a year-to- date basis, giving effect to the Ryan's Merger as if it had occurred at the beginning of the period, advertising expense totaled $18.7 million as of December 12, 2007, representing a 21.6% increase from the prior year. Total advertising expense increased 60 basis points as a percentage of sales as of December 12, 2007 compared to the prior year. General and Administrative Costs General and administrative costs totaled $16.7 million for the 12 weeks ended December 12, 2007, representing a 14.1% decrease from the same prior year period, on a pro-forma basis, giving effect to the Ryan's Merger as if it had occurred at the beginning of the period. Total general and administrative costs decreased 60 basis points during the second quarter of fiscal 2008 as a percentage of sales from the same prior year period. Mr. Wall said this decrease is due to certain cost savings and synergies realized in connection with the Ryan's Merger related to head-count reductions and changes in staffing mix at the Ryan's brand restaurants. On a year-to-date basis, giving effect to the Ryan's Merger as if it had occurred at the beginning of the period, general and administrative costs totaled $32.5 million, representing a 17.4% decrease from the prior year. Total general and administrative costs decreased 60 basis points as a percentage of sales as of December 12, 2007 compared to the prior year. 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 have selected Paul, Weiss, Rifkind, Wharton & Garrison LLP to represent them. Young Conaway Stargatt & Taylor, LLP, are the Debtors' proposed legal advisor and Houlihan Lokey Howard & Zukin Capital, Inc. and Kroll Zolfo Cooper LLC, their proposed financial advisors. 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). BUSINESS INNOVATIONS: Case Summary & 17 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Business Innovations Plus, Inc. 720 S. FOURTH ST., STE. 305 Las Vegas, NV 89101 Bankruptcy Case No.: 08-10786 Chapter 11 Petition Date: January 31, 2008 Court: District of Nevada (Las Vegas) Debtors' Counsel: Bonnie Jean Boyce, Esq. Albright, Stoddard, Warnick & Albright 801 S. Rancho Drive, Suite D-4 Las Vegas, NV 89106 Tel: (702) 384-7111 http://www.xmission.com/ Total Assets: $116,368 Total Debts: $1,421,090 Consolidated Debtors' List of 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service payrol taxes $570,000 MS: 5206: LVG. 2604 110 City Parkway Las Vegas, NV 89106 Tom R. Akers loan $569,000 3296 Cliff Sieler Court Las Vegas, NV 89117 Phillip Jung unpaid expenses $168,141 310-A Shadybrook Lane Las Vegas, NV 89107 Greg Peterson unpaid PR-unpaid $45,420 Mike Rice unpaid PR $15,369 Accountabilities, Inc. litigation $9,502 Linda McSweeney unpaid commission $8,600 Pacific Care...NCO Financial insurance $7,676 Employers Insurance of Nv contributions $5,670 Premium Processing AT&T Wireless Services utility $5,618 City of Las Vegas-License fees $5,267 Dept of Finance & Business Services Nevada Financial Center rent $4,012 Corestaff Services legal $2,570 Ryan M. Abate collection account $1,388 Palace Station Casino litigation $1,220 CNA Insurance disputed business $960 Sprint/Nextel cell phone $675 CABALLERO HOLDINGS: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Lead Debtor: Caballero Holdings, Ltd. 2805 Dallas N. Parkway, Suite 500 Plano, TX 75093 Bankruptcy Case No.: 08-40187 Type of Business: The Debtor owns and manages approximately 110 single family homes in the Dallas Fort Worth Metroplex. http://www.caballeroholdings.com/ Chapter 11 Petition Date: January 31, 2008 Court: Eastern District of Texas (Sherman) Debtors' Counsel: David L. Woods, Esq. McGuire, Craddock & Strother, P.C. 500 N. Akard, Suite 3550 Dallas, TX 75201 Tel: (214) 954-6847 Fax: (214) 954-6850 http://www.mcguirecraddock.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $100,000 to $500,000 The Debtor did not file a List of its 20 Largest Unsecured Creditors. CANAL CAPITAL: Todman & Co. Expresses Going Concern Doubt --------------------------------------------------------- Todman & Co., CPAs, P.C., raised substantial doubt about the ability of Canal Capital Corporation to continue as a going concern after it audited the company's financial statements for the year ended Oct. 31, 2007. The auditing firm reported that the company has suffered recurring losses from operations and is obligated to continue making substantial annual contributions to its defined benefit pension plan. The company posted a net loss from operations of $647,185 on total revenues of $598,305 for the year ended Oct. 31, 2007, as compared with a net loss from operations of $110,139 on total revenues of $1,132,868 in the prior year. At Oct. 31, 2007, the company's balance sheet showed $4,809,416 in total assets, $3,823,820 in total liabilities and $985,596 stockholders' equity. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?279f About Canal Capital Headquartered in Hauppauge, New York, Canal Capital Corporation (OTC: COWP) is engaged in two distinct businesses -- stockyard and real estate operations. Canal's real estate properties are located in Sioux City, Iowa, South St Paul, Minnesota, St Joseph, Missouri, Omaha, Nebraska and Sioux Falls, South Dakota. The properties consist, for the most part, of a commercial office space, land and structures leased to third parties as well as vacant land available for development or resale. Canal also operates two central public stockyards located in St. Joseph, Missouri and Sioux Falls, South Dakota. CATHOLIC CHURCH: Davenport Files Ch. 11 Plan of Reorganization -------------------------------------------------------------- The Diocese of Davenport and the Official Committee of Unsecured Creditors filed a Joint Consensual Plan of Reorganization on Jan. 31, 2008. The purpose of the Plan is to enable the Diocese to pay fair and just compensation to all survivors of abuse and to allow the Diocese to continue its ministry and service to the people of the Diocese. The Diocese negotiated a $37 million settlement with the Creditors Committee on Nov. 28, 2007. Of the $37 million settlement, $19.5 million is committed from Travelers Insurance Company and $17.5 million from the Diocese of Davenport. Of the $17.5 million from the Diocese, $3.9 million will come from the transfer of the deed to the St. Vincent Center property as valued by the Creditors Committee. The Diocese's share of the remaining $13.6 million is to be paid in cash. To date, $5.9 million of the $13.6 million has been committed from the St. Vincent Home Corporation and four parishes which will be named after they have had time to inform their parishioners. The four parishes had the most serious claims against them. The Diocese is considering the various options, including borrowing money, to raise the balance of the funds needed to meet the settlement. Details of the $37 million settlement will be included in the Joint Consensual Plan of Reorganization. The Plan must be approved by the Honorable Lee M. Jackwig, Chief Judge of the United States Bankruptcy Court, Southern District of Iowa, to be effective. Judge Jackwig has scheduled a hearing on March 5. If approved, the creditors will then vote on the Plan. Following the negotiations in November, Bishop Amos said, "The settlement provides the best opportunity for healing and for the just and fair compensation of those who have suffered sexual abuse by clergy in our Diocese. The settlement also provides the best way to continue the Church's mission in the Diocese of Davenport. While this settlement will not end the suffering by some victims of abuse, I pray that the healing process for them might begin." About Diocese of Davenport The Diocese of Davenport in Iowa filed for chapter 11 protection (Bankr. S.D. Ia. Case No. 06-02229) on Oct. 10, 2006. Richard A. Davidson, Esq., at Lane & Waterman LLP, represents the Davenport Diocese in its restructuring efforts. Hamid R. Rafatjoo, Esq., and Gillian M. Brown, Esq., at Pachulski Stang Zhiel Young Jones & Weintraub LLP represent the Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Davenport Diocese reported $4,492,809 in assets and $1,650,439 in liabilities. CHIQUITA INTERNATIONAL: Inks New Banana Pact with C.I. Banacol -------------------------------------------------------------- Chiquita Brands International Inc. disclosed in a regulatory filing with the Securities and Exchange Commission on Jan. 30, 2007, that its subsidiary International Chiquita International Limited, has entered into an agreement with an affiliate of C.I. Banacol S.A., a Colombia-based producer and exporter of bananas and other fruit products, relating to the purchase of bananas produced in Colombia. In 2004, Chiquita had sold its banana-producing and port operations in Colombia to Banacol, and at that time had entered into an 8-year banana purchase agreement. Pursuant to the New Banana Agreement, which is effective as of Jan. 1, 2008, Chiquita will purchase approximately 11 million boxes per year of bananas produced by Banacol in Colombia through June 2012 on terms comparable to the 2004 Banana Agreement, but subject to a price increase of up to $.25 per 40 lb. box if certain volume conditions are met and Banacol continues to remain current in certain of its obligations to Chiquita. In connection