T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, February 6, 2008, Vol. 12, No. 31 Headlines AAR CORP: Mulls Offering $175 Million of Convertible Senior Notes ADELPHIA COMMS: Distributing $216 Million & 737,476 Shares AIRGAS INC: Acquires Merriam-Graves Facilities and Operations ALAN DAVID WEINER: Case Summary & 19 Largest Unsecured Creditors AMERICAN LAFRANCE: Can Employ Kurtzman Carson as Claims Agent AMERICAN LAFRANCE: Classification and Treatment of Claims AMERICAN LAFRANCE: Liquidation Analysis Under Reorganization Plan AMERICAN RAILCAR: 9.45% Stake Acquisition Won't Affect S&P Ratings AMERICAN LAFRANCE: Wants to Sell Assets to Patriarch Partners ARCH ONE: Poor Credit Quality Cues Moody's to Review 'Ba2' Rating ASARCO LLC: Gets Court Nod to Sell Perth Amboy for $19.8 Million ASARCO LLC: Seeks Court Nod on Plan Sponsor Bid Procedures ASARCO LLC: Settle Toxic Tort Claims for $27.9 Million BAYOU GROUP: Files Amended Disclosure Statement in New York BAYOU GROUP: Files Schedules of Assets and Liabilities BEAR STEARNS: S&P Confirms Low-B Ratings on 7 Classes of Certs. BONIFACIUS LTD: Seven Classes Get Moody's Junk Ratings BOSTON SCIENTIFIC: Posts $458 Million Net Loss in 2007 4th Quarter BUCKEYE TECHNOLOGIES: Earns $13.9 Mil. in 2nd Qtr. Ended Dec. 31 BUILDING MATERIALS: Gets Temporary Waiver Conditions From Lenders BUILDING MATERIALS: S&P Cuts Corp. Rating to B, Keeps CreditWatch CA INC: Earns $163 Million in Third Quarter Ended Dec. 31 CALPINE CORP: S&P Assigns 'B' Corp. Rating Upon Chapter 11 Exit CAPELLA HEALTHCARE: Moody's Keeps B2 Corporate Family Rating CAPELLA HEALTHCARE: S&P Keeps B Corp Rating Due to Operating Risks CHARLES THOMAS: Case Summary & 17 Largest Unsecured Creditors CHRYSLER LLC: Inks Interim Pact w/ Chrysler; Operations Continue CHRYSLER LLC: Wants Court to Lift Stay in Order to Recover Tooling CHIQUITA BRANDS: 7-1/2% Noteholders Approve Indenture Amendments CHIQUITA BRANDS: Mulls Offering $150 Mil. of Conv. Senior Notes CHRISTOPHER BALL: Case Summary & 15 Largest Unsecured Creditors COBITCO INC: Voluntary Chapter 11 Case Summary COUNTRYWIDE FIN'L: Sanctioned by Court for Violating Bankr. Rules CROSSWINDS AT LONE STAR: Case Summary & 20 Largest Creditors DAN EASTERLING: Case Summary & 18 Largest Unsecured Creditors DB ATLANTA: Case Summary & 20 Largest Unsecured Creditors DUNMORE HOMES: Asks Court to Establish March 14 Claims Bar Date EDWARD CUTTER: Voluntary Chapter 11 Case Summary EPIXTAR CORP: Unit Appeals Phil. Court's Junking of Rehab Plan ERNEST KARA JR: Case Summary & 11 Largest Unsecured Creditors ERNEST KARA SR: Case Summary & Two Largest Unsecured Creditors EURAM-MACAULEY ONE: Case Summary & 20 Largest Unsecured Creditors FALCON PRODUCTS: 8th Cir. Says Trust's Preference Claim Valid FIRST PLACE: In Receivership; Owes $59M to Condo Project Backers GATEWAY HOMES: Case Summary & 20 Largest Unsecured Creditors GLOBAL MOTORSPORT: Wants Bidding Procedure to Sell Assets OK'd GLOBAL MOTORSPORT: Taps Pachulski as Lead Bankruptcy Counsel GEORGE HANSON: Case Summary & 18 Largest Unsecured Creditors GREENBRIER COS: S&P Ratings Unaffected by ARI's Stake Acquisition GREENWICH CAPITAL: S&P Junks 2 Certificates on WOM Loan Concerns GSRPM MORTGAGE: S&P Downgrades Ratings on Nine Classes of Certs. HAMLIN PROPERTIES: Case Summary & Eight Largest Unsec. Creditors HARMAN INTERNATIONAL: Paying $0.0125 Dividend Per Share on Feb. 20 HEMAGEN DIAGNOSTICS: Sept. 30 Balance Sheet Upside-Down by $1.5 M HOUSTON FAMILY: Case Summary & Five Largest Unsecured Creditors IAC/INTERACTIVECORP: Buys Minority Stake in HealthCentral Network INTERSTATE BAKERIES: Court Okays Proposed Solicitation Procedures K-SEA TRANSPO: Moody's Keeps B1 Family Rating with Stable Outlook LARRY DEE: Case Summary & 20 Largest Unsecured Creditors LEVITT AND SONS: Lienholders Want DIP Financing Motion Denied LEVITT AND SONS: Deposit Holders Panel Taps Charbonneau as Counsel LITTLETON EQUITY: Case Summary & 12 Largest Unsecured Creditors LOCAL INSIGHT: Moody's Reviews B1 Ratings on Berry Co. Buyout Deal LOCAL INSIGHT: S&P Ratings Unstirred by Berry Co. Asset Purchase MARICOPA COUNTY: Moody's Maintains 'B1' Rating After Restructuring MASSEY ENERGY: Earnings Drop to $5 Mil. in Fourth Quarter 2007 MEDIANEWS GROUP: Lures KCS Publisher Mac Tully Into its Ranks MEDICOR LTD: Files Schedules of Assets and Liabilities MERCERS ENTERPRISES: Case Summary & Four Largest Unsec. Creditors M FABRIKANT: Creditors' Group Allowed Probe on Katz Transactions MOVIE GALLERY: Court Okays CIO Seth Levy's Employment Terms MOVIE GALLERY: Wants Court Nod on Second Amended DIP Credit Pact NEW CENTURY: Files Joint Chapter 11 Plan of Liquidation NEW CENTURY: Claims Classification & Treatment Under Ch. 11 Plan NICHOLAS-APPLEGATE CBO: Moody's to Review B1, Caa2 Notes Ratings NUTRITIONAL SOURCING: Court OKs Modified Bonus Plan for Managers PETROLEUM DEVELOPMENT: Prices $203 Mil. Offering of 12% Sr. Notes PHARMED GROUP: Gets Go-Signal to Auction Headquarters for $10.8MM PLASTECH ENGINEERED: Inks Interim Pact Over Chrysler Tooling Rift PLASTECH ENGINEERED: Chrysler Wants Stay Lifted to Recover Tooling PLASTECH ENGINEERED: S&P's Rating Tumble to D on Chap. 11 Filing PORTOLA PACKAGING: Nov. 30 Balance Sheet Upside-Down by $98.4 Mil. PRC LLC: U.S. Trustee Appoints Seven-Member Creditors Committee PRC LLC: Wants to Employ Philip Goodeve as Chief Financial Officer PRC LLC: Obtains Court Nod to Hire Epiq as Claims & Noticing Agent PSS WORLD: Earns $14.2 Million in Fiscal 2008 Third Quarter QUEBECOR WORLD: U.S. Court Approves Donlin Recano as Claims Agent QUEBECOR WORLD: Justice Mongeon OKs Ernst & Young as CCAA Monitor QUEBECOR WORLD: Court Extends Noteholders' BIA Preference Period QUEBECOR WORLD: Gets Interim OK to Use $1 Billion DIP Facility R&B CONSTRUCTION: Case Summary & 26 Largest Unsecured Creditors RELIANCE INTERMEDIATE: Financing Plan Won't Affect S&P's Ratings RENAISSANCE HOME: Moody's Junks Ratings on Three Tranches RISKMETRICS GROUP: Improved Finances Cues S&P to Lift Rating to B+ RITCHIE MULTI-STRATEGY: Paying $30 Million to Settle SEC Inquest ROBERT RENCEWICZ: Case Summary & 16 Largest Unsecured Creditors SEAGATE TECHNOLOGY: Earns $403 Million in 2007 Second Quarter SEALY CORP: December 2 Balance Sheet Upside-down by $130 Million SECURE COMPUTING: Posts $35.1 Mil. Net Loss for Fiscal Year 2007 SILVER STATE: Slump in U.S. Credit Markets Cues Chapter 7 Filing SIMPSON BRICK: Case Summary & 29 Largest Unsecured Creditors SIRVA INC: Case Summary & 30 Largest Unsecured Creditors SIRVA INC: Commences Prepackaged Chapter 11 Case to Pare Debt SOLUTIA INC: To Pay DTE $773,364 to Cure PrePetition Default SOLUTIA INC: Aims to Assume Wal-Mart Deals Under Terms of Plan SOLUTIA INC: Wants to Hire Quinn Emanuel as Conflicts Counsel SPANSION INC: Posts $49.5 Million Net Loss in 2007 Fourth Quarter SUMMIT GLOBAL: Court OKs All "First-Day Motions" & Interim Funding SUNCOM WIRELESS: Unit Solicits Consent for Indenture Amendment TESORO CORP: Moody's Maintains Corporate Family Rating at 'Ba1' TEXAS INDUSTRIES: Moody's Holds Ba3 Ratings, Outlook Stable TOUSA INC: Taps Berger Singerman as Florida and Conflicts Counsel TOUSA INC: Wants to Hire Ernst & Young as Independent Auditors UAL CORP: Wants American Moulding Held in Contempt UAL CORP: Court Allows Illinois IRS' $256,562 Tax Claim UAL CORP: Resolves IAA Claims Through $1 Million Sale of Stock US ENERGY: Epiq Bankruptcy Okayed as Noticing and Claims Agent US ENERGY: Court Approves Hunton & Williams as Bankruptcy Counsel WESCO INT'L: Earns $61 Mil. in Fourth Quarter Ended December 31 WILLIAM BECKER: Case Summary & 17 Largest Unsecured Creditors * Fitch Proposes Changes in Rating Methodology for Corporate CDOs * Five Canadian Banks Support Third-Party ABCP Restructuring * Wall Street Banks Form Climate Change Guidelines * Locke Lord Creates Financial Guaranty Insurers Section * Upcoming Meetings, Conferences and Seminars ********* AAR CORP: Mulls Offering $175 Million of Convertible Senior Notes ----------------------------------------------------------------- AAR CORP. will offer $175 million in aggregate principal amount of convertible senior notes in a private offering to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended, subject to market and other conditions, in two equal tranches of $87.5 million aggregate principal amount of Notes due 2014, and $87.5 million aggregate principal amount of Notes due 2016. Upon conversion, holders will receive cash up to the principal amount, and any excess conversion value will be delivered, at the election of the company, in cash, common stock or a combination of cash and common stock. The company may sell up to an additional aggregate $25 million of Notes upon exercise of an over-allotment option that the company expects to grant to the initial purchasers in connection with the offering. In addition, the company expects to enter into separate convertible note hedge and warrant transactions with an affiliate of one of the initial purchasers of the Notes. These transactions are intended to reduce potential dilution to the company's common stock upon potential future conversion of the Notes and generally have the effect on the company of increasing the conversion price of the Notes. In connection with these transactions, the hedge counterparty has advised the company that it or its affiliates may enter into various derivative transactions with respect to the company's common stock concurrently with or shortly following pricing of the Notes. These activities could have the effect of increasing or preventing a decline in the price of the company's common stock concurrently with or after the pricing of the Notes. In addition, the hedge counterparty or its affiliates may from time to time, after the pricing of the Notes, enter into or unwind various derivative transactions with respect to the company's common stock and/or purchase or sell the company's common stock in secondary market transactions. These activities could have the effect of decreasing the price of the company's common stock and could affect the price of the Notes. The company expects to use the net proceeds of the offering to repay short-term indebtedness under its revolving credit facility, to pay the net cost of the convertible note hedge and warrant transactions and for general corporate purposes. About AAR Corp. Headquartered in Wood Dale, Illinois, AAR Corp. (NYSE: AIR) -- http://www.aarcorp.com/-- provides products and services to the worldwide aerospace and defense industry. With facilities and sales locations around the world, AAR uses its business model to serve aviation and defense customers through four operating segments: aviation supply chain; maintenance, repair and overhaul; structures and systems and aircraft sales and leasing. * * * AAR Corporation continues to carry Moody's Investors Service's 'Ba3' long term corporate family rating, which was assigned on November 2006. ADELPHIA COMMS: Distributing $216 Million & 737,476 Shares ---------------------------------------------------------- Adelphia Communications Corporation has announced subsequent distributions of $216 million in cash and 737,476 shares of TWC Class A Common Stock to holders of Allowed Claims against the parent Adelphia Communications Corp. pursuant to the First Modified Fifth Amended Joint Chapter 11 Plan of Reorganization of Adelphia Communications Corp. and Certain Affiliated Debtors, dated as of Jan. 3, 2007, as confirmed. The 737,476 shares of TWC Class A Common Stock to be distributed have a "Deemed Value" under the Plan of $28 million and a fair market value as of Jan. 28, 2008, of $18 million. A chart summarizing the distribution of cash and shares of TWC Class A Common Stock to be made to classes of ACC Claims is available in the Important Documents section of the company's website at http://www.adelphiarestructuring.com/ The chart does not reflect additional distributions that may be made over time as a result of the release of escrows, reserves and holdbacks. The amount and timing of such distributions as a result of the release of escrows, reserves and holdbacks are subject to the terms and conditions of the Plan and numerous other conditions and uncertainties, many of which are outside the control of Adelphia and its subsidiaries. Creditor inquiries regarding distributions under the Plan should be directed to creditor.inquiries@adelphia.com. About Adelphia Comms Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates' chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. (Adelphia Bankruptcy News, Issue No. 182; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AIRGAS INC: Acquires Merriam-Graves Facilities and Operations ------------------------------------------------------------- Airgas Inc. has acquired Merriam-Graves Corporation. The acquired operations include a headquarters, industrial fill plant, specialty gas laboratory, and central hardgoods warehouse in Charlestown, New Hampshire, plus six other locations in New Hampshire, six locations in Vermont, five locations in Massachusetts, five locations in Connecticut, and two in New York. Effective Feb. 1, 2008, the acquired operations have been integrated into Airgas East, one of the regional companies within Airgas. Airgas East will transition Merriam-Graves in an orderly process over the next few months. "We are excited to welcome Scott and Kit Wakeman, and all 225 Merriam-Graves associates to the Airgas team," Fred Manley, president of Airgas East, said. "They will find that their experience and entrepreneurial spirit will fit well with the Airgas culture. The added locations fill in our own network and help us serve customers in New England and New York more effectively." "Kit and I are excited to join Airgas and believe this transition offers the best opportunities to our talented staff and our loyal customers," said Scott Wakeman. "I want to thank all of our employees for their untiring support over the years. Now, as part of the Airgas family of companies, we will be able to offer our customers an even greater array of products and services as we continue to provide solution-oriented customer service." About Merriam-Graves Corporation Merriam-Graves Corporation is an independent distributor of industrial, medical, and specialty gases and related supplies operating in 25 locations in New England and New York. Merriam- Graves traces its roots to G.L. Merriam Company founded in 1924 and R.S. Graves Company founded in 1925. The firms merged in 1962 and in 1966, Merriam-Graves Corporation