/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080207.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, February 7, 2008, Vol. 12, No. 32 Headlines 1501 FM: Case Summary & Largest Unsecured Creditor AAR CORP: S&P Assigns BB Rating on Proposed $175 Mil. Senior Notes ACTIVE ENDEAVORS: Involuntary Chapter 11 Case Summary AIR EXPERTS: Case Summary & Six Largest Unsecured Creditors ALISA MORSE: Case Summary & Four Largest Unsecured Creditors AMERICAN AXLE: Net Loss Slides to $25MM in Qtr. Ended December 31 AMERICAN HOME: Presents Revised Procedures for the Loans Sale AMERICAN HOME: Obtains Court Nod to Reject Two PS Texas Contracts AMERICAN HOME: US Trustee Balks Deloitte & Touche as Tax Experts AMERICAN LAFRANCE: SEC 341 Meeting of Creditors Set for March 3 AMERICAN LAFRANCE: Asks Court to Set March 28 as Claims Bar Date AMERIGAS PARTNERS: Earns $54.3 Million in First Qtr. Ended Dec. 31 AMERICAN RAILCAR: Carl Icahn Acquires 9.% Stake in Greenbrier Cos. ANTHONY LINSEY: Case Summary & 11 Largest Unsecured Creditors BAYONNE MEDICAL: Buyer-IJKG Pays $2.5MM to Settle Medicare Issues BARNERT HOSPITAL: Creditors' Committee, et al., Balk at Asset Sale BEAR STEARNS: S&P Chips Ratings of Two Classes on Weak Performance BELIEVERS BIBLE: Case Summary & Eight Largest Unsecured Creditors BELO CORP: S&P Chips Rating on $33 Mil. Certs. to 'BB' From 'BB+' BLUE FROG: Files for Chapter 7 Bankruptcy to Liquidate Assets BMB ENTERPRISES: Case Summary & Two Largest Unsecured Creditors BOSTON HILL: Case Summary & 20 Largest Unsecured Creditors BROOKSIDE TECH: Posts $1.4 Million Net Loss in 2007 Third Quarter BRUCE STRICKLAND: Case Summary & Largest Unsecured Creditor CAPRI CONDOMINIUMS: Voluntary Chapter 11 Case Summary CA-TEL TELECOM: Case Summary & 20 Largest Unsecured Creditors CENTRAL ILLINOIS: Owes $5 Million to Investors of Incomplete Plant CGP INC: Case Summary & 16 Largest Unsecured Creditors CHARMING SHOPPES: Discloses Initiatives to Streamline Operations CHARMING SHOPPES: Shuts 150 Stores Following Restructuring Program CHARMING SHOPPES: Restructuring Won't Affect S&P's 'BB-' Rating CHATTEM INC: Earns $59.7 Million in Fiscal Year Ended Nov. 30 C&H PETROLEUM: Case Summary & 20 Largest Unsecured Creditors CHURCH ON THE MOVE: Voluntary Chapter 11 Case Summary COLLIN DWAYNE: Voluntary Chapter 11 Case Summary COLONIA SANTA RITA: Case Summary & 20 Largest Unsecured Creditors COMPLETE RETREATS: To Close 61 Chapter 11 Cases CROWN HOLDINGS: Earns $343 Million in 2007 Fourth Quarter DANKA BUSINESS: Dec. 31 Balance Sheet Upside Down by $354.2 Mil. DAVID WALKER: Case Summary & 19 Largest Unsecured Creditors DOMAIN HOME: Great American Presents $5.2MM Bid; Auction Today EASTMAN KODAK: Earns $92 Million in 2007 Fourth Quarter EL RIO PROFESSIONAL: Case Summary & 12 Largest Unsecured Creditors ENERGY FUTURE: CEO Confirms Support of The Carbon Principles ENVIRONMENTAL TECTONICS: PNC Waives Covenant Default Until May 31 FIRST MAGNUS: Wells Fargo Funding to Block Plan Confirmation FITCH INVESTMENT: Case Summary & Five Largest Unsecured Creditors FOLEY SQUARE: Moody's to Review Ratings Due to Weak Credit Quality FORD MOTOR: Toyota & Ford Unaffected by Plastech's Bankruptcy FOREST CITY: Expands Bank Credit Facility to $750 Million FORTUNOFF: Asks Court Approval to Hire Skadden Arps as Counsel FREMONT GENERAL: Moves Headquarters from Santa Monica to Brea FREMONT GENERAL: S&P Junks Long-term Counterparty Credit Rating GAINEY CORP: Moody's Junks Rating on High Default Probability GEORGIA SOD: Voluntary Chapter 11 Case Summary GLOBAL MOTORSPORT: Gets Initial OK to Access Styx's DIP Facility GMAC COMMERCIAL: Fitch Holds Low-B Ratings on Four Cert. Classes GMAC LLC: Financial Unit Posts $724MM Net Loss in Fourth Qtr. GMAC LLC: Moody's Downgrades Senior Unsecured Rating to 'B1' H.A.Z 4: Case Summary & 20 Largest Unsecured Creditors HORIZON LINES: Earns $10.7 Million in 4th Qtr. Ended December 31 INTERSTATE LOGISTICS: Case Summary & 20 Largest Unsec. Creditors JENNIFER WEST: Voluntary Chapter 11 Case Summary JENNIFER WHALEN: Case Summary & 16 Largest Unsecured Creditors KEITH CHANDLER: Voluntary Chapter 11 Case Summary KINETIC CONCEPTS: Earns $66.5 Million in 2007 Fourth Quarter LAKELAND COMMERCIAL: Voluntary Chapter 11 Case Summary LARRY GORIS: Case Summary & 18 Largest Unsecured Creditors LINEAR TECH: Dec. 30 Balance Sheet Upside-Down by $564.4 Million LIONEL LLC: Asks Court's Ok to Buy 50% Interest in Creative Trains LOUIS JEAN-LOUIS: Case Summary & Largest Unsecured Creditor MACY'S INC: Division Consolidation Cues Elimination of 2,550 Jobs MARK TAYLOR: Voluntary Chapter 11 Case Summary MEDIANEWS GROUP: Names Michael Tully as Publisher of Two Groups MEDIANEWS GROUP: Publishing Executive George Riggs Resigns MERIDIAN GLOBAL: Voluntary Chapter 11 Case Summary METALS USA: Earnings Up to $7.6 Mil. in Quarter Ended Dec. 31 MINH THAI TRAN: Case Summary & Eight Largest Unsecured Creditors MONITOR OIL: Judge Glenn Denys Ad Hoc Committee's Dismiss Plea MORGAN STANLEY: S&P Assigns Preliminary Low-B Ratings on Certs. MOUNT AIRY: S&P Puts 'B' Corporate Rating on Negative Watch MOVIE GALLERY: Judge Tice Okays 1st Amended Disclosure Statement MYSTIC POINT: S&P Junks Ratings on Six CDO Tranches NORTH FOREST: S&P Downgrades Issuer Credit Rating to BB From BBB- PEOPLE'S CHOICE: Wants Until March 31 to File Chapter 11 Plan PLASTECH ENGINEERED: Wants to Obtain $38 Million of DIP Financing PLASTECH ENGINEERED: Toyota & Ford Unaffected By Chapter 11 Filing PONTIAC MICHIGAN: Fitch Cuts Bond Ratings to 'CCC', 'BB-' PRADA DEVELOPMENT: Case Summary & Nine Largest Unsecured Creditors PRIME MORTGAGE: Files Ch. 7 Petition; Creditors to Meet on March 3 PROTECTED VEHICLES: Case Summary & 20 Largest Unsecured Creditors QUAKER FABRIC: Can't File Plan Without Committee Consent QUAKER FABRIC: Gets Go Signal to Sell Brazilian Unit for $100,000 QUEBECOR WORLD: Printing Union Seeks Discussion of Financial Woes QUEBECOR WORLD: BP Canada Wants to End Gas Supply to U.S. Plants QUEBECOR WORLD: Can File Schedules and Statements Until March 5 REDDY ICE: S&P Confirms B+ Rating After GSO Merger Termination RESIDENTIAL CAPITAL: Moody's Downgrades Senior Debt Rating to 'B2' RESERVE ESTATES: Case Summary & 15 Largest Unsecured Creditors RIDGEWAY COURT: Moody's Junks Notes Ratings on Poor Credit Quality ROBERT THOMAS: Voluntary Chapter 11 Case Summary ROCK SOLID: Case Summary & Seven Largest Unsecured Creditors RUTLAND RATED: Moody's Junks Ratings on Two Note Classes SACO I TRUST: Moody's Junks Rating on Class B-2 Certs. SAFEGUARD HOLDINGS: Involuntary Chapter 11 Case Summary SALANDER-O'REILLY: Protocol Proposed to Identify Art Works Owners SALOMAN BROTHERS: Case Summary & Five Largest Unsecured Creditors S AND A: Case Summary & Largest Unsecured Creditor SAND TECH: Oct. 31 Balance Sheet Upside-Down by CDN$1.2M SAXON ASSET: Moody's Cuts and Reviews Ratings on Certificates SAYBROOK POINT: Moody's Downgrades Three Classes of Senior Notes SEAGATE TECH: Board of Directors Approves $2.5BB Share Repurchase SEAGATE TECHNOLOGY: S&P's BB+ Rating Unmoved by Share Repurchase SECURE COMPUTING: S&P Lifts Rating on $110 Mil. Facility to 'BB' SECURITIZED ASSET: Moody's Lowers and Reviews Ratings on 10 Certs. SILHOUETTE CLOTHING: Case Summary & 20 Largest Unsecured Creditors SOUNDVIEW HOME: Moody's Cuts Ratings on 2001, 2005 Certificates SPECIALTY UNDERWRITING: Moody's Junks Rating on Class B-3 Certs. STRUCTURED ADJUSTABLE: Moody's Pares Rating on Class M5 to 'B3' STRUCTURED ASSET: Fitch Adjusts Ratings Basing on Loan Performance TEMBEC INC: Furnishes Updates on Proposed Recapitalization TOUSA INC: Court Sets Feb. 28 Final Hearing on $650MM DIP Loan TOUSA INC: Amends Value of Assets and Debts as of September 30 TOUSA INC: Taps Berger Singerman as Florida and Conflicts Counsel TOUSA INC: Taps Kurtzman Carson as Notice and Claims Agent TUESDAY MORNING: Earnings Slide to $20M in Qtr. Ended December 31 UAL CORP: Earns $403 Million in Year Ended Dec. 31, 2007 UAL CORP: Resells Previously Issued 4.50% Senior Notes Due 2021 U.S. CENTRAL: S&P Cuts Ratings to AA+ Over Risk Exposures of MBS U.S. CENTRAL: Responds to S&P's Negative Rating Action VENTAS INC: S&P Upgrades 'BB+' Corporate Credit Rating VICORP RESTAURANTS: Piper Jaffray to Aid Restructuring Deal Review VICORP RESTAURANTS: Moody's Junks Ratings on Possible Shakeup V & OUT: Case Summary & 18 Largest Unsecured Creditors WALDEN III: Voluntary Chapter 11 Case Summary WESTSHORE EXECUTIVE: Case Summary & Largest Unsecured Creditor YRC WORLDWIDE: Moody's Maintains 'Ba1' Corporate Family Rating * Fitch To Update RMBS Modeling Assumptions on Continued Pressure * Fitch Cuts Ratings on 26 Tranches of CLOs, Retains Neg. Watch * S&P Slashes Ratings on 26 Tranches From Four Cash Flows and CDOs * S&P Says Bond Insurer Downgrades to Significantly Affect Banks * U.S. Trustee Executive Office Appoints Four Trustees * Harold Kaplan and Mark Hebbeln Join Foley & Lardner * Jeffrey Lacker at Federal Reserve Says Mild Recession is Likely * Fed Finds Domestic and Foreign Banks Tighten Lending Standards * Be Cautious in Equity Markets This Spring, CIBC World Warns * U.S. Consumer Bankruptcy Filings Increase 30% in January *Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* 1501 FM: Case Summary & Largest Unsecured Creditor -------------------------------------------------- Debtor: 1501 F.M. 1960 East Bypass, L.P. 1 Diamond M. Drive Humble, TX 77346 Bankruptcy Case No.: 08-30652 Chapter 11 Petition Date: February 4, 2008 Court: Southern District of Texas (Houston) Judge: Jeff Bohm Debtors' Counsel: Ronald J. Sommers, Esq. Nathan Sommers Jacobs 2800 Post Oak Boulevard, 61st Floor Houston, TX 77056-6102 Tel: (713) 892-4801 Fax: (713) 892-4800 http://www.nathansommers.com/ Total Assets: $3,300,000 Total Debts: $3,275,322 The Debtor's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Reliant Energy Retail $23,176 Services, LLC P.O. Box 650475 Dallas, TX 75265-0475 AAR CORP: S&P Assigns BB Rating on Proposed $175 Mil. Senior Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB' rating to AAR Corp.'s proposed $175 million of convertible senior unsecured notes to be issued in two equal tranches: $87.5 million notes due 2014 and $87.5 million notes due 2016. At the same time, S&P affirmed its ratings, including the 'BB' corporate credit rating, on the company. The outlook is stable. The notes are offered under Rule 144A with registration rights. Proceeds of the notes are expected to be used to repay about $125 million of borrowings under the company's revolving credit facility and for other purposes. "The ratings on AAR reflect the risks associated with its primary market, the highly cyclical and competitive airline industry, and increasing financing requirements to support growth initiatives," said Standard & Poor's credit analyst Roman Szuper. "These factors are offset in part by AAR's established business position, currently generally favorable market conditions, and an overall appropriate financial profile." The commercial aviation market should remain fairly strong in 2008, although global flying hours are likely to increase at a lower rate than in recent years because of a slower economy. This, coupled with the expanding jetliner fleet in service and outsourcing trends, should continue to benefit AAR's aftermarket parts and services operations, despite high oil prices that constrained gains at many airlines. In addition, the company's extensive cost-reductions, strength in its defense-related manufacturing and logistics business (about 30% of revenues, mostly in the U.S.), a diversified customer base, and an expansion of operations in Asia and Europe have helped AAR rebound from its weak financial performance during the industry downturn in 2001-2003. As a result, operating margins and return on capital have increased, but both remain relatively modest, at about 12%. Although S&P expects further revenue and earnings gains, the highly competitive operating environment could limit profitability improvement. Moreover, cash generation has been limited by the growth of the business in the past two years. Wood Dale, Illinois-based AAR is a major independent provider of aviation support services, operating in four groups: the aviation supply chain (45%-50% of revenues); maintenance, repair, and overhaul (20%-25%); structures and systems (about 25%); and aircraft sales and leasing (about 5%). North America is the company's largest market, accounting for 70%-75% of sales. Generally favorable conditions in the airline and defense industries and expected further gains in AAR's profitability should support the company's growth initiatives and allow it to maintain a financial profile consistent with the rating. If there is a material improvement in financial performance, S&P could revise the outlook to positive. An outlook revision to negative is a less likely scenario, but S&P would consider this action if renewed problems in the airline industry cause the company's revenue and earnings growth to stall. ACTIVE ENDEAVORS: Involuntary Chapter 11 Case Summary ----------------------------------------------------- Alleged Debtor: Active Endeavors LLC 901 Church Street Evanston, IL 60202 Case Number: 08-02469 Involuntary Petition Date: February 4, 2008 Court: Northern District of Illinois (Chicago) Petitioners' Counsel: Catherine L. Steege, Esq. Jenner & Block LLP One IBM Plaza Chicago, IL 60611 Tel: (312) 222-9350 Fax: (312) 527-0484 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Robert Davis Promissory Note $736,200 1830 Southeast Street Andrews Drive Portland, OR 97202 Mark Knepper Promissory Note $100,000 1615 Judson Evanston, IL 60201 Andrew Dickerson Promissory Note $100,000 2215 Forestview Evanston, IL 60201 AIR EXPERTS: Case Summary & Six Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Air Experts, Inc. 211-A Jacob Drive Morehead City, NC 28557 Bankruptcy Case No.: 08-00732 Type of Business: The Debtor offers air conditioning services. Chapter 11 Petition Date: February 4, 2008 Court: Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Debtors' Counsel: David J. Haidt, Esq. Ayers, Haidt & Trabucco, P.A. P.O. Box 1544 New Bern, NC 28563 Tel: (252) 638-2955 Fax: (252) 638-3293 http://www.embarqmail.com/ Estimated Assets: Less than $10,000 Estimated Debts: $100,000 to $1 million Consolidated Debtor's List of Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ BB&T $85,000 Attn: Managing Agent P.O. Box 1847 Wilson, NC 27894-1847 East Coast Metal Distributors $21,000 Attn: Managing Agent P.O. Box 570 Durham, NC 27702 First Citizens Bank & Trust Co. $15,000 Attn: Managing Agent P.O. Box 29514 Raleigh, NC 2276620 Sprint Yellow Pages $14,000 Lennox Industries Inc. $4,500 Hwy 24 LLC $1,750 ALISA MORSE: Case Summary & Four Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Alisa Ann Morse 19027 Forest Ridge Drive Magnolia, TX 77355 Bankruptcy Case No.: 08-30684 Chapter 11 Petition Date: February 4, 2008 Court: Southern District of Texas (Houston) Judge: Karen K. Brown Debtors' Counsel: Rogena Jan Atkinson, Esq. The Law Offices of RJ Atkinson LLC 3617 White Oak Drive Houston, TX 77007 Tel: (713) 862-1700 Fax: (713) 862-1745 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Consolidated Debtor's List of Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Chase World Continental credit cards $7,475 Airlines Card P.O. Box 94014 Palatine, IL 600944014 Citibank credit card $445 P.O. Box 6241 Sioux Falls, SD 57117 Kohls/chase credit card $97 N56 W. 17000 Ridgewood Drive Menomonee Falls, WI 53051 Chase credit card $92 800 Brooksedge Boulevard Westerville, OH 43081 AMERICAN AXLE: Net Loss Slides to $25MM in Qtr. Ended December 31 ----------------------------------------------------------------- American Axle & Manufacturing Holdings Inc. reported its financial results for the fourth quarter and full year ended Dec. 31, 2007. AAM reported a net loss of $25.5 million in the fourth quarter of 2007, compared to a net loss of $188.6 million in the fourth quarter of 2006. AAM's earnings for the full year 2007 were $37 million, compared to a net loss of $222.5 million in 2006. In the third and fourth quarter of 2007, AAM recorded special charges relating to a voluntary separation program accepted by 558 UAW represented associates at the Buffalo Gear, Axle & Linkage facility in Buffalo, New York. Production at this facility was idled in December 2007. Also in 2007, AAM incurred additional special charges and non- recurring operating costs relating to other attrition programs, asset impairments, the redeployment of machinery and equipment and other actions to rationalize underutilized capacity. In total, AAM's 2007 results reflect the impact of charges amounting to $88.4 million relating to these items, including pension and other postretirement benefit curtailments and special termination benefits. In the fourth quarter of 2007, AAM recorded $70.6 million of these total restructuring charges. AAM's full year 2007 earnings also reflect the impact of an additional $5.5 million charge for the write-off of unamortized debt issuance costs and other costs related to the prepayment of the $250 million term loan due 2010. "In 2007, AAM made excellent progress in our plan to achieve sustainable market cost competitiveness in our global operations," Richard E. Dauch, AAM's co-founder, chairman of the board & CEO, said. "AAM has a strong balance sheet and will continue to focus on the appropriate cost structure adjustments, technology innovations, new business launches and an accelerated expansion of our global manufacturing and sourcing footprint to gain momentum in 2008. We are excited about what AAM can, and will, accomplish in what is sure to be a most difficult, demanding and tough year for the entire domestic automotive industry." Liquidity and Capital Resources As compared to the prior year, net cash or free cash flow provided by operating activities for the full year 2007 nearly doubled to $367.9 million. Capital spending for the full year 2007 was $186.5 million as compared to $286.6 million in 2006. Reflecting the impact of this activity and dividend payments of $31.8 million, AAM's free cash flow of $149.6 million in 2007 represents an improvement of $281.5 million as compared to the full year 2006. At Dec. 31, 2007, the company's balance sheet showed total assets of $2.91 billion, total liabilities $2.02 billion, and total stockholders' equity of $0.89 billion. About American Axle & Manufacturing Holdings Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE:AXL) -- http://www.aam.com/-- and its wholly owned subsidiary, American Axle & Manufacturing, Inc., manufactures, engineers, designs and validates driveline and drivetrain systems and related components and modules, chassis systems and metal-formed products for light trucks, sport utility vehicles and passenger cars. In addition to locations in the United States (in Michigan, New York and Ohio), the company also has offices or facilities in Brazil, China, Germany, India, Japan, Luxembourg, Mexico, Poland, South Korea and the United Kingdom. * * * As reported in the Troubled Company Reporter on Nov. 27, 2007, Moody's Investors Service affirmed American Axle & Manufacturing Holdings, Inc.'s Corporate Family rating of Ba3 as well as the senior unsecured rating of Ba3 to American Axle & Manufacturing Inc.'s notes and term loan. At the same time, the rating agency revised the rating outlook to stable from negative and renewed the Speculative Grade Liquidity rating of SGL-1. AMERICAN HOME: Presents Revised Procedures for the Loans Sale ------------------------------------------------------------- American Home Mortgage Investment Corp. and its debtor-affiliates presented to the U.S. Bankruptcy Court for the District of Delaware revised procedures for disposing of 424 mortgage loans with an aggregate unpaid principal balance of approximately $152 million. The loans consist of fixed rate, adjustable rate, balloon and interest only loans originated with full and alternative documentation that are 60 days or more delinquent, in default, or that may contain some underwriting or compliance issue. Under the revised procedures, the Debtors would abandon the proposed auction for the Non-Performing Loans and will sell the Loans after evaluating final sealed bids submitted by prospective buyers. The Debtors propose to pool and sell the Non-Performing Loans in three ways: (1) Non-Performing Loans owned by the Debtors, but subject to the liens of AH Mortgage Acquisition Co. Inc., and the other lenders under a Debtor-in-Possession Loan and Security Agreement dated as of Nov. 16, 2007. The Debtors propose to sell approximately 71 of this Unencumbered Non-Performing Loans with an aggregate unpaid principal balance of approximately $23 million; (2) Non-Performing Loans owned by the Debtors that constitute a portion of the collateral securing the obligations owing by certain of the Debtors to secured lenders under a Credit Agreement with Bank of America, N.A., as administrative agent for secured lenders. BofA and the secured lenders were granted liens upon, and security interests in, among other assets, certain non-performing loans, pursuant to a Security and Collateral Agency Agreement and the final order authorizing the Debtors' limited use of cash collateral. The Debtors propose to sell approximately 46 BofA Non-Performing Loans with an aggregate unpaid principal balance of $14,000,000; and (3) Non-Performing Loans owned by the Debtors pursuant to the JPMorgan Credit Agreement with JPMorgan Chase Bank, N.A. The Debtors propose to sell approximately 307 JPMorgan Non-Performing Loans with an aggregate unpaid principal balance of $115,000,000. Potential bidders will be allowed to conduct due diligence from Feb. 1, 2008, to Feb. 26, 2008. All indicative bids must be submitted in writing by 12:00 noon, Eastern Time, on Feb. 8, 2008. Indicative bids must contain, among other things, a binding proposal to purchase, and the proposed purchase price, for one or more of the three pools of Non-Performing Loans. Within one business day after the deadline for indicative bids, the Debtors, with the prior written consent of BofA or JPMorgan, as applicable, are authorized to select no more than three designated bidders who will be entitled to be reimbursed for reasonable costs and expenses in connection with the due diligence process. All final bids must be submitted by Feb. 26, 2008, at 4:00 p.m., Eastern Time. Final bids must contain, among other things, executed versions of a purchase agreement for the Non-Performing Loans to be purchased by the bidder. The Debtors, in consultation with the Official Committee of Unsecured Creditors and BofA or JPMorgan, as applicable, will determine the highest bidder, and the second highest bidder, if any, for each pool of the Non-Performing Loans. The parties selected will be notified by the Debtors on or before Feb. 27, 2008, 12 noon, Eastern Time. The Debtors will seek from the Court an order approving the Successful Bid and the Second Best Bid for each pool of Non- Performing loans at a hearing held on Feb. 28, 2008, at 11:00 a.m., Eastern Time. The closing of the Sale for each pool will occur on or before 10:00 a.m., Eastern Time, on Feb. 29, 2008. In the event the Successful Bidder does not close before 2:00 p.m., Eastern Time on February 29, the Debtors will be authorized to close with the Second Best Bidder at 10:00 a.m., Eastern Time on March 3. BofA et al., Object (1) Bank of America Bank of America, N.A., as administrative agent for itself and certain other prepetition secured lenders, tells the Court that it does not object to the Debtors' unilateral decision to change the process and sell the BofA Non-Performing Loans without the proposed auction process contemplated in the request. BofA, however, objects to the provisions of the Revised Sale Procedures to the extent that they require that the Debtors merely "consult" with BofA rather than obtaining its prior written consent. Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, in Wilmington, Delaware, notes that the Revised Sale Procedures seek to allow the Debtors to modify the sale protocol, including canceling the sale of the Non-Performing Loans or removing some or all of the Non-Performing Loans from the sale, at any time without the prior written consent of BofA. If the Debtors want to change the Revised Sale Procedures after approval by the Court, they should be required to obtain the consent of the respective secured creditors, whose collateral is being sold or, alternatively, seek Court approval of the proposed changes, Ms. Silverstein contends. She adds that the Revised Sale Procedures also provide that the Debtors could seek approval of the ultimate qualified final bid for the BofA Non-Performing Loans in their discretion without BofA's prior written consent. BofA submits that, as a secured creditor with the lien in the asset sought to be sold, it is entitled to a direct consent right rather than the more limited "consultation" that is currently provided for in the Revised Sale Procedures. Moreover, the direct consent right is particularly appropriate where the Debtors are abandoning the open Auction Process and replacing that with the proposal to sell the BofA Non-Performing Loans through sealed final bids, Ms. Silverstein contends. (2) Two Loan Holders Paula Rush and Laura Beall renew their request for demand to know the true owner or master servicer of their loans pursuant to Section 1641(f)(2) of the Truth in Lending Act. They tell the Court that, once again, the Debtors are proceeding to attempt to sell loans under a description that could fit their loan description, therefore, they want to renew their request for disclosure. Ms. Rush and Ms. Beall tell the Court that the Debtors continue to attempt to sell off loan assets free and clear of liens and liabilities, while neglecting to protect borrowers under Section 363(o) of the Bankruptcy Code and as provided for under the 2005 Bankruptcy Abuse and Consumer Protection Act. "I assert these loan assets are a small number of loans and the borrowers should be afforded the opportunity to bid on their loans, or offered the loans at the same price as the bids," Ms. Rush says. "At less than face value of between 30 to 55 cents on the dollar, homeowners may be able to refinance out of the Debtor's lien, and the estate may avoid litigation pending or probable litigation against loans with underwriting and compliance issues, as described by Debtors." Ms. Rush also suggests that for the price of a stamp the Court could order the Debtors to give homeowners a 30- to 60-day window, in which to purchase the interest in their property from the Debtors' bankruptcy estates. Ms. Rush and Ms. Beall, therefore, ask the Court to protect (i) the property rights of all borrowers, whose loans are currently part of the Debtors' estate, and (ii) the interest of all borrowers in reference to currently pending sales of negotiable instruments, documents of title, deposit accounts, and other assets of the estates, which may or may not include Ms. Rush's and Ms. Beall's properties. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. Parent company American Home Mortgage Corporation reported $3,330,185,447 in total assets and $4,057,927,550 in total debts as of September 30, 2007. American Home Mortgage Investment Corp., reported $1,944,088,936 in total assets and $2,205,608,826 in total debts end of September. The Debtors' exclusive period to file a plan expires on March 3, 2008. (American Home Bankruptcy News, Issue No. 25, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Obtains Court Nod to Reject Two PS Texas Contracts ----------------------------------------------------------------- American Home Mortgage Investment Corp. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the District of Delaware to reject two executory contracts with PS Texas Holding, Ltd., and abandon any property remaining at the premises, including furniture, fixtures and equipment. The Debtors also request that the rejection be effective retroactively as of Dec. 31, 2007. James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, relates that the Rejected Contracts are related to storage agreements for storage units 1024 and 1057 at 1474 Justin Road #407, in Lewisville, Texas. Mr. Patton contends that the economic burden associated with performing under the storage agreements, the wind-down of the Debtors' operations, and the lack of interest for potential assignment provide sufficient bases to justify the Debtors' request. He says the Debtors have reviewed the Rejected Contracts, and determined that the contracts and the premises' furniture hold no material economic value to the Debtors or the bankruptcy estates, and are not essential to the conduct of the bankruptcy cases. The rejection of the Contracts will eliminate the Debtors' obligation to perform, and the accrual of any further administrative expense obligations under the Rejected Contracts, Mr. Patton asserts. He notes that the Debtors will have effectively satisfied the criteria for retroactive rejection of the Rejected Contracts by Dec. 31, 2007. The Court also rules that the rejection bar date for filing a rejection claim pursuant to the order is fixed as a date, which is 30 days from the approval of the request. Judge Christopher S. Sontchi notes that any holder of a rejection claim, who fails to timely file a proof of claim by the Rejection Bar Date, will not be treated as a creditor for purposes of voting upon, or receiving distributions under, any plan of reorganization in the bankruptcy cases. Judge Sontchi further says that nothing in the order will prejudice the Debtors' rights to argue that any claim for damages arising from the rejection of the two executory contracts with PS Texas Holding, Ltd., is limited to the remedies available under any termination provision of the Rejected Contracts, or that any claim is an obligation of a third party, and not that of the Debtors. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. Parent company American Home Mortgage Corporation reported $3,330,185,447 in total assets and $4,057,927,550 in total debts as of September 30, 2007. American Home Mortgage Investment Corp., reported $1,944,088,936 in total assets and $2,205,608,826 in total debts end of September. The Debtors' exclusive period to file a plan expires on March 3, 2008. (American Home Bankruptcy News, Issue No. 25, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: US Trustee Balks Deloitte & Touche as Tax Experts ---------------------------------------------------------------- Kelly Beaudin Stapleton, U.S. Trustee for Region 3, asks the U.S. Bankruptcy Court for the District of Delaware to deny the request of American Home Mortgage Corporation and its affiliates to employ Deloitte & Touche as tax experts. Ms. Stapleton points out that John Niemiec, a director at Deloitte Tax LLP, disclosed that Deloitte & Touche LLP is a defendant in a putative securities class action lawsuit related to the firm's prepetition employment by American Home Mortgage Investment Corporation, titled Marlin v. Citigroup Global Markets Inc., et al. (No. 07-cv-3580 (E.D.N.Y.)). Ms. Stapleton notes that Deloitte & Touche has an interest in minimizing its own liability, and thus, it will necessarily involve pointing the finger at third parties, including the Debtors. She contends that Deloitte possesses or asserts an economic interest that creates an actual or potential dispute, in which the Debtors' bankruptcy estates are rival claimants. Hence, she says, Deloitte holds or represents an interest adverse to the Debtors' estates and, by extension, is ineligible to be employed under Section 327(a) of the Bankruptcy Code. Deloitte Tax is not a "disinterested person" because it has an interest materially adverse to both the interests of the Debtors' estates and a class of their equity security holders by reason of Deloitte & Touche's prepetition connections with the Debtors, Ms. Stapleton tells Judge Sontchi. Hence, she says, the application should be denied. The Niemiec declaration indicates that, in the event Deloitte Tax's employment is authorized, both Deloitte Tax and Deloitte & Touche will "not . . . seek recovery" of certain prepetition nonpayment claims, Ms. Stapleton relates. She notes that the language used in the declaration falls short of an explicit waiver of the claims. In the unlikely event that the Court were to authorize the employment of Deloitte Tax, both Deloitte Tax and Deloitte & Touche should explicitly waive those claims, she continues. Moreover, Ms. Stapleton points out that the disclosures in the Niemiec declaration do not provide sufficient information for her to determine whether Deloitte Tax or Deloitte & Touche received preferential transfers during the 90 days prior to the Petition Date. She informs the Court that her office is presently evaluating, among other things, whether all of the services listed in the application are permitted non-audit services under Section 10A of the Securities Exchange Act of 1934. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. Parent company American Home Mortgage Corporation reported $3,330,185,447 in total assets and $4,057,927,550 in total debts as of September 30, 2007. American Home Mortgage Investment Corp., reported $1,944,088,936 in total assets and $2,205,608,826 in total debts end of September. The Debtors' exclusive period to file a plan expires on March 3, 2008. (American Home Bankruptcy News, Issue No. 25, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN LAFRANCE: SEC 341 Meeting of Creditors Set for March 3 --------------------------------------------------------------- Kelly Beaudin Stapleton, the United States Trustee for Region 3, will convene a meeting of creditors in American LaFrance LLC's Chapter 11 case, on March 3, 2008, at 1:30 p.m., at Room 5209, 5th Floor, in J. Caleb Boggs Federal Building. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' case. The Section 341(a) Meeting has been scheduled within the time required by Rule 2003 of the Federal Rules of the Bankruptcy Procedure. All creditors are invited, but not required, to attend. The Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. 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, are the Debtor's proposed Lead Counsel. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, are the Debtor's proposed local counsel. In its schedules of assets and debts filed Feb. 4, 2008, the Debtor disclosed $188,990,680 in total assets and $89,065,038 in total debts. The Debtor's exclusive period to file a plan expires on May 27, 2008. (American LaFrance Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN LAFRANCE: Asks Court to Set March 28 as Claims Bar Date ---------------------------------------------------------------- American LaFrance LLC, asks the U.S. Bankruptcy Court for the District of Delaware to set March 28, 2008, as the deadline for all parties to file proofs of claim against the Debtor arising from any event occurring during the Debtor's operation of its business before and until the Petition Date. The Debtor also requests that claims of governmental units should be timely filed no later than July 31, 2008. Joanne B. Wills, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, in Wilmington, Delaware, tells the Court that the proposed Bar Date is necessary to finalize the total number and amount of claims prior to the confirmation hearing of its Plan of Reorganization, currently scheduled for April 9, 2008. Ms. Wills relates that the Prepetition Claims include: (i) unsecured claims incurred by vendors, suppliers, and other trade-related entities involved in the general operation of the Debtor's business; (ii) litigation claims, including claims that have been asserted in litigation where plaintiffs have sued or joined as co-defendants present or former managers, members, directors, officers or employees of the Debtor, or other individuals who may have indemnification claims or contribution claims against the Debtor; (iii) any worker's compensation claims; and (iv) any administrative agency claims or similar kinds of private enforcement claims. The Debtor requests that secured claimholders must file an appropriate proof of claim by the Bar Date. However, the Debtor recognizes that applicable bankruptcy law does not require the filing for the preservation of those claims. The Debtor also proposes that creditors and equity holders whose claims are solely limited to ownership of an equity interest in the Debtor should not be required to file claims. Any claims arising out of, or otherwise related to, the Debtor's rejection of any executory contract or unexpired lease under Section 365 of the Bankruptcy Code must be filed on or before the later of the Bar Date or the date that is 30 days after the effective date of rejection with respect to executory contract or unexpired lease. All parties-in-interest that are required to file a Claim will receive a copy of the proof claim form, which is substantially in compliance with Official Form No. 10, Ms. Wills says. 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, are the Debtor's proposed Lead Counsel. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, are the Debtor's proposed local counsel. In its schedules of assets and debts filed Feb. 4, 2008, the Debtor disclosed $188,990,680 in total assets and $89,065,038 in total debts. The Debtor's exclusive period to file a plan expires on May 27, 2008. (American LaFrance Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERIGAS PARTNERS: Earns $54.3 Million in First Qtr. Ended Dec. 31 ------------------------------------------------------------------ AmeriGas Propane Inc., general partner of AmeriGas Partners L.P., reported net income for the first fiscal quarter ended Dec. 31, 2007, of $54.3 million compared to net income $55.6 million for the same period last year. The partnership's earnings before interest expense, income taxes, depreciation and amortization (EBITDA) was $93.1 million for the first quarter of 2008, unchanged from the first quarter of fiscal 2007. For the three months ended Dec. 31, 2007, retail propane volumes sold declined 1.3% to 279.1 million gallons from 282.9 million gallons sold in the prior year period. Weather was 7.2% warmer than normal compared to weather that was 8.6% warmer than normal in the prior year period, according to the National Oceanic and Atmospheric Administration. Eugene V. N. Bissell, chief executive officer of AmeriGas, said "Significant increases in propane sales prices caused by extraordinarily high propane costs resulted in customer conservation that more than offset higher volumes sold in the quarter from businesses we acquired last year. The average wholesale propane cost at Mt. Belvieu, Texas for the quarter increased 58.0% over the same period last year. In spite of the challenging environment of warm weather and high product cost, we continued to execute our strategies to build long term value for unitholders." Revenues for the quarter increased to $748.2 million from $616.6 million in the prior year period, reflecting higher average selling prices due to significantly higher propane product costs. Total margin increased $13.9 million mainly due to higher average retail propane unit margins and slightly higher ancillary income. Operating and administrative expenses rose primarily as a result of expenses associated with acquisitions, increased compensation and benefits costs and higher vehicle expenses. Although EBITDA was unchanged from the prior year, operating income decreased to $74.0 million from $75.3 million in the fiscal 2007 quarter, reflecting higher depreciation and amortization costs. Separately, AmeriGas Partners disclosed that for the three-year period ended Dec. 31, 2007, the compound annual total return on partnership units was 15.0%. About AmeriGas Partners AmeriGas Partners L.P. (NYSE: APU) -- http://www.amerigas.com/-- is a retail propane marketer, serving nearly 1.3 million customers from over 600 locations in 46 states. UGI Corporation (NYSE: UGI) through its subsidiaries owns 44.0% of the partnership and individual unit holders own the remaining 56%. * * * To date, AmeriGas Partners L.P. carries Moody's Investors Service 'Ba3' corporate family rating. The Rating Outlook is Stable. AMERICAN RAILCAR: Carl Icahn Acquires 9.% Stake in Greenbrier Cos. ------------------------------------------------------------------ Associated Press reports that billionaire investor Carl Icahn has amassed a 9.5% stake in railcar manufacturer Greenbrier Companies Inc., according to a filing with the Securities and Exchange Commission on Monday. Icahn acquired the stake through ARI Longtrain Inc., whose lone stockholder is American Railcar Industries Inc. According to the Associated Press, Icahn beneficially owns 53.7% of the common stock of American Railcar. According to the filing, Icahn acquired the shares in Greenbrier Companies Inc. because he is interested in a possible merger between American Railcar and Greenbrier. According to the Thomson Financial, Standard & Poor's Ratings said the combination would "contribute to improving ARI's business risk profile, by strengthening and diversifying its product portfolio." About American Railcar American Railcar Industries Inc., (NasdaqGS: ARII) -- http://www.americanrailcar.com/-- through its subsidiaries, engages in the design, manufacture, sale, and marketing of covered hopper and tank railcars in North America. It operates in two segments, Manufacturing Operations and Railcar Services. * * * American Railcar Industries carries Moody's Investors Service 'Ba3' corporate family and 'B1' senior unsecured debt ratings which were last placed on Feb. 14, 2007. ANTHONY LINSEY: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Anthony J. Linsey, Sr. 909 Wilshire Court Grayson, GA 30017 Bankruptcy Case No.: 08-61961 Chapter 11 Petition Date: February 4, 2008 Court: Northern District of Georgia (Atlanta) Judge: Joyce Bihary Debtor's Counsel: Evan M. Altman, Esq. Evan M. Altman Law Firm Bldg. 2 - Northridge 400 8325 Dunwoody Place Atlanta, GA 30350 Tel: (770) 394-6466 Fax: (770) 620-9042 Total Assets: $1,099,010 Total Debts: $1,188,207 Debtor's list of its 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ ------------ --------- Georgia Department of Revenue $42,720 Attention: Bankruptcy Department P.O. Box 38143 Atlanta, GA 30334 Internal Reveue Service - PA $34,704 P.O. Box 21126 Philadelphia, PA 19114-0326 Emory Credit Union $11,125 1237 Clairmont Road Decatur, GA 30030 Beneficial $10,076 Internal Revenue Service - GA $9,258 First Equity Card Bank Loan $4,338 HSBC $32,000 Collateral: $38,000 Unsecured: $3,000 Chase Home Finance Bank Loan $922,582 Collateral: $1,000,000 Unsecured: $0 M&T Mortgage Corp. Bank Loan $89,851 Collateral: $1,000,000 Unsecured: $0 Ford Credit Bank Loan $20,000 Collateral: $28,000 Unsecured: $0 Long Beach Acceptance Corp Bank Loan $11,553 Collateral: $14,000 Unsecured: $0 BAYONNE MEDICAL: Buyer-IJKG Pays $2.5MM to Settle Medicare Issues ----------------------------------------------------------------- The United States has agreed to settle for $2.5 million, plus interest, allegations that Bayonne N.J., Medical Center defrauded the Medicare program. The settlement is with IJKG LLC, the buyer of the hospital. Bayonne Medical Center is currently in bankruptcy. The settlement resolves allegations that the hospital improperly increased charges to Medicare patients in order to obtain enhanced reimbursement from Medicare. In addition to its standard payment system, Medicare provides supplemental reimbursement, called outlier payments, to hospitals and other health care providers in cases where the cost of care is unusually high. Congress enacted the supplemental outlier payment system to ensure that hospitals possess the incentive to treat inpatients whose care requires unusually high costs. The Justice Department alleged that, between January 2000 and August 2003, Bayonne purposefully inflated charges for inpatient and outpatient care to make these cases appear more costly than they actually were, and thereby obtained outlier payments from Medicare that it was not entitled to receive. In 2007, Bayonne Medical Center filed for bankruptcy under Chapter 11 of the Bankruptcy Code. As part of the proposed reorganization, IJKG LLC agreed to purchase the hospital's assets and to settle the United States' claims against the hospital. "This settlement demonstrates that the United States is determined to protect the Medicare program against hospitals and other health care providers who overcharge for their services," Jeffrey S. Bucholtz, acting assistant attorney general for the department's civil division, said. The civil settlement agreement resolves allegations against Bayonne that were filed in a lawsuit brought by a whistleblower under the federal False Claims Act. The False Claims Act permits private citizens, known as relators, to bring lawsuits on behalf of the United States. Under the settlement, James Monahan, the relator in the lawsuit, will receive $400,000. The settlement with Bayonne was the result of a coordinated effort in investigating and resolving the allegations by the Justice Department's Civil Division, Commercial Litigation Branch; the U.S. Attorney's Office for the District of New Jersey, Affirmative Civil Enforcement Unit; the Department of Health and Human Services, Office of the Inspector General and Office of Counsel to the Inspector General; the Centers for Medicare and Medicaid Services; and the Federal Bureau of Investigation. About Bayonne Medical Center Based in Bayonne, New Jersey, Bayonne Medical Center -- http://www.bayonnemedicalcenter.org/-- provides healthcare services and operates a medical center. The company operates a 278-bed fully accredited, acute-care hospital located in Hudson County. The company filed for Chapter 11 protection on April 16, 2007 (Bankr. D. N.J. Case No. 07-15195). Lawrence C. Gottlieb, Esq., Adam C. Rogoff, Esq., and Eric J. Haber, Esq., at Cooley Godward Kronish LLP, represent the Debtor in its restructuring efforts. Stephen V. Falanga, Esq., at Connell Foley LLP, is the Debtor's local counsel. Kurtzman Carson Consultants LLC is the Debtor's claims and noticing agent. Andrew H. Sherman, Esq., and Boris I. Mankovetskiy, Esq., at Sills Cummis Epstein & Gross PC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $1 million to $100 million. The Debtor's exclusive period to file a plan expired Nov. 12, 2007. BARNERT HOSPITAL: Creditors' Committee, et al., Balk at Asset Sale ------------------------------------------------------------------ The Official Committee of Unsecured Creditors of Nathan and Miriam Barnert Memorial Hospital Association, dba Barnert Hospital asks the Hon. Donald H. Steckroth of the U.S. Bankruptcy Court for the District of New Jersey to deny the Debtor's request to sell substantially all of its assets to Hospital Associates LLC. The Committee tells the Court that the Debtor is seeking to sell assets which, it admitted, do not belong to the Debtor's estate. The Committee says the assets are included in the proposed sale for no reason other than that the proposed buyer wants them as part of the package. The Committee says the Debtor's sale proposal makes the secured lenders the sole beneficiaries of the sale. The Committee adds that the sale relies on the lenders' untested assertion that the assets being sold constitute their collateral. The Committee says it intends to file shortly an adversary complaint asserting the extent of the secured lenders' liens are narrower than assumed by Debtor; and in fact, are of unknown, and certainly unproven, worth. Even if the Court were to approve the sale, the Committee contests there is no reason at this time to approve any proposed allocation of sale proceeds. The Committee believes, and asks the Court to provide it opportunity to prove, that the estate's unencumbered assets are more than sufficient to provide a distribution to general unsecured creditors, once the secured creditors' overstatement of their liens is corrected. The Committee also objects to the proposed allocation because it unfairly shifts to the estate the attendant expenses for the maintenance and disposition of assets. The Sale Motion Pursuant to the Sale Motion filed by the Debtor, the proceeds of the Sale will be distributed as: (a) a Purchase Note in the amount of $5,000,000 will be paid directly to the New Jersey Health Care Facilities Financing Authority; (b) 75% of Pre-Closing accounts receivable (estimated by counsel for Debtor as worth in excess of $5,000,000) will also be paid to the Authority, and (c) $1,250,000, which allegedly represents the value of assets not subject to the Authority's liens, of which $500,000 is slated to pay Cain Brothers & Co. LLC., Debtor's investment bankers who shopped the property for the benefit of the secured creditor, and $750,000 will go to the estate, most likely (according to the voiced expectations of Debtor's counsel) to pay administrative expenses. Upon information and belief of the Committee, zero funds will be available for payment to any prepetition unsecured creditors. Life Trustees Limited Objection The Life Trustee of the Trust, established by Nathan Barnert by Trust Deeds dated 1914 and 1918, aka Life Trustees of Barnert Hospital, tells the Court that it opposes Barnert Hospital's motion to sell certain of its assets to Hospital Associates LLC. Life Trustee relates that it supports the arguments of the counsel to the Committee filed with the Court on Jan. 25, 2008, by the Guardian Ad Litem on Jan. 24, 2008. Life Trustee requests that the Court not approve the sale or in the alternative if the Court determines that the land owned by the Life Trustees on behalf of the heirs and the unborn heirs of Nathan Barnert will be included in the sale, that the Court require the continuation of the right of reverter in perpetuity as required by the Will of Nathan Barnert. Guardian Ad Litem Limited Objection Similarly, John W. Sywilok, Guardian Ad Litem for Living, Unborn and Unascertained Persons with Future and Reversion Interests in Block 8503, Lot 1, 23 & 24 in the City of Paterson filed with the Court his objection to the proposed sale of assets. Mr. Sywilok informs the Court that the Debtor's motion to sell the real property at Paterson seeks to terminate the "right of reverter." He says that the heirs have the right of reverter in that if the real property is not used in accordance with the restrictions in the 1914 and 1918 deeds, they would be entitled to title the property. He adds that the property in question is not property of the estate and remains in the names of the Trustees. Hence, the Debtor cannot sell this property. The sale, Mr. Sywilok asserts, will defeat the probable intent of Nathan Barnert who sought to insure the integrity and continued operation of the hospital facility. HUD and Authority Reserves Right to Object The New Jersey Health Care Facilities Financing Authority, the United States Department of Housing and Urban Development, the Bank of New York, as Bond Trustee, and MBIA Insurance Corporation also jointly filed their limited objection to the sale of the Debtor's assets. The Objectors contend that the Financing Authority authorized the issuance of Refunding Bonds Series 1999. The Authority entered in to a loan agreement with the Debtor, under which the Authority agreed to loan the proceeds of the Series 1999 Bonds to Barnert. The Debtor delivered to the Authority a Mortgage Note dated Jan. 28, 1999, in the amount of $34,876,000. The Authority Mortgage is secured by a small parcel of real property owned by Barnert with an interest of 3.75%. The Authority's liens does not include certain equipment financed by General Electric. As of Aug. 15, 2007, the Authority asserted a claim against the Debtor for an amount in excess of $26.25 million for prepetition debt. However, at the time the objection was filed, both HUD and the Authority have not decided whether they will consent to the sale. Both HUD and the Authority have been in constant communication with the Debtor. HUD and the Authority also allowed the Debtor to use their cash collateral to help its reorganization. Still, there are other significant issues yet to be resolved to the satisfaction of the secured parties, including Barnert's ability to finance itself until April 30, 2008, the Objectors tell the Court. They said the proposed sale is fraught with pitfalls. HUD and the Authority are not certain that the Debtor have enough resources to sustain operations until the proposed April 30, 2008 closing date. The secured parties will not consent to the sale especially when the purchase price is less than the aggregate value of liens on the assets. Due to the uncertainties, the secured parties request the Court to reserve their right to withhold consent and object to the sale of the assets. Blank Rome LLP represents The New Jersey Health Care Facilities Financing Agency and the United States Department of Housing and Urban Development. Reed Smith LLP represents The Bank of New York, as bond trustee. Winston & Strawn LLP represents MBIA Insurance Corporation. Barnert Closes, Transfers Patients As reported in the Troubled Company Reporter on Feb. 5, 2008, Barnert Hospital confirmed ending operations last weekend, including its outpatient department. The hospital's emergency room and mental health services remains open. On the night of Feb. 1, 2008, 24 out of the hospital's 41 patients were transferred to St. Joseph's Regional Medical Center, Nancy Collins at St. Joseph's said. The rest were either discharged or moved to other health care facilities, according to Steven Clark, Barnert spokesman. 