with entering into the New Banana Agreement, Chiquita and Banacol (i) terminated the 2004 Banana Agreement, effective as of Jan. 1, 2008, (ii) terminated, effective as of Dec. 31, 2007, an agreement which had been entered into in 2004 for Chiquita to purchase pineapples from affiliates of Banacol and (iii) entered into other commercial arrangements. The other commercial arrangements entered into by Chiquita and Banacol in connection with the New Banana Agreement and the termination of the 2004 Agreements include, among other things, arrangements providing for: (i) Banacol to make payments to Chiquita, or otherwise provide Chiquita with credits, of up to approximately $10.0 million in the aggregate between now and 2012, (ii) Chiquita to contract, subject to certain subcontract rights and at prices approximating current fair market value, for certain shipping space that otherwise would have been used to ship pineapples to Chiquita under the 2004 Pineapple Agreement, (iii) Banacol to increase its available supply to Chiquita of bananas it produces in Costa Rica by approximately two million boxes per year at prices approximating fair market value for a minimum of two years. About Chiquita Brands International Inc. Cincinnati, Ohio-based Chiquita Brands International, Inc. (NYSE: CQB) -- http://www.chiquita.com/-- markets and distributes fresh food products including bananas and nutritious blends of green salads. The company markets its products under the Chiquita(R) and Fresh Express(R) premium brands and other related trademarks. Chiquita employs approximately 25,000 people operating in more than 70 countries worldwide, including Belgium, Columbia, Germany, Panama, Philippines, among others. * * * To date, Chiquita Brands International Inc. carries Moody's Investors Service's B3 long term corporate family and Caa2 senior unsecured debt ratings which were last placed on Nov. 6, 2006. Outlook is Negative. CHIQUITA BRANDS: Posts $28.2 Million Net Loss in 2007 3rd Quarter ----------------------------------------------------------------- Chiquita Brands International Inc. reported a net loss of $28.2 million, including $4.0 million of charges relating to an earlier disclosed plan to exit owned operations in Chile. The company reported a net loss of $96.4 million, including a $43.0 million goodwill impairment charge related to Atlanta AG, the company's German distributor, in the year-ago period. Third quarter net sales increased 2.8% to $1.06 billion, versus net sales of $1.03 billion in the comparable period of 2006. Quarterly sales rose primarily due to higher banana pricing in core European and North American markets and favorable foreign exchange rates, partially offset by lower volumes in trading markets. "As we had anticipated, our third quarter, excluding charges, showed a modest improvement in year-over-year operating results," said Fernando Aguirre, chairman and chief executive officer. "While we continue to face rising industry costs and other market challenges, we expect to deliver further year-over-year progress in operating results in the fourth quarter and in the year ahead. "The banana pricing environment in Europe stabilized earlier in the year and improved in the third quarter, particularly in the aftermath of industry supply disruptions caused by Hurricane Dean. In addition, our value-added salads business showed significant year-on-year recovery in the third quarter, which we expect to continue in the fourth quarter and in 2008." The operating loss for the third quarter of 2007 was $9.7 million compared to an operating loss of $78.5 million in the third quarter of 2006. Operating results improved year-over-year due to higher banana pricing in core European markets, attributable to soft pricing in the year-ago period and to lower industry supply in 2007 due to Hurricane Dean, which impacted supply from the Caribbean beginning in late August 2007. Operating results also benefited from the absence of direct costs, such as lost raw product inventory and non-cancelable purchase commitments, incurred in the third quarter 2006 related to consumer concerns of the safety of fresh spinach products. The third quarter 2006 also was affected by the Atlanta AG goodwill impairment charge, which impacted both the Banana and Other Produce segments. Liquidity/Total Debt The company's cash balance was $124.0 million at Sept. 30, 2007, compared to $64.9 million at Dec. 31, 2006, and $101.6 million at Sept. 30, 2006. Operating cash flow was $14.7 million for the three months ended Sept. 30, 2007, compared to $22.8 million for the same period in 2006. The company repaid more than $40.0 million of debt during the quarter, from the proceeds of the ship sale transaction completed in June. As a result, the company's total debt at Sept. 30, 2007, was $815.0 million, compared to $857.0 million at June 30, 2007. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $2.64 billion in total assets, $1.76 billion in total liabilities, and $880.2 milllion 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?27a3 About Chiquita Brands International Inc. Cincinnati, Ohio-based Chiquita Brands International, Inc. (NYSE: CQB) -- http://www.chiquita.com/-- markets and distributes fresh food products including bananas and nutritious blends of green salads. The company markets its products under the Chiquita(R) and Fresh Express(R) premium brands and other related trademarks. Chiquita employs approximately 25,000 people operating in more than 70 countries worldwide, including Belgium, Columbia, Germany, Panama, Philippines, among others. * * * To date, Chiquita Brands International Inc. carries Moody's Investors Service's B3 long term corporate family and Caa2 senior unsecured debt ratings which were last placed on Nov. 6, 2006. Outlook is Negative. CINRAM INT'L: S&P Chips Corporate Rating to B+ on Weak Performance ------------------------------------------------------------------ Standard & Poor's Ratings Services said it lowered its corporate credit and bank loan ratings on prerecorded multimedia manufacturer Cinram International Inc., a wholly owned indirect subsidiary of Cinram International Income Fund, to 'B+' from 'BB- '. The '4' bank loan recovery rating remains unchanged. At the same time, S&P removed the ratings from CreditWatch with negative implications where they were placed Nov. 6, 2007. The outlook is stable. "The downgrade reflects Cinram's weakened financial performance for the nine months ended Sept. 30, 2007, which included a 25% drop in reported EBITDA on largely flat revenues compared with the same period the previous year," said Standard & Poor's credit analyst Lori Harris. As a result, the company's reported EBITDA margin declined to 13.1% for the nine months ended Sept. 30, 2007, from 17.1% for the same period the previous year, and 18.6% for the same period in 2005, because of lower prices and volume. At the same time, S&P expects digital distribution to become a larger source of studio revenues, which will contribute to a decline in DVD sales volume in the medium term. Because of these challenges, management has suspended monthly distributions to unitholders starting this month to improve Cinram's liquidity position. The ratings on Cinram reflect the company's limited financial flexibility and vulnerable business risk profile, which is based on customer and product concentration, seasonality, and the commodity-like nature of the media replication industry. Furthermore, the ratings reflect Standard & Poor's concerns about long-term industry fundamentals as S&P expects digital distribution to become a larger source of studio revenues. Partially offsetting these factors are Cinram's strong market position as the world's largest manufacturer of prerecorded multimedia products, solid credit protection measures, and management's track record of adapting to changing technologies. The stable outlook reflects Standard & Poor's expectation that Cinram will maintain its strong key market positions and solid credit measures in the medium term. Downward pressure on the ratings could come from debt-financed acquisitions, poor execution in the Motorola business, or deterioration in the company's operations stemming from the loss of a significant contract or the increased consumer acceptance of a competitive product or service. In the medium term, S&P sees limited potential for revising the ratings upward given the challenges associated with the media replication industry and Cinram's growth strategy. CITICORP RESIDENTIAL: S&P Reinstates Six Classes' Ratings From CCC ------------------------------------------------------------------ Standard & Poor's Ratings Services reinstated its pre-Jan. 30, 2008, ratings on six classes of residential mortgage-backed securities from Citicorp Residential Mortgage Trust Series 2007-1. Following the reinstatements, S&P placed these ratings on CreditWatch with negative implications. These classes represent an original par value of $35.29 million. The six classes were downgraded in conjunction with Standard & Poor's Jan. 30, 2008, U.S. RMBS subprime rating actions. This transaction, however, should not have been included in those actions because it is backed by fixed-rate loan collateral. Standard & Poor's will perform additional analysis related to