was purchased by Henry K. Wakeman, Jr. Since then, it has grown from two locations to its present size. Scott Wakeman joined the family business in 1980 and served as its chief executive officer. Another son, Kit, joined in 1988 and served as president. About Airgas Inc. Headquartered in Radnor, Pennsylvania, Airgas Inc. (NYSE:ARG) -- http://www.airgas.com/-- through its subsidiaries, is a distributor of industrial, medical, and specialty gases, and hardgoods, such as welding equipment and supplies. Airgas also distributes safety products, process chemicals, refrigerants, and ammonia products. The company produces of nitrous oxide and dry ice. More than 14,000 employees work in over 1,100 locations, including branches, retail stores, gas fill plants, specialty gas labs, production facilities and distribution centers. Airgas East, headquartered in Salem, New Hampshire, includes 86 retail branches, 40 cylinder fill plants, and 11 ISO 9000 series certified specialty gas laboratories. More than 1,100 associates serve customers in New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, New York, Pennsylvania, New Jersey, Maryland and northern Virginia. * * * Moody's Investor Service placed Airgas Inc.'s probability of default rating at 'Ba1' in September 2006. The rating still hold to date with a stable outlook. ALAN DAVID WEINER: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Alan David Weiner 7330 Sedona Way Delray Beach, FL 33446 Bankruptcy Case No.: 08-11228 Chapter 11 Petition Date: February 1, 2008 Court: Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman Jr. Debtor's Counsel: Kenneth S. Rappaport, Esq. Rappaport & Rappaport P.L. 1300 North Federal Highway, Suite 203 Boca Raton, FL 33432 Tel: (561) 368-2200 Estimated Assets: $1Million to $10 Million Estimated Debts: $10 Million to $50 Million Debtor's list of its 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ----- ------------- --------- Solaris Opportunity Fund Judgment $2,000,000 c/o Daniel S. Newman, Esq. Broad & cassel 2 South Biscayne Boulevard Miami, FL 33131 Scott Budner Lawsuit $1,873,335 c/o DuBosar & Perez, PA 120 East Palmetto Park Road Suite 100 Boca Raton, FL 33432 Vincent Carbone Loan $500,000 (no address) Melvin Gale Loan $225,000 Serge Abecassis Loan $170,000 Jeffrey Frisch Loan $50,000 Vivian Karow Loan $50,000 Skyline Builders Inc $44,870 ($3,500,000 secured) ($3,471,000 senior lien) US Bank 25' Sea Fox. $43,000 The boat is presently ($25,000 being used by Eric secured) Wynn under a charter agreement. Mr Wynn makes all monthly payments. Dow Jones & Co Trade Debt $36,900 FIA Card Services Consumer purchases $32,426 Jeffrey Carbone Loan $30,000 BMW Financial Services Deficiency $15,783 Chase Cardmember Services Trade Debt $11,650 Consumer purchases $1,306 American Express Trade Debt $8,062 FINRA Dispute Resolution Mediation $765 Block Orders Execution LLC Lawsuit Unknown Capital One Potential liability Unknown CFB Financial Trade Debt Unknown AMERICAN LAFRANCE: Can Employ Kurtzman Carson as Claims Agent ------------------------------------------------------------- American LaFrance LLC, sought and obtained the authority of the U.S. Bankruptcy Court for the District of Delaware to employ Kurtzman Carson Consultants LLC, as its claims, noticing and balloting agent. KCC is a data processing firm that specializes in Chapter 11 administration, consulting and analysis, including noticing, claims processing, voting and other administrative tasks in Chapter 11 cases. According to William Hinz, president and chief executive officer, KCC has assisted and advised numerous Chapter 11 debtors in connection with noticing, claims administration and reconciliation and administration of plan votes. KCC has provided identical or substantially similar services in other Chapter 11 cases, including Tweeter Home Entertainment Group, Inc., ResMae Corp., Dura Auto Sys., Inc., and Calpine Corp. As Claims, Noticing and Balloting Agent, KCC will, among other things: * serve as the Court's noticing agent to mail notices to the estate's creditors and parties-in-interest; * provide computerized claims, objection and balloting database services; and * provide expertise, consultation and assistance in claim and ballot processing and other administrative information with respect to ALF's Chapter 11 case. KCC will be paid for its services, expenses and supplies at the rates or prices set by KCC and in effect on the day the services or supplies are provided to ALF, in accordance with KCC's fee structure. Where the fees and expenses is expected to exceed $10,000 in any single month, KCC may require advance payment. The firm will submit its invoice to ALF within 15 days of the end of each calendar month. ALF agrees that the amount invoiced is due and payable upon receipt of the invoice. A late charge will apply to any unpaid amount, as of 30 days from receipt. If the invoice amount is disputed, a notice will be sent to KCC within 10 days of receipt of the invoice by ALF. Late charges will not accrue on any amounts in dispute. KCC will receive a retainer of $10,000 for services to be performed and expenses to be incurred. A full-text copy of the KCC Agreement is available for free at: http://researcharchives.com/t/s?27b6 As an administrative agent and an adjunct to the Court, ALF does not believe that KCC is a "professional" whose retention is subject to approval under Section 327 of the Bankruptcy Code, or whose compensation is subject to Court approval under Sections 330 and 331 of the Bankruptcy Code. Sheryl Betance, director of restructuring for KCC, told the Court that neither KCC, nor any of its employee, is connected with the Debtor, its creditors, other parties-in-interest or the United States Trustee or any person employed by the Office of the U.S. Trustee. KCC is a disinterested person, as the term is defined in Section 101(14) of the Bankruptcy Code. * * * ALF is authorized to pay, without further Court order, the reasonable fees and expenses of KCC incurred in connection with services rendered to the Debtor as Claims Agent, from the assets of the Debtor's estate, upon KCC's submission, on a monthly basis, of reasonably detailed invoices to ALF. The Hon. Brendan Linehan Shannon also approves of the KCC Agreement. As part of the overall compensation payable to KCC under the terms of the KCC Agreement, ALF has agreed to certain limitations of liability and indemnification obligations. 