T R O U B L E D C O M P A N Y R E P O R T E R Friday, February 8, 2008, Vol. 12, No. 33 Headlines 614/616 CONTI: Case Summary & Largest Unsecured Creditor AMERICAN HOME: Committee Taps Trenwith Sec. as Investment Banker AMERICAN HOME: S&P Puts Three Low-B Ratings on Negative Watch AMERICAN LAFRANCE: Can Employ Kurtzman Carson as Claims Agent AMERICAN RAILCAR: Earns $4.9 Million in 2007 Third Quarter ASARCO LLC: Asarco Inc.'s Examiner Request Unpopular to Parties ASARCO LLC: Wants Lehman to Produce Asset Valuation Report ASPEN INSURANCE: Earns $135.2 Million in 2007 Fourth Quarter ATHERTON-NEWPORT: Gets Initial OK to Use I.I.G.'s Cash Collateral AVISTA CORP: Fitch Holds 'BB+' ID Rating with Positive Outlook BLACKBOARD INC: Earns $4.2 Million in Quarter Ended December 31 BRISTOW GROUP: Quarter Ended Dec. 31 Earnings Increase to $20 Mil. BRUCE STRICKLAND: Case Summary & Largest Unsecured Creditor BUFFETS HOLDING: Landlords, et al., Cry Foul Over DIP Loan Motion BUILDING MATERIALS: Expected Neg. Trends Cue Fitch to Cut Ratings CALPINE CORP: Inks Settlement Pact With Debtholders' Committee CENTRAL ILLINOIS: To Sell Plant to Secured Lenders for $80 Million CHARMING SHOPPES: Discloses Changes in Executive Management CHEETAH GYMS: MB Financial to Auction Assets on Feb. 29 CHRISTENSEN REALTY: Case Summary & Five Largest Unsec. Creditors CHRYSLER LLC: Still Out to Grab Tooling Equipment from Plastech COLLIN DWAYNE: Voluntary Chapter 11 Case Summary CONTINENTAL AIR: WSJ Says United Merger Talks "Have Grown Serious" CROWN HOLDINGS: S&P Changes Outlook to Positive; Holds BB- Rating CREDIT-BASED: Fitch Downgrades Ratings on $511 Mil. Certificates COUNTRYWIDE ASSET: Fitch Junks Ratings on Seven Cert. Classes DEATH ROW: Warner Tenders $25-Mil. Cash Bid to Buy All Assets DELTA AIR: Merger Talks with Northwest Intensifies DOLLAR THRIFTY: Moody's Reviews B1 Corporate Rating for Likely Cut DOMAIN INC: Wants To Access Wells Fargo's $6 Mil Credit Facility DUKE FUNDING: Fitch Assigns DR6 on Ten Classes of 'C' Rated Notes DURA AUTOMOTIVE: To Bypass Executives From 2008 Bonuses DURA AUTOMOTIVE: Reaches Settlement Pact w/ Nyloncraft for $2 Mil. FORTUNOFF: Can Access BofA's $85 Mil. DIP Fund on Interim Basis FORTUNOFF: Obtains Interim Nod to Use Lenders' Cash Collateral FORTUNOFF: NRDC Arm Executes Deal to Buy Assets for $80 Million FOXTON NORTH: Disclosure Statement Hearing Scheduled for March 27 FOXTON NORTH: Unsecured Creditors To Be Paid in Full Under Plan GRANT FOREST: S&P Puts B- Corporate Rating on CreditWatch Neg GMAC COMMERCIAL: Fitch Holds 'B-' Rating on $3.8MM Class P Certs. GMAC LLC: Financial Unit Posts $724MM Net Loss in Fourth Qtr. GS ENERGY: Earns $461,456 in Third Quarter Ended Sept. 30, 2007 HANCOCK FABRICS: Asks Court's Nod to Assume 177 Unexpired Leases HANCOCK FABRICS: Asks Court's Nod to Modify Lease Agreements HANCOCK FABRICS: Court to Talk on Plan Exclusivity Issues Feb. 25 HARMAN INTERNATIONAL: Earns $43 Mil. in Quarter Ended December 31 IAC/INTERACTIVECORP: Incurs $144.1 Million Net Loss in Year 2007 IAC/INTERACTIVECORP: May Purchase AOL Biz For a "Ridiculous" Price IAC/INTERACTIVECORP: Won't Let Liberty Dispute Distract Operations INDEPENDENCE COUNTY: S&P Puts BB+ Bond Rating on CreditWatch Neg ING RE (UK): Court Recognizes Ch. 15 Case as Foreign Proceeding INTERSTATE HOTELS: Completes $208MM Buyout of Blackstone's Hotels K-SEA TRANSPO: Earns $9.9 Million in 2nd Fiscal Qtr. Ended Dec. 31 LAKE ENTERPRISES: Case Summary & Nine Largest Unsecured Creditors L2L EDUCATION: S&P Cuts Ratings on All Notes on High Default Rate MARJORIE FORD: Case Summary & 20 Largest Unsecured Creditors MARKETING & REFERRAL: Case Summary & Four Largest Unsec. Creditors MARS CDO: Seven Classes Gets Moody's Junk Ratings on High Losses MBS MANAGEMENT: to Sell Austin Apartment to Steelwood for $9.6MM MCGUIRK OIL: Case Summary & 12 Largest Unsecured Creditors MONITOR OIL: Committee Taps Thompson & Knight as Counsel MOVIE GALLERY: Court Extends Plan Voting Deadline to March 24 MUELLER WATER: Posts $1.6 Mil. Net Loss in Qtr. Ended December 31 NEO CDO: S&P Junks Ratings on Seven Tranches on Liquidation Plan NEWCASTLE CDO: Fitch Places 'BB' Rating Under Negative Watch NORBORD INC: Net Loss Up to $13 Mil. in Qtr. Ended December 31 NORBORD INC: Declining Risk Profile Cues S&P to Chip Rating to BB NORTHWEST AIRLINES: Merger Talks with Delta Air Lines Intensifies OZYMANDIUS LP: Sale of Kress Building Fails to Attract Bids PACIFIC LUMBER: Heartlands Commission Files Competing Plan PACIFIC LUMBER: Sale of Scotia School & Recreation Center Approved PALM BEACH: Defaults on Acquisition Agreement with Manchester Inc. PERFORMANCE TRANSPORTATION: Can Secure $15 Million DIP Financing PERFORMANCE TRANSPORTATION: Court OKs Use of All Cash Collateral PERFORMANCE TRANSPORTATION: Court OKs Use of All Cash Collateral PLASTECH ENGINEERED: Chrysler Still Out to Grab Tooling Equipment PLASTECH ENGINEERED: Can Obtain $38 Million of DIP Financing PLASTECH ENGINEERED: Moody's Puts D Probability of Default Rating QUEBECOR WORLD: ISDA Launches Protocol to Settle Derivate Trades RADIATION THERAPY: Shareholders OK Merger Deal with RTSHI & RTS RADIO SYSTEM: Moody's Chips Secured Credit Facility Rating to B2 RFSC SERIES: S&P Cuts Ratings; Rating on Class M-3 Tumbles to 'D' SEA CONTAINERS: Court Approves SC Iberia and YMCL Guarantees SEA CONTAINERS: Reaches Pact with Pension Schemes Trustees SECURITY CAPITAL: Moody's Cuts Insurance Strength Rating to 'A3' SEG DEVELOPMENT: Case Summary & Four Largest Unsecured Creditors SEMINOLE TRIBE: Moody's Affirms 'Ba1' Rating on $459 Mil. Bonds SOLUTIA INC: Compels Banking Group to Honor $2 Bil. Exit Financing SRH INVESTORS: Asset Sale Slated for March 5 STANDARD BEEF: Case Summary & 20 Largest Unsecured Creditors TAUBMAN CENTERS: Fitch Affirms and Withdraws Low-B Ratings TESORO CORP: Posts $40 Million Net Loss in 2007 Fourth Quarter TEXAS INDUSTRIES: Earns $29.3 Million in 2nd Quarter Ended Nov. 30 TRIBUNE CO: Appoints Ed Wilson as Pres. of Broadcasting Tribune UMMA RESOURCES: Must File Disclosure Statement & Chapter 11 Plan UNITED AIR: WSJ Says Continental Merger Talks "Have Grown Serious" WENDY'S INT'L: Earnings Improved to $14MM in Qtr. Ended Dec. 30 W.R GRACE: Reports Fourth Quarter 2007 Financial Results * Fitch Cuts Ratings on Eight CLO Tranches, Removes Neg. Watch * Fitch Says US Loan CDO Delinquencies Are Up from Last Month * S&P Lowers Ratings on 94 Tranches From 17 Cash Flows and CDOs * S&P Downgrades Ratings on Five Classes of RMBS From Seven Deals * S&P's Lists New Actions to Strengthen Rating Process * S&P Undertakes Actions Aimed at Strengthening Rating Process * BOOK REVIEW: How To Measure Managerial Performance ********* 614/616 CONTI: Case Summary & Largest Unsecured Creditor -------------------------------------------------------- Debtor: 614/616 Conti Street, L.L.C. 8654 Pontchartrain Boulevard 20 Peninsula New Orleans, LA 70124 Bankruptcy Case No.: 08-10227 Type of Business: The Debtor owns and manages real estate. Chapter 11 Petition Date: February 6, 2008 Court: Eastern District of Louisiana (New Orleans) Debtor's Counsel: Emile L. Turner, Jr., Esq. 424 Gravier Street New Orleans, LA 70130 Tel: (504) 586-9120 Total Assets: $500,000 to $1 Million Total Debts: $1 Million to $10 Million Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Earl North C.P.A. fees unknown Certified Public Accountant 1010 Common Street, Suite 2440 New Orleans, LA 70112 AMERICAN HOME: Committee Taps Trenwith Sec. as Investment Banker ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in American Home Mortgage Investment Corp. and its debtor-affiliates' Chapter 11 cases seek permission from the U.S. Bankruptcy Court for the District of Delaware to retain Trenwith Securities LLC to provide investment banking advisory services, nunc pro tunc to Aug. 14, 2007. Trenwith Securities is an affiliate of BDO Seidman. The Creditors Committee has previously sought and obtained permission to retain BDO Seidman LLP, as advisor. In that application, the Committee sought authority to retain Trenwith Securities to provide investment banking advisory services on an as-needed basis. Judge Christopher S. Sontchi advised the Creditors Committee to file a separate application to engage Trenwith Securities. Trenwith Securities has extensive experience in providing investment banking advisory services in Chapter 11 cases, in particular, with assisting creditors' committees in connection with the structure and process for conducting sales under Section 363 of the Bankruptcy Code, the Committee told the Court. The Creditors Committee believes that Trenwith Securities is well qualified to provide the Committee with investment banking advisory services, particularly, in assisting with the structure and process for conducting sales under Section 363. James McGinley, of the Wilmington Trust Company and co-chairman of the Creditors Committee, relates that Trenwith Securities is not being engaged to market and sell any specific estate asset. Rather, the Creditors Committee currently desires only to retain Trenwith Securities for the limited purpose of providing limited investment advisory services on an hourly basis. Trenwith Securities will be paid in its customary hourly rates for services rendered and for actual expenses incurred in connection with its retention: Professionals Hourly Rate ------------- ----------- Managing Directors $600 to $775 Directors $300 to $600 Managers $225 to $375 Vice President $175 to $275 Staff $125 to $200 Jeffrey R. Manning, a member of Trenwith Securities, assures the Court that the firm neither holds nor represents any interest adverse to the Debtors or the bankruptcy estates. He adds that Trenwith Securities is a "disinterested person," as defined in Section 101(14) of the Bankruptcy Code. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on March 3, 2008. (American Home Bankruptcy News, Issue No. 25, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: S&P Puts Three Low-B Ratings on Negative Watch ------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on 18 classes from American Home Mortgage Assets Trust 2006-6 on CreditWatch with negative implications. S&P placed these ratings on CreditWatch negative because of the amount of delinquent loans that are in foreclosure or classified as real estate owned so early in this transaction's life. This transaction is supported by residential mortgage loans that are only seasoned 15 months. Over the past six months, total delinquencies have increased 4.17% to 5.68% of the current pool balance, and the amount of loans classified as severely delinquent (90 days, foreclosure, and REO) has increased 3.38% to 4.24%. Credit enhancement for this transaction is provided by subordination. Standard & Poor's will continue to closely monitor the performance of this transaction. If the delinquent loans begin to perform to a point at which, in S&P's view, there would be no loss to the principal balance of a class, S&P will affirm the applicable rating and remove it from CreditWatch negative. Conversely, if delinquencies continue to increase and cause substantial realized losses in the coming months, thereby eroding subordination for these classes, S&P will take further negative rating actions. At origination, the collateral consisted of Alternative-A, option adjustable-rate mortgage loans, and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Ratings Placed on CreditWatch Negative American Home Mortgage Assets Trust 2006-6 Rating ------ Class To From ----- -- ---- A1-A, A1-B, A1-C, A2-A, A2-B AAA/Watch Neg AAA R, X-P AAA/Watch Neg AAA M-1 AA+/Watch Neg AA+ M-2 AA/Watch Neg AA M-3 AA-/Watch Neg AA- M-4 A+/Watch Neg A+ M-5 A/Watch Neg A M-6 A-/Watch Neg A- M-7 BBB+/Watch Neg BBB+ M-8 BBB-/Watch Neg BBB- M-9 B+/Watch Neg B+ B-1 B/Watch Neg B B-2 B/Watch Neg B AMERICAN LAFRANCE: Can Employ Kurtzman Carson as Claims Agent ------------------------------------------------------------- American LaFrance LLC, sought and obtained the authority of the U.S. Bankruptcy Court for the District of Delaware to employ Kurtzman Carson Consultants LLC, as its claims, noticing and balloting agent. KCC is a data processing firm that specializes in Chapter 11 administration, consulting and analysis, including noticing, claims processing, voting and other administrative tasks in Chapter 11 cases. According to William Hinz, president and chief executive officer, KCC has assisted and advised numerous Chapter 11 debtors in connection with noticing, claims administration and reconciliation and administration of plan votes. KCC has provided identical or substantially similar services in other Chapter 11 cases, including Tweeter Home Entertainment Group, Inc., ResMae Corp., Dura Auto Sys., Inc., and Calpine Corp. As Claims, Noticing and Balloting Agent, KCC will, among other things: * serve as the Court's noticing agent to mail notices to the estate's creditors and parties-in-interest; * provide computerized claims, objection and balloting database services; and * provide expertise, consultation and assistance in claim and ballot processing and other administrative information with respect to ALF's Chapter 11 case. KCC will be paid for its services, expenses and supplies at the rates or prices set by KCC and in effect on the day the services or supplies are provided to ALF, in accordance with KCC's fee structure. Where the fees and expenses is expected to exceed $10,000 in any single month, KCC may require advance payment. The firm will submit its invoice to ALF within 15 days of the end of each calendar month. ALF agrees that the amount invoiced is due and payable upon receipt of the invoice. A late charge will apply to any unpaid amount, as of 30 days from receipt. If the invoice amount is disputed, a notice will be sent to KCC within 10 days of receipt of the invoice by ALF. Late charges will not accrue on any amounts in dispute. KCC will receive a retainer of $10,000 for services to be performed and expenses to be incurred. A full-text copy of the KCC Agreement is available for free at: http://researcharchives.com/t/s?27b6 As an administrative agent and an adjunct to the Court, ALF does not believe that KCC is a "professional" whose retention is subject to approval under Section 327 of the Bankruptcy Code, or whose compensation is subject to Court approval under Sections 330 and 331 of the Bankruptcy Code. Sheryl Betance, director of restructuring for KCC, told the Court that neither KCC, nor any of its employee, is connected with the Debtor, its creditors, other parties-in-interest or the United States Trustee or any person employed by the Office of the U.S. Trustee. KCC is a disinterested person, as the term is defined in Section 101(14) of the Bankruptcy Code. * * * ALF is authorized to pay, without further Court order, the reasonable fees and expenses of KCC incurred in connection with services rendered to the Debtor as Claims Agent, from the assets of the Debtor's estate, upon KCC's submission, on a monthly basis, of reasonably detailed invoices to ALF. The Hon. Brendan Linehan Shannon also approves of the KCC Agreement. As part of the overall compensation payable to KCC under the terms of the KCC Agreement, ALF has agreed to certain limitations of liability and indemnification obligations. About American LaFrance Headquartered in Summerville, South Carolina, American LaFrance LLC -- http://www.americanlafrance.com/-- is one of the oldest fire apparatus manufacturers and one of the top six suppliers of emergency vehicles in North America. Thee company filed for Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No. 08-10178). Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at Haynes and Boone LLP, is the Debtor's proposed Lead Counsel. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, is the Debtor's proposed local counsel. When the Debtor filed for protection against its creditors, it listed assets and liabilities of between $100 Million and $500 Million. The Debtor's exclusive period to file a plan expires on May 27, 2008. (American LaFrance Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN RAILCAR: Earns $4.9 Million in 2007 Third Quarter ---------------------------------------------------------- American Railcar Industries reported net earnings of $4.9 million and revenues of $139.9 million for the three months ended Sept. 30, 2007. In comparison, the company reported net earnings of $11.0 million and revenues of $150.5 million for the three months ended Sept. 30, 2006. Results for the three months ended Sept. 30, 2007, included a pre- tax benefit of $9.3 million related to insurance recoveries from the April 2006 tornado at the company's tank railcar facility. The $9.3 million included $5.0 million of business interruption insurance compensation for lost profits while the tank railcar facility was shutdown due to the damage from the tornado, along with a $4.3 million gain, which was related to the involuntary conversion of assets that were destroyed by the tornado. During the three months ended Sept. 30, 2007, the company shipped 1,276 railcars compared to 1,546 railcars in the same period of 2006. Revenues and railcar shipments decreased in the third quarter of 2007 compared to the same period in 2006 primarily due to a reduction of hopper railcar shipments, reflecting less demand and increased competition for some of the company's hopper railcar products. EBITDA was $12.7 million in the third quarter of 2007 compared to EBITDA of $20.5 million in the third quarter of 2006, including the effect of insurance recoveries. The decrease in EBITDA was driven primarily by the decrease in revenues. For the nine months ended Sept. 30, 2007, revenues were $536.2 million and net earnings were $29.4 million. In comparison, for the nine months ended Sept. 30, 2006, the company had revenues of $480.7 million and net earnings of $28.5 million, including a pre-tax benefit of $14.3 million related to insurance recoveries. The $14.3 million included $10.0 million of business interruption insurance compensation for lost profits while the tank railcar facility was shutdown due to the damage from the tornado, along with a $4.3 million gain, which was related to the involuntary conversion of assets that were destroyed by the tornado. During the nine months ended Sept. 30, 2007, the company shipped 5,465 railcars compared to 5,260 railcars in the same period of 2006. Revenues increased in the nine months ended Sept. 30, 2007, compared to the same period in 2006, primarily due to an increase in tank railcar shipments, resulting from increased tank railcar plant capacity in 2007 and the recovery from the tornado related shutdown in 2006. EBITDA was $59.8 million in the nine months ended Sept. 30, 2007, compared to EBITDA of $54.2 million in the nine months ended Sept. 30, 2006, including the effect of insurances recoveries of $14.3 million in 2006. The increases in EBITDA and net earnings in 2007 resulted primarily from increased revenue. "We are pleased that our year-to-date earnings and gross profit are both ahead of the prior year, which reflects the strength of our tank railcar business. However, we have experienced less demand and increased competition for some of our hopper railcar products in the third quarter of 2007, resulting in lower earnings for the quarter when compared to the prior year. In addition, the third quarter of 2006 included insurance related gains," said James J. Unger, president and chief executive officer of ARI. "Management is controlling costs at our hopper railcar facility during this time of lower production levels. We are pleased with the outstanding performance of our tank railcar plant, which partially offset the lower hopper railcar deliveries for the quarter. Our backlog remains at a high level, totaling 13,384 railcars at Sept. 30, 2007, and our tank railcar lines are fully booked through 2008 and for most of 2009. We have hopper railcar orders through 2008 but not at capacity levels. We are pursuing a number of inquiries to fill our available capacity for hopper railcars." Liquidity and Capital Resources As of Sept. 30, 2007, the company had working capital of $391.4 million, including $297.6 million of cash and cash equivalents. At Sept. 30, 2007, the company had no borrowings outstanding under its $100.0 million revolving credit facility. On Feb. 28, 2007, the company issued $275.0 million of senior unsecured notes that are due in 2014. The offering resulted in net proceeds to the company of approximately $272.2 million. As of Sept. 30, 2007, the company was in compliance with all of its covenants under the notes. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $634.0 million in total assets, $352.7 million in total liabilities, and $281.3 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?27d9 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. ASARCO LLC: Asarco Inc.'s Examiner Request Unpopular to Parties --------------------------------------------------------------- Seven entities object to Asarco Incorporated's request to appoint a Chapter 11 examiner in ASARCO LLC and its debtor-affiliates' bankruptcy cases. These entities are: 1. ASARCO LLC and debtor-affiliates; 2. Official Committee of Unsecured Creditors for ASARCO LLC; 3. Official Committee of Unsecured Creditors for the Asbestos Subsidiary Debtors and Robert C. Pate, the Future Claims Representative; 4. United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO; 5. The U.S. Government; 6. Harbinger Capital Partners Master Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, L.P., and Citigroup Global Markets, Inc.; and 7. Wells Fargo Bank, N.A., as successor Indenture Trustee under an Indenture and Bankers Trust Company. The Objecting Parties point out that it is Asarco Inc.'s fifth attempt to take over the bankruptcy case of ASARCO LLC, and another attempt to delay the Debtors' reorganization efforts. As reported in the Troubled Company Reporter on Jan. 22, 2008, Asarco Inc. wants the U.S. Bankruptcy Court for the Southern District of Texas to appoint an examiner to: (a) investigate the facts and circumstances surrounding the good faith of the ongoing negotiations among the Debtors and certain other constituents with respect to the terms of the future plan of reorganization for the Debtors; (b) determine the value of the Debtors; (c) investigate the good faith of the settlements of claims reached among the Debtors, the asbestos claimants and the United States Department of Justice with respect to asbestos and environmental claims asserted against the Debtors; and (d) investigate whether ASARCO LLC has fulfilled its fiduciary duties to its parent company, Asarco Inc. The Debtors assert that Asarco Inc. has waived its right to invoke Section 1104(c)(2) of the Bankruptcy Code based on: (a) the timing of the Appointment Request, which was filed two and a half years after ASARCO LLC's date of bankruptcy and as ASARCO LLC works to select a Chapter 11 plan sponsor and negotiate the terms of what the Debtor anticipates will be a consensual reorganization plan; (b) Asarco Inc.'s agreement to the appointment of a Board of Directors with a majority of independent directors to manage the Debtors; (c) Asarco Inc.'s motive behind the Appointment Request, which is to delay ASARCO LLC's progress towards confirmation; (d) the fact that the appointment of an examiner at this late stage in ASARCO LLC's reorganization process will needlessly prolong the company's exit from bankruptcy and waste the Court's time and the Debtors' assets; and (e) Asarco Inc.'s allegations that reiterate those it already asserted before the Court, which arguments the Court repeatedly stated should be heard at the confirmation hearing of a reorganization plan. The ASARCO LLC Committee asserts that "the court may appoint an examiner any time before the plan is confirmed, a creditor cannot use the provision to disrupt the proceedings," citing In re Schepps Food Stores, Inc., 148 B.R. 27 (S.D. Tex. 1992). The ASARCO LLC Committee and the USW agree that should the Court appoint a Chapter 11 examiner, its duties should be of a limited scope and its expenses should be limited to $75,000. The U.S. Trustee for Region 7, however, tells the Court that it appears that the debt threshold of Section 1104(c)(2) has been met in ASARCO LLC's case. The U.S. Trustee asks the Court to consider all facts and circumstances to determine the proper scope of an examiner's duties. The U.S. Trustee says it is willing to move quickly to identify a qualified candidate to perform the examination. The city of El Paso, Texas, supports the appointment of an examiner to determine whether ASARCO LLC is solvent or insolvent. El Paso contends that appointment of an examiner to investigate ASARCO LLC's reorganization value could assist in streamlining the plan confirmation process. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Debtors' exclusive period to file a plan expires on Feb. 11, 2008. (ASARCO Bankruptcy News Issue No. 65; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Wants Lehman to Produce Asset Valuation Report ---------------------------------------------------------- ASARCO LLC and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Texas to expand the scope of services of Lehman Brothers Inc., the company's exclusive financial advisor and investment banker, and increase the firm's compensation for certain completed services. ASARCO had asked permission from the Court in August 2007 to expand the scope of Lehman Brothers' services and increase its compensation structure. That application, however, was met with many objections. Jack L. Kinzie, Esq., at Baker Botts, L.L.P., in Dallas, Texas, says negotiations regarding the production of documents and the deposition schedule relating to that application are ongoing. Mr. Kinzie relates that before the Court can hear the August 2007 Amended Employment Application, ASARCO asked Lehman Brothers to perform additional services relating to the pending fraudulent transfer complaint asserted against Grupo Mexico S.A. de C.V., and Americas Mining Corporation. Those services included the preparation on a highly expedited basis of a voluminous, detailed valuation report of ASARCO's assets, to be used in support of certain fraudulent transfer actions, Mr. Kinzie says. Subsequently, ASARCO and Lehman Brothers amended the 2005 Engagement Letter to include the terms and conditions under which Lehman Brothers would act as the exclusive valuation consultant regarding the value of ASARCO's operating assets in those proceedings. The Amended Engagement Letter provides that Lehman Brothers will perform these additional services: (a) Assist ASARCO in developing exit financing alternatives that may result in a "Liquidity Event," which, if asked by ASARCO, will include Lehman Brothers' assistance in the formulation and execution of an exit working capital facility; (b) Advise and assist ASARCO in connection with the recruitment of independent members of the company's board of directors, a new chief executive officer and a new chief financial officer; (c) Advise and assist ASARCO in connection with the creation and implementation of a new employee incentive program and new key employee retention program; and (d) Develop and implement a hedging program designed to protect ASARCO from copper price volatility. Mr. Kinzie also relates that ASARCO's Board has asked assistance and advice from Lehman Brothers in connection with certain labor negotiations, the retention of a crisis management firm, and the fraudulent transfer proceeding related to the South Mill Property. The Amended Engagement Letter provides that Lehman Brothers will: (a) receive a $150,000 monthly cash fee effective as of March 2007, which Advisory Fee will not be creditable against the Transaction Fee; (b) be entitled to a $4,000,000 flat fee on the closing of a sale of substantially all of ASARCO's assets; (c) receive 0.5% of the cash consideration involved in a Liquidity Event, which payment is capped at $2,500,000, pursuant to agreements with the Official Committee of Unsecured Creditors for the Asbestos Subsidiary Debtors and the Court-appointed Future Claims Representative; (d) receive $800,000 for analyzing and preparing a written report regarding the current value of ASARCO's operating assets for use in connection with the fraudulent transfer proceedings pending against Americas Mining and Montana Resources Inc.; and (e) receive additional $200,000 on delivery of valuation reports if ASARCO identifies Lehman Brothers as its valuation expert in the litigations against Montana Resources and August Resource Corporation. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Debtors' exclusive period to file a plan expires on Feb. 11, 2008. (ASARCO Bankruptcy News Issue No. 64; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASPEN INSURANCE: Earns $135.2 Million in 2007 Fourth Quarter ------------------------------------------------------------ Aspen Insurance Holdings Limited reported net income for the fourth quarter of 2007 of $135.2 million, an increase of 20.0% over the same quarter last year. For the three months ended Dec. 31, 2007, Aspen reported gross written premiums of $305.0 million, a increase of 6.3% over the same quarter last year. Chris O'Kane, chief executive officer, commented, "For the fourth quarter and full year 2007, Aspen delivered record net income and earnings per share. These outstanding results reflect that all areas of the company are executing in-line with our strategy to diversify and leverage our underwriting platforms, and generate strong consistent results from our investment portfolio. We are well positioned for the softening markets in 2008 and expect to continue delivering value for our shareholders." 