T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, February 5, 2008, Vol. 12, No. 30 1031 TAX GROUP: Okun Wants Turnover Deal Declared Void 1031 TAX GROUP: Ch. 11 Trustee to Sell Yacht for $9MM ABFC 2005: S&P's Rating on Class B2 Certs. Tumbles to D From CCC ABN AMRO: Fitch Affirms Low-B Ratings on 13 Certificate Classes ACCEPTANCE INSURANCE: Wants Until May 30 to File Chapter 11 Plan ACCEPTANCE INSURANCE: Court Approves PwC as Actuarial Accountant AK STEEL: S&P Upgrades Corporate Credit Rating to 'BB-' From 'B+' AMERICAN LAFRANCE: U.S. Trustee Appoints Creditors Committee AMERICAN LAFRANCE: Gets Authority to Use Lenders' Cash Collateral AMERICAN LAFRANCE: Can Obtain DIP Financing of Up to $10 Million AMERICAN LAFRANCE: Taps Klehr Harrison as Co-Counsel AMERICAN PACIFIC: S&P Lifts Corporate Credit Rating to B+ From B ANIXTER INTERNATIONAL: Earns $70.5 Million in Fourth Quarter 2007 AQUILA INC: Termination Date of Great Plains Merger Extended ARRIVA PHARMACEUTICALS: Bankruptcy Court Confirms Chapter 11 Plan ASHTON WOODS: Posts $15 Mil. Net Loss in Quarter Ended Nov. 30 ALL AMERICAN: Trustee Can Sell Plant Until March 21 Foreclosure AMEENA INVESTMENT: Voluntary Chapter 11 Case Summary AUGUA NEGRA: Voluntary Chapter 11 Case Summary BALLANTYNE RE: Projected Losses Prompt Moody's Rating Downgrades BARNERT HOSPITAL: Ends Operations Friday, Transfers 41 Patients BARNERT HOSPITAL: Wants Garfunkel, Wild and Travis as its Counsel BAYOU GROUP: Court OKs Panel's Rule 2004 Probe on Goldman Sachs BELO CORP: S&P Cuts Corporate Rating to BB After Planned Spin-off CALPINE CORP: Moody's Keeps Ratings at B2 After Bankruptcy Exit CAPITAL AUTO: S&P Attaches BB Rating on $5.013 Mil. Class D Notes CATHOLIC CHURCH: Milwaukee Archdiocese May File for Bankruptcy CELESTICA INC: Net Loss Down to $12MM in Qtr. Ended Dec. 31 CENDANT MORTGAGE: Fitch Holds 'B' Ratings on 16 Cert. Classes CENTRAL VERMONT: S&P Says Rate Hike MOU Approval is Credit Neutral CENTRAL ILLINOIS: Court OKs Barash & Everett as Bankruptcy Counsel CHRYSLER LLC: Total U.S. Sales Decreased 12% at 137,392 Units CHRYSLER LLC: Parts Shortage Prompts Closing of Four Facilities COMM 2007: Certs on Credit Watch Pending Macklowe Loan Maturity COMMERCIAL MORTGAGE: S&P Confirms Low-B Ratings on Three Classes COVENTREE INC: Ends ABCP Biz; Warns of Winding Up of Operations CREDIT SUISSE: Moody's Puts Ba1 Rating on Review for Possible Cut CROWN CITY: Moody's Puts Ba2-Rated Notes Due 2010 on Review CROWN CITY: Moody's Reviews Rating on Class E Notes for Likely Cut CSK AUTO: Weak Credit Metrics Cue Moody's B1 Rating Confirmation CSK AUTO: S&P Puts B- Rating on Positive Watch on Merger Proposal CHRISTOPHER RODRIGUEZ: Case Summary & 19 Largest Unsec. Creditors CHRYSLER LLC: Parts Shortage Prompts Closing of Four Facilities DANA CORP: Emerges from Chapter 11 Protection Effective Jan. 31 DEL LABORATORIES: $175MM Note Repayment Cues S&P to Vacate Ratings DELTA FINANCIAL: Committee Can Employ Hahn & Hessen as Counsel DISH NETWORK: Fitch Holds 'BB-' Issuer Default Rating DURA AUTOMOTIVE: Obtains Court OK for $170MM Replacement Loan ELYRIA FOUNDRY: S&P Rates Corporate Credit at B, Outlook Stable EUROFRESH INC: S&P Raises Corporate Credit Rating to 'CC' From 'D' FAIRPOINT COMM: Merger with Verizon Obtains Maine Regulatory OK FIELDSTONE MORTGAGE: Files Schedules of Assets and Liabilities FIELDSTONE MORTGAGE: Taps Murphy & Anderson as Local Counsel FIELDSTONE MORTGAGE: Wants American Mortgage as Special Co-Counsel FINANCE AMERICA: Five Certificates Obtains Moody's Junk Ratings FIRST FRANKLIN: S&P Revises Rating on Class M6 RMBS to 'BB' FORD MOTOR: January 2008 Sales Decreases 4% at 159,914 FORTUNOFF: Files Chapter 11 to Effectuate $100 Mil. NRDC Sale Deal FORTUNOFF: Case Summary & 30 Largest Unsecured Creditors FOSTER WHEELER: S&P Changes Outlook to Positive; Holds BB Rating FOX COLLISION: Court Set to Approve Sale of Assets on February 19 FORD MOTOR: Kicks Off 2008 with 9.6% Sales Increase in Canada GETTY IMAGES: Earns $28.5 Million in Fourth Quarter Ended Dec. 31 GLOBAL CASH: S&P Affirms BB- Corporate Rating on 10Q Filing Delay GLOBAL MOTORSPORT: Hires Epiq Bankruptcy as Claims Agent GENERAL MOTORS: Reports January 2008 Sales Up 2.1% at 252,565 GRAMERCY CRE: Fitch Affirms 'B' Rating on $35MM Class K Notes GREENPOINT MORTGAGE: S&P Reinstates Ratings on 15 Classes of RMBS GREENWICH CAPITAL: Fitch Puts $17.8M Certificates on Neg Watch GLOBAL VISION: Examiner Wants to Defer Report Submission to Apr. 8 HOLOGIC INC: Posts $358.6MM Net Loss for Qtr. Ended December 29 H&R BLOCK: Commences Lay Offs Meant to Cut Corporate Pay by 12% IAC/INTERACTIVECORP: Liberty Media Dispute to be Tried in March JOURNAL REGISTER: Reports $102.5 Million Net Loss for 2007 KB HOME: 4th Amendment to BofA's Loan Pact Cuts Amount by $2 Bil. KB HOME: Compensation Committee to Pay CEO $6 Million as Bonus KNOWLEDGE LEARNING: S&P Changes Outlook to Stable; Holds B+ Rating LBREP/L SUNCAL: S&P Junks Issuer, Loan Ratings on Weak Liquidity LEAR CORP: Earns $27 Million in 4th. Quarter Ended December 31 LEGENDS GAMING: S&P Cuts Ratings on Projected Covenant Violations LEVITT AND SONS: Lienholders Want 6 Units' Ch.11 Cases Dismissed LEVITZ FURNITURE: Harbinger Wants Order on GECC DIP Fund Reviewed LIBERTY MEDIA: Dispute with InterActiveCorp to be Tried in March LISA DEVRIES: Case Summary & Largest Unsecured Creditor LONG BEACH: Moody's Cuts 25 Tranches' Ratings on High Delinquency MAXJET AIRWAYS: Gets Go-Signal from Court to Auction Assets MEDICOR LTD: Wants February 25 to File Chapter 11 Plan MERITAGE MORTGAGE: Moody's Downgrades Ratings on 17 Certificates MOUNT HOPEWELL: Case Summary & Six Largest Unsecured Creditors MOVIE GALLERY: To Close 400 Underperforming Stores NICHOLS BROTHERS: Ice Floe Can Buy Assets for $9.1 Million NICHOLS BROTHERS: Wants Miles R. Stover as Financial Advisor NWT URANIUM: Sends Response to Azimut's Notice of Default OTZER CAPITAL: Case Summary & 18 Largest Unsecured Creditors PETROHAWK ENERGY: Moody's Affirms 'B2' Corporate Family Rating PROPERTY DEVELOPMENT: Bidder Hires Irell & Manella as Counsel PROSPECT MEDICAL: S&P Retains Negative Watch Posting of B- Rating QUEBECOR WORLD: U.S. Trustee Forms Seven-Member Creditors' Panel QUEBECOR WORLD: May Apply $1BB DIP Facility for LA and Europe Biz RADNOR HOLDINGS: Fails to Show Progress, Major Shareholders Says RALPH MCCLURE: Case Summary & 12 Largest Unsecured Creditors RETAIL PRO: Kevin Ralphs is New Interim Chief Financial Officer RF&B PROPERTIES: Case Summary & Two Largest Unsecured Creditors RICHARD ERIC POSTON: Case Summary & 16 Largest Unsecured Creditors RISKMETRICS GROUP: Moody's Upgrades Corporate Family Rating to Ba3 RIVERSIDE DEVELOPMENT: Involuntary Chapter 11 Case Summary RIVERSIDE ENERGY: Moody's Lifts Secured Loan Rating to Ba3 From B1 ROCKY MOUNTAIN: Moody's Lifts Loans Ratings to Ba3; Outlook Stable SAND TECHNOLOGY: Has CDN$881,951 Equity Deficit at July 31, 2007 SAWGRASS TOURS: Voluntary Chapter 11 Case Summary SINCLAIR BROADCAST: Buying Assets of KFXA-TV for $17.1 Million SOLOMON OLIVER: Case Summary & 20 Largest Unsecured Creditors SOLUTIA INC: To Pay $3.8 Million to Resolve EPA Claim SOLUTIA INC: Formally Asks $2 Billion Exit Funding from Citigroup STEP BY STEP: Case Summary & 20 Largest Unsecured Creditors ST MARY: Completes $131.6 Mil. Sale of Non-Strategic Assets TAUBMAN CENTERS: Unit, Cyber One to Invest $200M in The Mall TECHALT INC: Inks $1 Million Financing Pact w/ NY Investment Firm TIMKEN CO: Earnings Up to $48 Mil. in Quarter Ended December 31 TLC VISION: S&P Changes Outlook to Negative; Confirms 'B' Rating TOUSA INC: Taps Kirkland & Ellis as Lead Bankruptcy Counsel TRANS-INDUSTRIES: Tool Door Buys Unit's Property for $1.25 Million TYSON FOODS: Shareholders Elect Ten Directors; Expands in China U.S PANEL: Case Summary & Seven Largest Unsecured Creditors VILLAGEEDOCS INC: Stops Acquisition of Decision Management Company VILLAGEEDOCS INC: Posts $43,269 Net Loss in 2007 Third Quarter VISTEON CORP: Selling NA Facilities to Centrum Properties' Unit WACHOVIA AUTO: Fitch Cuts Rating on 2006-A Class B Trust to BB+ WICKES FURNITURE: Files for Chapter 11 Protection in Delaware WICKES HOLDINGS: Case Summary & 45 Largest Unsecured Creditors * Fitch Adjusts Loss Projections for Subprime RMBS * Fitch Says Cracks in U.S. Economy Will Affect Credit Cards * Fitch Updates Ratings Policy for U.S. Municipal Markets * Brown Rudnick Elects Nine Attorneys in the U.S. and U.K. * Lee Buchwald & Nicholas Kajon See Increase in Chapter 9 Cases * Michael Bruder Joins Macquarie Capital as Managing Director * Large Companies with Insolvent Balance Sheets ********* 1031 TAX GROUP: Okun Wants Turnover Deal Declared Void ------------------------------------------------------ Edward Okun, the former chief executive officer of The 1031 Tax Group, LLC, has asked the United States Bankruptcy Court for the Southern District of New York to void an October 2007 agreement with Gerard A. McHale, Jr., the Chapter 11 trustee appointed to oversee the bankrupt estate, according to various reports. Mr. Okun said Mr. McHale has "materially breached" the agreement by not giving Mr. Okun protection from a lawsuit by a creditor attempting to seize properties he was allowed to keep. Pursuant to the deal, Mr. Okun agreed to turn most of his properties to creditors and keep two multi-million dollar houses in Florida and New Hampshire, and two cars. Mr. Okun and his wife, Simone Bolanji, signed over most of their luxury items so that 1031 Tax Group's investors, many of whom lost much of their life savings when the company went bankrupt, can get some of their cash back, The Associated Press says. Mr. Okun said he and his family have "effectively entered into indentured servitude for the rest of our lives with no house or living budget" as a result of the deal, AP relates. The Chapter 11 Trustee sued Mr. Okun early in January for failure to turn over a Bentley automobile, a Rolls-Royce, a Porche 911, a Lamborghini and other property worth more than $600,000 in the aggregate. A hearing on Mr. Okun's request is scheduled for February 15. Headquartered in Richmond, Virginia, The 1031 Tax Group LLC -- http://www.ixg1031.com/-- is a privately held consolidated group of qualified intermediaries created to service real property exchanges under Section 1031 of the Internal Revenue Code. The company and 15 of its affiliates filed for Chapter 11 protection on May 14, 2007 (Bankr. S.D.N.Y. Case No. 07-11447 through 07-11462). Paul Traub, Esq., Norman N. Kinel, Esq., and Steven E. Fox, Esq., at Dreier LLP, represent the Debtors in their restructuring efforts. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent. Thomas J. Weber, Esq., Melanie L. Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig, LLP, represent the Official Committee of Unsecured Creditors. As of Sept. 30, 2007, the Debtors had total assets of $164,231,012 and total liabilities of $168,126,294, resulting in a total stockholders' deficit of $3,895,282. Gerard A. McHale, Jr., was appointed as the Debtors' Chapter 11 trustee on Oct. 25, 2007. Jonathan L. Flaxer, Esq., at Golenbock Eiseman Assor Bell & Peskoe LLP, represents Mr. McHale. Michael C. Markham, Esq., and Angelina E. Lim, Esq., at Johnson Pope Bokor Ruppel & Burns LLP, in Clearwater, Florida, serve as the Chapter 11 Trustee's co-counsel. 