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: Classification and Treatment of Claims --------------------------------------------------------- As reported in the Troubled Company Reporter on Feb. 4, 2008, American LaFrance LLC filed its Plan of Reorganization and supporting Disclosure Statement on Feb. 3, 2008. The Plan claims against and interests in the Debtor in seven classes: Estimated Est. Total Class Description Treatment Recovery Claim Amount ----- ------------- --------- --------- ------------ N/A Administrative Unimpaired 100% - Claims N/A Allowed Priority Unimpaired 100% - Tax Claims N/A DIP Financing Unimpaired 100% $50,000,000 Claims 1 Allowed Secured Impaired - $184,400,000 Prepetition Lender Claims 2 Other Allowed Unimpaired 100% $1,170,000 Secured Claims 3 Allowed Priority Unimpaired 100% $1,413,000 Non-Tax Claims 4 General Unsecured Impaired Pro rata $58,000,000 Creditors share of Trust property 5 Convenience Class Impaired 100% $500,000 6 Assumed Unimpaired 100% $27,000,000 Liabilities 7 Interests Unimpaired 0% - Holders of Administrative Claims and Allowed Priority Tax Claims are estimated to collectively receive distributions not to exceed $3,500,000. Allowed Class 4 Claims will not be paid by the Debtor, rather it will be paid from a certain Trust Property, which includes the (i) litigation assets -- any and all claims or causes of action of the Debtor against IBM Corporation related to services provided by IBM to ALF; (ii) $5,000,000 of cash; and (iii) avoidance actions not settled pursuant to the provisions of the Plan. Other than Allowed Class 4 Claims, the Plan obligations will be funded by the Debtor in accordance with the Plan. Settlement Provision for Class 4 Claims The Debtor informs the Court that it has conducted a preliminary analysis of potential preference claims. For each claimant subject to a potential Preference Claim, the Debtor identified total payments it made to the Claimant, and the value of goods provided by the Claimant to the Debtor, in the 90-day period immediately before the Petition Date. The preferential payments aggregate $43,255,939. A list of ALF's Preferential Claims is available for free at: http://researcharchives.com/t/s?27c1 If the Debtor holds a potential Preference Claim against a Class 4 Claimant, the Plan provides that the Claimant may settle its liability for the Preference Claim by electing and agreeing to: -- provide the Debtor, after the Effective Date, with unsecured trade credit with terms of net 30 days; and -- waive any distribution on account of its Allowed Class 4 Claim. 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. 4; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN LAFRANCE: Liquidation Analysis Under Reorganization Plan ----------------------------------------------------------------- American LaFrance LLC tells the U.S. Bankruptcy Court for the District of Delaware it does not believe that a liquidation under Chapter 7 of the Bankruptcy Code would yield a return to its creditors and interest holders higher than that noted in its proposed Plan of Reorganization, which was filed on Feb. 3, 2008. A liquidation of ALF would significantly impair recoveries to all Creditors and Interest Holders and clearly is not in the best interests of the Estate's constituencies, according to American LaFrance President and Chief Executive Officer William J. Hinz. "Creditors and Interest Holders will fare much better under the Plan than in a liquidation," Mr. Hinz says. American LaFrance LLC Liquidation Analysis (in thousands) Balance Forced Liquidation Sheet --------------------- Unaudited Realization Extended Gross Assets 12/31/07 Rate Value ------------ --------- ------------ -------- Cash and cash equivalents $4,000 100.0% $4,000 Restricted cash 26,100 100.0% 26,100 Accounts receivable 18,750 75.0% 14,063 Raw materials 35,662 25.0% 8,915 Work in process 45,824 18.5% 8,477 Finished goods 1,500 80.0% 1,200 Used 6,043 5.0% 302 Other - unidentified 15,972 0.0% - Reserve for excess & obsolence (5,000) 0.0% - --------- ------------ -------- Net Inventory $100,000 18.9% $18,895 --------- ------------ -------- Prepaid Insurance and other current assets 3,000 0.0% - --------- ------------ -------- Current Assets $151,850 41.5% $63,057 --------- ------------ -------- 235 N 16th St. Lebanon, PA - NA 4,000 3705 St. Johns Parkway FL - NA 4,000 Factory Equipment 3,531 25.0% 883 Leasehold Improvements 1,208 0.0% - Furnitures & Fixtures 1,194 10.0% 119 Computer & Communications Equipment 1,479 16.9% 250 Software 13,620 0.0% - Construction in Progress 9,800 10.0% 980 Vehicles 43 10.0% 4 --------- ------------ -------- Net Property, plant & equipment 30,875 33.2% 10,236 --------- ------------ -------- Gross Value of Assets $182,725 75.5% $73,294 --------- ------------ -------- Liquidation Expenses (2,309) -------- Net Liquidation value $71,255 ------- Claims Cascade Claim Amt. Recovery Recovery % ---------- -------- ---------- Summerville Lease Prepetition 11,950 3,000 25.9% Performance Bonds 31,300 23,100 73.8% Secured Debt 150,241 45,155 30.1% Priority Unsecured Claims 2,088 - 0.0% Secured Lender Deficiency Claim 105,087 - 0.0% Other General Unsecured Claims 95,859 - 0.0% ---------- -------- ---------- Subtotal 396,166 71,255 ---------- -------- 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. 4; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN RAILCAR: 9.45% Stake Acquisition Won't Affect S&P Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services said that an announcement that American Railcar Industries Inc. (ARI; BB-/Stable/--) has acquired a 9.45% stake in Greenbrier Cos. Inc. (BB-/Stable/--), and that ARI's principal shareholder, Carl Icahn, has expressed interest in a possible business combination of the two railcar manufacturers, does not immediately affect the ratings or outlook on either company. According to related SEC filings, no business combination offer has been made, nor has any structure of a potential acquisition been suggested. Combining with Greenbrier would contribute to improving ARI's business risk profile, by strengthening and diversifying its product portfolio. Standard & Poor's also notes that the company has a significant cash balance that it could use for an acquisition. However, the rating on ARI already reflects the company's aggressive financial policies, and completing a transaction could require additional financing. Additional debt could stretch ARI's credit metrics beyond levels commensurate with the rating, and should ARI assume Greenbrier's debt, negative rating actions could result for both issuers. Therefore, Standard & Poor's will monitor future developments and reflect such events in the ratings. AMERICAN LAFRANCE: Wants to Sell Assets to Patriarch Partners ------------------------------------------------------------- American LaFrance LLC, acknowledges that it has operated at a loss and experienced a severe contraction in trade terms by its vendors. The Debtor believes that the most viable solution to its liquidity crisis that will also preserve the value of its assets and business is an asset sale pursuant to Section 363 of the Bankruptcy Code. Accordingly, the Debtor asks the U.S. Bankruptcy Court for the District of Delaware for permission to sell substantially all of its assets to Patriarch Partners Agency Services LLC, free and clear of liens, claims, encumbrances and subject to higher and better bids. Patriarch Partners Agency Services LLC, is the current secured DIP Lender and agent for the other DIP Lenders who has committed to extend a $50,000,000 DIP credit facility to the Debtor. From the Petition Date through the close of the proposed sale, Patriarch has agreed to fund the Debtor's day-to-day obligations. This is expected to end on May 1, 2008. The Sale Agreement Christopher Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, in Wilmington, Delaware, relates that the Debtor seeks to enter into a asset purchase agreement with Patriarch. Under the APA, the Debtor will sell all of its assets to Patriarch for $150,000,000. The assets to be sold includes all of the