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. The $3.2 million DIP fund was supposed to fund the hospital's operations until the sale deal is completed in April. About Barnert 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. As of January 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. BEAR STEARNS: S&P Chips Ratings of Two Classes on Weak Performance ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its ratings on three classes of commercial mortgage pass-through certificates from Bear Stearns Commercial Mortgage Securities Inc.'s series 2004-BBA5. Concurrently, S&P lowered its ratings on two classes and affirmed S&P's ratings on the remaining two classes from this series. The rating actions follow S&P's analysis of the remaining loan in the pool, Colorado Mills. The analysis of the asset included a revaluation of the property securing the loan. The revaluation supports the raised and affirmed ratings at their current credit enhancement levels, which have increased since issuance. The continued weak operating performance of the property resulted in the downgrades of classes J and K. Although the credit support for class J has increased, it is no longer adequate to support an investment-grade rating. The remaining loan in the pool consists of a $115.0 million floating-rate interest-only A note indexed to the one-month LIBOR. The loan is currently scheduled to mature in November 2008 with a one-year extension available. The total mortgage debt is $170.0 million, with a $55 million B note held outside of the trust. The loan is secured by 921,900 sq. ft. of the 1.1 million-sq.-ft. Colorado Mills property, which is a single-level entertainment and value-oriented regional mall in Lakewood, Colorado. A 181,000- sq.-ft. Target shadow anchors the property. Since year-end 2005, the reported effective gross income from the property has declined each year. The declines were primarily due to decreased occupancy. As of November 2007, the occupancy was 78%, down from 94% at year-end 2006. The most recent decline in occupancy is due to the loss of an anchor tenant in September 2007, occupying 7% of the gross leasable area, coupled with a drop in the in-line occupancy to 77% as of November 2007 from 91% as of year-end 2006. Simon Property Group (A-/Stable/--), together with Farallon Capital Management LLC, a California-based hedge fund, completed an acquisition of Colorado Mills as part of their joint acquisition of the original sponsor, The Mills Corp., on April 3, 2007. Simon is attempting to address the property's weak operating performance. Simon transferred property management from a wholly owned Mills subsidiary to a wholly owned Simon entity in the second half of 2007. Simon also expressed its intentions to leverage its relationships with various national retailers to lease up the vacant space and is exploring other venues to boost revenue and lower operating expenses. Simon expects occupancy to stabilize in the low- to mid-90% area by the end of 2009. Standard & Poor's used a stabilized approach to revalue the loan collateral. The analysis assumed a stabilized occupancy in the low- to mid-90% area and considered local market conditions, as well as Simon's increased involvement in the operations of the property. The results of S&P's analysis support the revised and affirmed ratings. Ratings Raised Bear Stearns Commercial Mortgage Securities Inc. Commercial Mortgage Pass-through Certificates Series 2004-BBA5 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ E AAA AA 85.88% F AAA A+ 66.36% G A+ A- 50.19% Ratings Lowered Bear Stearns Commercial Mortgage Securities Inc. Commercial Mortgage Pass-through Certificates Series 2004-BBA5 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ J BB+ BBB- 21.34% K B+ BB N/A Ratings Affirmed Bear Stearns Commercial Mortgage Securities Inc. Commercial Mortgage Pass-through Certificates Series 2004-BBA5 Class Rating Credit enhancement ----- ------ ------------------ H BBB+ 36.56% X-1B AAA N/A N/A-Not applicable. BELIEVERS BIBLE: Case Summary & Eight Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Believers Bible Christian Church, Inc. 3689 Campbellton Road S.W. Atlanta, GA 30331 Bankruptcy Case No.: 08-61958 Chapter 11 Petition Date: February 4, 2008 Court: Northern District of Georgia (Atlanta) Judge: Joyce Bihary Debtors' Counsel: Paul Reece Marr, Esq. Paul Reece Marr, P.C. 300 Galleria Parkway, N.W., Suite 960 Atlanta, GA 30339 Tel: (770) 984-2255 http://www.mindspring.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Consolidated Debtor's List of Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service taxes $514,844 Bankruptcy/Insolvency P.O. Box 21126 Philadelphia Georgia Department of Revenue taxes $45,751 Bankruptcy Insolvency Unit P.O. Box 3889 Atlanta, GA 30334 Trace Dillon, Esq. account payable $15,282 Satellite Shelters Inc. 2775 Cruse Road, Suite 201 Lawrenceville, GA 30044 Fulton County Tax taxes $28,240 Vesta Holding/Hearwood II purchase $8,667 Dell Financial Services account payable $2,744 Office Depot account payable $1,450 System 5 Electronic Inc. account payable $1,377 BELO CORP: S&P Chips Rating on $33 Mil. Certs. to 'BB' From 'BB+' ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on two Belo Corp.-related pass-through transactions and removed them from CreditWatch with negative implications. The rating actions reflect the Feb. 1, 2008, lowering of the rating on the underlying securities, the 7.25% debentures due Sept. 15, 2027, issued by Belo Corp., and its removal from CreditWatch negative. PreferredPLUS Trust Series BLC-1 and PreferredPLUS Trust Series BLC-2 are pass-through transactions, and the ratings on them are based solely on the rating assigned to the underlying securities, the 7.25% debentures issued by Belo Corp. Ratings Lowered and Removed From CreditWatch Negative PreferredPLUS Trust Series BLC-1 $33 Million 7.875% Trust Certificates Series BLC-1 Rating ------ Class To From ----- -- ---- Certificates BB BB+/Watch Neg PreferredPLUS Trust Series BLC-2 $34 Million 8.000% Trust Certificates Series BLC-2 Rating ------ Class To From ----- -- ---- Certificates BB BB+/Watch Neg BLUE FROG: Files for Chapter 7 Bankruptcy to Liquidate Assets ------------------------------------------------------------- Seattle, Washington-based Blue Frog Mobile, which works with TV stations to allow viewers to text messages in to appear on the screen, filed for Chapter 7 bankruptcy Friday, various reports say. The company listed fewer than 50 creditors, between $1 and $10 million in assets, and $500,000 to $1 million in liabilities, MocoNews.net reports. Certain issues, however, are unclear. According to Seattle Post Intelligencer, the estate's Chapter 7 trustee, Bruce Kriegman, called the situation a "big mess." Seattle Post Intelligencer relates two separate factions have laid claim to Blue Frog. Mr. Kriegman said he is not sure who has authority over the company. Blue Frog raised $16,000,000 from Canaan Partners and MK Capital three years ago. MocoNews.net relates that the company did make significant progress in its four years of existence. The company used to sell ringtones and wallpapers, but later changed focus to selling its TXTV service, launching at one point in Detroit, Indianapolis and Phoenix and Los Angeles during odd hours and on off-brand TV stations, according to MocoNews.net. According to Seattle Post Intelligencer, Mr. Kriegman said he intends to focus on finding out whether the Chapter 7 filing was authorized or not "because -- for lack of better words -- the old board and the new board are contesting who is in charge." The group that filed the Chapter 7 bankruptcy is led by John Thull, a Blue Frog employee who handles network operations, Seattle Post Intelligencer relates. "No one really knows who is running the company," an unnamed shareholder told Seattle Post Intelligencer. "The venture capitalists deserted the company and kind of left it adrift," that shareholder said. In December, Blue Frog chopped 55 employees, shut down a Hispanic television channel and announced the resignation of board member Maha Ibrahim of Canaan Partners, Seattle Post Intelligencer relates. Chief Executive Victor Siegel -- who at the time of the layoffs said he felt good about Blue Frog's prospects -- recently resigned. Seattle Post Intelligencer says Blue Frog has claimed a work force of about 235 people, with the bulk of those people in the Philippines. Mr. Kriegman, Seattle Post Intelligencer reports, was told that the Philippines operation closed in January, with employees there allegedly receiving wages. Mr. Kriegman has yet to confirm the matter. Mr. Kriegman also said several employees in the Seattle office may have gone unpaid. BMB ENTERPRISES: Case Summary & Two Largest Unsecured Creditors --------------------------------------------------------------- Debtor: BMB Enterprises, Inc. 60 Knickerbocker Avenue Bohemia, NY 11716 Bankruptcy Case No.: 08-40672 Chapter 11 Petition Date: February 5, 2008 Court: Eastern District of New York (Brooklyn) Debtor's Counsel: Salvatore LaMonica, Esq. LaMonica Herbst and Maniscalco 3305 Jerusalem Avenue Wantagh, NY 11793 Tel: (516) 826-6500 Fax: (516) 826-0222 Total Assets: $1,250,000 Total Debts: $758,629 Debtor's list of its Two Largest Unsecured Creditors: Entity Claim Amount ------ --------- Town of Islip $17,000 Receiver of Taxes 41 Nassau Avenue Islip, NY 11751 NYS Department of Taxation and Finance $738 Bankruptcy Unit, Building 8, Room 455 W.A. Harriman State Campus Albany, NY 12227 BOSTON HILL: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Boston Hill Realty Trust 93 Main Street Kingston, MA 02364 Bankruptcy Case No.: 08-10830 Type of Business: The Debtor owns and manages real estate. Chapter 11 Petition Date: February 5, 2008 Court: District of Massachusetts (Boston) Judge: William C. Hillman Debtor's Counsel: Earl D. Munroe, Esq. Munroe & Chew 5 Broadway Saugus, MA 01906 Tel: (617) 848-1218 Fax: (617) 507-8377 Total Assets: $28,300,000 Total Debts: $17,544,341 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Department of Environmental trade debt $40,500 Protection Commonwealth Master Lockbox P.O. Box 3982 Boston, MA 02241 Town of Westborough $25,000 Collector of Taxes 34 West Main Street Westborough, MA 01581 Nextel Communications trade debt $21,297 P.O. Box 17621 Baltimore, MD 21297 Town of Northborough $15,000 B.L. Makepeace trade debt $8,411 Northland Willette, Inc. trade debt $5,832 Town of Shrewsbury $5,000 David Prybyla Electrical trade debt $3,916 Driveway Corp. trade debt $3,400 Ronald Rainer $2,000 Aggregate Industries trade debt $1,513 Atlantic Blasting Co., Inc. trade debt $1,500 Premium Fuels Corp. trade debt $939 Surbaban Propane trade debt $938 LaFleur Electric Co., Inc. trade debt $604 T.G.G., Inc. trade debt $603 Labor Ready Northeast, Inc. trade debt $358 Maine Lubrication bank loan $246 Leo Dodier $100 Mark Valas $100 BROOKSIDE TECH: Posts $1.4 Million Net Loss in 2007 Third Quarter ----------------------------------------------------------------- Brookside Technology Holdings Corp. reported a net loss of $1,444,691 for the third quarter ended Sept. 30, 2007, compared with net income of $223,532 in the same period of 2006. Total revenues from operations for quarter ended Sept. 30, 2007, were $927,036, compared to $1,123,494 reported for the same period in 2006, a decrease of $196,458 or 17.5%. General and administrative expenses were $841,130 and $303,432 for the quarter ended Sept. 30, 2007, and 2006, respectively. The increase in 2007 was due primarily to the administrative costs associated with being a public company, such as legal, accounting, public relations and investor relations, as well as additional administrative headcount, and 17 days of expenses from U.S. Voice and Data, LLC. The company recognized $933,615 of amortization expense for the quarter ended Sept. 30, 2007, related to the accounting treatment of the warrants issued and allocation of beneficial conversion in connection with the debt financing for the acquisition of USVD. There was no such expense for the comparable period in 2006. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $18,789,300 in total assets, $9,226,804 in total liabilities, and $9,562,496 in total stockholders' equity. The company's consolidated balance sheet also showed strained liquidity with $3,855,714 in total current assets available to pay $6,577,777 in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?27c9 Going Concern Doubt The company has incurred net losses during the nine months ended Sept. 30, 2007, and the years ended Dec. 31, 2006, 2005, and 2004. The company has a working capital deficit of $2,722,063 at Sept. 30, 2007. The company said that these matters raise substantial doubt about the company's ability to continue as a going concern. About Brookside Technology Holdings Based in Austin, Texas, Brookside Technology Holdings Corp. (OTC BB: BKSD) -- http://www.brooksideus.com/-- through its subsidiary companies, analyzes, designs, sells, and implements converged Voice over IP, data, video, and wireless business communications systems. BRUCE STRICKLAND: Case Summary & Largest Unsecured Creditor ----------------------------------------------------------- Debtor: Bruce E. Strickland Katrina Woodard Strickland 17 Ball Creek Way Atlanta, Georgia 30350 Bankruptcy Case No.: 08-62233 Chapter 11 Petition Date: February 5, 2008 Court: Northern District of Georgia (Atlanta) Judge: Paul W. Bonapfel Debtor's Counsel: David L. Miller, Esq. Law Offices of David L. Miller The Galleria - Suite 960 300 Galleria Parkway, NW Atlanta, Georgia 30339 Tel: 404-231-1933 Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million Debtor's list of its Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Carey Steele Alleged Security Unknown dba Steele Security Services 7357 Indian Hill Trail Riverdale, GA 30296 CAPRI CONDOMINIUMS: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: The Capri Condominiums, L.P. 4300 West Cypress Street, Suite 1075 Tampa, FL 33607 Bankruptcy Case No.: 08-01553 Type of Business: The Debtor owns and manages condominiums. Chapter 11 Petition Date: February 6, 2008 Court: Middle District of Florida (Tampa) Debtor's Counsel: Maureen A. Vitucci, Esq. Gray Robinson, P.A. 301 East Pine Street, Suite 1400 Orlando, FL 32802 Tel: (407) 843-8880 Fax: (407) 244-5690 Total Assets: $10 Million to $50 Million Total Debts: $10 Million to $50 Million The Debtor did not file a list of its largest unsecured creditors. CA-TEL TELECOM: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Ca-Tel Telecommunications, Inc. 878 West Illini Street Phoenix, AZ 85041 Bankruptcy Case No.: 08-01089 Type of Business: The Debtor is a fiber optic cable installation contractor. Chapter 11 Petition Date: February 5, 2008 Court: District of Arizona (Phoenix) Judge: Redfield T. Baum, Sr. Debtor's Counsel: James F. Kahn, Esq. James F. Kahn, P.C. 301 East Bethany Home Road, Suite C-195 Phoenix, AZ 85012 Tel: (602) 266-1717 Fax: (602) 266-2484 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ ------------- --------- Allied Insurance Co Trade Debt $112,912 P.O. Box 52014 Phoenix, AZ 85072-2014 Chase Card Services Trade Debt $78,522 P.O. Box 94014 Palatine, IL 60094-4014 Complete Cable Trade Debt $67,200 40 North Center Street Suite 200 Mesa, AZ 85201 Ditch Witch Trade Debt $63,588 Fennemore Craig Trade Debt $60,000 Firebird Fuel Co Trade Debt $51,236 Interwest Safety Trade Debt $47,861 KT-PC Trade Debt $44,705 Matco Pipeline Trade Debt $32,721 MRM Construction Trade Debt $31,746 Neff Rental Trade Debt $31,529 NEXTEL Trade Debt $30,635 PacifiCare Trade Debt $29,193 PFS Trade Debt $27,231 Quarles & Brady LLP Trade Debt $25,962 R&A CPAs Trade Debt $24,957 Rinker Materials Trade Debt $24,640 Southwest Materials Trade Debt $24,527 Trench Shore Rentals Trade Debt $24,268 United Rentals Trade Debt $22,951 CENTRAL ILLINOIS: Owes $5 Million to Investors of Incomplete Plant ------------------------------------------------------------------ Documents recently filed with the U.S. Bankruptcy Court for the Central District of Illinois show that around 74 shareholders signed letters of credit in the aggregate amount of $5 million to back up costs of building an ethanol plant, The Associated Press reports. The estimated cost of the plant located outside Canton, Illinois, was $40 million during the year 2001, AP reveals. When Central Illinois Energy went bankrupt late last year, at least $130 million was already applied to the still unfinished plant, AP relates. 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. CGP INC: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------ Debtor: C.G.P., Inc. 136 Mountain Creek Road Blairsville, GA 30512 Bankruptcy Case No.: 08-20310 Type of Business: The Debtor owns and manages real estate. Chapter 11 Petition Date: February 5, 2008 Court: Northern District of Georgia (Gainesville) Judge: Robert Brizendine Debtor's Counsel: Bruce Z. Walker, Esq. Cohen, Pollock, Merlin & Small, P.C. 3350 Riverwood Parkway, Suite 1600 Atlanta, GA 30339-6401 Tel: (770) 858-1288 Estimated Assets: $10 Million to $50 Million Estimated Debts: $1 Million to $10 Million Debtor's 16 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Brian Wight Construction Co. $445,370 2424 Pegasus Landing Blairsville, GA 30512 Allied Interstate $23,314 12655 North Central Expressway Dallas, TX 75243 Advanta Bank Corp. $10,253 P.O. Box 30715 Salt Lake City, UT 84130-0715 Park Manor $7,342 Irwin Commercial Finance $4,923 Fairway Outdoor Advertising $4,493 Highland Building Supply $3,770 Advanced Pools $3,465 Blairsville Surveying Co. $2,291 Pinnacle Business Finance, $2,264 Inc. Royal Premium Budget $1,920 Woodall's Pub. Corp. $1,825 400 Edition $650 C.T. Corporation System $249 Family Motor Coaching $107 Coosa Water Authority $33 CHARMING SHOPPES: Discloses Initiatives to Streamline Operations ---------------------------------------------------------------- Charming Shoppes Inc. disclosed further initiatives and actions taken as a result of the company's ongoing business review and in response to the continuing weak retail and economic environment in which the company is currently operating. These actions are being taken in order to streamline business operations, reduce SG&A and capital expenditures, improve cash flow, and enhance shareholder value, and include: -- the elimination of approximately 150, or 13%, of corporate and field management positions, which was completed as of Jan. 31, 2008, and together with the company's announcement to relocate its Catherines home operations to Bensalem, results in an aggregate reduction of approximately 200 full-time positions; -- a decrease of more than $40 million in the capital budget for fiscal year 2009, representing a 30% decrease from fiscal year 2008, primarily through a significant reduction in the number of planned store openings for fiscal year 2009; -- the closing of approximately 150 underperforming stores, including approximately 100 stores at the Fashion Bug chain; and, -- the closing of the Petite Sophisticate full-line retail concept. "As part of our ongoing review of our operations, especially in this challenging environment, we are taking a number of additional actions to improve profitability and enhance shareholder value," Dorrit J. Bern, chairman, chief executive officer and president of Charming Shoppes Inc. stated. "In November 2007, we announced the execution of a number of initiatives which had been under review during the last fiscal year, including decreases in inventory levels, reductions of capital expenditures, share repurchases, and the relocation of our Catherines' Memphis, Tennessee operations to our Bensalem, Pennsylvania offices," Ms. Bern added. "Today's announcements, in conjunction with initiatives we announced in November, will enable us to further sharpen our focus on our core businesses, reduce SG&A and capital spending, including a pull-back on new store growth, and ultimately improve cash flow." "These were difficult, but necessary actions and we are confident that by streamlining our operations, realigning our field management structure, and reducing the number of positions at our corporate headquarters, we will further strengthen Charming Shoppes' operational and financial performance," Ms. Bern continued. "Today's announcements add more emphasis and importance to many initiatives which we began in fiscal year 2008." "Although we remain confident in Charming Shoppes' continuing long-term growth opportunities, we have significantly pared back our fiscal year 2009 capital budget in connection with our ongoing review of operations and as a prudent measure in the current economic environment," Ms. Bern went on to say. "These reductions are in addition to the 10% decrease in the fiscal year 2008 capital budget as announced in August 2007." "Our fiscal year 2009 gross capital expenditures plan of approximately $103 million will represent a significant reduction of more than $40 million, or 30% below projected levels of $146 million for the fiscal year ending February 2, 2008," Ms. Bern added. "Compared to fiscal year 2008, key elements of our 2009 capital budget include a 50% reduction in our new store openings, a 20% reduction in relocations, and reductions in infrastructure spending." "Our store openings in fiscal year 2009 are largely at our Lane Bryant retail brand, and primarily reflect lease commitments that had been entered into during the first half of fiscal 2008," Ms. Bern concluded. About Charming Shoppes Based in Bensalem, Pennsylvania, Charming Shoppes Inc. (NASDAQ:CHRS) -- http://www.charmingshoppes.com -- is a retailer focused on women's plus-size specialty apparel. The company operates in two segments: retail stores segment and direct-to- consumer segment. The company's retail stores segment operates retail stores and related e-commerce websites through brands, such as Lane Bryant, Fashion Bug, Catherines Plus Sizes, Lane Bryant Outlet and Petite Sophisticate outlet. The company's direct-to- consumer segment operates a number of apparel, accessories, footwear, and gift catalogs and related e-commerce Websites through its Crosstown Traders business. During the fiscal year ended Feb. 3, 2007, the sale of plus-size apparel represented approximately 74% of the Company's total net sales. As of Feb. 3, 2007, Charming Shoppes Inc. operated 2,378 stores in 48 states. CHARMING SHOPPES: Shuts 150 Stores Following Restructuring Program ------------------------------------------------------------------ Charming Shoppes' recent disclosure of a restructuring includes the identification of approximately 150 underperforming store locations to be closed, representing a significant acceleration of the company's typical annual store closing program. The closings include approximately 100 Fashion Bug locations, as well as a number of locations in each of the company's other retail concepts. In a majority of cases, the closing store is in a market area supported by a number of its stores, and the company will take advantage of opportunities for sales transfers to remaining area stores. The company estimates that the stores identified for closure are currently generating a pre-tax loss of approximately $6 million on an annualized basis. Additionally, the company announced the closing of its four-store Petite Sophisticate Retail concept, which was launched during fiscal year 2008. "Although we continue to view Petite Sophisticate as an exciting growth opportunity, our more immediate priorities call for dedicating a greater focus to our core businesses," Ms. Bern commented. "The decision to discontinue the further development of the Petite Sophisticate full-line chain does not impact our 52 Petite Sophisticate Outlet stores, the majority of which operate in side-by-side locations with our Lane Bryant Outlet stores." The company anticipates that the execution of the initiatives announced recently will result in approximately $20.0 million of annualized pre-tax savings, primarily in the areas of non-store payroll and annualized losses related to the aforementioned 150 store closings. As a result of the initiatives disclosed, the company expects to recognize one-time non- recurring pre-tax charges of approximately $17.3 million ($10.8 million after tax, or $0.09 per diluted share) related to severance, benefits and lease termination costs, including $7.0 million ($4.4 million after tax) of non-cash pre-tax charges related to the write-down of store assets. On an after-tax basis, the impact of the one- time non-recurring charges is expected to be slightly cash-flow negative. "During fiscal year 2008, we have repurchased a significant number of shares under our share repurchase program," Ms. Bern stated. "Year to date, we have repurchased approximately 24 million shares, or 19% of our beginning-of-year share count." "Additionally, in November 2007, we announced our Board of Directors had authorized an extensive $200 million share repurchase program which we intend to complete over the next several years," Ms. Bern continued. "We remain confident in and committed to our long- term multi-brand, multi-channel strategy." "In the near-term, however, and similar to difficult actions we have taken in past retail and economic downturns, we are taking important steps to ensure a greater focus on our core businesses and on improving profitability," Ms. Bern added in summary. "As we have done in the past, we will continue to examine additional opportunities to further drive sales, profitability and shareholder value." About Charming Shoppes Based in Bensalem, Pennsylvania, Charming Shoppes Inc. (NASDAQ:CHRS) -- http://www.charmingshoppes.com -- is a retailer focused on women's plus-size specialty apparel. The company operates in two segments: retail stores segment and direct-to- consumer segment. The company's retail stores segment operates retail stores and related e-commerce websites through brands, such as Lane Bryant, Fashion Bug, Catherines Plus Sizes, Lane Bryant Outlet and Petite Sophisticate outlet. The company's direct-to- consumer segment operates a number of apparel, accessories, footwear, and gift catalogs and related e-commerce Websites through its Crosstown Traders business. During the fiscal year ended Feb. 3, 2007, the sale of plus-size apparel represented approximately 74% of the Company's total net sales. As of Feb. 3, 2007, Charming Shoppes Inc. operated 2,378 stores in 48 states. CHARMING SHOPPES: Restructuring Won't Affect S&P's 'BB-' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Charming Shoppes Inc. (BB-/Negative/--) remain unchanged after the company's announcement of a restructuring program designed to streamline operations and reduce expenses. The Bensalem, Pennsylvania-based company expects to save approximately $20 million annually on a pre-tax basis by closing 150 underperforming stores, reducing corporate and field management positions by 13%, decreasing the fiscal 2009 capital budget by $40 million, and closing its four Petite Sophisticate full-line stores. The closed stores currently contribute a pre-tax loss of about $6 million annually. Management expects the aforementioned initiatives to cost about $17 million, of which approximately $7 million is non-cash expenses related to store closures. S&P expects credit metrics to remain weak for the rating in the near term, with debt to EBITDA remaining near third-quarter 2007 levels of 3.7x and interest coverage of about 3.8x. Although the above actions have the potential to strengthen profitability over time, S&P's outlook for Charming Shoppes and apparel retailers in general is unfavorable for 2007 and S&P would consider lowering the rating if credit metrics deteriorate further. CHATTEM INC: Earns $59.7 Million in Fiscal Year Ended Nov. 30 ------------------------------------------------------------- Chattem Inc. reported net income of $59.7 million for the fiscal year ended Nov. 30, 2007, compared to net income of $45.1 million for fiscal 2006. Net income for fiscal 2007 included a loss on early extinguishment of debt and SFAS 123R employee stock option expense. Net income for fiscal 2006 included a debt extinguishment charge, litigation settlement items and SFAS 123R employee stock option expense. As adjusted to exclude these items, net income for fiscal 2007 was $65.1 million, compared to $37.5 million for fiscal 2006. Total revenues for fiscal 2007 rose to $423.4 million, an increase of 40.9%, compared to total revenues of $300.5 million in fiscal 2006. Revenue growth for the fiscal year was driven by the five acquired brands and continued growth of the Gold Bond and Icy Hot businesses, offset by declines in the Icy Hot Pro-Therapy(R) and Dexatrim(R) franchises, the latter of which was impacted by unprecedented competition in the weight loss category as well as difficult comparisons to the fiscal 2006 launch period of Dex Max2O(R). Excluding the impact of the acquired brands and Icy Hot Pro-Therapy, total revenues increased 5.0% compared to fiscal 2006. "The company experienced the most successful year in its 128 year history," said Zan Guerry, Chattem's chairman and chief executive officer. "Early in the year, we made the exciting acquisition of five brands from Johnson & Johnson and were able to integrate those brands into our organization smoothly and ahead of schedule. The acquisition, combined with the growth of our existing business, resulted in a 41.0% increase in total revenues for the year to a record $423.0 million and even more impressive earnings growth," Guerry stated. "In reference to the balance sheet," Guerry commented further, "we were able to finance the acquisition of the five brands on very favorable terms and have put in place a very solid and effective capital structure. Our strong operating cash flows for fiscal 2007 enabled us to reduce debt more rapidly than we anticipated at the time of the acquisition while also repurchasing over 400,000 shares of our common stock for $23.6 million, or an average cost of $58.98 per share." Fourth Quarter Financial Results Total revenues for the fourth quarter of fiscal 2007 were $100.6 million, compared to total revenues of $65.1 million in the prior year quarter, representing a 54.5% increase. Revenue growth for the quarter was led by the five acquired brands as well as strong performances from Gold Bond and Icy Hot. Offsetting these increases was a reduction in sales of Dexatrim and lower sales of Icy Hot Pro-Therapy. Excluding the impact of the acquired brands and Icy Hot Pro-Therapy, total revenues increased 3.0% compared to the prior year quarter. Net income for the quarter rose to $14.8 million, compared to net income of $4.9 million for the prior year quarter. Net income for the fourth quarter of fiscal 2007 included SFAS 123R employee stock option expense. Net income for the fourth quarter of fiscal 2006 included litigation settlement items and SFAS 123R employee stock option expense. As adjusted to exclude these items, net income for the fourth quarter of fiscal 2007 was $15.8 million, compared to $6.0 million for the prior year quarter. In the fourth quarter of fiscal 2007, the company increased the reserves for Icy Hot Pro-Therapy retail and in-house inventory exposure by approximately $7.0 million, which resulted in lower revenue and reduced gross margins during the fourth quarter of fiscal 2007. Cash Flows and EBITDA For the fiscal year, cash flows from operations increased 59.4% to $86.7 million compared to $54.4 million for fiscal 2006. Free cash flow was $80.4 million, up 61.8%, compared to $49.7 million for fiscal 2006. EBITDA increased 139.0% to $32.2 million, or 32.0% of total revenues, for the quarter and increased 82.6% to $133.9 million, or 31.6% of total revenues, for the fiscal year, compared to $73.3 million, or 24.4% of total revenues in fiscal 2006. Total Debt Since acquiring the five brands on Jan. 2, 2007, the company has reduced total debt by $62.5 million to $508.0 million as of Nov. 30, 2007. During that same period, the company funded the purchase of a net bond hedge of $12.1 million in connection with the issuance of the 1.625% senior convertible notes in April 2007; acquired the ACT business in Western Europe and the worldwide trademark rights to ACT for $4.1 million; and repurchased 400,129 shares of the company's common stock for $23.6 million, or an average cost of $58.98 per share. Balance Sheet At Nov. 30, 2007, the company's consolidated balance sheet showed $780.6 million in total assets, $578.9 million in total liabilities, and $201.7 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the fiscal year ended Nov. 30, 2007, are available for free at http://researcharchives.com/t/s?27ca About Chattem Chattem Inc. (NASDAQ: CHTT) -- http://www.chattem.com/-- markets and manufactures a broad portfolio of a broad portfolio of branded over the counter healthcare products, toiletries and dietary supplements. The company's portfolio of products includes well- recognized brands such as Icy Hot, Gold Bond, Selsun Blue, ACT, Cortizone-10 and Unisom. Chattem conducts a portion of its global business through subsidiaries in the United Kingdom, Ireland and Canada. * * * To date, Chattem Inc. still carries Moody's Investors Service 'Ba3' corporate family and 'B2' senior subordinate ratings. Outlook is Stable. C&H PETROLEUM: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: C & H Petroleum, LLC dba The Colony Kwik Kar Lube & Tune dba Kwik Kar Lube & Tune 4912 Main Street The Colony, TX 75056 Bankruptcy Case No.: 08-40275 Chapter 11 Petition Date: February 4, 2008 Court: Eastern District of Texas (Sherman) Debtors' Counsel: Mark I. Agee, Esq. 5401 North Central Expressway Suite 220 Dallas, TX 75205 Tel: (214) 320-0079 Fax: (214) 320-2966 Total Assets: $1,036,700 Total Debts: $2,962,586 Consolidated Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Compass Bank business Loan $1,148,926 8080 N. Central Expressway Attn: William Rosenberg Dallas TX 75206 Compass Bank - Special Assets business Loan $810,456 PO Box 650561 Dallas, TX 75265-0561 Linda & Bill Hobbs business Loan $285,000 2941 W. Oakhaven Lane Springfield MO 65810 BAI Enterprise, Inc. business Loan; $139,452 value: $77,000 First Funds business Debt $63,095 Kwik Industries business Debt $36,754 Bill Hobbs wages $34,575 Denton County Tax Assessor property taxes $20,375 Gaylon Chapman wages $19,890 Kwik Industries business Debt $17,380 David Childs property taxes $16,882 Felts Oil business debt $15,550 Ashland Inc. business Debt $9,693 Time Warner Telecom business Debt $6,915 David Childs property taxes $4,889 Elliot Lodging/Gordon Elliott services $4,850 ESPH, Inc. business debt $3,263 Safeco Insurance insurance $3,066 Integrated System Inc. business debt $3,013 Service Lloyds business Debt $2,930 CHURCH ON THE MOVE: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Church on the Move, Inc./Christ Temple fka Christ Temple Baptist Church of Dallas 7615 South Polk Dallas, TX 75232 Bankruptcy Case No.: 08-30661 Type of Business: The Debtor owns and manages a church. Chapter 11 Petition Date: February 5, 2008 Court: Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtor's Counsel: Joyce W. Lindauer, Esq. 8140 Walnut Hill Lane, Suite 301 Dallas, TX 75231 Tel: (972) 503-4033 Fax: (972) 503-4034 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its largest unsecured creditors. COLLIN DWAYNE: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Collin Dwayne Porterfield 3336 Hanover Dallas, Texas 75225 Tel: 214 3693380 Bankruptcy Case No.: 08-30653-11 Chapter 11 Petition Date: February 5, 2008 Court: Northern District of Texas (Dallas) Debtor's Counsel: Collin D. Porterfield, Esq. 3336 Hanover Street University Park, Texas 75225 Tel: 214 8376532 Estimated Assets: $1,000,001 to $50 million Estimated Debts: $1,000,001 to $50 million The Debtor did not file a list of its largest unsecured creditors. COLONIA SANTA RITA: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Colonia Santa Rita, Inc. 8000 IH 10 West, Suite 600 San Antonio, TX 78230 Bankruptcy Case No.: 08-50265 Chapter 11 Petition Date: February 4, 2008 Court: Western District of Texas (San Antonio) Judge: Leif M. Clark Debtor's Counsel: Arthur J. Rossi, Jr., Esq. Energy Plaza II, Fifth Floor 8620 North New Braunfels Avenue San Antonio, TX 78217-6363 Tel: (210) 822-8818 Fax: (210) 826-0374 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ ------------- --------- Prada Development, Ltd. Intercompany debt $538,961 8000 IH 10West, Suite 600 San Antonio, TX 78230 Santa Rita Plaza, LC Loan $30,000 600 Prada Machin Laredo, TX 78046 United Independent School Ad Valorem Taxes $8,500 District Norma Farabough RTA, CSTA CTA 3501 East Saunders Laredo, TX 78041 Webb County Tax Assessor Ad Valorem Taxes $4,000 City of Laredo Ad valorem Taxes $4,000 Menchar, Angel Condo deposit $800 Lopez, Anthony Tenant deposits $800 Castillo, Jose Israel Tenant deposits $800 Bautista, Juan Condo deposit $800 Menchaca, Ramiro E. Accounting services $500 Martinez, Jose Alfredo Contract for Deed $100 Maldonado, Homero Contract of Deed $100 Magana Jr., Daniel Contract of Deed $100 LaVaude, Louis P. Attorney for - Colonia $100 Santa Rita, Inc. Jalomo, Delia Contract for Deed $100 Gutierrez, Irma A. Contract for Deed $100 Gonzalez, Ariel Contract for Deed $100 Garcia, Maria Guadalupe Contract for Deed $100 Garcia, Diana Elsa Contract for Deed $100 Garcia Jr., Baldemar Attorney Fees $100 COMPLETE RETREATS: To Close 61 Chapter 11 Cases ----------------------------------------------- Pursuant to Section 350(a) of the Bankruptcy Code, Complete Retreats LLC and its debtor-affiliates ask the Hon. Alan H.W. Shiff of the United States Bankruptcy Court for the District of Connecticut to close the Chapter 11 cases of 61 debtor affiliates effective as of the Effective Date of their First Amended Joint Plan of Liquidation: Debtor Case No. ------ -------- Preferred Retreats, LLC 06-50246 LR Management Company, LLC 06-50247 New Retreats Holding Co., LLC 06-50248 T&H Villas, LLC 06-50249 Town Clubs, LLC 06-50250 Preferred Aviation, LLC 06-50251 Preferred Retreats Travel Company, LLC 06-50252 Preferred Retreats Design Group, LLC 06-50253 Private Retreats, LLC 06-50254 European Retreats, LLC 06-50255 Distinctive Retreats, LLC 06-50256 DR MGM I, LLC 06-50257 DR MGM II, LLC 06-50258 DR MGM III, LLC 06-50259 DR MGM IV, LLC 06-50260 Private Retreats Steamboat, LLC 06-50261 Private Retreats Steamboat II, LLC 06-50262 Private Retreats Telluride I, LLC 06-50263 Private Retreats Kamalani, LLC 06-50264 Private Retreats Tortuga, LLC 06-50265 Private Retreats Whitewing, LLC 06-50266 Private Retreats Belfair, LLC 06-50267 Private Retreats Cabin 4, LLC 06-50268 Private Retreats Cabin 8, LLC 06-50269 Private Retreats Colinas, LLC 06-50270 Private Retreats Yacht Club Tortola, LLC 06-50271 Private Retreats Yacht Club Mediterranean LLC 06-50272 Private Retreats Teton I, LLC 06-50273 Private Retreats Snake River I, LLC 06-50274 Private Retreats Snake River II, LLC 06-50275 Private Retreats Stowe II, LLC 06-50276 Private Retreats Stowe III, LLC 06-50277 Private Retreats Preserve Way, LLC 06-50278 Private Retreats Highpoint, LLC 06-50279 Private Retreats Tortola, LLC 06-50280 Private Retreats Pinecone 305, LLC 06-50281 Private Retreats Deer Valley I, LLC 06-50282 Private Retreats Tahoe I, LLC 06-50283 Private Retreats Tahoe II, LLC 06-50284 Private Retreats Tahoe III, LLC 06-50285 Private Retreats Belize, LLC 06-50286 Preferred Retreats Hospitality, LLC 06-50287 Private Retreats Powell II, LLC 06-50288 Private Retreats Powell III, LLC 06-50289 PR Esperanza II, LLC 06-50290 PR Esperanza III, LLC 06-50291 Olde Cypress I PR, LLC 06-50292 Olde Cypress II PR, LLC 06-50293 PR Vegas III, LLC 06-50294 A&K Destinations, LLC 06-50295 A&K Luxury Automobiles, LLC 06-50296 Bermuda Cliffs, LLC 06-50297 Private Retreats II, LLC 06-50298 Private Retreats Nevis, LLC 06-50299 Distinctive Retreats II, LLC 06-50300 Legendary Retreats, LLC 06-50301 Private Retreats Casa Dorada, LLC 06-50302 Private Retreats Summit, LLC 06-50303 P180, LLC 06-50304 DR Cerezas, LLC 06-50305 Preferred Brokerage, LLC 06-50306 In accordance with the terms of the Liquidation Plan, before the Effective Date, all of the Debtors, except DR Abaco, were merged into Complete Retreats. DR Abaco, which owns real property in the Bahamas, was not dissolved to facilitate the sale of the Bahamas property by the liquidating trust created under the Plan. The Plan became effective on December 31, 2007, and all aspects of the Debtors' bankruptcy cases, except for the cases of Complete Retreats and DR Abaco, have been fully administered, according to Jeffrey K. Daman, Esq., at Dechert, LLP, in Hartford, Connecticut. No further actions under the Plan are required of the Debtors, and in fact, none of them continue to exist as corporate entities, Mr. Daman says. Thus, he asserts that entering a final decree for all of the Debtors other than Complete Retreats and DR Abaco, and closing the 61 bankruptcy cases, effective as of the Effective Date, is warranted and justified and will benefit the Debtors, their estates, their creditors, and other parties-in-interest. Mr. Daman informs Judge Shiff that the Liquidating Trust has not yet completed distributions pursuant to the Plan. About Complete Retreats Headquartered in Westport, Connecticut, Complete Retreats LLC operates five-star hospitality and real estate management businesses. In addition to its mainline destination club business, the Debtor also operates an air travel program for destination club members, a villa business, luxury car rental services, wine sales services, fine art sales program, and other amenity programs for members. Complete Retreats and its debtor-affiliates filed for chapter 11 protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245). Nicholas H. Mancuso, Esq. and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in their restructuring efforts. Michael J. Reilly, Esq., at Bingham McCutchen LP, in Hartford, Connecticut, serves as counsel to the Official Committee of Unsecured Creditors. No estimated assets have been listed in the Debtors' schedules, however, the Debtors disclosed $308,000,000 in total debts. (Complete Retreats Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). CROWN HOLDINGS: Earns $343 Million in 2007 Fourth Quarter --------------------------------------------------------- Crown Holdings Inc. reported net income from continuing operations of $343.0 million for the fourth quarter ended Dec. 31, 2007, compared to net income from continuing operations of $168.0 million in the fourth quarter of 2006. Included within net income from continuing operations in the 2007 fourth quarter is a net gain of $324.0 million. The net gain reflects a $479.0 million benefit related to the reversal of valuation allowances on the company's U.S. deferred tax assets partially offset by a net charge of $7.0 million to settle retiree medical litigation and a supplier dispute, a $29.0 million net charge for asbestos, a $5.0 million net charge related to restructuring actions and a $114.0 million net impairment charge, primarily to write-off goodwill. In the 2006 fourth quarter, the company recorded a net gain of $146.0 million to record gains on sales of assets and the reversal of a tax balance in comprehensive income, partially offset by provisions for asbestos, the remeasurement of foreign currency exposures and an impairment charge recorded in the company's plastic bottle joint venture. Net sales in the fourth quarter increased to $1.87 billion, an 11.6% increase over the $1.68 billion in the fourth quarter of 2006. The increase in sales was attributable to higher sales unit volumes, the pass-through of higher raw material costs and favorable foreign currency translation. Fourth quarter gross profit rose 7.5% to $214.0 million over the $199.0 million in the 2006 fourth quarter. As a percentage of net sales, gross profit was 11.4% in the fourth quarter compared to 11.9% in the same quarter last year. The decline in percentage margin was attributable to the impact of passing through higher raw material costs partially offset by stronger sales unit volumes, increased operating efficiencies and productivity gains. Selling and administrative expense in the fourth quarter was $100.0 million compared to $84.0 million in last year's fourth quarter. The increase reflects a higher accrual for incentive compensation costs, foreign currency translation and general inflationary increases. Segment income, a non-GAAP measure defined by the company as gross profit less selling and administrative expense, was $114.0 million in the fourth quarter after the settlement charges of $7.0 million, down $1.0 million or 0.9% compared to the $115.0 million in the 2006 fourth quarter. Segment income as a percentage of net sales was 6.1% in the fourth quarter of 2007 compared to 6.9% in the fourth quarter of 2006. Excluding the settlement charges, segment income in the fourth quarter of 2007 was $121.0 million or 5.2% greater than the fourth quarter of 2006. Commenting on the results, John W. Conway, chairman and chief executive officer, stated, "We are very pleased with our overall 2007 performance. Worldwide volumes were good despite the impact of poor weather on our European food can business. Our significant beverage can growth initiatives in emerging markets remained on plan and delivered increasingly positive contributions. Importantly, in 2007, the company improved gross profit by more than 15.0% and generated strong free cash flow. Looking ahead, we expect the positive momentum to continue in 2008." Interest expense in the fourth quarter was $86.0 million compared to $76.0 million in the fourth quarter of 2006. The increase reflects the impact of higher average short-term borrowing rates and foreign currency translation. During the fourth quarter of 2007, the company determined that it considered it more likely than not that the majority of its U.S. deferred tax assets would be realized through future income from operations. Accordingly, an income tax benefit of $479.0 million was recorded for the reversal of previously established valuation allowances. The reversal of the valuation allowance has no impact on taxes paid. In the 2006 fourth quarter, the company recorded an income tax benefit of $121.0 million related to the reversal of a previously established adjustment to accumulated comprehensive income arising from the company's U.S. minimum pension liability. Net debt decreased by $435.0 million from Sept. 30, primarily as a result of the reduction in working capital during the fourth quarter. Net debt at Dec. 31, 2007, was $2.98 billion, $154.0 million lower than the Dec. 31, 2006, level as free cash flow for 2007 more than offset common share repurchases of $118.0 million and foreign exchange translation on net debt of $89.0 million. Full Year Results For 2007, net sales rose to $7.73 billion, up 10.7% over the $6.98 billion in 2006. The increase reflects higher sales unit volumes, the pass-through of higher raw material costs and foreign currency translation. Approximately, 73.0% of net sales were from outside the United States in 2007 compared to 72.0% in 2006. Gross profit for the year of $1.03 billion, or 13.3% of net sales, increased 15.1% compared to $892.0 million of gross profit, or 12.8% of net sales for 2006. The increase was driven by stronger sales unit volumes, increased operating efficiencies and productivity gains. Selling and administrative expense for 2007 was $385.0 million compared to $316.0 million in 2006. The increase is attributable to a higher accrual for incentive compensation costs, foreign currency translation and general inflationary increases. Segment income in 2007, after the $7.0 million charge to settle retiree medical benefits and a supplier dispute, increased 11.5% to $642.0 million over the $576.0 million in 2006. Segment income as a percentage of net sales was 8.3% in 2007 compared to 8.2% in 2006. Excluding the settlement charges, segment income for 2007 grew to $649.0 million and was 12.7% over 2006 segment income. Interest expense was $318.0 million in 2007 compared to $286.0 million in 2006. The increase reflects higher average short-term borrowing rates and foreign currency translation in 2007 compared to 2006. For 2007, the company reported net income from continuing operations of $545.0 million, compared to net income from continuing operations of $342.0 million in 2006. Balance Sheet At Dec. 31, 2007, the company's consolidated balance sheet showed $7.00 billion in total assets, $6.96 billion in total liabilities, and $37.0 million in total shareholders' equity. About Crown Holdings Inc. Based in Philadelphia, Pennsylvania, Crown Holdings Inc. (NYSE: CCK) -- http://www.crowncork.com/-- through its subsidiaries, is a supplier of packaging products to consumer marketing companies around the world. * * * Crown Holdings still carries Fitch's 'B+' long term issuer default rating assigned on July 18, 2006. Outlook is Stable. DANKA BUSINESS: Dec. 31 Balance Sheet Upside Down by $354.2 Mil. ---------------------------------------------------------------- Danka Business Systems PLC reported a net loss of $0.8 million for three months ended Dec. 31, 2007, compared to the previous year of the same quarter's net loss of $5.5 million. For nine months ended Dec. 31, 2007, net loss was $20.1 million compared to revenues of $12.1 million of nine months ended Dec. 31, 2006. The company's balance sheet, as of Dec. 31, 2007, reflected total assets of $233.5 million, total liabilities of $255.1 million and a shareholder's deficit of $354.2 million. For the quarter ended Dec. 31, 2007, the company's income statement also showed total revenues of $108.2 million, 2.4% higher compared to $105.6 million of quarter ended Dec. 31, 2006. For the nine months ended Dec. 31, 2006, total revenues were at $319.7 million, down 5.1%, compared to $336.9 of fiscal 2006. Operating earnings from continuing operations of $600,000 in the fiscal year 2008 third quarter ended Dec. 31, 2007, compared with a loss of $1.0 million in the comparable fiscal year 2007 quarter. For the nine months ended Dec. 31, 2007, the company reported operating earnings from continuing operations of $3.2 million, compared with a loss of $4.1 million in the prior year period. "Third quarter results again reflect some of the structural changes occurring in the marketplace." A.D. Frazier, Danka's chairman and chief executive officer said. "For example, we continue to see conversions from analog to digital that, at least initially, serve to reign in service revenue." "However, we posted solid gains in hardware sales, and are beginning to realize the full benefits of our financial restructuring and related cost-reduction measures," Mr. Frazier added. "We have also achieved significant organizational enhancements as a result of realigning our business into one unified organization in late 2007," Mr. Frazier continued. "Our focus on training and customer satisfaction strategies continues unabated." "Vendors, in particular, have been strong supporters of this effort," Mr. Frazier concluded. "Additionally, our recently announced strategic relationship with Konica Minolta is progressing favorably." About Danka Business Headquartered in St. Petersburg, Florida, Business Systems PLC (OTCBB: DANKY) -- http://www.danka.com-- provides document solutions, including office imaging equipment, software, support, and related services and supplies in the United States. It offers office imaging products, services, supplies and solutions, including digital and color copiers, digital and color multifunction peripherals printers, facsimile machines and software. It also provides contract services, including professional and consulting services, maintenance, supplies, leasing arrangements, technical support and training, collectively referred to as Danka Document Services. The company's revenue is generated from two primary sources: new retail equipment, supplies and related sales, and service