1031 TAX GROUP: Ch. 11 Trustee to Sell Yacht for $9MM ----------------------------------------------------- Gerard A. McHale, Jr., the Chapter 11 trustee appointed to oversee The 1031 Tax Group, LLC and its affiliates' estates, seeks permission from United States Bankruptcy Court for the Southern District of New York to sell a 132-foot yacht to Kelly Capital, free and clear of liens, for $9,000,000. The yacht is owned by Okun Water, Ltd. Mr. McHale also seeks the Court's authority to hire Moran Yacht & Ship, Inc., as broker. Moran will be paid a 5% commission and reimbursed of its necessary expenses. Wachovia Financial Services, Inc., has a lien on the yacht, according to a review by Moran. The broker has yet to complete a lien search on the yacht. Moran has advised the Chapter 11 Trustee that the Kelly offer is the highest and best offer likely to be received. Headquartered in Richmond, Virginia, The 1031 Tax Group LLC -- http://www.ixg1031.com/-- is a privately held consolidated group of qualified intermediaries created to service real property exchanges under Section 1031 of the Internal Revenue Code. The company and 15 of its affiliates filed for Chapter 11 protection on May 14, 2007 (Bankr. S.D.N.Y. Case No. 07-11447 through 07-11462). Paul Traub, Esq., Norman N. Kinel, Esq., and Steven E. Fox, Esq., at Dreier LLP, represent the Debtors in their restructuring efforts. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent. Thomas J. Weber, Esq., Melanie L. Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig, LLP, represent the Official Committee of Unsecured Creditors. As of Sept. 30, 2007, the Debtors had total assets of $164,231,012 and total liabilities of $168,126,294, resulting in a total stockholders' deficit of $3,895,282. Gerard A. McHale, Jr., was appointed as the Debtors' Chapter 11 trustee on Oct. 25, 2007. Jonathan L. Flaxer, Esq., at Golenbock Eiseman Assor Bell & Peskoe LLP, represents Mr. McHale. Michael C. Markham, Esq., and Angelina E. Lim, Esq., at Johnson Pope Bokor Ruppel & Burns LLP, in Clearwater, Florida, serve as the Chapter 11 Trustee's co-counsel. ABFC 2005: S&P's Rating on Class B2 Certs. Tumbles to D From CCC ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class B2 asset-backed certificates issued by ABFC 2005-WMC1 Trust to 'D' from 'CCC'. The downgrade of class B2 to 'D' reflects a principal write-down of $602,943 during the January 2008 remittance period. Subordination, overcollateralization, and excess spread provide credit support for this transaction. The collateral consists primarily of fully amortizing, fixed- and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. ABN AMRO: Fitch Affirms Low-B Ratings on 13 Certificate Classes --------------------------------------------------------------- Fitch has taken rating action on these ABN AMRO Mortgage Corporation pass-through certificates: Series 2003-1 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-4 affirmed at 'BB-'. Series 2003-2 -- Class A affirmed at 'AAA'; Series 2003-3 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AAA'; -- Class B-1 upgraded to 'AA+' from 'AA'; -- Class B-2 upgraded to 'A+' from 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'. Series 2003-4 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AAA'; -- Class B-1 upgraded to 'AA+' from 'AA'; -- Class B-2 upgraded to 'A+' from 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'. Series 2003-5 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A-'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'. Series 2003-6 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA+'; -- Class B-1 affirmed at 'A'; -- Class B-2 affirmed at 'BBB-'; -- Class B-3 affirmed at 'BB+'; -- Class B-4 affirmed at 'B+'. Series 2003-7 -- Class A affirmed at 'AAA'; -- Class B-1 upgraded to 'AA-' from 'A'; -- Class B-4 affirmed at 'B'. Series 2003-8 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA+'; -- Class B-1 upgraded to 'A' from 'A-'; -- Class B-2 upgraded to 'BBB' from 'BBB-'; -- Class B-3 affirmed at 'BB'; -- Class B-4 affirmed at 'B'. Series 2003-9 -- Class A affirmed at 'AAA'. Series 2003-10 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 affirmed at 'A'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 affirmed at 'BB'; -- Class B-4 affirmed at 'B'. Series 2003-11 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'A-'; -- Class B-3 affirmed at 'BB'; -- Class B-4 affirmed at 'B'. Series 2003-13 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA+'; -- Class B-1 upgraded to 'A+' from 'A'; -- Class B-2 upgraded to 'BBB+' from 'BBB'; -- Class B-3 affirmed at 'BB+'; -- Class B-4 affirmed at 'B'. The affirmations reflect a stable relationship between credit enhancement and expected losses, and affect approximately $1.99 billion in outstanding certificates. The upgrades reflect an improvement in the relationship between CE and expected losses, and affect approximately $16.53 million in outstanding certificates. The pool factors range from approximately 23% to 66%, and the transactions are seasoned in a range of 48 months and 59 months. The CE levels for all classes originally rated 'B' range from approximately 0.15% to 0.66%. ACCEPTANCE INSURANCE: Wants Until May 30 to File Chapter 11 Plan ---------------------------------------------------------------- Acceptance Insurance Companies Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Nebraska to further extend their exclusive periods to: a) file a Chapter 11 plan until May 30, 2008; and b) solicit acceptances of that plan until July 30, 2008. The Debtors tell the Court that they need sufficient time to negotiate and propose a Chapter 11 plan of reorganization and to rehabilitate their business. The Debtors relate that the Official Committee of Unsecured Creditors has retained StoneRidge Advisors LLC to assist the Committee, as well the Debtors, with transactions that may form the basis of a plan. John J. Jolley, Jr., Esq., at Kutak Rock LLP in Omaha, Nebraska, says that the Debtors have yet to resolve Granite Reinsurance Ltd.'s $10 million claim against the Debtors, which is pending before the Bankruptcy Appellate Panel for the Eighth Circuit Court of Appeals. An oral argument has been scheduled to take place on Feb. 13, 2008. The Debtors' plan exclusive period to file a plan expired on Jan. 31, 2008. Headquartered in Council Bluffs, Iowa, Acceptance Insurance Companies Inc. -- http://www.aicins.com/-- owns, either directly or indirectly, several companies, one of which is an insurance company that accounts for substantially all of the business operations and assets of the corporate groups. The company filed for chapter 11 protection on Jan. 7, 2005 (Bankr. D. Nebr. Case No. 05-80059). The Debtor's affiliates -- Acceptance Insurance Services Inc. and American Agrisurance Inc. -- each filed chapter 7 petitions (Bankr. D. Nebr. Case Nos. 05-80056 and 05-80058) on Jan. 7, 2005. John J. Jolley, Esq., at Kutak Rock LLP, represents the Debtor in its restructuring efforts. Lawyers at McGrath North Mullin & Kratz, PC LLO represent the the Official Committee of Unsecured Creditors in Acceptance Insurance's case. As of December 2007, Debtor listed $36,326,172 in total assets and $138,187,943 in total debts. ACCEPTANCE INSURANCE: Court Approves PwC as Actuarial Accountant ---------------------------------------------------------------- The Honorable Timothy J. Mahoney of the United States Bankruptcy Court for the District of Nebraska gave Acceptance Insurance Companies Inc. and its debtor-affiliates authority to employ PricewaterhouseCoopers LLC as its actuarial accountant. As the Debtors' actuarial accountant, the firm will to prepare an actuarial report regarding certain gross loss and allocated loss adjustment expense reserves as of Dec. 31, 2007, for its Acceptance Indemnity Insurance Company and Redland Insurance Company subsidiary. The firm is expected to deliver these reports: Draft Reserve Indications January 21-25, 2008 Draft Report February 2, 2008 Final Report February 9, 2008 The Debtors said that the firm will bill between $15,000 and $25,000 for this engagement. Christopher Walker, a principal of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Walker can be reached at: Christopher Walker PricewaterhouseCoopers LLP One North Wacker Chicago, IL 60606 Tel: (312) 298-2000 Fax: (312) 298-2001 Headquartered in Council Bluffs, Iowa, Acceptance Insurance Companies Inc. -- http://www.aicins.com/-- owns, either directly or indirectly, several companies, one of which is an insurance company that accounts for substantially all of the business operations and assets of the corporate groups. The company filed for chapter 11 protection on Jan. 7, 2005 (Bankr. D. Nebr. Case No. 05-80059). The Debtor's affiliates -- Acceptance Insurance Services Inc. and American Agrisurance Inc. -- each filed chapter 7 petitions (Bankr. D. Nebr. Case Nos. 05-80056 and 05-80058) on Jan. 7, 2005. John J. Jolley, Esq., at Kutak Rock LLP, represents the Debtor in its restructuring efforts. Lawyers at McGrath North Mullin & Kratz, PC LLO represent the the Official Committee of Unsecured Creditors in Acceptance Insurance's case. As of December 2007, Debtor listed $36,326,172 in total assets and $138,187,943 in total debts. AK STEEL: S&P Upgrades Corporate Credit Rating to 'BB-' From 'B+' ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit and other ratings on AK Steel Corp. and its parent, AK Steel Holding Corp., to 'BB-' from 'B+'. The outlook is stable. "The upgrade reflects the West Chester, Ohio, company's improved cost profile from the restructuring and better funding position of its postretirement obligations, lower book debt levels, and currently favorable market conditions, particularly for its high- value-added products," said Standard & Poor's credit analyst Marie Shmaruk. "These improvements, together with management's commitment to preserve a conservative balance sheet and adequate liquidity, should enable AK Steel to maintain a financial profile commensurate with the higher rating during the next cyclical downturn." AK Steel manufactures flat-rolled carbon, stainless, and electrical steel, which competes in cyclical and capital-intensive markets AK Steel benefits from a good liquidity position and from the expectation that relatively favorable conditions will persist in the company's key markets for at least the next year. "We could change the outlook to negative or lower ratings if market conditions weaken materially, resulting in increased leverage. We could also do so if the company doesn't realize legacy cost improvements, resulting in increased leverage, a weakened financial profile and a less-favorable cost profile," Ms. Shmaruk said. "We could change the outlook to positive within the next year or so if industry conditions are stronger than expected, the company realizes the expected cost savings, and its financial profile continues to improve. We could also revise the outlook or upgrade the rating if the company acts to enhance its diversity, size, scale, and scope without damaging its financial profile." AMERICAN LAFRANCE: U.S. Trustee Appoints Creditors Committee ------------------------------------------------------------ Kelly Beaudin Stapleton, the United States Trustee for Region 3, appoints five members to the Official Committee of Unsecured Creditors of the Chapter 11 case of American LaFrance LLC. The Creditors Committee members are: 1. Daimler Trucks North American, LLC Attn: Stefan H. Kurschner P.O. Box 3849 MP9-EXC Portland, Oregon 97208-3849 Tel. No.: (503) 745-6204 Fax. No.: (503) 745-8188 2. Bennett Motor Express, LLC Attn: Grant R. Booker P.O. Box 569 1001 Industrial Parkway, McDonough, Georgia 30253 Tel. No.: (770) 957-1866 extension 779 Fax. No.: (800) 874-2933 3. Hale Products, Inc./Class One, Inc. Attn: Craig T. Boyd 607 N. W. 27th Avenue, Ocala, Florida 34475 Tel. No.: (847) 664-4715 Fax. No.: (803) 216-7640 4. Ryder Integrated Logistics Attn: Michael Mandell, Corporate Collection Manager 11690 NW 105th St. Miami, Florida 33178 Tel. No.: (305) 500-4417 Fax. No.: (305) 500-3336 5. Rehoboth Beach Volunteer Fire Company, Inc. Attn: Donald Edward Mitchell, Sr., President P.O. Box 327 Rehoboth Beach, Delaware 19971 Tel. No.: (302) 227-8400 Fax. No.: (302) 227-8960 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). AMERICAN LAFRANCE: Gets Authority to Use Lenders' Cash Collateral ----------------------------------------------------------------- The Hon. Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware authorized American LaFrance LLC, to use their prepetition lenders' cash collateral, subject to certain funding and budget limitations, from Jan. 28, 2008, to and including the earlier of: -- notice of the occurrence of an event of default; and -- the Feb. 21, 2008 final hearing on the matter. As reported in the Troubled Company Reporter on Jan. 30, 2008, Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, in Wilmington, Delaware, the Debtor's proposed local counsel, told the Court that the authority to use cash collateral is necessary for the Debtor to maintain business relationships and confidence with vendors, suppliers and customers, to satisfy other working capital and operational needs, to meet ongoing business payroll disbursements, and to maintain employee morale. As adequate protection for the Prepetition Lenders' interests in the cash collateral, the Debtor will grant the Prepetition Lenders valid perfected and unavoidable first-priority replacement liens in all of the Debtors' properties and assets. As of American LaFrance's bankruptcy filing date, the aggregate amount due to the Prepetition Lenders under the company's credit agreement was $150,241,313 in unpaid principal and $4,225,767 in accrued but unpaid interest, plus all other fees, costs and obligations of the Debtor. To secure its performance under the Prepetition Credit Agreement, the Debtor granted a first-priority lien and security interest in substantially all of its assets to the Prepetition Lenders. 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. The 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. 3; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN LAFRANCE: Can Obtain DIP Financing of Up to $10 Million ---------------------------------------------------------------- The Hon. Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware allowed American LaFrance LLC, to borrow up to $10,000,000, on an interim basis, in accordance with a debtor-in-possession financing agreement with ZOHAR CDO 2003-1 Limited, ZOHAR II 2005-1, Limited, and ZOHAR III, Limited, and Patriarch Partners Agency Services LLC, as agent for the Lenders. The authority terminates, unless extended by written agreement of the parties, on the earlier of: -- the occurrence of an event of default; and -- final DIP hearing on Feb. 21, 2008. At the Feb. 21 hearing, the Debtor will seek the Court's permission to borrow up to $50,000,000 from the DIP Lenders. The Debtor's loan obligations are secured by valid and perfected first-priority liens superior to all other liens in all of the Debtor's unencumbered property, subject to a carve-out for: (a) statutory fees payable to the U.S. Trustee pursuant to Section 1930(a)(6) of the Judiciary and Judicial Procedures Code; (b) fees payable to the Clerk of the Bankruptcy Court; and (c) unpaid and outstanding fees and expenses incurred as of the Petition Date and approved by the Court of (i) the professionals retained by the Debtor of up to $950,000; and (ii) the professionals retained by a statutory committee in the Debtor's cases of up to $200,000. The proposed $50,000,000 DIP Facility will mature on the earliest of: (i) May 1, 2008; (ii) the date the Debtor terminates the commitment of the DIP Lenders to make the Postpetition Loan; (iii) the date the DIP Agent terminates the commitment of the DIP Lenders to make the Postpetition Loan upon the occurrence of a Postpetition Default; (iv) the effective date of a confirmed plan of reorganization for the Debtor; or (v) the date on which the Bankruptcy Court approves the extension of any other credit facility 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. 3; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN LAFRANCE: Taps Klehr Harrison as Co-Counsel ---------------------------------------------------- American LaFrance LLC seeks authority from the U.S. Bankruptcy Court for the District of Delaware to employ Klehr, Harrison, Harvey, Branzburg & Ellers LLP, as its co-counsel, nunc pro tunc to Jan. 28, 2008. Klehr Harrison will: (a) provide legal advice with respect to ALF's powers and duties as a debtor-in-possession in the continued operation of its business and management of its property; (b) take necessary action to protect and preserve the Debtor's estate, including assisting in the prosecution of actions on behalf of the Debtor, the defense of any action commenced against the Debtor, negotiations concerning all litigation in which the Debtor is involved, and objecting to claims field against the Debtor's estate; (c) negotiate and draft any agreements for the sale or purchase of assets of ALF, if appropriate; (d) negotiate and draft a plan of reorganization, consensual or otherwise, and all related documents; (e) render other legal services for ALF as may be necessary and appropriate; and (f) advise the Debtor with respect to the local rules and practice and procedure before the United States Bankruptcy Court for the District of Delaware. Klehr Harrison will consult with Haynes and Boone, LLC, the Debtors' lead counsel, to ensure that there is no duplication of efforts According to William Hinz, ALF president and chief executive officer, because of the extensive legal services that may be necessary in ALF's Chapter 11 case, and the fact that the nature and extent of the services are not known at this time, the employment of Klehr Harrison as counsel for all purposes under a general retainer would be appropriate and in the best interests of the constituency the Debtor represents. Klehr Harrison will be paid according to its normal hourly rates, and reimbursed for out-of-pocket expenses. The principal attorneys and paralegals assigned to ALF and their current hourly rates are: Joanne B. Wills, Esq. $525 Christopher A. Ward, Esq. $300 Melissa K. Hughes, paralegal $150 The hourly rates are subject to periodic increase in the normal course of the firm's business. Joanne B. Wills, Esq., a partner at Klehr Harrison, relates that due to the size and diversity of the firm's practice, Klehr Harrison may have represented or otherwise dealt with, and may not be representing or otherwise dealing with various persons who are or may consider themselves creditors, equity security holders or parties-in-interest in ALF's Chapter 11 case, but who are not presently identified as creditors or equity security holders. However, those representations or involvement, if any, does not relate to the Debtor or its estate, Ms. Wills assures the Court. 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. The 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. 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. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN PACIFIC: S&P Lifts Corporate Credit Rating to B+ From B ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings, including the corporate credit rating, on American Pacific Corp. to 'B+' from 'B'. At the same time, S&P raised its rating on the company's existing senior unsecured notes due 2015 to 'B+' from 'B'. The outlook is stable. The upgrade acknowledges Las Vegas-based American Pacific's improving operating performance, the strengthening of the financial profile, improved visibility of future revenue streams, and good prospects for maintaining credit quality. "We expect American Pacific to preserve credit metrics near current levels, even as it continues to pursue modest investments and acquisitions to further grow and diversify its fine chemicals business," said Standard & Poor's credit analyst Henry Fukuchi. ANIXTER INTERNATIONAL: Earns $70.5 Million in Fourth Quarter 2007 ----------------------------------------------------------------- Anixter International Inc. reported on Tuesday results for the quarter ended Dec. 28, 2007. Anixter International Inc. reported net income of $70.5 million for the fourth quarter ended Dec. 28, 2007, inclusive of a benefit of $9.7 million primarily related to foreign tax benefits and the finalization of prior year's tax returns, compared to net income of $52.4 million in last year's fourth quarter when the company reported a benefit of $4.2 million primarily related to tax benefits associated with its foreign operations. For the three-month period ended Dec. 28, 2007, the company reported sales of $1.49 billion. Included in the current year's fourth quarter results was $20.5 million of incremental sales from a series of acquisitions completed in the past year. After adjusting for acquisitions and the favorable foreign exchange impact of $50.5 million, fourth quarter sales grew at a year-over- year organic rate of 9.0%. In the prior year period, the company reported sales of $1.30 billion. Operating income in the fourth quarter increased 27.0% to $114.4 million as compared to $90.4 million in the year ago quarter. For the latest quarter, operating margins were 7.7% compared to 7.0% in the fourth quarter of 2006. Twelve Month Results For the twelve-month period ended Dec. 28, 2007, sales of $5.85 billion produced net income of $253.5 million. The 2007 results include incremental sales of $125.5 million from a series of acquisitions completed in the past year. After adjusting for acquisitions and the favorable foreign exchange impact of $139.3 million, full year sales grew at a year-on-year organic rate of 13.0%. Net income in 2007 also includes $11.8 million primarily related to foreign tax benefits and the finalization of prior year's tax returns. In the prior year period, sales of $4.94 billion produced net income of $209.3 million. In addition to the previously discussed tax benefits recorded in the prior year's fourth quarter associated with the company's foreign operations, the 2006 twelve- month results include $22.8 million of income primarily associated with a refund from the U.S. Internal Revenue. This refund was the result of the final settlement of income taxes covering the period of 1996 through 1998. Operating income in fiscal 2007 increased by 30.0% to $439.1 million as compared to $337.1 million in the prior fiscal year. Operating margins in 2007 were 7.5% as compared to 6.8% in the prior year. Robert Grubbs, president and chief executie officer, stated, "We are very pleased with the strong financial results in the quarter and the year. Our success in expanding our product and supply chain offering, along with an intense focus on broadening and diversifying our global customer base, drove record sales, operating margins and net income in 2007. We enter 2008 confident in our ability to continue executing on our growth strategies including further expanding our customer base as well as growing with our existing customers." Cash