Debtor's title and interest in and to all of its assets, properties, rights, claims and contracts owned, leased or licensed. The Debtor also intends to assume and assign certain contracts to Patriarch in connection with the proposed sale. Among the assets to be excluded from the proposed sale are all minute books, stock records and corporate seals; all records that the Debtor is required by law to retain in its possession; and the Debtor' equity interests. Pursuant to the APA, Patriarch will assume liabilities to cure costs associated certain contracts to be assigned by the Debtor to Patriarch; for trade payables arising postpetition that directly relates to the operation of the Debtor's business in the ordinary course; and all obligations under the Debtor's customer programs. The APA also provides that the Debtor will release Patriarch, as buyer, of all claims, counterclaim, set-off or causes of action. As of Feb. 3, 2008, no other entity has provided a definitive offer to purchase the Assets for greater economic value to the Debtor's estates than Patriarch, Mr. Ward informs the Court. The APA has been negotiated in good faith, he adds. A full-text copy of the Patriarch Partners APA is available for free at http://researcharchives.com/t/s?27c3 Bidding Procedures To obtain the greatest value for its assets, the Debtors propose to subject the asset sale to uniform bidding procedures. A Qualified Bidder must submit its bid no later than March 14, 2008, at 12:00 p.m. Prior to the Bid Deadline, a Qualified Bidder that wants to make an offer must deliver written copies of its cash bid to the Debtor, the Debtor's counsel, counsel for Patriarch and counsel for any counsel for any official committee of unsecured creditors appointed in the Debtor's cases. A Qualified Bidder is a potential bidder that the Debtor, in its discretion, determines is reasonably like to submit a bona fide offer and to be able to consummate a sale if selected as a Successful Bidder. If more than one Qualified Bid is received by the Bid Deadline, the Debtor propose to conduct an auction on March 28, 2008, at the offices Klehr, Harrison, Harvey, Branzburg & Ellers, in Wilmington, Delaware, to determine the best bid with respect to the Assets. To be able to participate in the Auction, each Bid must be in cash, must equal or exceed Patriarch's purchase price plus $100,000, and must be accompanied by a $100,000 good faith deposit. A bid must be irrevocable until two business days after the Assets have been sold. During the Auction, bidding will begin with the highest Baseline Bid and continue in minimum increments of at least $250,000. Moreover, to induce Patriarch to expend the time, energy and resources necessary to submit a stalking horse bid, the Debtor has agreed to provide, with the Court's consent, certain bid protections to Patriarch. If no other Qualified Bids are received, the Debtor intends to seek approval of and authority to consummate the proposed sale at a hearing on April 9, 2008. Any objections with respect to the Asset Sale must be filed no later than April 2. Notices The Debtor intends to give notice of the Bid Procedures, the Bid Procedures Order, the Auction and the Proposed Sale via first class mail to its creditors, the U.S. Trustee and other known parties-in-interest. It also intends to publish the Auction and Sale Publication Notice in the national edition of The Wall Street Journal, The New York Times or The USA Today. The Debtor also proposes to serve notice of its proposed cure costs no later than five days after a sale order is entered. Any objection to a proposed cure amount must be filed no later than April 2, 2008. Mr. Ward maintains that the Debtor's primary goal is to confirm a plan of reorganization, which it recently filed to the Court. The proposed asset sale is an alternative transaction to the Plan, he clarifies. If the proposed Plan is not confirmed, the Debtor intends to pursue approval of the Sale Motion. The hearing to consider the proposed bidding procedures and notices is on February 21, 2008, and will go forward regardless of the status of the Plan, according to Mr. Ward. 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. 4; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ARCH ONE: Poor Credit Quality Cues Moody's to Review 'Ba2' Rating ----------------------------------------------------------------- Moody's Investors Service placed its rating of this notes issued by ARCH One Finance Limited - Issuance of $3,000,000 Floating Rate Credit Linked Noted due June 2012 on review for possible downgrade: Class Description: $3,000,000 Secured Floating Rate Credit Linked Notes Due June 2012, Series 2005-1 Prior Rating: Ba2 Current Rating: Ba2, on review for possible downgrade Moody's explained that this rating action reflects deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of corporate securities. ASARCO LLC: Gets Court Nod to Sell Perth Amboy for $19.8 Million ---------------------------------------------------------------- The Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas approves the bidding procedures governing the auction of ASARCO LLC's 67-acre real property in Perth Amboy, New Jersey, to the best and highest bidder. ASARCO will establish the time, date and location of the auction after the expiration of the feasibility period granted to Emerald Bay Equity, LLC, as the stalking horse bidder. As reported in the Troubled Company Reporter on Jan. 18, 2008, the Debtors told the Court that they wanted to: (i) sell its 67-acre real property located in Perth Amboy, New Jersey, to Emerald Bay Equity, LLC, for $19,800,000, free and clear of all liens, claims and other interests; and (ii) assume certain permits and contracts related to the Property. Pursuant to a purchase and sale agreement, dated Dec. 10, 2007, ASARCO and Emerald Bay agreed that Emerald Bay will: -- pay ASARCO $19,800,000 in cash for the Perth Amboy Property; -- assume ASARCO's environmental obligations relating to the Property, which ASARCO estimates to have a present value of approximately $9,000,000; -- release, defend, and indemnify ASARCO for any environmental liabilities relating to the Property; and -- execute an Administrative Consent Order with the New Jersey Department of Environmental Protection for remediation of the Property. Emerald Bay has given a $495,000 deposit to General Land Abstract Co., Inc., ASARCO's escrow agent, Tony M. Davis, Esq., at Baker Botts, L.L.P., in Houston, Texas, told the Court. Mr. Davis said that in 1997, the city government of Perth Amboy designated the Property as a redevelopment zone. In 2004, the Perth Amboy Redevelopment Agency entered into a redevelopment agreement with a designated redeveloper, PA-PDC Perth Amboy, LLC, for the acquisition and redevelopment of the properties in the designated zone. Mr. Davis said that if PA-PDC is not able to acquire the Property consensually, then the Redevelopment Agency may file a condemnation action to acquire the Property. Any legal action to acquire title of the Property through condemnation is subject to defenses ASARCO may have and is currently subject to the automatic stay imposed by Section 362 of the Bankruptcy Code. Although there have been inquiries concerning the acquisition of the Property, the redevelopment status has limited the ability to market it, Mr. Davis told the Court. ASARCO has delivered the proposed Bidding Procedures to several entities that had previously expressed a bona fide interest in the Property, including PA-PDC. PA-PDC Perth Amboy, LLC, the designated redeveloper of ASARCO LLC's 69-acre property in Perth Amboy, New Jersey, previously objected to the proposed sale process of the property. PA-PDC asserts that the proposed sale process is inherently unfair, providing the proposed buyer, Emerald Bay Equity, LLC, with 180 days to "assess feasibility" of acquisition of the property, while providing other potential bidders a less-than-30-day investigation time frame. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Debtors' exclusive period to file a plan expires on Feb. 11, 2008. (ASARCO Bankruptcy News Issue No. 64 & 65; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Seeks Court Nod on Plan Sponsor Bid Procedures ---------------------------------------------------------- ASARCO LLC and its debtor-affiliates asks the Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas to approve uniform bidding procedures to govern the plan sponsor selection process. The Debtors relates that they have reached an agreement in principle with creditor constituents regarding the structure of a plan of reorganization, which proposes to: (1) sell substantially all of the company's assets, and (2) resolve the company's contingent environmental and asbestos liabilities. In March 2007, ASARCO presented to the Court a reorganization plan exit process timeline to identify a plan sponsor and develop a plan structure that maximizes the value of the assets of the company's bankruptcy estate. Since then, ASARCO and Lehman Brothers, Inc., its financial advisors, have engaged in marketing and due diligence program. James R. Prince, Esq., at Baker Botts, L.L.P., in Dallas, Texas, says ASARCO and its creditor constituents are ready to move forward with the plan sponsor selection process and implement procedures that will achieve that end. Under the uniform bidding procedures: (a) Any entity that wishes to make a bid for substantially all of ASARCO's assets must submit a written proposal on a date that is approximately three weeks after the entry of a Bid Procedures Order to: * George Mack Lehman Brothers, Inc. 745 Seventh Avenue, 26th Floor New York, NY 10019-6801 * Jack L. Kinzie, Esq. James R. Prince, Esq. Baker Botts L.L.P. 2001 Ross Avenue Dallas, TX 75201-2980 (b) ASARCO will distribute to bidders a draft acquisition agreement. The Bid must be accompanied by the Draft Agreement, as modified by the Bidder. (c) "Purchased Assets" will include substantially all of the tangible and intangible operating assets and properties of ASARCO. The Sale Transaction will be implemented pursuant to a confirmed Chapter 11 plan of reorganization so that the successful bidder will receive the protection of a channeling injunction under Sections 105, 363(f) and 524(g) of the Bankruptcy Code. (d) Each bid must disclose the Bidder's intention to provide the ASARCO Employees with at least the same compensation and benefits as was provided to those employees before the closing of the Sale Transaction, subject to management's authority adjust wages and benefits in the ordinary course as necessary to the extent consistent with legal obligations, including pursuant to a collective bargaining agreement, for the two-year period after the closing of the Sale. (e) Each bid must indicate whether or not the Bidder has negotiated mutually satisfactory agreements with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, and other unions representing ASARCO Employees that would replace ASARCO's current collective bargaining agreements with the Unions. In the alternative, the Bidder must provide a detailed statement of its stand in discussion with the unions, its expected outcome, and the basis for its views on the expected outcome. (f) Each bid must indicate whether or not the Bidder intends to maintain ASARCO's current pension plan without modification. (g) Each Bidder must indicate its intention to assume all of the Debtors' environmental liabilities relating to all of the Purchased Assets. ASARCO proposes that each Bidder will be responsible for all costs it may incur during the investigation and pursuit of a proposed Sale Transaction, including those of its advisors and agents, except as otherwise may be agreed to by ASARCO. ASARCO reserves the right to consider, in its discretion, all factors in determining which bid to accept or reject without assigning any reasons, or alter the bid procedures as it believes necessary to obtain the highest and best value for the company's bankruptcy estate. ASARCO proposes to hold a Plan Sponsor Selection meeting approximately two weeks after the Bid Submission Deadline, which meeting may be continued from time to time at ASARCO's discretion. Bidders must appear in person at the Plan Sponsor Selection Meeting. Bids submitted will be evaluated by ASARCO, in consultation with its advisors and the Creditor Constituents. In selecting the Plan Sponsor, the parties will consider these matters: * the amount, value and form of consideration of the bid, including assumption or exclusion of ASARCO's liabilities; * the extent to which the consideration is non-cash and the risks associated with a non-cash consideration; * the Excluded Assets; * the timing of consummation indicated by the bid; * the certainty of consummation indicated by the bid; * the structure indicated by the bid; * proposed financing arrangements reflected by the bid, and the sources of that financing; * the extent and nature of any changes made to the Draft Agreement; * relevant legal and contractual considerations; * the certainty of preservation of ASARCO's employees' jobs and assumption or successful negotiation of a CBA indicated by the bid; * the assumption of environmental liabilities of the Debtors relating to the Purchased Assets and availability of the Bidder's funding; and * the Bidder's and its affiliates' history of compliance or noncompliance with environmental regulations. ASARCO seeks the Court's authority to exercise its discretion on whether to pay a Break-Up Fee to any purchaser. ASARCO says it will pay a Break-Up Fee in the event a Final Agreement is terminated by the Purchaser if the Closing has not occurred: -- on or before the Termination Date due to ASARCO's failure to satisfy closing conditions; and -- on or before the Court has confirmed a reorganization plan. ASARCO will also pay a Break-Up Fee if it has received a Superior Proposal. A "Superior Proposal" refers to a bona fide written Acquisition Proposal that ASARCO's Board of Directors determines is reasonably likely to be consummated in a timely manner; would result in a transaction more favorable to ASARCO's stakeholders than the Sale Transaction; and provides a deemed value to ASARCO's bankruptcy estate that exceeds the deemed value of the Purchase Price plus the Break-up Fee by at least $25,000,000. ASARCO asks the Court for permission to file under seal the amount of any Break-Up Fee it will pay to any Purchaser. ASARCO further seeks the Court's authority to include a "no-shop requirement" clause in the Final