contracts. Danka sells Canon products, as well as Kodak, Toshiba and Hewlett-Packard. On Aug. 31, 2006, the company sold its subsidiary, Danka Australasia, PTY Limited, to Onesource Group Limited. In January 2007, the company disposed of its European businesses to Ricoh Europe B.V. DAVID WALKER: Case Summary & 19 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: David E. Walker, Jr. Kim S. Walker P.O.Box 241892 Little Rock, Arkansas 72223 Bankruptcy Case No.: 08-10716 Chapter 11 Petition Date: February 5, 2008 Court: Eastern District of Arkansas (Little Rock) Debtor's Counsel: Sheila F. Campbell, Esq. Sheila Campbell, P.A. P.O. Box 34007 Little Rock, Arkansas 72203 Tel: (501) 374-0700 Estimated Assets: $500,001 to $1 million Estimated Debts: $1,000,001 to $10 million Debtor's list of its 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ HPSC, INC. consignor or $693,468 1 Beacon Street Floor 2 business loan Boston, MA 02108 Sallie Mae Servicing student loan $438,620 1002 Arthur Dr. Lynn Haven, FL 32444 Bank of American credit account $47,181 P.O. Box 15726 Wilmington, DE 19886-5726 Bank of America, N.A. loan $43,566 Simmons First National Bank business loan $39,797 Bank of America, N.A. credit account $34,626 Simmons First National Bank line of credit $24,927 David E. Walker, Sr. personal loan $20,000 Simmons First National Bank 85400653 $19,786 American Express credit account $18,984 Baptist Health Medical Center medical expense $2,256 Sprint telephone bill $657 University of Ark. for Medical medical bill $574 Arkansas Health Group credit account $537 Anesthesia Laboratory Corporation of medical bill $410 America Emergency Doctors Group medical bill $236 Radiology Consultants of medical bill $171 Little Rock The Surgical Clinic of Central credit account $134 AT&T telephone bill $102 DOMAIN HOME: Great American Presents $5.2MM Bid; Auction Today -------------------------------------------------------------- Domain Inc., will hold an auction today to sell substantially all of its assets, William Rochelle at Bloomberg News reports. Initial bids were due yesterday, Mr. Rochelle says. The Boston Globe reports that Domain has named Great American Group LLC as lead bidder. Great American is offering $5.2 million to buy Domain Home's inventory and liquidate the furniture chain, Boston Globe says. Boston Globe also relates that Hudson Capital Partners LLC, yesterday said it was considering bidding for Domain. Hudson Capital chief executive James Schaye has a minority stake in Domain under another company known as Golden Acquisition, where he serves as managing partner, Boston Globe says. Great American would get a $120,000 break-up fee if Domain ultimately sell its assets to another party, according to Boston Globe. Great American would pay about 64 cents on the dollar-cost value of the Debtors' inventory, estimated at $8.5 million, and pay a minimum of $75,000 to bring in additional goods to sell during the liquidation and pay the ongoing cost to run the stores, Boston Globe relates, citing Maura Russell, Esq., Dreier LLP, Domain's counsel. The U.S. Bankruptcy Court for the District of Delaware will convene a hearing tomorrow to consider approval of any winning bid, Mr. Rochelle says. Certain owners or operators of regional retail shopping centers leased by the Debtors have objected to the proposed sale of the Debtors' assets. The Taubman landlords want the Debtors to comply with the use clause provision of their leases. They point out that the lease provisions preclude the Debtors from conducting any auction, liquidation, going out of business, fire or bankruptcy sales in the leased premises. They also want the Debtors to cure any existing defaults under the lease, as well as provide proof that any assignee of the lease can adequately perform under the contract and will not disrupt tenant mix. Norwood, Massachussetts-based Domain Inc., dba Domain Home/Domain Home Furnishings/Domain-Home.com -- http://www.domain-home.com/-- operate a chain of 27 home furnishing stores across seven states in the Northeast and Mid-Atlantic regions of the US, including suburbs of major metropolitan markets such as Boston, New York, Philadelphia and Washington, D.C. The Debtor and its affiliate, Domain Home Holding Co., LLC, filed for chapter 11 bankruptcy on Jan. 18, 2008 (Bankr. D. Del. Case Nos. 08-10132 and 08-10133). J. Kate Stickles, Esq., and Mark Minuti, Esq., at Saul Ewing LLP represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed assets and debts between $10 million and $50 million. The Debtors have disclosed that $4,900,000 was outstanding on a secured revolving credit loan. EASTMAN KODAK: Earns $92 Million in 2007 Fourth Quarter ------------------------------------------------------- Eastman Kodak Company reported earnings from continuing operations of $92.0 million for the fourth fiscal quarter ended Dec. 31, 2007, versus a loss from continuing operations of $15.0 million in the comparable period in 2006. The company achieved $146.0 million in digital earnings for the fourth quarter, driven by an expanded product portfolio, intellectual property arrangements, and operational improvements, resulting in strong full-year earnings performance across the company's digital business units. Earnings from continuing operations before interest, other income (charges), net, and income taxes were $130.0 million for the quarter. "I am thrilled with our 2007 performance, as it is powerful evidence that a new Kodak has emerged and is producing solid, value-creating growth," said Antonio M. Perez, chairman and chief executive officer, Eastman Kodak Company. "We delivered another strong quarter, and another strong year of earnings growth, and met or exceeded every important goal that we set for ourselves. "In addition, we successfully entered the $50 billion consumer inkjet market and exceeded our first-year printer sales goal. What's more, third-party data indicates that Kodak is enjoying a 30.0% price premium over the industry average. Clearly, our value proposition is resonating with consumers and they are willing to pay a bit more for a Kodak printer because they know they will save money every time they print. Consumer inkjet is just one of several new product introductions that are receiving positive customer response. The more I see of them, the more optimistic I am about their success." Items of net expense impacting comparability in the fourth quarter of 2007 totaled $28.0 million after tax. The most significant items were restructuring costs of $44.0 million after tax, net gains on sale of property of $89.0 million after tax, impairment of an investment of $46 million after tax, and various other tax- related items totaling $25.0 million. In the fourth quarter of 2006, items of net expense impacting comparability totaled $158.0 million after tax, primarily reflecting restructuring costs and tax valuation allowances. Sales totaled $3.22 billion, an increase of 4.0% from $3.11 billion in the fourth quarter of 2006. Digital revenue totaled $2.26 billion, a 15.0% increase from $1.97 billion in the prior-year quarter. Traditional revenue totaled $951.0 million, a 15.0% decline from $1.12 billion in the fourth quarter of 2006. Gross Profit margin was 24.5% for the quarter, up from 23.8% in the year-ago period, primarily attributable to lower costs from manufacturing footprint reductions, intellectual property, and foreign exchange, partially offset by increased commodity costs and price/mix impacts. Selling, General and Administrative expenses increased by $48.0 million from the year-ago quarter, primarily reflecting the company's investment in advertising to support new products, including its consumer inkjet printing system. As a result, SG&A as a percentage of revenue was 16.0%, compared with 15.0% in the year-ago quarter. Net Cash Generation for the fourth quarter was $1.13 billion, compared with $905.0 million in the year-ago quarter. This corresponds to net cash provided by operating activities from continuing operations of $1.05 billion for the fourth quarter, compared with $1.00 billion in the year-ago quarter. The company's debt level stood at $1.60 billion as of Dec. 31, 2007, a $1.18 billion reduction from the 2006 year-end debt level of $2.78 billion. Kodak held $2.95 billion in cash and cash equivalents as of Dec. 31, 2007, an increase of $1.488 billion from the year-ago period. Full Year Results The company's loss from continuing operations for 2007 was $205.0 million, a $599.0 million improvement, from the 2006 level. The favorable year-over-year change reflects a decrease in restructuring charges, as the company completed the final year of its corporate restructuring program. It also reflects greatly improved operational performance across all of the company's businesses as well as reduced taxes and SG&A expenses versus the prior year. For the full year, the company delivered $176.0 million in digital earnings, a $189.0 million improvement from the prior year, significantly outpacing a $30.0 million year-over-year decline in traditional earnings. Earnings from continuing operations before interest, other income (charges), net, and income taxes were $130.0 million for the quarter and a loss of $230.0 million for the year. Sales totaled $10.30 billion, a decrease of 3.0% from $10.57 billion in 2006. Net Cash Generation for the full year was $333.0 million, compared with $365.0 million in 2006. This corresponds to net cash provided by operating activities from continuing operations of $352.0 million for 2007, compared with $685.0 million in 2006. "Our corporate restructuring is now over and Kodak is revitalized and ready to grow," said Perez. "We have a strong market position in a significant number of very promising digital businesses, a competitive operating structure, a powerful brand, and extremely valuable intellectual property. We are a new company with a strong emphasis on sustaining profitable growth, and the talent and resources necessary to achieve that goal. This positions us well for strong performance in 2008 and beyond." Balance Sheet At Dec. 31, 2007, the company's consolidated balance sheet showed $13.66 billion in total assets, $10.63 billion in total liabilities, and $3.03 billion in total shareholders' equity. About Eastman Kodak Headquartered in Rochester, New York, Eastman Kodak Co. (NYSE: EK)-- http://www.kodak.com/-- develops, manufactures, and markets digital and traditional imaging products, services, and solutions to consumers, businesses, the graphic communications market, the entertainment industry, professionals, healthcare providers, and other customers. The company has operations in Argentina, Chile, Denmark, Greece, Jordan, Yemen, Australia, China among others. * * * As reported in the Troubled Company Reporter on Sept. 14, 2007, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Eastman Kodak Co. and removed the ratings from CreditWatch, where it has been placed with negative implications on Aug. 2, 2006. The outlook is negative. EL RIO PROFESSIONAL: Case Summary & 12 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: El Rio Professional Plaza, LLC 6870 West Highway 95, Suite 451 Mohave Valley, AZ 86440 Bankruptcy Case No.: 08-01069 Chapter 11 Petition Date: February 5, 2008 Court: District of Arizona (Yuma) Judge: Randolph J. Haines Debtor's Counsel: Daniel P. Collins, Esq. Collins, May, Potenza, Baran & Gillespie 220 Chase Tower 201 North Central Avenue Phoenix, AZ 85004-0022 Tel: (602) 252-1900 Fax: (602) 252-1114 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its 12 Largest Unsecured Creditors: Entity Claim Amount ------ --------- Loan Sevenstar $632,305 (no address) Far West Construction $377,924 (no address) Combs Construction Co., Inc. $254,395 P.O. Box 10789 Glendale, AZ 85318 Hoover Quality Homes, Inc. $144,979 Desert Resorts Development Group $24,840 Kevin J. Ott dba Canyon State $18,310 Arizona Stone - Design Center $18,284 Tri-Core Engineering $15,794 John K. Hoover Law Office $15,110 Sevenstar Capital LLC $5,269 Casino Discount Appliance $2,580 Stanley Consultants Inc. $2,125 ENERGY FUTURE: CEO Confirms Support of The Carbon Principles ------------------------------------------------------------ "Energy Future Holdings is strongly supportive of The Carbon Principles announced [Mon]day by Citi, JPMorgan Chase and Morgan Stanley. As the result of EFH's acquisition by an investor group led by KKR, TPG and Goldman Sachs Capital Partners last October, the company had already adopted and begun implementing the three basic principles laid out [Mon]day," John F. Young, CEO of Energy Future Holdings said. -- Energy Efficiency: EFH has committed $400 million over the next five years to energy efficiency/demand side management programs. -- Renewable and low carbon distributed technologies: EFH is the largest purchaser of wind power in the state of Texas and is committed to increasing that in the coming years. EFH also continues to reduce emissions, invest in new technologies, such as one process that turns carbon into ordinary bicarbonate soda, deploy broadband over power lines and install smart meters that will ultimately provide consumers with more tools to better manage and reduce their energy consumption. -- Conventional and advanced generation: EFH has begun the planning process for two Integrated Gasification Combined Cycle (IGCC) plants by issuing a request for proposals in December 2007. "We look forward to leading the way here in Texas as we continue fulfilling environmental commitments, like these, that were made as the result of the merger transaction," Mr. Young concluded. About Energy Future Holdings Headquartered in Dallas, Texas, Energy Future Holdings Corp. fka TXU Corp. (NYSE: TXU) -- http://www.txucorp.com/-- is an energy holding company, with a portfolio of energy subsidiaries, primarily in Texas, including TXU Energy, Luminant and Oncor. Luminant is a competitive power generation business, including mining, wholesale marketing and trading, construction and development operations. Luminant has over 18,300 MW of generation in Texas, including 2,300 MW of nuclear and 5,800 MW of coal- fueled generation capacity. Luminant is also the largest purchaser of wind-generated electricity in Texas and fifth largest in the United States. Oncor is a regulated electric distribution and transmission business that uses superior asset management skills to provide reliable electricity delivery to consumers. Oncor operates a distribution and transmission system in Texas, providing power to three million electric delivery points over more than 101,000 miles of distribution and 14,000 miles of transmission lines. * * * As reported in the Troubled Company Reporter on Oct. 24, 2007, Fitch Ratings has published a credit analysis on Energy Future Holdings Corp., formerly TXU Corp. Fitch downgraded the long-term Issuer Default Rating of TXU Corp. to 'B' from 'BB+' and took various rating actions on its subsidiaries on Oct. 7, 2007. The Rating Outlook of EFH and its indirect subsidiaries is Stable. ENVIRONMENTAL TECTONICS: PNC Waives Covenant Default Until May 31 ----------------------------------------------------------------- Environmental Tectonics Corporation has received an extension on its credit agreement waiver, originally received Nov. 21, 2007, from PNC Bank, National Association, which extends the waiver to May 31, 2008. This extension agreement requires ETC to deliver to PNC its restated financial statements for the fiscal year ended Feb. 23, 2007 no later than May 31, 2008. On July 31, 2007, ETC completed a refinancing of its indebtedness with PNC in the aggregate amount of up to $15 million. In connection with the Refinancing, the company entered into a Credit Agreement with PNC. On Nov. 14, 2007, the audit committee of the board of directors of the company, in consultation with management, determined that the company would need to restate its issued consolidated financial statements for prior periods, including the periods ended Nov. 24, 2006 and Feb. 23, 2007, due to errors in accounting with respect to accounts receivable related to the carrying value of a claims receivable booked in connection with a contract with the Department of the Navy for a submarine decompression chamber project. Default due to Restatements As a result of the proposed restatement, the company was in breach of the representation and warranty contained in Section 7(a) of the Credit Agreement with respect to its delivered financial statements as set forth in the company's Annual Report on Form 10-K for the fiscal year ended Feb. 23, 2007. This breach constituted an Event of Default under the Credit Agreement and related documents. In addition, the proposed restatement caused the company to be in breach of the Consolidated Tangible Net Worth covenant set forth in the Credit Agreement. Previously, PNC waived the financial statement default, and any comparable default in respect of the company's financial statements as of any prior fiscal period, provided that the company delivered to PNC its restated financial statements for the fiscal year ended Feb. 23, 2007, no later than Jan. 31, 2008. PNC also waived the net worth covenant default as of Feb. 23, 2007. The Extension does not obligate PNC to grant any future extension for the date on which the company must deliver its restated financial statements for the fiscal year ended Feb. 23, 2007. Additionally, on Jan. 30, 2008, the audit committee of the board of directors of the company engaged Friedman LLP as the company's registered public accounting firm for the company. About Environmental Tectonics Southampton, Pennsylvania-based Environmental Tectonics Corporation (AMEX: ETC) -- http://www.etcusa.com/-- designs, develops, installs and maintains aircrew training systems (aeromedical, tactical combat and general), disaster management training systems and services, entertainment products, sterilizers (steam and gas), environmental testing products, hyperbaric chambers and related products for domestic and international customers. FIRST MAGNUS: Wells Fargo Funding to Block Plan Confirmation ------------------------------------------------------------ Wells Fargo Funding Inc. will appear before the U.S. Bankruptcy Court for the District of Arizona today to block confirmation of First Magnus Financial Corporation's chapter 11 plan of liquidation, Bill Rochelle of Bloomberg News relates. Wells Fargo argues that the Debtor's plan does not provide treatment of a $3.8 million money, with which its $20,000 claim as loan servicer was "commingled," Bill Rochelle reports. Unless the Court decides on the proper ownership of the money in which several parties have asserted claims, the Debtor's plan should not be approved, Bill Rochelle says, citing Wells Fargo. Bill Rochelle notes of some 1,000 First Magnus employees who filed a class action suit demanding payment of $7 million, an amount that employees contend will not be paid under the Debtor's plan. About First Magnus Based in Tucson, Arizona, First Magnus Financial Corporation -- http://www.firstmagnus.com/-- purchases and sells prime and Alt-A mortgage loans secured by one-to-four unit residences. The company filed for chapter 11 protection on Aug. 21, 2007 (Bankr. D. Ariz. Case No.: 07-01578). John R. Clemency, Esq., at Greenberg Traurig LLP serves as the counsel for the Debtor. The Official Committee of Unsecured Creditors has selected the firm Warner Stevens LLP as its counsel. When the Debtor filed for bankruptcy, it listed total assets of $942,109,860 and total debts of $812,533,046. The Debtor's exclusive period to file a plan expired on Dec. 19, 2007. The confirmation hearing on the Debtor's liquidation plan will commence on Feb. 7, 2008. (First Magnus Bankruptcy News; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/ or 215/945-7000). FITCH INVESTMENT: Case Summary & Five Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Fitch Investment Company, Inc. 9509 North 134th East Avenue Owasso, OK 74055 Bankruptcy Case No.: 08-10192 Chapter 11 Petition Date: February 1, 2008 Court: Northern District of Oklahoma (Tulsa) Judge: Terrence L. Michael Debtors' Counsel: Scott P. Kirtley, Esq. Riggs, Abney, Neal, Turpen, Orbison 502 West 6th Street Tulsa, OK 74119-1016 Tel: (918) 587-3161 http://www.riggsabney.com/ Total Assets: $2,052,864 Total Debts: $1,216,369 Consolidated Debtor's List of Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ First Equity credit $10,444 P.O. Box 23029 Columbus, GA 31902 Advanta Bank Corp. credit $9,690 P.O. Box 8088 Philadelphia, PA 19101 Carter, Lewis N. legal fees $7,500 Doerner Saunders 320 South Boston, Suite 500 Tulsa, OK 74103 American Express credit $6,500 Capital One Bank credit $4,734 FOLEY SQUARE: Moody's to Review Ratings Due to Weak Credit Quality ------------------------------------------------------------------ Moody's Investors Service placed its rating of these notes issued by Foley Square CDO 2007-1 Ltd. on review for possible downgrade: Class Description: $17,000,000 Class D Floating Rate Deferrable Senior Subordinate Notes Due 2014 -- Prior Rating: Baa2 -- Current Rating: Baa2, on review for possible downgrade Class Description: $21,500,000 Class E Floating Rate Deferrable Subordinate Notes Due 2014 -- 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 bonds, as well as the negative action taken by Moody's on the insurance financial strength rating of AMBAC Assurance Corporation, which acts as GIC guarantor in the transaction. On Jan. 16, 2008 Moody's placed its rating of AMBAC Assurance Corporation on review for possible downgrade. Foley Square CDO 2007-1 Ltd. is a static synthetic CDO. It was originated in May 2007. FORD MOTOR: Toyota & Ford Unaffected by Plastech's Bankruptcy ------------------------------------------------------------- While Chrysler LLC said that it could close four of its U.S. plants due to Plastech Engineered Products, Inc. and its debtor- affiliates' failure to deliver component parts, Ford Motor Co. and Toyota Motor Corp. said their automotive production won't be affected by the auto-parts supplier's Chapter 11 filing. Ford said that Plastech's Chapter 11 filing won't adversely affect the auto maker's production, The Wall Street Journal reports. "We've had no impact," said Mark Fields, Ford's President of the Americas. "We anticipate, for the time being, to be able to continue our production." "We're not out shopping to take this business elsewhere at this point," Mr. Fields told WSJ. According to Reuters, Toyota said it continues to receive parts from Plastech. "We have had no interruption in supplies," Mike Goss said. "Plastech has told us that they will continue production and we will monitor the situation closely." As previously reported, Chrysler terminated its supply contracts with Plastech. Chrysler has sought court permission to seize certain equipment from Plastech's plants, so that it could transfer production of its parts to an alternate supplier. It warned that absent the transfer, it will lose production of approximately 500 end-item parts, halting the production of its entire corporate fleet of vehicles. Plastech's major customers include General Motors, Ford Motor Company, and Toyota. About Plastech Engineering Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) About Ford Motor Based in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Nov. 19, 2007, Moody's Investors Service affirmed the long-term ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured, and B3 probability of default), but changed the rating outlook to Stable from Negative and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit Company's B1 senior unsecured rating, and changed the outlook to Stable from Negative. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the UAW. FOREST CITY: Expands Bank Credit Facility to $750 Million --------------------------------------------------------- Forest City Enterprises Inc. has expanded its bank credit facility to $750 million by exercising the accordion feature of its existing revolving credit agreement. The expansion represents a $150 million increase in the availability of the company's credit facility while maintaining the existing interest rate structure. The transaction enhances Forest City's liquidity and financial flexibility, which will be instrumental in the continued development and acquisition of quality real estate assets. As of the Jan. 31, 2008 fiscal year- end, there were no net borrowings under the credit facility. "This increased liquidity -- even in the face of stressed credit markets -- speaks to our ability to fund our robust development pipeline and to selectively and strategically take advantage of opportunities in the market," Charles A. Ratner, president and chief executive officer, said. "The expanded credit also reflects continuing support from our corporate bank group and the trust- based relationship we have with these institutions, including two additional banks that are new to our group with this expansion." The $120 million of the accordion feature closed on Dec. 20, 2007, and the remaining $30 million closed on Jan. 31, 2008. The expansion was made possible by increases in lending commitments by existing and new members of the company's 14-member bank group. About Forest City Enterprises Headquartered in Cleveland, Ohio, Forest City Enterprises, Inc. is a $5.9 billion NYSE-listed real estate company. The Company is principally engaged in the ownership, development, acquisition and management of commercial and residential real estate throughout the United States. The Company's portfolio includes interests in retail centers, apartment communities, office buildings and hotels in 20 states and the District of Columbia. * * * As reported in the Troubled Company Reporter on Dec. 26, 2007, Standard & Poor's Ratings Services affirmed its 'BB+' issuer credit and 'BB-' senior unsecured ratings on Forest City Enterprises Inc. The rating affirmations affect $837.5 million in rated senior notes. The outlook remains stable. FORTUNOFF: Asks Court Approval to Hire Skadden Arps as Counsel -------------------------------------------------------------- Fortunoff Fine Jewelry and Silverware LLC and its debtor- affiliates seek the Court's authority to employ Skadden, Arps, Slate, Meagher & Flom LLP, as their bankruptcy counsel, effective as of Feb. 4, 2008. Arnold Orlick, chief executive officer of Source Financing Corp., tells the Court that the Debtors selected Skadden Arps because of the firm's experience and knowledge in the field of debtors' and creditors' rights and business reorganizations under Chapter 11 of the Bankruptcy Code. The Debtors believe that continued representation by Skadden Arps as their restructuring and bankruptcy counsel is critical to the Debtors' efforts to restructure their business, Mr. Orlick notes. Pursuant to an engagement agreement the Debtors entered into with Skadden Arps on Jan. 24, 2008, the firm, under a general retainer, is expected to, among other things: (a) advise the Debtors with respect to their powers and duties as debtors and debtors-in-possession, in the continued management and operation of their business and properties, including all of the legal and administrative requirements of operating in Chapter 11; (b) represent the Debtors in their efforts to restructure their financial affairs and capital structure, and to sell their assets; (c) represent and advise the Debtors in relation to strategic, corporate transactional and financial matters; (d) prepare administrative and procedural applications and motions, and making the necessary Court appearances for the sound conduct of the Debtors' bankruptcy proceedings; (e) prosecute and defend litigation that may arise during the course of the Debtors' bankruptcy cases; (f) consult with the Debtors concerning and participating in the formulation, negotiation, preparation and filing of one or more plans of reorganizations and disclosure statements; and (g) take all steps necessary and appropriate to bring the Debtors' cases to a conclusion. Mr. Orlick discloses that with respect to restructuring matters, the Debtors initially paid Skadden Arps $600,000, to be held as on-account cash for the advance payment of prepetition professional fees and expenses incurred by the firm. The remaining balance would become an evergreen retainer for professional fees and expenses incurred and charged by Skadden Arps, in its representation of the Debtors, commencing on the bankruptcy filing. According to Mr. Orlick, the Debtors have also paid Skadden Arps an initial replenishment of the On-Account Cash, for $600,000. For professional services rendered to the Debtors, Skadden Arps will be paid its hourly rates under a bundled rate structure range: Professional Hourly Rate ------------ ----------- Partners and Of-counsel $680 - $950 Counsel and Special Counsel $640 - $765 Associates $340 - $625 Legal Assistants $170 - $265 The hourly rates under the bundled rate structure are designed to compensate Skadden Arps fairly for the work of its attorneys and legal assistants, and to cover fixed and routine overhead expenses incurred by the firm. The Debtors understand that Skadden Arps will implement periodic adjustments to rates, commencing on Sept. 1, 2008, Mr. Orlick tells the Court. Sally McDonald Henry, Esq., a member of Skadden Arps, assures the Court that her firm is a "disinterested person," as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, NY 10036 Tel: (212) 735-3000 Fax: (212) 735-2000/1 http://www.skadden.com/ New York-based Fortunoff Fine Jewelry and Silverware LLC -- http://www.fortunoff.com/-- is a family owned business since 1922 founded by by Max and Clara Fortunoff. Fortunoff offers customers fine jewelry and watches, antique jewelry and silver, everything for the table, fine gifts, home furnishings including bedroom and bath, fireplace furnishings, housewares, and seasonal shops including outdoor furniture shop in summer and enchanting Christmas Store in the winter. It opened some 20 satellite stores in the New Jersey, Long Island, Connecticut and Pennsylvania markets featuring outdoor furniture and grills during the Spring/Summer season and indoor furniture (and in some locations Christmas trees and decor) in the Fall/Winter season. Fortunoff and two affilites, M. Fortunoff of Westbury LLC and Source Financing Corp., filed for chapter 11 petition on Feb. 4, 2008 (Bankr. S.D.N.Y. Case Nos. 08-10353 through 08-10355) in order to effectuate a sale to NRDC Equity Partners LLC -- http://www.nrdcequity.com/-- is a private equity firm that owns of Lord & Taylor from Federated Department Stores. Sally M. Henry, Esq., and Shana Elberg, Esq., at Skadden, Arps, Slate, Meagher & Flom represents the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed assets and debts between $100 million to $500 million. (Fortunoff Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FREMONT GENERAL: Moves Headquarters from Santa Monica to Brea ------------------------------------------------------------- Fremont General Corporation, doing business primarily through its wholly-owned bank subsidiary, Fremont Investment & Loan, said Monday that it has changed the location of the company's principal executive office from Santa Monica, California to FIL's corporate headquarters in Brea, California, effective Feb. 1, 2008. The company's new address is 2727 East Imperial Highway, Brea, California 92821. The phone number is (714) 961-5000 and the fax number is (714) 961-7515. About Fremont General Headquartered in Brea, California, Fremont General Corporation (NYSE: FMT) -- http://www.fremontgeneral.com/-- is a financial services holding company which is engaged in deposit gathering through a retail branch network in Central and Southern California and residential real estate mortgage servicing through its wholly owned subsidiary Fremont Investment & Loan. Fremont Investment funds its operations primarily through deposit accounts sourced through its 22 retail banking branches which are insured up to the maximum legal limit by the Federal Deposit Insurance Corporation. It had $8.8 billion in total assets at Sept. 30, 2007. * * * As reported in the Troubled Company Reporter on Nov. 6, 2007 Fitch Ratings downgraded Fremont General Corp.'s Long-term issuer default rating to 'CC' from 'CCC' and long-term senior debt to 'C/RR6' from 'CC/RR5'. At the same time, Fitch affirmed Fremont General Corp.'s short-term IDR at 'C', individual rating at 'E', support rating at '5', and support floor at 'NF'. FREMONT GENERAL: S&P Junks Long-term Counterparty Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term counterparty credit rating on Fremont General Corp. to 'CCC+' from 'B-'. At the same time, S&P removed its ratings on Fremont from CreditWatch Developing, where they were placed on May 22, 2007, and placed on them on CreditWatch Negative. "The downgrade reflects our view that liquidity at the holding company has deteriorated substantially," said Standard & Poor's credit analyst Adom Rosengarten. Although liquidity remains strong at the bank level, S&P believes that the provisions of the cease-and-desist order, restricting dividends from the bank to the holding company during the past year, have resulted in greatly decreased liquidity levels at the parent company. At this point, S&P has concerns about the parent's ability to meet its debt obligations, given S&P's assessment of its reduced cash holdings. The CreditWatch Negative placement reflects the continued risk that is present at the holding company level because of the ongoing restrictions of the cease-and-desist order. If the order is lifted in the near term, or if Fremont works out an arrangement with regulators, allowing for cash-flow transfer between the bank and the holding company to service its debt, S&P would view this as a positive ratings factor. On the other hand, if the order remains in place for an extended period with its current restrictions, the company could be downgraded further. GAINEY CORP: Moody's Junks Rating on High Default Probability ------------------------------------------------------------- Moody's Investors Service has downgraded the corporate family rating of Gainey Corporation to Caa1 from B3 following the February 1st amendment to the company's first lien credit facility. The ratings outlook remains negative. Among other changes, the amendment waives events of default that had occurred for the Sept. 30, 2007 compliance reporting period, shortens the credit facility maturity to June 2009, and reduces the revolving credit facility commitment size to $25 million from $50 million. In addition to the lower corporate family rating, these ratings changes have occurred: -- Probability of Default rating: to Caa2 from Caa1 -- First lien revolving credit facility and term loan: to Caa1 LGD 3 from B3 LGD 3 The downgrades and negative outlook reflect a higher probability of default due to Gainey's weaker liquidity profile following the credit agreement amendment coupled with an expectation of sluggish demand for truckload freight services. In addition to the aforementioned amendment terms, prepayments of $12.5 million are now required on the facility's $210 million term loan, the facility's interest rates have increased, an excess cash sweep provision has been put in place and the bank group has appointed an advisory firm to participate in Gainey's day-to-day management. Although financial covenant ratio test levels have been expanded to accommodate weak earnings, expected compliance headroom of the revised covenant test levels should be modest and the test levels will tighten after the first quarter of 2008. Moody's anticipates weak near term demand for trucking services which will pressure Gainey's operating performance. The Caa1 corporate family rating reflects Gainey's position as a modestly-sized, asset-heavy truckload operator with a operating ratio that generates a level of EBIT insufficient to cover interest. With annual revenues of about $400 million, Gainey is about one-third the size of the next larger, rated truckload company. Although the flexibility of the owned-asset model, whereby excess equipment can be sold to reduce debt, helps support the rating, this attribute does not assure a level of debt reduction sufficient to outpace earnings declines and to maintain compliance with financial covenants during cyclical troughs. Moody's notes that the February 1st credit facility amendment may enable the company to navigate through weak demand in 2008, maintain access to its revolving credit facility and to meet debt service requirements. The company will now be required to significantly limit near term capital spending and be required to prepay credit facility debt should assets be sold or equity capital be contributed. Moreover, Moody's anticipates that should operating performance not materially deteriorate, free cash flow before assets sales should cover the $12.5 million term loan prepayments required through the first quarter of 2009. Moody's considers Gainey's liquidity to be weak. Approximately $20 million of revolver-backed letters of credit are outstanding and cash on hand will be approximately $3 million, leaving an $8 million liquidity cushion. However, Moody's does not anticipate that material borrowings on the $5 million of revolving credit facility availability will be required. The prospect of additional relief from covenants weighs on the liquidity profile as does the company's fully encumbered asset base. The negative ratings outlook could stabilize if the company's liquidity position were to improve. Conversely, the ratings could be further downgraded if the liquidity profile were to further weaken, if additional covenant breaches were to occur, or if, in Moody's view, the value of Gainey's assets were to materially decline. Gainey Corporation, headquartered in Grand Rapids, Michigan, provides truckload transportation services, primarily through its owned fleet, throughout the continental U.S. and certain provinces of Canada. GEORGIA SOD: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Georgia Sod, L.L.C. 11 Franklin Road Newnan, Ga 30263 Bankruptcy Case No.: 08-10322 Type of Business: The Debtor is a landscape contractor. Chapter 11 Petition Date: February 4, 2008 Court: Northern District of Georgia (Newnan) Judge: W. Homer Drake Debtor's Counsel: Christopher S. Strickland, Esq. Levine, Block & Strickland, L.L.P. Suite 2270 945 East Paces Ferry Road Atlanta, GA 30326 Tel: (404) 231-4567 Fax: (404) 231-4618 Estimated Assets: $10 Million to $50 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its largest unsecured creditors. GLOBAL MOTORSPORT: Gets Initial OK to Access Styx's DIP Facility ---------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware approved, on an interim basis, a request by Global Motorsport Group Inc. and its debtor-affiliates to obtain postpetition secured financing from Styx Partners LP and other financial institution, until March 13, 2008. Abelco Finance LLC will act as DIP agent while Chrome Europe Ltd. and Custom Chrome Far East Ltd. as guarantors for Styx Partners. The Debtors tell the Court that they have an urgent need for additional funding to operate their businesses, pay professional fees and fund their working capital needs. The Debtors say that Styx and Abelco have agreed to lend up to $3,500,000 and, on the interim, up to $2,500,000 in revolving credit. The DIP loan, the Debtor adds, will incur interest rate equal to the reference rate plus 1% and to mature on or before March 13, 2008. As adequate protection, the Debtors granted the lenders superpriority administrative expenses and prepetition first priority liens and security interests in substantially all of the Debtors' assets. A final hearing will be held Feb. 19, 2008, at 1:30 p.m., to consider approval of the Debtors' request. Objections, if any, must be filed on or before Feb. 14, 2008. Credit Agreement Under an amended and restated credit agreement, Abelco Finance made certain loans to the Debtors, including: -- $30 million Revolving Loan; -- $34 million Term B Loan; -- $15 million Term D Loan; and -- $10 million Term E Loan. As of Jan. 31, 2008, $138,357,024 remains outstanding under the agreement. About Global Motorsport Headquartered in Morgan Hill, California, Global Motorsport Group Inc. -- http://www.gmgracing.com/home.shtml-- are dealers of European model sports cars. The company is also known as Global Motorsport Parts Inc. The company and three of its affiliates filed for protection on Jan. 31, 2008 (Bankr. D. Del. Lead Case No. 08-10192). The Debtors selected Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, as counsel. The U.S. Trustee for Region 3 has yet to appoint creditors to serve on an Official Committee of Unsecured Creditors in these cases. When the Debtors filed for protection against their creditors, it listed assets between $50 Million to $100 Million and debts between $100 Million to $500 Million. GMAC COMMERCIAL: Fitch Holds Low-B Ratings on Four Cert. Classes ---------------------------------------------------------------- Fitch has upgraded GMAC commercial mortgage pass-through certificates, series 2002-C3, as: -- $9.7 million class G to 'AA+' from 'AA'; -- $9.7 million class H to 'AA-' from 'A+'; -- $18.5 million class J 'A-' from 'BBB+'. Fitch also affirmed these classes: -- $107.5 million class A-1 at 'AAA'; -- $406.4 million class A-2 at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'. -- $29.2 million class B at 'AAA'; -- $11.7 million class C at 'AAA'; -- $18.5 million class D at 'AAA'; -- $11.7 million class E at 'AAA'; -- $9.7 million class F at 'AAA'; -- $8.7 million class K at 'BBB'; -- $5.8 million class L at 'BBB-'; -- $4.9 million class M at 'BB+'; -- $3.9 million class N at 'BB'; -- $2.7 million class O-1 at 'B+'; -- $1.2 million class O-2 at 'B'. Fitch does not rate $17.3 million class P. The rating upgrades reflect the increased credit enhancement due to loan payoffs, scheduled amortization and the additional defeasance of 4 loans (2.8%) since Fitch's last rating action. In total, twenty-four loans (29.2%) have defeased, including three (9.5%) of the top five loans. As of the January 2008 distribution date, the pool has paid down 12.9% to $677.0 million from $777.4 million at issuance. There is currently one asset (2.3%) in special servicing. The asset is a multifamily property consisting of 10 buildings of primarily student housing located in Talahassee, Florida that is currently real estate owned. The special servicer continues to market the property for sale. The property was 90% occupied as of November 2007. Losses on this asset are expected to be absorbed by the non-rated class P. The largest Fitch loan of concern (1.4%) is secured by a 170-unit hotel property located in New Orleans, Louisiana. The property suffered damage as a result of Hurricane Katrina and repairs have been completed. The hotel is located directly across the street from the New Orleans Convention Center and the master servicer expects performance to improve in 2008 as a result of early bookings. As of November 2007, the property was 57% occupied. No loans are scheduled to mature in 2008 and the weighted average interest rate of the remaining non-defeased loans is 6.46%. GMAC LLC: Financial Unit Posts $724MM Net Loss in Fourth Qtr. ------------------------------------------------------------- GMAC Financial Services reported a 2007 fourth quarter net loss of $724 million, compared to net income of $1 billion in the fourth quarter of 2006. The effect on Residential Capital LLC from the continued disruption in the mortgage, housing and capital markets was the primary driver of adverse performance. Affecting results in the quarter were higher credit provision as a percent of assets, market driven valuation adjustments and increased funding costs at the company. Several significant items are reflected in results for the fourth quarter of 2007, including: -- $563 million consolidated gain on the repurchase and retirement of ResCap debt, of which $521 million was recognized at ResCap and $42 million was recognized at GMAC; -- $438 million gain related to the sale of residual cash flows and the deconsolidation of several on-balance sheet securitization structures, which included $281 million of current period provision - the effect of this was an in- period net benefit of $157 million; -- $131 million restructuring charge. Comparisons to the fourth quarter of 2006 are affected by a $791 million gain related to GMAC's conversion to a limited liability company and a $570 million capital gain related to rebalancing the insurance investment portfolio in that period. Full Year Results For the full-year 2007, GMAC reported a net loss of $2.3 billion, compared to net income of $2.1 billion for the full- year 2006. Profitable results in the automotive and insurance businesses were more than offset by a $4.3 billion loss at ResCap. Comparisons of full-year results are affected by the fourth quarter significant items previously noted well as goodwill impairments of $455 million at ResCap in the third quarter of 2007 and $695 million at Commercial Finance in the third quarter of 2006. "Losses in the fourth quarter decreased compared to the prior quarter," Eric Feldstein, GMAC chief executive officer, said. "However, GMAC's performance throughout 2007 was severely affected by the ongoing challenges in the mortgage, credit and capital markets. As a result, 2007 was a year of significant transformation for the organization -- driving aggressive actions designed to reduce risk, streamline operations and rationalize our cost structure. Steps taken included reducing the balance sheet by $40 billion, bolstering liquidity, tightening underwriting standards, significantly restructuring operations and refocusing our business on core fundamentals. "We believe the steps taken position the company for future success," Mr. Feldstein concluded. Liquidity and Capital GMAC's consolidated cash and certain marketable securities were $22.7 billion as of Dec. 31, 2007, up from $18.3 billion at Dec. 31, 2006. Of these total balances, ResCap's consolidated cash and cash equivalents were $4.4 billion at year-end, up from $2 billion on Dec. 31, 2006. During the fourth quarter, GMAC purchased in the open market $740 million of ResCap debt that was subsequently contributed to ResCap and retired as a measure to support the capital position at the mortgage unit. As of Dec. 31, 2007, ResCap's equity base was $6 billion, above the minimum tangible net worth requirements in its credit facilities, and above the amount expected to be needed to support its ongoing operations. In addition, GMAC and ResCap may from time to time continue to purchase outstanding GMAC or ResCap debt in open market transactions or otherwise, as part of its liquidity and cash management strategy. Strategic Initiatives GMAC and ResCap continue to investigate strategic alternatives related to all aspects of ResCap's business. These strategic alternatives include potential acquisitions as well as dispositions, alliances, and joint ventures with a variety of third parties with respect to some of ResCap's businesses. GMAC and ResCap are in various stages of discussions with respect to certain of these alternatives, including, in some cases, execution of confidentiality agreements, indications of interest, non-binding letters of intent and other exploratory activities such as preliminary and confirmatory due diligence and conceptual discussions. GMAC and ResCap also have engaged advisers to explore the sale of certain parts of ResCap's operations. There are no substantive binding contracts, agreements or understandings with respect to any particular transaction. Further, there can be no assurances that any of these strategic alternatives will occur, or if they do, that they will achieve their anticipated benefits. At Dec. 31, 2007, the company's total debt amounted to $193.15 billion compared to $236.99 billion in 2006. About GMAC GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors Acceptance Corporation, is a global, diversified financial services company that operates in approximately 40 countries in automotive finance, real estate finance, insurance and other commercial businesses. GMAC was established in 1919 and employs approximately 26,700 people worldwide. * * * As reported in the Troubled Company Reporter on Nov. 27, 2007, Moody's Investors Service placed GMAC LLC's Ba2 senior unsecured rating on review for possible downgrade. The action was in response to GMAC's affirmation of support for Residential Capital LLC, as disclosed in ResCap's Nov. 21, 2007 debt tender announcement. ResCap's ratings and outlook (Ba3 senior unsecured, negative outlook) were not affected by the tender announcement or this GMAC rating action. As reported in the Troubled Company Reporter on Nov. 16, 2007, Fitch Ratings has placed GMAC LLC and its related subsidiaries 'BB+' long-term Issuer Default Ratings on Rating Watch Negative. This action reflects the ongoing pressures in the company's residential mortgage subsidiary, Residential Capital LLC (ResCap, IDR 'BB+' by Fitch with Rating Watch Negative). GMAC LLC: Moody's Downgrades Senior Unsecured Rating to 'B1' ------------------------------------------------------------ Moody's Investors Service downgraded the senior unsecured rating of GMAC LLC to B1 from Ba3. Separately, the senior unsecured rating of Residential Capital LLC was downgraded to B2 from Ba3. The rating outlook for both firms is negative. The GMAC rating action is a result of Moody's downgrade of ResCap's ratings. Since Dec. 21, 2007, the ratings of GMAC and ResCap had been aligned at Ba3, reflecting Moody's view that GMAC would likely provide support to ResCap and that such support could compromise GMAC's stand-alone (ex-ResCap) credit profile. During the fourth quarter of 2007, GMAC did in fact provide support to ResCap, by acquiring ResCap debt at a cost of approximately $740 million, representing a substantial discount to par, and thereafter contributing the debt to ResCap. Upon retiring the debt, ResCap recognized a $1.1 billion capital benefit that helped it avoid breaching its minimum tangible net worth financial covenant. In Moody's view, GMAC's willingness to use its cash and capital for this purpose diluted its own liquidity and capital positions. GMAC's rating downgrade contemplates that the firm will likely continue to provide capital support to ResCap in the near term, primarily through similar open-market debt repurchases. Moody's has come to believe, however, that GMAC may have a limited tolerance for supporting ResCap if ResCap's performance and condition fail to meet management expectations for improvement during the first half of 2008. GMAC's further support of ResCap could result in additional strains on its capital and liquidity positions. In relation to this, creditors' appetite to extend credit to GMAC beyond current commitments could be affected by GMAC's continued willingness to provide support to ResCap. "Given GMAC's strategic importance to GM, we think that GMAC's owners will not risk the firm's viability in its efforts to stabilize ResCap," said Moody's analyst Mark Wasden. "GMAC's B1 rating incorporates our expectation of the level of capital that GMAC could be required to provide to ResCap during the first two quarters of 2008, while ResCap confronts its operational issues. Beyond this horizon, we believe further support from GMAC to be less certain, as continued underperformance on the part of ResCap could signal a failure of the firm to regain solid footing" he added. This perspective results in GMAC's B1 rating being positioned one- notch above ResCap's B2 rating. The negative rating outlook assigned to GMAC's rating incorporates the continuing uncertainty regarding the extent and nature of the support GMAC may provide to ResCap. The negative outlook also reflects other pressures on GMAC's stand-alone profile arising from its association with ResCap, including higher borrowing costs and potential constraints to its access to critical funding support. GMAC is also beginning to contend with deteriorating asset quality measures, brought about by a less conducive credit environment that could also have a deleterious effect on its access to funding and its profitability. Key GMAC strengths continue to be its valuable auto finance origination and servicing franchise, its position of strength in terms of its financing share of GM auto sales, and its diligent liquidity and credit risk management practices. Absent the ResCap related stresses, GMAC's stand-alone profile could warrant a slightly higher rating profile. A significant constraint to higher ratings, again setting ResCap aside, is the firm's high stand-alone leverage and its continuing business risk concentrations with lower-rated GM (CFR at B3). GMAC LLC, based in Detroit, is a provider of retail and wholesale auto financing, auto insurance and warranty products, and through its wholly-owned subsidiary Residential Capital LLC, residential mortgage products and services. GMAC reported a preliminary 2007 fourth quarter consolidated net loss of $724 million. H.A.Z 4: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: H.A.Z. 4, LLC dba Hotel Marquis & Suites 34211 Pacific Highway South Federal Way, WA 98003 Bankruptcy Case No.: 08-30657 Type of Business: The Debtor operates hotels. Chapter 11 Petition Date: February 4, 2008 Court: Southern District of Texas (Houston) Debtors' Counsel: Rakhee V. Patel, Esq. Pronske & Patel 1700 Pacific Avenue, Suite 2260 Dallas, TX 75201 Tel: (214) 658-6500 Fax: (214) 658-6509 http://www.pronskepatel.