Flow and Leverage "In the fourth quarter we generated $92.9 million in cash from operations, up significantly compared to the $17.0 million generated in the year ago quarter," said Dennis Letham, executive vice president-finance. "The positive cash flow in the quarter reflects the normal seasonal patterns associated with the previously discussed slight drop in consecutive quarter sales due to the number of holidays in the fourth quarter and the related effects on working capital needs." "During the fourth quarter the company repurchased 1,250,000 of its outstanding shares at a total cost of $82.1 million. When combined with the 3,000,000 shares repurchased during the first quarter of 2007 for $162.7 million, the company repurchased 4,250,000, or 10.8% of the outstanding shares it had at the start of 2007, for a total consideration of $244.8 million or an average of $57.61 per share," continued Letham. Letham added, "Working capital requirements associated with our year-on-year sales growth consumed $139.8 million of cash during 2007. The company also completed two acquisitions for total consideration of $35.2 million. The share repurchases, added working capital requirements and acquisition costs were financed from a combination of a $300 million convertible bond offering completed in the first quarter of 2007 and added borrowings under bank lines of credit. "The company ended 2007 with a debt-to-total capital ratio of 49.4% as compared to 45.7% at the end of 2006. For the fourth quarter the weighted-average cost of borrowed capital was 4.3% as compared to 5.4% in the year ago quarter. At the end of the fourth quarter, approximately 77.0% of our total borrowings of $1.02 billion had fixed interest rates, either by the terms of the borrowing agreements or through hedge contracts. We also had $243.0 million of available, unused credit facilities at Dec. 28, 2007, which provide us with the resources to support continued strong organic growth and to pursue other strategic alternatives, such as acquisitions, in the new year." Balance Sheet At Dec. 28, 2007, the company's consolidated balance sheet showed $3.02 billion in total assets, $1.97 billion in total liabilities, and $1.05 billion in total stockholders' equity. About Anixter Headquartered in Glenview, Illinois, Anixter International Inc. (NYSE: AXE) -- http://www.anixter.com/-- is a distributor of communication products, electrical and electronic wire & cable and a distributor of fasteners and other small parts to Original Equipment Manufacturers. * * * To date, Anixter International Inc. carries Fitch Ratings' BB+ Issuer Default Rating and BB- Senior Unsecured Debt Rating. AQUILA INC: Termination Date of Great Plains Merger Extended ------------------------------------------------------------ Aquila Inc., in a regulatory SEC filing dated Jan. 31, 2008, disclosed that the company, Great Plains Energy Incorporated, and Black Hills Corporation extended the termination date of their Agreement and Plan of Merger, Asset Purchase Agreement and Partnership Interests Purchase Agreement from Feb. 6, 2008, until May 1, 2008. A full-text copy of the mutual extension is available for free at: http://researcharchives.com/t/s?27b5 As reported in the Troubled Company Reporter on Feb. 8, 2007, Great Plains Energy Incorporated and Aquila Inc., both of Kansas City, Mo., and Black Hills Corporation of Rapid City, South Dakota, entered into definitive agreements for two separate transactions, under which: -- Great Plains Energy will acquire all the outstanding shares of Aquila and its Missouri-based electric utility assets for $1.80 in cash plus 0.0856 of a share of Great Plains Energy common stock for each share of Aquila common stock in a transaction valued at approximately $1.7 billion, or $4.54 per share, based on Great Plains Energy's closing stock price on Feb. 6, 2007. In addition, Great Plains Energy will assume approximately $1 billion of Aquila's net debt. -- Immediately before Great Plains Energy's acquisition of Aquila, Black Hills will acquire from Aquila its electric utility in Colorado and its gas utilities in Colorado, Kansas, Nebraska, and Iowa along with the associated liabilities for a total of $940 million in cash, subject to closing adjustments. * * * Aquila Inc. still carries Moody's Investors Service's Ba2 corporate family, Ba3 Senior Unsecured Debt, and Ba3 probability- of-default ratings. ARRIVA PHARMACEUTICALS: Bankruptcy Court Confirms Chapter 11 Plan ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California has confirmed Arriva Pharmaceuticals Inc.'s Chapter 11 plan, Bill Rochelle of Bloomberg News, reports. As reported in the Troubled Company Reporter on Dec. 21, 2007, the Plan proposes to pay unsecured creditors in full or "something close" with a pool of $776,000 available to satisfy their claims. The Debtor has secured $6 million in new financing to continue drug development. Headquartered in Alameda, California, Arriva Pharmaceuticals Inc. -- http://www.arrivapharm.com/-- is a privately held biopharmaceutical company focused on the development and commercialization of anti-inflammatory therapies for the treatment of respiratory diseases. The Debtor is also known as AlphaOne Pharmaceuticals Inc. The Debtor filed for Chapter 11 bankruptcy protection on Aug. 29, 2007 (Bankr. N.D. Calif. Case No. 07-42767). Ori Katz, Esq., at Sheppard, Mullin, Richter and Hampton LLP represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed assets and debts between $1 million to $100 million. ASHTON WOODS: Posts $15 Mil. Net Loss in Quarter Ended Nov. 30 -------------------------------------------------------------- Ashton Woods USA LLC reported financial results for three months and six months ended Nov. 30, 2007. The company reported net loss of $15.10 million for the quarter ended Nov. 30, 2007, compared to net income of $3.05 million for the same period in the previous year. For six months ended Nov. 30, 2007, the company reported $25.72 million net loss, compared to $14.53 million net income for the same period in the previous year. Liquidity and Capital Resources The company's principal uses of cash are land purchases, lot development and home construction. The company funded its operations with cash flows from operating activities and/or borrowings under its senior unsecured revolving credit facility. As of Nov. 30, 2007, the company's ratio of total debt to total capitalization was 55.9%, compared to 52.1% as of May 31, 2007. Total debt to total capitalization consists of notes payable divided by total capitalization or notes payable plus members' equity. During the six months ended Nov. 30, 2007, the company provided approximately $6.2 million from its operating activities. The company has a net loss of $25.7 million and a $3.4 million increase in accounts receivable, which was offset by an impairment loss of $34.8 million. During the six months ended Nov. 30, 2006, the company used approximately $1 million in cash from operating activities as a result of $31.4 million spending on inventory supply, which was partially offset by net income of $14.5 million and $10.8 million decrease in accounts receivable. Cash used in investing activities totaled $2.6 million for the six months ended Nov. 30, 2007, which reflected additions to capital assets of $3 million. Cash used in investing activities totaled $2.7 million for the six months ended Nov. 30, 2006 due to additions to capital assets of $2.5 million. During the six months ended Nov. 30, 2007, cash used in financing activities totaled $3.1 million, which included borrowings under its senior unsecured revolving credit facility of $37 million and repayments of amounts outstanding under its senior unsecured revolving credit facility of $39.1 million. The company made distributions of $0.8 million to its members for the payment of federal and state income taxes. Net cash provided by financing activities totaled $3.6 million in the six months ended Nov. 30, 2006. The company incurred borrowings under its senior unsecured revolving credit facility of $108 million, made repayments of amounts outstanding under its senior unsecured revolving credit facility of $84.1 million and made distributions of $20.3 million to its members for the payment of federal and state income taxes and as general distributions of income. Balance Sheet At Nov. 30, 2007, the company's balance sheet showed total assets of $385.09 million, total liabilities of $238.58 million and total members' equity of $146.51 million. About Ashton Woods USA Headquartered in Atlanta, Georgia, Ashton Woods USA LLC is a private homebuilders. The company designs, builds and markets single-family detached homes, town homes and stacked-flat condominiums under the Ashton Woods Homes brand name. The company operates in Atlanta, Dallas, Houston, Orlando, Phoenix, Tampa and Denver. * * * As reported in the Troubled Company Reporter on Jan. 29, 2008, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit ratings on Ashton Woods USA LLC and its subsidiary, Ashton Woods Finance Co. At the same time, S&P affirmed its 'B-' rating on the company's $125 million senior subordinated notes. Concurrently, S&P revised its outlook on Ashton Woods to negative from stable. ALL AMERICAN: Trustee Can Sell Plant Until March 21 Foreclosure --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Washington has authorized Michael Hitt, the Chapter 7 trustee overseeing the liquidation of All American Bottled Water Corp., to sell a 120- acre property before its foreclosure on March 21, 2008, various sources say. The Olympian discloses that after a year of administering the Debtor's case, Mr. Hitt hasn't received offers that would pay for the $36.5 million the Debtor owes Bar K Inc. The lender is expected to wind up with the property, Mr. Hitt observes. As reported in the Troubled Company Reporter on Dec. 19, 2007, Mr. Hitt received three bids for the company's brewery plant, which are well below the market value, paving the way for a possible foreclosure. The Hon. Paul J. Snyder permitted the foreclosure of the property if the bankruptcy trustee cannot negotiate a sale. Bar K of Lafayette, California, financed the sale of the property in 2004. All American Bottled Water Corp. bought the brewery plant from Miller Brewing Co. in 2004. The company eventually landed in bankruptcy in 2006 after three creditors filed involuntary petition against it (Bankr. W.D. Wash. Case No. 06-43133). AMEENA INVESTMENT: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Ameena Investment, Inc. 3400 Moreland Avenue Conley, GA 30288 Tel: (678) 346-1552 Bankruptcy Case No.: 08-61778 Chapter 11 Petition Date: February 2, 2008 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: J. Robert Thompson, Esq. P.O. Box 831912 Stone Mountain, GA 30083 Tel: (770) 925-7999 Fax: (770) 925-7943 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its largest unsecured creditors. AUGUA NEGRA: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Augua Negra Springs Ranch, L.L.C. 28150 North Alma School Parkway Scottsdale, AZ 85262 Bankruptcy Case No.: 08-00968 Chapter 11 Petition Date: February 1, 2008 Court: District of Arizona (Phoenix) Judge: Randolph J. Haines Debtor's Counsel: Robert M. Cook, Esq. Missouri Commons-Suite 185 1440 East Missouri Phoenix, AZ 85014 Tel: (602) 285-0288 Fax: (602) 285-0388 Total Assets: $1 Million to $10 Million Total Debts: $1 Million to $10 Million The Debtor did not file a list of its largest unsecured