Agreement. The clause will provide that ASARCO and its affiliates will not solicit any proposals for a merger, recapitalization or purchase transaction of all of its assets, provided that ASARCO or the ASARCO Board is not prevented from: -- complying with its obligations under federal or state law with regard to an Acquisition Proposal; -- pursuing a reorganization plan not involving the sale of any material amount of ASARCO's assets; or -- engaging in any negotiations with any person who has made a bona fide written Acquisition Proposal or recommending an alternative Acquisition Proposal to its stakeholders. Mr. Prince says that ASARCO and its creditor constituents agree that a sale of substantially all of the company's assets under a confirmed reorganization plan should yield the highest return for ASARCO's stakeholders. He adds that if the plan sponsor selection process does not yield a high enough value for stakeholders, some or all of the creditor constituents may withdraw their support for the proposed plan structure. Mr. Prince asserts that a one-step plan sponsor selection process will yield higher and better results compared to a secondary topping auction process. "In the face of a secondary topping auction, prospective bidders are less likely (i) to expend the time and resources to participate in the first stage and (ii) to submit their highest and best bid," Mr. Prince says. "Armed with the knowledge of a second chance, bidders would resist either participating in or submitting their highest offers in the first round. "In the plan sponsor selection process that is the subject of the Bid Procedures, all bidders are invited to submit their highest and best offers," Mr. Prince maintains. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Debtors' exclusive period to file a plan expires on Feb. 11, 2008. (ASARCO Bankruptcy News Issue No. 65; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Settle Toxic Tort Claims for $27.9 Million ------------------------------------------------------ ASARCO LLC and its debtor-affiliates and certain toxic tort claimants entered into five separate settlement agreements which allows the claimants to assert approximately $27.9 million of general unsecured claims against the Debtors. Approximately 850 claims were filed against the Debtors asserting an aggregate of $1,470,000,000, for alleged physical harm or property damage arising from alleged exposure to lead or other toxic substances resulting from their operations of various sites located in Hayden, Arizona; Tar Creek, Oklahoma; and El Paso, Texas: Claimants Asserted Claim Amt. --------- ------------------- Tar Creek Site $1,030,000,000 Hayden Site 340,000,000 El Paso Site 12,000,000 In late October 2007, the Debtors and certain of the Toxic Tort Claimants participated in a two-day mediation, Ishaq Kundawala, Esq., at Baker Botts, L.L.P., in Dallas, Texas, relates. As a result of those mediations, the parties entered into the agreements, which provide that certain of the Claimants will be entitled to allowed general unsecured claims: Claimants Allowed Claim Amt. --------- ----------------- Tar Creek Claimants $20,782,500 Hayden Claimants 4,800,000 El Paso Claimants 2,387,500 The settlements also provide that any pending lawsuits filed by a Settling Claimant against the Debtors will be dismissed with prejudice within 20 days after the claimants obtain their allowed general unsecured claims. The Debtors clarify that they do not admit any liability to Settling Claimants. The Debtors said they will resolve some of the remaining claims through an omnibus claims objection process. Mr. Kundawala said the Court will continue with the toxic tort mediation to address the remaining unresolved Tar Creek property damage claims. Blue Tee Corporation and Gold Fields Mining, LLP, who filed contribution claims related to various pending toxic tort lawsuits against the Debtors, have notified the Debtors that the settlements resolve their contribution claims. Claimants Seek to File Supplemental Claims Certain Tar Creek toxic tort claimants represented by Betty Jean Cole and Darlene Evans seek leave from the Court to supplement Claim Nos. 9972 to 9983, 9985, 9986, 9987, 9988, and 9989. The Claims will be supplemented to include approximately 523 individual, municipal, and commercial property owners in the Picher, Cardin, and Quapaw, Oklahoma, towns, and to cap the asserted amount at $100,000,000, Patricia Reed Constant, Esq., in Corpus Christi, Texas, tells the Court. Ms. Constant says the Debtors have notified the Claimants that they need to file amended proofs of claim for each individual claimant. The Claimants, however, find it cumbersome to file individual claims as there are more than 500 individual claimants. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Debtors' exclusive period to file a plan expires on Feb. 11, 2008. (ASARCO Bankruptcy News Issue No. 64; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). BAYOU GROUP: Files Amended Disclosure Statement in New York ----------------------------------------------------------- Bayou Group LLC and its debtor-affiliates delivered their First Amended Joint Chapter 11 Plan of Reorganization and Modified Second Amended Disclosure Statement explaining that Plan to the Honorable Adlai S. Hardin Jr. of the United States Bankruptcy Court for the Southern District of New York. Overview of the Plan The Debtors' proposed amended plan contemplates the liquidation of their assets in order to provide fair, equitable, and reasonable treatment of all of their creditors. The Debtors say that they have $21,411,567 in cash as of Dec. 17, 2008, as a result of the settlement of certain of the adversary proceedings after the payment of certain costs and expenses associated with the administration of these cases. The Debtors further say that the United States government will, at a minimum, distribute at least $106.5 million on a pro rata basis to investor creditors. Prior the the Debtors' bankruptcy filing, the United States government seized certain assets from the prepetition principals and the Debtors, including more than $106.5 million in funds that the Arizona attorney general initially seized from several bank accounts, as well as certain other private equity investments funds belonging to the Debtors. The plan provides separate treatment of claims against Bayou Management LLC and Bayou Group's private pooled investment funds called the Bayou Hedge Funds. The Bayou Hedge Funds is composed of Bayou Superfund LLC, Bayou No Leverage Fund LLC, Bayou Accredited Funds LLC, Bayou Affiliates Fund LLC and Bayou Fund. Treatment of Claims A) Bayou Hedge Funds Under the Plan, claimants will recover 100% with respect to these claims: -- administrative expense claims totaling $2,601,932; -- Priority Tax Claims totaling $4,000; and -- Non-investor General Unsecured Claims totaling $1,400,000; In addition, each holders of these impaired claims will expect to recover between 8.5% and 34%: -- Investor Creditors Unsecured Claims totaling between $246,000,000 and $332,000,000; and -- Off-Shore Claims totaling $3,000,000. All outstanding equity interests will be canceled and holders will not receive any property under the Plan. B) Bayou Management Under the Plan, claimants