2007 Operating Highlights -- net investment income for the year was $299.0 million, up 46.3% on last year with the Funds of Hedge Funds producing an 11.4% return over the year. -- Assets under management increased to $5.9 billion at the end of 2007 from $5.2 billion at the end of 2006. -- Cash flows from operating activities increased from $723.0 million in 2006 to $774.0 million in 2007. -- Limited catastrophe losses for the year of $77.0 million, including $18.0 million of losses resulting from the California wildfires in the fourth quarter. -- Following the $50.0 million share buyback in the third quarter, Aspen completed the final $50.0 million tranche in the fourth quarter. This completes the $300.0 million buyback program authorized by the Board in November 2006. -- During 2007, Aspen continued to implement its successful diversification strategy across business lines and geographies, with new initiatives including entry into Political Risk, Global Excess Casualty and Professional Liability insurance markets, and the establishment of operating platforms in Zurich and Dublin. 2007 Business Segment Highlights In the third quarter of 2007, the Company disclosed a change in the composition of its business segments to reflect the manner in which the business is managed. The new segments are Property Reinsurance, Casualty Reinsurance, International Insurance, and U.S. Insurance. a) Property Reinsurance Segment The Property Reinsurance segment finished the year with a strong quarter recording a combined ratio of 74.8% compared with 80.1% last year, with the only substantial loss of $18.0 million attributable to the California wildfires. The full year combined ratio improved to 72.6% from 79.2% in 2006. In 2006, there were virtually no catastrophic events whereas 2007 has produced losses from Windstorm Kyrill, U.K. floods and the California wildfires. While not insignificant, losses from these events were comfortably within the initial catastrophe loss guidance of $135.0 million for the year. The loss ratio for the year was 39.7% versus 43.2% last year, and gross written premium fell by only 3% to $602 million despite pressure on prices. b) Casualty Reinsurance Segment Casualty Reinsurance finished the year with a combined ratio of 94.6% compared with 83.4% in the prior year reflecting increased loss experience and lower rate levels. In addition, 2006 included favorable reserve development of $60.0 million compared with $32.0 million in 2007. c) International Insurance Segment The International Insurance segment covers a wide range of classes of business with the overall combined ratio for the year of 80.7% compared with 79.1% last year. 2007 includes some moderate-sized losses in both the marine and aviation books, offset by strong prior year releases within the U.K. liability account from 2006 and prior years. In the fourth quarter of 2007, the new lines, excess casualty and professional liability, began contributing to the top line with increased contributions from all new teams and distribution platforms expected in 2008. d) U.S. Insurance Segment The U.S. Insurance operation has been strategically repositioned in 2007 against the backdrop of challenging market conditions in both the casualty and property lines. Full year combined ratio of 98.3% compared favorably to 111.4% last year and the segment moved from an underwriting loss of $12.0 million last year to a profit of $2.0 million in 2007. A reshaping of the property book in particular lowered gross written premium by 20.0% to $123.0 million. Share Repurchase Program On Feb. 6, 2008, Aspen's Board authorized a new buyback program for up to $300.0 million of ordinary equity. The authorization covers the next two years. Balance Sheet At Dec. 31, 2007, the company's consolidated balance sheet showed $7.19 billion in total assets, $4.37 billion in total liabilities, and $2.82 billion in total shareholders' equity. About Aspen Insurance Headquartered in Hamilton, Bermuda, Aspen Insurance Holdings Limited (NYSE: AHL) -- http://www.aspen.bm/-- provides reinsurance and insurance coverage to clients in various domestic and global markets through wholly-owned subsidiaries and offices in Bermuda, France, Ireland, the United States, the United Kingdom, and Switzerland. * * * Aspen Insurance Holdings Limited still carries Moody's Investors Services 'Ba1' Preferred Stock rating assigned on Dec. 21, 2005. Outlook is Stable. ATHERTON-NEWPORT: Gets Initial OK to Use I.I.G.'s Cash Collateral ----------------------------------------------------------------- The United States Bankruptcy Court for the Central District of California authorized Atherton-Newport Investments LLC to access, on an interim basis, I.I.G. Financial LLC's cash collateral until April 25, 2008. The Debtor tells the Court that it requires immediate access to I.I.G Financial's cash collateral to fund its daily obligations and it business operations. Joseph A. Eisenberg, Esq., at Jeffer Mangels Butler & Marmaro LLP, says that I.I.G. Financial, as secured creditor of the Debtor, has an equity cushion of approximately 280% in its collateral, as adequate protection. The Debtor states that it will not exceed 110% of the individual line item and aggregate expenditures under its cash flow analysis. A final hearing on the request has been set on Feb. 20, 2008, at 1:30 p.m. Objections, if any, must be filed before Feb. 15, 2008. About Atherton-NewPort Headquartered in Irvine, California, Atherton-Newport Investments, L.L.C. -- http://www.atherton-newport.com-- is a real estate investment and development. The company filed for protection on Jan. 16, 2008 (Bankr. C.D. Calif. Case No. 08-10230). Joseph A. Eisenberg, Esq., at Jeffer, Mangels, Butler & Marmaro, L.L.P., represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case to date. When the company filed for protection against it creditors, it list assets and debts between $10 Million to $50 Million. AVISTA CORP: Fitch Holds 'BB+' ID Rating with Positive Outlook -------------------------------------------------------------- Fitch Ratings has affirmed Avista Corporation's ratings as: Avista Corporation -- Long-term Issuer Default Rating 'BB+'; -- Senior Secured Debt 'BBB'; -- Secured Bank Facility 'BBB'; -- Senior Unsecured Debt 'BBB-'; -- Trust Preferred 'BB+'; -- Short-term IDR 'B'. Avista Capital II AVA Capital Trust III -- Trust Preferred 'BB+'. The Rating Outlook is Positive. Approximately $1.1 billion of debt and trust preferred securities are affected by the rating action. The Positive Rating Outlook reflects the constructive outcome in AVA's recently concluded Washington general rate case which is expected by Fitch to result in improved earnings and cash flow and strengthening underlying credit metrics in 2008. The ratings also reflect lower business risk as the result of the June 30, 2007 divestiture of AVA's energy marketing and resource management subsidiary, Avista Energy, and continued strategic focus on the core electric and gas utility business in the Pacific Northwest. Favorable resolution of the Positive Rating Outlook will depend on future regulatory developments and their impact on Fitch's earnings and cash flow expectations, among other things. The ratings and Outlook also consider regulatory mechanisms in Washington and Idaho that allow the utility to defer certain power supply costs for future recovery, reducing, but not eliminating, commodity cost exposure. Fitch estimates that AVA's earnings before interest, taxes and depreciation and amortization-to- interest expense and will improve from an estimated 2.7 times in 2007 to 3.8x in 2008, primarily reflecting higher electric and natural gas rates in Washington and lower financing costs. AVA reached a settlement agreement on Oct. 30, 2007 resolving all issues in its GRC. The settlement was filed with the commission and approved on Dec. 19, 2007. The WUTC-approved settlement authorized electric and natural gas rate increases of $30.1 million (9.4%) and $3.3 million (1.7%), respectively, effective January 1, 2008. The new rates are based on an authorized 10.2% return on equity and an equity ratio as a proportion of total capital of 46%. While the 10.2% allowed ROE represents a 20 basis points decline relative to AVA's previous levels, the equity ratio is six percentage points higher. The rate increases represent approximately 60% of the requested amount. AVA filed the GRC with the WUTC in April 2007 requesting a $51.1 million (15.9%) electric and $4.5 million (2.3%) natural gas rate increase. Under the terms of the settlement, the company's 'power cost only rate case,' which would create a mechanism to adjust rates between general rate case proceedings to reflect net power supply and transmission costs, will be considered in AVA's next GRC filing. In addition, AVA agreed to take a charge of $3.9 million related to certain debt repurchase costs to resolve accounting issues related to debt amortization. The charge was booked in the third quarter 2007. The potential negative cash flow impact from a prolonged period of below normal hydro conditions and high natural gas prices are primary sources of concern for fixed income investors. While the utility's power supply cost mechanisms in Washington and Idaho pass through the large majority of such costs to ratepayers, they also require that AVA absorb a portion of the increased operating costs that arise when actual power supply costs exceed amounts reflected in base rates. Avista Utilities' margins suffer during periods of below normal hydroelectric output because the utility is forced to rely on higher cost thermal resources to meet a larger proportion of its load requirement compared to a normal water year. AVA is a combination electric and natural gas utility that provides integrated electric and natural service in parts of eastern Washington and northern Idaho and natural gas distribution service in parts of northeast and southwest Oregon. At the end of 2006, AVA had 345,000 retail electric 304,000 natural gas distribution customers. BLACKBOARD INC: Earns $4.2 Million in Quarter Ended December 31 --------------------------------------------------------------- Blackboard Inc. reported financial results for the fourth quarter and year ended Dec. 31, 2007. Net income was $4.2 million for the fourth quarter of 2007 compared to net income of $201,000 in the same period last year. Net income was $12.9 million for the full year 2007 compared to a net loss of $10.7 million in the same period last year. "This was a tremendous year for Blackboard," Michael Chasen, chief executive officer and president for Blackboard, said. "We