creditors. BALLANTYNE RE: Projected Losses Prompt Moody's Rating Downgrades ---------------------------------------------------------------- Moody's Investors Service downgraded these notes of Ballantyne Re plc: - $250 million of 30-year Class A-1 Floating Rate Notes -- Current Rating: Baa3, on review for downgrade -- Prior Rating: Aa2 - $10 million of 30-year Class B-1 Subordinated Fixed Rate Notes -- Current Rating: B1, on review for downgrade -- Prior Rating: Baa1 - $40 million of 30-year Class B-2 Subordinated Floating Rate Notes -- Current Rating: B1, on review for downgrade -- Prior Rating: Baa1 Ballantyne Re is a special purpose reinsurer sponsored by Scottish Annuity & Life Insurance Company Ltd. (Baa3 insurance financial strength, negative outlook) for the purpose of financing the excess reserve requirement associated with a block of business ceded by Scottish Re, Inc. (Baa3 insurance financial strength, negative outlook), a subsidiary of Scottish Re Group Limited ((P)Ba3 senior unsecured, negative outlook). The reinsurance agreement between Scottish Re Inc. and Ballantyne Re covers a defined block of level premium term life policies subject to the statutory reserve requirements of Regulation XXX, which are considered to be economically redundant by Moody's. According to Moody's, the downgrades are primarily based on projected losses in Ballantyne Re's investment portfolio -- particularly investments in subprime and Alt-A residential mortgage-backed securities -- that support the repayments of the notes. The losses on the RMBS securities include both realized credit impairments as well as substantial unrealized mark-to- market losses, although none of the securities in the Ballantyne Re portfolio have experienced a default to date. The performance of the underlying level premium term business supporting the reserve funding structure is consistent with Moody's original expectations, and is not directly affected by movements in the investment portfolio. The rating agency said that the quarterly requirement for Ballantyne Re to true up the market value of the assets held in the reserve credit trust to the level of the statutory reserves, combined with the investment losses on the RMBS securities, have significantly eroded unencumbered surplus in Ballantyne Re. Moody's added that additional deterioration in the RMBS portfolio, either through asset defaults or further market value depreciation, combined with increasing statutory reserve requirements, could further diminish free assets and prompt the interruption of interest payments on the Class A notes. Moody's emphasized that despite the possibility of an interruption of interest payments, the ultimate loss on the Class A and Class B notes will be driven both by the performance of the underlying term life business and the realized losses on the investments. The Class B notes are currently accruing, but not paying interest, which is not considered an event of default. The review for further downgrade will focus on the potential for additional investment losses in the RMBS portfolio and the nature and likely effectiveness of any actions that may be pursued by Ballantyne Re and/or Scottish Re to mitigate the impact of losses on the ability of Ballantyne Re to pay interest on the notes. These rated notes of Ballantyne Re are not affected by this rating action: Class A-2, Series A Floating Rate Notes, insured by Ambac Assurance UK Ltd. -- Current Rating: Aaa, on review for downgrade Class A-2, Series B Floating Rate Notes, insured by Assured Guaranty UK Ltd. -- Current Rating: Aaa Class A-3 Floating Rate Notes, insured by Ambac Assurance UK Ltd. -- Current Rating: Aaa, on review for downgrade Ballantyne Re plc is a public limited company established in Ireland as a special purpose vehicle. Scottish Re Group Limited is a Cayman Islands company with principal executive offices located in Bermuda. On Sept. 30, 2007, Scottish Re Group Limited reported total assets of $13.4 billion and shareholder's equity of $869 million. BARNERT HOSPITAL: Ends Operations Friday, Transfers 41 Patients --------------------------------------------------------------- Nathan and Miriam Barnert Memorial Hospital Association, dba Barnert Hospital confirmed ending operations last weekend, including its outpatient department, The Star-Ledger reports. Although the hospital's emergency room and mental health services remains open, Star-Ledger says. On Friday night, the hospital's 24 out of 41 patients were transferred to St. Joseph's Regional Medical Center, Nancy Collins at St. Joseph's told Star-Ledger. The rest were either discharged or moved to other health care facilities, Star-Ledger reveals, citing Steven Clark, Barnert spokesman. Mr. Clark said that at a meeting Friday, officials notified workers of the closure, Star-Ledger relates. Interim president and CEO Peter Betts told Star-Ledger that while the hospital had money to pay workers last week, it has none for this week. According to Star-Ledger, the hospital failed to close deal selling Barnert for $15 million after the U.S. Department of Housing and Urban Development denied the hospital support for a $3.2 million debtor-in-possession financing. Star-Ledger recalls that the $3.2 million DIP fund was supposed to fund the hospital's operations until the sale deal is completed in April. Withdrawal of NHC DIP Fund As reported in the Troubled Company Reporter on Dec. 10, 2007, Barnert Hospital withdrew, without prejudice, its request for approval of a debtor-in-possession financing agreement with Northern Healthcare Capital LLC. The Debtor did not state any reasons for withdrawing the request. On Nov. 9, 2007, Northern Healthcare agreed to provide the Debtor with up to $5 million of revolving credit facility. Interest on the loan is 4.25% per annum. The proposed lending facility was to be structured initially as a sub-limit for advances of up to a maximum of $2,500,000. The funds was intended to pay the Debtor's bankruptcy expenses. The state of New Jersey extended $1.4 million to the hospital in August to aid its restructuring efforts. Fraud Cases Backed by DOJ The TCR related on Jan. 28, 2008, Barnert Hospital, together with two other hospitals, is facing two fraud cases that the U.S. Department of Justice has supported. The Department of Justice stated in its Web site that the United States has intervened against three New Jersey hospitals in two whistleblower lawsuits alleging that the hospitals defrauded Medicare. The three hospitals are Robert Wood Johnson University Hospital at Hamilton, and Bayonne Hospital. About Barnert Memorial Hospital Nathan and Miriam Barnert Memorial Hospital Association, dba Barnert Hospital, -- http://www.barnerthospital.com/-- owns and operates a 256 bed general acute care community hospital located at 680 Broadway in Paterson, New Jersey. The company filed for chapter 11 protection on Aug. 15, 2007 (Bankr. D. N.J. Case No. 07-21631). David J. Adler, Esq., at McCarter & English, LLP, represents the Debtor in its restructuring efforts. Warren J. Martin Jr., Esq. and John S. Mairo, Esq., at Porzio Bromberg & Newman, P.C., represent the Official Committee of Unsecured Creditors in this case. Donlin Recano & Company Inc. is the Debtor's claims, noticing, and balloting agent. The Debtor's schedules reflect total assets of $46,600,967 and total liabilities of $61,303,505. The Court extended the Debtor's exclusive filing period to file a plan until April 11, 2008. BARNERT HOSPITAL: Wants Garfunkel, Wild and Travis as its Counsel ------------------------------------------------------------------ Nathan and Miriam Barnert Hospital Association asks the United States Bankruptcy Court District of New Jersey to retain Garfunkel, Wild and Travis P.C. as its legal counsel. The firm will assist the debtor in litigation for recovery of damages necessary for the operations of the debtor and in the best interest of the debtor's unsecured creditors. As set forth in the Engagement Agreement, the debtor will pay a 15% contingency fee of any payments, debits or other consideration received by the debtor as a result of the Horizon action. The firm assures the Court that it is a disinterested person pursuant to Section 101(14) of the Bankruptcy Code. Headquartered in Great Neck, New York, Garfunkel, Wild and Travis P.C. -- http://gwtlaw.com-- attends to business and legal needs of clients in the health care industry. GWT expanded beyond New York and opened an office in New Jersey in 2000 and in 2007, opened an office in Connecticut. BAYOU GROUP: Court OKs Panel's Rule 2004 Probe on Goldman Sachs --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has allowed the Official Creditors' Committee of Unsecured Creditors of Bayou Group LLC and its debtor-affiliates to investigate the Debtor's controversial hedge fund Goldman Sachs Execution & Clearing LP, previously known as Spear Leeds & Kellogg LP, Bloomberg News reports. On Jan. 9 2008, the Committee filed a request with the Court to issue an order pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure. The Committee said in its court filing that it has no other means for obtaining the required information other that pursuant to Bankruptcy Rule 2004, to which no other parties should have legitimate objection to the request. Goldman Sachs' and SLK's Relation with Debtor The Committee relates that SLK provided prime brokerage services to the financial industry, including certain of the Debtors. Goldman Sachs Group purchased SLK on Nov. 1, 2000. Following its acquisition by Goldman, SLK continued to offer prime brokerage services to the financial industry, and in early 2005 changed its name to Goldman Sachs Execution & Clearing LP. The Committee asserts that SLK, and later GSEC, served from 1999 through the cessation of the Debtors' trading activities as a prime broker for certain of the Debtors. Hence, the Committee seeks authorization to conduct an examination pursuant to Rule 2004 to enable the Committee to gather information concerning: (1) GSEC's relationship with the Debtors, including but not limited to its receipt of funds from the Debtors for trading purposes, its maintenance of any margin accounts on behalf of the Debtors, and its collection of any commissions or fees from the Debtors; (2) GSEC's knowledge of the Debtors' financial state; (3) whether GSEC obtained money or property of the Debtors under circumstances which would require its return under one or more provisions of the Bankruptcy Code; and (4) whether GSEC caused injury to the Debtors under circumstances that are actionable at law or in equity. The documents and testimony sought, the Committee explains, are essential to the evaluation of claims that might be asserted against GSEC on behalf of the Debtors' estate and its creditors. Exclusivity Period Expires Meanwhile, Bayou's exclusive right to file a plan has expired, according to Bloomberg. As reported in the Troubled Company Reporter on Nov. 20, 2007, the bankruptcy court extended Bayou Group LLC and its debtor- affiliates' exclusive periods to: (a.) file a Chapter 11 plan until Nov. 30, 2007; and (b.) solicit acceptance of that plan until Jan. 30, 2008. According to the Debtors, this is the fourth and final request to further extend their exclusive periods. In December, the bankruptcy judge refused to approve a disclosure statement allowing creditors to vote on a liquidating Chapter 11 plan, Bloomberg notes. About Bayou Group 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) in order to pursue recoveries for the benefit of defrauded investors. Bayou also filed lawsuits against former investors who allegedly received fictitious profits and an inequitably large return of their principal investments. Jeff J. Marwil at Jenner & Block was appointed on April 28, 2006 as the federal equity receiver. 