will recover 100% with respect to these claims: -- Administrative Expense Claims; -- Priority Tax Claims; and -- Priority Non-Tax Claims. Holders of these claims will be entitled to receive a pro rata distribution from the Bayou Management Litigation Trust: -- Non-Investor General Unsecured Claims totaling between $12,000 and $1,600,000; and -- Investor Creditor Unsecured Claims totaling between $246 million and $332 million. -- Off-Shore Claims totaling $20 million. All outstanding Equity Interest in Bayou Management will be terminated and holder will not receive any property on account of their equity interest. A full-text copy of the Debtors' Modified Amended Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=080205004144 A full-text copy of the Debtors' Modified Amended Chapter 11 Plan of Reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=080205004333 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. BAYOU GROUP: Files Schedules of Assets and Liabilities ------------------------------------------------------ Bayou Group LLC filed with the U.S. Bankruptcy Court for the Southern District of New York its schedules of assets and liabilities disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $0 B. Personal Property $40,219 C. Property Claimed as Exempt D. Creditor Holding Secured Claim $250,000 E. Creditors Holding Unsecured Priority Claims Unknwon F. Creditors Hoilding Unsecured Nonpriority Claims $0 ------- --------- TOTAL $40,219 $250,000 Other affiliates filed separate schedules of assets and liabilities disclosing: Affiliate Total Assets Total Debts --------- ------------ ----------- Bayou Management LLC Unknown $576,240 Bayou Superfund LLC Unknown $250,000 Bayou No Leverage Fund LLC Unknown $250,000 Bayou Affiliates Fund LLC Unknown $250,000 Bayou Accredited Fund LLC Unknown $250,000 Bayou Fund LLC $0 $250,000 Bayou Advisors LLC $0 $250,000 Bayou Equities LLC $0 $250,000 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. BEAR STEARNS: S&P Confirms Low-B Ratings on 7 Classes of Certs. --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 72 classes of asset-backed certificates from five Bear Stearns Asset Backed Securitization Trust transactions. As of the Jan. 25, 2008, distribution date, cumulative realized losses for the transactions ranged from 0.50% (series 2006-SD1) to 1.54% (series 2006-1) of the original principal balances, and total delinquencies ranged from 15.18% (series 2006-SD1) to 39.15% (2006-1) of the current principal balances. Despite the elevated delinquency levels within the mortgage pools backing these transactions, the classes currently have adequate credit support to support the current ratings, partly due to the shifting interest structure of the transactions. Seasoning for these transactions ranges from 11 months (series 2007-SD1) to 31 months (series 2005-SD2), and these transactions have outstanding pool factors ranging from approximately 42.58% (2007-SD1) to 69.35% (series 2006-SD1). Credit support is provided either solely by subordination or through a combination of subordination, overcollateralization, and excess interest cash flow. The collateral for these transactions originally consisted of 30- year scratch-and-dent, or reperforming fixed- and/or adjustable- rate first- and second-lien mortgage loans secured by one- to four-fa[mily residences]. Ratings Affirmed Bear Stearns Asset Backed Securities Trust Asset-backed Certificates Series Class Rating ------ ----- ------ 2005-SD2 I-A-1 AAA 2005-SD2 I-A-2 AAA 2005-SD2 I-A-3 AAA 2005-SD2 I-M-1 AA 2005-SD2 I-M-2 A 2005-SD2 I-M-3 A- 2005-SD2 I-M-4 BBB+ 2005-SD2 I-M-5 BBB 2005-SD2 I-M-6 BBB- 2005-SD2 I-B BB 2005-SD2 II-A-1 AAA 2005-SD2 II-A-2 AAA 2005-SD2 II-M-1 AA 2005-SD2 II-M-2 A 2005-SD2 II-M-3 BBB 2005-SD2 II-B BBB- 2006-SD1 A AAA 2006-SD1 M-1 AA 2006-SD1 M-2 A 2006-SD1 M-3 BBB 2006-SD1 M-4 BBB- 2006-1 A AAA 2006-1 M-1 AA 2006-1 M-2 AA- 2006-1 M-3 A 2006-1 M-4 A- 2006-1 M-5 BBB+ 2006-1 M-6 BBB 2006-1 M-7 BBB- 2007-SD1 I-A-1 AAA 2007-SD1 I-X AAA 2007-SD1 I-PO AAA 2007-SD1 I-A-2A AAA 2007-SD1 I-A-2B AAA 2007-SD1 I-A-3A AAA 2007-SD1 I-A-3B AAA 2007-SD1 I-B-1 AA 2007-SD1 I-B-2 A 2007-SD1 I-B-3 BBB 2007-SD1 I-B-4 BB 2007-SD1 I-B-5 B 2007-SD1 II-1A-1 AAA 2007-SD1 II-1A-2 AAA 2007-SD1 II-2A-1 AAA 2007-SD1 II-2A-2 AAA 2007-SD1 II-3A-1 AAA 2007-SD1 II-3A-2 AAA 2007-SD1 II-B-1 AA 2007-SD1 II-B-2 A 2007-SD1 II-B-3 BBB 2007-SD1 II-B-4 BB 2007-SD1 II-B-5 B 2007-SD2 I-A-1A AAA 2007-SD2 I-A-1B AAA 2007-SD2 I-PO AAA 2007-SD2 I-A-2A AAA 2007-SD2 I-A-2B AAA 2007-SD2 I-A-3A AAA 2007-SD2 I-A-3B AAA 2007-SD2 I-X AAA 2007-SD2 I-B-1 AA 2007-SD2 I-B-2 A 2007-SD2 I-B-3 BBB 2007-SD2 I-B-4 BB 2007-SD2 I-B-5 B 2007-SD2 II-A-1 AAA 2007-SD2 II-A-2 AAA 2007-SD2 II-M-1 AA+ 2007-SD2 II-M-2 AA 2007-SD2 II-M-3 A 2007-SD2 II-M-4 BBB 2007-SD2 II-M-5 BBB- BONIFACIUS LTD: Seven Classes Get Moody's Junk Ratings ------------------------------------------------------ Moody's Investors Service downgraded ratings of nine classes of notes issued by Bonifacius, Limited, and left on review for possible further downgrade ratings of five of these classes of notes. The notes affected by this rating action are: Class Description: $1,625,000,000 Class A1-M Floating Rate Senior Secured Notes Due 2047 -- Prior Rating: Aaa -- Current Rating: A3, on review for possible downgrade Class Description: $225,000,000 Class A1-Q Floating Rate Senior Secured Notes Due 2047 -- Prior Rating: Aaa -- Current Rating: A3, on review for possible downgrade Class Description: $275,000,000 Class A1-J term loan made pursuant to the Class A-1J Loan Agreement -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Class Description: $125,000,000 Class A-2 Floating Rate Senior Secured Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Class Description: $115,000,000 Class A-3 Floating Rate Senior Secured Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: $55,000,000 Class A-4 Floating Rate Senior Secured Notes Due 2047 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ca Class Description: $33,000,000 Class B Floating Rate Subordinate Secured Deferrable Notes Due 2047 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ca Class Description: $15,000,000 Class C Floating Rate Subordinate Secured Deferrable Notes Due 2047 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Ca Class Description: $16,000,000 Class D Floating Rate Junior Subordinate Secured Deferrable Notes Due 2047 -- Prior Rating: B2, on review for possible downgrade -- Current Rating: Ca The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence on Jan. 24, 2008, as reported by the Trustee, of an event of default caused by the Class A Principal Coverage Ratio falling below 100% pursuant to Section 5.1(h) of the Indenture dated July 27, 2007. Bonifacius, Limited is a collateralized debt obligation backed primarily by a portfolio of RMBS securities and CDO securities. Recent ratings downgrades on the underlying portfolio caused ratings-based haircuts to affect the calculation of overcollateralization. Thus, the Principal Coverage Ratio relating to the Class A Notes failed to meet the required level. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by certain Noteholders. Because of this uncertainty, the ratings assigned to the Class A1-M Notes, Class A1-Q Not