are pleased with our financial results, made possible by our global client base adopting Blackboard products and services to manage their most mission-critical technologies. During the year, we realized strong revenue and earnings performance and generated operating cash-flows of more than $69 million." At Dec. 31, 2007, the company's balance sheet showed total assets of $307.3 million, total liabilities of $167.18 million and total stockholders' equity of $140.12 million. About Blackboard Inc. Headquartered in Washington D.C., Blackboard Inc. (Nasdaq: BBBB) -- http://www.blackboard.com/-- is a provider of enterprise software applications and related services to the education industry. Founded in 1997, Blackboard's software applications are used by colleges, universities, K-12 schools and other education providers, well as textbook publishers and student-focused merchants that serve education providers and their students. * * * As reported in the Troubled Company Reporter on Jan, 16, 2008, Standard & Poor's Ratings Services said its ratings and outlook on Blackboard Inc. (B+/Positive/--) would not be affected by the company's disclosed acquisition of The NTI Group Inc. BRISTOW GROUP: Quarter Ended Dec. 31 Earnings Increase to $20 Mil. ------------------------------------------------------------------ Bristow Group Inc. reported financial results for its three and nine-month ended Dec. 31, 2007. The company reported net income of $20.1 million, a 91% increase from $10.5 million for the December 2006 quarter. Net income for the December 2007 quarter includes the loss of $6.2 million on the sale of our Grasso Production Management business in November 2007, which is presented as discontinued operations. . For the nine months ended Dec. 31, 2007, net income of $76.8 million increased 64% from $46.8 million for the nine months ended Dec. 31, 2006. Net income for the nine months ended Dec. 31, 2007, includes the loss of $6.2 million on the sale of our Grasso business in November 2007, which is presented as discontinued operations. Capital and Liquidity -- the Dec. 31, 2007 consolidated balance sheet reflected $959.3 million in stockholders' investment and $607.8 million of indebtedness. -- the company has $315.3 million in cash and an undrawn $100 million revolving credit facility. -- the company generated $57.8 million of cash from operating activities, $344.8 million in net proceeds from the issuance of 7 1/2% senior notes, $23 million of cash from asset dispositions and $22 million in net cash from the sale of Grasso during the nine months ended Dec. 31, 2007. -- the company used $288.8 million for capital expenditures -- for aircraft -- and $14.6 million for the acquisitions, net of cash acquired, of Bristow Academy and Vortex during the nine months ended Dec. 31, 2007. -- Aircraft purchase commitments totaled $344.7 million for 28 aircraft, with options totaling $472.6 million for 34 aircraft as of Dec. 31, 2007. "We remain very pleased with our operational and financial performance," William E. Chiles, president and chief executive officer of Bristow Group Inc., said. The delivery of new aircraft well as rate increases in several operating regions produced strong revenues and earnings performance in the December quarter." "We renegotiated and extended the last of our major contracts in Nigeria at significantly better rates during the quarter, which should result in improved operating margins for our West Africa business unit and move us closer to meeting our return on capital goal for this region. We also saw improved rates from the North Sea," he added. "We continued to invest in our fleet with the exercise of options on eight additional aircraft, including five large- and three medium-sized helicopters from Sikorsky and Eurocopter," Mr. Chiles continued. "During the quarter we also completed the sale of our Grasso Production Management business, which makes Bristow Group a pure play in helicopter transportation services principally to the offshore energy industry," Mr. Chiles ended. About Bristow Group Inc. Headquartered in Houston, Texas, Bristow Group Inc. (NYSE:BRS) -- http://www.bristowgroup.com/-- fka Offshore Logistics Inc., provides helicopter transportation services to the worldwide offshore oil and gas industry with operations in the United States Gulf of Mexico and the North Sea. The company also has operations, both directly and indirectly, in offshore oil and gas producing regions of the world, including Australia, Brazil, China, Mexico, Nigeria, Russia and Trinidad. The company also provides production management services for oil and gas production facilities in the United States Gulf of Mexico. * * * Standard & Poor's Ratings Services placed Bristow Group Inc.'s long-term corporate family and senior unsecured debt ratings at 'Ba2' in January 2006. The ratings still hold today with a negative outlook. 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 BUFFETS HOLDING: Landlords, et al., Cry Foul Over DIP Loan Motion ----------------------------------------------------------------- Ten groups of landlords, Shapco Printing, Inc., U.S. Bank National Association, and Levine Leichtman Capital Partners Deep Value Fund L.P. ask the U.S. Bankruptcy Court for the District of Delaware to deny the request of Buffets Holdings Inc., and its debtor- affiliates to obtain up to $385,000,000 in postpetition financing and use their lenders' cash collateral. The Landlords are: * Kimco Realty Corporation; * CRI Easton LLC; * Macerich Company, RREEF Management Company, The Prudential Insurance Company of America, Watt Management Company, and Westwood Financial Corporation; * Seekonk Square Realty Trust; * Serve (MN)QRS 14-38, Inc.; * Centro Properties Group, Federal Realty Investment Trust, General Growth Management, Inc., and Levin Management Corporation; * Drawbridge Special Opportunities Fund; * Granite Village West L.P.; * Weingarten Realty Investors, Developers Diversified Realty Corporation, Gregory Greenfield & Associates, Ltd. and Turnberry Associates; and * Simon Property Group, Inc. The Landlords complain that the Debtors' request to obtain postpetition financing contains a provision proposing to grant Credit Suisse, Cayman Islands Branch, the administrative agent under the DIP facility, various rights and remedies to their properties, including the right to obtain possession of the premises and to foreclose the Debtors' leasehold rights under the leases. Macerich contends that the terms in the DIP Facility compromises the integrity of the Landlords' control over their spaces, their ability to market their properties, and risks putting the Landlords into default of their own financing and investment covenants. The Landlords argue that no authority exists allowing the DIP Lender to replace the Debtors as "tenant" or allowing the Leases to be assigned to a third party without further hearing before the Court, with proper notices to all parties. If the Lender wants the benefit of the Debtors' rights to the Leases, Kimco says that the Lender must pay for the rights to the same extent as the Debtors would in the event of default. Serve contends that the the DIP Facility should not be approved unless the liability of both tenant and guarantor is strictly limited to the net borrowing benefit each receives under the DIP Facility. Serve notes that the DIP Facility treats the Debtors as if they have been substantively consolidated. The Landlords argue that any order granting the Debtors' request should specifically provide that the DIP Lender cannot exercise any rights it may have with respect to the Leases unless the Debtor timely performs all of its obligations under the Leases as required by Section 365(d)(3) of the Bankruptcy Code. In addition to the Leases, Shapco points out that the Debtors' DIP Loan creates a purported carve-out granting certain administrative claims, but not others, priority over the DIP Lender's superpriority lien. The proposed Carve-out is: -- the accrued and unpaid fees due and payable to the Clerk of the Court and the Office of the United States Trustee pursuant o Section 1930 of the Judiciary and Judicial Procedures; -- all approved fees and expenses incurred by professionals retained pursuant to an order of the Court until the earlier of the occurence of a default under the DIP financing documents, or the conversion of the cases to Chapter 7; and -- up to $400,000 in approved fees and expenses incurred by Chapter 11 professionals retained pursuant to an order of the Court upon and after the occurence of a default under the DIP financing documents. Shapco says that the combined result of the Lender's superpriority status and the Carve-out will be to alter the statutory priorities for distribution in a plan of Chapter 7 liquidation. Appellate courts have unanimously denied these arrangements, Shapco contends. Shapco argues that the present agreement is not a true carve-out but a priority shift to the prejudice of all claimants, the U.S. Trustee, the professionals, and the DIP Lender. Accordingly, Shapco asks the Court to deny the proposed Carve-out and provide that all administrative priority claimants will share pro rata in the Carve-out; or provide that the DIP Lender will absorb all adverse consequences of the Carve-out, in effect making it a true carve-out. U.S. Bank is a lender under a $640,000,000 prepetition secured credit facility arranged by Credit Suisse for the Debtors. Pursuant to the terms of the Credit Agreement, the Debtors have no rights to the Credit-linked deposits and accounts, U.S. Bank says. As security for the DIP Facility, the DIP Lenders will receive a priming lien on all assets of the Debtors with priority over prepetition liens and a superpriority claim against the Debtors with priority over all administrative expenses, according to U.S. Bank. U.S. Bank asks the Court to clarify that the Credit-linked Deposits and Accounts are not the Debtors' property and that the DIP Lenders do not have a lien thereon. Levine Leichtman says that the Debtors' DIP Motion is a textbook example of giving away too much for too