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. Kasowitz, Benson, Torres & Friedman LLP is counsel to the Unofficial Committee of the Bayou Onshore Funds. Sonnenschein Nath & Rosenthal LLP represents the Sonnenschein Investors. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. BELO CORP: S&P Cuts Corporate Rating to BB After Planned Spin-off ----------------------------------------------------------------- Standard & Poor's Rating Services lowered its corporate credit and senior unsecured debt ratings on Belo Corp. to 'BB' from 'BB+' and removed the ratings from CreditWatch, where they were originally placed with negative implications on Oct. 1, 2007, after the company announced its intention to spin off its newspaper business. The outlook is stable. "The downgrade reflects the Dallas-based company's transformation into a pure-play TV broadcaster after the expected completion of the newspaper business spin-off on Feb. 8, 2008," said Standard & Poor's credit analyst Deborah Kinzer, "and its increased financial leverage from the retention of all outstanding indebtedness." Another factor is a significant reduction in asset flexibility. CALPINE CORP: Moody's Keeps Ratings at B2 After Bankruptcy Exit --------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Calpine Corporation, including the company's Corporate Family Rating at B2 and the B2 rating assigned to the company's senior secured term loan and revolving credit facility, following the company's emergence from bankruptcy earlier. Moody's also assigned a Speculative Grade Liquidity Rating of SGL-3 to Calpine. The rating outlook is stable. "Calpine's emergence from bankruptcy will result in a substantially less levered company as more than $6 billion of unsecured debt and other claims has been converted to equity, which should enhance overall financial flexibility for this merchant energy company", commented A.J. Sabatelle, Vice President and Senior Credit Officer. The rating affirmation reflects the degree of uncontracted revenues and resulting cash flow expected to be generated by Calpine's largely natural-gas fired merchant generation fleet over the next several years. While the company has substantial hedges in place for 2008 which should lock-in more than 70% of the company's margin this year, the percentage of margin hedged beyond 2008 declines leaving the company exposed to potentially greater year-over-year cash flow and earnings volatility over the next several years. Moody's believes that Calpine's funds from operations is expected to represent about 4.0-6.0% of total adjusted debt in 2008 while FFO from 2009 through 2010 is expected to average 5.0-8.0% of the company's projected average adjusted debt. Moody's also believes that Calpine's cash flow coverage of interest expense should range between 1.5x to 1.9x over the same three year time frame. These financial measures, which incorporate Moody's standard adjustments, are consistent with the financial measures of other B-rated independent power producers. Factored into this rating assessment is Moody's recognition that Calpine's consolidated earnings and cash flow should improve above the projected 2008 credit metrics and should be accompanied by greater predictability due to stronger margins anticipated across the key electric markets served by Calpine as well as the expected in-service date of three new separate generation projects in 2008, 2009, and 2010. These three projects, which are currently under construction, will provide, when completed, highly predictable contracted revenues and cash flows over an extended period based upon power purchase arrangements already in place with high credit quality off-takers. The ratings further consider the substantial degree of regional diversity that exists across Calpine's fleet, the company's recent operating performance, the fleet's competitive position in certain key markets, including California and to a lesser extent, in Texas, and the long-term advantages associated with having among the largest, most environmentally benign and efficient natural gas-fired electric generation fleets in North America. Under the reorganization plan, approximately $8.0 billion of claims is being settled with cash. Specifically, approximately $3.887 billion of borrowings under the company's debtor-in- possession term loan was converted to exit financing maturing March 29, 2014; $3.978 billion will satisfy claims of Calpine's second lien note holders; approximately $151.3 million will meet other secured, administrative, priority and convenience claims; and $267.1 million will cover transaction costs and professional fees. Calpine is funding the approximate $8.0 billion with a combination of $1.7 billion of cash and the incurrence of term debt, including $5.98 billion in secured term loans and a separate $300 million one year secured bridge term loan. Moody's acknowledges that the January 29 announcement that Calpine had entered into an agreement for the sale of the Fremont Project to FirstEnergy Generation for $253.6 million substantially increases the likelihood that the bridge financing will be repaid and terminated during the first part of 2008. Moody's observes that approximately $4.1 billion of project level debt at numerous subsidiaries will continue to exist under the current terms and conditions in their respective project loan financing documents. Moody's understands that several of these loan agreements have pricing terms that are above the current market for similar project financings. As such, Moody's believes that the company will look to refinance several of these financing arrangements over the next several years, which should reduce consolidated interest expense further resulting in better cash flow coverage metrics than projected in the company's current forecasts. Moody's further observes that the company's consolidated debt is expected to decline modestly from emergence through the end of 2009 as scheduled amortization payments under the term loan ($61 million annually) and under various project loan agreements ($252 million in 2008 and $268.7 million in 2009) are expected to be offset by the incurrence of more than $200 million of project level debt in 2008 and nearly $300 million of additional project level debt in 2009 to finance the completion of the Russell City Energy and Otay Mesa generation projects. Moody's assignment of a Speculative Grade Liquidity rating of SGL- 3 reflects an expectation for adequate liquidity over the next twelve months. Moody's expects that Calpine to be modestly free cash flow negative during 2008 due in large part due the need to complete the Otay Mesa and Russell City Energy projects. However, beginning in 2009, Calpine's internal cash flow should cover capital requirements and maturing debt obligations due to the expected decline in capital expenditure requirements that year. Calpine does not plan to maintain abundant levels of unrestricted cash on its balance sheet (approximately $200 million) over the foreseeable future. The SGL-3 rating also considers the existence of nearly $4 billion of project level subsidiary debt whose related cash flow must first be used to satisfy ongoing funding requirements of various project level reserves before being available to fund any parent needs. Virtually all of the project level financing documents have a restricted payments test which can trap cash at the project level during periods of weak project level performance, which could negatively impact parent level liquidity. External liquidity is expected to be principally provided by the company's $1 billion secured revolving credit facility that expires on March 29, 2014. While the company does not forecast any direct loan borrowing needs under the facility, letters of credit, principally to satisfy working capital or hedging requirements, are expected to be issued under the facility over the course of the next several months. Including the $200 million of unrestricted cash on hand expected at Calpine, total liquidity sources are expected to range from $800 million to $1.2 billion over the course of the next twelve months. The financing documents contain three financial covenants: an interest coverage ratio; a leverage ratio; and a senior leverage ratio. Based upon the company's projections, the company should be able to reasonably meet these covenant requirements under the bank facility. With respect to other forms of liquidity, virtually all of the company's assets are pledged to creditors under either project level subsidiary agreements or under the company's first lien credit agreements, thereby limiting the extent to which asset sales could provide a meaningful source of additional liquidity for the company. The stable rating outlook incorporates Moody's expectation that the company will likely generate financial metrics that remain in- line with other independent power companies whose CFR is B2. Moody's believes that the company's FFO to adjusted debt will register in the mid-single digits while cash coverage of interest expense will remain less than 2.0x during the next three years. The stable outlook also reflects Moody's view that Calpine's revenues and cash flow could have a fair amount of volatility over the next several years given the commodity nature of the independent power business and Moody's understanding of the company's current commercial hedging strategy. In light of the fact that debt levels are not likely to appreciably decline until after 2009, limited prospects exists for the company's CFR to be upgraded within the next eighteen months; however, to the extent that Calpine is able to meet or exceed cash flow projections over the next eighteen months resulting in greater than expected debt reduction, the company's CFR could be upgraded, particularly if company's FFO to adjusted debt reaches the high single digits on a sustainable basis and if greater cash flow predictability develops beyond one year due to contracts or hedges entered into by the company. The rating could be downgraded if poor operating performance or weaker than expected energy markets leads to a decline in expected cash flows for Calpine resulting in the ratio of cash flow to interest expense below 1.5 times or FFO to total adjusted debt approaching 3% or below for an extended period. These ratings were affected by this action: Ratings affirmed Calpine -- Corporate Family Rating at B2 -- Probability of Default Rating at B2 Rating assigned/LGD Assessment assigned: Calpine -- Senior Secured Revolving Credit Facility at B2 (LGD3, 49%) -- Senior Secured Bank Term Loan Facility at B2 (LGD3, 49%) Rating assigned: Calpine -- Speculative Grade Liquidity Rating at SGL-3 Headquartered in San Jose, California, Calpine is a major U.S. independent power company, capable of delivering nearly 24,000 MW of electricity to customers in 18 states in the U.S. The company owns, leases, and operates natural gas-fueled and renewable geothermal power plants. CAPITAL AUTO: S&P Attaches BB Rating on $5.013 Mil. Class D Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned ratings to Capital Auto Receivables Asset Trust 2008-1's $1 billion asset-backed