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Consolidated Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Choice Hotel International contract claim $240,000 10750 Columbia Pike Silver Spring, MD 20901-4447 Bank of America Line of Credit bank loan $98,000 820 A. Street, Suite 200 Tacoma, WA 98402 Irwin Commercial Finance lease $67,000 P.O. Box 6214 Indianapolis, IN 46206 Direct Energy utility $40,173 American Hallmark Insurance insurance $27,447 Chase Auto Finance lease payments $26,985 Champion Energy utility $15,019 Dell Financial Services lease $11,000 Houston Airport System trade debt $10,690 Nationwide Hospitality Inc. trade debt $8,899 World Cinema, Inc. Utility $8,345 Synexis trade debt $8,316 JC Decoux Airport trade debt $5,541 Sunshine Distributors trade debt $5,253 Higgns Macormac & Lawji attorney fees $5,000 LG Home Services trade debt $3,750 Premium Assignment insurance $3,740 Corporation Shell Fleet credit card $2,399 Bank of America Visa Card credit card $2,329 Dell Business Credit trade debt $2,303 HORIZON LINES: Earns $10.7 Million in 4th Qtr. Ended December 31 ---------------------------------------------------------------- Horizon Lines Inc. reported results for the fourth quarter and full year ended Dec. 23, 2007. Net income for the fourth quarter of 2007 was $10.7 million versus net income of $10.6 million in the fourth quarter of 2006. "The fourth quarter of 2007 brought to a close a year of many accomplishments for Horizon Lines," Chuck Raymond, chairman, president and chief executive officer of Horizon Lines, said. "Over the past year, we have managed to offset soft market conditions in Puerto Rico and rising fuel costs by aggressively managing costs and introducing valuable complementary services to our customers. Going forward, we will continue to execute on our long term strategy of offering our customers innovative shipping and logistics solutions to enhance our core service offerings. We believe we are well positioned for continued growth and profitability in our markets." "2007 presented some challenges and opportunities for us," said Mark Urbania, executive vice president and chief financial officer. "Despite the continuing soft market in Puerto Rico and unprecedented increases in fuel prices, we were able to generate net income and earnings per share that were in line with the 2006 fourth quarter and full year periods and our expectations." "These challenges were offset by improved cargo mix, a stable rate environment in all three of our offshore markets, and the benefits of our cost reduction efforts," Mr. Urbania related. "In addition, our debt refinancing and $28.5 million share repurchase in August of 2007 and our $50 million share buyback program initiated in November, which is now complete, will significantly benefit our shareholders in 2008 and beyond." For the full year 2007, net income was $28.9 million compared to net income of $72.4 million in 2006. After adjustment to exclude non-recurring loss on extinguishment of debt in 2007 and 2006, secondary offering expenses in 2006, and certain tax adjustments in 2007 and 2006, adjusted net income was $45.9 million in 2007 versus adjusted net income of $45 million in 2006. The company completed its $50 million share repurchase program this past month. "We completed a capital structure refinancing that is generating significant benefits in terms of a lower cost of capital, improved cash flow, enhanced flexibility and greater liquidity that will allow us to take advantage of future growth opportunities," Mr. Raymond continued. "2007 also saw us accomplish a corporate realignment that resulted in the creation of Horizon Logistics, which will enable us to grow our fully integrated logistics services offerings." "We also successfully completed the first full year of our Horizon EDGE process re-engineering and customer service program," Mr. Raymond added. "Horizon EDGE is delivering significant process improvements that are benefiting our customers and associates, while yielding cost savings that have met our internal targets and have somewhat mitigated the softness in Puerto Rico. In addition, we successfully integrated the Hawaii Stevedores, Inc. and Aero Logistics acquisitions, which have been earnings and cash flow accretive since inception." Balance Sheet At Dec. 23, 2007, the company's balance sheet showed total assets of $926.44 million, total liabilities $771.86 million and total stockholders' equity $154.58 million. About Horizon Lines Inc. Headquartered in Charlotte, North Carolina, Horizon Lines Inc. (NYSE: HRZ) -- http://www.horizon-lines.com/-- is a domestic ocean shipping and integrated logistics company comprised of two primary operating subsidiaries. Horizon Lines LLC operates a fleet of 21 U.S.-flag containerships and 5 port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. Horizon Logistics LLC offers customized logistics solutions to shippers from a suite of transportation and distribution management services designed by Aero Logistics, information technology developed by Horizon Services Group and intermodal trucking and warehousing services provided by Sea-Logix. * * * Moody's Investor Services placed Horizon Lines Inc.'s long term corporate family and probability of default ratings at 'B1' in July 2007 with a stable outlook. The ratings still hold today. INTERSTATE LOGISTICS: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Interstate Logistics, Inc. aka Interstate Intermodel, Inc. 2220 74th Street North Bergen, NJ 07047 Bankruptcy Case No.: 08-12056 Chapter 11 Petition Date: February 5, 2008 Court: District of New Jersey (Newark) Judge: Novalyn L. Winfield Debtor's Counsel: Richard D. Trenk, Esq. Trenk, DiPasquale, Webster, Della Fera & Sodono, P.C. 347 Mount Pleasant Avenue, Suite 300 West Orange, NJ 07052 Tel: (973) 243-8600 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Staff Management Group $858,839 P.O. Box 5733 New Brunswick, NJ Pro Handling System $362,159 88 King Street Dover, NJ 07801 Ralph Giordano & Associates $205,307 30 North Street Monticello, NY 12701 JG Associates Inc. $203,139 AMB Alliance Fund II $189,873 Prologis $156,628 PJT Transport Inc. $132,245 21st Century Software $131,378 McRoberts Protection $129,397 Contract Freighters $85,581 N&D Transportation $80,312 Contract Leasing Co. $67,698 Local 99 Health & Wel. $57,436 World Packaging, Inc. $33,289 Labor Ready $28,616 PSE&G - Newark $28,000 Meadowlands Employment $26,558 PSE&G - New Brunswick $23,793 HK Systems $23,784 Foraker Oil Inc. $20,361 JENNIFER WEST: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Jennifer Diane West 551 Eagle Watch Lane Osprey, FL 34229 Bankruptcy Case No.: 08-01410 Chapter 11 Petition Date: February 4, 2008 Court: Middle District of Florida (Tampa) Judge: K. Rodney May Debtor's Counsel: Timothy W. Gensmer, Esq. Timothy W. Gensmer, PA 2831 Ringling Boulevard Suite 202-A Sarasota, FL 34237 Tel: (941) 952-9377 Estimated Assets: Less than $50,000 Estimated Debts: $10 Million to $50 Million The Debtor did not file a list of its 20 largest unsecured creditors. JENNIFER WHALEN: Case Summary & 16 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Jennifer Ruth Whalen fka Jennifer Krizan 685 Spring Street, Suite 198 Friday Harbor, WA 98250 Bankruptcy Case No.: 08-10586 Chapter 11 Petition Date: February 4, 2008 Court: Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Darrel B. Carter, Esq. CBG Law Group PLLC 11100 Northeast 8th Street, Suite 380 Bellevue, WA 98004 Tel: (425) 283-0432 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its 16 Largest Unsecured Creditors: Entity Claim Amount ------ --------- Internal Revenue Service $180,000 P.O. Box 21126 Philadelphia, PA 19114 Bank of America $157,782 P.O. Box 84448 Seattle, WA 98124 Key Bank $126,055 P.O. Box 6418 The Lakes, NV 88901-6418 Ford Credit $25,598 American General $19,950 Master Marine Service, Inc. $16,433 American Express $13,142 Target Stores $10,286 Capital One $5,364 Employment Security $3,626 Johnson-Rountree Co, Inc. $2,605 Pool World $1,888 Department of Labor & Industry $1,703 ACI Coatings $1,458 Consolidated Irrigation District $826 Verizon Wireless $519 KEITH CHANDLER: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Keith Chandler 869 East 217 Street Bronx, NY 10467 Bankruptcy Case No.: 08-10360 Chapter 11 Petition Date: February 4, 2008 Court: Southern District of New York (Manhattan) Judge: Robert D. Drain Debtor's Counsel: Shmuel Klein, Esq. Law Office of Shmuel Klein P.C. 268 Route 59 Spring Valley, NY 10977 Tel: (845) 425-2510 Fax: (845) 425-7362 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. KINETIC CONCEPTS: Earns $66.5 Million in 2007 Fourth Quarter ------------------------------------------------------------ Kinetic Concepts, Inc. reported net earnings of $66.5 million for the fourth quarter ended Dec. 31, 2007, a 30.0% increase from $51.3 million for the same period last year. For the full year of 2007, net earnings were $237.1 million, up 21.0% from $195.5 million for the prior year. The company reported fourth quarter and full year 2007 total revenue of $433.6 million and $1.61 billion, respectively, an increase of 17.0% from the same respective periods of 2006. Foreign currency exchange movements favorably impacted total revenue for the fourth quarter and full year of 2007 by 4.0% and 3.0%, respectively, compared to the corresponding periods of the prior year. During the third quarter of 2007, KCI completed a new $500.0 million revolving credit facility due July 2012. The company recorded expenses of $4.5 million, net of income taxes, related to the refinancing. "For 2007, we strengthened our business fundamentals, resulting in solid financial performance," said Catherine Burzik, president and chief executive officer of KCI. "For 2008, we've established an experienced senior leadership team that is focused on executing our strategic plans. I am enthusiastic about the coming year." Gross profit for the fourth quarter and full year of 2007 was $213.9 million and $779.4 million, respectively, representing increases of 21.0% from the same respective periods of the prior year. Gross profit margin for the fourth quarter of 2007 was 49.3% compared to 47.7% for the same period one year ago. For the full year of 2007, gross profit margin was 48.4%, up from 47.0% for the same period of the prior year. Fourth quarter 2007 gross profit margin was favorably impacted by lower selling costs, due primarily to a slower expansion of our clinical sales force and lower marketing spending and a reduced level of depreciation expense, as a percent of revenue, compared to the prior-year period. Research and development expenses for the fourth quarter and full year of 2007 were $18.3 million and $50.5 million, respectively, representing increases of 58.0% and 38.0%, respectively, from the prior-year periods. The fourth quarter increase was due primarily to additional clinical research activities supporting new indications and products while the full-year increase represents the continued expansion of the company's clinical and product research and development activities targeting new indications and innovative products. During the fourth quarter and full year of 2007, KCI recorded share-based compensation expense, before income taxes, totaling $5.8 million and $23.7 million, respectively. The effective income tax rate for the fourth quarter of 2007 was 34.0% compared to 34.7% in the prior-year period. The effective income tax rate for the full year of 2007 was 33.8% compared to 33.1% in 2006. The increase in the 2007 effective income tax rate was due primarily to the favorable resolution of certain tax contingencies during the first half of 2006. Balance Sheet At Dec. 31, 2007, the company's consolidated balance sheet showed $1.06 billion in total assets, $380.6 million in total liabilities, and $677.0 million in total stockholders' equity. About Kinetic Concepts Headquartered in San Antonio, Kinetic Concepts Inc. (NYSE: KCI) -- http://www.kci1.com/-- designs, manufactures, markets and services a wide range of proprietary products that can improve clinical outcomes and can help reduce the overall cost of patient care. * * * To date, Kinetic Concepts Inc. still carries Moody's Investors Service 'Ba2' corporate family and 'Ba2' bank loan debt ratings. Outlook is Positive. LAKELAND COMMERCIAL: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Lakeland Commercial Partners, L.P. 3118 Richmond Avenue, Suite 210 Houston, TX 77098 Bankruptcy Case No.: 08-80055 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Lakeland Commercial Partners II, L.P. 08-80056 Lakeland Commercial Partners III, L.P. 08-80057 Type of Business: The Debtors own and manages real estate. Chapter 11 Petition Date: February 4, 2008 Court: Southern District of Texas (Galveston) Debtor's Counsel: Wayne Kitchens, Esq. Hughes, Watters & Askanase Three Allen Center 333 Clay, 29th Floor Houston, TX 77002 Tel: (713) 759-0818 Fax: (713) 759-6834 Lakeland Commercial Partners, LP's Financial Condition: Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Lakeland Commercial Partners, L.P.; Lakeland Commercial Partners II, L.P.; and Lakeland Commercial Partners III, L.P. did not file a list of largest unsecured creditors. LARRY GORIS: Case Summary & 18 Largest Unsecured Creditors ---------------------------------------------------------- Debtors: Larry E. Goris Judith Ann Goris 1000 South 950 West West Lafayette, IN 47906 Bankruptcy Case No.: 08-40058 Chapter 11 Petition Date: February 4, 2008 Court: Northern District of Indiana (Hammond Division at Lafayette) Judge: Robert E. Grant Debtors' Counsel: Alfred E. McClure, Esq. McClure & O'Farrell 987 South Creasy Lane Lafayette, IN 47905 Tel: (765) 446-8228 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million Debtors' list of their 18 Largest Unsecured Creditors: Entity Claim Amount ------ --------- Sears $7,126 P.O. Box 182149 Columbus, OH 43218 True Neighbor of N Middl $3,658 P.O. Box 31481 Tampa, FL 33631-3481 HSBC Card Services $2,187 Bankruptcy Department P.O. Box 5213 Carol Stream, IL 60197 PEFCU $1,459 Town of Otterbein $1,422 Country Critter Care $1,158 Sigma Medical Group $840 Kyburz Auto Center $470 Lafayette Rehabilitation Services $446 Wal Mart $365 DirectTV $293 Greg Ortman DDS $280 Macy's $198 Greater Lafayette Health Services $150 Wells Fargo Financial $148 Verizon North $134 Chase Bank Card Services $133 Lafayette Orthopaedic Clinic $60 LINEAR TECH: Dec. 30 Balance Sheet Upside-Down by $564.4 Million ---------------------------------------------------------------- Linear Technology Corporation's consolidated balance sheet at Dec. 30, 2007, showed $1.41 billion in total assets and $1.97 billion in total liabilities, resulting in a $564.4 million total stockholders' deficit. Net income of $93.8 million for the second quarter of fiscal 2008 decreased $11.2 million or 10.7% from $105.0 million in the second quarter of last fiscal year primarily due to the increase in net interest expense as a result of the company's issuance of convertible debt during fiscal year 2007. During the December quarter the company's cash and short-term investments balance increased $54.5 million net of spending $32.1 million to purchase 1.0 million shares of its common stock. Revenue for the second quarter of fiscal year 2008 increased 7.8% or $20.9 million over $267.8 million in the second quarter of fiscal year 2007. Excluding charges related to stock-based compensation, second quarter net income was $104.0 million, a decrease of $13.8 million from the second quarter of fiscal year 2007. According to Lothar Maier, chief executive officer of Linear Technology, "This marks the third consecutive quarter that the company has sequentially grown revenues. In the same time period the company has grown EPS faster than revenues. We are pleased with the company's results as we have grown revenues, sustained our margins, lowered our outstanding shares by 25.0%, grown EPS and increased our quarterly dividend by 17%. Full-text copies of the company's consolidated financial statements for the quarter ended Dec. 30, 2007, are available for free at http://researcharchives.com/t/s?27ce About Linear Technology Headquartered in Milpitas, California, Linear Technology Corporation (NasdaqGS: LLTC) -- http://www.linear.com/-- is a manufacturer of high performance linear integrated circuits. Linear Technology products include high performance amplifiers, comparators, voltage references, monolithic filters, linear regulators, DC-DC converters, battery chargers, data converters, communications interface circuits, RF signal conditioning circuits, uModule(TM) products, and many other analog functions. LIONEL LLC: Asks Court's Ok to Buy 50% Interest in Creative Trains ------------------------------------------------------------------ The Associated Press reports that Lionel LLC and minority owner Neil Young have asked the permission of the U.S. Bankruptcy Court for the Southern District of New York to buy out the rock star's partner in Creative Trains Co., a company that designs the wireless control system for Lionel LLC's model trains. Creative Trains is co-owned by a Young family trust and Louis G. Kovach. According to The Associated Press, court papers filed Jan. 29, 2007, reveals that Mr. Kovach has agreed to sell his 50% stake in Creative Trains for $650,000. AP adds that as part of the deal, Lionel has agreed to hire Mr. Kovach as a consultant for the next three years for $50,000 a year. The model train maker said it does not possess the in-house technology to develop a new version of its operating system. A hearing on Lionel's request is scheduled Feb. 21. About Lionel LLC Chesterfield, Michigan-based Lionel LLC --http://www.lionel.com/- - markets model train products, including steam and die engines, rolling stock, operating and non-operating accessories, track, transformers and electronic control devices. The company and its affiliate, Liontech Company, filed for chapter 11 protection on Nov. 15, 2004 (Bankr. S.D.N.Y. Case Nos. 04-17324 and 04-17324). Adam C. Harris, Esq., Abbey Walsh, Esq., and Adam L. Hirsch, Esq., at Schulte Roth & Zabel LLP; Dale Cendali, Esq., at O'Melveny & Myers LLP; and Ronald L. Rose, Esq., at Dykema Gossett PLLC, represent the Debtors. Houlihan Lokey Howard & Zukin Capital, L.P. and Ernst & Young LLP are the Debtors' financial advisors. Kurtzman Carson Consultants LLC acts as the Debtors' noticing and claims agent. As of May 31, 2007, the Debtor disclosed total assets of $39,161,000 and total debts of $62,667,000. Alan D. Halperin, Esq., and Robert D. Raicht, Esq., at Halperin Battaglia Raicht, LLP, represent the Official Committee of Unsecured Creditors. FTI Consulting, Inc., is the Committee's financial advisor. Alec P. Ostrow, Esq. in New York, represents Mike's Train House, Inc. The Court gave the Debtor until March 31, 2008 to file its Chapter 11 plan of reorganization. LOUIS JEAN-LOUIS: Case Summary & Largest Unsecured Creditor ----------------------------------------------------------- Debtor: Louis Jeune Jean-Louis 14229 Ashton Lane Riverside, CA 92508 Bankruptcy Case No.: 08-11109 Chapter 11 Petition Date: February 1, 2008 Court: Central District Of California (Riverside) Judge: Meredith A. Jury Debtors' Counsel: Thomas E. Cummings, Esq. 32295 Mission Trail #280 Lake Elsinore, CA 92530 Tel: (951) 579-3210 Estimated Assets: $1 million to $100 million Estimated Debts: $1 million to $100 million The Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Esperanza Barrera personal loan $100,000 641 Hazelwood Drive Oxnard, CA 93030 MACY'S INC: Division Consolidation Cues Elimination of 2,550 Jobs ----------------------------------------------------------------- Macy's Inc. disclosed new initiatives to strengthen local market focus and enhance selling service which, in combination with the consolidation of three Macy's divisions, is expected to enable the company to both accelerate same-store sales growth and reduce expense. "Improving sales and earnings performance requires innovation in engaging our customer more effectively in every store, well as reducing total costs," Terry J. Lundgren, Macy's Inc. chairman, president and chief executive officer, said. "We believe the right answer is to reallocate our resources to place more emphasis and talent at the local market level to differentiate Macy's stores, serve customers and drive business. "In essence, we plan to drive sales growth by improving our knowledge at the local level and then acting quickly on that knowledge. These moves will benefit our customers as well as our shareholders," Mr. Lundgren added. "In addition, we believe our new strategies will speed up decision making and simplify the process of working with our vendors." Localization Initiatives Called "My Macy's," a localization initiative was developed over the past year based on customer research, as well as input from Macy's store managers, senior division executives, merchandise vendors and industry experts. Its goal is to accelerate sales growth in existing locations by ensuring that core customers surrounding each Macy's store find merchandise assortments, size ranges, marketing programs and shopping experiences that are custom-tailored to their needs. To maximize the results from My Macy's, the company is taking action in certain markets that will: * Concentrate more management talent in local markets, effectively reducing the "span of control" over local stores; * Create new positions in the field to work with division central planning and buying executives in helping to understand and act on the merchandise needs of local customers; * Empower locally-based executives to make more and better decisions. This new structure will be adopted for those geographic markets that have been a part of Macy's North, Macy's Midwest and Macy's Northwest as they are consolidated into Macy's East, Macy's South and Macy's West. Macy's locations in these markets will be grouped into 20 newly formed districts of about 10 stores, compared with an average of 16 to 18 currently overseen by each regional manger. Districts will be based in cities including Chicago, Cincinnati, Cleveland, Columbus, Detroit, Indianapolis, Kansas City, Minneapolis, Pittsburgh, Portland, Oregon, St. Louis, Salt Lake City and Seattle. Each new district will have a manager and a small staff of store merchandisers and planners. These districts will report into their divisions through new regional offices being established in Chicago, Cincinnati, St. Louis and Seattle. District-based executives will be empowered to make more local decisions about space allocation, service levels and visual merchandising, which the company believes will enhance execution. Additionally, district-based planners will provide market-specific intelligence to division planning offices. More resources also will be provided to local markets for special events and to enhance customer service. A total of approximately 250 new district and region positions will be based in those local markets adopting the new model. This will double the number of management positions in the field in these markets. Merchandise localization will be supported by a series of new systems and technology being rolled out in 2008 to all Macy's divisions, including Macy's Florida, to facilitate more detailed store-level execution and assortment planning. In part, this will allow merchants to more accurately assort each Macy's store with items, brands, garment sizes and colors preferred by customers who shop that specific location. Division Organization Consolidations Effective immediately, the company will begin consolidating its Minneapolis-based Macy's North organization into New York-based Macy's East, its St. Louis-based Macy's Midwest organization into Atlanta-based Macy's South and its Seattle-based Macy's Northwest organization into San Francisco-based Macy's West. The Atlanta- based division will be renamed Macy's Central. All store locations will remain in place. The consolidation of divisional central office organizations, expected to be completed in the second quarter of 2008, will affect approximately 950 positions at the Macy's North headquarters offices in Minneapolis, 850 positions at the Macy's Midwest headquarters offices in St. Louis, and 750 positions at the Macy's Northwest headquarters offices in Seattle. Executives in the Macy's North, Macy's Midwest and Macy's Northwest central organizations will be considered for positions in the new local market organization or for open positions elsewhere in the company. Employees laid off in this process will be provided severance benefits and outplacement assistance. The company's Miami-based Macy's Florida and New-York based Bloomingdale's divisions are not affected. Financial Aspects The savings from the divisional consolidation process, net of the amount invested in localization initiatives and increased store staffing levels, are expected to reduce Macy's Inc. SG&A expense by approximately $100 million, beginning in 2009. The partial- year reduction in SG&A for 2008 is estimated at approximately $60 million. Macy's Inc. will take one-time pre-tax charges of approximately $150 million in 2008 for expenses related to the division consolidations. This will include relocation assistance for executives being assigned, well as severance and outplacement assistance for displaced employees. In addition, there will be a slight negative impact on gross margin in the spring season as inventories in the consolidated divisions are aligned. 2008 Guidance In fiscal 2008, Macy's Inc. is assuming a continued challenging economic environment through most of the year with some modest improvement expected by the fourth quarter. Given the uncertain macroeconomic environment, the company's range for same-store sales guidance for 2008 is wider than usual: down 1% to up 1.5%. Including this sales assumption and impact of the division consolidations, Macy's Inc. is assuming earnings per share on a diluted basis of $1.85 to $2.15, excluding one-time costs, for fiscal 2008. Effective with 2008, the company has decided to no longer provide quarterly sales or earnings guidance. While the company still expects to reach its goal of increasing EBITDA as a percentage of sales to the historic peak range of 14% to 15%, management does not believe it will do so in the 2008- 2009 time period because of the impact of lower-than-expected sales growth in 2007 and 2008 due in large part to the macroeconomic environment. The company is budgeting capital expenditures of approximately $1.1 billion in 2008. Macy's Inc. expects to buy back its stock in 2008, depending on market conditions. Division Principal Changes As part of the transition process, Jeffrey Gennette, chairman and chief executive officer of Macy's Northwest, will relocate to San Francisco as chairman and chief executive officer of Macy's West. He will succeed Robert L. Mettler, who has agreed to postpone his planned July retirement and will remain with Macy's Inc. as president for special projects, reporting to vice chair Susan D. Kronick. In this position, Mettler will focus initially on strategic development of the company's cosmetics business. Mr. Gennette will lead the Macy's West principal team that will continue to include Daniel H. Edelman, president and chief operating officer, and Rudolph J. Borneo, vice chairman and director of stores. The new Macy's West division will incorporate 257 Macy's stores in 13 western states and Guam, with 2007 sales of approximately $7 billion. Robert B. Harrison, Macy's Northwest president and chief operating officer, will remain in Seattle to supervise the transition and later will be reassigned to a senior position within the company. At Macy's North, Frank J. Guzzetta, chairman and chief executive officer, and Robert M. Soroka, president and chief operating officer, both will retire as they had previously planned in spring 2008. Amy Hanson, Macy's North vice chairman and director of stores, will remain in Minneapolis to supervise the transition and later will be reassigned to a senior position within the company. After the consolidation, Macy's East will be led by Ronald Klein, chairman and chief executive officer, and Mark S. Cosby, president and chief operating officer. The consolidated Macy's East division will incorporate 252 stores in 20 eastern and midwestern states and Washington, D.C. with 2007 sales of approximately $9 billion. William P. McNamara, Macy's Midwest chairman and chief executive officer, will remain with the company in a new role leading development of future Macy's reinvent strategies, reporting to Lundgren. Brian L. Keck, president and chief operating officer of Macy's Midwest, will remain in St. Louis to assist with the transition. After the consolidation, Macy's Central will be led by Edwin J. Holman, chairman and chief executive officer, Andrew P. Pickman, president and chief merchandising officer, and Michael G. Krauter, vice chairman and director of stores. The consolidated Macy's Central division will incorporate 240 stores in 18 states with 2007 sales of approximately $5.3 billion. All retail division chairmen, including Mssrs. Klein, Holman and Gennette, will report to Mr. Kronick. "Macy's Inc. has benefited from exceptional leadership at the divisional level, and this will continue to be the case going forward across the company. Bob Mettler has been an exceptional and highly effective leader at Macy's West, and we are fortunate that he will remain with the company to provide additional leadership and strategy development, initially in the cosmetics business. Frank Guzzetta, Bob Soroka, Bill McNamara and Brian Keck are retailers who have been instrumental in the transition of the Macy's North and Macy's Midwest organizations after the acquisition of The May Department Stores Company in 2005," Mr. Lundgren said. Mr. Gennette, 46, has been chairman and chief executive officer of Macy's Northwest since February 2006. For the previous two years, he served at Macy's Central in Atlanta as executive vice president and director of stores. Mr. Gennette was senior vice president/ general merchandise manager for men's and children's at Macy's West in San Francisco from May 2001 to March 2004, and before that vice president/division merchandise manager for men's collections at Macy's West. Mr. Gennette joined Macy's West in 1983 as an executive trainee and held various merchant and store management positions in that division. During his career, Mr. Gennette also has served as a store manager for FAO Schwarz and regional vice president for Broadway Stores. Mr. Guzzetta, 62, became chairman and chief executive officer of Macy's North in February 2006 after serving as president of Marshall Field's since January 2005. Previously, he was president and chief executive officer of May Company's Hecht's/Strawbridge's division since 2000. He joined Hecht's in 1988 as a divisional vice president and divisional merchandise manager before being promoted to senior vice president and general merchandise manager and, later, executive vice president of merchandising. Prior to joining May, he worked in retailing for 11 years at Woodward & Lothrop. Ms. Hanson, 49, joined Macy's North as vice chairman in July 2006. A 25-year Macy's Inc. veteran, she joined the company in 1983 and held positions of increasing responsibility at the Corporate Office and at The FACS Group (now Macy's Credit and Customer Services). She joined FACS in 1991 as group manager for planning and receivables before being promoted to senior vice president in 1997 and president of credit services in 2000. She was named president of FACS in 2002. Mr. Harrison, 44, has been president and chief operating officer of Macy's Northwest since February 2006. Previously, he was chairman of Robinsons-May in Los Angeles since October 2004, having previously served as that division's senior vice president and chief financial officer since June 2002, well as the senior vice president for finance of the Meier & Frank division before it was merged with Robinsons-May. Mr. Harrison began his career at May Company's Kaufmann's division in 1986 as an accounting analyst and served in positions of increasing responsibility before becoming vice president and controller of Kaufmann's. Mr. Keck, 55, was named president and chief operating officer of Macy's Midwest in October 2005. He began his career with May Company in 1986 as divisional vice president and director of recruitment and placement for Famous-Barr in St. Louis. In 1987, he was named senior vice president of human resources at May Centers, May's former shopping center development division. In 1989, he was named senior vice president for human resources for the Meier & Frank division in Portland, Oregon, and was named to a similar position in 1992 at Filene's in Boston. In 1997, Mr. Keck was named chairman of the Meier & Frank division, and in 2000 was selected to head the corporation's human resources organization. Mr. McNamara, 57, was named chairman and chief executive officer of Macy's Midwest in October 2005. He began his retailing career in 1972 as an executive trainee at Filene's in Boston. He served in a variety of executive and buying positions until 1986, when he was named senior vice president and general merchandise manager at Filene's. In 1995, Mr. McNamara was named senior vice president and general merchandising manager at May Merchandising Company in St. Louis. In 1997, Mr. McNamara was named president and chief executive officer of Famous-Barr, and in 1998 became president of May Merchandising Company. He became the corporation's vice chairman in 2000. Mr. Mettler, 67, was named chairman and chief executive officer of Macy's West in June 2002 after having served as the division's president and chief operating officer since 2000. Mr. Mettler began his retail career in 1962 as an executive trainee at Jordan Marsh in Boston, then a division of Allied Stores Corporation. Mr. Mettler stayed with Allied until 1986, having risen through the merchandising ranks at Jordan Marsh before being named president and chief executive officer of Joske's San Antonio in 1980, and chief executive officer of Joske's of Texas in 1984. Two years later, he joined the May Company as president and chief executive officer of its L.S.Ayres division before being named to that post at Robinson's in California in 1987. He joined Sears in 1993 as president for apparel and home fashions, and rose to become president of merchandising for full-line Sears stores. Mr. Soroka, 56, became president and chief operating officer of Macy's North in February 2006 after serving as chairman of Marshall Field's since October 2004. Previously, he was chairman of Robinsons-May in Los Angeles and, before that, the division's senior vice president/chief financial officer. Mr. Soroka joined May in 1970 at O'Neil's, May Company's former department store division headquartered in Akron, Ohio. From 1983 through 1990 he held increasingly responsible financial and credit positions at three additional May department store divisions. About Macy's Inc. Based in Cincinnati and New York, Macy's Inc. (NYSE: M) fka Federated Department Stores Inc. -- http://www.fds.com/-- is one of the nation's premier retailers. The company operates more than 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names of Macy's and Bloomingdale's. The company also operates macys.com, bloomingdales.com and Bloomingdale's By Mail. * * * As reported in the Troubled Company Reporter on Oct. 23, 2007, Moody's Investors Service affirmed all ratings of Macy's Inc., including its long term rating of Baa2, Prime 2 short term rating, and (P)Ba1 Preferred shelf rating but changed the outlook to negative from stable. The change in outlook was prompted by the continuing negative comparable store sales in the former May doors, credit metrics that are at the trigger points cited in Moody's Credit Opinion of Feb. 28, 2007, for a downgrade, and the uncertain outlook on consumer spending that could further delay improvement in the former May stores' performance. MARK TAYLOR: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Mark Geoffrey Taylor 19946 North 84th Way Scottsdale, AZ 85255 Bankruptcy Case No.: 08-01049 Chapter 11 Petition Date: February 4, 2008 Court: District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: Donald W. Powell, Esq. Carmichael & Powell, P.C. 7301 North 16th Street, Suite 103 Phoenix, AZ 85020 Tel: (602) 861-0777 Fax: (602) 870-0296 Total Assets: $2,584,350 Total Debts: $3,152,366 The Debtor did not file a list of its 20 largest unsecured creditors. MEDIANEWS GROUP: Names Michael Tully as Publisher of Two Groups --------------------------------------------------------------- Michael Tully has joined MediaNews Group Inc. as group vice president of its Bay Area News Group and president and publisher of the San Jose Mercury News. This newly created position includes responsibility for the San Jose Mercury News as well as the company's Bay Area -- East Bay newspapers including the Contra Costa Times, The Oakland Tribune, The Freemont Argus, The Hayward Daily Review, and The Tri Valley Herald as well as the San Mateo Times, The Santa Cruz Sentinel and the Marin Independent Journal. As publisher of the San Jose Mercury News, Tully replaces publisher Jeff Kiel, who has decided to step down. All of the newspapers are a part of the California Newspaper Partnership which is majority owned by MediaNews, along with partners Gannett, Inc. and SF Holding Corp. "Mac is ideally suited for his new position", said Steve Rossi, President and CEO of California Newspaper Partnership and COO of MediaNews Group, Inc. "He is a dynamic leader with proven ability to grow revenue streams. He has a track record of success in every recent position he has held in our industry." Tully comes to his new position from the Kansas City Star where he has been publisher since 2005. Prior to that was a corporate Group Vice President with responsibility for 18 Knight Ridder newspapers. He was also previously publisher of the Bradenton Herald and prior to that, publisher of the Arlington Star Telegram. "Mac's wealth of experience in managing both groups of newspapers as well as in publishing large market newspapers will prove invaluable to our company," said William Dean Singleton, CEO of MediaNews. About MediaNews Group Based in Denver, Colorado, MediaNews Group Inc. -- http://www.medianewsgroup.com/-- is the nation's fourth largest newspaper company. It develops and manages Web sites affiliated with each of MediaNews Group's newspapers, as well as several regional portals and advertising verticals. The company's suite of services includes web hosting, design, advertising sales support, ad management, marketing, content development and tech support. It works in partnership with the individual Web sites to further the company's goal of increasing Interactive revenue and readership. * * * As reported in the Troubled Company Reporter on Jan. 28, 2008, Standard & Poor's Ratings Services lowered its ratings on MediaNews Group Inc. including its corporate credit rating, which was lowered to 'B' from 'BB-'. The ratings were removed from CreditWatch, where they were placed with negative implications Sept. 14, 2007. The rating outlook is negative. MEDIANEWS GROUP: Publishing Executive George Riggs Resigns ---------------------------------------------------------- George Riggs, a senior publishing executive at MediaNews Group Inc., stepped down as CEO of the company's California Newspaper Partnership by the end of January. Mr. Riggs' responsibilities will be assumed by Steve Rossi, MediaNews Executive Vice President and COO. Mr. Riggs was president and CEO of MediaNews' California Newspaper Partnership, which has responsibility for its 33 daily and 57 weekly newspapers throughout California. He has been in the position since August 2006. "I have greatly enjoyed the past 18 months, and particularly the opportunity to work on the consolidation of the newspapers here in the Bay Area. We consolidated production facilities, merged finance, human resources and information technology, opened a new shared services center in San Ramon, disposed of surplus land and equipment, and generally streamlined overall publishing operations," Mr. Riggs said. "It's been a lot of fun, but now that work is completed, and I'd like to move on to other opportunities," Mr. Riggs added. MediaNews CEO, William Dean Singleton, said, "George has done an extraordinary job and we are sorry to see him go. However, we respect his desire to try something different." Mr. Rossi, who also worked with Mr. Riggs at Knight Ridder, said that it is always difficult to lose a key executive, especially one of Mr. Riggs' caliber. But he said that the organization is well positioned for the future. "With the infrastructure George has put in place, and the team he's recruited, we feel confident that the organization is positioned to show strong results once California's economy improves," he said. In addition to the consolidation in the Bay Area, Mr. Rossi said that Mr. Riggs has restructured online operations and launched three new statewide divisions: Targeted Marketing, Niche Publications, and Events. "These divisions sell across all of our California publications, and thus, as they grow, will help to drive new revenue in the face of declining core newspaper revenues," Rossi said. Mr. Riggs, 61, said he has no immediate plans. "It's difficult to think about the next job while you're doing the one you have, so I haven't given it a lot of thought. We're planning a bike trip to New Zealand in March. After that, I'll look around and see what's next," he said. About MediaNews Group Based in Denver, Colorado, MediaNews Group Inc. -- http://www.medianewsgroup.com/-- is the nation's fourth largest newspaper company. It develops and manages Web sites affiliated with each of MediaNews Group's newspapers, as well as several regional portals and advertising verticals. The company's suite of services includes web hosting, design, advertising sales support, ad management, marketing, content development and tech support. It works in partnership with the individual Web sites to further the company's goal of increasing Interactive revenue and readership. * * * As reported in the Troubled Company Reporter on Jan. 28, 2008, Standard & Poor's Ratings Services lowered its ratings on MediaNews Group Inc. including its corporate credit rating, which was lowered to 'B' from 'BB-'. The ratings were removed from CreditWatch, where they were placed with negative implications Sept. 14, 2007. The rating outlook is negative. MERIDIAN GLOBAL: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Meridian Global Investments LP dba MGI Capital LP 4934 N.W. Loop 410 San Antonio, TX 78229 Bankruptcy Case No.: 08-50331 Chapter 11 Petition Date: February 4, 2008 Court: Western District of Texas (San Antonio) Debtors' Counsel: Charles R. Bomba, Esq. 11230 West Avenue, Suite 3201 San Antonio, TX 78213 Tel: (210) 366-2317 Total Assets: $6,775,000 Total Debts: $5,117,830 The Debtor did not file a List of its Largest Unsecured Creditors. METALS USA: Earnings Up to $7.6 Mil. in Quarter Ended Dec. 31 ------------------------------------------------------------- Metals USA Inc., a subsidiary of Metals USA Holdings Corp., reported its operating results for the quarter and year ended Dec. 31, 2007. The company reported net income of $7.6 million for three months ended Dec. 31, 2007, compared to $6.2 million for the same period in the previous year. For twelve months ended Dec. 31, 2007, the company reported net income of $36.6 million, compared to net income of $39.5 million for the same period in the previous year. The company recognized depreciation and amortization expenses during the quarter of $6.6 million and $22.1 million for the full year. Interest expense for the fourth quarter was $13.7 million, and $57.6 million for the year. "During the fourth quarter the market lacked a consensus view about market direction," Lourenco Goncalves, the company's chairman, president and C.E.O., stated. "Several of our competitors actively sold steel below replacement cost, while the vast majority of end-users remained on the sidelines." "Metals USA used the seasonally weak fourth quarter to rebuild inventories, ensuring our ability to supply and properly service our customers in the months ahead, while continuing to be consistently profitable," Mr. Goncalves added. Liquidity and Capital Resources The company had $280.5 million drawn under its ABL credit facility at Dec. 31, 2007, with excess availability of $120.3 million. Total debt of $565.4 million at year-end was $45.2 million lower than at Dec. 31, 2006. Capital expenditures were $21.5 million for the year. Net cash provided by operating activities for 2007 was $126.8 million. Balance Sheet At Dec. 31, 2007, the company's balnce sheet showed total assets of $951.1 million, total liabilities $783.5 million and Total stockholder's equity of $167.6 million. About Metal USA Inc. Metals USA Inc. -- http://www.metalsusa.com/-- provides products and services in the heavy carbon steel, flat-rolled steel, non- ferrous metals, and building products markets. * * * Moody's Investor Service placed metal USA Inc.'s probability of default rating at 'B1' in Sept. 2006. The rating still holds today with a stable outlook. MINH THAI TRAN: Case Summary & Eight Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Minh Thai Tran 6029 Christie Avenue Emeryville, CA 94608 Bankruptcy Case No.: 08-40518 Chapter 11 Petition Date: February 4, 2008 Court: Northern District of California (Oakland) Debtor's Counsel: Charles D. Novack, Esq. Law Offices of Charles Novack 409 13th Street 10th Floor Oakland, CA 94612 Tel: (510) 465-1000 Total Assets: $2,057,550 Total Debts: $6,428,849 Debtor's list of its Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ ------------ --------- Franchise Tax Board $1,500,000 Bankruptcy Unit P.O. Box 2952 Sacramento, CA 95827-2952 Internal Revenue Service Taxes $1,385,924 Special Procedures Branch Bankruptcy Section/Mail Code 1400 S 1301 Clay Street Oakland, CA 94612 IRS agreement $3,123,914 with Debtor ($2,041,000 secured) ($303,010 senior lien) Capricorn Management, LLC Personal loan $105,000 Attention: Stephen George 250 University Avenue Palo Alto, CA 94301 Bank of America - Newark Credit Card $3,893 Capital One Credit Card $2,719 GE Money Bank Credit Card $2,577 Bank of America - Wilmington Credit Card $1,557 DirectTV $254 MONITOR OIL: Judge Glenn Denys Ad Hoc Committee's Dismiss Plea -------------------------------------------------------------- The Honorable Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York denied a request filed by the Ad Hoc Committee of Bondholders to dismiss Monitor Oil PLC and its debtor-affiliates' Chapter 11 cases. Judge Glenn said the Ad Hoc Committee failed to present before the Court a basis for granting extraordinary relief, pursuant to Section 305(a)(1) of the Bankruptcy Code. The Ad Hoc Committee argued that the Debtors have limited connections to the United States in general and New York, specifically. The Debtors, Ad Hoc Committee pointed out, have no operations in the United States and most of their oil-drilling operations are done in the North Sea. Moreover, Power Buoy, one of the Debtors' key assets, also filed for bankruptcy protection in Scotland. Judge Glenn, however, said the Scottish proceedings does not directly affect the Debtors' estate before the U.S. Court. In addition, Judge Glenn said the Debtors have offered sound arguments as to why their Chapter 11 cases better protects the Debtors' contractual rights, and therefore the rights of the Debtors' creditors as a whole. "This will allow us to preserve Monitor's contracts rather than having the contracts be deemed terminated upon the company's insolvency," Bloomberg News quotes Michael Foreman, Esq., a lawyer for Monitor Oil, as saying. About Monitor Oil Monitor Oil, P.L.C. -- htpp://www.monitoroil.com/ -- an oil and gas service company that provides oil and gas production solutions, offshore services and engineering services. The company and two of its affiliates, Monitor Single Lift 1, Ltd., and Monitor US FinCo, Inc., filed for Chapter 11 Protection on Nov. 21, 2007 (Bankr. S.D.N.Y. Case No. 07-13709). Eric Lopez Schnabel, Esq., at Dorsey & Whitney, L.L.P., represents the Debtor. The U.S. Trustee for Region 2 appointed five creditors to serve on an Official Committee of Unsecured Creditors in the Debtors' cases. Ira L. Herman, Esq., at Thompson & Knight, LLP, represents the Committee. As of Dec. 31, 2007, the company disclosed total assets of $98,340,000 and total debts of $56,125,000. MORGAN STANLEY: S&P Assigns Preliminary Low-B Ratings on Certs. --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Morgan Stanley Capital I Trust 2008-TOP29's $1.23 billion commercial mortgage pass-through certificates series 2008-TOP29. The preliminary ratings are based on information as of Feb. 5, 2008. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying loans, and the geographic and property type diversity of the loans. The class A-1, A-2, A- 3, A-AB, A-4, A-M, and A-J notes are being offered publicly. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.42x, a beginning loan-to-value ratio of 99.8%, and an ending LTV of 92.1%. Preliminary Ratings Assigned Morgan Stanley Capital I Trust 2008-TOP29 Recommended Credit Class Rating Amount Support ----- ------ ------ ------------------ A-1 AAA $46,000,000 27.000% A-2 AAA $36,100,000 27.000% A-3 AAA $64,800,000 27.000% A-AB AAA $49,200,000 27.000% A-4 AAA $704,616,000 27.000% A-M AAA $123,386,000 17.000% A-J AAA $72,489,000 11.125% B AA $20,050,000 9.500% C AA- $10,796,000 8.625% D A $21,593,000 6.875% E A- $12,339,000 5.875% F BBB+ $13,880,000 4.750% G BBB $13,881,000 3.625% H BBB- $10,797,000 2.750% J BB+ $1,542,000 2.625% K BB $4,627,000 2.250% L BB- $1,542,000 2.125% M B+ $1,543,000 2.000% N B $4,627,000 1.625% O B- $4,626,000 1.250% P NR $15,424,197 N/A X-1* AAA $1,233,858,197** N/A X-2* AAA $1,204,247,000** N/A * Interest-only class. ** Notional amount. NR - Not rated. N/A - Not applicable. MOUNT AIRY: S&P Puts 'B' Corporate Rating on Negative Watch ----------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Mount Airy #1 LLC, including the 'B' corporate credit rating, on CreditWatch with negative implications. The CreditWatch listing follows the Jan. 30, 2008 findings of the Dauphin County, Pennsylvania grand jury, which charged Louis DeNaples, principal owner of Mount Airy #1 LLC, with four counts of perjury for allegedly lying to the gaming control board about his ties to organized crime. The Pennsylvania Gaming Control Board issued an emergency order suspending Mr. DeNaples' gaming license pending a full review. While the casino is currently operating under the control of a three-person audit committee, if the suspension persists for 10 consecutive business days following the Jan. 30 order, an event of default will be triggered under Mount Airy's credit agreement. "In resolving its CreditWatch listing, we will monitor the progression of management's discussions with its lenders in alleviating a potential near-term event of default," said Standard & Poor's credit analyst Ariel Silverberg. "Also, we will evaluate the Gaming Control Board's actions with regard to the license issue. If in the next several days we do not see meaningful progress made that would lead to a waiver of default, the ratings may be lowered." MOVIE GALLERY: Judge Tice Okays 1st Amended Disclosure Statement ---------------------------------------------------------------- The Honorable Douglas O. Tice of the U.S. Bankruptcy Court for the Eastern District of Virginia approved a first amended disclosure statement explaining Movie Gallery, Inc. and its debtor- affiliates' First Amended Joint Plan of Reorganization, at a hearing held Feb. 5, 2008. Judge Tice held that the First Amended Disclosure Statement contains adequate information that would enable creditors to make an informed decision on whether to accept or reject the Plan. All objections that have not been withdrawn, sustained or settled are overruled. The Debtors' Plan will come before the Court for confirmation at a hearing on April 9, 2008, at 2:00 p.m., Eastern Standard Time. Parties have until March 24 to file objections to the Plan. The Debtors filed the First Amended Disclosure Statement and Plan on Feb. 4, 2008, to incorporate, among others (i) the key creditor groups' agreement to support the Plan; (ii) a revision to the treatment of claims to include creditors' projected recoveries; (iii) a recovery analysis; and (iv) financial projections. The Plan Support Agreement has been signed by: (1) more than 40 different lenders collectively holding more than two-thirds of the debt under the Movie Gallery's first lien credit facilities; (2) approximately five lenders collectively holding more that half of the debt under Movie Gallery's second lien credit agreement; and (3) Sopris Capital Advisors LLC, in its capacity as a Second Lien Lender, holder of a majority of the debt under Movie Gallery's 11% senior notes. Additionally, Sopris has committed to backstop a $50,000,000 rights offering under the Plan, and has placed $50,000,000 into escrow in support of its backstop commitment. The Amended Plan contemplates these restructuring transactions: * the Debtors will enter into the Amended and Restated First Lien Credit Agreement; * the Debtors will enter into the Amended and Restated Second Lien Credit Agreement; * Sopris will convert approximately $72 million plus accrued interest thereon, in Second Lien Claims into equity in the Reorganized Debtors; * the Debtors' outstanding $325 million 11% Senior Notes plus accrued interest, including approximately $174 million held by Sopris, will be converted into equity in the Reorganized Debtors; * the $50 million Rights Offering of additional New Common Stock is to be made available to eligible Holders of the 11% Senior Notes, which Rights Offering is to be fully backstopped by Sopris; * the Debtors' General Unsecured Claims and remaining 9.625% Senior Subordinated Notes will be converted into equity in the Reorganized Debtors subject to the Holder's right to elect, as an alternative, a limited cash-out option as set forth in the Plan; and * the Reorganized Debtors will enter into an exit financing facility. The Debtors have not yet secured the Exit Facility. Treatment & Recovery of Claims Under Plan The Projected Recovery for each class of claim and interest under the the Amended Plan are: Class Description Recovery ----- ----------- -------- 1 Other Priority Claims 100% 2 Other Secured Claims 100% 3 First Lien Claims 100% 4 Second Lien Claims 100% 5 Studio Claims Impaired 100% 6 11% Senior Note Claims 22.1% 7A General Unsecured Claims against Movie Gallery, Inc. 5.964% 7B General Unsecured Claims against Movie Gallery US, LLC 13.613% 7C General Unsecured Claims against M.G.A. Realty I, LLC 3.333% 7D General Unsecured Claims against M.G. Digital, LLC 0.702% 7E General Unsecured Claims and 9.625% Senior Subordinated Note Claims against Hollywood Entertainment Corporation 12.527% 7F General Unsecured Claims against MG Automation LLC 3.333% 8 Equity Interests in Movie Gallery, Inc. 0% 9 Intercompany Interests 0% Class 9 is impaired and is deemed to reject the Plan. Accordingly, the Debtors are soliciting votes to accept or reject the Plan from Holders of Claims in Classes 3, 4, 5, 6, 7A, 7B, 7C, 7D, 7E and 7F. The Debtors are not seeking votes from the Holders of Claims in Classes 1, 2, 8 and 9. Sopris holds (i) $174,000,000 in principal amount of 11% Senior Notes or 54% of the aggregate amount outstanding under the 11% Senior Notes; (ii) $72,000,000 in Second Lien Claims or 41% of the aggregate amount outstanding under the Second Lien Credit Agreement; and (iii) a small percentage of the First Lien Claims. Pursuant to the Plan, Sopris will receive about 41% of the Unsecured Claim Equity Allocation; the Sopris Second Lien Equity Allocation; at least 50% and as much as 100% of the Rights Offering Equity Allocation; the Rights Offering Commitment Fee payable in new common stock; and up to an additional 25% of the Unsecured Claim Equity Allocation. The Debtors estimate that as of the effective date of the Plan, Sopris will hold between 64% and 85% of the new common stock, subject to dilution by future stock issuances, including the issuance of equity, restricted stock or options under the Management and Director Equity Incentive Program, and by the possible exercise of the Warrants. The Plan provides holders of allowed claims under Classes 6, 7A, 7B and 7E, collectively, to receive an allocated portion of the new common stock, the warrants to be issued under the Plan, and the net proceeds realized by the Litigation Trust, except to the extent that the holders make a cash-out election. Sopris has agreed to provide up to $10,000,000 to fund an alternate recovery in cash to holders of allowed general unsecured claims in Classes 7A, 7B and 7E in lieu of the new common stock. The "cash-out" option will be capped at no more than 50% of the value ascribed by the Plan to the new common stock that a creditor would be entitled to receive on account of an allowed claim. The "warrants" will give holders of claims under Classes 6, 7A, 7B and 7E the right to purchase, in the aggregate, 5% of the fully-diluted new common stock at an exercise price equal to 200% of the Rights Offering Exercise Price, with a term of seven years. Appointment of Litigation Trustee On the Plan Effective Date, and in compliance with the provisions of the Plan and the Litigation Trust Agreement, William Kaye, the chairman of the Committee, will be appointed Litigation Trustee in accordance with the Litigation Trust Agreement. Feasibility Section 1129(a)(11) of the U.S. Bankruptcy Code requires that the Court find that Confirmation is not likely to be followed by the debtor's liquidation of the Reorganized Debtors or the need for further financial reorganization, unless the Plan contemplates such liquidation. For purposes of demonstrating that the Plan meets this "feasibility" standard, the Debtors have analyzed the ability of the Reorganized Debtors to meet their obligations under the Plan and to retain sufficient liquidity and capital resources to conduct their businesses. The Debtors believe that the Plan meets the feasibility requirement set forth in Section 1129(a)(11) of the Bankruptcy Code, as confirmation is not likely to be followed by liquidation or the need for further financial reorganization of the Debtors or any successor under the Plan. In connection with the development of the Plan and for the purposes of determining whether the Plan satisfies this feasibility standard, the Debtors analyzed their ability to satisfy their financial obligations while maintaining sufficient liquidity and capital resources. Management developed a business plan and prepared financial projections for the retail calendar years 2007 through 2010. A full-text copy of the Financial Projections is available for free at http://researcharchives.com/t/s?27cf The Debtors' Projections reflect an anticipated emergence from Chapter 11 as of May 11, 2008. The Debtors' estimated cash effects of emergence will constitute: * a compounded annual growth rate of 1.5% in rental revenue and merchandise sales; * a year-end store count of 3,540 stores, including Canadian stores, and an increase by 100 of Game Crazy stores in each of 2009 and 2010; * 53.8% gross margin in 2008, declining to 49.3% in 2010; * estimated gain of $311,900,000 consisting of cancellation of debt income associated with (a) the 11% Senior Notes, (b) the 9.625% Senior Subordinated Notes, (c) accounts payable, (d) accrued liabilities and (e) other general unsecured Claims, less (ii) the write-off of $25,500,000 of deferred financing fees and (iii) the $1,200,000 Rights Offering backstop fee; * $719,600,000 of outstanding debt upon emergence due to the extinguishment of the 11% Senior Notes and 9.625% Senior Subordinated Notes claims and the conversion of the Sopris Second Lien Claims converted into new common stock; and * maintenance of a minimum of $30,000,000 of book cash. In general, as illustrated by the Projections, the Debtors believe that with a significantly deleveraged capital structure, the Debtors' business will return to viability. The Debtors project that the Reorganized Debtors should have sufficient cash flow and availability to pay and service their debt obligations and to fund operations. The Debtors believe that Confirmation and Consummation is not likely to be followed by the liquidation or further reorganization of the Reorganized Debtors. Accordingly, the Debtors believe that the Plan satisfies the feasibility requirement of Section 1129(a)(11) of the Bankruptcy Code. Liquidation Analysis The Debtors with the assistance of their restructuring and financial advisors, have prepared a hypothetical liquidation analysis in connection with the Disclosure Statement. The Liquidation Analysis indicates the estimated values that may be obtained by Classes of Claims upon disposition of assets, pursuant to a Chapter 7 liquidation, as an alternative to continued operation of the Debtors' business under the Plan. ASSETS Total Consolidated Estimated Estimated Balance Recovery % Recovery ------------- ---------- ----------- Current Assets Cash and cash equivalents $75,753,000 100% $75,753,000 Merchandise Inventory 153,025,000 39% 59,221,000 Prepaid Expenses 50,937,000 74% 37,919,000 Accounts Receivable 6,235,000 57% 3,534,000 Store Supplies and other assets held for sale 7,366,000 48% 3,504,000 -------------- ---------- ----------- Total Current Assets 293,316,000 61% 179,931,000 ============== ========== =========== Rental Inventory, net 226,721,000 39% 87,741,000 Property, furnishings and equipment, net 123,269,000 9% 11,616,000 Goodwill, net 0 0% 0 Other intangibles, net 50,475,000 0% 0 Deferred income tax asset, net 1,774,000 0% 0 Deposits and other assets investment in subsidiaries 7,389,000 0% 6,223,000 -------------- ---------- ------------ Total Non-current Assets 409,628,000 26% 105,580,000 -------------- ---------- ------------ Total Assets/Proceeds $702,944,000 41% $285,511,000 ============== ========== ============ Chapter 7 Liquidation Expenses Winddown Costs ($55,200,000) Professional Fees (6,000,000) Trustee Fees and Commissions (7,726,000) ------------ Total Liquidation Expense ($68,926,000) ------------ Net Proceeds Available for Distribution $216,585,000 ============ DISTRIBUTIONS Total Total Estimated Total Estimated Claim Dist.% Distribution -------------- ------ ------------- Less Secured Claims DIP Term Loan $101,393,000 100% $101,993,000 LT Debt Facility (First Lien) 598,374,000 19% 114,592,000 Outstanding LCs (1st Lien) 25,030,000 0% 0 LT Debt Facility (2nd Lien) 189,576,000 0% 0 -------------- ------ ------------ Total Secured Claims 914,973,000 0% 216,585,000 ============== ====== ============ Remaining Distributable Value - Less Chapter 11 Admin & Priority Claims 103,287,000 0% $0 Remaining Distributable Value - Less General Unsecured Claims Subordinated Debt 341,861,000 0% $0 Other General Unsecured Claims 207,000,000 0% $0 -------------- ------ ------------- Total Unsecured Non-Priority Claims $548,861,000 0% - ============== ====== ============= Distributable Value Available for Equity - Total Estimated Claims/Distributions $1,567,121,000 14% $216,585,000 ============== ====== ============ A full-text copy of the Liquidation Analysis is available for free at http://researcharchives.com/t/s?27d0 Executory Contracts and Unexpired Leases To address the landlords' objections to the Disclosure Statement, the First Amended Plan provides that non-Debtor parties to executory contracts or unexpired leases that are deemed rejected as of the Plan Effective Date will have the right to assert any claim on account of the rejected contract or lease, including under Section 503 of the Bankruptcy Code; provided that the claims must be filed by the applicable Claims Bar Date. Debtors Continue Talks with Lenders The Debtors are currently soliciting prospective lenders regarding their interest in conducting due diligence with respect to providing the Exit Facility. The Debtors are also currently in discussions with Sopris regarding additional support for approximately $25 million to be provided by Sopris that could be utilized by the Debtors to realize additional liquidity during periods of peak product purchasing. No terms have been agreed to and there are no assurances about the final terms or conditions of the support. "With the Court's authorization, we can now begin the solicitation of stakeholder votes on our Plan, which is another important step forward in our restructuring process. We are very proud of what we have accomplished thus far as we work to emerge as a competitive and financially stable company. On behalf of my entire management team, we remain grateful for the unwavering support of our dedicated partners and associates throughout our restructuring process," Joe Malugen, chairman, president and chief executive officer of Movie Gallery, said. Movie Gallery will shortly begin the process of soliciting votes for the Plan from eligible claim holders. The Official Committee of Unsecured Creditors in Movie Gallery's Chapter 11 proceedings supported entry of the order approving the Disclosure Statement. Assuming the requisite approvals are received and the Bankruptcy Court confirms the Plan under the company's current timetable, Movie Gallery expects to emerge from Chapter 11 on May 11, 2008. A full-text copy of the Debtors' First Amended Plan is available for free at: http://researcharchives.com/t/s?27d1 A full-text copy of the Debtors' First Amended Disclosure Statement is available for free at: http://researcharchives.com/t/s?27d2 About Movie Gallery Based in Dothan, Alabama, Movie Gallery Inc. -- http://www.moviegallery.com/-- is a home entertainment specialty retailer. The company owns and operates 4,600 retail stores that rent and sell DVDs, videocassettes and video games. It operates over 4,600 stores in the United States, Canada, and Mexico under the Movie Gallery, Hollywood Entertainment, Game Crazy, and VHQ banners. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak Rock LLP, is the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. When the Debtors' filed for protection from their creditors, they listed total assets of US$891,993,000 and total liabilities of US$1,419,215,000. The Official Committee of Unsecured Creditors has selected Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B. Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at Miles & Stockbridge PC, as its local counsel. The Debtors' spokeswoman Meaghan Repko said that the company does not expect to exit bankruptcy protection before the second quarter of 2008. The Debtors have until June 13, 2008 to file their plan of reorganization. MYSTIC POINT: S&P Junks Ratings on Six CDO Tranches --------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on seven tranches from Mystic Point CDO Ltd. after receiving notification from the trustee of the controlling noteholders' intent to liquidate the collateral and terminate the transaction. The ratings on four of the CDO tranches are on CreditWatch negative following the rating actions, indicating a likelihood of further downgrades. On Feb. 1, 2008, Standard & Poor's received a notice for Mystic Point CDO Ltd., a hybrid mezzanine structured finance CDO of ABS, stating that a majority of the controlling noteholders is directing the trustee to proceed with the liquidation of the collateral supporting the notes. This notice follows a previous notice declaring an event of default as of Dec. 10, 2007, under section 5.1(j) of the indenture dated Dec. 21, 2006. This rating actions reflect Standard & Poor's opinion regarding the impact on the transactions of a potential liquidation of the collateral at the current market prices. The controlling class' election to liquidate the collateral at this time may result in losses for all classes of notes. Mystic Point CDO Ltd. is managed by Fortis Investment Management USA Inc. Standard & Poor's will continue to monitor the CDO transactions it rates and take rating actions (including CreditWatch placements) as appropriate given the performance of the underlying collateral, the credit enhancement afforded by each CDO structure, and the priority of payments specified in each transaction's legal documentation. Rating Lowered and Placed on Creditwatch Negative Mystic Point CDO Ltd. Rating ------ Class To From ----- -- ---- A-1 BB/Watch Neg AAA Ratings Lowered and Remaining on CreditWatch Negative Mystic Point CDO Ltd. Rating ------ Class To From ----- -- ---- A-X CCC-/Watch Neg AAA/Watch Neg A-2 CCC-/Watch Neg AA/Watch Neg B CCC-/Watch Neg A-/Watch Neg Ratings Lowered and Removed From CreditWatch Negative Mystic Point CDO Ltd. Rating ------ Class To From ----- -- ---- C CC BBB-/Watch Neg D CC BB-/Watch Neg E CC B-/Watch Neg NORTH FOREST: S&P Downgrades Issuer Credit Rating to BB From BBB- ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its issuer credit rating and underlying rating on North Forest Independent School District, Texas' general obligation debt two notches to 'BB' from 'BBB-' and placed the rating on CreditWatch with negative implications due to the district's significant financial deterioration and the potential for it to cease operations. The 'AAA' rating on the bonds guaranteed by the Texas Permanent School Fund remains in place. "We might take additional negative rating actions should the district's finances continue to deteriorate or if district management does not implement a plan to restore fiscal health and balance," said Standard & Poor's credit analyst James Breeding. The district ended fiscal 2007 with a severe decline in the unreserved general fund balance to a negative $6.7 million from a positive $14.8 million in fiscal 2006 based on a number of factors, including the recording of a $7.3 million liability to Texas for the overpayment of per pupil funding in the previous year and deficit spending in instructional, school leadership, and administration areas. According to the auditor, the overpayment by the state was due to improper reporting of student enrollment while deficit spending was due to the finance department's lack of monitoring and understaffing. The independent auditor also expressed concern about the district's ability to continue to exist. "The speculative-grade rating also reflects the district's continued negative student enrollment and population trends and below-average wealth and income," added Mr. Breeding. In addition, management has used bond proceeds to cover a portion of operating expenses while waiting for additional tax revenues to be collected. General fund assets are weak, consisting of cash totaling $1.02 million and a significant amount of delinquent taxes ($11.70 million) and receivables due from other funds ($7.40 million). The school district's next debt service payment is scheduled for Feb. 15, 2008; and the administration has confirmed it has sufficient funds on hand in the interest and sinking fund to meet its current obligations. The adopted fiscal 2008 budget includes balanced operations but does not include the withholding of the $7.3 million by the state. Therefore, a significant shortfall is likely should management not take immediate action to reduce expenditures. The operations and maintenance tax rate has already been set at the current state maximum of $1.04 per $100 of assessed value with an additional levy for debt service. Tax collections remain below average at less than 90%. The district's financial position has been historically volatile. Due to a state funding cut, the unreserved general fund balance dipped to a negative $2.2 million at fiscal year-end 2000 because of a decline in average daily attendance. Reserves, however, have improved since. The district ended fiscals 2001 through 2006 with stronger reserves that increased the unreserved general fund balance to $16.4 million, or about 23% of general fund operations. The rating action affects roughly $68 million of debt outstanding. PEOPLE'S CHOICE: Wants Until March 31 to File Chapter 11 Plan ------------------------------------------------------------- People's Choice Financial Corp. and its debtor-affiliates ask the Hon. Robert N. Kwan of the United States Bankruptcy Court for the Central District of California to extend their exclusive rights to file, and solicit acceptances of, a Chapter 11 plan.. The Debtors also seek to share their exclusive plan filing rights with the Official Committee of Unsecured Creditors. Except as to the Creditors Committee, the Debtors seek a two-month extension of their exclusive plan filing, through and including March 31, 2008; and their exclusive solicitation periods, through and including May 31, 2008. The Debtors reserve the right to seek further extensions. J. Rudy Freeman, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, California, relates that the Debtors, with the Creditors Committee, have expeditiously marketed their assets for sale and sold those assets in a number of transactions. In April and May 2007, the Debtors sold their contractual loan servicing rights and residual interests. In July 2007, the Debtors sold their loan servicing and loan origination platforms. The Debtors have sold various loan portfolios owned by the Debtors as well as miscellaneous assets. Combined, the asset sales have yielded approximately $45,000,000 in gross proceeds to the Debtors' estates and resulted in the elimination of thousands of dollars in potential claims of employees and vendors. Mr. Freeman assures the Court that the Debtors are not seeking an extension of the Exclusivity Periods to extract any improper concessions from creditors. The Debtors and the Creditors Committee are in the process of negotiating key provisions of the plan and working in concert to prepare a joint plan of liquidation, Mr. Freeman tells Judge Kwan. The Debtors simply require additional time to finalize their asset liquidation strategy for the benefit of all stakeholders, and finalize key plan provisions, Mr. Freeman says. Given the progress the Debtors and the Creditors Committee have made in the orderly liquidation of the Debtors' Chapter 11 cases, any rogue plan would likely only waste valuable resources better spent bringing the bankruptcy cases to a conclusion, Mr. Freeman asserts. A hearing will be held on March 11, 2008, at 2:30 p.m. About People's Choice Headquartered in Irvine, California, People's Choice Financial Corp. -- http://www.pchl.com/-- is a residential mortgage banking company, through its subsidiaries, originates, sells, securitizes and services primarily single-family, non-prime, residential mortgage loans. The company and two of its affiliates, People's Choice Home Loan, Inc., and People's Choice Funding, Inc., filed for chapter 11 protection on March 20, 2007 (Bankr. C.D. Calif. Case No. 07-10772). J. Rudy Freeman, Esq., at Pachulski, Stang, Ziehl & Jones, L.L.P., represents the Debtors. Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. In its schedules filed with the Court, People's Choice disclosed total assets of $806,776,901 and total liabilities of $105,772,386. (People's Choice Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). PLASTECH ENGINEERED: Wants to Obtain $38 Million of DIP Financing ----------------------------------------------------------------- Plastech Engineered Products, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Michigan for permission to borrow up to $38,000,000 in postpetition financing under a secured revolving credit facility syndicated by Bank of America, N.A., as administrative agent. According to Peter Smidt, executive vice president of Finance, and chief financial officer of Plastech, in response to decreasing liquidity, increasing raw materials costs, fixed, long-term agreements with customers, and a resulting decrease in earnings, the Debtors instituted a plan to increase liquidity and reduce costs. The Debtors ultimately determined that the DIP financing offered by the same lenders who provided the Debtors with a $200,000,000 Revolving Credit Facility entered into on Feb. 12, 2007, was the most favorable under the circumstances, and adequately addressed the Debtors' reasonably foreseeable liquidity needs. In making their decision to seek financing from the DIP Lenders, the Debtors considered many factors: -- The DIP Lenders already held secured first priority liens on the Debtors' Liquid Collateral, which includes, but is not limited to, all of the company's accounts; chattel paper; instruments; letter of credit rights; payment intangibles; receivables; deposit accounts; and inventory. -- The DIP Lenders' preexisting knowledge of the Debtors' business and all of the Debtors' existing prepetition collateral provided significant benefits, including, but not limited to, the speed with which the DIP Lenders are able to close. -- The Debtors' inability to obtain alternative postpetition financing proposals from other lenders. -- The proposed terms that the DIP Lenders offered: (a) Liens in the Liquid Collateral that are superior to the liens granted to the Prepetition Revolving Lenders and the junior lien granted to lenders under a $265,000,000 first lien term loan agreement entered into February 12, 2007. (b) The Debtors' agreement to use the proceeds of the Liquid Collateral or the proceeds of any other payments to repay the amounts owing to the Prepetition Revolving Lenders. The salient terms of the DIP Loan Agreement are: Borrowers: Each of The Debtors. Administrative Agent: Bank of America, N.A. Lenders: A syndicate of lenders consisting of the lenders under the Revolving Credit Facility. Commitment: A revolving credit facility in a committed amount up to $38,000,000. The $6,000,000 of the Committed Amount will be advanced at the Borrowers' request. Up to $17,000,000 will be advanced dollar for dollar based on the amounts paid by the Debtors' customers General Motors Corporation, Ford Motor Company, and Johnson Controls, Inc. The remaining $15,000,000 will be advanced for adequate assurance payments to the Prepetition Revolving Lenders to the extent of the cost of the goods sold by the Debtors during the funding period, with the amounts to be applied to the obligations under the Prepetition Revolving Facility. Use of Proceeds: The Facility will be used solely (a) for working capital and general corporate purposes consistent with the budget agreed to by the parties, (b) to pay the costs and expenses related to the administration of the bankruptcy cases, and for payment of certain other prepetition expenses as contemplated in the budget or as consented to by the DIP Agent in its sole discretion and as are approved by the Court, and (c) to make the adequate protection payments. Application of Proceeds: Amounts outstanding under the Revolving Credit Facility will be reduced from the net proceeds of the Liquid Collateral that is sold in the ordinary course or liquidated. Additional amounts for (x) payment of interest, expenses, fees, and other amounts owing under the DIP Credit Facility and (y) working capital and corporate purposes, will be borrowed under the DIP Loan Agreement. Maturity Date: 11:59 p.m. (Eastern time), Feb. 10, 2008; may be extended without further hearing or order by written agreement among Borrowers, DIP Agent, and DIP Lenders for an additional 15 days. Priority & Liens: Subject to the Carve Out, superpriority claim status pursuant to Section 364(c)(1) of the Bankruptcy Code. Secured by a first priority perfected security interest pursuant to Sections 364(c)(2) and (c)(3) and 364(d) in the Liquid Collateral, which, subject to the conditions set forth in the DIP Loan Agreement, will not include (i) avoidance actions; and (ii) the proceeds of any Avoidance Actions. Adequate Protection Liens for Prepetition Revolver Lenders: (i) replacement liens on all Liquid Collateral, (ii) adequate protection payments in the amount of interest, fees and other amounts (including principal) due under the Revolving Credit Facility from the Pre-Petition Accounts, the Pre-Petition Inventory, and the Other Pre-Petition Revolver Collateral. Representatives of the DIP Lenders will be authorized to visit the Debtors' business premises to monitor the Liquid Collateral, and the DIP Lenders will be authorized to retain appraisers, consultants, and financial advisors at Debtors' expense to monitor the Debtors' business, verify the Debtors' compliance with the terms of the DIP Financing Documents and the DIP Order and the Prepetition Revolver Credit Documents, and appraise the Liquid Collateral. Fees: Closing Fee of $100,000 Interest Rate: Base Rate + 1% (per annum) Events of Default: The DIP Documents contain usual and customary events of default for facilities of this type. In addition, the failure of the Borrowers to obtain final order approving financing on or before March 10, 2008, will constitute an event of default. Remedies on Events of Default: In addition to other customary remedies, upon the occurrence and during the continuance of an Event of Default and following the giving of 5 business days' notice to counsel for the Debtors, counsel for the Committee, and the United States Trustee, the Agent will have relief from the automatic stay and may foreclose on all or any portion of the Liquid Collateral, collect accounts receivable and apply the proceeds thereof to the obligations, or otherwise exercise remedies against the Liquid Collateral permitted by applicable nonbankruptcy law. Guaranty: The proposed financing is conditioned on execution and delivery of documents acceptable to DIP Agent by "Acceptable Customers" evidencing a non-recourse cash collateralized guarantee and non- offset agreement limiting set-offs on postpetition amounts to "ordinary course issues" capped at 10% of invoice. A full text copy of the draft of the Agreement is available for free at http://researcharchives.com/t/s?27d3 About Plastech Engineering Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLASTECH ENGINEERED: Toyota & Ford Unaffected By Chapter 11 Filing ------------------------------------------------------------------ While Chrysler LLC said that it could close four of its U.S. plants due to Plastech Engineered Products, Inc. and its debtor- affiliates' failure to deliver component parts, Ford Motor Co. and Toyota Motor Corp. said their automotive production won't be affected by the auto-parts supplier's Chapter 11 filing. Ford said that Plastech's Chapter 11 filing won't adversely affect the auto maker's production, The Wall Street Journal reports. "We've had no impact," said Mark Fields, Ford's President of the Americas. "We anticipate, for the time being, to be able to continue our production." "We're not out shopping to take this business elsewhere at this point," Mr. Fields told WSJ. According to Reuters, Toyota said it continues to receive parts from Plastech. "We have had no interruption in supplies," Mike Goss said. "Plastech has told us that they will continue production and we will monitor the situation closely." As previously reported, Chrysler terminated its supply contracts with Plastech. Chrysler has sought court permission to seize certain equipment from Plastech's plants, so that it could transfer production of its parts to an alternate supplier. It warned that absent the transfer, it will lose production of approximately 500 end-item parts, halting the production of its entire corporate fleet of vehicles. Plastech's major customers include General Motors, Ford Motor Company, and Toyota. About Ford Motor Based in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Nov. 19, 2007, Moody's Investors Service affirmed the long-term ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured, and B3 probability of default), but changed the rating outlook to Stable from Negative and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit Company's B1 senior unsecured rating, and changed the outlook to Stable from Negative. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the UAW. About Plastech Engineering Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PONTIAC MICHIGAN: Fitch Cuts Bond Ratings to 'CCC', 'BB-' --------------------------------------------------------- Fitch Ratings has taken these rating actions on Pontiac, Michigan: -- Pontiac General Building Authority, Michigan's outstanding $1.4 million limited tax general obligation bonds, series 2002, rated 'B+' placed on Rating Watch Negative -- Pontiac Tax Increment Finance Authority Area No. 2, Michigan's outstanding $6.2 million tax increment revenue bonds, series 2002 downgraded to 'CCC' from 'BB'. The bonds remain on Rating Watch Negative. -- TIFA Area No. 3, Michigan's outstanding $26.2 million tax increment revenue bonds, series 2002 downgraded to 'BB-' from 'BB+'. The bonds remain on Rating Watch Negative. The Rating Watch Negative for Pontiac GBA reflects an increase in the general fund balance deficit as indicated in the recently released fiscal 2007 audited financial results. The fiscal year ended with a general fund deficit of $2.0 million, increasing the cumulative fund balance deficit to $6.1 million from $4.1 million. The Rating Watch also reflects the failure of two ballot initiatives in a Jan. 15 election which could have allowed the city to improve its financial position through additional staff cuts and revenue generating capabilities. The downgrade of Pontiac TIFA Area No. 2 reflects the Area's structurally imbalanced financial operations over three of the last four years, including an $850,000 deficit as of the recently released fiscal 2007 audit. In addition, the rating reflects an increase in debt attributable to bonds issued by the Oakland County Building Authority payable from TIFA revenues, and a significant tax base concentration in General Motors Corp. (GM: IDR rated 'B' with a Negative Rating Outlook by Fitch). The downgrade for Pontiac TIFA Area No. 3, a largely residential area, reflects further deterioration in the housing market in Michigan, which could place increased pressures on the area's pledged revenue stream of incremental property tax revenues. The Rating Watch Negative indicates that the weakening of the city's financial position creates further potential for stress on the area's financial reserves. Fitch expects to resolve the Negative Rating Watches on the GBA, TIFA No. 2, and TIFA No. 3 within one month, pending additional information on the city's and TIFAs' financial operations. PRADA DEVELOPMENT: Case Summary & Nine Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Prada Development, Ltd. 8000 IH-10 West, Suite 600 San Antonio, TX 78230-3802 Bankruptcy Case No.: 08-50263 Chapter 11 Petition Date: February 4, 2008 Court: Western District of Texas (San Antonio) Judge: Ronald B. King Debtor's Counsel: Richard E. Hettinger, Esq. Davidson & Troilo, PC 7550 IH-10 West, Suite 800 San Antonio, TX 78229-5815 Tel: (210) 349-6484 Fax: (210) 349-0041 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its Nine Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ ------------- --------- The Laredo National Bank Overdraft fees $138,925 P.O. Box 59 Laredo, TX 78041 Loan $45,503 Closner Construction Co., L.C. Construction $180,000 6189 Highway 359 P.O. Box 2707 Laredo, TX 78044 United Independent School Taxes $67,185 District 3501 E. Saunders Laredo, TX 78041 Webb County Tax Assessor Taxes $32,408 TEC Engineers & Consultants Inc. Construction $15,000 Montalvo, Ricardo Contract of Deed $400 Sanchez, Carlos Jr. Contract of Deed $200 Villareal, Juan Jr. Contract of Deed $100 Yzaguirre, Arnoldo Contract of Deed $100 PRIME MORTGAGE: Files Ch. 7 Petition; Creditors to Meet on March 3 ------------------------------------------------------------------ Prime Mortgage Financial Inc. filed chapter 7 petition with U.S. Bankruptcy Court for the District of Massachusetts, Martin Luttrell writes for The Telegram. Documents filed with the Court did not disclose the reason for the bankruptcy filing. However, Telegram notes that mortgage lenders are under financial crisis brought by the slump in the housing industry. The company earned $9.5 million in 2007, a drop from $14.7 million earnings a year earlier, Telegram notes. According to Telegram, Prime Mortgage has disclosed that it is facing three cases, including a case filed by 371 Turnpike Road LLC, its landlord involving a $100,000 bank attachment in Worcester Superior Court and a case before the Rhode Island Department of Labor. According to the report, Prime Mortgage's telephone lines at its offices in Massachusetts, Connecticut and Rhode Island were disconnected Monday. Upon filing for bankruptcy, Prime Mortgage had unexpired leases in Auburn, Marshfield, Newburyport, East Providence and Middletown, R.I., Telegram says. Creditors are scheduled to meet on March 3, 2008, at 11:30 a.m., at the U.S. Trustee's office in 446 Main Street in Worcester, Mass. About Prime Mortgage Southbro, Massachusetts-based Prime Mortgage Financial Inc. -- http://www.primefinancialdirect.com/-- used to be a large local mortgage company and with at least $1.5 billion of originated loans in 2003. In 2006, the company originated 436 loans valued at $104 million and brokered 98 loans worth $21 million. It has offices in Massachusetts, Connecticut, and Rhode Island. Mark G. DeGiacomo, Esq., of Boston, is counsel to Prime Mortgage President Aris H. Pappas, a debtor-affiliate. The company's court filigs show assets of $888,786 and liabilities of $1,124,791, when it filed for chapter 7 protection. It has at least 100 creditors, mostly appraisal firms. PROTECTED VEHICLES: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Protected Vehicles, Inc. aka PVI 1210 Truxtun Avenue North Charleston,, SC 29405 Bankruptcy Case No.: 08-00783 Type of Business: The Debtor designs and manufactures ballistic and blast protected vehicles using technology derived from Rhodesian and South African vehicle development programs. See http://www.protectedvehicles.com/ Chapter 11 Petition Date: February 5, 2008 Court: District of South Carolina (Charleston) Judge: David R. Duncan Debtor's Counsel: G. William McCarthy, Jr., Esq. McCarthy Law Firm, LLC 1715 Pickens Street 29201 P.O. Box 11332 Columbia, SC 29211-1332 Tel: (803) 771-8836 Estimated Assets: $10 Million to $50 Million Estimated Debts: $50 Million to $100 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ United States Marine Corps $15,801,765 2200 Lester Street Quantico, VA 22134 Rafael Armament Development $2,484,100 Authority LLC P.O. Box 2250 Haifa 32021 Israel Aerotek Inc. $2,479,590 3689 Collection Center Drive Chicago, IL 60693 CMMC LLC $1,650,383 Attn: Danny Rowland 1670 Dry Dock Avenue Building 236 North Charleston, SC 29405 Consolidated Steel Inc. $1,164,292 P.O. Box 110 Pounding Mill, VA 24637 CMMC Machine $1,108,249 2081 Hayter Street North Charleston, SC 29405 Marmon-Herrington $997,502 P.O. Box 96654 Chicago, IL 60693 Metalworx $779,014 340 Deming Way Sumemrville, SC 29483 E=MC4 $761,131 3216-C Industry Drive North Charleston, SC 29418 Cummins Atlantic Inc. $695,260 P.O. Box 601778 Charlotte, NC 28260 Oran Safety Glass/Marketing $665,120 Kibbutz Palmach Zova MP Harei Yehuda 90870 Israel Bae Systems $548,138 9113 Lesaint Drive Fairfield, OH 45014 PraxAir $496,859 Department AT40174 Atlanta, GA 31192 IMCO $480,120 P.O. Box 189 Tel-Hanan Israel 20302 Hutchinson Industries $461,169 460 Southard Street Trenton, NJ 086388 Joseph Tryerson & Son $402,342 Department AT40108 Atlanta, GA 31192 Burtek Inc. $394,712 P.O. Box 822553 Philadelphia, PA 19182 Olympic Steel $368,306 P.O. Box 633538 Cincinnati, OH 45263 Ramsey Manufacturing Co. $362,491 P.O. Box 1384 Summerville, SC 29484 Four Rivers Peterbilt Inc. $358,245 P.O. Box 4229 Port Wentworth, GA 31407 QUAKER FABRIC: Can't File Plan Without Committee Consent -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware barred furniture upholstery manufacturer Quaker Fabric Corp. from filing a chapter 11 plan of liquidation absent consent from the official committee of unsecured creditors appointed in its case. Moreover, the Court rejected the Debtors' request for an April extension of their exclusive plan filing period. The Court settled for a 66-day extension, giving the Debtors until Feb. 18, 2008, to propose a bankruptcy plan. The Debtors were given until April 18 to solicit plan votes. As reported in the Troubled Company Reporter on Dec. 17, Quaker Fabric and its debtor-affiliates asked the Court to extend their exclusive periods to: a) file a chapter 11 plan until April 14, 2008; and b) solicit acceptances of that plan until June 11, 2008. The Debtors argued that they have been in chapter 11 for just over three months and have only recently obtained approval from the Court to secure DIP financing from their prepetition secured lenders. In addition, the Debtors pointed out they have devoted substantial time and resources in effectuating the sale of their assets which resulted in the sale of the their Bleachery Pond and the Tupelo Lee Industrial Park properties to separate buyers in September 2007. The Debtors said their cases are large and complex and they need more time to focus on the formulation, filing and solicitation of a plan of liquidation that will be accepted by their creditors and approved by the Court. The Debtors also pointed to the progress they have made in the collection of their receivables and are not seeking an extension to pressure creditors. About Quaker Fabric Based in Fall River, Mass., Quaker Fabric Corp. (NASDAQ: QFAB) -- http://www.quakerfabric.com/-- designs, manufactures, and markets woven upholstery fabrics primarily for residential furniture manufacturers and jobbers. It also develops and manufactures specialty yarns, including chenille, taslan, and spun products for use in the production of its fabrics, as well as for sale to distributors of craft yarns, and manufacturers of homefurnishings and other products. The company is one of the largest producers of Jacquard upholstery fabrics. Quaker Fabric sells its products through sales representatives andindependent commissioned sales agents in the United States, Canada, Mexico, and internationally. The company and its affiliate, Quaker Fabric Corporation of Fall River, filed for chapter 11 protection on Aug. 16, 2007 (Bankr. D. Del. Case No. 07-11146). John D. Sigel, Esq. at Wilmer Cutler Pickering Hale and Dorr LLP and Joel A. Waite, Esq. at Young Conaway Stargatt & Taylor LLP are co-counsels to the Debtors. Epiq Bankruptcy Solutions is the Debtors' claims agent. The Official Committee of Unsecured Creditors has selected Shumaker, Loop & Kendrick, LLP, as its bankruptcy counsel and Benesch, Friedlander, Coplan & Aronoff, LLP, as co-counsel. The Debtors' schedules reflect total assets of $41,375,191 and total liabilities of $54,435,354. QUAKER FABRIC: Gets Go Signal to Sell Brazilian Unit for $100,000 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware permitted Quaker Fabric Corp. to sell its Brazilian warehouse subsidiary Quaker Textil do Brasil Ltda to American Decorative Fabric, LLC for $100,000. The subsidiary had been a warehouse and sales office. The Debtors said operations at Quaker Brazil stopped after the Debtors consummated a sale of substantially all of their assets in September 2007. The Debtors initially opted to wind up Quaker Brazil's operations, however, Brazilian requirements for winding up a company are expensive. The Debtors said the costs of "dormancy" under Brazilian law will likely consume the remaining funds of Quaker Brazil. As part of the sale, the buyer required Quaker Fabric Corporation of Fall River to waive a $797,267 intercompany receivable owing to it from Quaker Brazil. The Debtors said they do not believe they would have recovered the receivable under any realistic circumstances. The unit is sold on an "as is, where is" basis. About Quaker Fabric Based in Fall River, Mass., Quaker Fabric Corp. (NASDAQ: QFAB) -- http://www.quakerfabric.com/-- designs, manufactures, and markets woven upholstery fabrics primarily for residential furniture manufacturers and jobbers. It also develops and manufactures specialty yarns, including chenille, taslan, and spun products for use in the production of its fabrics, as well as for sale to distributors of craft yarns, and manufacturers of homefurnishings and other products. The company is one of the largest producers of Jacquard upholstery fabrics. Quaker Fabric sells its products through sales representatives and independent commissioned sales agents in the United States, Canada, Mexico, and internationally. The company and its affiliate, Quaker Fabric Corporation of Fall River, filed for chapter 11 protection on Aug. 16, 2007 (Bankr. D. Del. Case No. 07-11146). John D. Sigel, Esq. at Wilmer Cutler Pickering Hale and Dorr LLP and Joel A. Waite, Esq. at Young Conaway Stargatt & Taylor LLP are co-counsels to the Debtors. Epiq Bankruptcy Solutions is the Debtors' claims agent. The Official Committee of Unsecured Creditors has selected Shumaker, Loop & Kendrick, LLP, as its bankruptcy counsel and Benesch, Friedlander, Coplan & Aronoff, LLP, as co-counsel. The Debtors' schedules reflect total assets of $41,375,191 and total liabilities of $54,435,354. QUEBECOR WORLD: Printing Union Seeks Discussion of Financial Woes ----------------------------------------------------------------- Canada's largest printing union, CEP Graphical, asked for a meeting with Quebecor World Inc., executives to discuss the financial crisis that forced the commercial printer to seek creditor protection, The Canadian Press reported. "The current financial crisis at Quebecor World is a major concern to all Quebecor World employees, including CEP members and their families," says Duncan Brown, National Director of CEP Graphical. "The CEP and our members are committed to the continuing viability of the company; but the lack of communication and information has been a problem, thus we are seeking to meet with company executives to discuss the current situation, its implications and the solutions." The union representing workers at Quebecor plants in Europe, UNI Graphical, has also asked to meet with company brass, the Canadian Press said. CEP National President Dave Coles said, "Although there may be problems in some markets, overall this appears to be a banking crisis, rather than a business crisis." CEP, the Communications, Energy and Paperworkers Union of Canada, represents 150,000 Canadian workers in several key parts of the economy, including more than 25,000 newspaper, broadcast, film and printing industry workers. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. In Canada it has 17 facilities in five provinces, through which it offers a mix of printed products and related value-added services to the Canadian market and internationally. The company is an independent commercial printer in Europe with 19 facilities, operating in Austria, Belgium, Finland, France, Spain, Sweden, Switzerland and the United Kingdom. In March 2007, it sold its facility in Lille, France. Quebecor World (USA) Inc. is its wholly owned subsidiary. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. They obtained creditor protection until Feb. 20, 2008. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of $5,554,900,000, total liabilities of $3,964,800,000, preferred shares of $175,900,000, and total shareholders' equity of $1,414,200,000. The company has until May 20, 2008, to file a plan of reorganization in the Chapter 11 case. (Quebecor World Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) QUEBECOR WORLD: BP Canada Wants to End Gas Supply to U.S. Plants ---------------------------------------------------------------- Craig W. Wolfe, Esq., at Kelley Drye & Warren, LLP, in New York, notes that Quebecor World Inc. and its debtor-affiliates are seeking to compel BP Canada Energy Marketing Corp., BP Energy Company, and IGI Resources Inc., to continue to provide natural gas to the Debtors' printing facilities in the United States under three separate base contracts. Mr. Wolfe asserts that the Debtors' request should be denied as it relates to BP Canada, BPEC and IGI. He argues that BP Canada, BPEC and IGI are not "utilities," and are thus not subject to Section 366 of the Bankruptcy Code. Section 366 does not define "utility," Mr. Wolfe notes. However, he points out that the legislative history of Section 366 indicates that Congress intended the statute to apply only to those "utilities," which have a special position with respect to the debtor. He further notes that utilities may include "an electric company, gas supplier, or telephone company that is a monopoly in the are so the debtor cannot easily obtain comparable services from another utility." Mr. Wolfe asserts that BP Canada, BPEC and IGI do not have a monopoly over the sale of natural gas to the Debtors. There are numerous other providers of natural gas that are available to the Debtors, including the local distribution company, he points out. Mr. Wolfe also argues that Section 556 expressly prohibits any injunction that seeks to compel BP Canada, et al., to sell natural gas to the Debtors because the controlling Base Contracts are forward contracts. Section 556 provides, among other things, that neither the automatic stay nor an "order of a court in any proceeding under this title," which includes granting the injunction, apply to contracts between a debtor and a forward contract merchant under a forward contract, he notes. * * * The Bankruptcy Court prohibits the Utility Providers, in the interim, to discontinue, alter or refuse service on account of any unpaid prepetition charges, or require additional assurance of payment other than the proposed Adequate Assurance pending final order. Any Utility Provider who objects to the proposed Adequate Assurance Procedures must file an objection on or before Feb. 12, 2008. Utility Providers who do not timely file an objection will be deemed to consent to the proposed procedures and will be bond by those procedures. The Court will convene a hearing on February 21 to consider final approval of the proposed Adequate Assurance Procedures. For purposes of the Interim Order, BP Canada, BPEC, IGI, BP Energy Marketing Corp., and National Fuel Resources Inc., will be excluded from the definition of Utility Provider. About BP Canada Headquartered in Calgary, Alberta, BP Canada Energy Company is an affiliate of London-based BP p.l.c. -- http://www.bp.com/-- is a holding company and employs around 1,500 Canadians. BP plc operates through three business segments: Exploration and Production, Refining and Marketing and Gas, Power and Renewables. Exploration and Production's activities include oil and natural gas exploration, development and production (upstream activities), together with related pipeline, transportation and processing activities (midstream activities). The activities of Refining and Marketing include oil supply and trading and the manufacture and marketing of petroleum products, including aromatics and acetyls, as well as refining and marketing. Gas, Power and Renewables activities include marketing and trading of gas and power; marketing of liquefied natural gas (LNG); natural gas liquids (NGLs), and low-carbon power generation through its Alternative Energy business. BP has operations in Europe, the United States, Canada, Russia, South America, Australasia, Asia and parts of Africa. In August 2006, it acquired Greenlight Enery, Inc. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. In Canada it has 17 facilities in five provinces, through which it offers a mix of printed products and related value-added services to the Canadian market and internationally. The company is an independent commercial printer in Europe with 19 facilities, operating in Austria, Belgium, Finland, France, Spain, Sweden, Switzerland and the United Kingdom. In March 2007, it sold its facility in Lille, France. Quebecor World (USA) Inc. is its wholly owned subsidiary. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. They obtained creditor protection until Feb. 20, 2008. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of $5,554,900,000, total liabilities of $3,964,800,000, preferred shares of $175,900,000, and total shareholders' equity of $1,414,200,000. The company has until May 20, 2008, to file a plan of reorganization in the Chapter 11 case. (Quebecor World Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc.,http://bankrupt.com/newsstand/ or 215/945-7000) QUEBECOR WORLD: Can File Schedules and Statements Until March 5 --------------------------------------------------------------- At the Debtors' behest, the U.S. Bankruptcy Court for the Southern District of New York extends until March 5, 2008, the deadline by which the Debtors will file their schedules of assets and liabilities, schedules of current income and expenditures, schedules of executory contracts and unexpired leases, and statements of financial affairs. Proposed counsel to the Debtors, Michael J. Canning, Esq., at Arnold & Porter LLP, in New York, says the the 30-day extension is needed since the Debtors maintain voluminous books and records and complex accounting systems with which certain prepetition invoices have not yet been received, or entered into the Debtors' financial accounting systems. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. In Canada it has 17 facilities in five provinces, through which it offers a mix of printed products and related value-added services to the Canadian market and internationally. The company is an independent commercial printer in Europe with 19 facilities, operating in Austria, Belgium, Finland, France, Spain, Sweden, Switzerland and the United Kingdom. In March 2007, it sold its facility in Lille, France. Quebecor World (USA) Inc. is its wholly owned subsidiary. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. They obtained creditor protection until Feb. 20, 2008. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of $5,554,900,000, total liabilities of $3,964,800,000, preferred shares of $175,900,000, and total shareholders' equity of $1,414,200,000. The company has until May 20, 2008, to file a plan of reorganization in the Chapter 11 case. (Quebecor World Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) REDDY ICE: S&P Confirms B+ Rating After GSO Merger Termination -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit and all other ratings on Dallas, Texas-based Reddy Ice Holdings Inc. and its wholly owned operating subsidiary, Reddy Ice Corp. The ratings were removed from CreditWatch, where they had been placed with negative implications on July 2, 2007. The outlook is stable. The ratings were placed on CreditWatch following the company's definitive merger agreement to be acquired by certain funds managed by GSO Capital Partners L.P. On Jan. 31, 2008, Reddy Ice announced the termination of this pending transaction and the execution of a settlement agreement between the company and the affiliates of GSO. In connection with the transaction termination agreement, GSO will pay Reddy Ice $21 million and in return Reddy Ice will pay GSO up to $4 million for fees and expenses associated with the merger agreement. "While the company experienced operating softness in fiscal 2007, primarily due to unfavorable weather during the company's peak revenue-generating months and higher commodity costs, we believe that Reddy Ice's credit protection measures are still adequate for its current ratings," said Standard & Poor's credit analyst Bea Chiem. Based on Reddy Ice's public guidance, Standard & Poor's estimates that leverage for the fiscal year ended Dec. 31, 2007, will be near 4.7x, relatively unchanged from pre-merger announcement levels. "However, we remain concerned about Reddy Ice's weakened operating performance, aggressive financial policy, recent management changes, and increased competition," said Ms. Chiem. If credit protection measures are weaker than expected after a full review of the company's final fiscal 2007 results (to be released by the end of February), Standard & Poor's may revise its outlook to negative over the near term. RESIDENTIAL CAPITAL: Moody's Downgrades Senior Debt Rating to 'B2' ------------------------------------------------------------------ Moody's Investors Service downgraded to B2, from Ba3, its ratings on the senior debt of Residential Capital, LLC (ResCap). Separately, the senior unsecured rating of GMAC LLC was downgraded to B1 from Ba3. The rating outlook for both firms is negative. The downgrade reflects: 1) a decline in the company's liquidity profile; 2) the risk that ResCap's net worth could fall below its minimum net worth covenant in the absence of support from its parent, which support is not assured; and, 3) Moody's belief that ResCap's franchise is impaired. In general the company's liquidity is ak due to its high concentration of secured market funding and therefore very low level of unencumbered assets. This position leaves the company vulnerable to disruptions in the wholesale markets. The previous rating had anticipated that ResCap would increase its reliance on deposits and Federal Home Loan Bank advances by originating more assets in its bank subsidiary. However this has not occurred and the migration to bank funding is uncertain. Additionally, short term liquidity concerns had been mitigated by the company's buildup of a sizable cash balance of $6.5 billion at Sept. 30, 2007. This balance declined by $2.1 billion in the fourth quarter primary due to the company being unable to sell certain international residential mortgage inventory. Of the $4.4 billion cash balance at Dec. 31, 2007, $1.4 billion is in the company's bank subsidiary and unavailable to service unsecured maturities. Moody's considers this cash balance decrease to represent a substantial decline in the company's contingent liquidity profile. ResCap recorded a $921 million loss in Q407, representing its fifth consecutive quarterly loss. During the quarter the company received a $1.1 billion capital benefit from its parent, GMAC, through GMAC purchasing ResCap debt in the open market below par and subsequently contributing this debt to ResCap at which point it was retired. This capital benefit prevented the company from violating its minimum net worth covenant of $5.4 billion at Dec. 31, 2007. Moody's believes ResCap is likely to incur additional losses over the coming quarters, possibly at a level that would reduce capital below its minimum net worth covenant. The non-performing level of ResCap's held-for-investment portfolio continues to be well above its rated peer group across loan types, and Moody's considers its loan loss allowance to be low at 23% of nonaccrual loans at Dec. 31, 2007. Additionally, it is unclear what level of reserving will be required for repurchase requirements and other contingent liabilities in the coming quarters. If ResCap's losses would result in the company violating its minimum net worth covenant, there is no guarantee that its parent, GMAC, or its ultimate parents, General Motors and Cerberus Capital Management, would provide the support required to avoid a covenant violation. Moody's has come to believe that ResCap's parents may have a limited tolerance for supporting ResCap if ResCap's performance and condition fail to meet management's expectations for improvement during the first half of 2008. GMAC's further support of ResCap could result in additional strains on its capital and liquidity positions. In relation to this, creditors' appetite to extend credit to GMAC beyond current commitments could be affected by GMAC's continued willingness to provide support to ResCap. "Beyond the horizon of the first half of 2008, we believe further support from ResCap's parents will become increasing less certain, as continued underperformance on the part of ResCap could signal a failure of the firm to regain solid footing," said Moody's Vice President Craig Emrick. Finally, Moody's believes ResCap's franchise has been impaired. "We consider ResCap to have a weak competitive position in the US mortgage sector where all of its major competitors can rely on robust retail origination channels, low cost deposit funding, and earnings diversity," said Mr. Emrick. Moody's believes the company's ability to gain market share and return to robust profitability is limited. Downgrades: Issuer: Residential Capital, LLC -- Multiple Seniority Shelf, Downgraded to a range of (P)B3 to (P)B2 from a range of (P)B1 to (P)Ba3 -- Subordinate Regular Bond/Debenture, Downgraded to B3 from B1 -- Senior Unsecured Regular Bond/Debenture, Downgraded to B2 from Ba3 Issuer: Residential Funding of Canada Finance ULC -- Senior Unsecured Regular Bond/Debenture, Downgraded to B2 from Ba3 ResCap is a subsidiary or GMAC LLC and is headquartered in Minneapolis, Minnesota. Rescap reported equity of $6.0 billion at Dec. 31, 2007. RESERVE ESTATES: Case Summary & 15 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Reserve Estates, LLC 5801 Mount Pleasant Drive Prospect, KY 40059 Bankruptcy Case No.: 08-30427 Chapter 11 Petition Date: February 4, 2008 Court: Western District of Kentucky (Louisville) Judge: Joan A. Lloyd Debtor's Counsel: Henry K. Jarrett, III, Esq. Suite 10 North First Trust Centre 200 South Fifth Street Louisville, KY 40202 Tel: () 584-1374 Fax: () 585-4009 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's list of its 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Jefferson County Sheriff Property Tax $5,126 P.O. Box 70300 Louisville, KY 40270-3000 Louisville Water Company $5,085 P.O. Box 32450 Louisville, KY 40232 Crawford Entertainment Systems $4,934 11630 Commonwealth Drive Suite 800 Louisville, KY 40299 Jefferson County Clerk Property Tax $4,778 Gresham Smith & Partners Bank Loan $3,675 Badenwarper Talbott & Roberts Bank Loan $827 Berry Floyd & Baxter Bank Loan $653 Ralph G. Hart Bank Loan $517 LG&E Bank Loan $315 Smith-Manus Bank Loan $259 Dave Burkmeier Bank Loan $0 DCB Homes Bank Loan $0 Irwin Union Bank Bank Loan $0 LaGrange Partners Bank Loan $0 Patricia Boug Bank Loan $0 RIDGEWAY COURT: Moody's Junks Notes Ratings on Poor Credit Quality ------------------------------------------------------------------ Moody's Investors Service downgraded ratings of seven classes of notes issued by Ridgeway Court Funding I, Ltd., and left on review for possible further downgrade ratings of three of these classes of notes. The notes affected by this rating action are: Class Description: $1,000,000,000 Class A1M Senior Floating Rate Notes Due November 2046 -- Prior Rating: Aaa -- Current Rating: Aa2, on review for possible downgrade Class Description: $600,000,000 Class A1Q Senior Floating Rate Notes Due November 2046 -- Prior Rating: Aaa -- Current Rating: Aa2, on review for possible downgrade Class Description: $160,000,000 Class A2 Senior Floating Rate Notes Due November 2046 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $128,000,000 Class A3 Senior Floating Rate Notes Due November 2046 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ca Class Description: $46,000,000 Class A4 Senior Floating Rate Notes Due November 2046 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Ca Class Description: $35,000,000 Class B Deferrable Floating Rate Notes Due November 2046 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca Class Description: $13,000,000 Class C Deferrable Floating Rate Notes Due November 2046 -- Prior Rating: Ba3, 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. 21, 2008, as reported by the Trustee, of an event of default caused by the Class A Principal Coverage Ratio falling below 97.5% pursuant to Section 5.1(d) of the Indenture dated July 27, 2006. Ridgeway Court Funding I, Ltd. 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 A1M Notes, Class A1Q Notes and Class A2 Notes remain on review for possible further action. ROBERT THOMAS: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Robert T. Thomas Bridget G. Thomas dba Bridget Celeste Thomas/ Bella Cibo Incorporated 8206 Argentina Houston, TX 77040 Bankruptcy Case No.: 08-30757 Chapter 11 Petition Date: February 4, 2008 Court: Southern District of Texas (Houston) Judge: Letitia Z. Clark Debtors' Counsel: Larry A. Vick, Esq. 800 W. Sam Houston Parkway, Suite 100 Houston, TX 77042 Tel: (713) 333-6440 Fax: (713) 236-1342 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a List of his Largest Unsecured Creditors. ROCK SOLID: Case Summary & Seven Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Rock Solid Stone Quarry, LLC P.O. Box 521 Florence, TX 76527 Bankruptcy Case No.: 08-60124 Chapter 11 Petition Date: February 4, 2008 Court: Western District of Texas (Waco) Debtor's Counsel: Eric R. Borsheim, Esq. 1601 Rio Grande Suite 360 Austin, TX 78701 Tel: (512) 479-7068 Fax: (512) 477-0741 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Triple S. Petroleum Trade Debt $21,000 P.O. Box 6156 Austin, TX 78762 CNH Capital Credit Card $5,100 P.O. Box 1083 Evansville, IN 47706 Wilder Diamond Tools Trade Debt $2,400 1079 West Round Grove Road Suite 300-330 Louisville, TX 75067 Capital Bearing Service Trade Debt $250 Florence Hardware Trade Debt $100 Fox Auto Parts Trade Debt $100 Zigs Exxon Trade Debt $100 RUTLAND RATED: Moody's Junks Ratings on Two Note Classes -------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible downgrade these notes issued by Rutland Rated Investments Series 31, 32, 33, 34, 35 (Millbrook 2006-4): Class Description: Series 31 (Millbrook 2006-4) USD 15,500,000 Asset Backed Securities Class A Variable Rate Credit-Linked Notes Due May 2046 -- Prior Rating: Aa2 -- Current Rating: Baa3, on review for possible downgrade Class Description: Series 32 (Millbrook 2006-4) USD 42,000,000 Asset Backed Securities Class B Variable Rate Credit-Linked Notes Due May 2046 -- Prior Rating: Aa3 -- Current Rating: Ba2, on review for possible downgrade Class Description: Series 33 (Millbrook 2006-4) USD 22,500,000 Asset Backed Securities Class C Variable Rate Credit-Linked Notes Due May 2046 -- Prior Rating: A2 -- Current Rating: B3, on review for possible downgrade In addition, Moody's also downgraded these notes: Class Description: Series 34 (Millbrook 2006-4) USD 10,000,000 Asset Backed Securities Class E Variable Rate Credit-Linked Notes Due May 2046 -- Prior Rating: Baa2 -- Current Rating: Caa3 Class Description: Series 35 (Millbrook 2006-4) USD 4,000,000 Asset Backed Securities Class D Variable Rate Credit-Linked Notes Due January 2040 -- Prior Rating: Baa1 -- Current Rating: Caa3 According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. SACO I TRUST: Moody's Junks Rating on Class B-2 Certs. ------------------------------------------------------ Moody's Investors Service has downgraded a certificate from a deal issued by SACO I Trust 2004-2. The action is based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to the expected loss. The transaction is backed by closed end second lien loans, and has seen recent losses that have completely depleted the overcollateralization. Complete rating action is: Issuer: SACO I Trust 2004-2 -- Cl. B-2, Downgraded to Caa3 from B3 SAFEGUARD HOLDINGS: Involuntary Chapter 11 Case Summary ------------------------------------------------------- Alleged Debtor: Safeguard Holdings, L.P. 2601 Redrock, Suite 201 Las Vegas, NV 89146 Case Number: 08-10924 Involuntary Petition Date: February 4, 2008 Court: District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Tim Anders Investment $90,000 1119 South Mission Road Suite 102 Fallbrook, CA 92028 Tel: (760) 522-6789 SALANDER-O'REILLY: Protocol Proposed to Identify Art Works Owners ----------------------------------------------------------------- The official committee of unsecured creditors appointed in Salander-O'Reilly Galleries LLC's chapter 11 case, the Debtor's secured lender First Republic Bank, and the gallery's chief restructuring officer have proposed procedure for figuring out who owns art works in Salander-O'Reilly's possession, William Rochelle at Bloomberg News reports. The Committee, et al., require anyone who has a claim on art to file a written notice of the claim by May 9, which claim will be reviewed by a four-man panel, Mr. Rochelle says. If the panel unanimously agree a particular art work belongs to someone else, it will be returned, according to Mr. Rochelle. The panel will comprise one member each to represent art claimants, the gallery, the committee and the bank. If there is disagreement about ownership, the owner must participate in non-binding mediation, Mr. Rochelle reports. An owner may file a lawsuit before the Bankruptcy Court to recover the art work if the dispute isn't settled. The procedures won't apply to art works not in the gallery's possession, nor will they resolve claims that art objects are subject to liens or constructive trusts, Mr. Rochelle says. Objections to the proposed procedures will be heard at a hearing Feb. 14. About Salander-O'Reilly Established in 1976, New York-based Salander-O'Reilly Galleries LLC -- http://www.salander.com/-- exhibits and manages fine art from renaissance to contemporary. On Nov. 1, 2007, three creditors filed an involuntary chapter 7 petition against the gallery (Bankr. S.D.N.Y. Case Number 07-13476). The petitioners, Carol F. Cohen of Two Swans Farm, Cavallon Family LP, and Richard Ellenberg, disclosed total claims of more than $5 million. Amos Alter, Esq., at Troutman Sanders LLP and John Koegel, Esq., at The Koegel Group LLP represent the petitioners. On Nov. 9, 2007, the Debtor's case was converted to a chapter 11 proceeding (Bankr. S.D.N.Y. Case No. 07-30005). Alan D. Halperin, Esq., at Halperin Battaglia Raicht, LLP, represents the gallery. Salander-O'Reilly Galleries is owned by Lawrence B. Salander and his wife, Julie D. Salander, of Millbrook, New York. The couple also has membership interests in galleries including non-debtor entities, Renaissance Art Investors and Salander Decorative Arts LLC. The couple filed for chapter 11 protection on Nov. 2, 2007 (Bankr. S.D.N.Y. Case No. 07-36735). Douglas E. Spelfogel, Esq. and Richard J. Bernard, Esq. at Baker & Hostetler LLP and Susan P. Persichilli, Esq. at Buchanan Ingersoll PC represent the Debtors in their restructuring efforts. When they filed for bankruptcy, Mr. and Mrs. Salander listed assets and debts between $50 million and $100 million. Prior to bankruptcy, Mr. Salander resigned as Salander-O'Reilly Galleries' manager and turned over the control to Triax Capital Advisors LLC, an independent turnaround firm. SALOMAN BROTHERS: Case Summary & Five Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Saloman Brothers Realty, LLC c/o Baywood Square Apartments 1700 Baywood Drive Bay City, TX 77414 Bankruptcy Case No.: 08-30813 Chapter 11 Petition Date: February 5, 2008 Court: Southern District of Texas (Houston) Debtor's Counsel: Rogena Jan Atkinson, Esq. The Law Offices of RJ Atkinson LLC 3617 White Oak Drive Houston, TX 77007 Tel: (713) 862-1700 Fax: (713) 862-1745 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its Five Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Bay City Water $7,251 Public Works Department 1901 5th Street Bay City, TX 77414 TXU Electric $3,300 P.O. Box 666565 Dallas, TX 75266-6565 Bay City Gas $2,900 P.O. Box 1603 Bay City, TX 77474 Allied Waste Services $1,700 8101 Little York Road Houston, TX 77016 AT&T Long Distance $263 P.O. Box 78628 Ph9oenix, AZS 85062-8628 S AND A: Case Summary & Largest Unsecured Creditor -------------------------------------------------- Debtor: S. and A. Corporation of Clinton dba Howard Johnson Express 2811 North Ashley Street Valdosta, GA 31602 Bankruptcy Case No.: 08-70147 Chapter 11 Petition Date: February 4, 2008 Court: Middle District of Georgia (Valdosta) Debtor's Counsel: William Orson Woodall, Esq. Woodall and Woodall P.O. Box 3335 1003 North Patterson Street Valdosta, GA 31604 Tel: (229) 247-1211 Fax: (229) 247-1636 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Lowndes Co. Tax Back Property Taxes $3,000 Commissioner 300 North Patterson Street Valdosta, GA 31601 SAND TECH: Oct. 31 Balance Sheet Upside-Down by CDN$1.2M -------------------------------------------------------- SAND Technology Inc.'s consolidated balance sheet at Oct. 31, 2007, showed CDN$2,245,054 in total assets and CDN$3,431,925 in total liabilities, resulting in a CDN$1,186,871 total stockholders' deficit. At Oct. 31, 2007, the company's consolidated balance also showed strained liquidity with CDN$2,001,607 in total current assets available to pay CDN$3,431,925 in total current liabilities. The company reported a net loss for the first quarter of fiscal year 2008 of CDN$304,920, on revenues of CDN$1,784,925. In comparison with the first quarter of fiscal year 2007, revenues have increased by over 21.0% and the operating loss has decreased by over 64.0%. "We are encouraged by the revenue growth over the first quarter of last year," said Arthur Ritchie, president and chief executive officer of SAND. "This gives us some indication on the level of the growing interest for our SAND/DNA products in general and our new SAND/DNA for SAP BI offering," added Ritchie. Management Raises Going Concern Doubt The company said it will continue to search for additional sources of debt and equity financing. It added that there can be no assurance that its activities will be successful and as a result there is doubt regarding the "going concern" assumption. The company said that because it has not been profitable in four out of its last five fiscal years, it has had to fund losses through a combination of sales of liquid investments and assets. The company incurred losses of CDN$7,129,930 in fiscal 2004, CDN$7,363,054 for the fiscal year ended July 31, 2005, CDN$3,926,921 for the fiscal year ended July 31, 2006 and CDN$2,526,524 for the fiscal year end July 31, 2007. Although fiscal year 2003 was profitable, the profit was due to the gain from the sale of ClarityBlue, which amounted to CDN$11,757,280. According to the company, had it not sold ClarityBlue, it would have shown a loss of CDN$1,964,199. About SAND Technology Westmount, Quebec-based SAND Technology Inc. (OTC BB: SNDTF) -- http://www.com/-- provides advanced analytic data management products. SAND Technology-based solutions include CRM analytics, financial analysis, regulatory compliance and specialized Business Intelligence applications for government and security, healthcare, telecommunications, financial services, retail and other business sectors. SAND Technology has offices in the United States, Canada, the United Kingdom and Central Europe. SAXON ASSET: Moody's Cuts and Reviews Ratings on Certificates ------------------------------------------------------------- Moody's Investors Service has downgraded and placed on review for possible downgrade three certificates from a deal issued by Saxon Asset Securities Trust 2001-3. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to the expected loss. The transaction is backed by fixed rate and adjustable rate home equity loans, and has seen recent losses that have completely depleted the overcollateralization. The pool factor is 5.5% as of the December 25th reporting date. Complete rating actions are: Issuer: Saxon Asset Securities Trust 2001-3 -- M-1, Placed on Review for Possible Downgrade, currently Aa2 -- M-2, Downgraded to B3 from Baa1 -- B, Downgraded to C from Caa3 SAYBROOK POINT: Moody's Downgrades Three Classes of Senior Notes ---------------------------------------------------------------- Moody's Investors Service downgraded these notes issued by Saybrook Point CBO, Limited: Class Description: Class A Floating Rate Senior Notes, Due 2031 -- Prior Rating: Aa1, on review for possible downgrade -- Current Rating: Baa1 Class Description: Class B Floating Rate Senior Secured Notes, Due 2036 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Ba2 Class Description: Class C Fixed Rate Senior Secured Notes, Due 2036 -- Prior Rating: Ca, on review for possible downgrade -- Current Rating: C According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. SEAGATE TECH: Board of Directors Approves $2.5BB Share Repurchase ----------------------------------------------------------------- Seagate Technology divulged that its board of directors has approved an increase in its quarterly dividend from $0.10 to $0.12 per share, effective with the dividend expected to be paid to shareholders after the conclusion of the company's third fiscal quarter of 2008. Additionally, the board of directors has authorized the company to repurchase up to an additional $2.5 billion of its outstanding common shares over the next 24 months. This new share repurchase authorization continues our commitment to enhancing shareholder value. Seagate expects to fund the share repurchase through a combination of cash on hand, future cash flow from operations and potential alternative sources of financing. Share repurchases under this program may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades, accelerated share repurchase transactions or otherwise, or by any combination of such methods. The timing and actual number of shares repurchased will depend on a variety of factors including the common share price, corporate and regulatory requirements and other market and economic conditions. The share repurchase program may be suspended or discontinued at any time. About Seagate Technology Headquartered in Grand Cayman, Cayman Islands, Seagate Technology (NYSE: STX) -- http://www.seagate.com-- is engaged in the design, manufacture and marketing of rigid disc drives. The company produces a range of disc drive products addressing enterprise applications, where its products are used in enterprise servers, mainframes and workstations; desktop applications, where its products are used in desktop computers; mobile computing applications, where the company's products are used in notebook computers, and consumer electronics applications, where its products are used in a variety of devices, such as digital video recorders, gaming devices and other consumer electronic devices that require storage. In May 2006, the company acquired Maxtor Corporation. SEAGATE TECHNOLOGY: S&P's BB+ Rating Unmoved by Share Repurchase ---------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Scotts Valley, California-based Seagate Technology (BB+/Stable/--) are not affected by the company's announcement that the board of directors has approved a $2.5 billion share repurchase program. The new program replaces a $2.5 billion authorization approved in August 2006. Similar to its prior share repurchase program, the authorization is for two years, and S&P expects it to be administered at a measured pace. Seagate's liquidity is adequate to fund a $2.5 billion program, with cash of $1.75 billion as of Dec. 31, 2007, and about $700 million of discretionary cash flow in the 12 months ended December 2007. The company is expected to maintain a moderate leverage profile. SECURE COMPUTING: S&P Lifts Rating on $110 Mil. Facility to 'BB' ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its bank loan rating on Secure Computing Corp.'s $110 million senior secured credit facility to 'BB' from 'BB-'. This action follows Secure Computing's continued repayment of its first-lien term loan. The first-lien facility, which consists of a $20 million revolving credit facility and a $90 million term loan B, is rated 'BB' (two notches above the corporate credit rating on the company). The recovery rating is revised to '1', indicating the expectation for very high (90% to 100%) recovery in the event of a payment default, from '2'. "The corporate credit rating on Secure Computing reflects its narrow business profile and secondary market positions," said Standard & Poor's credit analyst David Tsui. "These factors are offset partially by the favorable business environment in enterprise security solutions and recurring revenues based on a predictable subscription and maintenance revenue stream." Ratings List Upgraded To From -- ---- Secure Computing Corp. Senior Secured $20 mil revolv credit fac BB BB- Recovery Rating 1 2 $90 mil term ln B BB BB- Recovery Rating 1 2 SECURITIZED ASSET: Moody's Lowers and Reviews Ratings on 10 Certs. ------------------------------------------------------------------ Moody's Investors Service has downgraded and placed on review for possible downgrade 10 certificates from two deals issued by Securitized Asset Backed Receivables Trust in 2004. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to the expected loss. The transactions are backed by fixed rate and adjustable rate subprime mortgage loans originated by Decision One Mortgage Company. Both the 2004-DO1 and the 2004-DO2 are passing their respective delinquency and cumulative loss triggers thereby allowing the enhancement levels of all tranches to step-down to their respective target levels. This decrease in enhancement coupled with the back ended expected losses are the main drivers for the rating action. Complete rating actions are: Issuer: Securitized Asset Backed Receivables LLC Trust 2004-DO1 -- Cl. M-2, Placed on Review for Possible Downgrade, currently A2 -- Cl. M-3, Placed on Review for Possible Downgrade, currently A3 -- Cl. B-1, Placed on Review for Possible Downgrade, currently Baa1 -- Cl. B-2, Downgraded to B3 from Baa2 -- Cl. B-3, Downgraded to Caa2 from Baa3 Issuer: Securitized Asset Backed Receivables LLC Trust 2004-DO2 -- Cl. M-2, Placed on Review for Possible Downgrade, currently A2 -- Cl. M-3, Placed on Review for Possible Downgrade, currently A3 -- Cl. B-1, Placed on Review for Possible Downgrade, currently Baa1 -- Cl. B-2, Downgraded to B1 from Baa2 -- Cl. B-3, Downgraded to B3 from Baa3 SILHOUETTE CLOTHING: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Silhouette Clothing, Inc. dba Silhouette dba Love D 7105 Paramount Boulevard Pico Rivera, CA 90660 Bankruptcy Case No.: 08-11471 Type of Business: The Debtor retails women's clothing. Chapter 11 Petition Date: February 5, 2008 Court: Central District Of California (Los Angeles) Judge: Richard M. Neiter Debtor's Counsel: Lawrence A. Diamant, Esq. Robinson, Diamant & Wolkowitz, APC 1888 Century Park East, Suite 1500 Los Angeles, CA 90067-1702 Tel: (310) 277-7400 Fax: (310) 277-7584 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Quiksilver Vendor $96,277 15202 Graham Huntington Beach, CA 92649 Shoe Magnate, Inc. Vendor $60,488 18560 East San Jose Avenue City of Industry, CA 91748 Wells Fargo Bank Line of Credit $49,986 Bus Payment Processing P.O. Box 54349 Los Angeles, CA 90054-0439 Bank of America, N.A. Line of Credit $49,583 Wax Jean Vendor $39,203 Fortune Dynamic, Inc. Vendor $35,191 Chase Card Service Credit Card $33,466 Do & Be Vendor $33,036 Hannah Vendor $32,673 Janette Vendor $29,066 Scott Apparel, Inc. Vendor $28,817 Monteau, Inc. Vendor $28,234 Converse, Inc. Vendor $27,581 H.S. Clothing & Cielo Vendor $27,437 Clothing Illustrated, Inc. Vendor $26,653 Be Cool Vendor $27,198 To Have Fashion, Inc. Vendor $23,946 Spot Footware, Inc. Vendor $22,939 Angel Vendor $22,596 Joia Trading Co. Vendor $22,760 SOUNDVIEW HOME: Moody's Cuts Ratings on 2001, 2005 Certificates --------------------------------------------------------------- Moody's Investors Service has downgraded seven certificates from three deals issued by Soundview Home Loan Trust in 2001 and 2005. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to the expected loss. The 2001-2 and 2005-1 transactions are backed by first and second-lien, fixed and adjustable-rate subprime mortgage loans. The 2005-B transaction is backed by closed end second lien loans, and has seen recent losses that have completely written-off four non-rated tranches. Complete rating actions are: Issuer: Soundview Home Equity Loan Asset-Backed Certificates, Series 2001-2 -- Cl. M-2, Downgraded to Baa2 from A2 -- Cl. M-3, Downgraded to B1 from Ba2 Issuer: Soundview Home Loan Trust 2005-1 -- Cl. M-8, Downgraded to Ba1 from Baa2 -- Cl. M-9, Downgraded to Ba3 from Baa3 -- Cl. B-1, Downgraded to Caa1 from Ba2 Issuer: Soundview Home Loan Trust 2005-B -- Cl. M-9, Downgraded to B3 from Baa3 SPECIALTY UNDERWRITING: Moody's Junks Rating on Class B-3 Certs. ---------------------------------------------------------------- Moody's Investors Service has downgraded one certificate and placed on review for possible downgrade nine certificates from three deals issued by Specialty Underwriting and Residential Finance in 2005. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to the expected loss. The transactions are backed by subprime mortgage loans. Complete rating actions are: Issuer: Specialty Underwriting and Residential Finance Series 2005-AB1 -- Cl. M-4, Placed on Review for Possible Downgrade, currently A3 -- Cl. B-1, Placed on Review for Possible Downgrade, currently Baa1 -- Cl. B-2, Placed on Review for Possible Downgrade, currently Baa3 -- Cl. B-3, Downgraded to Caa2 from Ba2 Issuer: Specialty Underwriting and Residential Finance Trust, Series 2005-BC1 -- Cl. B-1, Placed on Review for Possible Downgrade, currently Baa1 -- Cl. B-2, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. B-3, Placed on Review for Possible Downgrade, currently Baa3 Issuer: Specialty Underwriting and Residential Finance Trust, Series 2005-BC2 -- Cl. B-2, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. B-3, Placed on Review for Possible Downgrade, currently Baa3 -- Cl. B-4, Placed on Review for Possible Downgrade, currently Ba1 STRUCTURED ADJUSTABLE: Moody's Pares Rating on Class M5 to 'B3' --------------------------------------------------------------- Moody's Investors Service has downgraded a certificate and placed on review for possible downgrade another certificate from a deal issued by Structured Adjustable Rate Mortgage Loan Trust 2005-10. The actions are based on the analysis of the credit enhancement provided by subordination and excess spread relative to the expected loss. The transaction is backed by Alt-A mortgage loans. Complete rating actions are: Issuer: Structured Adjustable Rate Mortgage Loan Trust 2005-10 -- Cl. M3, Placed on Review for Possible Downgrade, currently A3 -- Cl. M5, Downgraded to B3 from Baa3 STRUCTURED ASSET: Fitch Adjusts Ratings Basing on Loan Performance ------------------------------------------------------------------ Fitch Ratings has taken these rating actions on Structured Asset Securities Corporation mortgage pass-through certificates. Affirmations total $826.3 million and downgrades total $736.6 million. In addition, $38.5 million is placed or remains on Rating Watch Negative. Break Loss percentages and Loss Coverage Ratios for each class, rated 'B' or higher, are included with the rating actions as: Series 2005-S1 -- $27.3 million class M2 affirmed at 'AA+' (BL: 94.83, LCR: 4.86); -- $14.3 million class M3 affirmed at 'AA' (BL: 81.77, LCR: 4.19); -- $28.7 million class M4 affirmed at 'A+' (BL: 53.17, LCR: 2.73); -- $6.3 million class M5 rated 'A', remains on Rating Watch Negative (BL: 46.14, LCR: 2.37); -- $5.2 million class M6 rated 'BBB+', remains on Rating Watch Negative (BL: 38.86, LCR: 1.99); -- $5.0 million class M7 rated 'BBB-', remains on Rating Watch Negative (BL: 31.65, LCR: 1.62); -- $3.5 million class M8 rated 'B', remains on Rating Watch Negative (BL: 26.35, LCR: 1.35); -- $5.3 million class B1 remains at 'C/DR6', and is removed from Rating Watch Negative: -- $2.9 million class B2 remains at 'C/DR6', and is removed from Rating Watch Negative; -- $2.5 million class B3 remains at 'C/DR6'. Deal Summary -- Originators: Aurora (34%), American Home (13%), Option One (11%); -- 60+ day Delinquency: 14.62%; -- Realized Losses to date (% of Original Balance): 5.31%; -- Expected Remaining Losses (% of Current Balance): 19.49%; -- Cumulative Expected Losses (% of Original Balance): 8.74%. Series 2005-S2 -- $12.9 million class M1 affirmed at 'AA+' (BL: 94.57, LCR: 3.42); -- $10.7 million class M2 affirmed at 'AA' (BL: 82.98, LCR: 3); -- $8.7 million class M3 affirmed at 'AA-' (BL: 71.72, LCR: 2.6); -- $7.9 million class M4 affirmed at 'A+' (BL: 61.45, LCR: 2.22); -- $7.5 million class M5 affirmed at 'A' (BL: 51.67, LCR: 1.87); -- $5.9 million class M6 affirmed at 'A-' (BL: 43.78, LCR: 1.58); -- $5.3 million class M7 rated 'BBB', remains on Rating Watch Negative (BL: 36.50, LCR: 1.32); -- $4.5 million class M8 downgraded to 'B' from 'BB', and remains on Rating Watch Negative (BL: 30.21, LCR: 1.09); -- $4.3 million class M9 downgraded to 'CC/DR4' from 'B', and removed from Rating Watch Negative; -- $7.3 million class M10 remains at 'C/DR6'; -- $2.9 million class B1 remains at 'C/DR6'. Deal Summary -- Originators: Aurora (40%), Fieldstone (23%), Accredited (14%); -- 60+ day Delinquency: 15.31%; -- Realized Losses to date (% of Original Balance): 7.41%; -- Expected Remaining Losses (% of Current Balance): 27.62%; -- Cumulative Expected Losses (% of Original Balance): 12.85%. Series 2005-S3 -- $14.6 million class M1 affirmed at 'AA+' (BL: 94.62, LCR: 3.29); -- $19.7 million class M2 affirmed at 'AA' (BL: 83.31, LCR: 2.9); -- $12.5 million class M3 affirmed at 'AA-' (BL: 73.86, LCR: 2.57); -- $11.6 million class M4 affirmed at 'A+' (BL: 64.62, LCR: 2.25); -- $11.1 million class M5 affirmed at 'A' (BL: 55.68, LCR: 1.94); -- $10.2 million class M6 affirmed at 'A-' (BL: 47.20, LCR: 1.64); -- $9.1 million class M7 affirmed at 'BBB' (BL: 39.49, LCR: 1.37); -- $8.3 million class M8 rated 'BB', placed on Rating Watch Negative (BL: 32.46, LCR: 1.13); -- $7.5 million class M9 downgraded to 'C/DR4' from 'B+'; -- $9.1 million class M10 downgraded to 'C/DR6' from 'B'; -- $7.7 million class M11 revised to 'C/DR6' from 'C/DR5'; -- $3.9 million class B1 remains at 'C/DR6'. Deal Summary -- Originators: Aurora (29%), Option One (23%), Fremont (15%); -- 60+ day Delinquency: 15.35%; -- Realized Losses to date (% of Original Balance): 9.10%; -- Expected Remaining Losses (% of Current Balance): 28.77%; -- Cumulative Expected Losses (% of Original Balance): 15.6%. Series 2005-S5 -- $44 million class A2 affirmed at 'AAA' (BL: 90.80, LCR: 2.67); -- $37.4 million class M1 affirmed at 'AA+' (BL: 73.13, LCR: 2.15); -- $32.5 million class M2 downgraded to 'A' from 'AA' (BL: 57.57, LCR: 1.69); -- $14.2 million class M3 downgraded to 'BBB' from 'AA-' (BL: 50.69, LCR: 1.49); -- $30.3 million class M4 downgraded to 'B' from 'BBB' (BL: 36.03, LCR: 1.06); -- $10.5 million class M5 downgraded to 'C/DR5' from 'BBB-'; -- $11.1 million class M6 downgraded to 'C/DR6' from 'BB'; -- $9.9 million class M7 downgraded to 'C/DR6' from 'B+'; -- $9.9 million class M8 remains at 'C/DR6'; -- $8.9 million class B1 remains at 'C/DR6'. Deal Summary -- Originators: Aurora (39%), Option One (35%), Fremont (14%); -- 60+ day Delinquency: 17.05%; -- Realized Losses to date (% of Original Balance): 8.28%; -- Expected Remaining Losses (% of Current Balance): 33.97%; -- Cumulative Expected Losses (% of Original Balance): 19.76%. Series 2005-S6 -- $60.9 million class A2 affirmed at 'AAA' (BL: 83.08, LCR: 2.21); -- $26.1 million class M1 affirmed at 'AA+' (BL: 69.34, LCR: 1.84); -- $22.3 million class M2 downgraded to 'A' from 'AA-' (BL: 57.57, LCR: 1.53); -- $10.3 million class M3 downgraded to 'BBB' from 'A' (BL: 52.10, LCR: 1.38); -- $14.8 million class M4 downgraded to 'BB' from 'BBB+' (BL: 44.19, LCR: 1.17); -- $10.8 million class M5 downgraded to 'B' from 'BBB-' (BL: 38.38, LCR: 1.02); -- $6.5 million class M6 downgraded to 'C/DR6' from 'BB+'; -- $11.3 million class M7 downgraded to 'C/DR6' from 'B+'; -- $7.2 million class M8 downgraded to 'C/DR6' from 'B'; -- $6.5 million class M9 remains at 'C/DR6'; -- $3.7 million class B1 remains at 'C/DR6'; -- $5.0 million class B2 remains at 'C/DR6'; -- $4.9 million class B3 remains at 'C/DR6'. Deal Summary -- Originators: Aurora (54%), Ameriquest (35%); -- 60+ day Delinquency: 13.71%; -- Realized Losses to date (% of Original Balance): 9.62%; -- Expected Remaining Losses (% of Current Balance): 37.67%; -- Cumulative Expected Losses (% of Original Balance): 23.82%. Series 2005-S7 -- $10.6 million class A1 affirmed at 'AAA' (BL: 98.56, LCR: 3.92); -- $141.1 million class A2 affirmed at 'AAA' (BL: 63.50, LCR: 2.53); -- $26.7 million class M1 affirmed at 'AA+' (BL: 53.80, LCR: 2.14); -- $25.1 million class M2 affirmed at 'AA' (BL: 44.65, LCR: 1.78); -- $11.2 million class M3 downgraded to 'A' from 'AA-' (BL: 40.53, LCR: 1.61); -- $8.8 million class M4 downgraded to 'BBB' from 'A+' (BL: 37.24, LCR: 1.48); -- $13.0 million class M5 downgraded to 'BB' from 'A-' (BL: 32.30, LCR: 1.28); -- $8.8 million class M6 downgraded to 'BB' from 'BBB' (BL: 28.81, LCR: 1.15); -- $7.7 million class M7 downgraded to 'B' from 'BBB-' (BL: 25.52, LCR: 1.01); -- $7.2 million class M8 downgraded to 'C/DR4' from 'BB'; -- $7.7 million class M9 downgraded to 'C/DR5' from 'B+'; -- $6.6 million class B downgraded to 'C/DR6' from 'B'. Deal Summary -- Originators: Aurora (54%), Ameriquest (35%); -- 60+ day Delinquency: 8.65%; -- Realized Losses to date (% of Original Balance): 3.22%; -- Expected Remaining Losses (% of Current Balance): 25.15%; -- Cumulative Expected Losses (% of Original Balance): 16.3%. Series 2006-ARS1 -- $88.2 million class A1 downgraded to 'CCC/DR3' from 'BBB-'; -- $13.9 million class M1 downgraded to 'C/DR6' from 'BB'; -- $12.1 million class M2 downgraded to 'C/DR6' from 'B'; -- $5.9 million class M3 downgraded to 'C/DR6' from 'B-/DR2'; -- $5.3 million class M4 downgraded to 'C/DR6' from 'B-/DR2'; -- $5.5 million class M5 downgraded to 'C/DR6' from 'B-/DR2'; -- $5.1 million class M6 remains at 'C/DR6'. Deal Summary -- Originators: Argent (100%); -- 60+ day Delinquency: 19.31%; -- Realized Losses to date (% of Original Balance): 17.47%; -- Expected Remaining Losses (% of Current Balance): 58.88%; -- Cumulative Expected Losses (% of Original Balance): 51.74%. Series 2006-S1 -- $95.9 million class A1 affirmed at 'A+' (BL: 70.21, LCR: 2.01); -- $44.1 million class A2 downgraded to 'A' from 'A+' (BL: 52.69, LCR: 1.51); -- $21.1 million class M1 downgraded to 'BB' from 'BBB+' (BL: 42.93, LCR: 1.23); -- $9.9 million class M2 downgraded to 'B' from 'BBB' (BL: 38.31, LCR: 1.09); -- $11.0 million class M3 downgraded to 'CC/DR4' from 'BB+'; -- $10.1 million class M4 downgraded to 'C/DR6' from 'BB-'; -- $7.5 million class M5 downgraded to 'C/DR6' from 'B'; -- $6.1 million class M6 remains at 'C/DR6'; -- $5.7 million class M7 remains at 'C/DR6'; -- $5.6 million class M8 remains at 'C/DR6'. Deal Summary -- Originators: Aurora (96%); -- 60+ day Delinquency: 9.65%; -- Realized Losses to date (% of Original Balance): 7.61%; -- Expected Remaining Losses (% of Current Balance): 35.00%; -- Cumulative Expected Losses (% of Original Balance): 24.83%. Series 2006-S2 -- $45.8 million class A1 affirmed at 'AAA' (BL: 97.56, LCR: 2.58); -- $98.4 million class A2 affirmed at 'AAA' (BL: 77.62, LCR: 2.06); -- $106.6 million class M1 downgraded to 'BBB' from 'A+' (BL: 49.60, LCR: 1.31); -- $34.7 million class M2 downgraded to 'B' from 'BBB+' (BL: 40.16, LCR: 1.06); -- $13.7 million class M3 downgraded to 'CC/DR4' from 'BBB'; -- $17.3 million class M4 downgraded to 'C/DR6' from 'BBB-'; -- $14.7 million class M5 downgraded to 'C/DR6' from 'BB'; -- $9.1 million class M6 downgraded to 'C/DR6' from 'BB-'; -- $8.8 million class M7 downgraded to 'C/DR6' from 'B+'; -- $6.5 million class M8 downgraded to 'C/DR6' from 'B'; -- $6.5 million class M9 remains at 'C/DR6'; -- $5.2 million class B1 remains at 'C/DR6'; -- $6.8 million class B2 remains at 'C/DR6'; -- $1.3 million class B3 remains at 'C/DR6'. Deal Summary -- Originators: Aurora (100%); -- 60+ day Delinquency: 13.19% -- Realized Losses to date (% of Original Balance): 5.84%; -- Expected Remaining Losses (% of Current Balance): 37.76%; -- Cumulative Expected Losses (% of Original Balance): 27.47%. The rating actions are based on deterioration in the relationship between credit enhancement and expected losses and reflect continued poor loan performance and home price weakness. Minimum LCR's specifically for subprime second lien transactions are: 'AAA': 2.00; 'AA': 1.75; 'A': 1.50; 'BBB': 1.30; 'BB' 1.10; 'B': 1.00. TEMBEC INC: Furnishes Updates on Proposed Recapitalization ---------------------------------------------------------- Tembec Inc. yesterday provided an update on its proposed recapitalization transaction disclosed on Dec. 19, 2007. -- Additional noteholders have executed support agreements in which they agreed to vote in favor of and to support the recapitalization. Noteholders have now agreed to vote in excess of $795 million of notes in favor of and to support the recapitalization, representing in excess of 66% of the total amount of notes outstanding. -- As contemplated in the key terms of the recapitalization announced on Dececember 19, all additional backstop deals with Tembec have now been completed. -- Tembec received written notice from the financial advisors to the informal committee of noteholders, confirming the committee's continuing support for the recapitalization and advising Tembec that they have informed Jolina Capital Inc. and its advisors of such views in respect of the recapitalization. Tembec stakeholders are also reminded of these: -- As previously stated, a management proxy circular relating to the recapitalization was mailed to registered noteholders of Tembec Industries Inc. and registered shareholders of Tembec Inc. on Jan. 29, 2008. -- Qualifying noteholders who wish to participate in the new $300 million loan to Tembec Industries Inc. must deliver properly executed new loan participation forms to Computershare Investor Services prior to Feb. 15, 2008. Details regarding participation in the new loan are contained in the proxy circular. -- A special meeting of shareholders and a meeting of noteholders will be held on Feb. 22, 2008 relating to the approval of the recapitalization. Proxies for the meetings must be received by Computershare Investor Services prior to 5:00 p.m. (Toronto time) on Feb. 20, 2008. -- A hearing for the court order approving the recapitalization has been set for Feb. 27, 2008. Implementation of the recapitalization is expected to occur on Feb. 29, 2008. Tembec indicated that it will continue to solicit and obtain further support for the recapitalization. Further information concerning the meetings, the completion of proxies and participation in the new loan is provided in the proxy circular and related materials, which are available on: -- SEDAR: http://www.sedar.com -- EDGAR: http://www.sec.gov/edgar.shtml -- Tembec's Web site: http://www.tembec.com/ Questions regarding the meetings or participation in the new loan should be directed to Georgeson Shareholder Communications Canada Inc. through telephone numbers, 1-866-783-6756. As reported in the Troubled Company Reporter on Feb. 4, 2008, Jolina Capital Inc. has presented the terms of its proposal for the recapitalization of Tembec Inc. at a meeting of the holders of Tembec Industries Inc. unsecured senior notes respectively due June 2009, February 2011 and March 2012. The meeting was convened after Tembec's rejection of the Jolina Proposal and Tembec's invitation to Jolina to make the details of its proposal available to Tembec's stakeholders through a public statement. News Say Bondholders Balk at Recapitalization Plan The Canadian Press stated Tuesday that a number of bondholders have united to object to Tembec Inc.'s recapitalization as offered by Jolina Capital. This rejection, based on the report, may likely lead Tembec to go into bankruptcy under Companies Creditors' Arrangment Act (Canada) to allow the company get other refinancing. According to Canadian Press, creditors who were at last week's meeting with Jolina Capital asserted that "a disproportionate power" will be bestowed upon Jolina chairman Emanuele Saputo when the recapitalization is completed. Mr. Saputo was once part of Tembec's board of directors and presently owns about 19.4% stake at Tembec, according to the news. But many speculate that Mr. Saputo will gain influence over Tembec's $1.2 billion recapitalization at a Feb. 22, 2008 meeting if the plan earns at least one-third of the votes, report related. About two-thirds of bondholders and shareholders must support the recapitalization during separate conventions, Canadian Press said. Mr. Saputo's consultant, Neil Rothschild told Canadian Press that his client remains indecisive. Tembec refused to comment about the possibility of CCAA filing, Canadian Press added. About Tembec Headquartered in Montreal Quebec, Tembec Inc. (TSC:TBC) -- http://www.tembec.com -- operates an integrated forest products business. The company's operations consist of four business segments: forest products, pulp, paper and chemicals. The forest products segment consists primarily of forest and sawmills operations, which produce lumber and building materials. The pulp segment includes the manufacturing and marketing activities of a number of different types of pulps. The paper segment consists primarily of production and sales of newsprint and bleached board. The chemicals segment consists primarily of the transformation and sale of resins and pulp by-products. As of Sept. 29, 2007, Tembec operated manufacturing facilities in New Brunswick, Quebec, Ontario, Manitoba, Alberta, British Columbia, the states of Louisiana and Ohio, as well as in Southern France. * * * Standard & Poor's placed Tembec Inc.'s long term foreign and local issuer credit ratings at 'CC' in Dec. 20, 2007. TOUSA INC: Court Sets Feb. 28 Final Hearing on $650MM DIP Loan -------------------------------------------------------------- The Honorable John K. Olson of the United States Bankruptcy Court for the Southern District of Florida, Miami Division, will convene a hearing February 28, 2008, to consider the entry of a final order with respect to the Debtors' DIP Financing request. The Debtors is seeking permission to borrow up to $650,000,000 to fund operations and other charges while in bankruptcy. As reported in the Troubled Company Reporter on Feb. 1, TOUSA permitted the Debtors to borrow, on an interim basis, up to $134,574,000 from Citigroup Global Markets Inc. and a syndicate of lenders to pay for their normal operating expenses. The Court also permitted the Debtors to pay DIP financing fees. Aurelius Capital Master, Ltd., Aurelius Capital Partners, LP, Attentus CDO I, Ltd., Attentus CDO II, Ltd., Trapeza CDO X, Ltd., GSO Special Situations Fund L.P., GSO Special Situations Overseas Master Fund Ltd., GSO Credit Opportunities Fund (Helios), L.P., K Squared Capital Master Fund L.P. and Lyxor/K Squared Capital Fund Ltd. tried to block approval of the Debtors' request to obtain financing on an interim basis. While the Noteholders agree that the Debtors have long needed a financial restructuring and welcome the Debtors filing for bankruptcy protection, they argued that the Debtors cannot demonstrate an "emergency" situation exist to warrant approval of the proposed DIP financing. The Noteholders lobbied to the Court to allow interested parties to conduct discovery. "The DIP Motion represents the continuation of the Debtors' damaging pattern of sacrificing its unsecured noteholders' interests to mollify their bank lenders," Paul J. Battista, Esq., at Genovese, Joblove & Battista, P.A., in Miami, Florida, said on the Noteholders' behalf. Mr. Battista argued that TOUSA Inc. forced its subsidiaries to grant TOUSA's First and Second Lien Term Loan Lenders secured guaranties of $500 million and to guaranty its $700 million revolver. He said the TOUSA Subsidiaries did not receive any consideration from the $500 million in new financing nor from certain draws from the refinanced revolver -- draws knowingly made in violation of the Noteholders' indenture. "These loans merely refinanced parent TOUSA's debt to its lenders that had commenced collection lawsuits," he said. The TOUSA Subsidiaries' guaranties of the First and Second Lien Term Loans, along with debt under the Debtors' revolving credit facility, undeniably rendered the Debtors insolvent, Mr. Battista said. "Avoidance of this debt likely would pay the TOUSA Subsidiaries' unsecured creditors in full." Mr. Battista told the Court that virtually every provision of the proposed DIP financing promotes the Prepetition Lenders' interest at the expense of those of the TOUSA Subsidiaries' unsecured creditors, citing that: * The Prepetition Lenders are not entitled to adequate protection. The Noteholders intend to prove that the Prepetition Lenders are not secured by liens of the TOUSA Subsidiaries and thus, are not entitled to any adequate protection. * The Debtors propose to "roll-up" the prepetition revolver and the prepetition First Lien Term Loan. The Debtors seek to convert illegally more than $515 million of prepetition debt into postpetition secured, superpriority debt. "The Debtors fail to disclose that the DIP Lenders have agreed to provide DIP financing even if the Court does not approve the Roll-up," Mr. Battista says. * The proposed DIP Financing unfairly prejudices prosecution of claims against Prepetition Lenders. The Debtors release all claims against the Prepetition Lenders and instead, leave to other parties the right to file challenges to the Prepetition claims within 60 to 75 days, but prohibit funding of any challenges. * The DIP Order Should Provide Immediate Standing to creditors to prosecute claims against the Prepetition Lenders. Otherwise, the proposed brief investigation period will decrease further by the time necessary to litigate standing. The proposed financing is procedurally inappropriate, Mr. Battista said. "[Moreover], the Debtors cannot prove immediate and irreparable harm because they do not need the money," Mr. Battista avers. "Instead, as the Debtors all but concede, they are seeking approval on an interim basis solely as a public relations coup for their vendors and suppliers." In its Interim DIP Order, the Court clarified that no portion of the DIP Obligations incurred by the Debtors prior to the Final DIP Hearing will be used to repay any portion of the Prepetition Lender Obligations. Subject to the Carve-Out for the fees of bankruptcy professionals and U.S. Trustee Fees, all DIP Obligations constitute allowed superpriority administrative expense claims under Section 364(c)(1) of the Bankruptcy Code, the Court held. A full-text copy of the Interim DIP Order is available for free at http://bankrupt.com/misc/TOUSA_InterimDIPorder.pdf TOUSA INC: Amends Value of Assets and Debts as of September 30 --------------------------------------------------------------- TOUSA Inc. and its debtor affiliates amended their Chapter 11 voluntary petition to report $2,291,688,010 in assets and $2,247,566,361 in liabilities as of Sept. 30, 2007. In its original petition, the company reflected roughly $2.27 billion in assets and $1.76 billion in liabilities as of the end of the 2007 third quarter. Tousa spokesman Thomas Becker told Bloomberg News that the discrepancy in the reporting of the company's financial date was a "clerical error." Plan Term Sheet Filed The company also relates that it has met with the advisors for certain holders of its Senior Notes and Senior Subordinated Notes to discuss de-leveraging objectives and a general process for a comprehensive restructuring. TOUSA avers that it has successfully negotiated a plan term sheet with certain holders of Senior Notes, and on January 28, 2008, entered into a Restructuring Support Agreement with those holders. The Plan Term Sheet provides, among other things, that the Plan will provide these treatment for key constituencies: * Refinance TOUSA's Revolving Loan Facility and the First Lien Term Debt by borrowings under the DIP financing * Reinstate TOUSA's Second Lien Term Debt * Satisfy the claims of the holders of Senior Notes by transferring to them substantially all of the common stock of reorganized TOUSA as well as an interest in, and entitlement to proceeds received by, a litigation trust to be established pursuant to the terms of the Plan * Satisfy the claims of other general unsecured creditors not paid pursuant to Court order during TOUSA's Chapter 11 cases by transferring to them a pro rata share of common stock of reorganized TOUSA and an interest in, and entitlement to proceeds received by, the Litigation Trust * Satisfy the claims of the holders of Subordinated notes by granting them an interest in, and entitlement to proceeds received by, the Litigation Trust as well as additional consideration that likely will take the form of warrants to acquire a specified percentage of common stock of reorganized TOUSA * Cancel the Preferred Stock and the common stock of TOUSA The Plan Term Sheet also contemplates that substantially all of TOUSA's prepetition claims, rights and causes of action would be assigned and transferred to the Litigation Trust, to be pursued, for the benefit of unsecured creditors, on the Plan Effective Date. The Plan Term Sheet also sets forth certain other agreed provisions and mechanisms, including: (i) a mechanism for appointing directors of reorganized TOUSA, (ii) provision for exit financing of the reorganized Company, (iii) a provision that the shares of reorganized TOUSA will be publicly traded on one of three identified exchanges; and (iv) an agreement that the parties will explore up to a $200,000,000 new-money investment, in addition to exit financing. The Plan Term Sheet provides that the holders of Senior Notes will have an opportunity to participate in the New Investment, and the holders of Senior Notes will have the first opportunity to lead or backstop any New Investment, provided that their commitment is on market terms. The Restructuring Support Agreement obligates the Consenting Holders to, among other things, vote to support a plan of reorganization consistent with the terms set forth in the Restructuring Support Agreement and the Plan Term Sheet. The Restructuring Support Agreement will terminate on its terms if TOUSA does not meet certain milestones by specified deadlines. Among other things, the Restructuring Support Agreement requires that: (1) TOUSA and each of the Consenting Holders must agree upon a comprehensive business plan within 30 days after the Petition Date; (2) The Bankruptcy Court must enter a final, non-appealable order approving DIP financing within 60 days after TOUSA's bankruptcy filing; (3) TOUSA must file the Plan and corresponding disclosure statement, in a form acceptable to each of the Consenting Holders, within 60 days after the Petition Date; (4) The disclosure statement is approved within 120 days after the Petition Date; and (5) A Plan confirmation order, in form and substance acceptable to TOUSA and each of the Consenting Holders, is entered within 180 days after the Petition Date. TOUSA believes that the debt-for-equity exchange represented by the Plan Term Sheet and the related Restructuring Support Agreement would accomplish the much-needed de-leveraging of the its balance sheet and would provide for an expeditious emergence from Chapter 11, according to TOUSA Inc. Executive Vice President and Chief Financial Officer Tommy L. McAden. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08- 10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq. of Kirkland & Ellis LLP and Paul Steven Singerman, Esq. of Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. (TOUSA Bankruptcy News; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945- 7000). TOUSA INC: Taps Berger Singerman as Florida and Conflicts Counsel ----------------------------------------------------------------- TOUSA Inc. and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Southern District of Florida to employ Berger Singerman P.A., as their Florida counsel and conflicts counsel, nunc pro tunc to their bankruptcy filing. Executive vice president and chief financial officer of TOUSA Inc. Tommy L. McAden believes that Berger Singerman is qualified to advise the Debtors on their relation with, and responsibilities to, creditors and other interested parties. The Debtors are simultaneously seeking Court approval to hire Kirkland & Ellis LLP, as its lead counsel. Mr. McAden notes that Kirkland & Ellis does not operate or maintain an office in Florida. As the Debtors' local counsel, Berger Singerman will: -- advise the Debtors and Kirkland & Ellis with respect to their responsibilities in complying with the U.S. Trustee's Guidelines and Reporting Requirements and with the Local Rules of the Court; -- represent the Debtors in matters in which Kirkland & Ellis has as a conflict; and -- collaborate with Kirkland & Ellis on all matters within the scope of its retention as general counsel to the Debtors in respect of which it seeks Berger Singerman's assistance as Florida counsel and undertake other assignments as requested by the Debtors and their general counsel. Berger Singerman will exert efforts to avoid duplication of its services with those of Kirkland & Ellis'. Berger Singerman will be paid on an hourly basis at its customary hourly rates: Professionals Hourly Rate ------------- ----------- Attorneys $250 to $475 Paralegals $135 to $160 Paul Steven Singerman, Esq., a shareholder of Berger Singerman, relates that the firm received a $50,000 prepetition retainer. The firm also received $238,656 representing prepetition fees and costs and supplement retainer. Mr. Singerman assures the Court that Berger Singerman is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code and does not hold or represent any interest adverse to the Debtors' estates. U.S. Trustee Responds Donald F. Walton, U.S. Trustee for Region 21, asserts that the Debtors' request was filed before the formation of a creditors committee, and includes materials the Court and parties in interest need to review and evaluate. Thus, the U.S. Trustee asks the Court to deny the Debtors' request or reschedule the hearing on the request until a creditors committee, if appointed, and other parties in interest have had the time to evaluate and object, if necessary. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq. of Kirkland & Ellis LLP and Paul Steven Singerman, Esq. of Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. ( TOUSA Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). TOUSA INC: Taps Kurtzman Carson as Notice and Claims Agent ---------------------------------------------------------- TOUSA Inc. and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Southern District of Florida to employ Kurtzman Carson Consultants LLC, as their notice, claims and balloting agent. The Debtors relate that they may have more than 50,000 potential creditors and parties in interest that must be served with notices for various purposes. The Debtors believe that Kurtzman is well qualified to provide comprehensive solutions to design legal notice programs and manage claims issues in their Chapter 11 cases. Kurtzman is expected to perform the necessary administrative tasks to effectively operate the Debtors' Chapter 11 cases. (1) For noticing and claims processing tasks, Kurtzman will: (a) prepare and serve required notices on behalf of the Debtors, including: * a notice of the commencement of the Debtors' Chapter 11 cases and the initial meeting of creditors under Section 341(a) of the Bankruptcy Code; * a notice of the claims bar date; * notices of objections to claims; * notices of any hearings on a disclosure statement and confirmation of the Debtors' plan or plans of reorganization; and * other miscellaneous notices as the Debtors or the Court may deem necessary or appropriate for an orderly administration of the Debtors' Chapter 11 cases; (b) prepare for filing with the Clerk of the Court's Office a certificate or affidavit of service that includes an alphabetical list of persons on whom the notice was served along with their addresses and the date and manner of service; (c) receive, examine, and maintain copies of all proofs of claim and proofs of interest filed in the Debtors' Chapter 11 cases; (d) maintain official claims registers in the Debtors' Chapter 11 cases by docketing all proofs of claim and proofs of interest in a claims database; (e) implement necessary security measures to ensure the completeness and integrity of the claims registers; (f) transmit to the Clerk's Office a copy of the claims registers on a weekly basis unless the Clerk's Office requests a more or less frequent basis; (g) maintain an up-to-date mailing list for all entities that have filed proofs of claim or proofs of interest and make that list available upon request to the Clerk's Office or any party in interest; (h) provide access to the public for examination of copies of the proofs of claim or proofs of interest filed in the Debtors' Chapter 11 cases without charge during regular business hours; (i) record all transfers of claims pursuant to Rule 3001(e) of the Federal Bankruptcy Rules of Bankruptcy Procedure, and provide notice of those transfers as required by Bankruptcy Rule 3001(e); (j) comply with applicable federal, state, municipal, and local statutes, ordinances, rules, regulations, orders and other requirements; (k) provide temporary employees to process claims as necessary; (l) comply with other conditions and requirements as the Clerk's Office or the Court may at any time prescribe; and (m) provide other claims processing, noticing, and related administrative services as may be requested from time to time by the Debtors. (2) For balloting functions, Kurtzman will: (a) print ballots including the printing of creditor and shareholder specific ballots; (b) prepare voting reports by plan class, creditor, or shareholder and amount for review and approval by the Debtors and their counsel; (c) coordinate the mailing of ballots, disclosure statement, and plan of reorganization to all voting and non-voting parties and provide affidavit of service; (d) establish a toll-free "800" number to receive and address questions regarding voting on the plan; (e) receive ballots at a post office box, inspect ballots for conformity to voting procedures, date stamping and numbering ballots consecutively, and tabulate and certify the results; and (f) provide balloting services as may be requested from time to time by the Debtors. For the contemplated services, Kurtzman will be paid based on the firm's hourly rates: Professional Hourly Rate ------------ ----------- Clerical $45 to $65 Project Specialists $80 to $140 Consultants $145 to $225 Senior Consultants & $230 to $295 Senior Manager Consultants Technology & Programming $130 to $195 Consultants Kurtzman received a $50,000 one time retainer fee from the Debtors in October 2007. Kurtzman will also be reimbursed for necessary out-of-pocket expenses it incurs and the Debtors will make an advance payment when the firm's expenses exceed $10,000 monthly. Jonathan A. Carson, president of Kurtzman Carson, assures the Court that his firm does not hold or represent any interest adverse to the Debtors, their estates, their creditors and any parties in interest. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq. of Kirkland & Ellis LLP and Paul Steven Singerman, Esq. of Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. ( TOUSA Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). TUESDAY MORNING: Earnings Slide to $20M in Qtr. Ended December 31 ----------------------------------------------------------------- Tuesday Morning Corporation reported financial results for three and six months ended Dec. 31, 2007. The company reported $20.5 million net income for the second quarter ended December 31 compared to $23.8 million net income during the same quarter last year. For the six month period ended Dec. 31, 2007, net income was $21.7 million compared to net income of $27 million for the same period in the prior year. "We are aggressively responding to the pressures of the home furnishings macro environment," Kathleen Mason, president and chief executive officer, stated. "We believe the flexibility of our format will enable us to continue generating positive cash flows and long term profitability." Liquidity and Capital Resources Net cash flows provided by operating activities for the six months ended Dec. 31, 2007, was $63.6 million due to net income, adjusted for: -- non-cash items of $32.1 million; -- an increase in inventory of $29.2 million; -- a decrease in accounts payable of $16.6 million; and -- an increase in income taxes payable of $14.7 million. The increase in inventory and the decrease in accounts payable is a result of the timing of inventory receipts and the related payments to vendors. There has been no material change in the company's payment policy to vendors. The increase in income taxes payable is the result of higher pretax earnings in the six month period ended Dec. 31, 2007, compared to the six month period ended June 30, 2007. Net cash used in investing activities of $6.1 million for the six months ended Dec. 31, 2007, is a result of capital expenditures that relate to opening new stores and store relocations in addition to the purchase of warehouse equipment and corporate hardware and software. Net cash used in financing activities for the six months ended Dec. 31, 2007, is due to repayments under the revolving credit facility of $168,000 net of borrowings of $118,500. At Dec. 31, 2007, the company has $7 million outstanding under the revolving credit facility, $8.9 million of outstanding letters of credit and availability of $184.1 million under the revolving credit facility. The company incur commitment fees of up to 0.25% on the unused portion of the revolving credit facility. The company's balance sheet as of quarter ended Dec. 31, 2007, reflected total assets of $363.5 million, total liabilities of $124.5 million and a stockholders' equity of $239 million. About Tuesday Morning Based in Dallas, Texas, Tuesday Morning Corporation (Nasdaq: TUES) -- http://www.tuesdaymorning.com/-- is a retailer of decorative home accessories and gifts in the United States. The company opened its first store in 1974 and currently operates 762 stores in 46 states during periodic "sale events." * * * Tuesday Morning Corporation continues to carry Moody's Investors Service's 'Ba3' issuer rating, 'Ba2' corporate family rating, which were assigned in December 2002. UAL CORP: Earns $403 Million in Year Ended Dec. 31, 2007 -------------------------------------------------------- UAL Corporation, the holding company whose primary subsidiary is United Airlines, reported pre-tax income of $695 million for 2007, the highest since 1999. Pre-tax income excluding special items and severance was $606 million, $665 million higher than 2006. The company: -- Reported annual diluted earnings per share (EPS) of $2.79, despite a basic loss per share of $0.47 in the fourth quarter. -- Increased annual mainline passenger unit revenue (or PRASM) by 7.1 percent year-over-year, excluding special items, through continued capacity discipline and revenue execution, with fourth quarter mainline PRASM increasing 13.1 percent year-over-year. -- Continued its focus on controlling costs, with 2007 annual operating expenses increasing 1.1 percent versus 2006. -- Generated operating cash flow of $2.1 billion in 2007, a 37 percent increase from 2006. -- Strengthened its balance sheet in 2007 by reducing on and off balance sheet debt by $2.3 billion, including a reduction of nearly $700 million in the fourth quarter. The company ended the year with an unrestricted cash and short-term investments balance of $3.6 billion as of December 31, 2007 and restricted cash of $0.8 billion. -- Announced a special distribution of $2.15 per share of UAL common stock, or approximately $250 million, to holders of record as of January 9, 2008. -- Reported that employees had earned about $170 million of cash payments related to 2007 performance, composed of approximately $110 million in profit-sharing, $40 million in Success Sharing incentives and $20 million from the special distribution. 2007 Earnings Growth Driven By Strong Revenue Performance The company generated net income of $403 million in 2007, the first full-year profit since 2000, excluding reorganization items. Excluding special and reorganization items and severance, 2007 net income of $352 million was $417 million higher than 2006. On a full-year basis, the company reported pre-tax income of $695 million, or $606 million excluding special items and severance, resulting in a pre-tax margin of 3.0 percent compared to a negative 0.3 percent for full-year 2006. The company generated $1.0 billion of operating income for the year, or $948 million excluding special items and severance, $515 million or nearly 120 percent higher than 2006, more than doubling operating margin to 4.7 percent. The company's fourth quarter results were negatively affected by the sharp rise in the price of fuel. While the company reported passenger unit revenue growth that was among the best in the industry, consolidated fuel expense increased $359 million as fuel prices rose more than 25 percent versus last year. As a result, the company reported an operating loss of $64 million for the fourth quarter of 2007, a pre-tax loss of $98 million and a net loss of $53 million, $8 million better than the fourth quarter of 2006. "Our employees and management team made real progress in 2007 to strengthen the core airline and provide a return to shareholders, delivering the highest annual profit since 1999," said Glenn Tilton, United chairman, president and CEO. "We will continue to improve in 2008, as we add breadth to our leadership team in areas critical to the success of our strategy such as strategic sourcing and information technology, that we will leverage to reduce our costs, improve our operation and strengthen the infrastructure we use to deliver enhanced services for our customers." Annual operating expenses increased 1.1 percent versus 2006, while full-year 2007 mainline CASM, excluding fuel, special items and severance, was up 3.1 percent. Fourth quarter operating expenses increased by $531 million or approximately 11.6 percent year-over- year primarily due to the $359 million increase in consolidated fuel expense. Fourth quarter mainline CASM, excluding fuel and special items, of 8.28 cents was up 9.2 percent year-over-year driven mainly by lower capacity, higher heavy maintenance volumes, increased purchased services expense for information technology deployment and efficiency and revenue improvement initiatives, as well as higher profit-sharing expense. Additionally, the severe winter storms that took place in Chicago and Denver in December increased staffing, glycol and other related costs for the quarter. The company's consolidated passenger revenue for the fourth quarter includes approximately $55 million of non-cash revenue relating to the quarterly amortization of the benefit from the change to the expiration period for inactive Mileage Plus accounts announced in January 2007. In addition, at year-end when miles expired for the first time under the new policy, the company recorded mileage expiration that was higher than it had estimated in previous quarters. As a result, the company recognized approximately $66 million of incremental non-cash revenue, bringing the total impact of the change in the policy to $121 million for the fourth quarter. Offsetting this, the change to deferred revenue accounting for the Mileage Plus program, from the previous incremental cost method, decreased passenger revenue by $61 million in the fourth quarter of 2007, $34 million lower than the effect of deferred revenue accounting in the fourth quarter of 2006. In total, these Mileage Plus changes resulted in consolidated passenger revenue increasing by $60 million for the fourth quarter, and on a year-over-year basis resulted in revenue increasing by $155 million. Annual mainline unit earnings, which is mainline revenue per available seat mile (RASM) minus mainline CASM, excluding fuel, special items and severance, increased 13.6 percent in 2007 compared to 2006. Mainline unit earnings for the fourth quarter of 2007 decreased to (0.19) cents from 0.07 cents a year ago, while mainline unit earnings, excluding fuel and special items, increased 19.2 percent to 3.91 cents from 3.28 cents last year. Regional affiliates' annual contribution to operating income increased $45 million or 58 percent in 2007. For the quarter, the regional operation reported break-even operating income as a 9.6 percent increase in regional affiliate revenue was offset by a 9.3 percent increase in operating expenses due to higher fuel prices. The company recorded a largely non-cash, full-year income tax expense of $297 million for 2007 and a non-cash income tax benefit of $43 million for the fourth quarter. The effective tax rates for the year and the quarter were 43 percent and 44 percent, respectively. Because of its Net Operating Loss carry-forwards, the company expects to pay minimal cash taxes for the foreseeable future. Focus On Balance Sheet Improvement Continues Despite the seasonally slower quarter and the rapid escalation of fuel prices, the company generated positive operating cash flow of $132 million, ending the year with an unrestricted cash and short- term investments balance of $3.6 billion and a restricted cash balance of $756 million. Including both on and off balance sheet debt and deducting the debt securities the company repurchased during the year, the company reduced total debt by $2.3 billion in 2007. On the same basis, during the fourth quarter, the company reduced total debt by $681 million, including a $500 million pay down on its credit facility and the repurchase of $20 million of debt securities. The repurchased securities are classified as available-for-sale investments in the consolidated balance sheet. The company separately records interest income and interest expense on the repurchased notes; the related savings in financing costs from these investments are included in the total savings from debt repurchases noted below. The company expects to reduce annual net financing costs by approximately $120 million through the transactions it has implemented in 2007. Full-year free cash flow, defined as operating cash flow less capital expenditures, increased by 23 percent year-over-year to $1.5 billion, and to $1.7 billion after excluding the impact certain aircraft refinancing transactions in 2007. Fourth quarter free cash flow was a negative $98 million, reflecting the significant increase in fuel prices and a $120 million year-over- year increase in capital expenditures to $230 million. On Jan. 23, 2008, the company will make a special distribution of $2.15 per share to common stockholders. The total payment to stockholders will be approximately $250 million, including approximately $20 million to employee shareholders. "We made significant financial strides in 2007 -- delivering among the best revenue and free cash flow performance in the industry, paying down more than $2.0 billion of debt and continuing our focus on cost control," said Jake Brace, EVP and chief financial officer. "We are pleased to be making a $250 million distribution to our shareholders tomorrow, and that employees earned $170 million in cash payments related to our 2007 performance -- a well earned reward for their hard work throughout the year." Strong Revenue Growth Enabled By Continued Capacity Discipline The company's focus on capacity discipline and revenue execution continues to drive strong revenue performance both internationally and domestically. Total revenues, excluding special items, increased by 3.9 percent in 2007 compared to the prior year and increased by 9.7 percent in the fourth quarter versus the same period last year, driven by growth in passenger and cargo revenue that was partially offset by the elimination of pass-through sales for our fuel subsidiary, UAFC. Full-year 2007 consolidated passenger revenue per available seat mile (PRASM), excluding special items, increased 6.5 percent year-over-year, driven by a 5.9 percent increase in passenger yield, which includes the effect of the changes in Mileage Plus accounting. The company's 2007 mainline RASM increased by 4.7 percent, as the increase in passenger yield was partially offset by a decline in other operating revenues due to the elimination of $307 million in pass-through sales for our fuel subsidiary, UAFC. Excluding UAFC and special items, mainline RASM increased by 6.5 percent from 2006. Total passenger revenues increased by 11.6 percent in the fourth quarter compared to the prior year driven by a 13.0 percent consolidated yield improvement which includes the effect of changes in Mileage Plus accounting. Fourth quarter mainline domestic PRASM increased by 12.3 percent, aided by a 5.0 percent reduction in capacity. International markets continued to produce strong unit revenue growth; international PRASM grew 14.9 percent in the fourth quarter compared to the same period last year despite a 5.0 percent increase in international capacity year-over-year. In total, consolidated PRASM increased by 12.6 percent versus the fourth quarter of 2006. Fourth quarter mainline PRASM increased by 13.1 percent on a 1.2 percent decrease in traffic, a 1.0 percent decrease in capacity and a 13.5 percent increase in yield. About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News, Issue No. 152 Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). * * * Fitch Ratings, on May 2007, affirmed the Issuer Default Ratings of UAL Corp. and its principal operating subsidiary United Airlines Inc. at B-. UAL CORP: Resells Previously Issued 4.50% Senior Notes Due 2021 --------------------------------------------------------------- UAL Corp. supplemented the prospectus dated April 23, 2007, relating to the resale by selling security holders of up to $726,000,000 aggregate principal amount of 4.50% Senior Limited- Subordination Convertible Notes due 2021 and shares of UAL's common stock issuable upon conversion of the notes or in payment of accrued interest on the notes. The Sixth Supplement to the Prospectus provides an updated list of the Selling Securityholders and the total number of UAL shares they beneficially own after the offering: Selling Principal Amount of UAL Shares Shares Owned Securityholder Notes Owned/Offered Offered After Offering -------------- ------------------- ---------- -------------- Argent Classic $820,000 25,126 - Convertible Arbitrage Fund Ltd. Argentum Multi- 40,000 1,225 - Strategy Fund Ltd - Classic Citigroup Global 5,000,000 153,209 - Markets Inc. Lehman Brothers, Inc. 2,000,000 61,283 - The Drake Offshore 1,000,000 30,641 - Master Fund, Ltd. Xavex Convertible 140,000 4,289 - Arbitrage 10 Fund Total $9,000,000 275,773 - A full-text copy of the Sixth Supplement to the Prospectus is available for free at the SEC: http://ResearchArchives.com/t/s?27bc About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News, Issue No. 152 Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). * * * Fitch Ratings, on May 2007, affirmed the Issuer Default Ratings of UAL Corp. and its principal operating subsidiary United Airlines Inc. at B-. U.S. CENTRAL: S&P Cuts Ratings to AA+ Over Risk Exposures of MBS ---------------------------------------------------------------- On Feb. 5, 2008, Standard & Poor's Rating Services said it lowered its long-term counterparty credit rating on U.S. Central Federal Credit Union (USC) to 'AA+' from 'AAA'. At the same time, it placed the ratings on USC on CreditWatch with negative implications. S&P said it took this action in response to mounting concerns regarding USC's exposure to losses from its large portfolio of higher-risk subprime and Alt-A mortgage-backed securities (MBS). "With the housing market weakening to levels not seen since the early 1990s down-cycle, we expect USC's large portfolio of mortgage-related securities to further decline in value," said Standard & Poor's credit analyst Robert Hoban. The CreditWatch Negative placement reflects S&P's expectation that USC's nonprime MBS exposure will pressure already weak capital and profitability during the near term. If USC has further material realized losses, either from the sale of investments or from deterioration in the fundamental performance of its MBS portfolio that results in other-than-temporary impairment, the ratings could be lowered. If USC has only minimal realized losses and demonstrates its ability to adapt under changing industry conditions, the outlook could return to stable. U.S. CENTRAL: Responds to S&P's Negative Rating Action ------------------------------------------------------ U.S. Central Federal Credit Union reiterated in its Web site that Standard & Poor's had lowered U.S. Central's long-term debt rating one notch from "AAA" to AA+" this week. According to U.S. Central, it believes that it's important to view this ratings change in context. First, the new rating is S&P's second-highest rating and is equivalent to the rating U.S. Central has had from Moody's since 1992, when U.S. Central initially obtained its long-term debt ratings from both ratings agencies. Also, both agencies continue to give U.S. Central their highest commercial paper debt ratings. Second, it's important to understand how strongly S&P continues to view U.S. Central's credit strength. The "AA+" rating is shared with only two other of the nation's leading financial institutions -- Bank of America and U.S. Bank. Only one institution, Wells Fargo, has a higher rating. This rating is an acknowledgement of the continued strength of U.S. Central's balance sheet and high liquidity position at a time of considerable uncertainty in the financial markets. The rating action was prompted by S&P's concern over values of mortgage-related securities in U.S. Central's investment portfolio. In announcing U.S. Central's new rating, S&P said, "Our ratings on U.S. Central continue to be supported by the company's strong funding and liquidity profile, which allows it to continue to hold these securities despite the market value declines." The release went on to say, "The company's unique and central role as liquidity provider to the Corporate Credit Union Network also provides support for the rating." Third, a review of recent market developments adds to the context. In recent years, there has been an increase in the portion of residential loans that are packaged into mortgage-backed securities (MBS). These securities generally are structured with subordinated (lower credit-rated) tranches or other credit enhancements that absorb the first losses on any defaulted loans used as collateral before the senior tranches are impacted. The subordinated tranches, with their higher risk and higher yields, have been particularly attractive to investors with higher appetites for risk, such as hedge fund managers. The senior tranches typically are purchased by more risk-averse investors, such as U.S. Central. Meanwhile, the growth in asset-backed commercial paper (ABCP) conduits also has fueled the growth in MBS. These conduits issue commercial paper to investors and then use the proceeds to purchase securities, often MBS. The conduit manager typically earns fees for managing the conduit, or in other ways earns spread income from the conduit. The abundant funding supply provided by hedge funds, ABCP conduits and other investors has had the effect of increasing the demand for MBS. Beginning in July 2007, U.S. Central said that the U.S. housing market has experienced record-setting declines. New home construction has slowed to a 20-year low, while the supply of houses for sale has increased to nearly 12 months. There has been a steep rise in delinquencies and foreclosures in residential mortgage loans, particularly sub-prime loans, to unprecedented levels. Most economists anticipate these housing trends will persist throughout 2008. Of course, these trends have affected the MBS markets accordingly, says U.S. Central. MBS investors began to demand higher spreads on MBS investments relative to U.S. Treasury securities and, correspondingly, the market value of most outstanding MBS declined abruptly. This caused some investors to sell some of their MBS holdings, and others to be reluctant to purchase commercial paper from ABCP conduits. As investors began to shy away from MBS or investments secured by MBS (such as ABCP conduits), and to require higher yields for their existing MBS holdings, issuers began to dramatically slow or stop their purchasing of residential mortgage loans that would be packaged into MBS. The previously liquid market of mortgage origination and securitization became illiquid almost overnight. This lack of liquidity has made the valuation of MBS more difficult. Within just a few weeks, what started as a subprime mortgage crisis has evolved into the most severe dislocation in the credit markets in the modern era. While the declining residential market was leading to this severe credit market dislocation, U.S. Central asserts that the major credit rating agencies began to use the newly available delinquency and foreclosure data to re-evaluate their previous ratings of privately issued MBS. Today, the criteria for a security to attain a particular credit rating are significantly more stringent than they were just a year ago. For example, S&P's expectations for losses on mortgage pools originated in 2006 have increased 350 percent since the beginning of 2007. Using these new criteria, the credit rating agencies have lowered their ratings on several thousand MBS, primarily the subordinated tranches. Most recently, the credit rating agencies have downgraded several of the "monolines," the companies that insure the payments on some MBS and MBS-backed securities. U.S. Central adds that these developments have negatively affected the financial institutions that originate or hold residential mortgage loans, as well as the investors in MBS and other securities indirectly collateralized by these loans. In the second half of 2007, there were a number of large financial institutions, brokerage firms and hedge funds that announced massive losses related to residential mortgage loans or related securities. A pdf copy of the company's response on S&P's latest ratings action can be downloaded at http://ResearchArchives.com/t/s?27cb Financial Performance To support its claims, U.S. Central also issued most recent information on its financial performance. U.S. Central's annual year-end audit currently is in process and additional financial information will be provided when U.S. Central releases its year- end financial data at the completion of the audit, which is expected to occur in April. U.S. Central's unaudited year-end financials show net income for 2007 substantially below the $63 million earned in 2006. The reduction in earnings is principally attributable to $96 million in unusual investment related charges, some realized and some unrealized. These losses were partially offset by an additional $40 million in net interest income (compared to 2006). U.S. Central had $2.4 billion in total regulatory capital at December 31, 2007, with a total capital to assets ratio of 5.32%, comfortably above the 5% regulatory minimum. In addition to more than $3.5 billion in cash and short-term funds available, U.S. Central has access to more than $20 billion in liquidity. According to U.S. Central's CEO, Francis Lee, "Credit unions can have confidence in our strength and stability as we continue our mission to provide investment and correspondent services to the corporate credit union community." A full-text copy of the company's financial performance can be downloaded in pdf format at http://ResearchArchives.com/t/s?27cc About U.S. Central U.S. Central Federal Credit Union -- http://www.uscentral.org/-- is the wholesale financial center for the nation's corporate credit unions. Founded in 1974, U.S. Central is owned and directed by its member corporate credit unions, in the tradition of the cooperative credit union spirit. As the "credit union for corporate credit unions," U.S. Central exists solely to assist them in serving 8,400 credit unions across the country. Currently, U.S. Central's assets total approximately $49.1 billion. U.S. Central has three wholly owned subsidiaries and one majority-owned subsidiary: Network Financial Services LLC, Charlie Mac LLC, CU Investment Solutions Inc. and Corporate Network eCom LLC. VENTAS INC: S&P Upgrades 'BB+' Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit ratings on Ventas Inc., its operating partnership, Ventas Realty L.P., and Ventas Capital Corp. to 'BBB-' from 'BB+'. In addition, S&P raised its ratings on the company's senior unsecured debt, which totals roughly $1.5 billion, to 'BBB-' from 'BB+'. Concurrently, S&P revised its outlook on Ventas to stable from positive. "The upgrades reflect the company's demonstrated commitment to maintaining a moderate financial profile over the long run, its successful integration of the Sunrise portfolio, which it acquired in April 2007, and the recent disclosure that Sunrise Senior Living Inc., Ventas' partner and property manager, expects to file its long-delayed financial statements with the SEC," said Standard & Poor's credit analyst George Skoufis. Supporting the ratings are the quality and stability of the portfolio, as evidenced by the good overall facility-level rent coverage of leased facilities, solid performance out of the high- quality Sunrise portfolio, and favorable long-term demographic trends. However, the company's opportunistic growth, higher secured debt levels, and its operator concentration mitigate these strengths. Standard & Poor's expects Ventas' cash flow to be relatively stable, supported by a good-quality and geographically diverse portfolio of health care-related assets. Property cash flows comfortably cover leased facility rents, and net operating income from the high-quality Sunrise-managed portfolio of assisted living facilities complement a moderate financial profile. Favorable long-term demographics and a stable reimbursement environment add additional support. Further upgrades are unlikely in the near term due to the company's operator concentration and S&P's expectation that the company will remain opportunistic. The rating and outlook could be negatively affected if Ventas pursues aggressive or debt-financed acquisitions that strain its financial profile, or if one of Ventas' top operators faces challenges that affect Ventas' facilities or cash flow. VICORP RESTAURANTS: Piper Jaffray to Aid Restructuring Deal Review ------------------------------------------------------------------ Piper Jaffray & Co. confirmed, in a letter dated Jan. 25, 2008, its engagement as VICORP Restaurants Inc.'s exclusive financial advisor to assist the company in a review of strategic alternatives in connection with a restructuring transaction. Specifically, Piper Jaffray is expected to: -- meet with the company's management and familiarize itself with the business, operations, properties, financial condition and prospects of the company; -- assist the company in analyzing and reviewing the acts, conduct, assets, liabilities and financial condition of the company; -- evaluate the company's potential debt capacity in light of its existing cash flows; -- advise the company with respect to the Restructuring Transaction options (including timing, structure and pricing), including analyzing, negotiating and effecting (i) an out-of-court restructuring of the company's Senior Notes, (ii) a plan of reorganization or recapitalization for the company, and (iii) to the extent necessary, performing valuation analyses on the company and its assets; -- with the prior approval of the company, solicit, coordinate and evaluate proposals regarding a Restructuring Transaction; -- provide the company's Board of Directors and senior management with regard to the comparative implications of different strategic alternatives available to the company, including, without limitation, valuation metrics related to any alternative transactions (if any) and for comparable public companies and comparable publicly reported transactions; -- provide testimony, as necessary, with respect to matters on which we have been engaged to advise you in any proceeding before the Bankruptcy Court, if applicable; and -- any other tasks as mutually agreed upon by Piper Jaffray and the company. The engagement will be run on a day to day basis by Joe Radecki, who will lead throughout the term of the agreement for so long as he is an officer of Piper Jaffray. However, Piper Jaffray reserves the right to augment or substitute other qualified senior officers reasonably acceptable to the company to the extent that business exigencies may require. In the letter, Piper Jaffray stated it is not assuming any responsibility for the company's underlying business decision to pursue or not to pursue any business strategy or to effect or not to effect any Restructuring Transaction. Piper Jaffray will not have the responsibility to provide "crisis management" services for the company. A fee of $50,000.00 per month for the first two months of this engagement and $100,000 per month thereafter, payable monthly in advance in cash (the 'Monthly Fee') up to the effective date of termination of this Agreement; provided, however, that 50% of the monthly fees owing after Piper Jaffray has earned $400,000 in monthly fees. S&P Further Junks Rating on Filing Delay As reported in the Troubled Company Reporter on Feb. 1, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating on the Denver-based VICORP Restaurants Inc., including the corporate credit rating, to 'CCC' from 'CCC+'. The outlook is developing. The rating action is based on the company's delay in filing its 10-K to finish an evaluation of its intangible asset carrying values. VICORP indicated that it expects to record an impairment charge, which means that the fair value of its assets has diminished and likely indicative that operating performance remained weak in company's fourth quarter. About VICORP Restaurants VICORP Restaurants Inc., with corporate headquarters in Denver, Colorado, operates and franchises family-style restaurants under the brand names Village Inn and Baker's Square. As of July 12, 2007, the company operated 170 Village Inn restaurants and 146 Bakers Square restaurants, and franchisees operated 93 Village Inn restaurants. Revenues for the last 23 months were about $478 million. VICORP RESTAURANTS: Moody's Junks Ratings on Possible Shakeup ------------------------------------------------------------- Moody's Investors Service downgraded VICORP Restaurants, Inc.'s Corporate Family Rating to Caa3 from Caa2, and its senior unsecured notes rating to Ca (LGD 4, 63%) from Caa3 (LGD 4, 63%). At the same time the Probability of Default rating was lowered to Caa3 from Caa2. The rating outlook is negative. The rating action was prompted by the company's disclosure on Feb. 4, 2008 that it has engaged Piper Jaffray & Co. as its financial advisor to explore potential "Restructuring Transaction" which could include a re-organization pursuant to Chapter 11 and recapitalization etc., among others. Additionally, the company disclosed on Jan. 30, 2008 that it was unable to file its fiscal 2007 Form-10K due on the same day as it was evaluating its intangible assets carrying value and expected to record an impairment charge. The Caa3 Corporate Family Rating and Caa3 Probability of Default Rating reflect VICORP's elevated probability of default, primarily stemming from increasing uncertainty surrounding its capital structure due to a potential restructuring as well as a potential technical default under its bank agreement and bond indenture arising from its inability to meet its financial reporting requirement. The downgrade also incorporates the high probability of debt impairment within the capital structure, in particular, material losses for unsecured senior creditors in the event of default, given the company's very high leverage relative to its cash flow generation or asset base. The negative outlook encompasses the ongoing challenges in the current operating environment and VICORP's limited prospects for a near-term rebound in performance. The outlook also reflects the possibility that the company's liquidity and financial flexibility could be constrained further due to its inability to file its annual financials within the grace period or its further deteriorating financial and operating metrics. The rating action are: -- Corporate family rating downgraded to Caa3 from Caa2 -- Probability of default rating downgraded to Caa3 from Caa2 -- Senior unsecured notes maturing in 2011 to Ca (LGD4, 63%) from Caa3 (LGD4, 63%) -- Rating outlook: negative VICORP Restaurants, Inc., with corporate headquarters in Denver, Colorado, operates and franchises family-style restaurants under the brand names Village Inn and Baker's Square. As of July 12, 2007, the company operated 170 Village Inn restaurants and 146 Bakers Square restaurants, and franchisees operated 93 Village Inn restaurants. Revenues for the last twelve months ending July 12, 2007 were approximately $478 million. V & OUT: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------ Debtor: V & Out, LLC dba Payless Car Sales aka Mary Jane Too, Inc. dba Suzuki of Carson City 5246 North Elk River Road Reno, NV 89511 Bankruptcy Case No.: 08-10948 Chapter 11 Petition Date: February 5, 2008 Court: District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: Michael Lehners, Esq. 429 Marsh Avenue Reno, NV 89509 Tel: (775) 786-1695 Fax: (775) 786-0799 Total Assets: $3,900,247 Total Debts: $2,873,387 Debtor's list of its 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ RGH Advertising Business Debt $78,576 1000 Bible Way, Suite 22 Suzuki Reno, NV 89502 Business Debt $75,610 Wells Fargo Business Debt $24,503 P.O. Box 54349 Los Angeles, CA 90054 DSC Flooring Contract $118,000 1130 East Missouri Secured: Suite 100 $95,045 Phoenix, AZ 85014 Bank of America Flooring Pact $1,250,000 Secured: $1,232,031 Business Debt $13,333 Suzuki Fireside Bank Business Debt $14,687 Reno Gazette Journal Business Debt $10,083 Wells Fargo Multiple Accounts $6,100 Portfolio Business Debt $4,005 Great Direct Concepts Business Debt $3,980 Equifax Business Debt $3,801 Les Schwab Tires Multiple Accounts $3,400 Capitol One Business Debt $3,193 PRCO Business Debt $3,180 State of California - DMV Business Debt $3,100 Auto 4 Life Business Debt $2,729 Autotrader Business Debt $2,550 Talon Lead Management Business Debt $1,991 Best Deals Press, Inc. Business Debt $1,859 WALDEN III: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Walden III, Inc. P.O. Box 945 Dillard, OR 97432 Tel: (541) 430-8442 Bankruptcy Case No.: 08-60306 Chapter 11 Petition Date: February 4, 2008 Court: District of Oregon Judge: Albert E. Radcliffe Debtor's Counsel: John Putnam Pries, Esq. John Putnam Pries, LLC 860 Olive Street Eugene, OR 97401 Tel: (541) 343-0684 Fax: (541) 343-8252 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million The Debtor did not file a list of its 20 largest unsecured creditors. WESTSHORE EXECUTIVE: Case Summary & Largest Unsecured Creditor -------------------------------------------------------------- Debtor: Westshore Executive Center, LLC 150 East Bloomingdale Brandon, FL 33511 Bankruptcy Case No.: 08-01485 Type of Business: The Debtor owns, operates, and leases executive suites. Chapter 11 Petition Date: February 5, 2008 Court: Middle District of Florida (Tampa) Judge: Catherine Peek McEwen Debtor's Counsel: Buddy D. Ford, Esq. Buddy D. Ford, P.A. 115 North MacDill Avenue Tampa, FL 33609-1521 Tel: (813) 877-4669 Fax: (813) 877-5543 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hillsborough County Westshore Exec. $6,413 Tax Collector Center, 5010 West P.O. Box 172920 Carmen Street, Tampa, FL 33672-0920 Tampa, Florida YRC WORLDWIDE: Moody's Maintains 'Ba1' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service has affirmed the ratings of YRC Worldwide Inc., Corporate Family Rating at Ba1. In a related action, Moody's has changed YRC's rating outlook to negative from stable. The outlook was changed in response to expectations of a continued soft operating environment in the trucking sector, in conjunction with weaker than expected operating results that the company has recently announced for the fourth quarter of 2007. On Jan. 28, 2008, YRC announced fourth quarter 2007 operating results that showed substantial deterioration in performance for the year, citing the current weak economic environment with unexpectedly soft volume levels at both its national and regional transportation subsidiaries. The company also provided a limited degree of guidance as to its 2008 operating plans, but did not express likelihood for a recovery in operating performance over the near term due to continued uncertainty surrounding the economic conditions in the trucking sector. YRC's Ba1 Corporate Family Rating reflects the company's leading positions in national and regional LTL (less-than-truckload) transportation and a reputation for strong service levels. Ratings are also supported by its historical ability to reduce costs while integrating large acquisitions, Roadway in particular, resulting in improved yield through market cycles. However, during the most recent downturn, cost reduction has not been as evident, and operating ratios have dropped below levels expected for YRC at this point in the cycle. Over the near term, in consideration of the current sharp and possibly prolonged industry downturn, the Ba1 rating and negative outlook considers uncertainty as to the restoration of profitability in the company's core LTL businesses, and the ability of YRC to accomplish cost improvements to accommodate a lower freight volume environment. The ratings also consider YRC's high total debt levels (including Moody's standard adjustments, including pension plans) relative to the volatility in earnings and cash flows inherent in the severely cyclical trucking industry. Key credit metrics such as Retained Cash Flow to Debt, EBIT / Interest, and Debt to EBITDA are currently weaker than Ba1 peers, as they are negatively impacted by the weak economic conditions prevailing in the trucking sector and a high debt burden related to adjustments for multi-employer pension plans. However, Moody's notes that YRC has shown its commitment to reduce debt through free cash flow, and expects that the company will resume such practices once industry conditions allow this. In addition, YRC maintains an adequate liquidity profile which will likely be appropriate to cover modest unexpected cash shortfalls over the near term, barring substantial further deterioration in market conditions. The negative ratings outlook anticipates LTL markets will continue to be soft through 2008, precluding any near term improvement in YRC's operating results, and that operating ratio's will remain in the high 90% range. Moody's also anticipates that weaker seasonal first half 2008 cash flows and operating profits will further stress credit metrics. The ratings could be downgraded if the free cash flow were to be neutral or negative in 2008, or if liquidity were to deteriorate due to increased reliance on the credit facility to fund cash shortfall. Ratings could also be lowered if weaker operating performance were to impair the likelihood of compliance with financial covenants in the company's credit facility, possibly requiring waivers or amendments of terms. The ratings could be stabilized if free cash flows return to strongly positive levels in 2008, with operating ratios returning to the mid-90% range. The company will have to demonstrate the maintenance of a solid liquidity position throughout this period, with only minor and temporary reliance, if any, on the revolving credit facility to cover cash requirements while maintaining ample cushion to covenants. Outlook Actions: Issuer: Roadway LLC -- Outlook, Changed To Negative From Stable Issuer: USF Corporation -- Outlook, Changed To Negative From Stable Issuer: YRC Worldwide Inc. -- Outlook, Changed To Negative From Stable YRC Worldwide does business through two national less-than- truckload companies, YRC National Transportation, which comprises the long-haul operations that comprises the legacy Yellow and Roadway businesses (about 69% of total FY 2007 revenue), and through YRC Regional Transportation , a regional LTL business essentially comprising YRC's acquired USF companies (about 25% of revenue). Through its YRC Logistics business unit, the company also offers logistics and supply chain services. YRC's broad service offering includes next day and expedited service throughout most of the country. * Fitch To Update RMBS Modeling Assumptions on Continued Pressure ----------------------------------------------------------------- Fitch Ratings announced that in light of consensus movement towards a view of increased loss projections for U.S. subprime residential mortgage backed securities that is now held by various market participants and observers, including Fitch, the agency will be updating certain modeling assumptions in its ongoing analysis of the financial guaranty industry. Fitch believes it is possible that modeled losses for structured finance collateralized debt obligations could increase materially as a result of these updated projections. The need to update loss assumptions at this time reflects the highly dynamic nature of the real estate markets in the U.S., and the speed with which adverse information on underlying mortgage performance is becoming available. Fitch believes that a sharp increase in expected losses would be especially problematic for the ratings of financial guarantors -- even more problematic than the previously discussed increases in 'AAA' capital guidelines, which has been the primary focus of recent analysis of the industry. Expected losses reflect an estimate of future claims that Fitch believes would ultimately need to be paid by a guarantor. A material increase in claim payments would be inconsistent with 'AAA' ratings standards for financial guarantors, and could potentially call into question the appropriateness of 'AAA' ratings for those affected companies, regardless of their ultimate capital levels. Fitch expects in addition to increases in expected losses, that its capital guidelines are likely to increase materially as well. An increase in both expected losses and capital guidelines would place further downward pressure on the ratings of those five financial guarantors - Ambac Assurance Corp., CIFG Guaranty, Financial Guaranty Insurance Co., MBIA Insurance Corp. and Security Capital Assurance Ltd., the parent company of XL Capital Assurance Inc. - that Fitch has previously identified as having material subprime exposure within their insured portfolios. Ratings on three of these guarantors - Ambac, FGIC and SCA - were recently downgraded by Fitch, and their ratings remain on Rating Watch Negative. In separate releases in conjunction with this announcement, Fitch has also placed the 'AAA' insurer financial strength ratings of CIFG and MBIA on Rating Watch Negative. Fitch continues to hold Stable Rating Outlooks for the 'AAA' insurer financial strength ratings of the operating subsidiaries of Assured Guaranty Corp. and Financial Security Assurance Holdings Ltd, the two financial guaranty companies that avoided direct exposures to SF CDOs to a material degree. Fitch, however, will continue to monitor the impact of deteriorating RMBS performance on SF CDO-related credit linked notes tied to FSA's guaranteed investment contract business. While deterioration in the performance of the CLNs in FSA's GIC portfolio would not cause a direct credit loss for FSA, they could result in early withdrawal of certain GIC liabilities, which could create added liquidity requirements for FSA. While Fitch will update its capital and expected loss analysis of all subprime-exposed sectors within each guarantors' insured portfolios, Fitch believes that loss projections will be most sensitive to loss given default assumptions used for SF CDOs that reference subprime RMBS collateral. Fitch has not yet defined a timetable for the conclusion of its analysis or any related rating actions, but will update the market as new information becomes available. * Fitch Cuts Ratings on 26 Tranches of CLOs, Retains Neg. Watch --------------------------------------------------------------- Fitch Ratings has downgraded 26 tranches of total rate of return collateralized loan obligations. The affected classes also remain on Rating Watch Negative by Fitch. Approximately, $1.61 billion and EUR74.75 million of securities are affected by these actions, of which 56% were rated 'AA' with ratings downgraded to 'A', 2% were rated 'A' with ratings downgraded to 'BBB', and 6% were rated 'BBB' with ratings downgraded to BB and the balance of the securities were below investment-grade. The actions are driven primarily by a continued decrease in the market values of the collateral portfolios and resultant erosion of cushion versus the total return swap termination/liquidation triggers in the respective transactions. This action follows previous actions taken on Aug. 29, 2007 and Jan. 18, 2008 in which Fitch downgraded a total of 28 classes and placed a total of 65 classes on Rating Watch Negative from 24 TRR CLOs. -- 'Fitch Downgrades Canal Point I, Ltd'; -- 'Fitch Downgrades Canal Point II, Ltd'; -- 'Fitch Downgrades 28 & Places 37 Classes on Watch Negative from 24 TRR CLOs'. These actions were taken in response to the severe deterioration in loan prices as compared to Fitch's expectations when originally rating the transactions. Specifically, many of the classes affected are in close proximity to breaching their TRS termination/liquidation triggers, which were designed to protect the TRS counterparty from realized and unrealized losses. Once a trigger is breached, the TRS counterparty, in its sole discretion, may elect to terminate the TRS. Of note, collateral performance to date in many of these transactions has been relatively strong, though some are breaching their weighted average rating factor covenants. In the case of three older vintage transactions, no action has been taken given the buildup of overcollateralization due to cash diversion and other features. However, the unprecedented velocity of market value declines of collateral reduces the benefit of cash diversion and other structural features to both the recent vintage transactions and the lower rated classes and increases the impact of the TRS termination/liquidation trigger on the expectations of losses to those classes. Furthermore, each of these transactions consists of a number of unique structural features and methods in which their termination triggers are calculated. In some instances, the triggers may adjust depending upon leverage or portfolio composition, and proximity to a trigger may be affected by automatic cash diversion or delevering mechanisms, or discretionary delevering of the transaction by the asset manager. To that end, Fitch has analyzed the portfolio of transactions on a relatively comparable basis based on their proximity to the TRS unwind trigger as of Feb. 1, 2008 as well as other factors. As a result, the magnitude of downgrades has generally been subject to these parameters: -- In cases where the decline in MTM value of collateral has dropped to within 3.5% of the TRS termination/liquidation trigger, Fitch has taken these downgrades with all classes remaining on Rating Watch Negative. Coltrane CLO p.l.c. -- EUR 26,000,000 class B to 'BBB' from 'A'; -- EUR45,000,000 class C to 'BB' from 'BBB'; -- EUR 1,750,000 class D-1 to 'B' from 'BB'; -- EUR 2,000,000 class D-2 to 'B' from 'BB'. Structured Enhanced Return Vehicle Trust (SERVES) 2004-1, Ltd -- $47,500,000 class A to 'BB' from 'BBB'. -- In cases where the decline in MTM value of collateral has dropped to within 2% of the TRS termination/liquidation trigger, Fitch has taken these downgrades with all classes remaining on Rating Watch Negative. Fall Creek CLO, Ltd -- $157,500,000 class A-1 revolving notes to 'A' from 'AA'; -- $312,500,000 class A-2 to 'A' from 'AA'; -- $29,167,000 class B to 'BB' from 'BBB'; -- $47,000,000 class C to 'B' from 'BB'; -- $2,000,000 class D-1 to 'CCC' from 'B'; -- $5,167,000 class D-2 e to 'CCC' from 'B'. Structured Enhanced Return Vehicle Trust (SERVES) 2006-1, Ltd -- $157,500,000 class A-1 revolving notes to 'A' from 'AA'; -- $312,500,000 class A-2 to 'A' from 'AA'; -- $29,167,000 class B to 'BB' from 'BBB'; -- $50,000,000 class C to 'B' from 'BB'; -- $2,080,000 class D-1 to 'CCC' from 'B'; -- $2,087,000 class D-2 to 'CCC' from 'B'. -- In cases where the decline in MTM value of collateral has dropped to within 1% of the TRS termination/liquidation trigger, Fitch has taken these downgrades, with all classes remaining on Rating Watch Negative. Aladdin Managed LETTRS Fund, Ltd -- $43,000,000 class A to 'CCC+' from 'BB+'; -- $22,500,000 class B to 'CCC' from 'BB'. Bushnell Loan Fund, Ltd -- $38,300,000 class A to 'CCC+' from 'BB+'; -- $25,000,000 class B to 'CCC' from 'BB'. Hartford Leveraged Loan Fund, Ltd -- $125,000,000 income notes and shares to 'CCC' from 'BB'. Stedman Loan Fund, Ltd -- $57,400,000 class A to 'CCC+' from 'BB+'; -- $38,000,000 class B to 'CCC' from 'BB'. -- In the case of one transaction, Fitch has confirmed that a TRS termination/liquidation trigger has been breached. As of the date of this report, the trustee had not received notice from the TRS counterparty of intent to terminate the transaction and liquidate the collateral. In the event the TRS in this transaction were to be unwound, it is Fitch's opinion that the rated classes below could suffer losses. Fitch has taken the following downgrades with all classes remaining on Rating Watch Negative. Beecher Loan Fund, Ltd -- $66,800,000 class A to 'CC' from 'BB+'; -- $44,000,000 class B to 'CC' from 'BB'. Given the high volatility in loan prices, further negative action may be taken in response to additional reductions in cushion versus TRS termination/liquidation triggers. * S&P Slashes Ratings on 26 Tranches From Four Cash Flows and CDOs ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on 26 tranches from four U.S. cash flow and hybrid collateralized debt obligation transactions. The downgraded tranches have a total issuance amount of $4.327 billion. At the same time, S&P affirmed its rating on one tranche from one of these transactions and removed it from CreditWatch negative. Three of the four transactions are mezzanine structured finance CDOs of asset-backed securities, while the fourth is a high-grade SF CDO of ABS. Mezzanine CDOs of ABS are collateralized by mezzanine tranches of residential mortgage backed securities and other SF securities, while high-grade CDOs of ABS are backed predominantly by senior tranches of RMBS and other SF securities. The CDO downgrades are a result of a number of factors, including the Jan. 30, 2008, rating actions on first-lien subprime RMBS. To date, including the CDO tranches listed below and including actions on both publicly and confidentially rated tranches, S&P has lowered its ratings on 1,418 tranches from 423 U.S. cash flow, hybrid, and synthetic CDO transactions as a result of stress in the U.S. residential mortgage market and credit deterioration of U.S. RMBS. In addition, 2,667 ratings from 645 transactions are currently on CreditWatch negative for the same reasons. In all, the affected tranches represent an issuance amount of $342.150 billion. Standard & Poor's will continue to monitor the CDO transactions it rates and take rating actions, including CreditWatch placements, when appropriate. Additionally, S&P will continue to review its current criteria assumptions in light of the recent performance of U.S. RMBS assets and CDOs. Rating and CreditWatch Actions Rating ------ Transaction Class To From ----------- ----- -- ---- ACA ABS 2007-3 Ltd. A-1LA CCC A-/Watch Neg ACA ABS 2007-3 Ltd. A-1LB CC CCC/Watch Neg ACA ABS 2007-3 Ltd. Combo notes AAA AAA/Watch Neg ACA ABS 2007-3 Ltd. X BBB AAA/Watch Neg Bonifacius Ltd. A-1J BBB+ AAA/Watch Neg Bonifacius Ltd. A-1M AA- AAA/Watch Neg Bonifacius Ltd. A-1Q AA- AAA/Watch Neg Bonifacius Ltd. A-2 BB+ AAA/Watch Neg Bonifacius Ltd. A-3 B- AAA/Watch Neg Bonifacius Ltd. A-4 CCC+ AA+/Watch Neg Bonifacius Ltd. B CCC AA-/Watch Neg Bonifacius Ltd. C CC A/Watch Neg Bonifacius Ltd. D CC BBB/Watch Neg Coda CDO 2007-1 Ltd. A-1LA A- AAAsrp/Watch Neg Coda CDO 2007-1 Ltd. A-1LB BBB- AAA/Watch Neg Coda CDO 2007-1 Ltd. A-2L BB AA/Watch Neg Coda CDO 2007-1 Ltd. A-3L B- A/Watch Neg Coda CDO 2007-1 Ltd. B-1L CCC+ BBB/Watch Neg Coda CDO 2007-1 Ltd. B-2L CCC BB/Watch Neg Coda CDO 2007-1 Ltd. X BBB- AAA/Watch Neg Gemstone CDO VII Ltd. A-1a A+ AAA/Watch Neg Gemstone CDO VII Ltd. A-1b B- AAA/Watch Neg Gemstone CDO VII Ltd. A-2 CCC- AA-/Watch Neg Gemstone CDO VII Ltd. B CC BBB/Watch Neg Gemstone CDO VII Ltd. C CC B-/Watch Neg Gemstone CDO VII Ltd. D CC CCC+/Watch Neg Gemstone CDO VII Ltd. E CC CCC/Watch Neg Other Outstanding Ratings Transaction Class Rating ----------- ----- ------ ACA ABS 2007-3 Ltd. A-2L CC ACA ABS 2007-3 Ltd. A-3L CC ACA ABS 2007-3 Ltd. A-4L CC * S&P Says Bond Insurer Downgrades to Significantly Affect Banks ---------------------------------------------------------------- Downgrades of bond insurers (Financial Guaranty Insurance Co. was downgraded to 'AA'; ACA Financial Guaranty Corp. to 'CCC'; and 'AAA' rated MBIA Inc., Ambac Assurance Corp., and Security Capital Assurance Ltd. are on CreditWatch Negative) prompt questions about the effect on both commercial and investment banks, according to a report released by Standard & Poor's Ratings Services. The ripple effects of the still-unfolding subprime lending situation have affected various directly related markets, notably the residential mortgage-backed securities, collateralized debt obligations, asset-backed commercial paper, and structured investment vehicle markets, as such markets trade in or reference subprime loans or other securities that hold such loans. "Bond insurers are suffering as a result of their roles as guarantors of mortgage-related securities, and downgrading them could affect all markets in which they are active, including the municipal bond, commercial mortgage-backed securities, and other structured finance areas. In turn, dislocation in those markets could affect banks. We believe that the specific, identifiable effect on banks may be significant and, in a few cases, could lead to downgrades. Large global institutions have direct exposure to the bond insurers in a number of ways," said Standard & Poor's credit analyst Tanya Azarchs. * U.S. Trustee Executive Office Appoints Four Trustees ------------------------------------------------------- In separate press releases, Clifford J. White III, the Director of the Executive Office for the U.S. Trustees, disclosed that the U.S. Attorney General appointed four trustees on Feb. 1, 2008. The U.S. Trustees include: 1) Donald F. Walton Donald F. Walton was appointed as the U.S. Trustee for Region 21, which includes Georgia, Florida, Puerto Rico, and the U.S. Virgin Islands. "I am delighted at Don Walton's appointment as U.S. Trustee for Region 21, as he represents the very best of public service," Mr. White stated. "Over the years, the U.S. Trustee Program has benefitted immeasurably from his outstanding legal and management skills. I look forward to working with him as he leads this important region." Mr. Walton was appointed Acting U.S. Trustee for Region 21 on Sept. 1, 2007, while also serving as Acting Principal Deputy Director of the Executive Office for U.S. Trustees in Washington, D.C. Mr. Walton joined the U.S. Trustee Program in 1987 as Assistant U.S. Trustee in Atlanta after working for 11 years as an associate, and then partner, with an Atlanta law firm. He continued as Regional Assistant U.S. Trustee in Atlanta while also serving the Program in a variety of special assignments. In 1992 he received the Attorney General's Award for Distinguished Service and 2001 he received the Director's Award for Distinguished Service. Mr. Walton received his undergraduate degree from the University of North Carolina at Chapel Hill in 1968. He was commissioned as an ensign in the U.S. Navy Reserve and served three years active duty. He received his law degree cum laude in 1974 from the University of Georgia's Lumpkin School of Law. Immediately afterward, he clerked for the Honorable James C. Hill of the U.S. District Court for the Northern District of Georgia, and the U.S. Circuit Court of Appeals for the Fifth Circuit. 2) Robert D. Miller, Jr. Robert D. Miller Jr. was appointed as the Acting United States Trustee for Region 18 -- Washington, Oregon, Montana, Idaho, and Alaska -- for an interim period effective on Feb. 4, 2008. Mr. Miller replaces Ilene Lashinsky, U.S. Trustee for Region 14, who has also served as U.S. Trustee for Region 18 since January 2004. Mr. Miller has headed the U.S. Trustee Program's office in Spokane, Washington, since 1988. In addition, he served in the Executive Office as Acting Assistant Director for Review and Oversight from October 2005 to July 2007, and as Acting Assistant Director for Research and Planning from May 2006 to May 2007. Before joining the U.S. Trustee Program, Mr. Miller was an estate administrator for the U.S. Bankruptcy Court for the Eastern District of Washington. He received a law degree from Gonzaga University School of Law in Spokane, a Master of Business Administration from Northwestern University School of Business in Evanston, Ill., and an undergraduate degree from Dartmouth College in Hanover, N.H. 3) Ilene J. Lashinsky Ilene J. Lashinsky was reappointed as the U.S. Trustee for the District of Arizona (Region 14). "Ilene Lashinsky has worked enthusiastically to carry out the goals of the U.S. Trustee Program, and I am pleased to announce her reappointment as U.S. Trustee for Region 14," Director Cliff White stated. "I particularly appreciate her willingness to serve as interim United States Trustee in the Northwestern states while continuing to lead her region in Arizona." Ms. Lashinsky was first appointed as U.S. Trustee for Region 14 in November 2002. She has also served as interim U.S. Trustee for Washington, Oregon, Montana, Idaho, and Alaska (Region 18). Before her appointment as U.S. Trustee for Region 14, Ms. Lashinsky's professional experience included: a) practicing commercial and bankruptcy law; b) serving as resident bankruptcy advisor to the CFED-USAID Macedonia Commercial Law Project, where she assisted in workouts of Macedonian businesses and advised on that nation's transition to a free market economy; c) serving as Director of Continuing Legal Education for the State Bar of Arizona; and d) teaching as an adjunct faculty member for Arizona State University's Russian and East European Studies Consortium. Ms. Lashinsky received her law degree cum laude from Arizona State University College of Law in Tempe, Ariz., and her undergraduate degree from Arizona State University. 4) Richard F. Clippard Richard F. Clippard was reappointed by the Attorney General as U.S. Trustee for Region 8, which includes Tennessee and Kentucky. "Mr. Clippard has made significant contributions to bankruptcy policies and practices within his region," Director Cliff White stated. "I am pleased to announce his reappointment as U.S. Trustee for Region 8, and I look forward to continuing to work with him." Mr. Clippard was first appointed as U.S. Trustee for Region 8 in January 2003. Before his appointment as U.S. Trustee, Mr. Clippard's professional experience included serving as interim U.S. Attorney for the Middle District of Tennessee, Chief of the Civil Division of the U.S. Attorney's Office for the Middle District of Tennessee, and Special Assistant U.S. Attorney for the Small Business Administration, and practicing law with a Nashville law firm. Mr. Clippard received his law degree from the University of Mississippi Law School in Oxford, Mississippi, and his undergraduate degree from the University of Mississippi. The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The Program has 21 regions and 95 field offices. * Harold Kaplan and Mark Hebbeln Join Foley & Lardner ----------------------------------------------------- Foley & Lardner LLP reported that Harold L. Kaplan and Mark F. Hebbeln are joining the firm's Chicago office as partners in the Business Reorganizations Practice. Kaplan and Hebbeln focus their practice on corporate restructuring and insolvency and have extensive experience in the representation of indenture trustees and bondholders. "The addition of Harold and Mark is the latest step in our strategic plan to expand our national Business Reorganizations Practice and grow our Chicago office," said Chicago Office Managing Partner Mark L. Prager. "Harold and Mark are nationally known for their representation of indenture trustees, among other aspects of corporate restructuring and insolvency, and we are excited that they will be leading the firm's efforts in this area." Kaplan and Hebbeln join the firm from Drinker Biddle & Reath LLP. Kaplan will help lead efforts to expand Foley's Business Reorganizations Practice, both in Chicago and nationally, and will lead its Corporate Trust and Bondholders Rights practice. He recently served as co-chair of Drinker Biddle's Corporate Restructuring practice group and head of its Corporate Trust and Bondholder Rights practice group. He previously served as chairman of Gardner Carton & Douglas LLP, playing an instrumental role in the firm's merger with Drinker Biddle & Reath in 2007. "I am excited to join Foley, a dynamic firm with a strong national presence, and to join some of my longest-standing, most respected friends in the corporate restructuring world," said Kaplan. "Foley provides a great platform for Mark and me to add our experience in corporate trust and bondholder rights as well as health care insolvency to the firm's already strong business reorganizations practice." In addition to his nationally recognized indenture trustee and health care insolvency practices, Kaplan has represented financial institutions, debtors, trustees under the Bankruptcy Code and the Securities Investors Protection Act, foreign liquidators in ancillary proceedings, creditors committees and other creditor groups. Kaplan also has significant experience in claims trading and regulated industry matters. Turnarounds & Workouts recognized Kaplan as one of 12 outstanding bankruptcy lawyers in the country. Kaplan is also co-chair of the Annual Renaissance American Management, Inc. & Beard Group's Corporate Reorganization conference. He chairs the American Bar Association's Health and Not For Profit Working Group and is vice chair of the American Bar Association Committee on Trust Indentures and Indenture Trustees. Hebbeln will also serve as a member of the firm's Corporate Trust and Bondholders Rights practice. He has represented indenture trustees and bondholder interests in national bankruptcy cases and in health care reorganizations, insolvencies and other proceedings. He also has extensive experience in representing securitization trustees in insolvency and bankruptcy proceedings, official creditors' committees in chapter 11 proceedings and other creditor constituencies. He currently serves as co-chair of the American Bar Association's Trust Indenture Act Annotation Project. Turnarounds & Workouts recognized Hebbeln as one of 12 outstanding young restructuring lawyers in the nation. Foley's attorneys have extensive experience in all aspects of bankruptcy law and practice and continue to garner recognition for their services. Most recently, Foley was ranked by Bankruptcy Law360 as one of the nation's top 10 firms in the area of bankruptcy based upon new and recent engagements. About Foley & Lardner Foley & Lardner LLP -- http://www.Foley.com-- continually evolves to meet the changing legal needs of our clients. The firm's team-based approach, proprietary client service technology, and practice depth enhance client relationships while seeing clients through their most complex legal challenges. The BTI Consulting Group (Wellesley, Massachusetts) recently recognized Foley as one of the top four law firms shaping the U.S. legal market, while CIO magazine has named Foley to its CIO 100 list six times for our client-focused technology. With more than 1,000 attorneys in 22 offices and more than 50 practices, count on Foley for high- caliber business and legal insight. * Jeffrey Lacker at Federal Reserve Says Mild Recession is Likely ----------------------------------------------------------------- Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, Va., told businessmen in Charleston, West Virginia, Tuesday that a mild recession is likely to happen, various reports relate. Mr. Lacker stated that the recession will not be as worse as that of 1982 or 1974, but it's going to be "shallow and with a slow recovery," reports say. Mr. Lacker, however, explained that his projection does not center on a recession but on "sluggish growth" for about six months prior to a "gradual firming" starts, reports reveal. Mr. Lacker also reiterated the banks' move to tighten credit standards due to the risk exposures on mortgages, according to the reports. Concerning interest rates, Mr. Lacker asserted that its not clear if additional cuts is warranted if the economy gets better than projected in the next few months, reports add. Meanwhile, Michael Feroli at JPMorgan Chase & Co. in New York told reporters that Mr. Lacker's statements imply "a willingness to go along with, and even possibly endorse, further policy accommodation." * Fed Finds Domestic and Foreign Banks Tighten Lending Standards ---------------------------------------------------------------- The Division of Monetary Affairs, Board of Governors of the Federal Reserve System conducted the January 2008 Senior Loan Officer Opinion Survey on Bank Lending Practices. The survey addressed changes in the supply of, and demand for, bank loans to businesses and households over the past three months. Special questions in the survey queried banks about changes in terms on commercial real estate loans during 2007, expected changes in asset quality in 2008, and loss-mitigation strategies on residential mortgage loans. In addition, the survey included a new set of recurring questions regarding revolving home equity lines of credit. This article is based on responses from 56 domestic banks and 23 foreign banking institutions. C&I Lending In the January survey, domestic and foreign institutions reported having tightened their lending standards and terms for a broad range of loan types over the past three months. Demand for bank loans reportedly had weakened, on net, for both businesses and households over the same period. In the January survey, one-third of domestic institutions -- a larger net fraction than in the October survey -- reported having tightened their lending standards on C&I loans to small as well as to large and middle-market firms over the past three months. Significant net fractions of respondents also noted that they had tightened price terms on C&I loans to all types of firms, including raising the cost of credit lines and the premiums charged on riskier loans over the survey period. About two-fifths of domestic banks -- a higher net fraction than in the October survey -- reported having increased spreads of loan rates over their cost of funds over the previous three months. Smaller net fractions of domestic banks also indicated that they had tightened non-price terms on C&I loans to all types of firms. Compared with domestic institutions, larger net fractions of U.S. branches and agencies of foreign banks reported having tightened lending standards and terms on C&I loans. About two-thirds of foreign banks -- up from one-third in the October survey -- noted that they had tightened their lending standards on C&I loans over the past three months, and large majorities also reported that they had tightened selected price terms for the loans. About 85 percent of foreign banks -- a higher net fraction than in the October survey -- indicated that they had increased spreads of loan rates over their cost of funds over the past three months. Large majorities of domestic and foreign institutions that reported having tightened lending standards and terms on C&I loans over the past three months pointed to a less favorable or more uncertain economic outlook, a worsening of industry-specific problems, and a reduced tolerance for risk as reasons for their more-restrictive lending policies. Smaller but significant fractions of domestic and foreign respondents noted that a deterioration of their banks' current or expected capital or liquidity positions had contributed to the tightening of lending standards and terms over the past three months. On net, large domestic banks reported that demand for C&I loans from large and middle-market firms was about unchanged over the past three months, whereas about 35% of small domestic banks, on net, reportedly experienced weaker demand for C&I loans from these firms. About one-fourth of both large and small domestic banks, on net, also saw weaker demand for C&I loans from small firms. Finally, about 40% of foreign institutions reported weaker demand, on net, for C&I loans over the past three months. Very large majorities of domestic institutions that indicated a weakening of loan demand pointed to a decrease in customers' needs to finance inventories and investment in plant and equipment. In addition, 70% of domestic banks and all foreign respondents cited a decrease in customers' needs for merger and acquisition financing as a reason for lower demand for C&I loans. Regarding future business, about 20% of domestic and 50 percent of foreign respondents, on net, reported that the number of inquiries from potential business borrowers had decreased over the previous three months. Commercial Real Estate Lending About 80% of domestic banks reported tightening their lending standards on commercial real estate loans over the past three months, a notable increase from the October survey. The net fraction of domestic banks reporting tighter lending standards on these loans was the highest since this question was introduced in 1990. About 55% of foreign banks -- up from about 40% in the October survey -- indicated that they had tightened their lending standards on the loans. Concerning loan demand, about 45% of both domestic and foreign respondents, on net, reported weaker demand for commercial real estate loans over the past three months. As in past years, the January survey queried banks about changes in their lending terms on commercial real estate loans over the previous 12 months. The responses to these special questions indicated that considerable net fractions of banks had tightened terms on commercial real estate loans in 2007; in contrast, in last year's survey, banks reported that they had eased lending terms, on net, in 2006. In the latest survey, about 55% of domestic respondents and 45% of foreign respondents noted that they had required higher debt service coverage ratios and lower loan-to-value ratios on commercial real estate loans in 2007. In addition, about 40% of domestic banks and 50% of foreign banks indicated that they had reduced the maximum loan sizes that they were willing to grant over the past 12 months. About 45% of domestic banks and 75% of foreign banks reported raising loan rate spreads over their cost of funds in 2007. A large number of domestic and foreign respondents pointed to a less favorable economic outlook and to a worsening of the conditions of, or the outlook for, commercial real estate in the markets where their banks operate as reasons for tightening terms on commercial real estate loans in 2007. In addition, a large fraction of domestic banks noted a reduced tolerance for risk, whereas foreign banks indicated that reduced liquidity of the securities collateralized by these types of loans was an important factor. Lending to Households In the January survey, significant numbers of domestic respondents reported that they had tightened their lending standards on prime, nontraditional, and subprime residential mortgages over the past three months; the remaining respondents noted that their lending standards had remained basically unchanged. About 55% of domestic respondents indicated that they had tightened their lending standards on prime mortgages, up from about 40% in the October survey. Of the thirty-nine banks that originated nontraditional residential mortgage loans, about 85% reported a tightening of their lending standards on the loans over the past three months, compared with about 60% in the October survey. Finally, five of the seven banks that originated subprime mortgage loans noted that they had tightened their lending standards on the loans, a proportion similar to that in the October survey. About 60% of domestic respondents, on net, indicated that demand for prime residential mortgages had weakened over the past three months, and 70% of respondents, on net, noted weaker demand for nontraditional and subprime mortgage loans over the same period. The net fractions reporting weaker demand for each of the three types of mortgage loans increased relative to the October survey. About 60% of domestic respondents indicated that they had tightened their lending standards for approving applications for revolving home equity lines of credit over the past three months. Regarding demand, about 35% of domestic banks, on net, reported that demand for revolving home equity lines of credit had weakened over the past three months. About 10% of respondents -- up from about 5% in the October survey -- reported that they had tightened their lending standards on credit card loans over the past three months. About 30% of respondents noted that they had reduced the extent to which the loans were granted to customers who did not meet credit-scoring thresholds; smaller net fractions also indicated an increase in minimum required credit scores and a reduction of credit limits on credit card loans. About 15% of domestic banks -- up from about 5% in the October survey -- indicated a diminished willingness to make consumer installment loans relative to three months earlier. About one-third of domestic banks -- up from about one-fourth in the October survey -- reported that they had tightened their lending standards on consumer loans other than credit card loans. Significant net fractions of banks also noted that they had tightened lending terms and conditions on the loans. In particular, domestic banks had increased minimum credit scores, reduced the extent to which the loans were granted to customers who did not meet credit-scoring thresholds, and widened spreads of loan rates over their cost of funds. Regarding loan demand, about 35 percent of domestic institutions, on net, indicated that they had experienced weaker demand for consumer loans of all types. Questions on the Outlook for 2008 Loan Quality A set of special questions asked banks about their expectations for delinquencies and charge-offs on loans to businesses and households in 2008 under the assumption that economic activity progresses in line with consensus forecasts. On balance, the responses indicate that large majorities of domestic and foreign banks expect a deterioration in loan quality in 2008. Regarding loans to businesses, between about 75% and 85% of domestic and foreign banks expect a deterioration in the quality of their C&I and commercial real estate loan portfolios. About 15% of domestic and 20% of foreign respondents expect a substantial deterioration in the quality of their commercial real estate portfolios. Concerning residential real estate loans, between about 70% and 80% of domestic respondents expect the quality of their prime, nontraditional, and subprime residential mortgage loans, as well as of their revolving home equity loans, to deteriorate in 2008. Finally, about 70% of domestic respondents expect a deterioration in the quality of both credit card and other consumer loans. Questions on Loss-Mitigation Strategies on Residential Mortgage Loans A final set of special questions queried domestic respondents about strategies that they expect their banks to employ in order to mitigate a potential deterioration in the credit quality of their bank's residential mortgage loan portfolio or of the mortgage loans that their banks service for others. More than 85% of respondents indicated that they expect loan-by- loan modifications based on individual borrowers' circumstances to be at least a somewhat significant loss-mitigation strategy at their banks. More than 65% of respondents also anticipate steps -- such as short sales or deed-in-lieu of foreclosures -- in which borrowers lose possession of the house to be at least somewhat significant loss-mitigation steps at their banks. A large number of respondents also indicated that their banks' loss-mitigation strategies will include refinancing of loans into other mortgage products at their banks or into Federal Housing Administration (FHA) products. Finally, about 35% of respondents expected streamlined loan modifications of the sort proposed by the Hope Now alliance to be at least a somewhat significant loss- mitigating strategy for their banks. Domestic respondents expect their banks to face several potential obstacles in undertaking these loss-mitigation strategies: Respondents anticipate difficulties in contacting borrowers, and they are concerned with borrowers' reduced motivation to retain possession of their properties. To a lesser extent, respondents also anticipate difficulties arising from a shortage of qualified loss-mitigation specialists at their banks. * Be Cautious in Equity Markets This Spring, CIBC World Warns ------------------------------------------------------------- North American stock markets face further declines this spring with the prospect of significant writedowns by North American banks and weakness in the U.S. economy, notes a new CIBC World Markets report. "The tandem of falling (U.S.) housing prices and rising default rates should trigger as much as another US$30-50 billion in asset writedowns by North American banks over the next quarter, which, together with a visibly struggling U.S. economy could be a catalyst for another five percent correction," says Jeff Rubin, Chief Strategist and Chief Economist at CIBC World Markets in his monthly Canadian Portfolio Strategy Outlook report. "Already at $140 billion, world-wide writedowns on U.S. subprime mortgage assets are likely to peak in the $265 billion range over the next year," says Mr. Rubin, adding that those losses are likely to occur in spite of both Fed easing and efforts by Washington to spare over 300,000 mortgage holders from painful mortgage resets. "As long as falling (U.S.) house prices continue to generate significant negative home equity among subprime mortgage holders, default rates will continue to rise even if subprime mortgage rates do not," says Mr. Rubin. "A double-digit decline in housing prices will bring a concomitant increase in default rates which will likely approach just under 30 percent by the fourth quarter." Yet despite the near-term bumpiness, Mr. Rubin remains bullish on the year. "While interest rate cuts and fiscal stimulus will not salvage U.S. housing prices or prevent subprime mortgage default rates from rising, they should go a long way in containing broad contagion effects to the rest of the economy," he says, adding that "a 2.5 percent federal funds rate should resuscitate the U.S. economy and North American equity markets by the second half of the year." Mr. Rubin also points to continuing strength in overseas economies and the prospect of triple-digit oil prices over the next twelve months which "should set the stage for a powerful second-half rally in the market that will see the TSX end the year at 14,500." These conditions should also see the energy and resource laden TSX hitting 16,200 by the end of 2009, he says. To guard against interim volatility, Mr. Rubin is cutting the weighting of stocks in his model portfolio by nine percentage points, and putting that money into bonds. "We would expect to be adding weight back to our equity position over the latter half of the year" as markets move closer to his targets, says Mr. Rubin. By sector, Mr. Rubin remains "overweight" in energy, gold and base metal stocks which he says have been undervalued by subprime jitters. "We continue to like the energy and commodity side of the market which is largely detached from the problems of the U.S. housing market and even the more general outlook for the U.S. economy," he says. Meanwhile, Mr. Rubin is raising his target for bullion prices to $1,000 per ounce this year and is reaffirming his "overweight" stance in this sector. He's also forecasting that base metal prices, while not keeping pace with gold prices, "should remain at historically high levels despite the performance of the US economy, reflecting robust economic growth not only in China but in other resource-intensive developing economies like India and Brazil." Mr. Rubin is also reducing his weighting in banks and telecoms by a further half-percentage point each, and moving those funds into utilities. The complete CIBC World Markets report is available at: http://research.cibcwm.com/economic_public/download/psfeb08.pdf About CIBC CIBC World Markets is the wholesale and corporate banking arm of CIBC, -- http://www.cibc.ca/-- that provides a range of integrated credit and capital markets products, investment banking, and merchant banking to clients in key financial markets in North America and around the world. It provides innovative capital solutions and advisory expertise across a wide range of industries as well as top-ranked research for our corporate, government and institutional clients. * U.S. Consumer Bankruptcy Filings Increase 30% in January ---------------------------------------------------------- Business Credit Management U.K. reports that U.S. consumer bankruptcy filings rose more than 30% in January from the same period in 2006, according to the American Bankruptcy Institute based on data from the National Bankruptcy Research Center. Business Credit Management adds that although the consumer filings for January increased relative to the previous year, the NBKRC data reveals that the total January consumer bankruptcy filings were flat compared to December 2006. Chapter 13 filings constituted 40.05% of all consumer cases in January. "With over one million more subprime adjustable-rate mortgages due to reset during 2008, the payment shock for many households could lead to higher bankruptcies this year," said ABI Executive Director Samuel J. Gerdano. According to the NBKRC data, the overall consumer filing total for the 2007 calendar year reached 801,840, versus 573,203 filings recorded in 2006. National Bankruptcy Institute -- http://www.nbkrc.com/-- is an online research center that offers subscribers access to up-to- date research and statistics on bankruptcy filings. *Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ----------------------------------------------------------- Recent Chapter 11 cases filed with assets and liabilities below $1,000,000: In Re Plantation Road Service, Inc. Bankr. N.D. Fla. Case No. 08-40047 Chapter 11 Petition filed January 30, 2008 See http://bankrupt.com/misc/flnb08-40047.pdf In Re Kendall Hotel and Suites, L.L.C. Bankr. S.D. Fla. Case No. 08-11050 Chapter 11 Petition filed January 30, 2008 See http://bankrupt.com/misc/flsb08-11050.pdf In Re Kimberly Curry Bankr. E.D. N.Y. Case No. 08-70473 Chapter 11 Petition filed January 30, 2008 See http://bankrupt.com/misc/nyeb08-70473.pdf In Re James H. Guenther Bankr. W.D. Penn. Case No. 08-20581 Chapter 11 Petition filed January 30, 2008 See http://bankrupt.com/misc/pawb08-20581.pdf In Re Pesa Properties, Inc. Bankr. D.C. Case No. 08-00055 Chapter 11 Petition filed January 30, 2008 Filed as Pro Se In Re Mark Stephen Turner Bankr. E.D. Tex. Case No. 08-40155 Chapter 11 Petition filed January 30, 2008 See http://bankrupt.com/misc/txeb08-40155.pdf In Re R.T.M. Enterprises, Inc. Bankr. W.D. Wash. Case No. 08-10477 Chapter 11 Petition filed January 30, 2008 See http://bankrupt.com/misc/wawb08-10477.pdf In Re Star Vision Centers, Inc. Bankr. S.D. Ala. Case No. 08-10315 Chapter 11 Petition filed January 31, 2008 See http://bankrupt.com/misc/alsb08-10315.pdf In Re Dawn O. Verdegan Bankr. N.D. Ind. Case No. 08-20270 Chapter 11 Petition filed January 31, 2008 See http://bankrupt.com/misc/innb08-20270.pdf In Re Atlantic Excavation Corp. Bankr. D. Mass. Case No. 08-10675 Chapter 11 Petition filed January 31, 2008 See http://bankrupt.com/misc/mab08-10675.pdf In Re 00000 86-92 Hamilton Street Realty, L.L.C. Bankr. D. Mass. Case No. 08-10708 Chapter 11 Petition filed January 31, 2008 See http://bankrupt.com/misc/mab08-10708.pdf In Re RxEyes, L.L.C. Bankr. W.D. N.C. Case No. 08-10082 Chapter 11 Petition filed January 31, 2008 See http://bankrupt.com/misc/ncwb08-10082.pdf In Re Alumatek, Inc. Bankr. D. Nv. Case No. 08-10856 Chapter 11 Petition filed January 31, 2008 See http://bankrupt.com/misc/nvb08-10856.pdf In Re Humphrey Humber Pachecker Bankr. S.D. Fla. Case No. 08-11130 Chapter 11 Petition filed January 31, 2008 Filed as Pro Se In Re Anchor Senior Medical Services, P.L.L.C. Bankr. E.D. Mich. Case No. 08-42585 Chapter 11 Petition filed January 31, 2008 Filed as Pro Se In Re El Veasta Lampley Bankr. C.D. Calif. Case No. 08-10444 Chapter 11 Petition filed January 31, 2008 Filed as Pro Se In Re Larry Dean Williams Bankr. W.D. Tex. Case No. 08-10143 Chapter 11 Petition filed January 31, 2008 See http://bankrupt.com/misc/txwb08-10143.pdf In Re Birmingham Electric Battery Co., Inc. Bankr. N.D. Ala. Case No. 08-40204 Chapter 11 Petition filed February 1, 2008 See http://bankrupt.com/misc/alnb08-40204.pdf In Re S.V.V. Group, Inc. Bankr. C.D. Calif. Case No. 08-11080 Chapter 11 Petition filed February 1, 2008 See http://bankrupt.com/misc/cacb08-11080.pdf In Re Kaghann's Korner, Inc. Bankr. N.D. Ind. Case No. 08-10255 Chapter 11 Petition filed February 1, 2008 See http://bankrupt.com/misc/innb08-10255.pdf In Re Point Beach Holdings, L.L.C. Bankr. D. N.J. Case No. 08-11896 Chapter 11 Petition filed February 1, 2008 See http://bankrupt.com/misc/njb08-11896.pdf In Re Safe Disposal Systems, Inc. Bankr. E.D. Penn. Case No. 08-10833 Chapter 11 Petition filed February 1, 2008 See http://bankrupt.com/misc/paeb08-10833.pdf In Re Kenneth Henry Bankr. E.D. Va. Case No. 08-10506 Chapter 11 Petition filed February 1, 2008 Filed as Pro Se In Re Eduardo Relicio Bautista Bankr. N.D. Calif. Case No. 08-50423 Chapter 11 Petition filed February 1, 2008 Filed as Pro Se In Re Joseph Johnson Bankr. N.D. Calif. Case No. 08-50432 Chapter 11 Petition filed February 1, 2008 Filed as Pro Se In Re The Beverage Depot, Inc. Bankr. S.D. Tex. Case No. 08-30483 Chapter 11 Petition filed February 1, 2008 See http://bankrupt.com/misc/txsb08-30483.pdf In Re Kaycia L. Vansickle Bankr. N.D. Ala. Case No. 08-80324 Chapter 11 Petition filed February 4, 2008 See http://bankrupt.com/misc/alnb08-80324.pdf In Re Center of Life Apostolic Ministries, Inc. Bankr. N.D. Ga. Case No. 08-62137 Chapter 11 Petition filed February 4, 2008 See http://bankrupt.com/misc/ganb08-62137.pdf In Re Cumberland Academy, Inc. Bankr. N.D. Ga. Case No. 08-62155 Chapter 11 Petition filed February 4, 2008 See http://bankrupt.com/misc/ganb08-62155.pdf In Re Odisho Builders, L.L.C. Bankr. N.D. Ill. Case No. 08-02497 Chapter 11 Petition filed February 4, 2008 See http://bankrupt.com/misc/ilnb08-02497.pdf In Re Alfred Heller Heat Treating Co. Bankr. D. N.J. Case No. 08-12027 Chapter 11 Petition filed February 4, 2008 See http://bankrupt.com/misc/njb08-12027.pdf In Re JMYGEEZ, Inc. Bankr. W.D. Penn. Case No. 08-20710 Chapter 11 Petition filed February 4, 2008 See http://bankrupt.com/misc/pawb08-20710.pdf In Re Unique Restaurants Corp. Bankr. D. P.R. Case No. 08-00615 Chapter 11 Petition filed February 4, 2008 See http://bankrupt.com/misc/prb08-00615.pdf In Re The Vail Group Bankr. N.D. Ga. Case No. 08-62113 Chapter 11 Petition filed February 4, 2008 Filed as Pro Se In Re Brian Cubbins Wight Bankr. N.D. Ga. Case No. 08-20286 Chapter 11 Petition filed February 4, 2008 Filed as Pro Se In Re Eldridge Suggs, IV Bankr. N.D. Ga. Case No. 08-61963 Chapter 11 Petition filed February 4, 2008 Filed as Pro Se In Re G.&D. Furniture, L.L.C. Bankr. C.D. Calif. Case No. 08-11416 Chapter 11 Petition filed February 4, 2008 Filed as Pro Se In Re Hicks Townsend, L.L.C. Bankr. N.D. Tex. Case No. 08-30554 Chapter 11 Petition filed February 4, 2008 Filed as Pro Se In Re William Puls, Sr. Bankr. N.D. Tex. Case No. 08-40524 Chapter 11 Petition filed February 4, 2008 See http://bankrupt.com/misc/txnb08-40524.pdf In Re Mart Apartments, Ltd. Bankr. N.D. Tex. Case No. 08-40540 Chapter 11 Petition filed February 4, 2008 See http://bankrupt.com/misc/txnb08-40540.pdf In Re Giddings Apartments, Ltd. Bankr. N.D. Tex. Case No. 08-40550 Chapter 11 Petition filed February 4, 2008 See http://bankrupt.com/misc/txnb08-40550.pdf In Re J.R.D. Investments, L.L.C. Bankr. S.D. Tex. Case No. 08-30752 Chapter 11 Petition filed February 4, 2008 See http://bankrupt.com/misc/txsb08-30752.pdf In Re Vong's International, Inc. Bankr. E.D. Va. Case No. 08-10533 Chapter 11 Petition filed February 4, 2008 See http://bankrupt.com/misc/vaeb08-10533.pdf In Re Hiview Enterprises, Inc. Bankr. N.D. Calif. Case No. 08-50466 Chapter 11 Petition filed February 5, 2008 See http://bankrupt.com/misc/canb08-50466.pdf In Re L.&N. Investments, Inc. Bankr. W.D. Mo. Case No. 08-60163 Chapter 11 Petition filed February 5, 2008 See http://bankrupt.com/misc/mowb08-60163.pdf In Re Jefferson Pharmacy Corp. Bankr. D. N.J. Case No. 08-12086 Chapter 11 Petition filed February 5, 2008 See http://bankrupt.com/misc/njb08-12086.pdf In Re Paging Management I, L.L.C. Bankr. D. N.J. Case No. 08-12097 Chapter 11 Petition filed February 5, 2008 See http://bankrupt.com/misc/njb08-12097.pdf In Re Unique Management Corp. Bankr. D. P.R. Case No. 08-00651 Chapter 11 Petition filed February 5, 2008 See http://bankrupt.com/misc/prb08-00651.pdf In Re American Financial Bankr. S.D. Tex. Case No. 08-30817 Chapter 11 Petition filed February 5, 2008 Filed as Pro Se In Re Randall Martin Schulze Bankr. W.D. Tex. Case No. 08-50340 Chapter 11 Petition filed February 5, 2008 Filed as Pro Se In Re Michael A. Gregorakos Bankr. N.D. Ga. Case No. 08-62286 Chapter 11 Petition filed February 5, 2008 Filed as Pro Se In Re Hunter Intermodal Transport, Inc. Bankr. W.D. Tenn. Case No. 08-10441 Chapter 11 Petition filed February 5, 2008 See http://bankrupt.com/misc/tnwb08-10441.pdf In Re Channelview Capital, Inc. Bankr. S.D. Tex. Case No. 08-30795 Chapter 11 Petition filed February 5, 2008 See http://bankrupt.com/misc/txsb08-30795.pdf In Re Piping Rock Place Townhomes, L.L.C. Bankr. S.D. Tex. Case No. 08-30814 Chapter 11 Petition filed February 5, 2008 See http://bankrupt.com/misc/txsb08-30814.pdf In Re Johnny Castillo, Inc. Bankr. S.D. Tex. Case No. 08-50035 Chapter 11 Petition filed February 5, 2008 See http://bankrupt.com/misc/txsb08-50035.pdf ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Joseph Medel C. Martirez, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, Philline P. Reluya, Ma. Cristina I. Canson, Christopher G. Patalinghug, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2008. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***