little. Although lauded as a traditional DIP financing with terms "favorable" to the Debtors, the DIP Facility is neither traditional nor favorable to the Debtors and their creditors. Levine Leichtman contends that the DIP Facility is structured more to fix apparent collateral problems of prepetition senior lenders. According to Levine Leichtman, the $300,000,000 roll-up is inappropriate as it will only enhance the position of the Prepetition Lenders to the detriment unsecured creditors. Pursuant to the Roll-up, $300,000,000 of the $385,000,000 will be used to repay nearly half of Prepetition Lenders' claims. Levine Leichtman notes that the Debtors have failed to establish that the proposed Roll-Up is necessary. Levine Leichtman contends that the Debtors also failed to establish that $85,000,000 in new loans is necessary to preserve the assets of their estates. Levine Leichtman says that the true beneficiaries of the New Loans are the Debtors' lenders and trade creditors. In addition, Levine Leichtman argues that the DIP Documents contain other objectionable provisions that should be stricken like the DIP Facility's one-year term, the Debtors' pledge of avoidance actions, and the Debtors' waiving of Section 506(c) of the Bankruptcy Code. Against this backdrop, Levine Leichtman asks the Court to deny the Debtors' request in its entirety. Committee Wants Hearing Postponed As previously reported, the final hearing of the Debtors' request to obtain postpetition financing is scheduled for February 13, 2008, with February 6 as the objection deadline. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, relates that the Official Committee of Unsecured Creditors needs additional time to analyze the Financing Motion and its impact upon the Debtors' restructuring and creditors. She says that the Committee has asked that the Final Hearing be continued to the omnibus hearing scheduled for February 27, 2008 and that the objection deadline be extended, but the Debtors' postpetition lenders refused the request. According to Ms. Jones, the terms of the proposed financing are complex and contain aggressive provisions, including: -- a significant roll-up of prepetition debt, with less than the full amount of debt being rolled-up at a time when there are questions as to the value of the collateral securing debt; -- cross collateralization, -- adequate protection payments at an enhanced interest rate, -- liens and super-priority claims on the proceeds of avoidance actions, -- certain milestone restructuring covenants that provide control over the Debtors' restructuring to the DIP Lenders, -- an inadequate carve-out, and -- numerous other problematic provisions. The Committee wants the Final Hearing continued to February 27, 2008, and the Objection Deadline for the Committee extended to February 25. Ms. Jones contends that the requested extensions will not negatively impact the Debtors or their creditors because the Debtors have advised the Committee that they have sufficient liquidity to continue operations through February 27. In addition, Ms. Jones argues that that the Committee has only been appointed for a few days in the Debtors' Chapter 11 cases. As reported in the Troubled Company Reporter on Jan. 24, 2008, the Delaware Bankruptcy Court granted the Debtors permission to access up to $30 million of the $85 million of new funding available under its $385 million debtor-in-possession credit facility. The DIP credit facility, which includes $300 million carried over from the company's prepetition credit facility, will be used to enhance the company's liquidity during the reorganization process. Headquartered in Eagan, Minnesota, Buffets Holdings Inc. -- http://www.buffet.com/-- is the parent company of Buffets, Inc., the nation's largest steak-buffet restaurant company, currently operates 626 restaurants in 39 states, comprised of 615 steak- buffet restaurants and eleven Tahoe Joe's Famous Steakhouse restaurants, and franchises sixteen steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain brands. Buffets, Inc. employs approximately 37,000 team members and serves approximately 200 million customers annually. The company and all of its subsidiaries filed Chapter 11 protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). The Debtors have selected Paul, Weiss, Rifkind, Wharton & Garrison LLP to represent them. Young Conaway Stargatt & Taylor, LLP, are the Debtors' proposed legal advisor and Houlihan Lokey Howard & Zukin Capital, Inc. and Kroll Zolfo Cooper LLC, their proposed financial advisors. The Debtors' balance sheet as of Sept. 19, 2007, showed total assets of $963,538,000 and total liabilities of $1,156,262,000. (Buffets Holdings Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BUILDING MATERIALS: Expected Neg. Trends Cue Fitch to Cut Ratings ----------------------------------------------------------------- Fitch Ratings has downgraded these ratings on Building Materials Holding Corporation: -- Issuer Default Rating to 'B+' from 'BB'; -- Senior secured debt to 'BB-/RR3' from 'BB+'. Fitch has also placed BMHC on Rating Watch Negative. Fitch's '3' Recovery Rating on BMHC's secured term loan and revolving credit facility indicate good (50%-70%) recovery prospects for holders of these debt issues. Fitch applied a going concern value analysis for these RRs. The downgrade on the senior secured debt applies to BMHC's $850 million senior secured credit facilities, including the company's $500 million secured revolving credit facility. The downgrade reflects the difficult U.S. housing environment, current and expected negative trends in BMHC's operating results and meaningful deterioration in credit metrics. The Rating Watch Negative reflects BMHC's exposure to liquidity risk given ongoing discussions with its bank group regarding a permanent amendment to its existing syndicated credit facility. BMHC received a temporary waiver of certain conditions relating to borrowing under its revolving credit facility, which allows the company to borrow up to $75 million through Feb. 29, 2008. As of Dec. 31, 2007, there were no borrowings under the revolver and $346 million were outstanding under the term loan. Resolution of the Rating Watch Negative will be based on the company's ability to negotiate a new bank credit facility. Fitch will review the terms and conditions of the new agreement, including the amount of funds the company can access under it. The company's financial results have been adversely affected by the meaningful downturn in the homebuilding market, especially as the large public builders sharply reduced production of new homes to balance supply with demand. BMHC's revenues fell 28.4% through Sept. 30, 2007 while gross margins for the year-to-date period declined 170 basis points to 19.6% compared to 21.3% during the same period in 2006. Fitch is encouraged that the margins have not declined more, given the very challenging environment and the large public builders aggressively negotiating lower prices with their labor and materials suppliers. In response to the housing downturn, BMHC is reducing capital expenditures and is deferring discretionary capital spending, limiting its acquisition activities and reducing SG&A expenses by consolidating business infrastructure and optimizing its staffing levels. Fitch expects that BMHC's margins and credit metrics will continue to be under pressure as the housing environment remains difficult and is unlikely to meaningfully turn around in the current year. In 2008, Fitch projects that total and single family starts will decline 13.9% and 15.1%, respectively. The rating reflects BMHC's diverse range of product and service offerings and its focus on the large production homebuilders. Risk factors include BMHC's exposure to the cyclicality of the homebuilding industry and the continued consolidation of BMHC's customer base. The rating also incorporates BMHC's growth strategy. Although the company has not been acquisitive over the past year, Fitch believes that acquisitions will continue to be a primary strategy for the company to grow its business. In the near term, Fitch expects that acquisitions will be limited as the company navigates through the housing downturn. BMHC conducts business with 17 of the 25 largest production homebuilders in 16 of the 25 most significant new home construction markets in the U.S. The major builders are typically significant players in many of the largest, often high-growth metropolitan housing markets. BMHC's focus on the major homebuilders should benefit the company in the long-term. These companies should be able to continue to gain market penetration and grow their businesses. The past decade has seen consolidation in the distribution channels of the building products industry. New home sales from the top 10 U.S. homebuilders increased from approximately 10% of industry sales in 1993 to over 20% in 2007. Fitch expects more consolidation in the industry, with the large builders continuing to principally buy private, midsize companies and to take share from smaller builders. The continued growth of the large homebuilders may eventually limit the pricing power of building products and construction services providers like BMHC. However, Fitch believes that the continued consolidation of the homebuilding industry will create a long-term need for broad-based suppliers like BMHC to enable national homebuilders to lower costs and reduce logistics complexity in their business. Large builders are the ones who will value BMHC's services, allowing them to focus on what they do best. A key element of the company's business strategy for the past several years entails shifting its product and service mix from commodity lumber to value-added manufactured building components and construction services. Through acquisitions, the company now delivers a growing range of residential construction services in key growth markets in the U.S. The focus on construction services as well as value-added manufactured building components somewhat lessens the impact of lumber volatility on the company's margins. During this current housing downturn, BMHC has also pursued some light commercial construction projects to help offset a portion of the drop-off in new residential construction. Additionally, the acquisition of Davis Brothers Framing, Inc. in 2006 allows the company to focus somewhat more heavily on mid-rise multifamily construction, particularly in an often land-constrained market like California. Founded in 1987, BMHC is one of the largest residential construction services and building materials companies in the United States. BMHC competes in the homebuilding industry through two business segments: BMC West and SelectBuild Construction. With locations in the western and southern United States, BMC West distributes building products and manufactures building components for professional builders and contractors. SelectBuild Construction provides construction services to high-volume production homebuilders through operations in key growth markets across the United States. CALPINE CORP: Inks Settlement Pact With Debtholders' Committee -------------------------------------------------------------- Calpine Corporation has reached an agreement-in-principle with its Unofficial Committee of Second Lien Debtholders with respect to the Second Lien Debtholders' remaining secured claims for payment of compound and default interest, as well as claims for the transaction fee of Houlihan Lokey, the Unofficial Committee's financial advisors. Under the Settlement, which is subject to definitive documentation, the Second Lien Debtholders shall receive their allocable share of $51,836,191 in cash in full and final satisfaction of such secured claims, which amount shall be funded through: 1) an allowed general unsecured claim in Calpine's chapter 11 case in the amount of $65,000,000 (subject to a $51,836,191 cap on distributions based on Calpine's total enterprise value set forth in its plan of reorganization), which the Second Lien Debtholders intend to assign for value; plus 2) an additional cash payment from Calpine to the extent required. The Second Lien Debtholders will not be permitted to retain any amounts in excess of $51,836,191 in connection with the assignment of such claim with any excess being paid to Calpine. The Settlement will result in Second Lien Debtholders receiving the following additional amounts over and above amounts previously allowed by the Bankruptcy Court: -- holders of the 8.5% notes will receive $13,334,509; -- holders of the 8.75% notes will receive $10,817,498; -- holders of the 9.875% notes will receive $2,210,264; -- holders of the floating rate notes will receive $4,906,139; and -- holders of term loan debt will receive $20,567,780. Upon receipt of the amounts set forth above, the Second Lien Debtholders, the indenture trustee and term loan agent shall be deemed to have waived any and all rights that they now have or may hereafter have against other parties or property including, without limitation, under or with respect to the subordination provisions contained in Calpine's 6.00% Contingent Senior Convertible Notes due September 30, 2014 and the 7.750% percent Contingent Senior Convertible Notes due June 1, 2015. About Calpine Corporation Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., Kirkland & Ellis LLP, represents the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Nov. 31, 2007, the Debtors disclosed total assets of $18,212,000,000, total liabilities not subject to compromise of $11,024,000,000, total liabilities subject to compromise of $11,859,000,000 and stockholders' deficit of $4,675,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. On Dec. 19, 2007, the Court confirmed the Debtors' Plan. (Calpine Bankruptcy News, Issue No. 80; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on Feb. 6, 2008, Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to San Jose, California-headquartered power company Calpine Corp. following the company's emergence from bankruptcy Chapter 11 filing on Jan. 31, 2008. The outlook is stable. CENTRAL ILLINOIS: To Sell Plant to Secured Lenders for $80 Million ------------------------------------------------------------------ Central Illinois Energy LLC intends to sell its unfinished ethanol plant at Canton to secured creditors for $80 million credited debt, subject to better offers, Bill Rochelle of Bloomberg News relates. The Debtor said that the mortgages on the plant is significantly more than its value, Mr. Rochelle reports. The Debtor intends to get permission from the U.S. Bankruptcy Court for the Central District of Illinois to publicly sell the plant to commence the solicitation of bids by March 17 and hold an auction on March 20, 2008, Mr. Rochelle says. Mr. Rochelle reveals that Credit Suisse Group, agent for secured lenders with $95 million claims, won't lend money to the Debtor for the construction of the plant until it's sold. The plant was designed to process around 37 million gallons of ethanol per year, he adds. $5 Million Letters of Credit As reported in the Troubled Company Reporter yesterday, Feb. 7, 2008, documents recently filed with the U.S. Bankruptcy Court for the Central District of Illinois show that around 74 shareholders of Central Illinois Energy LLC signed letters of credit in the aggregate amount of $5 million to back up costs of building an ethanol plant. The estimated cost of the plant located outside Canton, Illinois, was $40 million during the year 2001. When Central Illinois Energy went bankrupt late last year, at least $130 million was already applied to the still unfinished plant. About Central Illinois Energy 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. CHARMING SHOPPES: Discloses Changes in Executive Management ----------------------------------------------------------- Charming Shoppes, Inc. disclosed an executive management change. Joseph M. Baron, executive vice president and chief operating officer, has assumed leadership of the company's Bensalem-based retail businesses on an interim basis, following the departure of Diane M. Paccione, who has left the company to assume the position of chief executive officer at DEB Shops Inc. The company's Bensalem-based retail businesses include Fashion Bug, Catherines Plus Sizes, Lane Bryant Outlet and Petite Sophisticate Outlet. Charming Shoppes Inc. is conducting a search for an appropriate successor to Paccione. Since 2002, Baron has served as executive vice president and chief operating officer of Charming Shoppes. His career in retailing has spanned over 35 years, including various management and executive management positions during his 30-year career at Sears, Roebuck & Co. "In the last six years, Joe has made many strong contributions to Charming Shoppes, including leading the development and launch of our outlet channel business, and building a platform which has supported the strong growth of our e- commerce business," Dorrit J. Bern, chairman, chief executive officer and president of Charming Shoppes Inc. commented. "A few years ago, Joe was instrumental in the repositioning of our Lane Bryant brand following our acquisition of Lane Bryant in 2001." "Most recently, we called upon Joe's leadership and organizational talents to transition our direct-to-consumer business through an executive leadership change, which led to the successful launch of the Lane Bryant Woman catalog, and improvements in our core catalog businesses," Ms. Bern continued. "This is an important time for our organization, as we build a strong foundation for the support of our Bensalem-based retail businesses," Mr. Baron, commenting on his appointment, stated. "During my time with Charming Shoppes, I have had the pleasure of working closely with many associates throughout the organization, and I look forward to continuing our work together." Paccione joined Charming Shoppes in 2004 as the president of the company's Catherines Plus Sizes brand, and most recently served the company as the group divisional president of the company's Bensalem-based retail businesses. About Charming Shoppes Based in Bensalem, Pennsylvania, Charming Shoppes Inc. (NASDAQ:CHRS) -- http://www.charmingshoppes.com -- is a retailer focused on womens plus-size specialty apparel. The company operates in two segments: retail stores segment and direct-to- consumer segment. The companys 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 companys 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 Companys total net sales. As of Feb. 3, 2007, Charming Shoppes Inc. operated 2,378 stores in 48 states. * * * As reported in the Troubled Company Reporter on Feb. 6, 2008, 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. CHEETAH GYMS: MB Financial to Auction Assets on Feb. 29 ------------------------------------------------------- MB Financial Bank NA, secured creditor of David Wilshire, will hold a public foreclosure of Mr. Wilshire's shares of stock pledged as security to his obligations to MB Financial. The shares to be sold are Mr. Wilshire's interests in Jungle Gym Fitness Corporation, Wild Kingdom Fitness Enterprises Inc., Wilshire Enterprises Inc., Energia Cafe Inc., and Top Cat Enterprises Inc. Jungle Gym, Wild Kingdom and Wilshire Enterprises each owns a separate gym doing business as Cheetah Gyms in the City of Chicago. Energia and Top Cat do not own any currently operating business. The secured party has accepted a $2,300,000 "stalking horse" cash bid from an independent third party in exchange for the stock of each of the operating clubs as a lot, subject to higher and better bids and the payment of certain retained liabilities. The stalking horse bidder has indicated the he intends to continue to operate the clubs. The secured party is also submitting a floor credit bid of $10,000 for the stock of Energia and Top Cat. The sale will be held on an "as is" basis, without any representations and warranties. The secured party reserves the right to offer the shares in bulk or in lots. The secured party reserves the right to establish other reasonable bidding procedures and close the sale to reasonable satisfaction of the secured party. The secured party also reserves the