notes series 2008-1. The ratings reflect: -- The credit quality of the underlying pool, which has a weighted average FICO score of 701.65 and consists of prime automobile loans; -- The timely interest and principal payments made under stressed cash flow modeling scenarios that are consistent with the ratings assigned to each class of notes; -- The credit enhancement; and -- The sound legal structure. Ratings Assigned Capital Auto Receivables Asset Trust 2008-1 Legal Interest Amount final Class Rating Type rate (million) maturity ----- ------ ---- -------- --------- -------- A-1* A-1+ Senior Fixed $207.000 February 2009 A-2a AAA Senior Fixed $125.000 September 2010 A-2b AAA Senior Floating $136.000 September 2010 A-3a AAA Senior Fixed $55.000 August 2012 A-3b AAA Senior Floating $304.000 August 2012 A-4a AAA Senior Fixed $66.407 July 2014 A-4b AAA Senior Floating $54.000 July 2014 B** A Sub Fixed $32.583 July 2014 C** BBB Sub Fixed $15.038 July 2014 D** BB Sub Fixed $5.013 July 2014 * The class A-1 notes will be sold in one or more private placements. ** The class B, C, and D notes may be initially retained by the depositor or sold in one or more private placements. CATHOLIC CHURCH: Milwaukee Archdiocese May File for Bankruptcy -------------------------------------------------------------- The Roman Catholic Archdiocese of Milwaukee is facing a $3,000,000 deficit and may need to substantially trim down staff and services during the fiscal year starting July 1, 2008, The Associated Press reports. The deficit is due, in part, to a failed deal to sell a 44-acre property -- the Cousins Center -- in suburban St. Francis. According to AP, the sale proceeds would have been used to pay off a loan the Archdiocese incurred to cover about $4,600,000 of its $8,250,000 portion of a nearly $17,000,000 settlement of 10 sexual abuse lawsuits. According to Jerry Topczewski, chief of staff for Archbishop Timothy M. Dolan, the Archdiocese is making loan payments of about $30,000 per month, on top of operating costs and expenses for the center. Mr. Topczewski said a bill is currently pending in the state legislature, which would create a limited time period, in which any victim of childhood sexual abuse by clergy could file civil suits against denominations no matter how long ago the abuse occurred. The passage of that bill could raise the possibility of bankruptcy for the Archdiocese. He added that, except for the Cousins Center, the Archdiocese has sold most of its property and does not have reserves, the AP reports. "At some point, if we have judgments and we are unable to have the assets to cover them, that (bankruptcy) is going to be one option that's looked at," Mr. Topczewski said, reports the Milwaukee Journal Sentinel. He added that the Archdiocese's ongoing $105,000,000 Faith in Our Future capital fundraising campaign would not be used to balance the budget or to pay sexual abuse costs. Archbishop Dolan's Letter to Milwaukee's Catholic Community My Brothers and Sisters in Christ: As you are painfully aware, over the past six years, there has been much horrible news regarding the sexual abuse of minors by priests -- both in this archdiocese and across the nation. Since my arrival as your archbishop, I have promised to try my best to be open and candid with you, the faithful Catholics of the Church in southeastern Wisconsin. Part of that openness has been my commitment to share news with you -- even when it's bad. For example, you'll remember in summer of 2006, I told you about lawsuits facing the Archdiocese of Milwaukee for sexual abuse cases involving former priests Siegfried Widera and Franklyn Becker, and the pending financial consequences of those lawsuits. Those ten cases in California were settled in a multi- million dollar agreement, all of which I made public. In July of 2007, the Wisconsin Supreme Court handed down a decision directing that cases alleging fraud by the archdiocese about sexual abuse by two accused priests of the archdiocese could proceed, even though the events were 20-to-40-years old. Those cases have now been returned to the trial judges to go forward through normal court procedures, and we can expect to hear a lot about them. In addition, since July 2007, two other cases have been brought against the Archdiocese of Milwaukee and the Diocese of Sioux Falls, South Dakota, alleging sexual abuse in Wisconsin by a different priest, Bruce MacArthur. While not a priest of our Archdiocese of Milwaukee, he did serve here for several years. During the next weeks, the records of these three accused priests will be part of court proceedings, and we can expect they will be given to the media. Thus, I am sending you this newsletter to let you know of the sordid information that will be forthcoming. As you have often told me: "Archbishop, when there is bad news coming, we'd prefer to hear it from you." Well, as you will see, this news is nauseating. There are three priests accused of wrongdoing. None of these three accused individuals are now serving as priests within the Archdiocese of Milwaukee, nor have they done so for many years. The accused are Siegfried Widera, Bruce MacArthur and Franklyn Becker. Widera is dead; MacArthur, 84, is aged and residing in a controlled nursing home; and Becker was laicized in 2004 and expelled from ministry. I mentioned these three at our four recent meetings regarding the "state of the archdiocese." However, I want to talk specifically about the case involving Franklyn Becker. As I said, Becker was permanently removed from the priesthood at my request in 2004. Although there could be various explanations for all the decisions that were made or not made, at the end of the day, you will see, I have to admit, these decisions are a particularly ugly example of how the Church made some dreadful mistakes in its handling of these cases. The reports about this ex-priest are very troubling. Some might argue that since both doctors and civil officials made the same mistakes by recommending reassignments, transfers, or "fresh starts," that the Church should not be held accountable for the decisions made 20 or 30 years ago. Some would say that the Church was simply following the "praxis" of the time, considering the circumstances, the body of knowledge then available to us, and the recommendations that were presented, suggesting offenders could be rehabilitated, moved, and reassigned. This might all be true, but I need to say that our faith tells us that our Church must acknowledge that poor decisions were made, regardless of how these decisions were reached. And, the Church's decisions about Becker were badly misguided. So what do we do next? Do we hide in the corner while the scab of this mess is once again picked open? No! The good work of Jesus Christ and His Church continues, despite this mess and despite any of us. The mistakes of the past do not change the needs of our people today, the needs of today's community, or the needs of our world. Nor, do these things diminish the good work that has been done over the past years as the Archdiocese of Milwaukee has ardently worked with victims/survivors and the wider community to bring healing and resolution. Nothing changes our commitment to continue to work together to ensure that we do everything in our power to protect our children and young people of today and tomorrow. In the past, people could point and say the Catholic Church is a sad example of what NOT to do, as some of this data will embarrassingly show. Now, however, even outside, objective observers say the Catholic Church is an example of what TO do. That is why we insist upon safe environment programs in all of our parishes and schools. That's why all staff and volunteers who work with children and youth participate in safe environment training as a way of recognizing the signs of abuse. That's why we have a full-time victims-assistance coordinator to work with victims/survivors, and why I meet regularly with a community advisory board, whose members include survivors, advocates and experts in the area of sexual abuse. That's why now no one who has ever abused a minor can ever serve in priestly ministry again. It's why I directed the names of offending diocesan priests to be published on our archdiocesan website back in 2004. It is also why I directed an independent mediation system established in 2004 to come to resolution with victims/survivors. To date, we've reached resolution with 170 individuals and have provided spiritual, pastoral and ongoing therapeutic assistance, in addition to a financial consideration. Some of you might ask, "Why are you telling us this; why can't you just let this be over and move on?" Believe me, part of me would like nothing more, but, I know that the effects of this crisis will never be over. Practically, too, I know that you are better hearing this news from me, all at once. So that's why I share it with you now. May I ask that you please pray for people who are victims/survivors of sexual abuse, especially for those whose abuse came about by clergy and Church personnel? May I also ask that you pray for our Church, especially our Church in southeastern Wisconsin, that the Holy Spirit continue to guide us and give us strength to get through this, and that His Church be cleansed, purified and renewed by the agony of this scandal, sin and suffering. Faithfully in Christ, Most Reverend Timothy M. Dolan Archbishop of Milwaukee CELESTICA INC: Net Loss Down to $12MM in Qtr. Ended Dec. 31 ----------------------------------------------------------- Celestica Inc. reported financial results for the fourth quarter and year ended Dec. 31, 2007. Net loss on a generally accepted accounting principles basis for the fourth quarter was $11.7 million compared to GAAP net loss of $60.8 million for the same period last year. Restructuring charges in the quarter were $24 million compared to $59 million for the same period last year. GAAP net loss for the quarter also included a non-cash write-down of long-lived assets of $15 million. Adjusted net earnings for the quarter were $37.2 million compared to $6.5 million for the same period last year. These results compare with the company's guidance for the fourth quarter, disclosed on Oct. 25, 2007, of revenue of $2 to $2.15 billion. Net loss on a GAAP basis was $13.7 million compared to GAAP net loss of $150.6 million for last year. Adjusted net earnings for 2007 were $62.3 million compared to adjusted net earnings of $93.5 million for 2006. "We are pleased with the strong results our company delivered in the fourth quarter," Craig Muhlhauser, president and chief executive officer, Celestica, said. "Since implementing our turnaround plans 12 months ago, we have undergone a major transformation which has resulted in our best ever and industry leading inventory turns, strong margin recovery and an improving trend in returns on invested capital. "We are executing well and our financial position is strong," Mr. Muhlhauser added. "We know we have more work to do in order to deliver continued improvements in our future performance, but we are encouraged with our financial and operational position as we enter 2008." At Dec. 31, 2007, the company's balance sheet showed total assets of $4.68 billion, total liabilities of $2.59 billion and total shareholders' equity of 2.09 billion. About Celestica Inc. Headquartered in Toronto, Celestica Inc. (NYSE:CLS) -- http://www.celestica.com/-- provides innovative electronics manufacturing services to