right to cancel or adjourn the auction without further notice. A copy of the stalking horse bid is available upon request from the secured party's counsel, Robert E. Richards, Esq., at Sonnenschein Nath & Rosenthal LLP, in Chicago. Parties interested in further information on the assets should contact the counsel of the secured party or appear at the foreclosure sale on Feb. 29, 2008, at 10 a.m., at the office of: Robert E. Richards, Esq. Sonnenschein Nath & Rosenthal LLP 7800 Sears Towers Chicago, Illinois 60606 Tel: (312) 876-8000 Fax: (312) 876-7934 http://www.sonnenschein.com/ CHRISTENSEN REALTY: Case Summary & Five Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Christensen Realty Investment II, L.L.C. P.O. Box 2781 Boise, ID 83701 Bankruptcy Case No.: 08-00193 Type of Business: The Debtor is a real estate investor. Chapter 11 Petition Date: February 6, 2008 Court: District of Idaho (Boise) Judge: Jim D. Pappas Debtor's Counsel: Howard R. Foley, Esq. Patrick John Geile, Esq. Foley Freeman, P.L.L.C. P.O. Box 10 Meridian, ID 83680 Tel: (208) 888-9111 Fax: (208) 888-5130 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sandy Smith services $126,000 Commercial Real Estate Co. 1401 Shoreline Drive, Suite 3 Boise, ID 83702 iBeam Systems goods $3,233 280 North 8th Street, Suite 30 Boise, ID 83702 American Geotechnics goods $2,452 5260 West Chinden Boulevard Garden City, ID 83714 Wood Windows, Inc. goods $1,771 T.M.L. Heating and Cooling goods $467 CHRYSLER LLC: Still Out to Grab Tooling Equipment from Plastech --------------------------------------------------------------- Chrysler LLC CEO Robert Nardelli disclosed that the auto-maker is still in pursuit of its tooling equipment holed up at Plastech Engineered Products Inc.'s plants, and continues to seek component supplies from other vendors, Jeff Bennett of the Wall Street Journal reports. As reported in the Troubled Company Reporter on Feb. 6, 2008, a temporary disruption in Chrysler's production was caused by a tooling dispute over the parties, with Chrysler attempting to retrieve its tooling equipment over at Plastech's plants and transfer them to other suppliers so its operations would not suffer. The parties however, reached an agreement early this week that ended the idling of Chrysler plants. Pursuant to an interim agreement, Plastech resumed its shipment of car parts and components to Chrysler, which enabled the auto maker to resume its plant operations. The arrangement will continue until Feb. 15. "This was not hard-ball tactics, it was a solid business practice," WSJ quotes Nardelli during an auto show. "We never meant to create an adversarial relationship with Plastech or any other suppliers." Nardelli related to WSJ that Plastech was going to raise its prices. "We have to stay competitive," Nardelli insisted. "No hard feelings, no animosity, just solid business practices." As reported in the Troubled Company Reporter on Feb. 7, 2008, while Chrysler said that it could close four of its U.S. plants due to Plastech's 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." About Chrysler LLC Based in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Nov. 12, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC and removed it from CreditWatch with positive implications, where it was placed Sept. 26, 2007. S&P said the outlook is negative. 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. 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. CONTINENTAL AIR: WSJ Says United Merger Talks "Have Grown Serious" ------------------------------------------------------------------ United Air Lines could likely end up marrying Continental Airlines in the event of a merger, instead of with Delta Air Lines, various report say. According to The Wall Street Journal, exploratory merger talks between United and Continental have grown serious. Moreover, the reports also note that merger talks between Delta Air and Northwest Airlines Corp. have intensified that could lead to an agreement being announced in the next two weeks. However, key details of the Delta-Northwest deal have yet to be hammered out and negotiations could still fall apart, according to the Wall Street Journal, citing people familiar with the talks. As reported in the Troubled Company Reporter on Jan. 22, 2008, Mr. Anderson obtained approval from Delta's board of directors on Jan. 11, 2007, to engage in formal merger talks with both Northwest and United. WSJ, citing people briefed on the matter, says Delta and United have continued exploratory talks over the past month. Pardus Capital Management, a New York-based hedge fund, and major stakeholder in both United and Delta, had urged both carriers to consolidate, to save money and counter escalating jet-fuel prices which rose by around 53% last year. Delta, the No. 3 U.S. carrier in terms of passenger traffic, has a market value of over $4,100,000,000 -- higher than UAL's $3,800,000,000, and Northwest's $3,700,000,000. United is the second-largest U.S. carrier, while Northwest takes the fifth spot. Continental, in Houston, Texas, is the No. 4 carrier. A Delta merger with either Northwest or United would create the largest passenger airline in the world. Delta-Northwest Merger Reports note the potential dealbreaker in a Delta-Northwest combination was the structure of the new company's management, specifically Northwest CEO Doug Steenland and his management team's role in the new company. The Journal's source says those issues were overcome earlier this week. When companies merge, it's not uncommon for the chief executives to divide the leadership roles, with one taking the CEO post and the other becoming chairman, according to TheStreet.com. In the case of Delta and Northwest, the situation is complicated by the role of Daniel Carp, who became chairman of Delta when the carrier emerged from bankruptcy in May 2007, TheStreet.com says. Since Mr. Carp was brought in to enhance Delta's position, there is a feeling that he should remain because of the progress the company has made, TheStreet.com says, citing a source. TheStreet.com's source says Mr. Steenland has apparently accepted the idea that Mr. Carp and Delta CEO Richard Anderson will retain their current posts in a new company. Mr. Anderson, a former Northwest Airlines chief executive, assumed the Delta CEO post from Gerald Grinstein in August. That decision to hire Mr. Anderson "raised new questions about Delta's future strategy", WSJ reported at that time. Mr. Anderson's appointment raises speculations that with an outsider at the helm, Delta may reverse its "go it alone" strategy and pursue a consolidation with Northwest, United Air Lines or Continental Airlines, Business Week had said. At the time of its bankruptcy, Delta and its unsecured creditors committee fended off a $8,000,000,000 to $10,000,000,000 hostile takeover bid from US Airways Group, Inc. Delta said it was better off as a stand-alone carrier. In January 2007, about two months since US Airways launched its hostile bid, Delta and NWA were reported to have held discussions about a potential merger. While both companies denied the reports, Mr. Grinstein subsequently admitted to sharing information with Northwest. "At the behest of our creditors' committee we recently retained an investment banker to obtain information from Northwest, a far cry from negotiating for a merger with them," Mr. Grinstein told members of the Delta Board Council, according to Reuters. Delta did not discount any possibility of a merger post- bankruptcy. According to a prior WSJ report, the Creditors Committee conditioned its support of Delta's stand-alone Chapter 11 plan of reorganization to a number of concessions, including the appointment of a new board that favors consolidation as a strategic opotion. In October, Mr. Anderson said he saw "obvious benefits" for Delta's employees and shareholders in Delta's merging with another carrier, Meg Marco at The Star Tribune reported. Although Mr. Anderson did not name a potential merger target for Delta at that time, analysts have argued that Northwest would make a good partner because the carriers' routes complement each other, Ms. Marco said. As proposed, the Delta-Northwest deal would be a stock-for-stock transaction, done "at market," meaning at roughly where the two stocks are trading, with little or no premium for either side, WSJ says. The Journal adds that the dynamic has made non-economic issues the center of the deal negotiations. Compressed Timeline The Journal says Delta's intent was to pursue tandem negotiations with Northwest and United on a compressed timeline, get a deal inked by mid-February and quickly begin the process for winning antitrust approval. Executives at the airlines believe any mergers are more likely to pass regulatory muster during the waning days of the Bush administration, the Journal relates. A United-Continental deal will have to be done very near a Northwest-Delta announcement, so the two potential combinations would undergo regulatory scrutiny at the same time, the Journal says citing a source familiar with the matter. A different source told the Journal United and Continental are poised to act quickly once another airline merger is announced. Northwest holds a "golden share" of preferred stock in Continental that allows Northwest to block a merger of Continental with another large carrier, WSJ notes. But if Northwest agrees to merge with Delta, Continental could redeem that stock for a total of $100, even if the deal is never consummated, freeing Continental to entertain other suitors, WSJ says. Continental executives have repeatedly said they prefer to remain independent, but would do what is best for the company if the competitive landscape changes, WSJ notes. Experts in the airline industry believe that a Northwest-Delta merger is more likely as Delta's Anderson was previously CEO at Northwest, and is already well acquainted with Northwest's operations. Bloomberg, citing an unnamed person familiar with Air France-KLM Group's plans, has reported that Air France is encouraging a merger between Delta and Northwest and m