companies in the computing, communications, consumer, industrial, and aerospace and defense end markets. * * * Moody's Investors Service placed Celestica Inc.'s corporate family and probability of default ratings at 'B1' in May 2007. The ratings still hold to date with a negative outlook. CENDANT MORTGAGE: Fitch Holds 'B' Ratings on 16 Cert. Classes ------------------------------------------------------------- Fitch has taken rating actions on these Cendant Mortgage Capital mortgage pass-through certificates: Series 2002-4 -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AAA'; -- Class B2 affirmed at 'AAA'; -- Class B3 affirmed at 'AA+'; -- Class B4 affirmed at 'AA'; -- Class B5 affirmed at 'A'. Series 2002-6P -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AAA'; -- Class B2 affirmed at 'AAA'; -- Class B3 affirmed at 'AA+'; -- Class B4 affirmed at 'AA-'; -- Class B5 affirmed at 'BBB+. Series 2002-8 -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AAA'; -- Class B2 affirmed at 'AA'; -- Class B3 upgraded to 'A+' from 'A'; -- Class B4 upgraded to 'BBB+' from 'BBB'; -- Class B5 affirmed at 'BB'. Series 2002-11P -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; -- Class B5 affirmed at 'B'. Series 2003-1 -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA+'; -- Class B2 affirmed at 'AA-'; -- Class B3 affirmed at 'BBB+'; -- Class B4 affirmed at 'BB+'; -- Class B5 affirmed at 'B'. Series 2003-2P -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; -- Class B5 affirmed at 'B'. Series 2003-4 -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA+'; -- Class B2 affirmed at 'A+'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; -- Class B5 affirmed at 'B'. Series 2003-5P -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; -- Class B5 affirmed at 'B'. Series 2003-6 -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; -- Class B5 affirmed at 'B'. Series 2003-7P -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; -- Class B5 affirmed at 'B'. Series 2003-8 Pool 1 -- Class A affirmed at 'AAA'; -- Class 1B1 affirmed at 'AA'; -- Class 1B2 affirmed at 'A'; -- Class 1B3 affirmed at 'BBB'; -- Class 1B4 affirmed at 'BB'; -- Class 1B5 affirmed at 'B'. Series 2003-8 Pool 2 -- Class A affirmed at 'AAA'; -- Class 2B1 affirmed at 'AA'; -- Class 2B2 affirmed at 'A'; -- Class 2B3 affirmed at 'BBB'; -- Class 2B4 affirmed at 'BB'; -- Class 2B5 affirmed at 'B'. Series 2003-9 Pool 1 -- Class A affirmed at 'AAA'; -- Class 1B1 affirmed at 'AA'; -- Class 1B2 affirmed at 'A'; -- Class 1B3 affirmed at 'BBB'; -- Class 1B4 affirmed at 'BB'; -- Class 1B5 affirmed at 'B'. Series 2003-9 Pool 2 -- Class A affirmed at 'AAA'; -- Class 2B1 affirmed at 'AA'; -- Class 2B2 affirmed at 'A'; -- Class 2B3 affirmed at 'BBB'; -- Class 2B4 affirmed at 'BB'; -- Class 2B5 affirmed at 'B'. Series 2004-1 -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; -- Class B5 affirmed at 'B'. Series 2004-2 -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; -- Class B5 affirmed at 'B'. Series 2004-3 -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; -- Class B5 affirmed at 'B'. Series 2004-4 -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; -- Class B5 affirmed at 'B'. Series 2004-5 -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; -- Class B5 affirmed at 'B'. Series 2005-1 -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; -- Class B5 affirmed at 'B'. The affirmations reflect a stable relationship between credit enhancement and expected losses, and affect approximately $1.46 billion in outstanding certificates. The upgrades reflect an improvement in the relationship between CE and expected losses, and affect approximately $1.09 million in outstanding certificates. The pool factors range from approximately 8% to 80%, and the transactions are seasoned in a range of 35 months and 66 months. The CE levels for all classes originally rated 'B' range from approximately 0.14% to 2.28%. CENTRAL VERMONT: S&P Says Rate Hike MOU Approval is Credit Neutral ------------------------------------------------------------------ Standard & Poor's Ratings Services noted that the Vermont Public Service Board's approval of a Memorandum of Understanding between Central Vermont Public Service Corp. (CVPS; BB+/Stable/--) and the Vermont Department of Public Service for a $6.4 million (2.3%) rate increase is credit neutral. Rate relief was needed to recover the costs of transmission and power costs and reliability improvements. The hike falls short of the $12.4 million (4.46%) increase originally sought by the company, and will only modestly lift CVPS's somewhat weak financial parameters. Meanwhile, the more significant consideration of the company's credit quality will be the outcome of the pending alternative regulation plan, filed by CVPS in August 2007. Implementation of certain mechanisms, such as fuel-adjustment clause, which would enable the utility to recover fuel and purchased-power costs in a timelier manner, could lead to more substantial financial improvement. CENTRAL ILLINOIS: Court OKs Barash & Everett as Bankruptcy Counsel ------------------------------------------------------------------ Central Illinois Energy LLC obtained authority from the United States Bankruptcy Court for the Central District of Illinois to employ of Barash & Everett LLC as their bankruptcy counsel. As reported in the Troubled Company Reporter on Jan. 11, 2008, Barash & Everett is expected to: a) assist in restructuring the Debtor's financial affairs and capital structure; b) provide legal advice to the Debtor with respect to proposals from one or more third-party investors; c) advise the Debtor on corporate transactions and corporate governance, negotiations, out-of-court agreements with creditors, equity holders, prospective acquirers and investors; d) review documents, assist in the preparation of agreements and pleadings; e) assist the Debtor in the filing of a Chapter 11 plan of reorganization and disclosure statement; and f) render other necessary legal services. In the parties' engagement agreement, the firm will bill the Debtor according to their hourly rates: Designation Hourly Rate ----------- ----------- Barry M. Barash, Esq. $400 Attorneys $150-$400 Paralegals $75-$150 The Debtor told the Court that the firm has no adverse interest to the Debtor or its estates. Based in Canton, Illinois, Central Illinois Energy LLC -- http://www.centralillinoisenergy.com/-- operates a 37-million gallons-per-year ethanol plant. The Debtor filed for Chapter 11 protection on Dec. 13, 2007 (Bankr. C.D. Ill. Case No 07-82817). Barry M. Barash, Esq., at Barash & Everett, LLC, represents the Debtor in its restructuring efforts. The U.S. Trustee for Region 10 has not appointed creditors to serve on an Official Committee of Unsecured Creditors in this case. When the Debtor filed for protection from its creditors, it listed assets between $1 million to $100 million, and more than $100 million in liabilities. CHRYSLER LLC: Total U.S. Sales Decreased 12% at 137,392 Units ------------------------------------------------------------- Chrysler LLC's total U.S. sales of 137,392 units were down 12% and total fleet sales were down 18% in January. This was due to a planned reduction of daily rental fleet vehicles that is in line with the company's strategy. The company opened the new year with strong sales performance from the Dodge Avenger, Dodge Viper, Dodge Caliber and Dodge Charger, all contributing to a year-over-year sales increase of 42% (28,457 units) for Dodge brand car sales. This is compared with 20,020 units in January 2007. Chrysler Aspen sales of 2,570 units represented a 20% increase in January 2008 versus the same period last year. Based on strong consumer demand, sales of the redesigned Jeep(R) Liberty mid-size sport-utility vehicle increased 17% to 8,331 units in January 2008. Sales in January 2007 were 7,141 units. "As customers become even more thoughtful about the vehicles they buy, Chrysler is committed to delivering products that meet their needs-and exceed their expectations," Jim Press, Vice Chairman and President, said. "While the government works on an economic stimulus package, we are ready to offer consumers the best value in the American car market, with vehicles that meet the highest safety and quality standards. We are pleased to offer products like the Dodge Journey, Challenger and Ram; and launching soon, the two new SUV hybrids -- Chrysler Aspen and Dodge Durango. These products, combined with the best-in-industry Lifetime Powertrain Warranty, will continue to bring more customers to our showrooms." "We're moving fast to earn the trust of dealers and customers and prove that we are listening," Deborah Meyer, Vice President and Chief Marketing Officer said. "In the first 60 days after Chrysler became private, we approved 260 line-item improvements to our products. With all of the changes, we have the opportunity to really get back in step with the American public. Our task is to challenge old perceptions and build a new image that is strong and relevant to today's consumers-and prove that it really is a New Day for Chrysler." The company finished the month with 413,874 units of inventory, or a 75-day supply. Inventory is down by 15% compared with January 2007 when it was at 488,410 units. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Nov. 12, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC and removed it from CreditWatch with positive implications, where it was placed Sept. 26, 2007. S&P said the outlook is negative. CHRYSLER LLC: Parts Shortage Prompts Closing of Four Facilities --------------------------------------------------------------- Chrysler LLC, has closed four facilities on Feb. 4, 2008, as the direct result of a supplier-related parts shortage: -- Belvidere Assembly Plant - Rockford, Illinois -- Newark Assembly Plant - Newark, Delaware -- Sterling Heights Assembly Plant - Sterling Heights, Michigan -- Toledo North Assembly Plant - Toledo, Ohio -- Toledo Supplier Park - Toledo, Ohio (Second shift only dismissed) Mike Ramsey and Erik Larson at Bloomberg News reports that Chrysler temporarily halted production at the four assembly plants in a dispute with auto-parts supplier Plastech Engineered Products Inc. Bloomberg says Chrysler closed the plants after following through Feb. 1 on a threat to revoke contracts with Plastech. The parts maker filed for Chapter 11 bankruptcy protection hours after Chrysler canceled orders. Chrysler's move may result in the closure of all 13 of its North American assembly plants, according to Messrs. Ramsey and Larson, unless it finds a way to obtain Plastech parts on an interim basis. Employees will be notified directly by their facility or through local media regarding a return-to-work schedule, Chrysler said in a statement announcing the plant closures. Skilled trades and janitorial services personnel will be notified of their work schedules by their respective plants. All other employees are advised not to report to work unless notified directly by their management. Powertrain and Stamping operation employees will be notified by their local facility as to their work schedule. These actions are to ensure quality for the company's customers. The delayed volume will be rescheduled in the near future. The company are monitoring the situation and will adjust inventory mix accordingly to ensure its operations resume efficiently and as quickly as possible. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrys