/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080307.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, March 7, 2008, Vol. 12, No. 57 Headlines AAR CORP: To Merge Acquired Avborne with MRO Segment in Miami AMBAC FINANCIAL: Offering Can Retain 'Aaa' Rating, Says Moody's ANF DEER CREEK: Case Summary & 21 Largest Unsecured Creditors ATLANTIS PLASTICS: Moody's Puts Probability of Default at Ca/LD BAYOU GROUP: 47 Investors Face Lawsuits Over Fraudulent Transfers BEAZER HOMES: Weak Performance Cues Fitch to Chip Ratings BLUE WATER: Gets Interim OK to Borrow $27.5MM from Citizens Bank BLUE WATER: Creditors Panel Wants Interim DIP Order Vacated BLUE WATER: Sec. 341 Meeting of Creditors Set for March 24 BLUE WATER: Seeks Authority to Assume Molding Contracts BLUE WATER: CIT Entities Wants Adequate Protection Payments BRODERICK CDO: Moody's Downgrades Ratings on Eight Note Classes CHAMP CAR: Case Summary & 20 Largest Unsecured Creditors CHRYSLER LLC: Plastech Agrees to Continue Supply Until March 17 CIRRUS LOGIC: Investigation of Stock Option Practices Completed CMS ENERGY: Net Loss Increases to $227MM in Year Ended December 31 CORNERSTONE MINISTRIES: U.S. Trustee, Panel Want Full Disclosure CORNERSTONE MINISTRIES: U.S. Trustee Appoints Seven-Member Panel COUNTRYWIDE FIN'L: Court Says "Negligent Bungling" Not "Bad Faith" COUNTRYWIDE FINANCIAL: BofA Says Deal Will Go On Despite Worries COUNTRYWIDE FINANCIAL: Sued Again by U.S. Trustee in Miami Case CATHOLIC CHURCH: Davenport's Disclosure Statement Needs Revision DOV PHARMA: Sells Future Royalties on Bicifadine for $1.6 Mil. EMC MORTGAGE: Fitch Downgrades Ratings on 20 Certificate Classes INYX USA: Disclosure Statement Doesn't Say Much for Creditors FAIRPOINT COMM: Paying $0.39781/Share Dividend on April 16 FIRST FRANKLIN: Mortgage Origination Biz Halted FORTUNOFF: Gets Final Nod on Togut Segal & Skadden Arp's Retention FORTUNOFF: Court Gives Final Nod on FTI Consulting's Retention FORTUNOFF: Landlords Balk at Assignment of Leases to New Owner GOODYEAR TIRE: Cost, Debt Reduction Prompts Fitch to Lift Ratings GSC ABS: Moody's Junks 'Aa2' Rating on $96 Million Notes HARTSHORNE CDO: Moody's Junks Rating on $133 Mil. Notes From 'B2' INGEAR CORP: Wants to Hire Harney Management as Financial Advisor INVERNESS MEDICAL: Plans to Close Unipath Operations in England IRIDIUM SATELLITE: Moody's Raises Corporate Family Rating to 'B2' ISLE OF CAPRI: Appoints Jim Perry as Chief Executive Officer ISLE OF CAPRI: Posts $14 Mil. Net Loss in Quarter Ended January 27 JUPITER HIGH: Moody's Junks Rating on $150 Million Notes From 'A2' JUPITER HIGH: Moody's Junks Rating on $150 Million Notes From 'A2' KEY DEVELOPERS: Voluntary Chapter 11 Case Summary KURLEMANN BUILDERS: Commences Chapter 7 Liquidation in Ohio MANCHESTER INC: Gets Interim Court Nod on Cash Collataral Use MCCALL CITY: Allowed to Issue Bonds; Contempt Hearing Called Off MIAMI BEACH FLA: Moody's Cuts Rating on Revenue Bonds to 'Ba2' MOST HOME: Receives $350,000 in Private Placement of Common Shares NATIONAL BEEF: Moody's Holds 'B2' Ratings; Changes Outlook to Neg NORTH AMERICAN SCIENTIFIC: James Klinger Resigns as CFO OKO-MED DOWNTOWN: Voluntary Chapter 11 Case Summary OZYMANDIUS LP: Court OKs $5.6 Mil. Kress Sale to Sound Warehouse PASA FUNDING: Moody's Reviews Ratings of Four Note Classes PASCACK VALLEY: Sells Assets For $45 Million to HUMC/Touro LLC PFP HOLDINGS: Wants to Hire Michael W. Carmel as Conflict Counsel PILGRIM'S PRIDE: Board Names J. Clinton Rivers as President & CEO PINNACLE POINT: Moody's Downgrades Ratings on Poor Credit Quality PLASTECH ENGINEERED: Supply Agreement Stretched to March 17 PRB ENERGY: Case Summary & 63 Largest Unsecured Creditors QUAKER FABRIC: Can File Chapter 11 Plan Until March 19 Says Court QUEBECOR WORLD: Cuts 30 Positions at Merced, California Facility QUEBECOR WORLD: Seeks OK to Pay Non-Worker Sales Commissions QUEBECOR WORLD: NFR Wants Stay Lifted and Base Contract Terminated R&B CONSTRUCTION: May Employ Chamberlain Hrdlicka as Attorneys REGAL ENTERTAINMENT: Fitch Assigns 'B-/RR6' Rating on $190MM Notes REGAL ENTERTAINMENT: Prices $190 Mil. Offering of Senior Notes RJ GROOVER: Case Summary & 13 Largest Unsecured Creditors R SCOTT FORD: Case Summary & 15 Largest Unsecured Creditors SAN PERMIS: Case Summary & 20 Largest Unsecured Creditors SECURITY CAPITAL: Files Notice of Late Filing With SEC on Form 10K SECURITY CAPITAL: 10-K Filing Delay Cues Moody's to Review Ratings SHARPER IMAGE: To Liquidate Underperforming Stores; Bids Due Today SIRVA INC: Court Oks Motion to Approve Equity Trading Restrictions SMITHFIELD FOODS: Moody's Holds Ba2 Ratings on $565 Mil. JBS Deal SMITHFIELD FOODS: Sells Beef Processing Unit to JBS for $565 Mil. SOUNDVIEW HOME: Fitch Puts 'B' Rated $2.6MM Cert. Under Neg. Watch SOUNDVIEW HOME: Fitch Chips Ratings on $3.4 Billion Certificates STOCKTON CDO: $81 Mil. Notes Get Moody's Junk Rating TAHOMA CDO: Eroding Credit Quality Prompts Moody's Rating Reviews TEMBEC INC: DBRS Rating at D on Failure to Complete Exchange Offer TROPICANA ENT: Appeals New Jersey Casino Commission's Verdict TROPICANA ENT: Moody's Pares Corp. Family Rating to Caa3 From Caa1 TYCO INTERNATIONAL: Sells Nippon Dry to Daiwa Securities' Unit US ENERGY: Gets Court Final Approval to Access Cash Collateral VESTA INSURANCE: FSIA Liquidation Voting Deadline Set to March 18 VESTA INSURANCE: FSIA's Solicitation Period Extended to May 19 WAMU ASSET-BACKED: Fitch Lowers Ratings on $2.3 Bil. Certificates WASTE SERVICES: Completes $57 Mil. Sale of Jacksonville Assets * Fitch Details Its Negative Outlook on US Title Insurers * Hugh McDonald Joins Thacher Proffitt as Bankruptcy Partner * KCP Advisory Appoints Jacen A. Dinoff as Principal and CEO * McGuireWoods and Helms Mulliss to Combine Into 900-Lawyer Firm * BOOK REVIEW: Voluntary Assignments for the Benefit of Creditors ********* 100 KING: Case Summary & Four Largest Unsecured Creditors --------------------------------------------------------- Debtor: 100 King LC 101 South Union Street Alexandria, VA 22314 Bankruptcy Case No.: 08-11068 Chapter 11 Petition Date: March 4, 2008 Court: Eastern District of Virginia (Alexandria) Debtor's Counsel: Steven H. Greenfeld, Esq. Cohen Baldinger & Greenfeld LLC 7910 Woodmont Avenue Suite 760 Bethesda, MD 20814 Tel: 301-881-8300 Fax: 301-881-8350 steveng@cohenbaldinger.com Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million Debtor's list of its Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Peter Mallios $800,000 12606 Hill Creek Lane Potomac, MD 20854 BB & T 1909 K. Street, NW $586,166 Second Floor Washington, DC 20006 American Energy Restaurant $286,816 Equipment 7538 Fullerton Court Springfield, VA 221153 Genops Construction $75,000 City of Alexandria $38,810 AAR CORP: To Merge Acquired Avborne with MRO Segment in Miami ------------------------------------------------------------- AAR Corp. completed the acquisition of Avborne Heavy Maintenance Inc. The acquired business will operate as part of the company's Maintenance, Repair and Overhaul segment as AAR Aircraft Services - Miami. The acquisition significantly increases the company's MRO capacity, workforce and capabilities. The move adds 226,000 square feet of modern hangar space at Miami International Airport and 467 aviation maintenance technicians, increasing AAR's hangar space by 22% and bringing the total number of AMTs at AAR to more than 2,000. "We're very impressed with the strong management team, skilled workforce and the high levels of customer satisfaction that they've achieved at Avborne," David P. Storch, chairman and chief executive officer of AAR CORP. "The acquisition expands our capacity and capabilities at a time when airlines are seeking ways to operate more efficiently, lower their operating expenses and combat the rising cost of fuel," said Mr. Storch. About Avborne Heavy Maintenance Inc. Avborne Heavy Maintenance Inc. is an independent provider of aircraft heavy maintenance checks, modifications and painting services located in Miami, Florida. Founded in 1985, Avborne performs heavy maintenance on both Airbus and Boeing aircraft at its 226,000 square-foot hangar, located at Miami International Airport. The Avborne facility is capable of accommodating up to three wide-body aircraft or nine narrow-body aircraft, simultaneously. About AAR Corp. Headquartered in Wood Dale, Illinois, AAR Corp. (NYSE: AIR) -- http://www.aarcorp.com/-- provides products and services to the worldwide aerospace and defense industry. With facilities and sales locations around the world, AAR uses its business model to serve aviation and defense customers through four operating segments: aviation supply chain; maintenance, repair and overhaul; structures and systems and aircraft sales and leasing. * * * As reported in the Troubled Company Reporter on Feb. 7, 2008, Standard & Poor's Ratings Services assigned its 'BB' rating to AAR Corp.'s proposed $175 million of convertible senior unsecured notes to be issued in two equal tranches: $87.5 million notes due 2014 and $87.5 million notes due 2016. At the same time, S&P affirmed its ratings, including the 'BB' corporate credit rating, on the company. The outlook is stable. AES-STELLAR INC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: AES-Stellar Inc. 14012 Califa Street Van Nuys, CA 91401 Bankruptcy Case No.: 08-11309 Chapter 11 Petition Date: March 4, 2008 Court: Central District Of California (San Fernando Valley) Judge: Geraldine Mund Debtor's Counsel: Robert M. Yaspan, Esq. Law Offices of Yaspan & Thau 21700 Oxnard Street Ste. 1750 Woodland Hills, CA 91367 Tel: 818-905-7711 Fax: 818-501-7711 tmenachian@yaspanthau.com Estimated Assets: less than $50,000 Estimated Debts: $1,000,001 to $10 million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Gold Pleasure Industrial Co. $1,615,484 7F, 1067 King's Road Hong Kong Alto $6,023 2867 Surveyor Street Pomona, CA 91768 Unity Property Investments $4,700 16039 Loukelton Street Industry, CA 91744 FedEx $2,000 South Bay Distribution $1,341 Netzel Associates Inc. $1,092 EDI Express $1,054 Banghart-Corin & Associates $769 Kahn & Comings, Inc. $713 Man Fu Yeung $653 CMA Inc. $647 Ronnie Yeung $461 Maan Yoong $399 Linda Lee Ying Cheung $392 Primus $300 Anna L. Hernandez $256 Gregory W. Crist $248 Dot-Line Transportation $162 Paychex $137 AT&T $70 AMBAC FINANCIAL: Offering Can Retain 'Aaa' Rating, Says Moody's --------------------------------------------------------------- Moody's Investors Service said in a news statement that Ambac Financial Group Inc., if successful with its equity offering of $1.5 billion, will likely retain its "Aaa" rating. Moody's said that it will evaluate Ambac's ability to raise capital at reasonable terms as an indication of the company's financial flexibility and overall level of support from investors. In Moody's view, Ambac's new equity and equity linked capital through a public offering represents an important component of its overall plan to strengthen the credit profile of its financial guaranty insurance subsidiary, Ambac Assurance Corporation. Various reports have said that investors are disappointed about Ambac's planned $1.5 billion cash infusion, as reflected in a recent dip of Ambac's shares. As reported in the Troubled Company Reporter on March 6, 2008, investors were displeased by major banks not helping out Ambac, instead letting the monoline insurer raise capital on its own. Ambac anticipated a proposed $3 billion financing deal offered by various banks. The company was willing to accept the $3 billion financing from the banks -- until the rating agencies advised against it. Out of an issuance of $1 billion of common stock and $500 million of equity units, Ambac found only a $1 billion demand for its shares, a person familiar with the issue told Reuters. Aside from the equity offering, Ambac is also pursuing a number of initiatives to strengthen risk-adjusted capitalization, including: -- a reduction in holding company dividends to shareholders -- a six-month moratorium on the writing of new structured finance business; -- targeted reinsurance strategies; -- implementation of substantive changes to its underwriting and risk management guidelines, including the discontinuation of certain structured finance and asset management activities, as well as the tightening of single risk limits. Moody's adds that the ratings of the Ambac group of companies are currently under review for possible downgrade, reflecting the weakened capital profile of the group as a result of its mortgage and mortgage-related CDO exposures. About Ambac Financial Based in New York City, Ambac Financial Group, Inc. is a holding company whose affiliates provide financial guarantees and financial services to clients in both the public and private sectors around the world. For the nine months ended Sept. 30, 2007, Ambac reported net income of $26 million. As of Sept. 30, 2007, Ambac had shareholders' equity of approximately $5.65 billion. * * * On Jan. 18, Fitch Ratings downgraded Ambac to double-A after the insurer put off plans to raise equity capital. As reported Troubled Company Reporter on Jan. 17, 2008, Moody's Investors Service placed the Aaa insurance financial strength ratings of Ambac Assurance Corporation and Ambac Assurance UK Limited on review for possible downgrade. In the same rating action, Moody's also placed the ratings of the holding company, Ambac Financial Group, Inc. (senior debt at Aa2), and related financing trusts on review for possible downgrade. Moody's stated that this rating action follows Ambac's announcement of record losses, a capital raising plan, and the retirement of its CEO. ANF DEER CREEK: Case Summary & 21 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: ANF Deer Creek, LLC 23792 Rockfield, Suite 200 Lake Forest, CA 92630 Bankruptcy Case No.: 08-11068 Type of Business: The Debtor owns and manages real estate. Chapter 11 Petition Date: March 5, 2008 Court: Central District Of California (Santa Ana) Judge: Erithe A. Smith Debtor's Counsel: Leonard M Shulman, Esq. (lshulman@shbllp.com) Shulman Hodges & Bastian, LLP 26632 Towne Center Drive, Suite 300 Foothill Ranch, CA 92610 Tel: (949) 340-3400 Fax: (949) 340-3000 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million Debtor's 21 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Belfour USA Group trade debt $375,710 5870 La Costa Canyon Court, Suite 200 Las Vegas, NV 89139 Clark Co. Water Reclamation trade debt $51,614 District P.O. Box 98526 Las Vegas, NV 89193 Humphreys & Partners- trade debt $27,787 Architects 700 East Flamingo Road Las Vegas, NV 89119 Multifamily Community trade debt $26,450 Insurance Escalera Landscaping trade debt $24,020 AT Systems Security trade debt $23,094 Acme Security trade debt $19,141 World Cinema trade debt $18,216 Pircher, Nichols & Meeks trade debt $16,760 Stanley Consultants trade debt $16,371 Las Vegas Valley Water trade debt $11,203 District For Rent Magazine trade debt $8,847 Republics Services of South trade debt $7,624 Nevada Multifamily Community trade debt $6,490 Insurance Labor Finders trade debt $6,021 West Coast Flooring trade debt $5,967 US Landscape trade debt $5,679 Classic Design Group trade debt $5,483 Consumer Source trade debt $5,138 Las Vegas Pool Service trade debt $5,015 Las Vegas Pool & Spa Care trade debt $4,267 ANN-LEE CONSTRUCTION: Case Conversion Trial Continues on April 8 ---------------------------------------------------------------- The Honorable Jeffery A. Deller of the United Sates Bankruptcy Court for the Western District of Pennsylvania will continue the hearing of the conversion of Ann-Lee Construction and Supply Company, Inc.'s chapter 11 case into a chapter 7 liquidation proceeding at 10:00 a.m., on April 8, 2008, at the Courtroom D, 54th Floor, US Steel Tower in Pittsburgh, Pennsylvania. As reported in the Troubled Company Reporter on Dec. 27, 2007, the Court deferred the hearing to consider approval of Ann-Lee Construction's request to convert its case to Feb. 5, 2008. In its request, the Debtor told the Court that they have incurred additional losses from Jan. 11, 2007, to Aug. 17, 2007, and as a result, it was unable to meet its debts as they come due. The Debtor further said that it was unable to file a viable Chapter 11 plan and disclosure statement within the required time set by the Court. The Debtor's exclusive plan filing period expired on Sept. 19, 2007. About Ann-Lee Construction Based in Saltsburg, Pennsylvania, Ann-Lee Construction and Supply Company, Inc. offers construction consulting & management services. The company filed for Chapter 11 protection on Jan. 11, 2007 (Bankr. W.D. Pa. Case No. 07-20226). Michael J. Henny, Esq. and Joseph V. Luvara, Esq. represent the Debtor in its restructuring efforts. Kirk B. Burkley, Esq., at Bernstein Law Firm PC, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $1 million to $100 million. ARROW ELECTRONICS: To Buy Achieva's Components Distribution Biz --------------------------------------------------------------- Arrow Electronics Inc. has signed a definitive agreement pursuant to which Arrow will purchase the components distribution business from parent company Achieva Ltd., a value-added distributor in Asia Pacific. Arrow anticipates the transaction will be immediately accretive to earnings in the first twelve months by $0.01 to $0.03 per share and will meet the companys acquisition objectives for return on invested capital. The transaction is subject to approval by the shareholders of Achieva Ltd. and is expected to close in the next 60 to 90 days. "Achieva will further strengthen our position in the ASEAN (Association of Southeast Asian Nations) and greater China markets and enhance our existing demand creation capabilities," said William E. Mitchell, chairman, president and chief executive officer of Arrow Electronics, Inc. "With this acquisition, Arrow will gain strong, established relationships with major semiconductor suppliers that will expand our line card as well as build upon existing partnerships. The Achieva management team is highly experienced and will be an impressive addition of bench strength to position Arrow for continued profitable growth in the Asia Pacific region," added Mr. Mitchell. Achieva is focused on creating value for its partners through technical support and demand creation activities. The companys product range covers semiconductor components such as application specific integrated circuits, programmable logic devices, digital signal processing chips and microchip-controller units. With over 200 employees, the company has a presence in eight countries (Singapore, Taiwan, China, India, Malaysia, Philippines, Thailand, and Korea) and primarily serves small and medium sized customers in the data communications, telecommunications, lighting, industrial and digital consumer end markets. Total 2006 sales were approximately $200 million. About Arrow Electronics Headquartered in Melville, New York, Arrow Electronics Inc. -- http://www.arrow.com/-- provides products, services and solutions to industrial and commercial users of electronic components and computer products. Arrow serves as a supply channel partner for nearly 600 suppliers and more than 130,000 original equipment manufacturers, contract manufacturers and commercial customers through a global network of over 270 locations in 53 countries and territories. The company operates in France, Spain, Portugal, Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, Norway, Sweden, Italy, Germany, Austria, Switzerland, Belgium, the Netherlands, United Kingdom, Argentina, Brazil, Mexico, Australia, China, Hong Kong, Korea, Philippines and Singapore. * * * Arrow Electronics senior subordinated stock continues to carry Moody's Investors Service's Ba1 rating. The company's senior preferred stock is rated at Ba2. ATLANTIS PLASTICS: Moody's Puts Probability of Default at Ca/LD --------------------------------------------------------------- Moody's Investors Service revised the Probability of Default Rating of Atlantis Plastics, Inc. to Ca/LD following the company's failure to pay the interest on its $75 million junior term loan due 2012. The outlook remains negative. Moody's took these rating actions: -- Affirmed, $25 million revolving credit facility due 2011, Caa3 (LGD 3, 42%) -- Affirmed, $120 million senior term loan due 2011, Caa3 (LGD 3, 42%) -- Affirmed, $75 million junior term loan due 2012, C (LGD 5, 89%) -- Affirmed, Corporate Family Rating, Ca -- Revised, Probability of Default Rating, to Ca/LD from Ca (to reflect the actual defaulted status of the $75 million junior term loan due 2012) -- Affirmed, Speculative Grade Liquidity Rating SGL-4 Moody's previously downgraded the Corporate Family Rating of Atlantis's to 'Ca' on Jan. 16, 2008. The downgrade reflected the company's lack of success in negotiating a waiver and amendment to its Credit Facilities for the breach of financial covenants, lack of liquidity and likely impairment of the debt instruments on an enterprise value basis. The company continues to seek a forbearance agreement with its senior lenders. On Jan. 18, 2008, Atlantis engaged Houlihan, Lokey, Howard & Zukin as its exclusive financial advisor to assist the Company in evaluating strategic alternatives, including a possible sale transaction. Atlantis Plastics, Inc., headquartered in Atlanta, Georgia, is a manufacturer of specialty polyethylene films and molded and extruded plastic components used in a variety of industrial and consumer applications. Atlantis has 15 manufacturing plants located throughout the United States. Revenues for the twelve months ended Sept. 30, 2007 were $398 million. AUSTINBURG PROPERTIES: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Lead Debtor: Austinburg Properties, LLC 3864 Center Road Suite A-18 Brunswick, OH 44212 Bankruptcy Case No.: 08-50651 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- 138 Mazal Health Care, Ltd. 08-50655 Dani Family Ltd. 08-50657 Willow Interests, LLC 08-50653 Type of Business: The Debtor is a real estate corporation. Chapter 11 Petition Date: February 29, 2008 Court: Northern District of Ohio (Akron) Judge: Marilyn Shea-Stonum Debtor's Counsel: Theodore T. Mairanz, Esq. Neiman & Mairanz P.C. 39 Broadway 25th Floor New York, NY 10006 Tel: (212) 269-1000 tmairanz@ngmpc.com Austinburg Properties LLC's financial condition: Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtors did not file a list of their 20 Largest Unsecured Creditors. BAYOU GROUP: 47 Investors Face Lawsuits Over Fraudulent Transfers ----------------------------------------------------------------- Bayou Group LLC and its debtor-affiliates delivered 47 adversary complaints to the Hon. Adlai S. Hardin Jr. of the United States Bankruptcy Court for the Southern District of New York, seeking to recover certain fraudulent transfers made by investors against the Debtors. Bayou Fund expects to recover at least $8 million, according to Bill Rochelle of Bloomberg News. These investors were named in the lawsuits, among other things: -- Somers & Co. FBO RCG Absolute Return Fund, LLC; -- Preferred Investors L.P.; -- The Carlyle Group, Inc.; -- Advisory Select Enhanced Opportunity Fund, LLC; -- William F. Wheeler Jr. and William F. Wheeler Jr.; -- Wells Street Partners LLC; -- Tact American Fund, LLC; -- Stern Investment Holdings (Bermuda) Ltd.; -- Rodger Bemel and Rodger Bemel; -- Robert P. McNeill; -- Ricardo C. Oelkers; -- Marvin D. Snyder and Marvin D. Snyder; -- PinOak Partners, L.P.; -- Narendra Gidwani; -- Moshe & Gabrielle Tsabag Charitable Foundation; -- MCEL Pension Plan and Profit Sharing Plan; -- LeBlanc Enterprises, Ltd., LeBlanc 2000 Trust; -- on Vein, Ellen Goldsmith Vein; and -- John C. Williams. Moreover, Bayou Fund asks the Court to disallow any claims filed by these investors against its parent, until investors have returned all fraudulent transfers which are in question under the complaints. The Debtors relates that these adversary proceedings arises from a massive fraudulent investment scheme committed by the Bayou entities, which controlled private pooled investment hedge funds. The Bayou entities are: -- Bayou Management LLC; -- Bayou Advisors LLC; -- Bayou Equities LLC -- Bayou Fund LLC; -- Bayou Superfund; -- Bayou No Leverage Fund LLC; -- Bayou Affiliates Fund LLC; and -- Bayou Accredited Fund LLC. The Debtor says that the Bayou entities have attracted at least $450 million in investments for their hedge funds before suffering millions of dollars in trading losses. Tracy L. Klestadt, Esq., at Klestadt & Winters LLP in New York, said the Bayou entities attempted to stay afloat and prolonged the scheme by disclosing false investment performance and creating false financial statements. In addition, the entities attempted to conceal their losses through a series of fraudulent transfers to certain of their investor creditors, Mr. Klestadt adds. As a result, the Bayou entities used their depleted capital and capital from new investors to pay redemption proceeds to investor creditors seeking to exit the hedge funds, according to the complaint. These redemption proceeds were paid based on inflated statements of what the investments were worth and with fraudulent intent by the the Bayou entities. Consequently, the Bayou entities' fraudulent investment scheme collapsed, with at least $250 million in principal unpaid to hundreds of creditors. The Debtors seeks the return of the fictitious investment gains fraudulently transferred to redeeming investors so that the funds can be equitably redistributed pro rata to all of the Bayou entities' creditors. About Bayou Group Based in Chicago, Illinois, Bayou Group LLC operates and manages hedge funds. The company and its affiliates filed for chapter 11 protection on May 30, 2006 (Bankr. S.D.N.Y. Case No. 06-22306) in order to pursue recoveries for the benefit of defrauded investors. Bayou also filed lawsuits against former investors who allegedly received fictitious profits and an inequitably large return of their principal investments. Jeff J. Marwil at Jenner & Block was appointed on April 28, 2006 as the federal equity receiver. Elise Scherr Frejka, Esq., at Dechert LLP, represents the Debtors in their restructuring efforts. Joseph A. Gershman, Esq., and Robert M. Novick, Esq., at Kasowitz, Benson, Torres & Friedman, LLP, represents the Official Committee of Unsecured Creditors. Kasowitz, Benson, Torres & Friedman LLP is counsel to the Unofficial Committee of the Bayou Onshore Funds. Sonnenschein Nath & Rosenthal LLP represents the Sonnenschein Investors. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. BEAZER HOMES: Weak Performance Cues Fitch to Chip Ratings --------------------------------------------------------- Fitch Ratings has downgraded Beazer Homes USA, Inc.'s Issuer Default Rating and other outstanding debt ratings as: -- IDR to 'B+' from 'BB-'; -- Senior notes to 'B/RR5' from 'BB-'; -- Convertible senior notes to 'B/RR5' from 'BB-'; -- Junior subordinated debt to 'CCC+/RR6' from 'B'. Fitch has also assigned this Recovery Rating to Beazer's credit facility, as highlighted below: -- Secured revolving credit facility 'BB/RR1'. The 'RR1' on Beazer's secured revolving credit facility indicates outstanding recovery prospects for holders of this debt issue based on the information currently available. The 'RR5' on Beazer's senior unsecured notes indicate below-average recovery prospects for holders of these debt issues. Beazer's exposure to claims made pursuant to performance bonds and joint venture debt and the possibility that part of these contingent liabilities would have a claim against the company's assets were considered in determining the recovery for the unsecured debt holders. The 'RR6' on Beazer's junior subordinated notes indicate poor recovery prospects in a default scenario. Fitch applied a liquidation value analysis for these RRs. The downgrade of the IDR reflects Beazer's performance amidst continued challenging market conditions. Beazer's net new orders continue to be weak and cancellation rates remain elevated. While Beazer has generated cash flow and improved its cash position over the past five quarters, the company has not paid down debt significantly. During its fiscal 2008 first quarter, Beazer repaid $75 million of secured indebtedness. Beazer's ratings remain on Rating Watch Negative due to the company's inability to make a timely filing of its Form 10Q and Form 10K with the Securities and Exchange Commission. Beazer has until May 15, 2008 to file its financial statements in order to avoid an Event of Default under its bank credit facility and bond indentures. Furthermore, there is uncertainty as to the financial impact of Beazer's potential liability as well as regulatory fines related to the violations found within its mortgage subsidiary. Beazer reported preliminary home closings of 2,010 homes during its fiscal 2008 first quarter ended Dec. 31, 2007, a 24% decline from the same period last year. Net new orders totaled 1,260 homes, a 29% drop from last year's first quarter. The cancellation rate for the fiscal 2008 first quarter was 46%. Beazer had cash of approximately $325 million at Dec. 31, 2007, compared with about $459.5 million at Sept. 30, 2007. The company has a $500 million secured revolving credit facility with no outstandings and $92 million of letters of credit. The company has sufficient real property that, if added to the collateral pool, would allow it to fully access the total $500 million commitment under the credit facility. For all of fiscal 2008, Beazer expects to be cash flow positive, to be aided in part by the company's decision to exit certain markets and reduce land and development spending in fiscal year 2008. Furthermore, Beazer recently suspended its quarterly dividend, which should save the company about $16 million this year. In February 2008, Beazer announced its decision to exit its homebuilding operations in Charlotte, North Carolina, Cincinnati / Dayton, Ohio, Columbia, South Carolina, Columbus, Ohio, and Lexington, Kentucky during fiscal year 2008. Management is evaluating its current land holdings and inventory in each of these markets to determine the appropriate methods and timing for disposition. Beazer intends to complete all homes under construction and is committed to maintaining customer care resources to provide ongoing warranty service to homeowners through their warranty periods. Beazer also announced the discontinuation of mortgage origination services through Beazer Mortgage Corporation. Beazer established a new marketing services arrangement with Countrywide, whereby Beazer will market Countrywide as the preferred mortgage provider to Beazer customers. Resolution of the Negative Rating Watch will be based on the company filing its Form 10Q and its Form 10K with the Securities and Exchange Commission. As previously announced, Beazer reported that its Audit Committee determined that it will be necessary for the company to restate its financial statements relating to fiscal years 2004 through 2006 and the interim periods of fiscal 2006 and fiscal 2007. The resolution of the on-going external investigations will be considered in resolving Beazer's Rating Watch Status. Future ratings and Outlooks will also be influenced by broad housing market trends as well as company specific activity, such as trends in land and development spending, general inventory levels, speculative inventory activity, gross and net new order activity, debt levels and free cash flow trends and uses. BLUE WATER: Gets Interim OK to Borrow $27.5MM from Citizens Bank ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan issued an interim order authorizing Blue Water Automotive Systems, Inc., and its debtor-affiliates to obtain postpetition loans not to exceed $27,500,000 from Citizens Bank. The Court's order will be deemed final absent timely filed objections to the loan by parties-in-interest by March 28, 2008. The Court will convene a hearing on March 31 if the Debtors receive objections to the loan, which requires the provision of financial accommodations by certain of Blue Water's major customers. Citizen's Bank will provide the Debtors with a $35,000,000 revolving credit facility, including up to $24,000,000 of "overformula advances", upon final approval of the DIP Loan. The Court also authorizes the Debtors to make intercompany loans not exceeding $3,000,000, to non-operating debtor-affiliates from the DIP proceeds. The Court further authorizes the Debtors to enter into an accommodation agreement with Ford Motor Company, Automotive Component Holding, Inc., and AutoAlliance International, Inc., and to grant these customers access rights in exchange for certain credit enhancements. Until the time (x) as Citizens Bank is satisfied with the results of its examination of the Debtors' books and records, and (y) payment of $1,720,000, with respect to the postpetition liens of certain customers of the Debtors pursuant to the Cash Collateral Orders are made into escrow, all advances will be treated as Overformula Advances. All liens of the customers will be transferred to the proceeds of the escrow, subject to the resolution of the validity, existence, and priority of the liens. Subject to Citizens Bank's satisfaction with its due diligence, it will make loans based on this borrowing base formula: * up to 90% of Accommodating Customer Eligible Accounts; plus * up to 85% of Eligible Accounts other than Accommodating Customer Eligible Accounts; plus * up to 75% of the cost of Accommodating Customer Inventory; plus * up to 35% of the cost of Eligible Inventory other than Accommodating Customer Eligible Inventory; minus * the "Reserves." Reserves refer to Borrowing Base reserves imposed from time-to- time by Citizens Bank, including reserves for the Carve-Out, reserves for Permitted Liens on accounts or inventory that are senior to the liens of Citizens Bank, and reserves in respect of any adequate protection payments to the DIP agent. In addition to the In-Formula Loans, Citizens Bank will lend up to an amount equal to the difference between $35,000,000, and the outstanding amount of In-Formula Loans made according to the Borrowing Base, not to exceed $24,000,000, of Overformula Advances. Overformula Advances will only be made if they are fully guaranteed by Ford Motor Company and other Accommodating Customers acceptable to Citizens Bank. As between all other Postpetition Indebtedness, the Overformula Advances will be subordinate in all respects. The DIP Loans will bear interest at: Loans Interest Rate ----- ------------- Postpetition Loans that Prime Rate, plus are not Overformula Advances 1.25% per annum on the outstanding day-to-day principal balance Overformula Advances Prime Rate per annum, plus 0.50% per annum on the outstanding day-to-day principal balance DIP Loans 2.0% per annum on top of the other applicable interest rates from and after an Event of Default Interest on the DIP Loans will be due and payable on the first business day of each month in arrears and all interest will be calculated based on a 360-day year. The Court directs the Debtors to pay Citizens Bank (i) a non- refundable $250,000 facility fee; (ii) a $5,000 monthly collateral monitoring fee; (iii) a fee of 0.25% time the average daily unused portion of the DIP Facility; and (iv) all reasonable fees and expenses incurred by the Bank in monitoring, administering, or providing financing, including its attorneys' fees, and fees and costs associated with the Bank's Court appearance. Citizens Bank will apply the $50,000 expense deposit received from certain affiliates of KPS Special Situations Fund I, L.P., on February 12, 2008, toward payment of the DIP Lender Expenses. KPS Fund is the Debtors' ultimate parent company. To secure the Debtors' obligations on account of the DIP Loans, including principal, interest, the Loan Fees and Lender Expenses, Citizens Bank is granted: (i) a lien and security interest in the Prepetition Collateral junior in priority only to the Existing Liens; (ii) a first priority lien and security interest in the Postpetition Collateral; and (iii) a first priority lien and security interest in any of the Collateral that is not otherwise subject to a lien under Section 364(c)(2) of the Bankruptcy Code. The Court clarifies that the Postpetition Collateral does not include any causes of action or judgments or proceeds of the causes of action against any entity arising under Chapter 5 of the Bankruptcy Code. The superpriority administrative claims granted to Citizens Bank and the liens securing the claims will be subject to the Carve- Out, which refers to the budgeted amount per month to be paid to bankruptcy professionals hired by the Debtors and any Court- appointed committees, Chapter 7 Trustee fees and fees to be paid to the Clerk of the Court. The Carve-Out includes a $100,000 retainer to each of Foley & Lardner LLP and Huron Consulting Group, plus an additional $850,000 for the Debtors' bankruptcy professionals and $150,000 for any committee's bankruptcy professionals. The superpriority administrative claims and Section 364(c)(1) claims that are being granted to Citizens Bank are limited to the deficiency, if any, in the amount collected by the bank with respect to its In-Formula Advances. The DIP Loans will be due and payable on the earliest of (i) September 30, 2008; (ii) the occurrence of an Event of Default; (iii) the sale of all or substantially all of the Debtors' assets; or (iv) the effective date of any confirmed plan of reorganization. Citizens Bank, the Accommodating Customers, any of the Debtors' customers, or any other party is not granted a lien, security interest, or right in any Collateral that "primes" or is superior to any enforceable, unavoidable, prepetition lien or security interest. The Debtors will furnish regularly to Citizens Bank, the DIP Agent and the Accommodating Customers financial and inventory reports as sought by the Bank. Provisions to Prepetition Lenders >From the proceeds of the DIP Credit Facility, the Debtors will pay $13,651,819 to The CIT Group/Business Credit, Inc., in its capacity as agent, as settlement and payment in full of all obligations owed by the Debtors with respect to the Amended and Restated Loan and Security Agreement dated as of July 18, 2006, calculated as: Principal Balance on Petition Date $17,230,720 Less: Payments through March 3, 2008 (4,814,316) Accrued Pre- and Post-Petition Interest 259,943 Agreed Upon Cap of Fees and Expenses 805,000 ----------- $13,651,819 The Debtors will also pay $2,500,000, into an escrow account at one of the CIT Group Lenders in full payment of the Prepetition Lenders' liens and security interests in the Revolving Loan First Lien Collateral, other than the liens of CIT, as lessor, in the equipment. CIT will have a perfected and unavoidable first perfected security interest in the Escrow Account. A full-text copy of the Interim DIP Order is available for free at http://bankrupt.com/misc/bluewater_InterimDIPOrder.pdf Sale Process Milestones Blue Water's accommodation agreement with the Participating Customers provides that the process to sell all or substantially all of the Debtors' assets will be conducted in accordance with these milestones: April 15, 2008 -- Obtain a letter of intent to sell Debtors' assets May 28, 2008 -- Execute a definitive purchase agreement with a Qualified Buyer and file a motion seeking Court's approval of the sale on the terms outlined in the definitive agreement June 20, 2008 -- Obtain Court approval of the proposed sale June 30, 2008 -- Close the sale The financial accommodations granted by the Participating Customers will expire on May 31, 2008, but will be extended to June 30, 2008, if the definitive agreement is executed by May 28. A full-text copy of the Accommodation Agreement is available for free at http://bankrupt.com/misc/bluewater_AccommodationPact.pdf About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operation in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News Issue No. 6, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BLUE WATER: Creditors Panel Wants Interim DIP Order Vacated ----------------------------------------------------------- The Official Committee of Unsecured Creditors in Blue Water Automotive Systems, Inc., and its debtor-affiliates' cases has taken an appeal from the interim order issued by the U.S. Bankruptcy Court for the Eastern District of Michigan authorizing the Debtors to obtain postpetition loans not to exceed $27,500,000 from Citizens Bank. The Creditors Committee wants the U.S. District Court for the Eastern District of Michigan, Southern Division, to determine whether: (a) the Interim DIP Order be vacated and the matter remanded to the Bankruptcy Court; (b) the Bankruptcy Court erred in granting the DIP Financing Motion and in entering the Interim DIP Order where the Order: -- allows the Debtors to incur up to $15,000,000, in additional debt secured by liens and superpriority claims on all the Debtors' assets; -- renders the Debtors immediately and irreversibly administratively insolvent; -- compels the sale of all the Debtors' operating assets on an expedited basis and allows the Debtors' customers veto rights on any potential purchaser; -- waives the Debtors' rights to reject their unprofitable contracts with their customers, even though those are the same contracts that rendered the Debtors insolvent in the first place; -- waives and releases all claims against the prepetition lenders where the prepetition lenders' highly inequitable and possibly illegal actions in sweeping funds advanced by Ford forced the Debtors into bankruptcy, and where the Committee has had no opportunity to review those claims; -- permits the Debtors' customers to take over and operate the Debtors' business at any time if the customers feel that the continued production of their parts is in any way threatened; and -- prevent the Debtors, the Committee, or any other party-in-interest from confirming any plan of reorganization, and giving the customers veto rights over any proposed plan of liquidation; (c) the Bankruptcy Court erred in finding that the Debtors would be irreparably harmed if not permitted to spend $15,000,000, before the Interim DIP Order could become a final order; and (d) the Bankruptcy Court erred in finding that the DIP Lenders extended credit to the Debtors in good faith. The Creditors Committee, two days before the Bankruptcy Court issued the Interim DIP Order, filed an objection to the DIP Motion asserting that the Debtors have failed to (i) demonstrate that their management has fulfilled their fiduciary duty to unsecured creditors; and (ii) support their case for borrowing money, which will never be repaid to the prejudice of unsecured creditors, just to provide a controlled sale or liquidation for the benefit of the Accommodating Customers who continue to enjoy prices that result in Debtors' substantial operating losses. "It is not an exaggeration to say that the Financing Motion is intended only to benefit the customers with no concern whatsoever for maximizing the value of the estate or protecting either administrative or unsecured creditors," Ryan D. Heilman, Esq., at Schafer and Weiner, PLLC, in Bloomfield Hills, Michigan, argues. H.S. Die & Engineering, Inc., and Tri-Way Manufacturing Inc., also objected to the DIP Motion to the extent that it does not clarify the Debtors' intentions with respect to the security interests held by H.S. Die and Tri-Way. H.S. Die says the Debtors owe it $98,150, for prepetition purchases of tooling, while Tri-Way says the Debtors owe it $364,910, for prepetition delivery of goods. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operation in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News Issue No. 6, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BLUE WATER: Sec. 341 Meeting of Creditors Set for March 24 ---------------------------------------------------------- Habbo Fokena, the United States Trustee for Region 9, will convene a meeting of creditors in Blue Water Automotive Systems, Inc.'s Chapter 11 case, on March 24, 2008, at 2:00 p.m., at Room 315 D, 211 W. Fort St. Bldg., in Detroit, Michigan. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' case. The Section 341(a) Meeting has been scheduled within the time required by Rule 2003 of the Federal Rules of the Bankruptcy Procedure. All creditors are invited, but not required, to attend. The Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operation in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News Issue No. 6, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BLUE WATER: Seeks Authority to Assume Molding Contracts ------------------------------------------------------- In the ordinary course of their businesses, Blue Water Automotive and its four debtor-affiliates issue purchase orders with various molding contractors that provide the terms and conditions of, among other things, manufacture, payment and delivery. The Debtors need molds to launch new programs or continue existing programs, and they must obtain them in a timely manner to meet their production schedule with the original equipment manufacturers. If the molds are not produced or are delivered late, the Debtors could be in breach of their obligations to the OEMs, Judy A. O'Neill, Esq., at Foley & Lardner LLP, in Detroit, Michigan, says. In that event, the OEMs could be forced to shut down production lines or miss launch dates because the Debtors were not able to timely deliver component parts, leading to significant damage claims from the OEMs, Ms. O'Neill adds. The Debtors stand to lose considerable business and loss of reputation if any OEM production lines are shut down, Ms. O'Neill tells the Court. Thus, by this motion, the Debtors seek authority from the U.S. Bankruptcy Court for the Eastern District of Michigan to assume: (a) certain molding contracts, a list of which is available for free at: http://bankrupt.com/misc/bluewater_MoldingPacts.pdf (b) certain contracts for design or testing services necessary to the fabrication and approval of the Molds, a list of which is available for free at: http://bankrupt.com/misc/bluewater_MoldServicesPacts.pdf The Debtors also seek the Court's authority to cure any defaults under the Molding Contracts and the Mold Service Contracts, and pay all other debts under them as they arise in the ordinary course of business either: (i) by agreements with the OEMs; or (ii) other customers providing that the customers will pay the Contractors directly; or payments by the customers will be made to the Debtors, which will be escrowed or set aside so that funds are dedicated to the payment of the Contractors. Mr. O'Neill tells the Court that the Debtors currently are negotiating with their customers on the payment approaches, and have secured preliminary consents in many instances. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operation in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News Issue No. 6, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BLUE WATER: CIT Entities Wants Adequate Protection Payments ----------------------------------------------------------- CIT Group/Equipment Financing, Inc., and CIT Capital USA, Inc., ask the U.S. Bankruptcy Court for the Eastern District of Michigan to: (a) lift the automatic stay to enforce the prepetition agreements with the Debtors; or (b) grant them adequate protection from the Debtors' continued use of property securing the Debtors' obligations under the Prepetition CIT Agreements. Shalom L. Kohn, Esq., at Sidley Austin LLP, in Chicago, Illinois, relates that the Debtors and CIT Capital are parties to a Promissory Note, which is secured by certain mortgages encumbering the Debtors' properties in Tuscola, Sanilac, and St. Clair Counties, Michigan; certain Assignments of Rents and Leases; and an Indemnity and Guaranty Agreement, dated May 17, 2006. In addition, the Debtors and CIT Equipment Financing, Inc., are parties to a prepetition Master Lease Agreement under which CIT Equipment Financing provided financing or financing leases for the Debtors' benefit. The Debtors' obligations under the Lease Agreement is secured by: (a) all plastic injection and bold molding machinery and related support equipment like resin drying, blending loading and granulating equipment; (b) all parts, and their replacements, accessions, additions, alterations, and modifications; (c) all rights, interests, choses in action, causes of action, claims and all other intangible property of any kind or nature related to the foregoing personal property; (d) all payments under any insurance, or any indemnity, warranty, or guaranty payable by reason of loss or damage to or otherwise with respect of any of the foregoing; and (e) all proceeds and products of any of the foregoing. Mr. Kohn says that the CIT Entities have perfected their security interests in the Debtors' properties and equipment securing the Debtors' obligations under the Prepetition CIT Agreements. Mr. Kohn adds that as of the Petition Date, Debtors owed CIT Capital $14,831,875, under the Loan Documents, and $14,314,584, under the Master Lease Agreement. Mr. Kohn asserts it is necessary to lift the automatic stay for the CIT Entities to enforce the Prepetition Agreements against the Debtors because the Debtors have been using CIT's Collateral since the Petition Date without providing adequate assurance payments to CIT. Mr. Kohn relates that CIT has asked the Debtors for adequate protection payments to CIT Equipment Financing but the Debtors refused and stated that if CIT desired adequate protection it would have to file a motion and lift the automatic stay. Mr. Kohn adds that the Debtors' refusal to provide adequate protection is even more disturbing because their books and records show that their real estate and equipment are depreciating $797,000, per month. Mr. Kohn adds that the Debtors have failed to provide CIT with periodic cash payments as compensation for the continued depreciation of the Collateral. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operation in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News Issue No. 6, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BRODERICK CDO: Moody's Downgrades Ratings on Eight Note Classes --------------------------------------------------------------- Moody's Investors Service downgraded ratings of eight classes of notes issued by Broderick CDO 2 Ltd., and left on review for possible further downgrade the rating of four of these classes of notes. The notes affected by this rating action are: Class Description: $876,000,000 Class A-1 AD First Priority Senior Secured Floating Rate Delayed Draw Notes Due 2049 -- Prior Rating: Aaa -- Current Rating: Aa1, on review for possible downgrade Class Description: $500,000,000 Class A-1 AT First Priority Senior Secured Floating Rate Notes Due 2049 -- Prior Rating: Aaa -- Current Rating: Aa1, on review for possible downgrade Class Description: $42,000,000 Class A-1B Second Priority Senior Secured Floating Rate Notes Due 2049 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $70,000,000 Class A-2 Third Priority Senior Secured Floating Rate Notes Due 2049 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade Class Description: $67,600,000 Class B Fourth Priority Senior Secured Floating Rate Notes Due 2049 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Ca Class Description: $23,500,000 Class C Fifth Priority Senior Deferrable Secured Floating Rate Notes Due 2049 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: C Class Description: $8,000,000 Class D Sixth Priority Mezzanine Deferrable Secured Floating Rate Notes Due 2049 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: C Class Description: $4,900,000 Class E Seventh Priority Mezzanine Deferrable Secured Floating Rate Notes Due 2049 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: C The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence, as reported by the Trustee on Feb. 27, 2008, of an event of default caused by a failure of the Class A Sequential Pay Ratio to be greater than or equal to 100 per cent pursuant Section 5.01(i) of the Indenture dated Sept. 1, 2006. Broderick CDO 2 Ltd. is a collateralized debt obligation backed primarily by a portfolio of structured finance securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades taken today reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by certain Noteholders following the event of default. Because of this uncertainty, the ratings assigned to Class A-1 AD Notes, Class A-1 AT Notes, Class A-1B Notes, and Class A-2 Notes remain on review for possible further action. CARAUSTAR INDUSTRIES: S&P Chips Ratings to 'B-' on Weak Earnings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Caraustar Industries Inc., including its corporate credit rating, to 'B-' from 'B+'. The outlook is negative. "The downgrade reflects continuing weak earnings and cash flow, lower-than-expected liquidity, and refinancing risk," said Standard & Poor's credit analyst Pamela Rice. "Fourth-quarter 2007 earnings were substantially weaker than expected. In addition, margin pressure from raw material and energy costs persists, and the realization of recently announced price increases is uncertain. We are also concerned about the company's ability to address the June 1, 2009, maturity of its $190 million senior unsecured notes given the challenging credit markets." Caraustar had about $315 million of total debt, including debt- like obligations, at Dec. 31, 2007. Austell, Georgia-based Caraustar is one of the largest U.S. manufacturers of 100% recycled paperboard. "We could lower the ratings if Caraustar's profitability worsens in the next few quarters, if market conditions deteriorate, or if liquidity narrows," Ms. Rice said. "We could also lower the ratings if the company is unable to address its June 2009 debt maturity in a manner that does not harm credit quality. We could revise the outlook to stable if the company is able to realize sufficient benefits from its rationalization and cost-reduction efforts and price increases to meaningfully improve earnings over the next few quarters and successfully refinances or repays its maturing debt." CARAUSTAR INDUSTRIES: S&P Chips Ratings to 'B-' on Weak Earnings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Caraustar Industries Inc., including its corporate credit rating, to 'B-' from 'B+'. The outlook is negative. "The downgrade reflects continuing weak earnings and cash flow, lower-than-expected liquidity, and refinancing risk," said Standard & Poor's credit analyst Pamela Rice. "Fourth-quarter 2007 earnings were substantially weaker than expected. In addition, margin pressure from raw material and energy costs persists, and the realization of recently announced price increases is uncertain. We are also concerned about the company's ability to address the June 1, 2009, maturity of its $190 million senior unsecured notes given the challenging credit markets." Caraustar had about $315 million of total debt, including debt- like obligations, at Dec. 31, 2007. Austell, Georgia-based Caraustar is one of the largest U.S. manufacturers of 100% recycled paperboard. "We could lower the ratings if Caraustar's profitability worsens in the next few quarters, if market conditions deteriorate, or if liquidity narrows," Ms. Rice said. "We could also lower the ratings if the company is unable to address its June 2009 debt maturity in a manner that does not harm credit quality. We could revise the outlook to stable if the company is able to realize sufficient benefits from its rationalization and cost-reduction efforts and price increases to meaningfully improve earnings over the next few quarters and successfully refinances or repays its maturing debt." CARLYLE CAPITAL: Misses Margin Calls and Gets Notice of Default --------------------------------------------------------------- Carlyle Capital Corporation Limited said that since filing its annual report on Feb. 28, 2008, the company has been subject to margin calls and additional collateral requirements totaling more than $60 million. It said that until March 5, the company had met all of the margin requirements imposed by its repo counterparties. However, on March 5, the company received additional margin calls from seven of its 13 repo counterparties totaling more than $37 million. The company has met margin calls from three of these financing counterparties that have indicated a willingness to work with the company during these tumultuous times, but did not meet the margin requirements of the four other repo financing counterparties. >From this group of four counterparties, one notice of default has been received by the company and management expects to receive at least one additional default notice. John Stomber, Chief Executive Officer, President and Chief Investment Officer of the company, said, "The last few days have created a market environment where the repo counterparties' margin prices for our AAA-rated U.S. government agency floating rate capped securities issued by Fannie Mae and Freddie Mac are not representative of the underlying recoverable value of these securities. Unfortunately, this disconnect has created instability and variability in our repo financing arrangements. Management is actively working with the company's repo counterparties to develop more stable financing terms." Since the liquidity crisis in global fixed income markets started in August, the company has sold almost $1 billion in non-RMBS assets to improve liquidity and reduce leverage. The company has also received significant support from The Carlyle Group, most notably in the form of a $150 million subordinated revolving credit line. Fourth Quarter 2007 Highlights and Update The company had net income for the fourth quarter of 2007 was $17.6 million, compared to a net loss of $34.2 million in the third quarter of 2007. Fully diluted net income per Class B share was $0.34 in the fourth quarter, compared to a loss per Class B share of $0.74 in the third quarter of 2007. Net income for the year ended Dec. 31, 2007, was $16.8 million, or $0.45 per Class B share on a fully diluted basis. As of Feb. 27, 2008, the company\u2019s $21.7 billion investment portfolio is comprised exclusively of AAA-rated floating rate capped residential mortgage backed securities issued by Fannie Mae and Freddie Mac, which are considered to have the implied guarantee of the U.S. government and are expected to pay at par at maturity. The Carlyle Group agreed to increase the $100 million unsecured revolving credit facility made available to the company to $150 million and extend the maturity to July 1, 2009. As of Feb. 27, 2008, the company had $80 million of availability under this credit facility. As of Feb. 27, 2008, the company had unused repo lines of $2.4 billion with 11 counterparties. As of Dec. 31, 2007, the company's "Liquidity Cushion" was $67.2 million and was comprised of cash and cash equivalents, unencumbered AAA-rated mortgage backed securities and available committed borrowings from The Carlyle Group. As of Feb. 27, 2008, the company's Liquidity Cushion had increased to $130 million. The Liquidity Cushion consists of an existing $80 million Liquidity Cushion plus the additional $50 million increase to the existing unsecured revolver provided by Carlyle. The Carlyle Group with the support of the Board of Directors of the company waived the incentive fee earned for the fourth quarter of 2007. The Carlyle Group also amended its Investment Management Agreement so that the incentive fee will only be earned with respect to a calendar quarter for which the Board declares a dividend on the company's Class B shares. The Board of Directors decided to retain the company's fourth quarter earnings and not pay a dividend to achieve its short term objective of preserving the long term value of its shareholders' equity. During the fourth quarter of 2007, an affiliate of Carlyle Investment Management LLC, the company's investment manager, purchased Class B shares of the company in the open market increasing its ownership to approximately 15% of the issued and outstanding Class B shares from approximately 12% at the time of the global offering. "During the fourth quarter our portfolio stabilized and we were able to generate returns consistent with our near term targets," said John Stomber, Chief Executive Officer, President and Chief Investment Officer of the Company. "We are focused on building our liquidity cushion and broadening our available repo lines. We continue to run our business to preserve the value of our shareholders' equity and to position the Company to meet our long run objectives of earning an attractive risk adjusted return and paying a consistent dividend in the future." A full-text copy of the company's annual report can be obtained at http://ResearchArchives.com/t/s?28d7 About Carlyle Capital Carlyle Capital Corporation Limited (Euronext Amsterdam ticker symbol: CCC; ISIN: GG00B1VYV826) -- http://www.carlylecapitalcorp.com/-- is a Guernsey investment company that was formed on Aug. 29, 2006. It is a closed-end investment fund domiciled and registered as a limited company under the laws of Guernsey, Channel Islands. CCC invests in a diversified portfolio of fixed income assets including high-grade mortgages and credit products. CCC's day-to-day activities and investment portfolio are managed by Carlyle Investment Management LLC, whose investment professionals have extensive experience in the areas of mortgage finance, leveraged finance, capital markets transaction structuring and risk/portfolio management. CIM manages the CCC pursuant to a management agreement. CIM is a registered investment adviser under the U.S. Investment Advisers Act of 1940 and is an affiliate of The Carlyle Group. CASA DE CAMBIO: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Casa de Cambio Majapara S.A. de C.V. aka Majapara Casa de Cambio Lago Margarita No. 16 Colonia Granada, C.P. 11520 Mexico, D.F. Bankruptcy Case No.: 08-05230 Type of Business: The Debtor is engaged in financial transactions processing, reserve, and clearing house activities. See http://www.majapara.com.mx Chapter 11 Petition Date: March 5, 2008 Court: Northern District of Illinois (Chicago) Debtor's Counsel: Andrew L. Wool, Esq. (andrew.wool@kattenlaw.com) Katten Muchin Rosenman, LLP 525 West Monroe Street Chicago, IL 60661 Tel: (312) 902-5623 http://www.kattenlaw.com Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wachovia Bank N.A. contract, disputed, $24,197,000 Attention: Carlos Perez quasi-contract, 200 South Biscayne Boulevard, trade 12 Floor Miami, FL 33131 Tel: (305) 789-6920 Blanca Nieves Luisa contract, $2,009,944 Valle Villazon quasi-contract, Navegantes 234 Esq. trade Jacarandas Col. Virginia Boca del Rio C.P. 94294 Veracruz, Mexico Tel: 52-229-935-1909 Adquira Mexico S.A. de C.V. contract, $1,674,436 Attention: Miguel Angel quasi-contract, Escalona trade Paseo de la Reforma No. 1200 Piso 2, Cruz Manca Cuajimalpa C.P. 5349 Mexico, D.F. Tel: 52-55-5-16169714 Zions First National Bank contract, $1,670,690 Attention: Lourdes Vega quasi-contract, 1 South Main Street trade Salt Lake City, UT 84111-1904 Tel: (801) 844-7876 Andamios Cimbras Y Casetone contract, $730,580 S.A. de C.V. quasi-contract, Attention: Marcelo Vazquez trade Stringel Patricio Sanz No.33 Desp. 101 Col. del Valle Mexico, D.F. C.P. 03100 Tel: 52-55-5-669-1188 Secrimex, S.A. de C.V. contract, $618,192 Attention: Ana Maria Amador quasi-contract, Lopez trade Calle 2 No. 16 Col. Alce Blanco Naucalpan de Juarez C.P. 53370 Estado de Mexico Piso Prestigio S.A. de C.V. contract, $614,590 Attention: Adan Esparza quasi-contract, Sanchez trade Calz. Lazaro Cardenas 4145 Col. Camino Real Zapopan, Jal. C.P. 45040 Mexico Tel: 52-33-3647-4088 Su Casa Produce, LLC contract, $580,134 Attention: Victor Manuel Diaz quasi-contract, 188 Old Tucson Road trade P.O. Box 1381 Nogales, AZ 85628 tel: 520-281-1409 Agencia de Viajes K contract, $478,749 Attention: Rosa Maria Lopez quasi-contract, Ramirez trade Baedeker S.A. de C.V. Tlacotalpan 96 Esquina Tehuantepec Col. Roma Sur C.P. 6760 Mexico, D.F. Tel: 52-55-5-5574-4040 Promedia Computer S.A. de contract, $416,105 C.V. quasi-contract, Attention: Evangelina Reyes trade Perez Av. Baja California 196-201 Del. Benito Juarez C.P. 6700 Mexico, D.F. Tel: 52-55-5-5564-3994 Industrias John Crane contract, $400,000 de Mexico S.A de C.V. quasi-contract, Attention: Lic. Jesus Urdaneta trade Poniente 152 No. 667 Col. Industrial Vallejo C.P. 02300 Mexico, D.F. Tel: 52-55-5-5385-0525 Taurus-Espa A, S.a. de C.V. contract, $396,585 Attention: Jos� Luis Fernandez quasi-contract, Henriquez trade Rosas Moreno 4-203 Col. San Rafael C.P. 6470 Mexico, D.F. Tel: 52-55-5-5546-8162 ext. 239 Standard Machinery and Supply contract, $394,000 Co. S.A. de C.V. quasi-contract, Attention: Barbara Hernandez trade Larrieta Tenayuca 82 Fracc. Ind. Tlalnepantla C.P. 54030 Estado de Mexico Tel: 52-55-5-565-6741 Suspension Y Direccion S.A. de contract, $329,071 C.V. quasi-contract, Attention: Luis Becerril trade Colorado Dr. Lucio 211 Col. Doctores C.P. 06720 Mexico, D.F. Tel: 52-55-5134-0700 Instituto Tecnologico contract, $278,311 Autonomo de Mexico quasi-contract, Attention: Monica de Lourdes trade Arrieta Blanco Rio Hondo No. 1 Col Tizapan, San Angel C.P. 01000 Mexico, D.F. Tel: 52-55-5-5628-4000 Grupo Plastico Nova S.A. de contract, $277,872 C.V. quasi-contract, Attention: Laura Garcia trade Carrillo San Juan 768 Col. Granjas Modernas C.P. 07460 Mexico, D.F. Tel: 52-55-5-5748-0583 Suyun Yan Hu contract, $270,964 Dr. Salvador Garcia Diego quasi-contract, 209, Col. Doctores C.P. 06720 trade Mexico, D.F. Tel: 52-55-5-3096-8108 America Maria Luisa Taracido contract, $247,880 Berea quasi-contract, trade Rittal, S.A. de C.V. contract, $240,524 quasi-contract, trade Catalizadores Salh Mon S.A. de contract, $213,495 C.V. quasi-contract, trade CHAMP CAR: Goes Bankrupt, Plans To Sell Assets to Indy Racing ------------------------------------------------------------- Champ Car World Series LLC was put into chapter 11 bankruptcy by its counsels on March 5, 2008, John Oreovicz writes for ABC Local News in North Carolina. Despite the bankruptcy, Champ Car plans to proceed in the management of its business and operate as a debtor-in-possession, the report says. Champ Car is scheduled to host an open-wheel race in Long Beach, California -- www.longbeachgp.com/ -- on April 18-20, 2008, the Debtor's alleged final event, ABC relates. In a statement filed with the Court, Champ Car vice president and chief financial officer, Gene Cottingham, said that the Debtor's board of managers have decided that it's no longer finanncially sound to continue and open-wheel series and found that there is insufficient money to operate the event this year, ABC notes. Champ Car's board is composed of Kevin Kalkhoven, Gerald Forsythe, Paul Gentilozzi and Dan Pettit, ABC reports. Its major owners are Kalkhoven, by its 21st Century Racing Holdings LLC unit and Forsythe by its Willis Capital LLC unit, ABC adds. Also, Champ Car plans to liquidate its assets related to the open- wheel racing to the Indy Racing League for the unification of open-wheel racing with Indy-style racing by the beginning of this year's season, ABC quotes Mr. Cottingham's statement. According to court documents, Champ Car's board have already decided to file for bankruptcy as early as Feb. 14, 2008, before major owners issued a memorandum of understanding, ABC relates. In the memorandum, Kalkhoven and Forsythe ordered the sale of "substantially all" of Champ Car's "intangible assets" and its "mobile medical unit to the IRL for $6 million," ABC reveals. The memorandum also provides $2 million each to the major owners who promised to support the open-wheel racing in Long Beach, ABC says. The Long Beach race is operated by Aquarium Holdings LLC, owned by Kalkhoven and Forsythe, ABC notes. On Feb. 2, 2004, Judge Frank J. Otte of the U.S. Bankruptcy Court for the Southern District of Indiana permitted the sale of Championship Auto Racing Teams Inc.'s assets to Kalkhoven and Forsythe's unit, which is now known as Champ Car World Series LLC, ABC reveals. The Troubled Company Reporter said on Jan. 2, 2006, that the stockholders of Championship Auto, aka CART Inc., approved on Dec. 29, 2005, the company's Plan of Liquidation and Dissolution offered for vote at a Special Meeting. About Champ Car Indianapolis-based Champ Car World Series LLC, fdba Open Wheel Racing Series LLC and Corkscrew Acquisition LLC, -- http://www.champcarworldseries.com/-- organizes and operates a racing circuit that features about 20 drivers competing in single- seat, open-wheeled race cars. The circuit includes more than a dozen race tracks and road courses in the US, Canada, Mexico, and Australia. It regulates the sport and promotes the races; it generates revenue from sponsorships and broadcasting rights. It filed for chapter 11 protection on March 5, 2008 (Bankr. S.D. Ind. Case No. 08-02172). Gary Lynn Hostetler, Esq., and Jeffrey A. Hokanson, Esq., at Hostetler & Kowalik PC represent the Debtor in its restructuring efforts. The Debtor had assets between $10 million to $50 million and debts between $1 million to $10 million when it filed for bankruptcy. Its largest unsecured creditor, Cosworth Inc., is owed $1,825,000. CHAMP CAR: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Champ Car World Series, LLC fdba Open Wheel Racing Series, LLC fdba Corkscrew Acquisition, LLC 5350 West Lakeview Parkway South Drive Indianapolis, IN 46268 Bankruptcy Case No.: 08-02172 Type of Business: Formerly known as Open Wheel Racing, the Debtor organizes and operates a racing circuit that features about 20 drivers competing in single- seat, open-wheeled race cars. The circuit includes more than a dozen race tracks and road courses in the US, Canada, Mexico, and Australia. It regulates the sport and promotes the races; it generates revenue from sponsorships and broadcasting rights. See http://www.champcarworldseries.com Chapter 11 Petition Date: March 5, 2008 Court: Southern District of Indiana (Indianapolis) Judge: Anthony J. Metz, III Debtor's Counsel: Gary Lynn Hostetler, Esq. (glh@hostetler-kowalik.com) Jeffrey A. Hokanson, Esq. (jeff.hokanson@hostetler-kowalik.com) Hostetler & Kowalik, P.C. 101 West Ohio Street, Suite 2100 Indianapolis, IN 46204 Tel: (317) 262-1001 Fax: (317) 262-1010 http://www.hostetler-kowalik.com/ Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Cosworth, Inc. Open Account $1,825,000 3031 Fujita Street Torrance, CA 90505 PKV Racing Open Account $645,884 4001 Methanol Lane Indianapolis, IN 46268 RuSPORT, Inc. Open Account $424,861 6771 East 45th Street Loveland, CO 80538 Mullin Production Group Open Account $400,000 5743 Corsa Avenue, Suite 114 Thousand Oaks, CA 91362 Dan D. Jones & Associates, Open Account $359,001 Inc. 27010 Doxtator Dearborn Heights, MI 48127 Forsythe Championship Racing Open Account $327,961 Ltd., LLC 7231 Georgetown Road Indianapolis, IN 46268 PSAV Presentation Services Open Account $34,848 R&S Consulting Open Account $30,656 The Media Loft, Inc. Open Account $30,032 Oregon Sports Authority Open Account $25,000 Performance Products, LLC Open Account $24,744 Husar's Corporate Gifts & Open Account $19,488 Promotions Brener Zwikel & Associates, Open Account $17,642 Inc. Champcar Europe Open Account $16,324 Perrin Promotions, LLC Open Account $10,000 Airgas Safety, Inc. Open Account $6,466 Fleishman-Hillard, Inc. Open Account $5,250 Video Monitoring Services of Open Account $4,106 America, LP Kirkman's Rapid Repair Open Account $2,239 Gordon Productions, LLC Open Account $1,271 CHRYSLER LLC: Plastech Agrees to Continue Supply Until March 17 --------------------------------------------------------------- Plastech Engineered Products Inc. and its debtor-affiliates, and Chrysler LLC agreed to extend their supply agreement to March 17 even as Chrysler argues its tooling case before the U.S. District Court for the Eastern District of Michigan, the Associated Press reports. As reported in the Troubled Company Reporter on March 4, 2008, Chrysler LLC, Chrysler Motors Company LLC, and Chrysler Canada Inc., took an appeal under 28 U.S.C. Section 158(a) before the Court from the orders of the Honorable Phillip Shefferly that denies: i) the lifting of the automatic stay to allow Chrysler to regain possession of tooling located in Plastech Engineered Products Inc. and its debtor-affiliates' plants; and ii) issuance of a preliminary injunction in connection with the proposed recovery of tooling equipment. Judge Shefferly said in a court opinion that the Debtors needed to keep the tooling equipment to faciliate them in their reorganization. The balancing of interests favored Plastech, the Court said. The Court affirmed the Debtors' contentions that the automatic stay applies to both the tooling paid by Chrysler and the tooling that Chrysler has not paid for. "Even assuming that the Debtor has only a possessory interest in the tooling paid for by Chrysler, that is a sufficient interest by itself to cause the application of the automatic stay," Judge Shefferly said. In addition, the Court was convinced that if Chrysler takes immediate possession of the tooling, the Debtor will not be able to continue to provide parts uninterrupted to its other major customers and therefore any prospect of an effective reorganization will be lost. About Plastech Engineered 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. An Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. 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. CIRRUS LOGIC: Investigation of Stock Option Practices Completed --------------------------------------------------------------- Cirrus Logic Inc. disclosed that on March 3, 2008, it received written notice from the Securities and Exchange Commission that the regulator has completed the formal investigation of the company's historical stock option practices. The SEC's Division of Enforcement commenced the investigation last year. It does not intend to recommend any enforcement action. About Cirrus Logic Inc. Cirrus Logic Inc. (NASDAQ:CRUS) -- http://www.cirrus.com/-- develops high-precision, analog and mixed-signal integrated circuits for a broad range of consumer and industrial markets. Building on its diverse analog mixed-signal patent portfolio, Cirrus Logic delivers highly optimized products for consumer and commercial audio, automotive entertainment and industrial applications. The company operates from headquarters in Austin, Texas, with offices in Europe, Japan and Asia. * * * As reported in the Troubled Company Reporter on April 26, 2007, Standard & Poor's Ratings Services removed its ratings on Cirrus Logic from CreditWatch negative, and affirmed its 'B' corporate credit rating. The Rating holds to date. Outlook is Stable. CMS ENERGY: Net Loss Increases to $227MM in Year Ended December 31 ------------------------------------------------------------------ CMS Energy Corp. reported net loss of $127 million for fourth quarter ended Dec. 31, 2007, compared to net loss of $32 million in the fourth quarter of 2006. The 2007 fourth quarter loss included an after-tax charge of $193 million as a result of the restructuring of various electric supply agreements at the Dearborn Industrial Generation facility. For full year 2007, the company reported net loss of $227 million, compared to a net loss of $90 million for 2006. The reported net loss for the year was caused by $428 million from a charge for restructuring some electric supply agreements and currency translation account losses associated with the sale of international assets. CMS Energy completed $1.5 billion in international asset sales in 2007. The company's 2007 adjusted non-Generally Accepted Accounting Principles net income, which excludes gains and losses from asset sales, impairment charges and other items, was $201 million compared to adjusted net income of $103 million for 2006. The 2007 fourth quarter adjusted net income was $59 million compared to adjusted net income of $62 million for the same period of 2006. CMS Energy reaffirmed its guidance for 2008 adjusted earnings of $1.20 per share. While the company expects 2008 reported earnings to be about the same as its adjusted earnings, reported earnings could vary because of gains or charges relating to previously sold assets or other factors. "2007 was a successful transition year for the company as it exited international markets, reduced debt, and invested substantially in its Michigan utility, Consumers Energy," David Joos, the president and chief executive officer of CMS Energy, said. "That success allowed us to increase the common stock dividend by 80% in January," Mr. Joos said. "We will continue to implement that successful strategy in 2008 and build upon our company's underlying strength, which can be seen in our adjusted results. We expect adjusted earnings to be back on track in 2008 and to grow by an average annual rate of 6% to 8% over our five-year planning horizon." "Michigan policy makers are currently considering changes needed in the state's energy policy to assure the state has reliable and affordable energy to meet the future needs of customers," Mr. Joos commented on the ongoing energy policy discussions in Michigan. "The adoption of those changes will allow the company to fully implement its plan to invest $6 billion in the utility over the next five years in energy efficiency, renewable energy, environmental and customer service enhancements, and new power generation," Mr. Joos said. At Dec. 31, 2007, the company's balance sheet showed total assets of $14.19 billion, compared to $15.37 billion at Dec. 31, 2006. About CMS Corp. Headquartered in Michigan, CMS Energy Corp. (NYSE: CMS) -- http://www.cmsenergy.com/-- is a company that has as its primary business operations an electric and natural gas utility, natural gas pipeline systems, and independent power generation. * * * As reported in the Troubled Company Reporter on Dec. 6, 2007, Fitch Ratings rated CMS Energy Corp.'s issuer default rating 'BB+' with a stable outlook. CORNERSTONE MINISTRIES: U.S. Trustee, Panel Want Full Disclosure ---------------------------------------------------------------- Donald F. Walton, the U.S. Trustee for Region 21, and the Official Committee of Unsecured Creditors of Cornerstone Ministries Investment Inc. object to the retention of three professionals proposed by the Debtor. These professionals are: -- Miller & Martin PLLC as special counsel; -- Berman, Hopkins, Wright & Laham as auditors; and -- eNable Business Solutions Inc. as financial and investment advisor. The objectors tell the United States Bankruptcy Court for the Northern District of Georgia that the Debtor did not provide a specific amount of the management fees paid to eNable Business. The Debtor entitled eNable Business to receive management fees equal to 10% of the Debtor's gross income, plus 30% of the Debtor's income from loan participation agreements, plus a loan origination fee equal to 30% of the loan fees realized by the Debtor. In regard with the received payments of Miller & Martin, the Debtor failed to provide information in connection with the payments made to the firm before the Debtor filed for bankruptcy. The Debtor paid $191,266, which it described as "made and received in the ordinary course of business." Furthermore, the U.S. Trustee and Committee argue that Berman Hopkins regarding prepetition fees constitutes a comprise and settlement that required court approval. Berman Hopkins' interest in securing a release of that claim could represent an interest adverse to the estate. Accordingly, the Committee at the behest of the U.S. Trustee ask the Court to further delay the ruling on these applications until the Committee has retained counsel. About Cornerstone Ministries Headquartered in Cumming, Georgia, Cornerstone Ministries Investments Inc. -- http://www.cmiatlanta.com/-- is engaged in financing the acquisition and development of facilities for use by churches, faith-based or non-profit organizations and for-profit organizations. The company offers development, construction, bridge and interim loans, usually due within one to three years. The company makes loans to four distinct groups of borrowers, including churches, senior housing facilities, family housing development projects and daycare/faith-based schools. The company filed for Chapter 11 protection on Feb. 10, 2008 (N.D. Ga. Case No. 08-20355). J. Robert Williamson, Esq., at Scroggins and Williamson, represents the Debtor. The Debtor selected BMC Group Inc. as claims, noticing and balloting agent. When the Debtor filed for protection from its creditors, it listed assets was $159,118,892 and debts of $153,847,984. CORNERSTONE MINISTRIES: U.S. Trustee Appoints Seven-Member Panel ---------------------------------------------------------------- The United States Trustee for Region 21 appointed seven creditors to serve on an Official Committee of Unsecured Creditors in Cornerstone Ministries Investments Inc.'s bankruptcy case. The Committee members are: 1) Donald R. Labate c/o Donald R. Labate, Jr. and Camille Kotani 445 Overview Dr., NW Atlanta, GA 30327-4254 Tel: 770-956-8229 Fax: 770-956-8229 2) Huntleigh Securities Corporation c/o David A. Pickerill, Senior Vice President 7800 Forsyth Blvd., 5th Floor St. Louis, MO 63105 Tel: 314-236-2236 Fax: 314-236-2427 3) Mason Memorial Church c/o Bishop Williams % Bruce C. Sams, Esq. 744 Goff Street P.O. Box 1223 Norfolk, VA 23504 Tel: 757-627-3999 Fax: 757-627-4042 4) E. R. Jones Management, Inc. c/o Edward R. Jones, President 1382 Garth Road Charlottesville, VA 22901 Tel: 434-825-1847 Fax: 434-984-1122 5) Ray Hill III 6335 Shannon Parkway Union City, GA 30291 Tel: 770-964-0074 Fax: 770-969-0778 6) Donald A. and Joan E. Sievenpiper c/o Donald A. Sievenpiper 5231 Laurel Circle Gainesville, GA 30506 Tel: 678-450-4502 Fax: 678-450-4502 7) Linden Presbyterian Church c/o Raymond A. Burge, Sr. P.O. Box 480129 Linden, AL 36748 Tel: 334-295-5920 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Cumming, Georgia, Cornerstone Ministries Investments Inc. -- http://www.cmiatlanta.com/-- is engaged in financing the acquisition and development of facilities for use by churches, faith-based or non-profit organizations and for-profit organizations. The company offers development, construction, bridge and interim loans, usually due within one to three years. The company makes loans to four distinct groups of borrowers, including churches, senior housing facilities, family housing development projects and daycare/faith-based schools. The company filed for Chapter 11 protection on Feb. 10, 2008 (N.D. Ga. Case No. 08-20355). J. Robert Williamson, Esq., at Scroggins and Williamson, represents the Debtor. When the Debtor filed for protection from its creditors, it listed assets was $159,118,892 and debts of $153,847,984. COUNTRYWIDE FIN'L: Court Says "Negligent Bungling" Not "Bad Faith" ------------------------------------------------------------------ The Honorable Jeff Bohm of the U.S. Bankruptcy Court for the Southern District of Texas ruled that Countrywide Financial Corp. did not commit "bad faith" lending in a Texas consumer case, Peg Brickley of The Wall Street Journal reports. Judge Bohm instead found Countrywide guilty of committing errors -- what he calls "negligent bungling" -- in its handling of Allen Parsley's mortgage, WSJ says. Judge Bohm said he was not sure whether the lender's actions with the Texas homeowner were done in bad faith. WSJ relates that Countrywide improperly imposed fees on Mr. Parsley, and inappropriately applied the homeowner's payments to past, pre-bankrutcy debts. Judge Bohm blamed Countrywide's problems, among others, with "confusing corporate culture," says WSJ. Countrywide is continuing to rectify various homeowner issues nationwide. As reported in the Troubled Company Reporter on Feb. 6, 2008, the Honorable Jim Pappas of the U.S. Bankruptcy Court for the District of Idaho sanctioned Countrywide for not following Court rules. Judge Pappas fined $2,250 to two Countrywide subsidiaries for not responding to borrowers who requested for documents, and for failing to show up at depositions in Countrywide's lawsuit where the company was accused of trying to foreclose on home loans. As reported in the Troubled Company Reporter on Mar. 3, 2008, Donald F. Walton, U.S. Trustee for Region 21, also sought to sanction the mortgage lender for continuing to collect payments from certain Georgia homeowners after alleging that they defaulted on their mortgage. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider and a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. * * * As reported in the Troubled Company Reporter on Jan. 15, 2008, Moody's placed the ratings of Countrywide Financial Corporation and its subsidiaries under review for upgrade. CFC and Countrywide Home Loans senior debt is rated Baa3 and short-term debt is rated Prime-3. Countrywide Bank FSB's bank financial strength rating is C-, deposits are rated Baa1 and short-term debt Prime-2. All long and short-term ratings are placed under review for possible upgrade. COUNTRYWIDE FINANCIAL: BofA Says Deal Will Go On Despite Worries ---------------------------------------------------------------- Bank of America Corp. representative Scott Silvestri told Riley McDermid of MarketWatch that the bank's acquisition of Countrywide Financial Corp. will push through, despite fears that the deal may fall apart. Mr. Silvestri's assurance confirms CEO Ken Lewis' comments on the acquisition last January. "At this point, everything is a go to complete this transaction," MarketWatch quotes Mr. Lewis as saying. As reported in the Troubled Company Reporter on Feb. 20, 2008, Countrywide disclosed high delinquency and foreclosure rates in January, depicting the mounting homebuilding sector woe in the U.S. Late payments to loan servicers, who collect mortgage payments for owners, increased 7.47% last month, compared with 7.2% in December 2007 and 4.32% in January 2007. Foreclosure rates of unpaid principal balance was up 1.48% in January, compared with 1.44% in December 2007 and 0.77% in January 2007. The company also faced raised eyebrows concerning the acquisition. As reported in the Troubled Company Reporter on Feb. 4, 2008, SRM Global Fund General Partner Ltd. threatened to block the all-stock transaction worth $4 billion. SRM stated that the merger agreement does not provide sufficient value to shareholders. Some groups said that the fear of investigations by government regulators may have prompted Countrywide to ink a deal with Bank of America. As reported in the Troubled Company Reporter on Jan. 30, 2008, the lender was facing probes from attorney-general offices in the states of California, Illinois and Florida for its lending practices. The company is also facing lawsuits nationwide by shareholders and homeowners alike. The deal, said BofA, may be consummated in the fall of 2008. About Bank of America Bank of America -- http://www.bankofamerica.com/-- is a financial institution, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk- management products and services. The company serves clients in 175 countries and has relationships with 99 percent of the U.S. Fortune 500 companies and 80 percent of the Fortune Global 500. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider and a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. * * * As reported in the Troubled Company Reporter on Jan. 15, 2008, Moody's placed the ratings of Countrywide Financial Corporation and its subsidiaries under review for upgrade. CFC and Countrywide Home Loans senior debt is rated Baa3 and short-term debt is rated Prime-3. Countrywide Bank FSB's bank financial strength rating is C-, deposits are rated Baa1 and short-term debt Prime-2. All long and short-term ratings are placed under review for possible upgrade. COUNTRYWIDE FINANCIAL: Sued Again by U.S. Trustee in Miami Case --------------------------------------------------------------- Donald F. Walton, U.S. Trustee for Region 21, sued Countrywide Financial Corp. for a second time alleging abuses in the bankruptcy process, Reuters reports. Mr. Walton accused sub-unit Countrywide Home Loans of continuing to assert and collect payments from a Miami couple, Jose and Fanny Sanchez, who filed for Chapter 13 protection in the U.S. Bankruptcy Court for the Southern District of Florida, relates Reuters. The lender unit pursued claims against the couple for four years, even though a federal judge previously ruled that Countrywide had an invalid lien on the couples' mortgage, Reuters says. "Countrywide's failure to ensure the accuracy of its claims and pleadings has resulted in an abuse of the bankruptcy process and has prejudiced and will continue to prejudice, parties in interest in the bankruptcy cases in which Countrywide participates," Reuters quotes Mr. Walton as saying. As reported in the Troubled Company Reporter on Mar. 3, 2008, Mr. Walton also sought to sanction the mortgage lender for continuing to collect payments from Georgia homeowners John and Robin Atchley, after alleging that they defaulted on their mortgage. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider and a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. * * * As reported in the Troubled Company Reporter on Jan. 15, 2008, Moody's placed the ratings of Countrywide Financial Corporation and its subsidiaries under review for upgrade. CFC and Countrywide Home Loans senior debt is rated Baa3 and short-term debt is rated Prime-3. Countrywide Bank FSB's bank financial strength rating is C-, deposits are rated Baa1 and short-term debt Prime-2. All long and short-term ratings are placed under review for possible upgrade. CATHOLIC CHURCH: Davenport's Disclosure Statement Needs Revision ---------------------------------------------------------------- Judge Lee Jackwig of the United States Bankruptcy Court for the Southern District of Iowa denied approval of the Diocese of Davenport's disclosure statement explaining the Diocese's Joint Consensual Plan of Reorganization, Gregg Hennigan of The Gazette reports. According to the Gazette, Judge Jackwig, at the March 5, 2008 hearing, questioned the validity of Davenport's $37 million settlement with its Official Committee of Unsecured Creditors. As previously reported, the Diocese negotiated a $37 million settlement with the Creditors Committee on November 28, 2007. Of the $37 million settlement, $19.5 million is committed from Travelers Insurance Company and $17.5 million from the Diocese. Four parishes will contribute $2.65 million of the Diocese's portion, including $650,000 from St. Mary's Church in Iowa City. Judge Jackwig said the nature of the compromise needs to be clearer in the disclosure statement, says the Gazette. Quad City Times reports that the Court had doubts as to whether the $37,000,000 settlement can release parishes, schools and other entities from liability for sex abuse cases. Since Davenport's Plan releases all Diocese schools and parishes from liability for abuse that happened before the bankruptcy filing, Judge Jackwig is concerned whether bankruptcy law allows the entities, which are incorporated separately and could file for bankruptcy on their own, to be included in the "global settlement," according to reports. The judge said they might need to "stand alone" in the case. The Court sustained objections to the disclosure statement filed by ACE American Insurance Co. and Iowa City Regina High School, the Gazette says. Counsel for the Diocese said they would work to include language in the disclosure statement to satisfy ACE and Regina. The Court will convene another hearing on April 2, 2008, to consider approval of the Disclosure Statement. The Confirmation Hearing remains set for April 30. Plan Not in Jeopardy Attorneys for the sexual abuse victims were surprised by the Court's decision but are confident that the plan was not in jeopardy, Gazette's Mr. Hennigan reports. "The bottom line of it is, it doesn't impact the settlement," counsel for the Committee, Hamid R. Rafatjoo, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, California, said after the hearing, reports the paper. "She wants us to expand of how the bankruptcy court can reach a settlement between not only the diocese and the claimants but also the parishes and the claimants when the parishes are separate corporations," Dick Davidson, Esq., counsel for the Diocese said, according to Quad City. "There is a way to do that." Davenport filed its Plan on January 31, 2008. The Official Committee of Unsecured Creditors is a proponent to the Plan. About Diocese of Davenport The Diocese of Davenport in Iowa filed for chapter 11 protection (Bankr. S.D. Ia. Case No. 06-02229) on Oct. 10, 2006. Richard A. Davidson, Esq., at Lane & Waterman LLP, represents the Davenport Diocese in its restructuring efforts. Hamid R. Rafatjoo, Esq., and Gillian M. Brown, Esq., at Pachulski Stang Zhiel Young Jones & Weintraub LLP represent the Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Davenport Diocese reported $4,492,809 in assets and $1,650,439 in liabilities. The Court will hear the adequacy of Davenport's disclosure statement explaining its reorganization plan on March 5, 2008. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). DOV PHARMA: Sells Future Royalties on Bicifadine for $1.6 Mil. -------------------------------------------------------------- DOV Pharmaceutical Inc. disclosed in a regulatory filing dated March 4, 2008, that it agreed to sell to private investors a fractional interest in future royalties otherwise payable to the company under its license agreement with XTL Biopharmaceuticals Inc. Under the agreement, the company has assigned its right to receive an amount equal to four and one-half percent (4.5%) of net sales of bicifadine up to $350.0 million in any calendar year for a period of nine years. The purchase price for the assignment is $1.6 million. The agreement is expected to close within 30 to 60 days, subject to certain customary closing conditions. No further details were provided. About DOV Pharmaceutical Based in Somerset, N.J., DOV Pharmaceutical Inc. (Other OTC: DOVP.PK) -- http://www.dovpharm.com/ -- is a biopharmaceutical company focused on the discovery, acquisition and development of novel drug candidates for central nervous system disorders. The company's product candidates address some of the largest pharmaceutical markets in the world including depression, pain and insomnia. * * * As reported in the Troubled Company Reporter on April 5, 2007, PricewaterhouseCoopers LLP in Florham Park, N.J., expressed substantial doubt about DOV Pharmaceutical Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and net capital deficiency. EMC MORTGAGE: Fitch Downgrades Ratings on 20 Certificate Classes ---------------------------------------------------------------- Fitch Ratings has taken these rating actions on EMC Mortgage Loan Trust transactions: EMC Mortgage 2001-A -- $18.5 million class A affirmed at 'AAA'; -- $3.3 million class M-1 affirmed at 'AA'; -- $2.6 million class M-2 affirmed at 'A'; -- $1.9 million class B rated 'BBB-', placed on Rating Watch Negative. EMC Mortgage 2002-B -- $11.0 million class A-1 affirmed at 'AAA'; -- $3.3 million class A-2 affirmed at 'AAA'; -- $3.4 million class M-1 affirmed at 'AA'; -- $1.7 million class M-2 affirmed at 'A'; -- $1.7 million class B rated 'BBB', placed on Rating Watch Negative. EMC Mortgage 2003-A -- $17.6 million class A-1 affirmed at 'AAA'; -- $4.4 million class A-2 affirmed at 'AAA'; -- $4.4 million class M-1 affirmed at 'AA'; -- $2.5 million class M-2 affirmed at 'A'; -- $2.5 million class B downgraded to 'BB' from 'BBB', placed on Rating Watch Negative. EMC Mortgage 2003-B -- $10.9 million class A-1 affirmed at 'AAA'; -- $2.7 million class A-2 affirmed at 'AAA'; -- $9.4 million class M-1 affirmed at 'AA'; -- $2.1 million class M-2 downgraded to 'BBB' from 'BBB+'; -- $1.6 million class B downgraded to 'B-/DR1' from 'B'. EMC Mortgage 2004-A -- $4.7 million class A-2 affirmed at 'AAA'; -- $15.0 million class A-3 affirmed at 'AAA'; -- $3.6 million class M-1 affirmed at 'AA'; -- $2.5 million class M-2 downgraded to 'BBB' from 'BBB+'; -- $1.9 million class B downgraded to 'CC/DR3' from 'BB'; EMC Mortgage 2004-B -- $9.0 million class A-1 affirmed at 'AAA'; -- $11.0 million class A-2 affirmed at 'AAA'; -- $5.8 million class M-1 downgraded to 'A' from 'AA'; -- $2.8 million class M-2 downgraded to 'BB' from 'A'; -- $2.3 million class B downgraded to 'CC/DR4' from 'BBB'; EMC Mortgage 2004-C -- $22.4 million class A affirmed at 'AAA'; -- $8.0 million class M-1 affirmed at 'AA'; -- $4.5 million class M-2 downgraded to 'BBB' from 'A'; -- $3.3 million class B downgraded to 'B' from 'BBB'; EMC Mortgage 2005-A -- $45.7 million class A affirmed at 'AAA'; -- $11.7 million class M-1 downgraded to 'BBB' from 'AA', placed on Rating Watch Negative; -- $8.5 million class M-2 downgraded to 'CC/DR4' from 'A'; -- $2.9 million class B downgraded to 'C/DR6' from 'BBB'; EMC Mortgage 2005-B -- $60.3 million class A-1 rated 'AAA', placed on Rating Watch Negative; -- $10.0 million class M-1 downgraded to 'BBB' from 'AA'; -- $6.6 million class M-2 downgraded to 'B' from 'A'; -- $4.6 million class B downgraded to 'CC/DR4' from 'BBB'; EMC Mortgage 2006-A -- $53.4 million class A downgraded to 'AA' from 'AAA'; -- $10.2 million class M-1 downgraded to 'BB' from 'AA'; -- $7.5 million class M-2 downgraded to 'CC/DR3' from 'A'; -- $3.1 million class B downgraded to 'C/DR5' from 'BBB'. The aforementioned trusts consist of fixed rate and adjustable rate seasoned fixed rate, first and second liens secured primarily by one- to four-family residential properties, with the exception of a limited number of multifamily properties. The mortgage loans were acquired by EMC Mortgage Corporation from various institutions and include loans which had defaulted in the past and are re-performing or are performing under the provisions of a bankruptcy plan or a forbearance plan, or loans which are performing under the terms of the related original notes or such notes as modified. The affirmations reflect adequate relationships of credit enhancement to future loss expectations and affect approximately $215.2 million of outstanding certificates. The classes with negative actions reflect the deterioration in the relationship of CE to future loss expectations and affects approximately $147.7 million of outstanding certificates. In addition, $28 million is placed on Rating Watch Negative. The master servicer for this transaction, EMC Mortgage Corp., is a wholly owned subsidiary of The Bear Stearns Companies Inc. and is rated 'RPS1' for prime, Alt-A, and subprime products, rated 'RSS1' as a special servicer by Fitch, and rated 'RMS3+' for master servicing. INYX USA: Disclosure Statement Doesn't Say Much for Creditors ------------------------------------------------------------- Debtor Exaeris Inc. filed a disclosure statement explaining its Chapter 11 plan of liquidation with the U.S. Bankruptcy Court for the District of Delaware on March 3, 2008, Bill Rochelle of Bloomberg News reports. Bloomberg discloses that under the proposed plan, the Debtor's assets will be sold to controlling shareholder Jack Kachkar in exchange for a waiver of the $1.2 million postpetition financing the Debtor's owe him. The plan, however, proposes that an auction for the Debtor's assets be held to see whether a higher offer than that of Mr. Kachkar will surface. Mr. Kachkar, pursuant to the plan, will also pay the Debtor's $420,000. Unsecured creditors with $5.5 million in claims will divide what cash is left, Bloomberg relates. The disclosure statement doesn't say how much creditors can expect to receive. Bloomberg recounts that in January 2008, the Hon. Kevin Gross rejected Mr. Kachkar's offer to buy the Debtor's assets for 337,500 and to forgive any claims against him and parent company Inyx Inc., which Mr. Kachkar controls. Judge Gross determined that the sale might not benefit the creditors and might not be in good faith. The judge noted the lack of evidence about the value of the assets being sold and the claims being waived. Bloomberg says that the Chapter 11 trustee for affiliate Inyx USA Inc. determined that Inyx Inc. and Mr. Kachkar cheated secured lender Westernbank Puerto Rico out of $142.8 million. Westernbank said that Inyx Inc. obtained loans through false and fraudulent invoices. About Inyx USA and Exaeris Based in Manati, Puerto Rico, Inyx USA Ltd. operates a pharmaceuticals production center that encompasses five buildings totaling 140,000 square feet and extending over 9.5 acres. Exaeris, Inc., located in Exton, Pennsylvania, focuses on the strategic commercialization of niche or enhanced pharmaceutical products, marketing and promotion activities. Inyx USA and Exaeris are wholly owned subsidiaries of Inyx, Inc. (OTC:IYXI) -- http://www.inyxinc.com/-- a specialty pharmaceutical company. Inyx USA and Exaeris filed for chapter 11 protection on July 2, 2007 (Bankr. D. Del. Case Nos. 07-10887 and 07-10888). Anthony M. Saccullo, Esq., at Fox Rothschild, L.L.P., represents the Debtors. When Inyx USA filed for protection from its creditors, it listed estimated assets and debts between $1 million and $100 million. Exaeris estimated its assets were less than $10,000 but debts were between $1 million and $100 million. In Court documents filed by Jack Kachkar, CEO of Inyx, Inc., Inyx USA is indebted to Westernbank Puerto Rico in the approximate amount of $35 million and secured by a first-priority lien in substantially all of Inyx USA's assets. Exaeris has in excess of $5 million in prepetition unsecured obligations outstanding to various creditors. Ashton Pharmaceuticals and Inyx Pharma, the Debtors' UK affiliates, were placed into an involuntary administration on June 29, 2007. Ernst & Young was appointed by the UK court as administrators. FAIRPOINT COMM: Paying $0.39781/Share Dividend on April 16 ---------------------------------------------------------- The board of directors of FairPoint Communications Inc. declared a contingent dividend of $0.39781 per share on FairPoint's common stock. This dividend will be payable on April 16, 2008, to stockholders of record at the close of business on March 30, 2008, only if FairPoint's merger with Northern New England Spinco Inc., a subsidiary of Verizon Communications Inc., closes on March 31, 2008. Pursuant to the terms of FairPoint's credit facility, as amended, FairPoint will not be permitted to pay this dividend if the Merger does not close on March 31, 2008. FairPoint has been advised by the New York Stock Exchange that beginning March 5, 2008, and continuing through the anticipated closing date of the Merger, there will be two markets in FairPoint common stock on the NYSE: -- a "regular way" market, trading under the symbol "FRP"; and -- a "when issued" market, trading under the symbol "FRP wi". If FairPoint pays the contingent dividend described herein, Verizon stockholders who receive shares of FairPoint common stock in the Merger and purchasers of FairPoint common stock in the FairPoint when issued market will not be entitled to receive this dividend. About FairPoint Communications Based in Charlotte, North Carolina, FairPoint Communications Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- provides communications services to rural and small urban communities across the country. FairPoint owns and operates 30 local exchange companies located in 18 states offering an array of services, including local and long distance voice, data, Internet and broadband offerings. * * * As reported in the Troubled Company Reporter on Feb. 29, 2008, Standard & Poor's Ratings Services raised its corporate credit rating on Charlotte North Carolina-based local exchange carrier, FairPoint Communications Inc. to 'BB' from 'BB-' and removed the ratings from CreditWatch. The outlook is stable. FIRST FRANKLIN: Mortgage Origination Biz Halted ----------------------------------------------- Merrill Lynch is discontinuing mortgage origination at its First Franklin subsidiary in the United States and will explore the sale of Home Loan Services, a mortgage loan servicing unit for First Franklin. The company said it made the decision to discontinue lending by First Franklin because of the deterioration of the subprime lending market. Merrill Lynch acquired First Franklin from National City Corp. in December 2006 for $1.3 billion at the real estate market's peak, The Associated Press says. Merrill Lynch ceased originating subprime mortgages on Dec. 28, and reported mortgage-related losses and write-downs totaling $24.4 billion in 2007, AP says. AP relates that Merrill Lynch will spend $600 million in 2008 to pay for severance and other real estate costs linked to unwinding First Franklin's operations. First Franklin stopped accepting mortgage loan applications effective March 5 at 2 p.m. PST, 2008, according to a note on its Web site. "Since July, we have reduced staffing at First Franklin by nearly 70 percent, but after evaluating a number of strategies, we believe it is appropriate to discontinue mortgage origination," said David Sobotka, head of Fixed Income, Currencies & Commodities at Merrill Lynch. About 650 people will be affected by the discontinuation of mortgage origination at First Franklin and First Franklin's NationPoint division. The firm estimates total charges, primarily severance and real estate costs related to this matter, for 2008 of approximately $60 million, of which approximately half will be recorded in the first quarter. The actions do not affect mortgage origination through the firm's Global Wealth Management Group, including prime mortgages originated through Merrill Lynch Credit Corporation. Merrill Lynch's international mortgage businesses are not affected by these actions. Home Loan Services is a profitable mortgage servicer located in Pittsburgh, servicing First Franklin originated mortgage loans. Merrill Lynch will solicit bids for Home Loan Services in the coming weeks. Merrill Lynch is one of the world's leading wealth management, capital markets and advisory companies, with offices in 40 countries and territories and total client assets of almost $2 trillion. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world's largest publicly traded investment management companies, with more than $1 trillion in assets under management. On the Net: http://www.ml.com/ San Jose, California-based First Franklin is the Top 5 subprime originator for the third quarter of 2007, according to data compiled by National Mortgage News. First Franklin ranked second during the second quarter of 2007. For the third quarter, First Franklin originated $2,300,000,000, down from $7,668,000,000 during the same period in 2006, National Mortgage News data shows. FORTUNOFF: Gets Final Nod on Togut Segal & Skadden Arp's Retention ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorized Fortunoff Fine Jewelry and Silverware LLC and its debtor-affiliates, on a final basis, to employ Togut Segal & Segal LLP as their bankruptcy counsel, nunc pro tunc to Feb. 15, 2008. As reported in the Troubled Company Reporter on Feb. 27, 2008, the Debtors sought to employ Skadden Arps Meagher & Flom LLC, to provide legal advice in connection with the Debtors' efforts to work out their financial difficulties and representation in any reorganization cases filed under Chapter 11. However, the Office of the United States Trustee indicated its possible objection to the retention of Skadden Arps as the Debtors' general bankruptcy counsel, in light of Skadden Arps' prepetition relationship with certain parties-in-interest in the Debtors' bankruptcy cases. According to Arnold Orlick, chief executive officer of Source Financing Corp., Skadden Arps consequently advised the Debtors to retain an alternative general bankruptcy counsel, instead of using valuable estate assets to contest an objection by the U.S. Trustee. Togut Segal as Special Counsel As a result, the Debtors determined to employ Togut Segal as their general bankruptcy counsel, and to hire Skadden Arps, as special counsel pursuant to Section 327(e) of the Bankruptcy Code, to perform services in connection with the sale the Debtors' assets. In the same way, On a final basis, the Court permitted the Debtors to employ Skadden Arps as the Debtor's special counsel under a general retainer, effective as of the bankruptcy filing. Skadden Arps will continue to provide the Debtors with bankruptcy and corporate services with respect to all matters relating to the sale of the Debtors' assets, Judge Peck held. About Fortunoff New York-based Fortunoff Fine Jewelry and Silverware LLC -- http://www.fortunoff.com/-- is a family owned business since 1922 founded by by Max and Clara Fortunoff. Fortunoff offers customers fine jewelry and watches, antique jewelry and silver, everything for the table, fine gifts, home furnishings including bedroom and bath, fireplace furnishings, housewares, and seasonal shops including outdoor furniture shop in summer and enchanting Christmas Store in the winter. It opened some 20 satellite stores in the New Jersey, Long Island, Connecticut and Pennsylvania markets featuring outdoor furniture and grills during the Spring/Summer season and indoor furniture (and in some locations Christmas trees and decor) in the Fall/Winter season. Fortunoff and two affiliates, M. Fortunoff of Westbury LLC and Source Financing Corp., filed for chapter 11 petition on Feb. 4, 2008 (Bankr. S.D.N.Y. Case Nos. 08-10353 through 08-10355) in order to effectuate a sale to NRDC Equity Partners LLC, -- http://www.nrdcequity.com/-- a private equity firm that owns of Lord & Taylor from Federated Department Stores. Due to the U.S. Trustee's objection, Fortunoff is backing out of its request to employ Skadden Arps Meagher & Flom LLC, as bankruptcy counsel. Fortunoff is hiring Togut Segal & Segal LLP, as their general bankruptcy counsel, but Skadden Arps will continue to serve the Debtors as special counsel in connection with the sale the Debtors' assets. Logan & Company, Inc., serves as the Debtors' claims, noticing, and balloting agent. FTI Consulting Inc. are the Debtors' proposed crisis manager. An Official Committee of Unsecured Creditors has been appointed in this case. In their schedules, Fortunoff Fine Jewelry listed $5,052,315 total assets and $136,626,948 total liabilities; Source Financing Corp. listed $154,680,100 total assets and $176,961,631 total liabilities; and M. Fortunoff of Westbury LLC listed $6,300,955 total assets and $119,985,788 total liabilities. The Debtors' exclusive period to file a plan of reorganization ends on June 3, 2008. (Fortunoff Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FORTUNOFF: Court Gives Final Nod on FTI Consulting's Retention -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York deemed the application of Fortunoff Fine Jewelry and Silverware LLC and its debtor-affiliates to employ FTI Consulting, Inc., as an amended application pursuant to Section 327(a) of the Bankruptcy Code, rather than pursuant to Section 363 of the Bankruptcy Code. Accordingly, the Court authorized the Debtors to employ FTI, effective as of the bankruptcy filing, as their financial advisors. As reported in the Troubled Company Reporter on Feb. 11, 2008, sought Court's permission to hire FTI as their crisis manager, pursuant to the terms of an engagement letter, dated Feb. 1, 2008. The Debtors have determined that the size of their business operations, and the complexity of the financial difficulties related to large scope operations, require them to employ an experienced crisis manager in connection with their Chapter 11 cases, Arnold Orlick, chief executive officer of Fortunoff, told the Court. According to Mr. Orlick, the Debtors retained FTI Consulting to provide them with crisis management services, in connection with contingency planning and restructuring efforts. Since then, Mr. Orlick notes, FTI Consulting has developed an extensive knowledge of the Debtors' business, operations and financial condition. About Fortunoff New York-based Fortunoff Fine Jewelry and Silverware LLC -- http://www.fortunoff.com/-- is a family owned business since 1922 founded by by Max and Clara Fortunoff. Fortunoff offers customers fine jewelry and watches, antique jewelry and silver, everything for the table, fine gifts, home furnishings including bedroom and bath, fireplace furnishings, housewares, and seasonal shops including outdoor furniture shop in summer and enchanting Christmas Store in the winter. It opened some 20 satellite stores in the New Jersey, Long Island, Connecticut and Pennsylvania markets featuring outdoor furniture and grills during the Spring/Summer season and indoor furniture (and in some locations Christmas trees and decor) in the Fall/Winter season. Fortunoff and two affiliates, M. Fortunoff of Westbury LLC and Source Financing Corp., filed for chapter 11 petition on Feb. 4, 2008 (Bankr. S.D.N.Y. Case Nos. 08-10353 through 08-10355) in order to effectuate a sale to NRDC Equity Partners LLC, -- http://www.nrdcequity.com/-- a private equity firm that owns of Lord & Taylor from Federated Department Stores. Due to the U.S. Trustee's objection, Fortunoff is backing out of its request to employ Skadden Arps Meagher & Flom LLC, as bankruptcy counsel. Fortunoff is hiring Togut Segal & Segal LLP, as their general bankruptcy counsel, but Skadden Arps will continue to serve the Debtors as special counsel in connection with the sale the Debtors' assets. Logan & Company, Inc., serves as the Debtors' claims, noticing, and balloting agent. FTI Consulting Inc. are the Debtors' proposed crisis manager. An Official Committee of Unsecured Creditors has been appointed in this case. In their schedules, Fortunoff Fine Jewelry listed $5,052,315 total assets and $136,626,948 total liabilities; Source Financing Corp. listed $154,680,100 total assets and $176,961,631 total liabilities; and M. Fortunoff of Westbury LLC listed $6,300,955 total assets and $119,985,788 total liabilities. The Debtors' exclusive period to file a plan of reorganization ends on June 3, 2008. (Fortunoff Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FORTUNOFF: Landlords Balk at Assignment of Leases to New Owner -------------------------------------------------------------- Fortunoff Fine Jewelry and Silverware LLC and its debtor- affiliates lease retail spaces from General Growth Properties, Inc. and Developers Diversified Realty Corp., pursuant to certain written leases. The Landlords object to the assignment of the Leases to H Acquisition, LLC, proposed buyer of substantially all of the Debtors' assets, because the Debtors have failed to provide adequate assurance of H Acquisition's future performance despite repeated requests, James S. Carr, Esq., at Kelley Drye & Warren LLP, in New York, relates. "To date, the Landlords have received only unaudited financials from H Acquisition and no proposed use of the Leased Premises," Mr. Carr informs the U.S. Bankruptcy Court for the Southern District of New York. "This is insufficient." According to Mr. Carr, the Debtors' interests in an expedited sale of their assets should not and cannot override the explicit provisions of Section 365(b)(3) of the Bankruptcy Code and deprive the Landlords of a meaningful opportunity to assess H Acquisition, its financials and its ability to perform under the Leases. Because the Debtors have failed to provide the Landlords with sufficient information, Mr. Carr says that the Landlords have been unable to: -- assess the operating performance and financial adequate assurance information of the Buyer; -- determine whether the Buyer's use of the premises will violate any radius or use restrictions or disrupt the tenant mix in the affected shopping centers; -- prepare a specific objection and conduct discovery; and -- prepare for a contested hearing. Mr. Carr contends that the adequate assurance provision contained in the Debtors' Sale Motion is a "vastly oversimplified view of adequate assurance" and ignores the provisions of Section 365(b)(3). To determine whether adequate assurance of future performance is satisfied, Mr. Carr asserts that the Debtors have to provide the Landlords certain information, including: (1) the exact name of the Buyer and the exact name of the entity who is going to be designated as the assignee of the Leases; (2) the Buyer's or any guarantor's audited financial statements and any supplemental schedules for the calendar or fiscal years ended 2006 and 2007; (3) any and all documents regarding the Buyer's experience in operating in-line retail stores in shopping centers; and (4) the Buyer's 2008 business plan including sales and cash flow projections; and In the ordinary course of business, Mr. Carr points out that the Landlords require some form of security when leasing to a newly formed company with no operating history or a company formed for the sole purpose of acquiring assets out of a bankrupt entity, like the Buyer. As a result, the Landlords require that the Buyer provide the Landlords with guarantees from a parent corporation with significant assets, or provide a cash security deposit or letter of credit equal to six months base rent under each of the Leases. The Landlords, therefore, ask the Court to: -- deny any proposed assignment of the Leases until the Landlords have been provided with evidence of adequate assurance of future performance by the Buyer; -- provide the Landlords at least five business days from receipt of adequate assurance of future performance, to determine whether the Buyer is "acceptable"; and -- require that the Buyer provide the Landlords with a parent guarantee, cash security deposit or letter of credit equal to six months base rent for each of the Leases. About Fortunoff New York-based Fortunoff Fine Jewelry and Silverware LLC -- http://www.fortunoff.com/-- is a family owned business since 1922 founded by by Max and Clara Fortunoff. Fortunoff offers customers fine jewelry and watches, antique jewelry and silver, everything for the table, fine gifts, home furnishings including bedroom and bath, fireplace furnishings, housewares, and seasonal shops including outdoor furniture shop in summer and enchanting Christmas Store in the winter. It opened some 20 satellite stores in the New Jersey, Long Island, Connecticut and Pennsylvania markets featuring outdoor furniture and grills during the Spring/Summer season and indoor furniture (and in some locations Christmas trees and decor) in the Fall/Winter season. Fortunoff and two affiliates, M. Fortunoff of Westbury LLC and Source Financing Corp., filed for chapter 11 petition on Feb. 4, 2008 (Bankr. S.D.N.Y. Case Nos. 08-10353 through 08-10355) in order to effectuate a sale to NRDC Equity Partners LLC, -- http://www.nrdcequity.com/-- a private equity firm that owns of Lord & Taylor from Federated Department Stores. Due to the U.S. Trustee's objection, Fortunoff is backing out of its request to employ Skadden Arps Meagher & Flom LLC, as bankruptcy counsel. Fortunoff is hiring Togut Segal & Segal LLP, as their general bankruptcy counsel, but Skadden Arps will continue to serve the Debtors as special counsel in connection with the sale the Debtors' assets. Logan & Company, Inc., serves as the Debtors' claims, noticing, and balloting agent. FTI Consulting Inc. are the Debtors' proposed crisis manager. An Official Committee of Unsecured Creditors has been appointed in this case. In their schedules, Fortunoff Fine Jewelry listed $5,052,315 total assets and $136,626,948 total liabilities; Source Financing Corp. listed $154,680,100 total assets and $176,961,631 total liabilities; and M. Fortunoff of Westbury LLC listed $6,300,955 total assets and $119,985,788 total liabilities. The Debtors' exclusive period to file a plan of reorganization ends on June 3, 2008. (Fortunoff Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) GEA SEASIDE: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: GEA Seaside Investments, Inc. dba Daytona Beach Property Management dba Daytona Beachside Property Management fdba GEA Investments, Inc. 434 North Halifax Avenue, Suite 2 Daytona Beach, FL 32118 Bankruptcy Case No.: 08-01693 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: March 6, 2008 Court: Middle District of Florida (Orlando) Debtor's Counsel: Elizabeth A. Green, Esq. (bankruptcynotice@lseblaw.com) Latham, Shuker, Eden & Beaudine, LLP 390 North Orange Avenue, Suite 600 Orlando, FL 32801 Fax: (407) 481-5801 Tel: (407) 481-5800 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The Debtor does not have any creditors who are not insiders. GOODYEAR TIRE: Cost, Debt Reduction Prompts Fitch to Lift Ratings ----------------------------------------------------------------- Fitch Ratings upgraded The Goodyear Tire & Rubber Company's Issuer Default Rating and senior unsecured debt rating as: The Goodyear Tire & Rubber Company: -- IDR to 'BB-' from 'B+'; -- Senior unsecured debt to 'B+' from 'B-/RR6'. In addition, Fitch has affirmed these ratings: The Goodyear Tire & Rubber Company: -- $1.5 billion first lien credit facility at 'BB+'; -- $1.2 billion second lien term loan at 'BB+'. Goodyear Dunlop Tires Europe B.V. (GDTE): -- EUR505 million European secured credit facilities at 'BB+'. The ratings cover approximately $4.1 billion of outstanding debt. The Rating Outlook is Stable. Furthermore, Fitch is withdrawing its ratings for GT's third lien senior secured debt following repayment of the debt. The two-notch rating difference between GT's secured debt and its IDR reflect the benefit of significant collateral support. GT's first lien credit facility and the second lien term loan are given the same rating due to Fitch's opinion that the collateral package provides sufficient coverage to both facilities even in the case of the first lien revolver being fully drawn. The one-notch difference between the unsecured debt and the IDR reflects the unsecured debt's junior position in the capital structure, as well as credit concerns described below. The rating upgrades reflect the positive impact on GT's balance sheet from its continued debt reduction, significant cost reduction in the past year, and a successful strategic shift to selling more premium-priced products. The senior unsecured debt also benefits from the reduced amount of secured debt in the capital structure after GT redeemed $650 million of senior secured third lien notes on March 3. Combined with the expected repayment of $100 million of 6 3/8% notes that mature on March 17, 2008, GT will have reduced its debt by $3.2 billion since the beginning of 2007. The ratings and Stable Outlook for GT reflect an improving cost structure, a more focused marketing strategy, growing international sales, and a solid liquidity position. GT has exited low-margin segments of the wholesale private label tire business and expanded its higher margin premium tire business. Results in GT's North American operations, while improving, remain weaker than its international operations, and GT remains exposed to declining vehicle sales in the U.S. and an uncertain economy. An increasing proportion of sales outside the U.S. should help alleviate this concern over the long term. Other rating concerns also include high raw material costs, competitive pricing in certain international markets and cash requirements for capital expenditures and pension contributions. Further upside changes in the ratings or Outlook will depend on GT's ability to extend its recent progress in addressing operating challenges and in building stronger credit metrics. Cash flow from operations continued to be weak in 2007 due to large pension contributions and higher working capital requirements as GT recovered from the labor strike in late 2007. In 2008, cash flow will remain challenging but should be favorably affected by reduced pension contributions, a better working capital position, and lower interest expense related to debt reduction. Cost pressures from raw materials, including rubber, which GT estimates may rise 7%-9% in 2008, could be mitigated by GT's ongoing cost-reduction program. At the end of 2007, GT had achieved more than half of its $1.8 billion-$2 billion four-year cost reduction goal. The program involves cost savings from higher productivity, a reduction in GT's global footprint, and a further transition to low-cost sourcing. GT has been effective at reducing the negative impact of high raw material costs by raising prices and emphasizing higher-margin premium tires. At the end of 2007, GT had a liquidity position of approximately $4.9 billion, consisting of $3.5 billion of cash and $1.8 billion of credit facility availability, less $396 million of short-term debt and current maturities. Year-end cash balances were used to execute the debt reduction mentioned above, and they will be utilized to fund the planned $1 billion contribution to GT's Voluntary Employees' Beneficiary Association trust. The transaction would significantly reduce OPEB liabilities and associated cash requirements in future years. Other cash requirements in 2008 will include pension contributions, though at a much lower level than previous years, increased capital expenditures, and modest debt reduction. GT's debt-to-EBITDA ratio has declined from an unusually high level one year ago and stood at 3 times as of Dec. 31, 2007. The company's long-term target for debt/EBITDA is 2.5x as measured by its bank facilities and differs somewhat from Fitch's calculation. EBITDA-to-Interest coverage improved to 3.4x at the end of 2007 compared to 2.4x at the end of 2006. All previously assigned Recovery Ratings have been withdrawn as a result of the IDR upgrade to 'BB-'. Fitch assigns explicit RR's only for companies with an IDR of 'B+' or below. Notching for companies with IDR's above 'B+' continues to be heavily influenced by broader historical recovery patterns. GSC ABS: Moody's Junks 'Aa2' Rating on $96 Million Notes -------------------------------------------------------- Moody's Investors Service downgraded ratings of seven classes of notes issued by GSC ABS Funding 2006-3g, Ltd., and left on review for possible further downgrade the rating of four of these classes. The notes affected by this rating action are: Class Description: Up to $1,085,000,000 Commercial Paper Notes/Class A-1LT Floating Rate Notes Due June 2042 -- Prior Rating: Aaa/P-1 -- Current Rating: Aa2, on review for possible downgrade/P-1, on review for possible downgrade Class Description: $35,000,000 Class A-1-a Floating Rate Notes Due June 2042 -- Prior Rating: Aaa -- Current Rating: Aa2, on review for possible downgrade Class Description: $192,000,000 Class A-1-b Floating Rate Notes Due June 2042 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa1, on review for possible downgrade Class Description: $104,000,000 Class A-2 Floating Rate Notes Due June 2042 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade Class Description: $96,000,000 Class B Floating Rate Notes Due June 2042 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Ca Class Description: $49,600,000 Class C Deferrable Floating Rate Notes Due June 2042 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: C Class Description: $22,400,000 Class D Deferrable Floating Rate Notes Due June 2042 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: C The rating downgrade actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence on Jan. 31, 2008, as reported by the Trustee, of an event of default that occurs when the Class A/B Overcollateralizatoin Ratio is less than or equal to 93.7 per cent, as described in Section 5.1(h) of the Indenture dated Jan. 18, 2007. GSC ABS Funding 2006-3g, Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS securities, CMBS securities and CDO securities. Recent ratings downgrades on the underlying portfolio caused ratings-based haircuts to affect the calculation of overcollateralization. Thus, the Event of Default described in Section 5.1(h) of the Indenture occurred. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, certain parties to the transaction may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by the Controlling Class following an event of default. Because of this uncertainty, the ratings assigned to the Commercial Paper Notes/Class A-1LT Notes, Class A-1-a Notes, Class A-1-b Notes and Class A-2 Notes remain on review for possible further action. HARTSHORNE CDO: Moody's Junks Rating on $133 Mil. Notes From 'B2' ----------------------------------------------------------------- Moody's Investors Service downgraded ratings of seven classes of notes issued by Hartshorne CDO I, Ltd., and left on review for possible further rating action the rating of one of these classes of notes. The notes affected by this rating action are: (1) $625,000,000 Class A1S Variable Funding Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: B3, on review future direction uncertain (2) $133,000,000 Class A1J Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: B2, on review for possible downgrade -- Current Rating: C (3) $75,000,000 Class A2 Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Caa3, on review for possible downgrade -- Current Rating: C (4) $52,000,000 Class A3 Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Ca -- Current Rating: C (5) $25,000,000 Class B1 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Ca -- Current Rating: C (6) $20,000,000 Class B2 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Ca -- Current Rating: C (7) $20,000,000 Class B3 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Ca -- Current Rating: C The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence, as reported by the Trustee on Nov. 9, 2007, of an event of default caused by a failure of the Senior Credit Test to be satisfied pursuant Section 5.1(h) of the Indenture dated March 20, 2007. This event of default is still continuing. Hartshorne CDO I, Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS and CDO securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral and the Notes. In this regard the Trustee reports that a majority of the Controlling Class has exercised its right under the Indenture to declare the principal of the Notes and the Outstanding Class A1S Funded Amount to be immediately due and payable. Furthermore, according to the Trustee, a majority of the Controlling Class has exercised its right to direct the disposition of the Collateral in accordance with relevant provisions of the transaction documents. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and outcome of the liquidation. Because of this uncertainty, the ratings assigned to the Class A1S Notes remain on review for possible further action. INGEAR CORP: Wants to Hire Harney Management as Financial Advisor ----------------------------------------------------------------- InGear Corporation seeks authority from the U.S. Bankruptcy Court for the Northern District of Illinois to employ Harney Management Partners LLC as financial advisor. According to the Debtor, Harney Management is a leading provider of management and consulting services to lending institutions, secured and unsecured creditors, shareholders and business owners. Harney Management has skilled and diverse team of professionals, qualified to serve as financial advisor and to assist in the evaluation of the Debtor's business. Harney Management will: a) evaluate the business operations of the Debtor; b) counsel the Debtor with respect to the administration of the bankruptcy estate; c) investigate the acts, conduct, assets, liabilities and financial condition of the Debtor's business, and any other matter relevant to the case or to the formulation of a plan of reorganization; d) assist in the preparation of motions, answers, orders, reports, and other legal papers in connection with the administration of the bankruptcy estate; e) assist the Debtor in fulfilling its duties set forth in 11 U.S.C. Section 1106; and f) perform other financial advisory services as may be necessary and appropriate for the efficient and economical administration of the case. Gregory S. Milligan, Harney Management's executive vice president, tells the Court that firm intends to be paid weekly for professional services rendered in connection with this Chapter 11 case. Harney Management will also reimburse all out-of-pocket expenses incured in connection with this case. Mr. Milligan relates that the fees and expenses advanced by the Debtor since Jan. 15, 2008, totaled $63,891. Mr. Milligan assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the bankruptcy Code. Headquartered in Buffalo Grove, Illinois, InGear Corporation -- http://www.ingearsports.com/-- manufactures leather goods, toys and sporting goods. The Debtor filed for Chapter 11 protection on Feb. 7, 2008, (Bankr. N. D. Ill. Case No.: 08-02824.) Daniel A. Zazove, Esq. of Perkins Coie LLP represents the Debtor in its restructuring efforts. No Trustee or examiner has been appointed in this case. When the Debtor filed for protection from its creditors, it has estimated assets and debts of $10 million to $50 million. INVERNESS MEDICAL: Plans to Close Unipath Operations in England ------------------------------------------------------------- Inverness Medical Innovations Inc. disclosed in a regulatory filing dated March 4, 2008, that it has commenced the process, to close its Unipath Inc. facility in Bedford, England, and to move manufacturing operations principally to Shanghai and Hangzhou, China. This is in connection with the company's ongoing review of its worldwide operations for the purpose of improving efficiency, lowering operating costs and improving margins, According to the company, Unipath has began discussions with employee representatives as part of a consultation process as required under English law. If implemented, the proposed closure and transfer could be completed by the end of 2009. The company expects that total costs of the proposed transfer and closure will be approximately $37.0 million, including approximately $24.0 million in severance costs, rent expense through the lease termination date and other cash expenditures and non-cash fixed and current asset charges totaling approximately $13.0 million. Approximately 80% of these costs would be absorbed by the partners in the company's 50/50 consumer diagnostics joint venture or their parent companies, with the company paying the rest. Based in Waltham, Massachusetts, Inverness Medical Innovations Inc. (AMEX: IMA) -- http://www.invernessmedical.com/-- develops, manufactures and markets in vitro diagnostic products for the over-the-counter pregnancy and fertility/ovulation test market and the professional rapid diagnostic test markets. * * * Inverness Medical Innovations Inc. carries Moody's Investors Service's B2 corporate family rating assigned on Jan. 28, 2008. IRIDIUM SATELLITE: Moody's Raises Corporate Family Rating to 'B2' ----------------------------------------------------------------- Moody's Investors Service upgraded Iridium Satellite LLC's Corporate Family Rating by one notch to B2 from B3 and also upgraded the company's speculative grade liquidity rating to SGL-1 (indicating very good liquidity) from SGL-2 (indicating good liquidity). Ratings of the company's outstanding debt instruments were also upgraded and applicable LGD assessments were adjusted accordingly. The outlook for all ratings is stable. The rating action reflects improved financial performance as favorable competitive dynamics and the continued uptake under Iridium's US Department of Defense contract combine to generate improved free cash flow. In the near term, expectations of Iridium being FCF positive over the rolling four quarter forward- looking SGL rating horizon, combined with an unused revolving credit facility whose access will not be adversely affected by financial covenant compliance, results in an assessment of very good liquidity and an SGL-1 speculative grade liquidity rating. Upgrades: Issuer: Iridium Satellite LLC -- Corporate Family Rating, Upgraded to B2 from B3 -- Probability of Default Rating, Upgraded to B1 from B3 -- Senior Secured Bank Credit Facility, Upgraded to B1 (LGD4, 55) from B2 (LGD3, 34) -- Second Lien Secured Bank Credit Facility, Upgraded to B3 (LGD6, 95) from Caa2 (LGD5, 82) At this juncture, despite recent accelerated debt repayments and the potential of additional accelerated pre-payment, ratings are constrained by the lack of clearly articulated guidance concerning FCF application, and the related potential of cash being allocated to other purposes. In addition, there is the longer term matter of uncertainty concerning the company's ability to be cash flow self-sufficient given the finite life of its existing 66-satellite constellation and the need to fund its replacement. This balance of short and long term influences combine to generate the B2 CFR. The stable rating outlook reflects a balance of considerations that could impact ratings over the near term. However, with favorable short term influences (i.e.; the company being FCF positive and having very good liquidity arrangements), near-term default risk is somewhat reduced relative to the standard for even the revised B2 CFR. Conversely, as the company's asset base nears the expiration of its useful life, the loss given default assessment has been revised upward somewhat. Accordingly, the probability of default is assessed as more akin to B1 risk levels, and the LGD expectation for the enterprise has been raised to 65% from the prior 50% historical mean level range most commonly applied to and realized by rated corporate entities. Individual instrument ratings reflect these revisions as well as the CFR upgrade. Headquartered in Bethesda, Maryland, Iridium Satellite LLC is a mobile satellite services company that provides global telecommunication services to government and commercial customers. ISLE OF CAPRI: Appoints Jim Perry as Chief Executive Officer ------------------------------------------------------------ Jim Perry, a gaming industry executive, will become Isle of Capri Casinos Inc.'s chief executive officer effective March 10, replacing Bernard Goldstein in that position. "Since joining our board last July, Jim Perry has served as the chair of a joint strategic committee comprised of members of our board and our management team," Bernard Goldstein, chairman of the board and chief executive officer, commented. "Our goal was to develop a plan to make our assets more competitive, more closely align our operating strategy with the needs of our customers and strengthen our balance sheet." "I firmly believe that the strategic plan developed under his leadership will serve as a platform for the future growth of the company." Mr. Goldstein said. "As such, I am disclosing my retirement from the position of chief executive officer and it is my pleasure to disclose the appointment of Jim Perry to the position of executive vice chairman and CEO, effective March 10, subject to regulatory approval. "Along with president and chief operating officer Virginia McDowell and the rest of the senior management team, our employees and investors are in the capable hands of a team that is known for financial discipline and operational excellence," Mr. Goldstein continued. "It has been my pleasure to watch the company grow since our first casino opened in 1992." "We have assembled a talented and respected team to ensure that the company continues to grow into the future," Mr. Goldstein said. "I look forward to working with them, and will continue to serve as chairman of the board as we implement our strategic plan." Over the past decade, Mr. Perry has served as the president, chief executive officer and as a member of the board of directors at both Trump Entertainment Resorts and Argosy Gaming Company. With nearly 30 years of experience leading gaming operations and companies in regional and destination markets, he is recognized as one of the gaming industry's distinguished executives. During Mr. Perry's tenure at Argosy, the company built one of the strongest balance sheets in gaming, was an industry leader in EBITDA margins, and was recognized by several leading publications for record earnings growth and financial stability. "Bernie Goldstein and the Isle board of directors have offered me a wonderful opportunity to work with a very talented team, to continue to enhance the value of the company for our shareholders, improve the gaming experience for our customers, and build a strong company with opportunity for our employees," Mr. Perry said. "I appreciate both their support and their confidence in me." "The main components of the strategic plan are to focus on organic growth opportunities, and to consolidate our portfolio into two brands based on a variety of factors, including the size of the facility, amenities, and the size of the primary markets served," Mr. Perry explained. "Our Isle brand will feature regional facilities with hotel rooms and convention facilities designed for both business and leisure travelers, with upgraded amenities, all of which will complement our casino product. Based on a significant market research project conducted with our database customers, we will reintroduce Lady Luck as the brand for our smaller facilities that serve more local markets." "The strategic committee is continuing to work with the board of directors on the approval of the major projects associated with the re-branding, the timing of which will occur over the next few years." Mr. Perry continued. "The first Isle properties will include Biloxi, where planning is nearly complete on Phase One of the master plan, and Bettendorf, where the company is beginning the planning process for a land-based casino which will be located between the existing two hotel towers." "We expect that the expanded Bettendorf facility will be connected by a sky bridge to the new 50,000 square foot convention center being jointly developed by the City of Bettendorf and Isle of Capri, which the City expects to open later this year," Mr. Perry said. "Caruthersville will become the first Lady Luck property by June 2008." "We have a tremendous opportunity to unlock shareholder value by further improving operating results," Virginia McDowell, president and chief operating officer, added. "We have made progress over the course of fiscal 2008, most notably in Black Hawk, the Quad Cities and Boonville. Despite pressure on the economy, EBITDA and margins have continued to improve at several properties year over year. In addition, we continue to re-engineer our business processes at both the corporate and property levels." "A reorganization at the corporate office, during the third quarter, included a reduction in the workforce and the introduction of cost saving programs which we expect, when fully implemented, will result in expense reductions of over $3 million annually," Ms. McDowell added. "In addition, we are continuing to evaluate, consulting agreements and agreements with outside contractors for additional expense reduction opportunities. "At the property level, we continue to identify margin improvement opportunities, Ms. McDowell said. "In many cases, programs eliminated at the corporate level represent a direct savings to the operating units. We recognize, however, that companies cannot save their way to success and we continue to reallocate our resources in order to improve the overall guest experience, target more profitable customers and increase revenue. In line with our strategic objectives, we will build our brands around our customers, and create experiences for our guests based upon what is important to them." About Isle of Capri Casinos Inc. Based in Biloxi, Mississippi and founded in 1992, Isle of Capri Casinos Inc. (Nasdaq: ISLE) -- http://www.islecorp.com/-- owns and operates casinos in Biloxi, Lula and Natchez, Mississippi; Lake Charles, Louisiana; Bettendorf, Davenport, Marquette and Waterloo, Iowa; Boonville, Caruthersville and Kansas City, Missouri and a casino and harness track in Pompano Beach, Florida. The company also operates and has a 57% ownership interest in two casinos in Black Hawk, Colorado. Isle of Capri Casinos' international gaming interests include a casino that it operates in Freeport, Grand Bahama, a casino in Coventry, England, and a two-thirds ownership interest in casinos in Dudley and Wolverhampton, England. * * * Moody's Investor Services placed Isle of Capri Casinos Inc.'s probability of default and long-term corporate family ratings at 'B1' in June 2007. The ratings still hold to date with a stable outlook. ISLE OF CAPRI: Posts $14 Mil. Net Loss in Quarter Ended January 27 ------------------------------------------------------------------ Isle of Capri Casinos Inc. reported financial results for the third fiscal quarter ended Jan. 27, 2008. The company reported net loss for the third quarter of fiscal 2008 of $13.8 million compared to net loss of $8.9 million for the third quarter of fiscal 2007. For nine months ended Jan. 27, 2007, the company reported net loss of $45.5 million compared to net income of $9.9 million for the same period in the previous year. The company's results of operations for the three and nine month periods ended Jan. 27, 2008, and Jan. 28, 2007, reflect the consolidated operations of all of its subsidiaries. The Vicksburg and Bossier City properties are reflected as discontinued operations for the periods prior to their sale in July 2006. Other significant factors impacting net income are: 1. Stock based compensation expense was $1.7 million in the third quarter of 2008 versus $1.5 million in 2007. 2. Depreciation and amortization expense increased from $24.6 million to $34.9 million due to the Pompano, Waterloo, Caruthersville and Coventry assets being placed in service. 3. Interest expense increased $5.3 million to $27.5 million due to higher average borrowings. 4. The income tax benefit recorded in the third quarter increased to $7.4 million from $1.9 million during the third quarter of last year. Capital Structure As of Jan. 27, 2008, the company has $117.6 million of cash and cash equivalents and total debt of $1.57 billion. Effective Jan. 27, 2008, the company completed the purchase of the 43% minority interest in a Colorado operations owned by its partner, for $64.6 million. On Jan. 28, 2008, the company refinanced approximately $187 million of debt that existed at the Blackhawk entity through borrowings under our credit facility. The company has designated the subsidiaries that operate the Blackhawk operations as "restricted subsidiaries" under the provisions of our credit facility and its 7% subordinated notes. At Jan. 27, 2008, the company's balance sheet showed total assets of $2.11 billion, total liabilities of $1.88 billion and total stockholders' equity $0.23 billion. About Isle of Capri Casinos Inc. Based in Biloxi, Mississippi and founded in 1992, Isle of Capri Casinos Inc. (Nasdaq: ISLE) -- http://www.islecorp.com/-- owns and operates casinos in Biloxi, Lula and Natchez, Mississippi; Lake Charles, Louisiana; Bettendorf, Davenport, Marquette and Waterloo, Iowa; Boonville, Caruthersville and Kansas City, Missouri and a casino and harness track in Pompano Beach, Florida. The company also operates and has a 57% ownership interest in two casinos in Black Hawk, Colorado. Isle of Capri Casinos' international gaming interests include a casino that it operates in Freeport, Grand Bahama, a casino in Coventry, England, and a two-thirds ownership interest in casinos in Dudley and Wolverhampton, England. * * * Moody's Investor Services placed Isle of Capri Casinos Inc.'s probability of default and long-term corporate family ratings at 'B1' in June 2007. The ratings still hold to date with a stable outlook. JUPITER HIGH: Moody's Junks Rating on $150 Million Notes From 'A2' ------------------------------------------------------------------ Moody's Investors Service downgraded ratings of six classes of notes issued by Jupiter High Grade CDO VII, Ltd., and left on review for possible further downgrade the rating of one of these classes. The notes affected by this rating actions are: Class Description: $150,000,000 Class A-2 Floating Rate Notes Due November 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $150,000,000 Class A-3 Floating Rate Notes Due November 2047 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ca Class Description: $80,000,000 Class A-4 Floating Rate Notes Due November 2047 -- Prior Rating: Caa3, on review for possible downgrade -- Current Rating: C Class Description: $20,000,000 Class A-5 Floating Rate Notes Due November 2047 -- Prior Rating: Ca -- Current Rating: C Class Description: $20,000,000 Class B Deferrable Floating Rate Notes Due November 2047 -- Prior Rating: Ca -- Current Rating: C Class Description: $10,000,000 Class C Deferrable Floating Rate Notes Due November 2047 -- Prior Rating: Ca -- Current Rating: C The rating downgrade actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence on Nov. 30, 2007, as reported by the Trustee, of an event of default caused by the failure of the Principal Coverage Ratio relating to the Class A Notes to be at least equal 97.00%, as described in Section 5.1(d) of the Indenture dated Aug. 2, 2007. Jupiter High Grade CDO VII, Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS securities and CDO securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. In this regard, Moody's has received notice from the Trustee that the Requisite Noteholders directed the Trustee to accelerate the Rated Notes and terminate the Reinvestment Period. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of other post-event of default remedies by certain Noteholders. Because of this uncertainty, the ratings assigned to Class A-2 Notes remain on review for possible further action. JUPITER HIGH: Moody's Junks Rating on $150 Million Notes From 'A2' ------------------------------------------------------------------ Moody's Investors Service downgraded ratings of six classes of notes issued by Jupiter High Grade CDO VII, Ltd., and left on review for possible further downgrade the rating of one of these classes. The notes affected by this rating actions are: Class Description: $150,000,000 Class A-2 Floating Rate Notes Due November 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $150,000,000 Class A-3 Floating Rate Notes Due November 2047 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ca Class Description: $80,000,000 Class A-4 Floating Rate Notes Due November 2047 -- Prior Rating: Caa3, on review for possible downgrade -- Current Rating: C Class Description: $20,000,000 Class A-5 Floating Rate Notes Due November 2047 -- Prior Rating: Ca -- Current Rating: C Class Description: $20,000,000 Class B Deferrable Floating Rate Notes Due November 2047 -- Prior Rating: Ca -- Current Rating: C Class Description: $10,000,000 Class C Deferrable Floating Rate Notes Due November 2047 -- Prior Rating: Ca -- Current Rating: C The rating downgrade actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence on Nov. 30, 2007, as reported by the Trustee, of an event of default caused by the failure of the Principal Coverage Ratio relating to the Class A Notes to be at least equal 97.00%, as described in Section 5.1(d) of the Indenture dated Aug. 2, 2007. Jupiter High Grade CDO VII, Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS securities and CDO securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. In this regard, Moody's has received notice from the Trustee that the Requisite Noteholders directed the Trustee to accelerate the Rated Notes and terminate the Reinvestment Period. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of other post-event of default remedies by certain Noteholders. Because of this uncertainty, the ratings assigned to Class A-2 Notes remain on review for possible further action. LUCHT'S CONCRETE: Case Summary & 17 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Lucht's Concrete Pumping, Inc. 3800 South Federal Boulevard Sheridan, CO 80100 Bankruptcy Case No.: 08-12619 Type of Business: The Debtor offers concrete pumping services. See http://www.luchtsconcrete.com/and http://www.luchts.com/ Chapter 11 Petition Date: March 5, 2008 Court: District of Colorado (Denver) Judge: Sidney B. Brooks Debtor's Counsel: David Wadsworth, Esq. (dvw@sendwass.com) Harvey Sender, Esq. (Sendertrustee@sendwass.com) 1660 Lincoln Street, Suite 2200 Denver, CO 80264 Tel: (303) 296-1999 Fax: (303) 296-7600 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Dougherty Funding, LLC value of collateral: $5,244,987 90 South 7th Street, $3,314,000 Suite 4300 Minneapolis, MN 55402 SL Financial Services Corp value of collateral: $5,169,882 251 Riverside Avenue $2,845,150 Westport, CT 06880 First National Bank of value of collateral: $2,053,976 Colorado $860,000 P.O. Box 9032 Boulder, CO 80301-9032 Orix Financial Services, Inc. value of collateral: $1,241,207 P.O. Box 7247-0369 $955,500 Philadelphia, PA 19170-0369 All Points Capital Corp. value of collateral: $767,060 P.O. Box 3071 $556,500 Hicksville, NY 11802-3071 Omni National Bank value of collateral: $495,319 Six Concourse Parkway, $339,500 Suite 2300 Atlanta, GA 30328 Summit Financial $408,865 2455 East Parleys Way, Suite 200 Salt Lake City, UT 84109 SM Realty $365,998 Suite 201, 1400 Glenarm Pl. Denver, CO 80202 RP Capital Corp value of collateral: $277,662 7401 Metro Boulevard, $232,750 Suite 320 Edina, MN 55439 Kraus-Anderson Capital, Inc. value of collateral: $256,113 523 South Eigth Street, $191,100 Suite 523 West Minneapolis, MN 55404 Comdata $146,986 Carson Oil Co., Inc. $146,871 American Express $129,593 AGC-IUDE Local 701 Trust Fund $62,239 Stonehill Financial, LLC $45,434 Anthem Blue Cross/Blue Shield $39,820 Boulder Gas $36,078 KEY DEVELOPERS: Section 341(a) Meeting Slated for April 2, 2008 --------------------------------------------------------------- Parties owed money by Key Developers Group LLC will have a meeting at 1:30 p.m., on April 2, 2008, at the courthouse in 501 East Polk Street in Tampa, Florida, Tampa Bay Business Journal's Michael Hinman relates. The Place at Channelside Web site -- http://www.theplacecondos.com/-- indicated Thursday that 95% of its 469 units have been sold, BizJournal says. That Web site is no longer accessible at press time. Based on BizJournal's report, Key Developer is facing a hundred lawsuits alleging breach of contract and demanding cancellation of contracts filed in November 2007 by buyers. The Place at Channelside is valued at $194 million, and its unit prices ranges from $180,000 to above $1 million, BizJournal adds. According to Emporis.Com, other firms involved in the construction of The Place include Bovis Lend Lease Inc., Kimmins Contracting Corp., Wichman Construction, Jablonsky, Ast and Partners, KTD Engineers, Cecconi Simone, Phil Graham & Company, PA, APG Electric Inc., Long Foundation Drilling Company, Williamson & Associates, Inc., KTD Engineers, Potain SAS, KONE Inc., CapForm Inc., and South Carolina Steel Corporation. The design was done by Hariri Pontarini Architects and Studiomarc International, Emporis.Com reveals. About Key Developers Tampa, Florida-based Key Developers Group LLC is a real estate developer. Its developments include a 469-unit, The Place at Channelside I and II. The Place at Channelside I, an-8-floor building, was completed in 2007, while The Place at Channelside II, a 32-floor building, was never built. Its president is Fida Sirdar Hussain. Key Developers filed for chapter 11 on March 5, 2008 (Bankr. M.D. Fla. Cas No. 08-02929). Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser PA represents the Debtor in its restructuring efforts. It listed asset between $100 million to $500 million and debts between $50 million to $100 million when it filed for bankruptcy. KEY DEVELOPERS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Key Developers Group, LLC 1101 Channelside Drive, Suite 237 Tampa, FL 33602 Bankruptcy Case No.: 08-02929 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: March 5, 2008 Court: Middle District of Florida (Tampa) Judge: Michael G. Williamson Debtor's Counsel: Scott A. Stichter, Esq. (sstichter.ecf@srbp.com) Stichter, Riedel, Blain & Prosser 110 East Madison Street, Suite 200 Tampa, FL 33602-4700 Tel: (813) 229-0144 Fax: (813) 229-1811 http://www.srbp.com Estimated Assets: $100 million to $500 million Estimated Debts: $50 million to $100 million The Debtor did not file a list of its largest unsecured creditors. KURLEMANN BUILDERS: Commences Chapter 7 Liquidation in Ohio ----------------------------------------------------------- Kurlemann Builders, Inc. filed for protection under Chapter 7 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of Ohio on March 3. Kurlemann Builders disclosed $61,907 in assets and $1.85 million in liabilities, including at least $1.5 million of the debt associated with two lawsuits filed in Warren County, Ohio, The Lebanon (Ohio) Western Star reports. Now that luxury home builder Bernie Kurlemann has taken one of his companies into bankruptcy court, two Mason residents who sued him for shoddy work will likely only get a fraction of their money, Western Star Staff Writer Denise G. Callahan says. Mr. Kurlemann started the company 20 years ago. Business Courier of Cincinnati relates that the company's largest creditors included home buyers Michael and Marianne Chappelle of Maineville and John and Connie Musuraca of Mason, who filed suits against the builder earlier this year, as well as Thompson Hine LLP for its law services in both disputes. Other creditors include contractors like Interwood Custom Carpentry of Cincinnati, H & H Plumbing of Cincinnati and JP Flooring of West Chester, Business Courier says. Mr. Kurlemann said the creditors were aware of the bankruptcy filing, Business Courier relates. When asked if they would be made whole, he speculated that most would not take issue with it, Business Courier says. "Creditors are going to manage what they have to manage," Mr. Kurlemann said, Business Courier relates. "It's up to them as to how they will pursue their situation." MANCHESTER INC: Gets Interim Court Nod on Cash Collataral Use ------------------------------------------------------------- Manchester Inc. and its debtor-affiliates obtained interim permission from the U.S. Bankruptcy Court for the Northern District of Texas to use their lenders' cash collateral, and grant the lenders adequate protection. Certain secured lenders assert that some prepetition obligations were, as of the date of bankruptcy, secured by valid, enforceable and properly perfected liens on and security interests in substantially all of the Debtors' personal property and other assets, including funds held in bank accounts. The funds constitute cash collateral under Section 363(a) of the U.S. Bankruptcy Code. The Debtors expect to obtain cash collateral from cash on hand and proceeds from accounts receivable. As of the bankruptcy date, the Debtors had significant cash on hand, and is sufficient to fund the Debtors' continued operations during the period specified in a budget. Pursuant to the Interim Cash Collateral Order, the Court permitted the the Debtors to make payments on account of prepetition claims of mechanics and other vendors that hold valid possessory liens against the property of the Debtors' estates. As adequate protection, the Debtor gave the secured lenders replacement security interest in and liens upon the postpetition collateral. The Debtors have an immediate need to use the cash collateral for the purpose of meeting necessary expenses incurred in the ordinary course of their business, including payroll and restructuring costs. About Manchester Inc. Based in Dallas, Texas, Manchester Inc. (OTCBB: MNCS) -- http://www.manchesterinc.net/-- is in the Buy-Here/Pay-Here auto business. Buy-Here/Pay-Here dealerships sell and finance used cars to individuals with limited credit histories or past credit problems, generally financing sales contacts ranging from 24 to 48 months. It operates six automotive sales lots, which focus on the Buy-Here/Pay-Here segment of the used car market. The company and its seven affiliates filed for chapter 11 protection on Feb. 7, 2008 (Bankr. N.D. Tex. Case No.08-30703). Eric A. Liepins, Esq., represents the debtors in their restructuring efforts. As of the debtors' bankruptcy filing, it listed total assets of $131,582,157 and total debts of $123,881,668. MCCALL CITY: Allowed to Issue Bonds; Contempt Hearing Called Off ---------------------------------------------------------------- The city of McCall, which last week was in danger of falling into bankruptcy due to its debt with a contractor, got two favorable court rulings recently, KTVB.com (Ida.) reports. Judge Thomas Neville, District Judge (4th District) of Ada County, agreed to let the city issue 30-year municipal sewer bonds to raise $6.5 million owed in a settlement of a suit with a wastewater treatment facility contractor. In another ruling, U.S. District Judge B. Lynn Winmill agreed to postpone a contempt of court hearing scheduled for Thursday that could have forced the city into bankruptcy. McCall had claimed that Boise-based St. Clair Contractors, Inc., didn't do the agreed work properly. The contractor, and Employers Insurance of Wausau, which provided the contractor's performance bond, demanded payment of $6.5 million. Since May of last year, the city has paid back $1 million of that debt, according to KTVB.com. The companies say the city is in contempt for not following Judge Winmill's previous ruling ordering the city to pay the judgment immediately. It wanted the Court to prohibit McCall from making any payments to anyone until that judgment is satisfied, according to the report. The city has appealed to the Ninth Circuit Court of Appeals. If McCall wins that case, the amount owed would be reduced by nearly 90 percent, from more than $6 million to around $600,000, the report says. A hearing on that issue has not been scheduled. According to KTVB.com, if the city pays off its debt by mid-May, that contempt motion will be dismissed altogether. During a special city council meeting on Monday, the council asked the company to drop their petition while presenting a plan to pay the debt, KBCI CBS 2 (Ida.) reports. The council plan to increase McCall area residents sewer bill by $10 over the next 25-30 years. McCall is a city in Valley County, Idaho. At a Special Election in August, 1993, the citizens of McCall chose to adopt the City Manager-Council form of municipal government. MIAMI BEACH FLA: Moody's Cuts Rating on Revenue Bonds to 'Ba2' -------------------------------------------------------------- Moody's Investors Service downgraded the rating on $830,000 of outstanding Housing Authority of the City of Miami Beach, Florida Mortgage Revenue Refunding Bonds, Series 1997A (Section 8 Assisted - Midtown Plaza Project) to Ba2 from A3. The outlook has been revised to negative from stable. The downgrade is based on a significant decline in debt service coverage, primarily resulting from an increase in property expenses. Midtown Plaza, also known as Shep Davis apartments, is a 49-unit building located in Miami Beach. The building includes studio and one-bedroom apartments, and is intended for low-income families with a disabled, handicapped, or elderly member. Strengths * Fully funded debt service reserve fund as of Jan. 31, 2008; * 100% occupancy rate as of Feb. 20, 2008; * Relatively short time until bond maturity; * Rental rates below Fair Market Rent, making future increases in rental rates possible. Property management has indicated that the property may receive additional payments from HUD in the near future. Challenges * Debt service coverage levels are deteriorating. Audited financial statements show debt service coverage levels have declined from 0.94x (FY2004) to 0.90x (FY2005) to .83 (FY2006). * Real estate taxes have increased substantially over the past three fiscal years and remain at elevated levels. Property management reports that the taxes are being appealed, but no rebate has been received to date. * The bonds do not amortize evenly. The final debt service payment on the bond maturity date of Sept. 1, 2012 requires a large principal payment, which increases the importance of preserving the debt service reserve fund. Outlook The outlook on the bonds has been revised to negative due to the steady decline in debt service coverage and the potential for draws on the debt service reserve fund. In the event of a draw on the debt service reserve fund, the bonds would likely experience another multi-notch downgrade. Key Statistics -- Current Occupancy: 100% -- Bond Maturity: Sept. 1, 2012 -- HAP Expiration: July 16, 2012 -- Debt Service Coverage (FY2006): 0.83x MOST HOME: Receives $350,000 in Private Placement of Common Shares ------------------------------------------------------------------ Most Home Corp. disclosed in a regulatory SEC filing Tuesday that on Dec. 12, 2007, the company entered into an agreement with an accredited investor to sell up to 1,200,000 shares of common stock and 1,200,000 share purchase warrants for total proceeds of $300,000, at a price of $0.25 per unit of share and warrant. Each warrant entitles the investor to purchase one additional common share at an exercise price of $0.40 per share for a period of three years. The company said it has received $150,000 as of Feb. 26, 2007. The balance will be paid on or before March 2008. No commission was paid by the company in connection with the private placement. The company also disclosed that on Jan. 7, 2008, the company entered into an agreement with two accredited investors to sell up to 800,000 shares of common stock and 800,000 share purchase warrants for total proceeds of $200,000, at a price of $0.25 per unit of share and warrant. Each warrant entitles the investor to purchase one additional common share at an exercise price of $0.40 per share for a period of three years. The company has received the full amount of $200,000 and will be issuing the securities once the proper paperwork are completed. The company did not pay any commission in connection with the private placement. About Most Home Headquartered in Maple Ridge, British Columbia, Canada, Most Home Corp. (OTC BB: MHME.OB) -- http://www.mosthome.com/-- is a real estate services company providing technology solutions for agents, brokers and real estate franchises. * * * Manning Elliott LLP, in Vancouver, Canada, expressed substantial doubt about Most Home Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended July 31, 2007, and 2006. The auditing firm reported that the company has a working capital deficiency and has incurred recurring losses from operations. As reported in the Troubled Company Reporter on Dec. 19, 2007, Most Home Corp.'s consolidated balance sheet at Oct. 31, 2007, showed $1.4 million in total assets and $2.9 million in total liabilities, resulting in a total stockholders' deficit of $1.5 million. NATIONAL BEEF: Moody's Holds 'B2' Ratings; Changes Outlook to Neg ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of National Beef Packing Company LLC, including the company's B2 corporate family rating and B2 probability of default rating. The rating outlook was changed to negative from stable. Ratings affirmed: -- Corporate family rating at B2 -- Probability of default rating at B2 Rating affirmed, with LGD percentage revised -- $160 million 10.50% senior unsecured notes due 2011 at Caa1 (LGD5); LGD percentage to 86% from 87% The change in outlook to negative is based on Moody's concern that National Beef will be challenged to maintain credit metrics that are appropriate for its rating over the near term, given margin pressure as beef costs remain high for processors. Separately, National Beef and the holders of membership interests in the company announced yesterday that JBS S.A. would acquire the membership interests, subject to regulatory and other approvals. The rated debt of National Beef will have to be refinanced or amended upon the change of control. The rating of JBS and the position of the rated debt, if it remains outstanding, in JBS' capital structure, will determine the post-acquisition ratings. The company's B2 corporate family rating is supported by National Beef's moderate scale, solid volume growth and lower earnings volatility relative to other processors. However, these attributes are offset by the speculative grade elements in the company's profile, primarily anemic credit metrics, narrow product focus, and the concentration of its raw material sources. Moody's also views its capital structure as weak, given the ability of two shareholder groups to put back their capital to the company at any time beginning in August 2008, which could result in either a leveraged recapitalization or an outright sale of the company. National Beef Packing Company LLC, headquartered in Kansas City, Missouri, is a processor of fresh beef products. The company also provides refrigerated transportation services. Revenues for the twelve months ended Nov. 24, 2007 were approximately $5.7 billion. The company is majority owned and controlled by U.S. Premium Beef, LLC. NORTH AMERICAN SCIENTIFIC: James Klinger Resigns as CFO ------------------------------------------------------- North American Scientific Inc. disclosed Tuesday that James Klingler resigned as senior vice president and chief financial officer, effective March 21, 2008. The company has initiated a search for a new chief financial officer. John Rush, president and chief executive officer, stated, "We appreciate Jim's many contributions to the company and we wish him all the best in his future endeavors." About North American Scientific Based in Chatsworth, California, North American Scientific Inc. (NasdaqGM: NASI) -- http:www.nasmedical.com/ -- provides radiation therapy products in the fight against cancer. Its products provide physicians with tools for the treatment of various types of cancers. They include Prospera(R) brachytherapy seeds and SurTRAK(TM) needles and strands used primarily in the treatment of prostate cancer. * * * At Oct. 31, 2007, the company's balance sheet showed total assets of $6.18 million, total liabilities of $9.09 million, resulting to a total stockholders' deficit of $2.91 million. OKO-MED DOWNTOWN: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Oko-Med Downtown Imaging, L.P., In Re Oko-Med Downtown Imaging, L.P. 2101 Crawford Houston, Texas 77002 Bankruptcy Case No.: 08-31250 Chapter 11 Petition Date: March 1, 2008 Court: Southern District of Texas (Houston) Judge: Letitia Z. Clark Debtor's Counsel: Kelley Wilson, Esq. Cain & LaCroix 416 Westheimer Houston, Texas 77006 Tel: (713) 623-8200 Fax: (713) 456-2633 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its largest unsecured creditors. OZYMANDIUS LP: Court OKs $5.6 Mil. Kress Sale to Sound Warehouse ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas approved the sale of 1936 vintage Kress Building to Sound Warehouse of Dallas Inc. for $5.6 million, Bill Rochelle of Bloomberg News reports. As reported in the Troubled Company Reporter on Feb. 8, 2008, the 1936 vintage Kress Building owned by Ozymandius LP in Fort Worth, Texas, did not attract a bid at a February 4 auction, William Rochelle at Bloomberg News reports, citing the Fort Worth Star-Telegram. Mr. Rochelle says a buyer canceled in January a contract to purchase the building. According to Mr. Rochelle, the building's upper floors have been converted into loft apartments. Forth Worth, Texas-based Ozymandius LP filed for Chapter 11 bankruptcy September 27, 2007, before the United States Bankruptcy Court for the Northern District of Texas (Dallas) (Case No. 07- 34670). Joyce W. Lindauer, Esq., in Dallas, represents the Debtor. The Debtor has disclosed to the Court $8 million in total assets and $5.8 million in total debts, including $5.6 million in secured claims, Mr. Rochelle says. PACIFIC LUMBER: Wants Interim Court Nod on $51MM DIP Financing -------------------------------------------------------------- The Pacific Pacific Lumber Company and its debtor-affiliates ask authority from the Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas to obtain $51 million debtor-in-possession financing from Bank of America N.A. Scotia Pacific Company LLC has determined that it is in its best interests to avoid expensive battles over the use of cash collateral, and to increase its operational flexibility by securing a single and final round of postpetition financing to fund its operations through confirmation of a Plan of Reorganization, Kyung S. Lee, Esq., at Diamond McCarthy LLP, in Houston, Texas, informed the Court. According to Mr. Lee, Scopac's operations are significantly affected by the weather and certain regulations. Therefore, he explains, planning and budgeting on a 13-week basis is extremely difficult and subject to significant variances in results from what was budgeted. Because Scopac's noteholders have insisted on this unreasonably short budgeting period and have failed and refused to consent to the use of cash collateral throughout the pendency of Scopac's case, Scopac's operational flexibility has been hampered. Mr. Lee told Judge Schmidt that a more pressing reason to obtain additional financing has arisen. "[Scopac] can no longer rely on its heretofore only customer, The Pacific Lumber Company, to buy its product at a predetermined price and to pay for that product on a regular schedule." In February 2008, PALCO could not pay Scopac the $4,317,000 it owed Scopac for the logs it bought from Scopac in January 2008, Mr. Lee noted. There is no assurance, he adds, that PALCO will be able to make that payment in the foreseeable future, nor has PALCO been able to assure that Scopac will be paid for the logs it sold PALCO in February -- payment for which is due March 20, 2008. As a result of PALCO's nonpayment, Scopac considers itself free to sell logs and standing timber to buyers other than PALCO, but it must also bear pricing risk and the risk of increases in its cost of goods sold, Mr. Lee elaborated. In this light, Scopac obtained on Feb. 26, 2008, a commitment letter from Bank of America, N.A., to advance $51,214,344 in postpetition funds. The proceeds of the DIP Loan will be used to: 1) finance Scopac's postpetition working capital needs and general corporate purposes; and 2) pay in full the existing indebtedness under Scopac's existing Credit Agreement dated July 1998, with BofA and certain other lenders. A full-text copy of the terms of the BofA DIP Loan is available for free at http://researcharchives.com/t/s?28d6 Mr. Lee informed the Court that Scopac heavily negotiated the terms of the DIP Loan Facility with the DIP Lenders. He adds that Scopac solicited financing proposals from other parties, however, only the DIP Lenders presented the best available financing package based on price, commitment amount and other factors. "The success of this chapter 11 case depends upon Scopac's immediate access to sufficient postpetition financing to enable continued operations and generation of income," Mr. Lee asserted. Bank of America is represented by O'Melveny & Myers LLP. Objections The Bank of New York Trust Company, N.A., as Indenture Trustee for the Timber Notes, and the Official Committee of Unsecured Creditors each object to Scopac's request to incur postpetition indebtedness. A. BoNY Scopac had known since at least February 22, 2008, that it would be filing the DIP Motion, yet it waited until the evening of March 3 to file the request, Toby L. Gerber, Esq., at Fulbright & Jaworski LLP, in Houston, Texas, notes. As a result, Scopac has created a situation where it is impossible for any party-in- interest to adequately prepare for its requested March 6 interim hearing on the DIP Motion. Moreover, Mr. Gerber argues, Scopac's pleadings fall far short of the standards required to authorize the obtaining of credit prior to a final hearing because there is no legitimate allegation of immediate and irreparable harm facing the Debtor within the next 15 days. Rather, Mr. Gerber asserts, Scopac's DIP Motion merely provides conclusory and unsupported statements that "Scopac will be unable to pay operating expenses, and therefore, unable to continue to conduct its businesses pending Final Hearing." Despite Scopac's assertions of dire need to pay operating expenses prior to a final hearing on the DIP Motion, a review of Scopac's weekly cash forecast through June 20, 2008, discloses that its assertions are, at a minimum, greatly exaggerated, Mr. Berber contends. Scopac fails to address the fact that its current 13-week cash collateral budget provides for those payments. As of March 4, 2008, no event of default has been declared under Scopac's use of the Cash Collateral, the Court has already authorized Scopac to use up to $5,000,000 in a Scheduled Amortization Reserve Account, and the amount has not yet been fully drawn by Scopac, Mr. Gerber reminds Judge Schmidt. Accordingly, BoNY asks the Court to deny Scopac's request for an emergency interim hearing on the DIP Motion for these reasons: -- Costs related to the continuation of operations are minimal; -- Authority already exists under the 13-week cash collateral budget to pay certain expenses; -- There is available cash in the SAR Account based on the Court's prior Orders; and -- The Court's Cash Collateral Order authorizes the payment of any expenses necessary to preserve the value of Scopac's assets after an extraordinary event. B. Creditors Committee The Creditors Committee asks the Court to deny Scopac's DIP Motion because there is no business justification for Scopac's request. Representing the Creditors Committee, Maxim B. Litvak, Esq., at Pachulski Stang Ziehl & Jones, in San Francisco, California, asserts, "Scopac simply does not need to borrow money because the company already has cash in the SAR account." If Scopac needs additional cash, then it should ask to draw more money out of the SAR Account, rather than entering into a costly and complex postpetition loan agreement with Bank of America, at a significantly higher cost to the estate, Mr. Litvak argues. According to Mr. Litvak, the Creditors Committee has three specific concerns with Scopac's DIP Motion: (1) The DIP Financing is expensive, with fees alone totaling $750,000, and interest charges fluctuating between 6% to 7%, based on current rates; (2) The DIP Financing converts prepetition debt into a postpetition administrative expense; (3) The DIP Financing comes with many other strings attached, which, among other things: (i) prohibits the SAR account from being drawn below $25,000,000, (ii) requires confirmation of a Plan "acceptable to" BofA by August 31, 2008; and (iii) imposes certain additional reporting obligations and financial covenants on the Debtor's estate. Taken together, Scopac would save itself a lot of money and trouble if it were simply permitted to use SAR funds, rather than entering into the DIP Financing, Mr. Litvak maintains. About Pacific Lumber Based in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co- counsel. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors filed their Joint Plan of Reorganization on Sept. 30, 2007, which was amended on Dec. 20, 2007. Four other parties-in- interest have filed competing plans for the Debtors -- The Bank of New York Trust Company, N.A., as Indenture Trustee for the Timber Notes; the Official Committee of Unsecured Creditors; Marathon Structured Finance Fund L.P, the Debtors' DIP Lender and Agent under the DIP Credit Facility; and the Heartlands Commission, which represents the tribal members of the Bear River Band of Rohnerville Rancheria and PALCO employees. The Debtors' exclusive plan filing period expired on Feb. 29, 2008. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 50, http://bankrupt.com/newsstand/or 215/945-7000). PASA FUNDING: Moody's Reviews Ratings of Four Note Classes ---------------------------------------------------------- Moody's Investors Service downgraded ratings of five classes of notes issued by PASA Funding 2007, Ltd. and left on review for possible further downgrade the ratings of four of these classes. Moody's also placed the rating of one additional class of notes issued by PASA Funding 2007, Ltd. on review for possible downgrade. The notes affected by this rating action are: Class Description: Up to $ 2,810,000,000 aggregate Principal Component of Class A-1B Notes -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade Class Description: $120,000,000 Class A-2 Senior Secured Floating Rate Notes Due 2052 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $21,000,000 Class B Senior Secured Floating Rate Notes Due 2052 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Class Description: $21,000,000 Class C Secured Floating Rate Deferrable Notes Due 2052 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: $13,000,000 Class D Floating Rate Deferrable Notes Due 2052 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ca Class Description: $17,400,000 Class X Senior Secured Notes Due 2017 -- Prior Rating: Aaa -- Current Rating: Baa2, on review for possible downgrade The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence as reported by the Issuer on Feb. 22, 2008, of an event of default described in Section 5.01(i) of the Indenture dated March 29, 2007. PASA Funding 2007, Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS securities and CDO securities. Recent ratings downgrades on the underlying portfolio caused ratings-based haircuts to affect the calculation of overcollateralization. Thus, the Event of Default described in Section 5.01(i) of the Indenture occurred. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. In this regard, Moody's has received notice from the Trustee that, at the direction of a majority of the Controlling Class, it has declared the aggregate outstanding amount of the Secured Notes and the Redemption Price of the Class X Notes to be immediately due and payable. The rating actions taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of further remedies to be pursued by the Controlling Class. Because of this uncertainty, the ratings assigned to Class A-1B Notes, Class A-2 Notes, Class B Notes, Class C Notes and Class X Notes remain on review for possible further action. PASCACK VALLEY: Sells Assets For $45 Million to HUMC/Touro LLC -------------------------------------------------------------- Pascack Valley Hospital Association Inc., in consultation with Bank of New York, determined that HUMC/Touro LLC's $45 million bid is the highest and best offer beating 9 Knoll-LN LLC's offer. Jack M. Zackin, Esq., at Sills Cummis & Gross P.C. in Newark, New Jersey, said 9 Knoll also offered $45 million but the bid included the Debtor's furniture, fixtures and equipments valued at $500,000. The Debtor's asset is comprised of real property located at 250 Old Hook Road in Westwood, New Jersey. he auction sale was held on Feb. 27, 2008, before the Hon. Rosemary Gambardella of the United States Bankruptcy Court for the District of New Jersey. Judge Gambardella approved on Dec. 20, 2007, the bidding procedure for the sale of substantially all of the Debtor's asset. The Debtor and HUMC/Touro LLC are currently finalizing a revised asset purchase agreement. Judge Gambardella set a sale hearing on March 18, 2008, whether to approve the sale. About Pascack Valley Headquartered in Westwood, New York, Pascack Valley Hospital Association, Inc. -- http://www.pvhospital.org/-- operates a full-service, 291-bed non-profit medical facility, part of a system of healthcare affiliates known as the Well Care Group, Inc., which provides a full range of the most advanced, technically specialized healthcare services available. The company filed for Chapter 11 protection on September 24, 2007 (Bankr. Case No.07-23686). Jack M. Zackin, Esq., at Sills Cummis Radin Tischman, represents the Debtor in its restructuring efforts. The U.S. Trustee for Region 3 appointed creditors to serve on an Official Committee of Unsecured Creditors on this case. Douglas J. Mcgill, Esq., at Drinker Biddle & Reath, represents the Committee. When the Debtor filed for protection against its creditors, it listed assets between $1 million to $100 million and debts of more than $1 million. PFP HOLDINGS: Wants to Hire Michael W. Carmel as Conflict Counsel ----------------------------------------------------------------- P.F.P. Holdings Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Arizona to employ Michael W. Carmel Ltd. as conflicts counsel. The Carmel firm will: 1. advise and represent the Debtors in specified and discrete legal matters, including contested matters and adversary proceedings in which Bryan Cave may have a conflict or otherwise is unable to represent the Debtors; and 2. performing such other legal services as may be requested by the Debtor, for reasons of efficiency. The Debtors tell the Court that they will coordinate the involvement of Bryan Cave and the Carmel Firm to avoid undue expense to their estates. Michael W. Carmel, principal of the Michael W. Carmel Ltd. tells the Court that his hourly rate is $425. He adds that the Carmel firm will reimburse the costs and expenses incurred in representing the Debtors. Mr. Carmel relates that his firm received an advance retainer of $30,000 from the Debtors in these Chapter 11 cases. Mr. Carmel assures the Court that his firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Carmel can be reached at: Michael W. Carmel Ltd. 80 East Columbus Avenue Phoenix, AZ 85012-2334 Tel (602) 264-4965 Fax (602) 277-0144 PFP Holdings Inc., is a homebuilder based in Phoenix, Arizona. The company does business under names including Trend Homes and Regency. Papers filed in Court indicate that the Debtor generated $309 million in revenue during 2007 while delivering almost 1,100 homes. PFP and its debtor-affiliates filed for separate Chapter 11 bankruptcy protection on Jan. 31, 2008, (Bankr. D. Ariz. Case No. 08-00899). Robert J. Miller, Esq., at Bryan Cave, L.L.P., represents the Debtor. Upon its bankruptcy filing, it listed $50 million to $100 million in estimated assets and debts. PILGRIM'S PRIDE: Board Names J. Clinton Rivers as President & CEO ----------------------------------------------------------------- The board of directors of Pilgrim's Pride Corporation elected J. Clinton Rivers as president and chief executive officer, effective immediately. Mr. Rivers, 49, previously served as chief operating officer. A special subcommittee of the board had been conducting a search for a new president and CEO following the unexpected death of O.B. Goolsby Jr. last December. "After a thorough review of internal and external candidates, the board unanimously agreed that Clint has the right combination of experience and skills necessary to lead Pilgrim's Pride into the future," Ken Pilgrim, chairman of Pilgrim's Pride and chairman of the subcommittee that conducted the search, said. "Our company and industry are facing unprecedented challenges from soaring feed-ingredient costs and other issues. Throughout his career at Pilgrim's Pride, Clint has played a pivotal role in positioning the company for operational growth, leading the integration of several large acquisitions, establishing key performance benchmarks at our production facilities, and finding new ways to operate more efficiently. Clint loves a challenge, and we are confident that he will provide the leadership necessary to position the company for long-term growth." During his career at Pilgrim's Pride, Mr. Rivers has held a variety of increasingly responsible management positions. He joined the company as quality assurance manager in 1986. He was appointed plant manager of the Mt. Pleasant, Texas, production facility in 1989. Three years later, Mr. Rivers was promoted to vice president of prepared foods operations in 1992, then moved up to senior vice president of prepared foods operations, a post he held until 2002. After that, he was promoted to executive vice president of prepared foods operations. In 2004, he was appointed COO. Mr. Rivers earned a Bachelor of Science degree in animal science from Virginia Tech in Blacksburg, Virginia. "I am proud and honored to lead a company with such a rich history of innovation and service to our customers," Mr. Rivers said. "It's clear that we have a lot of work ahead of us, but I know that our 55,000 employees are ready to deliver on our mission of being a world-class food company." Mr. Pilgrim said no decision has been made at this time about a new COO. Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. Pilgrim's Pride employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. * * * Pilgrim's Pride Corp. holds Moody's Investors Service's B1 senior unsecured credit rating, B2 senior subordinated notes, and Ba3 corporate family ratings. PPC's planned new $250 million senior unsecured notes also bears Moody's B1 rating and its new $200 million senior subordinated notes bears Moody's B2 rating. The outlook on all ratings is stable. Standard & Poor's Ratings Services gave Pilgrim's Pride Corp. a 'BB-' corporate credit rating. PINNACLE POINT: Moody's Downgrades Ratings on Poor Credit Quality ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible downgrade these notes issued by Pinnacle Point Funding II Ltd. Class Description: Up to $1,800,000,000 Principal Component of CP Notes -- Prior Rating: P-1 -- Current Rating: P-1, on review for possible downgrade Class Description: Up to $800,000,000 Class A-1 A-EX Floating Rate Extendible Notes -- Prior Rating: P-1 -- Current Rating: P-1, on review for possible downgrade Class Description: Up to $1,800,000,000 Class A-1B Notes due 2052 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $111,000,000 Class A-2 Floating Rate Notes due 2052 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade In addition, Moody's also downgraded these notes: Class Description: $33,000,000 Class B Floating Rate Notes due 2052 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca Class Description: $12,000,000 Class C-1 Floating Rate Deferrable Notes due 2052 -- Prior Rating: Ca -- Current Rating: C Class Description: $10,000,000 Class C-2 Fixed Rate Deferrable Notes due 2052 -- Prior Rating: Ca -- Current Rating: C Class Description: $17,500,000 Class D Floating Rate Deferrable Notes due 2052 -- Prior Rating: Ca -- Current Rating: C According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. PLASTECH ENGINEERED: Supply Agreement Stretched to March 17 ----------------------------------------------------------- Plastech Engineered Products Inc. and its debtor-affiliates, and Chrysler LLC agreed to extend their supply agreement to March 17 even as Chrysler argues its tooling case before the U.S. Bankruptcy Court for the Eastern District of Michigan, the Associated Press reports. As reported in the Troubled Company Reporter on March 4, 2008, Chrysler LLC, Chrysler Motors Company LLC, and Chrysler Canada Inc., took an appeal under 28 U.S.C. Section 158(a) before the Court from the orders of the Honorable Phillip Shefferly that denies: i) the lifting of the automatic stay to allow Chrysler to regain possession of tooling located in Plastech Engineered Products Inc. and its debtor-affiliates' plants; and ii) issuance of a preliminary injunction in connection with the proposed recovery of tooling equipment. Judge Shefferly said in a court opinion that the Debtors needed to keep the tooling equipment to faciliate them in their reorganization. The balancing of interests favored Plastech, the Court said. The Court affirmed the Debtors' contentions that the automatic stay applies to both the tooling paid by Chrysler and the tooling that Chrysler has not paid for. "Even assuming that the Debtor has only a possessory interest in the tooling paid for by Chrysler, that is a sufficient interest by itself to cause the application of the automatic stay," Judge Shefferly said. In addition, the Court was convinced that if Chrysler takes immediate possession of the tooling, the Debtor will not be able to continue to provide parts uninterrupted to its other major customers and therefore any prospect of an effective reorganization will be lost. 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 Engineered 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. An Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. PRB ENERGY: Plans to Continue Operations Amid Bankruptcy Filing --------------------------------------------------------------- PRB Energy Inc. sought the protection of the U.S. Bankruptcy Court by filing a Chapter 11 petition for reorganization. The company intends to continue to conduct business while it devotes significant efforts to resolve its liquidity problems, recapitalize the company and develop a reorganization plan. PRB Energy also said it received notice from the American Stock Exchange that it does not meet certain continued listing standards, as set forth in section 1003 (a) (iv) of the AMEX Company Guide, which could jeopardize the Company's continued listing pursuant to Section 1009 of the AMEX Guide. The AMEX Guide requires, among other things, that an issuer has not sustained losses which are so substantial in relation to its overall operations or its existing financial resources, or its financial condition has not become so impaired that it appears questionable, in the option of the AMEX, as to whether the Company will be able to continue operation and meet its obligations as they mature. The notice letter asserts that the company must submit a plan to the AMEX by March 14, 2008, advising the AMEX of the action that it has taken, or that it will take, to bring the company into compliance with all the continued listing standards of the AMEX Guide by May 28, 2008. Settle Default Disputes with Senior Lenders As reported in the Troubled Company Reporter on March 4, 2008, PRB Energy was working with senior lenders that hold the company's $15 million Senior Secured Debentures due Aug. 31, 2008. The Debtor intended to satisfy its future obligation and to settle a dispute of whether any default has occurred and whether a redemption has occurred, as asserted by the senior lenders. The company, however, does not believe that a default under the Debentures has occurred. Given its negative working capital position and the senior lenders' assertion that it is in default, the company is exploring all of the strategic alternatives available to it under applicable law, including filing for bankruptcy protection. Lenders Notice of Default The TCR said on Feb. 29, 2008, that the company received written notice from DKR Soundshore Oasis Holding Fund Ltd. and West Coast Opportunity Fund LLC, the holders of the company's $15 million Senior Secured Debentures due Aug. 31, 2008. The notice claimed that the company defaulted by failing to honor its obligations under a letter agreement dated June 15, 2007, with the senior lenders relating to the proceeds from the company's settlement agreement with Rocky Mountain Gas. The notice also claimed that the company failed to take all actions necessary to maintain title to certain of the collateral securing its obligations under the Debentures. The notice also notified the company that as a remedy for the alleged defaults, an automatic redemption by the company of the Debentures has occurred. About PRB Energy Headquartered in Denver, PRB Energy, Inc., formerly PRB Gas Transportation Inc., -- http://www.prbenergy.com/-- operate as independent energy companies engaged in the acquisition, exploitation, development and production of natural gas and oil. In addition, they provide gas gathering, processing and compression services for properties it operates and for third- party producers. They conduct business activities in Wyoming, Colorado and Nebraska. The Debtor filed for chapter 11 protection on March 5, 2008 (Bankr. D. Co. Case No. 08-12658) together with two affiliates, PRB Oil & Gas Inc. (Case No. 08-12661) and PRB Gathering Inc. (08- 12663). James T. Markus, Esq., at Block, Markus & Williams LLC represents the Debtors in their restructuring efforts. The Debtors listed assets between $50 million and $100 million and liabilities between $10 million and $50 million. It owes at least $1 million each to four unsecured creditors. * * * As reported in the Troubled Company Reporter on Jan. 9, 2008, After reporting a positive working capital of $13.71 million at Dec. 31, 2006, PRB Energy, Inc. recorded a $35.39 million working capital deficit at Sept. 30, 2007. PRB ENERGY: Case Summary & 63 Largest Unsecured Creditors --------------------------------------------------------- Lead Debtor: PRB Energy, Inc. fka PRB Gas Transportation, Inc. 1875 Lawrence Street, Suite 450 Denver, CO 80202 Bankruptcy Case No.: 08-12658 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- PRB Oil & Gas, Inc. 08-12661 PRB Gathering, Inc. 08-12663 Type of Business: Formerly PRB Gas Transportation, Inc., the Debtors operate as independent energy companies engaged in the acquisition, exploitation, development and production of natural gas and oil. In addition, they provide gas gathering, processing and compression services for properties it operates and for third-party producers. They conduct business activities in Wyoming, Colorado and Nebraska. See http://www.prbenergy.com Chapter 11 Petition Date: March 5, 2008 Court: District of Colorado (Denver) Judge: A. Bruce Campbell Debtors' Counsel: James T. Markus, Esq. (jmarkus@bmwllc.com) Block, Markus & Williams, LLC 1700 Lincoln Street, Suite 4000 Denver, CO 80203 Tel: (303) 830-0800 Fax: (303) 830-0809 http://www.bmwllc.com PRB Energy, Inc's Financial Condition: Estimated Assets: $50 million to $100 million Estimated Debts: $10 million to $50 million A. PRB Energy, Inc's 25 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ BNY Mellon $1,750,000 Attention: US Fixed In P.O. Box 3195 Pittsburgh, PA 15230-3195 Gus Blass II $1,000,000 16 West Palisade Drive Little Rock, AR 72207 John P. McGrain $1,000,000 4 Richland Place Pasadena, CA 91103 David L. Jordan $1,000,000 40 Cushman Road Scarsdale, NY 10583 Gus Blass II IRA $700,000 111 Center Street Little Rock, A 72201 Treeline Investmest Partner LP $600,000 40 Wall Street, 58th Floor New York, NY 1005 Glickenhaus & Co. $500,000 546 Fifth Avenue New York, NY 10036 G.E. Manolovici & Nancy G. Man $500,000 1060 5th Avenue, Apartment 9A New York, NY 10128 P.A.W. Long Term Partners L.P. $500,000 4 Greenwich Office Park Third Floor Greenwich, CT 6831 R. Worthington TTEE $500,000 777 Third Avenue 17th Floor New York, NY 10017 Gus Blass III MPPP $500,000 111 Center Street Little Rock, AR 72201 Capital Properties, LLC $500,000 212 Center Street Suite 800 Little Rock, AR 72201 Bay Manor Farms LP $500,000 456 Stratfield Road Fairfield CT 6825 City of Milford Pension & Reti $451,000 157 Church Street New Haven, CT 06510 Kuekenhof Equity Fund $420,000 22 Chuch Street, Suite 5 Ramsey, NJ 7446 Disosway, Inc. $300,000 942 Old Liverpool Road Liverpool, NY 13088 The Hwang Community Property $300,000 35 Smithcliffs Road Laguna Beach, CA 92651 Constance Bliss (the O'Neill) $300,000 16 West Palisade Drive Little Rock, AR 72207 Barry J. Goldstein $255,000 950 South Cherry Street, No. 320 Denver, CO 80246 Douglas M. Polinksy $250,000 130 Lake Street West, No. 300 Wayzata, MN 55391 Vincent Manngard & Eric $250,000 Manngard 196 East Main Street Huntington, NY 11743 RL Capital Partner L.P. $250,000 405 Lexington Avenue Second Floor New York, NY 10174 Jandon Foundation $250,000 3 Stratford Road Harrison, NY 10528 Rachel Glicksman $250,000 Attention: CEOcast 369 Lexington, Fourth Floor New York, NY 10017 Richard M. Dearnly $250,000 9 West Palisades Drive Little Rock, AR 72207 B. PRB Oil & Gas, Inc's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Shores Oilfield Equipment, $319,181 Inc. 11 East 1st Street Edmond, OK 73034 Powder River Energy Corp. $74,836 P.O. Box 930 Sundance, WY 82729-0930 J-W Excell Services, Inc. $69,890 Lockbox 970490 Dallas, TX 75397-0490 The Termo Co. $62,361 CalFrac $56,572 National Oilwell Varco, L.P. $36,921 Williams Electric & Instrument $36,771 J.W. Williams $27,276 Tru-Tech Products, L.L.C. $25,389 Great Plains Surveying, Inc. $13,950 Quantum Energy $12,865 Pacer Energy, LLC $11,026 C&L Well Service of Gillette $10,639 Kennedy Oil $10,257 GAP Enterprises, Inc. $10,252 M&S Oil Well Cementing Co. $8,420 Pump Sales & Service $7,847 Contractors Supply, Inc. $6,994 Central Hydraulic Pump Systems $6,590 Champion Technologies $6,427 C. PRB Gathering, Inc's 18 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Pearl Field Services Co. $1,020,371 P.O. Box 783 Sheridan, WY 82716 J-W Power Operating Co. $379,437 P.O. Box 970490 Dallas, WY 82801 Exterran $124,297 P.O. Box 972641 Dallas, WY 82201 Baker Energy $96,482 Cordilleran Compliance Service $5,103 Aspen Consulting & Testing $4,828 Universal Compression, Inc. $3,279 Toolpushers Supply Co. $2,905 Line Finders, Inc. $1,867 Powder River Energy Corp. $950 Citation Oil and Gas Corp. $773 Williams Electric & Instrument $759 Kissack Water and Oil Service $712 Ryan Equipment Co., LLC $650 Midnight Oil Field Services $400 One-Call of Wyoming $216 USA Parts & Service $75 McJunkin Appalachian Supply $51 QUAKER FABRIC: Can File Chapter 11 Plan Until March 19 Says Court ----------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware further extended Quaker Fabric Corp. and its debtor-affiliates' exclusive period to file a Chapter 11 plan until March 19, 2008, according to Bloomberg News. Bloomberg said that the Court also extended the Debtors' exclusive rights to solicit acceptances of that plan until May 18, 2008. As reported in the Troubled Company Reporter on Dec. 17, 2007, the Debtors devoted substantial time and resources in effectuating the sale of their assets which resulted in the sale of the their Bleachery Pond and the Tupelo Lee Industrial Park properties to separate buyers in September 2007. The Debtors added that their cases are large and complex and they need more time to focus on the formulation, filing and solicitation of a plan of liquidation that will be accepted by their creditors and approved by the Court. The Debtors also told the Court that they have made progress in the collection of their receivables and are not seeking an extension to pressure creditors. About Quaker Fabric Based in Fall River, Mass., Quaker Fabric Corp. (NASDAQ: QFAB) -- http://www.quakerfabric.com/-- designs, manufactures, and markets woven upholstery fabrics primarily for residential furniture manufacturers and jobbers. It also develops and manufactures specialty yarns, including chenille, taslan, and spun products for use in the production of its fabrics, as well as for sale to distributors of craft yarns, and manufacturers of homefurnishings and other products. The company is one of the largest producers of Jacquard upholstery fabrics. Quaker Fabric sells its products through sales representatives andindependent commissioned sales agents in the United States, Canada, Mexico, and internationally. The company and its affiliate, Quaker Fabric Corporation of Fall River, filed for chapter 11 protection on Aug. 16, 2007 (Bankr. D. Del. Case No. 07-11146). John D. Sigel, Esq. at Wilmer Cutler Pickering Hale and Dorr LLP and Joel A. Waite, Esq. at Young Conaway Stargatt & Taylor LLP are co-counsels to the Debtors. Epiq Bankruptcy Solutions is the Debtors' claims agent. The Official Committee of Unsecured Creditors has selected Shumaker, Loop & Kendrick, LLP, as its bankruptcy counsel and Benesch, Friedlander, Coplan & Aronoff, LLP, as co-counsel. The Debtors' schedules reflect total assets of $41,375,191 and total liabilities of $54,435,354. QUEBECOR WORLD: Cuts 30 Positions at Merced, California Facility ---------------------------------------------------------------- Scott Jason of Merced Sun-Star reported that Quebecor World Inc. laid off about 30 employees from its Merced plant in California during the past two months. According to the report, Quebecor World made the cutbacks in Merced because less work was scheduled for the coming months. "Hopefully, the volume will come back," Mr. Jason quoted Tony Ross, vice president of communications, as saying. "If it comes back, we'll be able to afford more people to the work force," Mr. Ross told Merced Sun-Star. Mr. Ross said that the company doesn't anticipate laying off any other workers at the Merced plant, which now employs about 850 people, the report added. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. In Canada it has 17 facilities in five provinces, through which it offers a mix of printed products and related value-added services to the Canadian market and internationally. The company is an independent commercial printer in Europe with 19 facilities, operating in Austria, Belgium, Finland, France, Spain, Sweden, Switzerland and the United Kingdom. In March 2007, it sold its facility in Lille, France. Quebecor World (USA) Inc. is its wholly owned subsidiary. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of $5,554,900,000, total liabilities of $3,964,800,000, preferred shares of $175,900,000, and total shareholders' equity of $1,414,200,000. The company has until May 20, 2008, to file a plan of reorganization in the Chapter 11 case. The Debtors' CCAA stay has been extended to May 12, 2008. (Quebecor World Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 13, 2008, Moody's Investors Service assigned a Ba2 rating to the $400 million super priority senior secured revolving term loan facility of Quebecor World Inc. as a Debtor-in-Possession. The related $600 million super priority senior secured term loan was rated Ba3 (together, the DIP facilities). The RTL's better asset value coverage relative to the TL accounts for the ratings' differential. QUEBECOR WORLD: Seeks OK to Pay Non-Worker Sales Commissions ------------------------------------------------------------ Quebecor World Inc. and its debtor-affiliates' sales and marketing efforts are done through both employees and third-party brokers. The Debtors previously sought and obtained U.S. Bankruptcy Court for the Southern District of New York's approval to pay sales commissions that accrued prepetition to one group of sales employees who were otherwise scheduled to receive their commissions on Feb. 1, 2008. The Debtors now seek the Court's permission to pay commissions that accrued prepetition to non-employee sales brokers. Michael Canning, Esq., at Arnold & Porter LLP, in New York, relates that these third-party brokers are utilized in certain segments of the Debtors' businesses, and it is crucial to the Debtors' sales and marketing effort that the Debtors maintain a strong and loyal team of sales brokers. The Debtors have determined that there approximately 36 brokers who are or will likely be due commissions based on prepetition activities. The total amount expected to be owing for these commissions is $705,775. There could be some variation in the final total based on payments from customers, but it is not anticipated that the final total will be materially higher than this amount, Mr. Canning says. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. In Canada it has 17 facilities in five provinces, through which it offers a mix of printed products and related value-added services to the Canadian market and internationally. The company is an independent commercial printer in Europe with 19 facilities, operating in Austria, Belgium, Finland, France, Spain, Sweden, Switzerland and the United Kingdom. In March 2007, it sold its facility in Lille, France. Quebecor World (USA) Inc. is its wholly owned subsidiary. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of $5,554,900,000, total liabilities of $3,964,800,000, preferred shares of $175,900,000, and total shareholders' equity of $1,414,200,000. The company has until May 20, 2008, to file a plan of reorganization in the Chapter 11 case. The Debtors' CCAA stay has been extended to May 12, 2008. (Quebecor World Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 13, 2008, Moody's Investors Service assigned a Ba2 rating to the $400 million super priority senior secured revolving term loan facility of Quebecor World Inc. as a Debtor-in-Possession. The related $600 million super priority senior secured term loan was rated Ba3 (together, the DIP facilities). The RTL's better asset value coverage relative to the TL accounts for the ratings' differential. QUEBECOR WORLD: NFR Wants Stay Lifted and Base Contract Terminated ------------------------------------------------------------------ National Fuel Resources and Quebecor World Buffalo Inc., debtor- affiliate of Quebecor World Inc., are parties to a base contract for the purchase of natural gas and a transaction confirmation, each dated June 14, 2007. Pursuant to the NFR Contract, NFR provides natural gas to Quebecor World Buffalo Inc. Quebecor World Buffalo Inc. currently owes NFR $277,163 for unpaid natural gas provided before the bankruptcy filing. This amount constitutes invoices due and owing for gas provided by NFR to Quebecor World Buffalo Inc. for December 2007 and the portion of January 2008. Under the NFR Contract, NFR may terminate the contract upon 30 days' written notice and could demand a prepayment in the event that Quebecor World Buffalo Inc. files a petition for bankruptcy relief. NFR was included in the list of utilities filed by the Debtors in their chapter 11 cases. Before the entry of the Utility Order, NFR and the Debtors agreed that NFR will not be subject to the order and that each party will reserve its rights with respect to the question of whether NFR was a utility as defined under the Bankruptcy Code, and agreed to discuss an adequate protection framework to protect NFR. National Fuel Resources asks the U.S, Bankruptcy Court for the Southern District of New York to: (1) lift the automatic stay to exercise its contractual right to terminate the NFR Contract; (2) grant it adequate protection to protect its interest in the NFR Contract until it is assumed or rejected by the Debtors; (3) compel the Debtors to assume or reject the NFR Contract; and (4) grant it adequate assurance of future payment, if the Court determines NFR as a utility under Section 366 of the Bankruptcy Code. Allan Hill, Esq., at Phillips Lytle LLP, in New York, states that NFR is entitled to relief from stay because the Debtors have little to no equity in the NFR Contract and the NFR Contract is not necessary to the Debtors' reorganization since it will not leave the Debtors without access to natural gas. Mr. Hill says that NFR is entitled to adequate performance of payment. Pursuant to Sections 361 and 363 of the Bankruptcy Code, the Debtors can be compelled to make cash payments to NFR if the automatic stay results in a diminution of value of NFR's property. The Bankruptcy Code also provides that NFR be entitled to other relief as will result in NFR's realization of the equivalent of its interest in the NFR Contract. Similarly, Sections 365 and 366 of the Bankruptcy Code provide for a debtor to provide adequate protection or adequate assurance of future payment to non-debtor parties to executory contracts and to utility providers, Mr. Hill adds. As adequate protection of NFR's interests in the NFR Contract, unless and until the Contract is either assumed or rejected by the Debtors, Mr. Hill asserts that: (a) NFR should be allowed to bill the Debtors twice a month: (b) the Debtors should be required to make due payments by wire transfer within nine business days of the receipt of any valid invoice under the NFR Contract; and (c) the Debtors should be required to provide NFR with a security deposit or letter of credit that adequately covers NFR's financial exposure under the NFR Contract. In addition, if the Debtors fail to timely make a payment, NFR should be allowed to terminate the NFR Contract without further Court order. Mr. Hill believes that the Debtors would not suffer significant harm if the Court compelled them to decide whether to assume or reject the NFR Contract. Accordingly, NFR asks the Court to enter an Order fixing a date no later than 20 days after its request is approved as the deadline by which the Debtors must file any necessary pleadings seeking to assume or reject the NFR Contract, provided that NFR may, in its sole discretion and without further approval or notice to the Court, agree to grant the Debtors additional time to file those pleadings. Mr. Hill says that if the Court determines that NFR is a utility, then under Section 366 of the Bankruptcy Code, NFR seeks adequate assurance of future payment in a form of a letter of credit totaling $300,000 covering two months usage of gas supplies, and modification of billing and payment procedures to reduce the length of time that NFR is financially exposed on account of natural gas supplies that NFR has supplied to the Debtors. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. In Canada it has 17 facilities in five provinces, through which it offers a mix of printed products and related value-added services to the Canadian market and internationally. The company is an independent commercial printer in Europe with 19 facilities, operating in Austria, Belgium, Finland, France, Spain, Sweden, Switzerland and the United Kingdom. In March 2007, it sold its facility in Lille, France. Quebecor World (USA) Inc. is its wholly owned subsidiary. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of $5,554,900,000, total liabilities of $3,964,800,000, preferred shares of $175,900,000, and total shareholders' equity of $1,414,200,000. The company has until May 20, 2008, to file a plan of reorganization in the Chapter 11 case. The Debtors' CCAA stay has been extended to May 12, 2008. (Quebecor World Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 13, 2008, Moody's Investors Service assigned a Ba2 rating to the $400 million super priority senior secured revolving term loan facility of Quebecor World Inc. as a Debtor-in-Possession. The related $600 million super priority senior secured term loan was rated Ba3 (together, the DIP facilities). The RTL's better asset value coverage relative to the TL accounts for the ratings' differential. R&B CONSTRUCTION: May Employ Chamberlain Hrdlicka as Attorneys -------------------------------------------------------------- The United States Bankruptcy Court for the Northern District of Georgia granted authority to R&B Construction Inc. and debtor- affiliate Joy Built Homes Inc., to employ James L. Paul and Chamberlain, Hrdlicka, White, Williams & Martin as their attorneys. As the Debtors' bankruptcy attorneys, Chamberlain Hrdlicka will: a) advise the Debtors with respect to their powers and duties as Debtors-in-Possession in the continued operations of their business and management of their property; b) represent the Debtors in disputes with creditors; c) prepare of behalf of the Debtors necessary applications, answers, orders, reports and other legal papers, necessary to proceed in this reorganization case; d) represent the Debtors in any claims held by the Debtors against third parties; e) advise the Debtors regarding negotiations with creditors and participation in negotiations with creditors; f) advise the Debtors in connection with formulation of a reorganization plan; g) represent the Debtors in connection with negotiation and documentation of any sale of assets; and h) perform all other services necessary for the proper representation of the Debtors. James L. Paul, Esq., a shareholder of Chamberlain Hrdlicka, assured the Court that the firm does not hold or represent any interest adverse to the Debtors or their estates. As compensation for their services, the firm's professionals bill: Designation Hourly Rate ----------- ----------- Attorneys $265-$400 Paralegals $100-$160 On Feb. 1, 2008, R&B Construction paid $150,000 of the $300,000 creditor consultation and negotiation retainer required under the engagement letter via a wire transfer to Hrdlicka's Trust Account. The payment was advanced by Brenda Short, the mother of Brandon Robertson, vice president of R&B Construction. A total amount of $20,542 in fees and $2,078 in expenses incurred through Feb. 4, 2008, has been posted against the funds held in trust, as of bankrupty filing. On Feb. 4, 2008, R&B paid an additional $150,000 to pay in full the requisite pre-petition retainer of $300,000 through a wire transfer into Chamberlain Hrdlicka's Trust Account. The funds were advanced by Marissa Robertson, the wife of Brandon Robertson, vice president of R&B Construction. The remaining $277,380 retainer balance is to be held in escrow duing the pendency of this Chapter 11 proceeding and only to be drawn down after appropriate motion practice and court ordered approval. Mr. Paul can be reached at: James L. Paul, Esq. Chamberlain, Hrdlicka, White, Williams & Martin 191 Peachtree Street N.E., 34th Floor Atlanta, GA 30303 Tel: (404) 659-1410 Fax: (404) 659-1852 About R&F Construction Based in Jonesboro, Georgia, R&B Construction Inc. is a homebuilder in Metro Atlanta, Alabama, and North West Florida. The Debtor and a debtor-affiliate, Joy Built Homes Inc., filed for chapter 11 protection on Feb. 4, 2008 (Bankr. N.D. Ga. Lead Case No. 08-62023). James L. Paul, Esq., at Chamberlain, Hrdlicka, White, Williams & Martin, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million. REGAL ENTERTAINMENT: Fitch Assigns 'B-/RR6' Rating on $190MM Notes ------------------------------------------------------------------ Fitch Ratings has assigned a 'B-/RR6' to the Regal Entertainment Group $190 million 6.25%, per annum, convertible senior notes due 2011. RGC expects to grant the initial purchasers an option to purchase an additional $20 million in principal amount of notes for a total potential $210 million aggregate principal amount. Proceeds from this issuance are expected to be used to repurchase or repay its 3.75% convertible senior notes due 2008, general corporate purposes and cost associated with the offerings hedge and warrant transactions. Fitch currently rated RGC and its subsidiaries as: RGC -- Issuer Default Rating 'B+'; -- Senior unsecured convertible notes 'B-/RR6'. Regal Cinemas: -- IDR 'B+'; -- Senior secured facility 'BB/RR2'; -- Senior subordinated notes 'B/RR5'. The ratings continue to reflect RGC's size and position as a leading theater exhibitor, solid geographic diversity, sound operating performance, and relatively stable free cash flow generation. These strengths are balanced by the intermediate term risks associated with collapsing film distribution windows, increased competition from at-home entertainment media, heavy reliance upon a limited number of film distribution companies, limited control over revenue trends, high operating leverage which could make theater operators free cash flow-negative in a downturn, and a history of aggressive dividend payouts. REGAL ENTERTAINMENT: Prices $190 Mil. Offering of Senior Notes -------------------------------------------------------------- Regal Entertainment Group priced its offering of $190 million aggregate principal amount of convertible senior notes due 2011 to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The notes will bear interest at a rate of 6.25% per annum, will initially be convertible into Regal's Class A common stock at a conversion price of $23.03 per share and will rank on parity with all of our other existing and future senior indebtedness. The initial conversion price represents an 18% premium over the last reported sale price of Regal's Class A common stock on March 4, 2008, which was $19.52 per share. On or after Dec. 15, 2010, the notes are convertible at any time before the maturity date. The notes are convertible prior to Dec. 15, 2010, only if: (1) during any calendar quarter after June 30, 2008, if the last reported sale price of Regal's Class A common stock for at least 20 trading days in a period of 30 consecutive trading days ending on the last trading day of the preceding calendar quarter is more than 130% of the conversion price; (2) during the five consecutive business-day period following any ten consecutive trading-day period in which the trading price per $1,000 principal amount of notes was less than 95% of the product of the last reported sale price per share of Class A common stock and the conversion rate for each day of the ten trading-day measurement period; or (3) during specified periods if specified distributions to holders of our common stock are made or specified corporate transactions occur. Regal has also granted the initial purchasers of the notes a 13-day option to purchase up to an additional $20 million principal amount of the notes. The sale of the notes is expected to close on March 10, 2008. Regal estimates that the net proceeds from this offering will be approximately $184.2 million after deducting estimated discounts and expenses. Regal intends to use approximately $6.3 million of the net proceeds of the offering to pay the net cost of convertible note hedge and warrant transactions. Regal intends to use the remaining net proceeds from the offering for general corporate purposes, which Regal expects will include the repurchase of all or a portion of its outstanding 3-3/4% Convertible Senior Notes due 2008 or the repayment of the principal amount of those notes at maturity. Regal may acquire the 3-3/4% Notes through open market purchases, privately negotiated transactions or conversions. In connection with the offering, Regal intends to enter into a convertible note hedge transaction with an affiliate of one of the initial purchasers. Regal also intends to sell warrants to the option counterparty. The convertible note hedge transaction is intended to reduce potential dilution with respect to Regal's Class A common stock upon conversion of the notes. However, the warrant transaction could have a dilutive effect on Regal's earnings per share to the extent that the price of its Class A common stock exceeds the strike price of the warrants. The warrant transaction will be accounted for as an adjustment to shareholders' equity. Regal expects that holders of its 3-3/4% Notes from whom Regal may repurchase such notes, which holders may include one or more of the initial purchasers, may have outstanding short hedge positions in Regal's Class A common stock relating to the 3-3/4% Notes. Upon repurchase, Regal expects that such holders will unwind or offset those hedge positions by purchasing Class A common stock in secondary market transactions, including purchases in the open market, and/or entering into various derivative transactions with respect to the Class A common stock at the time of the pricing of the notes offered in the private placement. These activities could have the effect of increasing, or preventing a decline in, the price of the Class A common stock concurrently with or shortly after the pricing of the notes in the private placement offering. About Regal Entertainment Headquartered in Knoxville, Tennessee, Regal Entertainment Group (NYSE: RGC) -- http://www.regalcinemas.com/-- is a motion picture exhibitor. The company's theatre circuit, comprising Regal Cinemas, United Artists theatres and Edwards theatres, operates 6,355 screens in 526 locations in 39 states and the District of Columbia. Regal operates theatres in all of the top 25 and 43 of the top 50 U.S. designated market areas. * * * As reported in the Troubled Company Reporter on Jan. 24, 2008, Regal Entertainment Group's consolidated balance sheet at Sept. 27, 2007, showed $2.59 billion in total assets and $2.68 billion in total liabilities, resulting in a $93.1 million total stockholders' deficit. * * * As reported in the Troubled Company Reporter on Jan. 22, 2008, Standard & Poor's Rating Services said that Regal Entertainment Group's (BB-/Negative/--) statement that it has reached an agreement to acquire Consolidated Theatres LLC for $210 million does not affect the ratings or outlook on the company. RJ GROOVER: Case Summary & 13 Largest Unsecured Creditors --------------------------------------------------------- Lead Debtor: R.J. Groover Construction, LLC 8 Sundew Road Savannah, GA 31411-2955 Bankruptcy Case No.: 08-40386 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Robert J. Groover, Jr. & Tina A. Groover 08-40391 Chapter 11 Petition Date: March 3, 2008 Court: Southern District of Georgia (Savannah) Debtors' Counsel: Richard C. E. Jennings, Esq. Law Offices Of Skip Jennings, PC 115 W Oglethorpe Avenue Savannah, GA 31401 Tel: (912) 234-6872 Fax: (912) 236-7549 skipjenningspc@comcast.net --and-- James L. Drake, Jr., Esq. James L. Drake, Jr., P.C. P.O. Box 9945 Savannah, GA 31412 Tel: (912) 790-1533 jdrake7@bellsouth.net R.J. Groover Construction, LLC's financial condition: Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A. R.J. Groover Construction, LLC's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ First National Bank 312 East Hall $200,000 101 West Mulberry Road Street Savannah, Suite 100 GA 31401 Pooler, GA 31322 Home Depot Credit Services Credit Card $12,430 P.O. Box 9122 Des Moines, IA 50368-9122 Chase Credit Card $5,000 Cardmember Services P.O. Box 15123 Wilmington, DE 19850-5123 Gaster Lumber Account $4,000 Southern Pavers Account $2,000 Counterfitters Account $1,500 Lowes Credit Card $1,144 Guerry Lumber Account $1,000 J. Whitley Reynolds Land Surveyor $400 services Total Merchant Services Credit Card $57 Chatham County Tax Property Taxes Unknown Georgia Department of Revenue Corporate income Unknown taxes Internal Revenue Service Corporate income Unknown taxes B. Robert J. Groover's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Investers Lending Group Loan $1,000,000 7370 Hodgson Memorial Drive E-2 Savannah, GA 31406 Atlantic Southern Bank Bank Loan $525,000 P.O. Box 16029 Savannah, GA 31416 Colony Bank Bank Loan $320,000 625 West Wood Street Douglas, GA 31533 Chase Visa Credit Card $40,000 Bank of America Credit Card $25,000 Capital One Mastercard Credit Card $5,000 Capital One Visa Credit Card $5,000 Old Navy Open Account $500 Target Open Account $500 Linens and Things Open Account $500 Macy's Open Account $500 Ann Taylor Loft Open Account $500 Dress Barn Open Account $500 R SCOTT FORD: Case Summary & 15 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: R. Scott Ford 206 John Brown Road Lake Placid, New York 12946 Bankruptcy Case No.: 08-10574-1 Chapter 11 Petition Date: February 29, 2008 Court: Northern District of New York (Albany) Debtor's Counsel: Justin A. Heller, Esq. Nolan & Heller, LLP 39 North Pearl Street Albany, NY 12207 Tel: (518) 449-3300 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Richard L. Ford Personal loans $80,582 6 Colony Drive Blauvelt, New York 10913 Town of North Elba, Real Property Taxes on $32,278 Tax Collector 206 John Brown Road, 301 Main Street Lake Placid, New York Lake Placid, New York 12946 NBT Bank Note $20,000 P.O. Box 351 Norwich, New York 13815 Chubb Insurance Insurance on properties $12,182 Located at 34 and 206 John Brown Road, Lake Placid, New York AT&T Universal Card Credit card $9,480 Big D Fuel Oil Fuel delivery $6,470 Internal Revenue Service $5,000 Walsh Duffield Co's, Inc. Car insurance $4,342 Chesner and Vogel, DDS, Dental services $2,750 PLL LaVigna Brothers Garage Vehicle work $2,729 Wilkins & Griffin, PLLC Attorney legal fees $2,102 Steve W. Harstedt, CPA Accountant Services $1,840 New York State $1,000 Dept. of Tax & Finance Adirondack Marine, Inc. $911 Commercial Water and $223 Energy Co. Rolls Royce & Bentley Vehicle work Unknown SAN PERMIS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: San Permis Partners LLC 2717 Aviation Way Santa Maria, CA 93455 Bankruptcy Case No.: 08-10418 Chapter 11 Petition Date: February 29, 2008 Court: Central District Of California (Santa Barbara) Debtor's Counsel: Melanie C Scott, Esq. Robinson Diamant & Wolkowitz 1888 Century Park East Suite 1500 Los Angeles, CA 90067 Tel: (310) 277-7400 Fax: (310) 277-7584 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Thomas Brown Trade debt $26,000 1418 Ceder Street Calistoga, CA 94515 Oeneo Closures USA Trade debt $15,226 902 Enetrprise Way, Suite M Napa, CA 94558 Saury USA Trade debt $9,968 P.O. Box 672 Rutherford, CA 94573 Metropolis Labels Trade debt $9,170 Louis Latour Inc. Trade debt $7,800 Matthew Hathaway Trade debt $7,000 Caliber Wine Pak Trade debt $6,740 P. Woran Deckard, CPA Trade debt $6,265 Gamba USA Trade debt $5,466 American Express Trade debt $5,000 Vinquiry Inc. Trade debt $4,714 First Equity Credit Card Trade debt $4,202 Dan Thoner Trade debt $4,000 Michael Dusi Truxking Trade debt $2,460 Jed Benedict Trade debt $2,124 Lee Menifee Trade debt $1,836 Aeris-Central Coast Gases Trade debt $1,572 Ann Filer Trade debt $1,500 Jan Sloman Trade debt $1,048 Arrowhead Water Trade debt $1,016 SCOTTISH RE: May Sell Life Reinsurance & Wealth Management Units ---------------------------------------------------------------- Scottish Re Group Ltd. told The Royal Gazette that it may sell its international life reinsurance and wealth management units. According to The Gazette, Scottish Re wants to cut costs after suffering mortgage-related losses and a credit rating downgrade. Scottish Re told The Gazette that it is losing money from investments tied to subprime and "Alt-A" residential mortgages. A Jan. 31 downgrade by Standard & Poor's will also make it harder for the company to compete and to expand its core life reinsurance business, The Gazette says, citing Scottish Re. Scottish Re told The Gazette that it will continue concentrating on its North American life reinsurance business, "through strategic alliances or other means and cut costs to preserve capital and liquidity." Scottish Re said it set up a financial incentive program to keep "essential" employees, The Gazette adds. Scottish Re Group Ltd. -- http://www.scottishre.com/-- is a global life reinsurance specialist. Scottish Re has operating businesses in Bermuda, Grand Cayman, Guernsey, Ireland, the United Kingdom, United States, and Singapore. Its flagship operating subsidiaries include Scottish Annuity & Life Insurance Company (Cayman) Ltd. and Scottish Re (US), Inc. Scottish Re Capital Markets, Inc., a member of Scottish Re Group Ltd., is a registered broker dealer that specializes in securitization of life insurance assets and liabilities. * * * As reported in the Troubled Company Reporter on Feb. 4, 2008, Standard & Poor's Ratings Services lowered its counterparty credit rating on Scottish Re Group Ltd. to 'B' from 'B+'. At the same time, it lowered its counterparty credit and financial strength ratings on Scottish Re's operating companies to 'BB' from 'BB+' and also lowered the ratings on all these companies' dependent unwrapped securitized deals by one notch. In addition, S&P placed the ratings on all these companies on CreditWatch with negative implications. As reported in the Troubled Company Reporter on Feb. 19, 2008, Moody's Investors Service placed Scottish Re Group Limited's Senior unsecured shelf of (P)Ba3; subordinate shelf of (P)B1; junior subordinate shelf of (P)B1; preferred stock of B2; and preferred stock shelf of (P)B2 ratings on review for downgrade. SECURITY CAPITAL: Files Notice of Late Filing With SEC on Form 10K ------------------------------------------------------------------ Security Capital Assurance filed a notification of late filing on Form 12b-25 on Feb. 29, 2008 with the Securities and Exchange Commission with respect to its annual report on form 10-K for the fiscal year ended Dec. 31, 2007. SCA expects to file its 2007 form 10-K by March 17, 2008 and expects to host an earnings conference call shortly after the form 10-K filing. The company continues to work with its financial advisor, Goldman Sachs & Co., and has also engaged Rothschild Inc. to assist with the comprehensive review of all strategic options available to the company. About Security Capital Assurance Security Capital Assurance Ltd. (NYSE: SCA) -- http://www.scafg.com/-- is a holding company whose operating subsidiaries provide credit enhancement and protection products to the public finance and structured finance markets throughout the United States and internationally. The company provides credit enhancement and protection through the issuance of financial guarantee insurance policies and credit default swaps, as well as the reinsurance of financial guarantee insurance and credit default products written by other insurers. The company operates in two segments: financial guarantee insurance and financial guarantee reinsurance. The company's subsidiaries include XL Capital Assurance Inc., which is an insurance company domiciled in the State of New York, and XL Financial Assurance Ltd., which is primarily engaged in the business of proving reinsurance of financial guarantee insurance policies and credit default swaps. SECURITY CAPITAL: 10-K Filing Delay Cues Moody's to Review Ratings ------------------------------------------------------------------ Moody's Investors Service placed the A3 insurance financial strength ratings of the operating subsidiaries of Security Capital Assurance Ltd, including XL Capital Assurance Inc., XL Capital Assurance (U.K.) Limited and XL Financial Assurance Ltd. on review for possible downgrade. Moody's is also reviewing for possible downgrade the debt ratings of the holding company, Security Capital Assurance Ltd. (senior debt at (P)Baa3), and a related financing trust. This rating action was prompted by SCA's recent SEC filing which stated that the company was delaying the filing of its 2007 Form 10-K and that the company's independent auditor is evaluating the need to include a going concern explanatory paragraph in its audit opinion with respect to SCA's audited financial statements for the year ended Dec. 31, 2007. Impact on Ratings of Insured Obligations As a result of this review for possible downgrade, the Moody's- rated securities that are guaranteed or "wrapped" by XLCA, XLCA-UK and XLFA are also placed on review for possible downgrade, except those securities with public underlying ratings of A3 or higher. Moody's stated that a going concern explanatory paragraph indicates that the auditor concludes that there is substantial doubt regarding the entity's ability to continue as a going concern for a reasonable period of time without substantial disposition of assets outside the ordinary course of business, restructuring of debts, externally forced revisions of its operations, or similar actions. Moody's notes that SCA's disclosure suggests that it has not yet been determined whether a going concern paragraph will be included in the auditor's opinion letter, nor does it indicate what the rationale for a going concern paragraph would be. Nonetheless, the fact that the need for such a paragraph is being evaluated by SCA's auditor is further indication of disruption in the company's operating profile. The company also noted in its filing that it expects to incur approximately $1.5 billion of net mark-to-market losses on its credit derivative portfolio, including approximately $645 million in net credit impairment charges, as well as $44 million in net losses arising from its direct RMBS exposures, primarily from transactions backed by second lien mortgage collateral. Moody's stated that the magnitude of credit impairments announced by SCA falls within the range of losses previously considered by Moody's in its rating action of Feb. 7, 2008, when the insurance financial strength rating was downgraded from Aaa to A3. According to Moody's, the ratings review will focus on developments related to the potential issuance of a going concern explanatory paragraph by SCA's auditor, as well as additional details related to SCA's capital plans and strategic direction. List of Rating Actions These ratings have been placed on review for possible downgrade: -- XL Capital Assurance Inc.: insurance financial strength at A3; -- XL Capital Assurance (U.K.) Limited: insurance financial strength at A3; -- XL Financial Assurance Ltd: insurance financial strength at A3; -- Security Capital Assurance Ltd: provisional rating on senior debt at (P)Baa3, provisional rating on subordinated debt at (P)Ba1 and preference shares at Ba2; and Twin Reefs Pass-Through Trust: contingent capital securities at Baa2. Overview of Security Capital Assurance Security Capital Assurance Ltd is a Bermuda-domiciled holding company whose primary operating subsidiaries, XL Capital Assurance Inc. and XL Financial Assurance Ltd, provide credit enhancement and protection products to the public finance and structured finance markets throughout the United States and internationally. For the nine months ended Sept. 30, 2007, SCA reported a net loss available to common shareholders of $27 million. As of Sept. 30, 2007, SCA had shareholders' equity of approximately $1.6 billion. SHARPER IMAGE: To Liquidate Underperforming Stores; Bids Due Today ------------------------------------------------------------------ Sharper Image Corporation operates 184 stores in 38 states and the District of Columbia, of which four are outlet stores that sell slow-moving, discontinued, reconditioned, and irregular merchandise. Prior to the company's bankruptcy filing, the Debtor began an examination of the performance of its Retail Business Operations to identify unprofitable stores. As a consequence of this analysis and in light of the severe liquidity restraints the Debtor currently faces, the Debtor believes it is imperative to conduct store closing or similar sales to aid its reorganization efforts, the Debtor's proposed counsel, Steven K. Kortanek, Esq., at Womble Carlyle Sandridge & Rice, PLLC, in Wilmington, Delaware, relates. According to Mr. Kortanek, the proposed Store Closing Sales will dramatically reduce the costs associated with the under- performing Stores and are designed to provide the maximum value to the estate. Moreover, the Store Closing Sales will reduce the obligations outstanding, if any, under the Debtor's prepetition credit agreement and, thereafter, obligations under the DIP credit agreement will facilitate future advances under the agreement. The Debtor also wants to employ a liquidating agent to maximize the value of the inventory at the Stores and facilitate the Store Closing Sales. Based on auction results, the Debtor will negotiate and enter into a Liquidation Agreement with the highest bidder at the Auction. By this motion, the Debtor asks the Court to enter an order on an expedited basis: (a) approving proposed auction procedures; (b) setting the time, date, and place of the auction; (c) approving the form of notice of the Auction and notice of the Store Closing Sales; and (d) setting March 14,2008, as the hearing to consider the approval of the Sale. After the Sale Hearing, the Debtor will ask the Court to approve (i) a liquidation agreement with the party or parties submitting the highest or otherwise best Bid at the Auction, and (ii) the Store Closing Sales, and (iii) an expedited rejection procedures for the Debtor to reject any or all of its Leases. It is important for the Debtor to minimize any damages or costs that may arise from the Store Closures by establishing procedures for the expedited rejection of the underlying nonresidential real property of the Stores, Mr. Kortanek says. The Lease Rejection Procedures provide that all parties-in-interest, including affected landlords, have opportunity to object, and to reconcile any objections, to a proposed rejection in a timely and cost- efficient manner. The Lease Rejection Procedures will ensure a smooth transition from the Store Closing Sales process to actual Store Closures, he says. Auction Procedures According to Mr. Kortanek, various financial data and other relevant information in connection with the Stores have been provided to several nationally recognized liquidation firms starting February 25, 2008. The Interested Parties will be provided with the opportunity to visit a number of the Stores to obtain information regarding the Stores and the Merchandise located there. The Debtor distributed to the Interested Parties copies of the Liquidation Agreement on March 4, 2008. Notice of the Auction and Store Closing Sales ought to have been served on March 4, 2008 to the notice parties including (i) the Office of the United States Trustee for the District of Delaware, (ii) the attorneys for the Secured Lender, (iii) the attorneys for the Official Committee of Unsecured Creditors, (iv) all Interested Parties, (v) all known entities holding or asserting a lien in the Merchandise, (vi) the Landlords of the Stores, (vii) for each state in which the Stores are located, (a) the Attorney General's Office, and (b) the applicable taxing authorities, and (viii) all entities entitled to notice in the Chapter 11 case. Each Interested Party must submit an executed Liquidation Agreement on or before March 7, 2008. Bids must be submitted so that they are actually received by no later than 10:00 a.m. Pacific Time, 1:00 p.m. Eastern Time, on March 7, 2008 by (i) the Debtor (ii) the attorneys for the Secured Lender, and (iii) the attorneys for the Committee. All Bids are irrevocable until seven days after the Sale Hearing. All Bids will be accompanied by an earnest money deposit equal to 5% of the total guaranteed amount in the form of a certified check or wire transfer payable to the Debtor. Within 24 hours of the Auction, any successful bidder must supplement the initial earnest money down payment, so that the total deposit equals 10% of the Guaranteed Amount of the winning Bid. The Debtor will hold the deposits, without interest, until the earlier to occur of (i) the time the Bid is officially rejected, and (ii) seven days after the Sale Hearing. The deposit will be forfeited in the event that any bidder for an accepted Bid defaults. In that event, the Debtor may proceed to seek approval of the second highest or otherwise best Bid. Bids that meet the foregoing conditions will be deemed "qualified bids." The Debtor proposes to conduct the Auction at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, NY 10153 on March 13, 2008 at 10:00 a.m Eastern Time. Only Qualified Bidders who have complied with the Auction Procedures may improve their Bids at the Auction. The Debtor will select the highest or otherwise best Bids after consultation with the Secured Lender and the Creditors Committee at the conclusion of the Auction, subject to Court approval, and the winning bidders will be required to enter into definitive Liquidation Agreements before the Auction is closed. The Debtor asks that the Sale Hearing be held in the United States Bankruptcy Court for the District of Delaware, Courtroom 3,824 Market Street, 6th Floor, Wilmington, Delaware 19801, on March 14, 2008 at 4:00 p.m. Eastern Time. The Sale Hearing may be adjourned without further notice other than by announcement at the Sale Hearing. The Debtor also asks that the Court establish March 11, 2008 at 12:00 noon Eastern Time as the deadline for filing objections to the motion, the procedures order, and the sale order. Proposed Lease Rejection Procedures The Debtor proposes that it will file a written notice to reject a Lease, and will serve the Rejection Notice via Federal Express on: (i) the Landlord affected by the Rejection Notice, (ii) other interested parties to each Lease sought to be rejected by the Debtor, (iii) the U.S. Trustee, (iv) the attorneys for the Secured Lender, and (v) the attorneys for the Creditors Committee. Parties-in-interest must serve a written objection no later than seven days after the date the Rejection Notice is filed, on (i) the Debtor, (ii) the Debtor's the attorneys, (iii) the U.S. Trustee, and (iv) the attorneys for the Creditors Committee. The written objection must be served to the parties no later than seven days after the date the Rejection Notice is filed. Absent an objection, the rejection of each Lease will become effective on the later of (i) the date the applicable Rejection Notice is filed and served and (ii) the date that the Debtor unequivocally relinquishes control of the premises to the affected Landlord, without further notice, hearing, or order of the Court. If an objection is properly filed and served on the Objection Notice Parties, the Debtor will contact the Court to schedule a hearing to consider the objection. If the objection is overruled by the Court or withdrawn, the rejection of the affected Lease will be deemed effective on the later of (i) the date the applicable Rejection Notice is filed and served, and (ii) the date that the Debtor unequivocally relinquishes control of the premises to the affected Landlord, without further notice, hearing, or Court order. If an affected Landlord or any other party-in-interest asserts a claim arising from the rejection of the Lease, the Rejection Claimant will submit a claim for damages arising from the rejection to Kurtzman Carson Consultants LLC, on or before the later of (i) the date that is 30 days after the effective date of rejection of the Lease, or (ii) the bar date established by the Court for filing claims against the Debtor. Moreover, if the Debtor has deposited funds with a Landlord as a security deposit or other arrangement, the Landlord may not set off or otherwise use the deposit without the prior authority of the Court. If the Debtor determines that the property at a particular location has de minimis value or the cost of removing the property exceeds the value of the property, the Debtor will generally describe the property in the Rejection Notice and include as a service party any entity that may have an interest in the property to be abandoned. Absent a timely objection, the property will be deemed abandoned as of the effective date of the rejection of the Lease and the Landlord may dispose of the abandoned property without liability to any third party claiming an interest in the abandoned property. Taubman Landlords Object Andrew S. Conway, Esq., at Honigman Miller Schwartz and Cohn LLP, in Bloomfield Hills, Michigan, attorney for the Taubman Landlords, relates that pursuant to Section 365(d)(3) of the Bankruptcy Code, the Debtor is required to timely perform all obligations under the leases with Taubman Landlords. The Taubman Landlords are the owners of regional retail shopping centers consisting of: * Taubman-Cherry Creek Shopping Center L.L.C., located in Denver, Colorado; * Tampa Westshore Associates Limited Partnership, located in Tampa, Florida; * MacArthur Shopping Center LLC, located in Norfolk, Virginia; * Short Hills Associates, L.L.C., located in Millburn, New Jersey; * Rich-Taubman Associates, located in Stamford, Connecticut; * Stony Point Fashion Park Associates, L.L.C., located in Richmond, Virginia; * Twelve Oaks Mall, LLC, located in Novi, Michigan; * TJ Palm Beach Associates Limited Partnership, located in West Palm Beach, Florida; * Willow Bend Shopping Center Limited Partnership, located in Plano, Texas; and * Woodfield Mall LLC, located in Schaumburg, Illinois. With respect to the mall locations from which the Debtor wishes to run its closing sales, the sales would constitute a violation of the Taubman Leases, Mr. Conway points out. Moreover, Section 105 of the Bankruptcy Code does not permit the Court to enter an order that it believes makes "good business sense," when the result of the order is to negate the express language of the Code, he says. The Taubman Landlords believe that it would be inequitable to allow the sale to occur unless the signage requirements and use and operations clauses of the Taubman Leases are complied with. Mr. Conway states that the duration of the sale is also of major concern to the Taubman Landlords. The Taubman Landlords think that a limited period is in the best interests of the neighboring tenants and the landlords, and they suggest that a 10-week sale period would be sufficient in balancing the interests of all concerned parties. Also, to the extent the Debtor is proposing to have the liquidator pay "occupancy costs" on a per diem basis, the practice has been rejected by the Courts in the Sixth Circuit and elsewhere, Mr. Conway notes. Mr. Conway adds that if ever the Debtor proposes to bring additional inventory to the leased premises, all inventory must be in compliance with the requirements of the Taubman Leases. To the extent the Debtor proposes to sell the store fixtures from the mall locations during the closing sale, the Taubman Landlords object. Accordingly, the Taubman Landlords ask that the Debtor's motion for a closing sale should be subject to the additional requirements, and that the Taubman Landlords be awarded their costs and attorneys' fees incurred in connection with their objection. About Sharper Image Corp. Based in San Francisco, California, Sharper Image Corp. -- http://www.sharperimage.com/-- is a multi-channel specialty retailer. It operates in three principal selling channels: the Sharper Image specialty stores throughout the U.S., the Sharper Image catalog and the Internet. In addition, through its Brand Licensing Division, it is also licensing the Sharper Image brand to select third parties to allow them to sell Sharper Image branded products in other channels of distribution. The company filed for Chapter 11 protection on Feb. 19, 2008 (Bankr. D.D., Case No. 08-10322). Steven K. Kortanek, Esq. at Womble, Carlyle, Sandridge & Rice, P.L.L.C. represents the Debtor in its restructuring efforts. An official Committee of Unsecured Creditors has been appointed in the case. When the Debtor filed for bankruptcy, it listed total assets of$251,500,000 and total debts of $199,000,000. (Sharper Image Bankruptcy News Issue No. 5, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). SIRVA INC: Court Oks Motion to Approve Equity Trading Restrictions ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York approved notification and hearing procedures that must be satisfied before certain transfers of, or claims of worthlessness with respect to, common stock or preferred stock of SIRVA, Inc., or of any beneficial interest therein are deemed effective. The restrictions and procedures set forth in the Interim Order Order Establishing Notification and Hearing Procedures for Transfers of, or Claims of Worthlessness with Respect to, Certain Equity Securities will remain in full force and effect. Judge James M. Peck ruled that any purchase, sale, or other transfer of, or declaration of worthlessness, with respect to the Debtors' equity securities, or of any beneficial interest in violation of the procedures in the Interim Order, will be null and void ab initio. The Debtors have incurred, and are currently incurring, significant net operating losses. The Debtors can carry forward their NOLs to (i) set off future taxable income for up to 20 taxable years, reducing future aggregate tax obligations, and (ii) set off taxable income generated by transactions completed during the pendency of their Chapter 11 cases, Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, the Debtors' proposed counsel, says. However, Mr. Cieri notes that unrestricted trading of Equity Securities could adversely affect the Debtors' NOLs if: -- too many 5% or greater blocks of Equity Securities are created; or -- too many shares are added to or sold from those blocks so that, together with previous trading by 5% shareholders during the preceding three-year period, an ownership change within the meaning of Section 382 of the Internal Revenue Code of 1986 is triggered before the Debtors' emergence from Chapter 11 and outside the context of a confirmed plan of reorganization. Likewise, if a 50% or greater shareholder were, for federal or state tax purposes, to treat its Equity Securities as becoming worthless before the Debtors emerge from Chapter 11 protection, a claim could trigger an ownership change, thus triggering an adverse affect on the Tax Attributes, Mr. Cieri says. A "50% Shareholder" refers to any person or entity that at any time since September 28, 2003, has beneficially owned either 50% or more of SIRVA Common Stock or 50% or more of SIRVA Preferred Stock. To protect and preserve their valuable tax attributes, the Debtors sought and obtained the Court's authority, on an interim basis, to require any entity who currently is or becomes a "Substantial Shareholder" to file with the Court a declaration of its status. A "Substantial Shareholder" refers to any entity that has Beneficial Ownership of either (a) at least 3,400,000 shares of SIRVA, Inc., common stock, or (b) at least $3,400,000 face value of Preferred Stock. Prior to effectuating any transfer of Equity Securities that would result in an increase or decrease in the amount of Equity Securities of which a Substantial Shareholder has Beneficial Ownership or would result in an entity becoming a Substantial Shareholder, that Substantial Shareholder must file with the Court an advance written declaration of the intended transfer. If the Debtors object to a transfer, that transfer cannot proceed unless the Debtors withdraw their objection or unless that transfer is approved by a final Court order. If the Debtors do not object to a transfer within a 30-day period, that transfer can proceed. The Debtors also require any person or entity that currently is or becomes a 50% Shareholder to file with the Court a notice of his status. Prior to filing any federal or state tax return asserting any deduction for worthlessness of the Equity Securities for the tax year ending before the Debtors' emergence from Chapter 11, that 50% Shareholder must file with the Court an advance written notice of the intended claim of worthlessness. If the Debtors object to the claim of worthlessness, the claim filing would not be permitted unless approved by a final and non- appealable Court order. If the Debtors do not object, the filing may proceed. About SIRVA Inc. Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets : SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation solutions to a well-established and diverse customer base. The company handles all aspects of relocation, including home purchase and home sale services, household goods moving, mortgage services and home closing and settlement services. SIRVA conducts more than 300,000 relocations per year, transferring corporate and government employees along with individual consumers. SIRVA's brands include Allied, Allied International, Allied Pickfords, Allied Special Products, DJK Residential, Global, northAmerican, northAmerican International, Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA Settlement. The company and 61 of its affiliates filed separate petitions for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis, L.L.P. is representing the Debtor. At its bankruptcy filing, the company reported total assets of $924,457,299 and total debts of $1,232,566,813 for the quarter ended Sept. 30, 2007. (Sirva Inc. Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SMITHFIELD FOODS: Moody's Holds Ba2 Ratings on $565 Mil. JBS Deal ----------------------------------------------------------------- Moody's Investors Service affirmed the long-term ratings of Smithfield Foods, Inc., including the company's Ba2 corporate family rating and Ba2 probability of default rating, following the company's announcement that it will sell its beef processing and cattle feeding operation to JBS S.A. for $565 million in cash. The company's speculative grade liquidity rating of SGL-3 was also affirmed. The rating outlook remains negative. Ratings affirmed: -- Corporate family rating at Ba2 -- Probability of default rating at Ba2 -- Speculative Grade Liquidity Rating at SGL-3 Ratings affirmed, with LGD percentage changed: -- Senior unsecured debt at Ba3 (LGD5). LGD percentage to 84% from 82% The affirmation of the company's long term ratings is based on the expectation that material portion of proceeds from the transaction will be applied to debt reduction. In addition to the initial proceeds of $565 million, live cattle owned by Smithfield and its Five Rivers joint venture are excluded from the transaction. Proceeds to Smithfield from the liquidation of cattle over the next 12 months are likely to exceed $200 million, after payment of joint venture debt. In total, cash proceeds to Smithfield could exceed $750 million. This inflow and the related debt reduction will improve the company's liquidity, and should strengthen credit ratios. Moody's will monitor the timeliness of payments and the receipt of regulatory and other approvals, if any, for the transaction. The continued negative outlook reflects Moody's expectation that credit metrics could remain weak for the rating level, given margin pressure on the company's hog production business. Smithfield's Ba2 corporate family rating reflects the company's high leverage, somewhat volatile earnings and cash flow stream, aggressive historical acquisition strategy, and complex and changing business structure. Smithfield's ratings are supported by the company's large size, very strong market position, geographic and product diversity, and solid brand in the US pork industry. Smithfield's speculative grade liquidity rating of SGL-3 is affirmed, based on Moody's expectation that the company's liquidity will remain adequate. Moody's assumes that the sale of the beef business will proceed without significant delay or opposition. The SGL reflects Smithfield's reliance on its external sources of cash in order to cover some cash demands such as capital expenditures, working capital requirements and scheduled debt maturities. Smithfield recently increased the size of its domestic revolving credit by $75 million and obtained $200 million in uncommitted short term credit lines. The $1.275 billion domestic revolving credit expires in August 2010, and a Euro 300 million revolving credit expires in August 2009. Headroom under financial covenants has historically been limited due to weak operating performance in the recent past. International assets are generally unencumbered, and the company's bank facility permits the establishment of an accounts receivable facility for up to 5% of total assets. Smithfield Foods, headquartered in Smithfield Virginia, is the world's largest pork producer and processor and the fifth largest US beef processor. Sales for the twelve months ended Jan. 27, 2008 were approximately $13.67 billion. SMITHFIELD FOODS: Sells Beef Processing Unit to JBS for $565 Mil. ----------------------------------------------------------------- Smithfield Foods Inc. signed a definitive agreement to sell Smithfield Beef Group Inc., its beef processing and cattle feeding operation, to JBS S.A., for $565.0 million in cash. The sale to JBS will include 100% of Five Rivers Ranch Cattle Feeding LLC, which is currently held by Smithfield Beef in a 50/50 joint venture with Continental Grain Company. Smithfield Foods and CGC have agreed that, immediately before closing of the JBS transaction, Smithfield Beef will acquire from CGC the 50 percent of Five Rivers that it does not presently own in return for 2.167 million shares of Smithfield common stock. The purchase prices for JBS's purchase of Smithfield Beef, and Smithfield Beef's purchase of the 50% interest in Five Rivers, are subject to customary adjustments, including adjustments for differences in working capital at closing from agreed-upon targets. The transaction excludes all live cattle inventories held by Smithfield Beef and Five Rivers as of the closing date, together with associated debt. Live cattle owned by Five Rivers will be transferred to a new 50/50 joint venture between Smithfield Foods and CGC, while live cattle owned by Smithfield Beef will be transferred to another subsidiary of Smithfield Foods. The excluded live cattle will be raised by JBS after closing for a negotiated fee and then sold at maturity at market-based prices. Proceeds from the sale of the excluded live cattle will be paid in cash to the Smithfield Foods and CGC joint venture or Smithfield Foods, as appropriate. Smithfield believes that most of the live cattle inventories will be sold within six months after closing with all sold within 12 months after closing. The proceeds from the sale of Smithfield Beef's live cattle inventories, together with Smithfield's 50% interest in Five Rivers' cattle inventory, net of associated debt, are expected to be in excess of $200 million. Smithfield Foods expects that the net proceeds of the transaction, consisting of the $565.0 million to be paid at closing, plus the net proceeds from the sale of the retained cattle inventory post- closing after payment of associated debt, will be used for debt reduction. Smithfield Beef processes approximately 1.5 billion pounds of fresh beef annually. Its processing capacity is 7,600 cattle per day. Five Rivers is the largest cattle feedlot operation in the U.S. with a one-time feeding capacity of 811,000 head of cattle. "We see this acquisition as an opportunity to participate in a segment of the business and a region where we are not present today," Wesley Mendon�a Batista, chief executive officer of JBS USA, said. "The synergy created will help us increase our customer base and reduce overheads in a highly competitive industry." "We are pleased that Smithfield Foods is able to benefit our shareholders through this transaction by using the ultimate net proceeds of approximately $750 million to reduce leverage and invest capital in higher return businesses," C. Larry Pope, president and chief executive officer, said. "While outperforming the industry, our beef group has nevertheless been a relatively minor player, as we have been unable to grow through acquisition or justify building a new plant in this adverse environment." "It makes sense to exit the beef business at this time," Mr. Pope added. The transaction is expected to close as soon as possible subject to customary regulatory review and closing conditions. Smithfield's financial advisor in connection with the transaction was Evercore Partners and its legal advisor was Hunton & Williams LLP. JBS's financial advisor was JPMorgan Securities Inc. while Allen & Overy LLP acted as its legal advisor. About JBS S.A. Based in Sao Paolo, Brazil, JBS S.A. -- http://www.jbs.com.br-- is a bovine processor based in Brazil. The company is active in food sectors, hygiene and cleaning, farming, and transportation. The company's brands include, Anglo, Friboi, Bordon, Sola, Fluminense, Hereford, Mouran, Minuano and Albany. The company produces 22,600 bovines per day. In 2005 the company acquired Swift Argentina, which is engaged in the meat chilling industry through name brands such as Cabana Las Lilas and Plate. JBS SA exports to more then 70 countries. About Smithfield Foods Headquartered in Smithfield, Virginia, Smithfield Foods Inc. (NYSE:SFD) -- http://www.smithfieldfoods.com/-- is a hog producer, and pork and beef processor. The Company conducts its business through six segments: pork, beef, international, hog production, other and corporate, each of which comprises a number of subsidiaries. The pork segment produces a variety of fresh pork and packaged meats products in the United States and markets them nationwide and to a number of foreign markets, including Japan, Mexico, Canada and Australia. The pork segment operates over 40 processing plants. The beef segment is composed mainly of two United States beef processing subsidiaries, the company's cattle feeding operations and the company's interests in cattle feeding operations. The international segment includes the company's international meat processing operations that produce a variety of fresh and packaged meats products. The hog production segment operates a number of hog production facilities with approximately 888,000 sows producing about 13.9 million market hogs annually. SOUNDVIEW HOME: Fitch Puts 'B' Rated $2.6MM Cert. Under Neg. Watch ------------------------------------------------------------------ Fitch Ratings placed on Rating Watch Negative one Soundview Home Loan Trust mortgage pass-through certificate transaction. Soundview 2007-2 -- $32.7 million class A rated 'AAA', placed on Rating Watch Negative; -- Notional class A-IO affirmed at 'AAA'; -- $11.7 million class M-1 rated 'AA-', placed on Rating Watch Negative; -- $4.9 million class M-2 rated 'A', placed on Rating Watch Negative; -- $6.6 million class M-3 rated 'BBB', placed on Rating Watch Negative; -- $4.4 million class M-4 rated 'BB', placed on Rating Watch Negative; -- $2.6 million class M-5 rated 'B', placed on Rating Watch Negative. Deal Summary -- Originators: Various; -- 60+ day Delinquency: 17.13%; -- Realized Losses to date (% of Original Balance): 0.36%. The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions. The updated assumptions better capture the deteriorating performance of pools from 2007, 2006 and late 2005 with regard to continued poor loan performance and home price weakness. SOUNDVIEW HOME: Fitch Chips Ratings on $3.4 Billion Certificates ---------------------------------------------------------------- Fitch Ratings has taken rating actions on four Soundview Home Loan Trust mortgage pass-through certificate transactions. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are removed. Affirmations total $218.5 million and downgrades total $3.4 billion. Additionally, $1.8 billion remains on Rating Watch Negative. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: Soundview 2007-1 -- $192.8 million class I-A-1 rated 'AA-', remains on Rating Watch Negative (BL: 32.94, LCR: 1.82); -- $120.1 million class II-A1 affirmed at 'AAA' (BL: 45.45, LCR: 2.51); -- $25.6 million class II-A-2 affirmed at 'AAA' (BL: 41.86, LCR: 2.31); -- $77.4 million class II-A-3 downgraded to 'AA' from 'AAA' (BL: 34.19, LCR: 1.89); -- $29.8 million class II-A-4 rated 'AA-', remains on Rating Watch Negative (BL: 32.35, LCR: 1.79); -- $20.5 million class M-1 downgraded to 'BBB' from 'A' (BL: 28.66, LCR: 1.58); -- $18.6 million class M-2 downgraded to 'BB' from 'BBB+' (BL: 25.26, LCR: 1.39); -- $10.7 million class M-3 downgraded to 'BB' from 'BBB' (BL: 23.26, LCR: 1.28); -- $9.8 million class M-4 downgraded to 'B' from 'BBB-' (BL: 21.36, LCR: 1.18); -- $9.1 million class M-5 downgraded to 'B' from 'BB' (BL: 19.51, LCR: 1.08); -- $8.5 million class M-6 affirmed at 'B', (BL: 17.72, LCR: 0.98); -- $8.2 million class M-7 downgraded to 'CCC' from 'B' (BL: 15.91, LCR: 0.88); -- $4.3 million class M-8A downgraded to 'CCC' from 'B' (BL: 14.58, LCR: 0.80); -- $2.0 million class M-8B downgraded to 'CCC' from 'B' (BL: 14.58, LCR: 0.80); -- $6.0 million class M-9 downgraded to 'CC' from 'CCC' (BL: 13.31, LCR: 0.73); -- $6.3 million class M-10 downgraded to 'CC' from 'CCC' (BL: 12.25, LCR: 0.68). Deal Summary -- Originators: Various; -- 60+ day Delinquency: 14.31%; -- Realized Losses to date (% of Original Balance): 0.11%; -- Expected Remaining Losses (% of Current balance): 18.12%; -- Cumulative Expected Losses (% of Original Balance): 16.49%. Soundview 2007-OPT1 -- $841.2 million class I-A-1 downgraded to 'A' from 'AAA', remains on Rating Watch Negative (BL: 39.57, LCR: 1.32); -- $326.3 million class II-A-1 rated 'AAA', remains on Rating Watch Negative (BL: 57.75, LCR: 1.92); -- $171.8 million class II-A-2 downgraded to 'AA' from 'AAA' (BL: 47.78, LCR: 1.59); -- $178.0 million class II-A-3 downgraded to 'A' from 'AAA' (BL: 40.97, LCR: 1.36); -- $62.2 million class II-A-4 downgraded to 'A' from 'AAA', remains on Rating Watch Negative (BL: 39.44, LCR: 1.31); -- $104.5 million class M-1 downgraded to 'B' from 'AA+' (BL: 34.41, LCR: 1.14); -- $105.6 million class M-2 downgraded to 'B' from 'AA' (BL: 29.19, LCR: 0.97); -- $44.1 million class M-3 downgraded to 'CCC' from 'AA-' (BL: 26.93, LCR: 0.90); -- $43.0 million class M-4 downgraded to 'CCC' from 'A+' (BL: 24.60, LCR: 0.82); -- $38.3 million class M-5 downgraded to 'CCC' from 'A' (BL: 22.42, LCR: 0.75); -- $32.5 million class M-6 downgraded to 'CC' from 'BBB+' (BL: 20.49, LCR: 0.68); -- $27.9 million class M-7 downgraded to 'CC' from 'BBB' (BL: 18.81, LCR: 0.63); -- $13.9 million class M-8 downgraded to 'CC' from 'BBB-' (BL: 17.98, LCR: 0.60); -- $44.1 million class M-9 downgraded to 'CC' from 'BB' (BL: 15.47, LCR: 0.51); -- $36.0 million class M-10 downgraded to 'C' from 'BB' (BL: 13.82, LCR: 0.46). Deal Summary -- Originators: 100% Option One Mortgage Corp.; -- 60+ day Delinquency: 13.71%; -- Realized Losses to date (% of Original Balance): 0.13%; -- Expected Remaining Losses (% of Current balance): 30.06%; -- Cumulative Expected Losses (% of Original Balance): 28.09%. Soundview 2007-OPT3 -- $233.9 million class 1-A-1 downgraded to 'A' from 'AAA', remains on Rating Watch Negative (BL: 35.98, LCR: 1.39); -- $64.3 million class II-A-1 affirmed at 'AAA', (BL: 63.70, LCR: 2.45); -- $46.3 million class II-A-2 rated 'AAA', remains on Rating Watch Negative (BL: 46.09, LCR: 1.78); -- $44.0 million class II-A-3 downgraded to 'A' from 'AAA' (BL: 37.51, LCR: 1.44); -- $13.8 million class II-A-4 downgraded to 'A' from 'AAA', remains on Rating Watch Negative (BL: 35.88, LCR: 1.38); -- $21.5 million class M-1 downgraded to 'B' from 'AA+' (BL: 31.68, LCR: 1.22); -- $18.4 million class M-2 downgraded to 'B' from 'AA' (BL: 28.05, LCR: 1.08); -- $10.7 million class M-3 downgraded to 'B' from 'AA-' (BL: 25.89, LCR: 1.00); -- $10.2 million class M-4 downgraded to 'CCC' from 'A+' (BL: 23.80, LCR: 0.92); -- $9.3 million class M-5 downgraded to 'CCC' from 'A' (BL: 21.76, LCR: 0.84); -- $8.8 million class M-6 downgraded to 'CCC' from 'A-' (BL: 19.65, LCR: 0.76); -- $8.2 million class M-7 downgraded to 'CC' from 'BBB+' (BL: 17.41, LCR: 0.67); -- $7.1 million class M-8 downgraded to 'CC' from 'BBB' (BL: 15.48, LCR: 0.60); -- $5.9 million class M-9 downgraded to 'CC' from 'BBB-' (BL: 14.00, LCR: 0.54); -- $5.7 million class M-10 downgraded to 'CC' from 'BB+' (BL: 12.90, LCR: 0.50). Deal Summary -- Originators: 100% Option One Mortgage Corp.; -- 60+ day Delinquency: 6.53%; -- Realized Losses to date (% of Original Balance): 0.00%; -- Expected Remaining Losses (% of Current balance): 25.97%; -- Cumulative Expected Losses (% of Original Balance): 24.07%. Soundview 2007-WMC1 -- $219.8 million class I-A-1 downgraded to 'B' from 'A-' (BL: 37.62, LCR: 0.97); -- $274.7 million class II-A-1 downgraded to 'B' from 'A-' (BL: 36.18, LCR: 0.93); -- $182.6 million class III-A-1 downgraded to 'AA' from 'AAA' (BL: 48.76, LCR: 1.26); -- $73.9 million class III-A-2 downgraded to 'BBB' from 'AAA', remains on Rating Watch Negative (BL: 42.20, LCR: 1.09); -- $77.8 million class III-A-3 downgraded to 'B' from 'A-' (BL: 37.41, LCR: 0.97); -- $31.2 million class III-A-4 downgraded to 'B' from 'A-' (BL: 36.16, LCR: 0.93); -- $40.0 million class M-1 downgraded to 'CCC' from 'BBB' (BL: 32.33, LCR: 0.83); -- $36.5 million class M-2 downgraded to 'CC' from 'BBB-' (BL: 28.61, LCR: 0.74); -- $21.8 million class M-3 downgraded to 'CC' from 'BB' (BL: 26.28, LCR: 0.68); -- $19.4 million class M-4 downgraded to 'CC' from 'BB' (BL: 24.09, LCR: 0.62); -- $17.7 million class M-5 downgraded to 'CC' from 'B' (BL: 21.99, LCR: 0.57); -- $17.1 million class M-6 downgraded to 'CC' from 'B' (BL: 19.96, LCR: 0.51); -- $16.5 million class M-7 downgraded to 'C' from 'CCC' (BL: 18.02, LCR: 0.46); -- $13.0 million class M-8 downgraded to 'C' from 'CCC' (BL: 16.50, LCR: 0.43); -- $10.0 million class M-9 downgraded to 'C' from 'CCC' (BL: 15.34, LCR: 0.40); -- $11.8 million class M-10 downgraded to 'C' from 'CCC' (BL: 14.18, LCR: 0.37). Deal Summary -- Originators: 100% WMC Mortgage Corp.; -- 60+ day Delinquency: 32.39%; -- Realized Losses to date (% of Original Balance): 0.81%; -- Expected Remaining Losses (% of Current balance): 38.76%; -- Cumulative Expected Losses (% of Original Balance): 36.66%. The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions. The updated assumptions better capture the deteriorating performance of pools from 2007, 2006 and late 2005 with regard to continued poor loan performance and home price weakness. STOCKTON CDO: $81 Mil. Notes Get Moody's Junk Rating ---------------------------------------------------- Moody's Investors Service downgraded ratings of nine classes of notes issued by Stockton CDO Ltd. and left on review for possible downgrade ratings of three of these classes of notes. The classes affected by these rating actions are: Class Description: Up to $495,000,000 Class A-1 Variable Funding Senior Secured Floating Rate Notes Due 2052 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $90,000,000 Class A-2 Senior Secured Floating Rate Notes Due 2052 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $54,000,000 Class A-3 Senior Secured Floating Rate Notes Due 2052 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: $81,000,000 Class B Senior Secured Floating Rate Notes Due 2052 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Ca Class Description: $67,500,000 Class C Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2052 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca Class Description: $18,000,000 Class D-1 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2052 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Ca Class Description: $15,000,000 Class D-2 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2052 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ca Class Description: $25,500,000 Class D-3 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2052 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca Class Description: $9,000,000 Class E Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2052 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence on Feb. 20, 2008, as reported by the Trustee, of an event of default caused by a failure of the Senior Credit Test, pursuant Section 5.1(h) of the Indenture dated July 19, 2007. Stockton CDO Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS securities and CDO securities and synthetic securities in the form of credit default swaps. Reference obligations for the credit default swaps are RMBS and CDO securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued following the event of default by certain Noteholders. Because of this uncertainty, the rating assigned to the Class A-1, A-2 and A-3 Notes remains on review for possible further action. TAHOMA CDO: Eroding Credit Quality Prompts Moody's Rating Reviews ----------------------------------------------------------------- Moody's Investors Service downgraded ratings of five classes of notes issued by Tahoma CDO III, Ltd. and left on review for possible further downgrade the ratings of two of these classes. The notes affected by this rating action are: Class Description: $192,500,000 Class A-1 Senior Secured Floating Rate Notes due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa1, on review for possible downgrade Class Description: $97,000,000 Class A-2 Senior Secured Floating Rate Notes due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: $14,500,000 Class B Senior Secured Floating Rate Notes due 2047 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Ca Class Description: $14,500,000 Class C Senior Secured Deferrable Floating Rate Notes due 2047 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca Class Description: $13,000,000 Class D Senior Secured Deferrable Floating Rate Notes due 2047 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ca The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence as reported by the Trustee on Feb. 25, 2008, of an event of default described in Section 5.1(g) of the Indenture dated April 18, 2007. Tahoma CDO III, Ltd. is a collateralized debt obligation backed by a portfolio of CDO securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating actions taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of further remedies to be pursued by the Controlling Class. Because of this uncertainty, the ratings assigned to Class A-1 Notes and Class A-2 Notes remain on review for possible further action. TEMBEC INC: DBRS Rating at D on Failure to Complete Exchange Offer ---------------------------------------------------------------- DBRS downgraded the Senior Unsecured Debentures of Tembec Inc. to D from CCC. The rating had been placed Under Review with Developing Implications on Dec. 19, 2007. The rating action follows the completion of the recapitalization of Tembec, which included the conversion of $1.2 billion in long-term debt into equity. The rating change to D is consistent with DBRS methodology given that, although a payment default did not occur, failure to complete the exchange offer would ultimately have led to default, in DBRS's opinion. Concurrent with the completion of the recapitalization, DBRS has discontinued the rating on Tembec's Senior Unsecured Debentures. DBRS plans to assign a new rating to Tembec following a review of the newly capitalized company. TROPICANA ENT: Appeals New Jersey Casino Commission's Verdict ------------------------------------------------------------- Tropicana Casinos and Resorts Inc., asked New Jersey appellate court to overturn a commission order denying renewal of the company's Atlantic City casino license, charging the New Jersey Casino Control Commission with abuse of regulatory discretion and a lack of requisite neutrality and impartiality. The brief contends that the commission's decision was arbitrary, capricious and unreasonable; that it was not supported by sufficient credible evidence; and it relied on ad hoc rulemaking and standard-setting. The brief alleges that the commission purposefully ignored facts on the record with respect to the company's financial stability, its current business operations, and the voluminous communications it had with gaming authorities in its attempts to decipher and ultimately satisfy regulations and staffing requirements. It is also critical of the influence that self-interested third parties may have had on the deliberations. A major portion of the appeal focuses on the issue of independent audit committees, beginning with the assertion that New Jersey regulation on such committees is notable because it has "absolutely no requirements" and "thus, the commission could not deny the company's license because it failed to comply with non- existent or improperly adopted policies." In that regard, the brief contends that the commission acted improperly when, without advance rulemaking or guidelines, it used the hearing as a venue for literally creating a new rule against one-person audit committees, a rule directly contrary to the commission's earlier insistence on and approval of Tropicana's one-person structure. The one-member audit committee that Tropicana put in place in June of 2007 has been in widespread use by other New Jersey casinos. In addition, according to the brief, the commission not only gave unwarranted credence to "severely overstated" customer complaints but also completely disregarded non-refuted testimony about the quality of the Tropicana's operations. Among other things, the brief says the commission gave no sway to the fact that the property enjoyed 94% occupancy rates during 2007, that rates of customer complaint were "minuscule" compared with those required by highly regarded national hotel chains, that the casino was consistently rated among the top two or three in Atlantic City, and that ownership invested more than $30 million in needed improvements in the short time, just over 11 months, that Tropicana operated the casino. Finally, the brief takes issue with the commission's diligence with respect to adhering to the tenets of the licensing process, decrying the virtual absence of interrogation about the company's business plans and aspirations that is ordinarily a staple of renewal hearings. As reported in the Troubled Company Reporter on Mar. 04, 2008, The Chancery Court of Delaware dismissed two out of three claims filed by bondholders against Columbia Sussex Corp. and its subsidiary, Tropicana Entertainment LLC, Liz Benston writes for the Las Vegas Sun. On the retained case, the Court ruled that Columbia Sussex defaulted on its $960 million loan and gave Columbia 60 days to repay the loan, the Sun relates. The report also mentioned that in 2007, New Jersey regulators revoked Columbia's license to run Tropicana Entertainment, a casino in Atlantic City, after bondholders filed a case against the company for gross mismanagement, the Sun says. Columbia counter attacked with a request to deny the default and blamed bondholders for its financial woes, asserting that bondholders blocked a property sale, the Sun reveals. An undisclosed source familiar with the case told the Sun that instead of two months, Columbia has only a month to repay its debt since the default was already a month old. The source added that Columbia's non-repayment of the defaulted loan will trigger a second default on another bank loan, the Sun reports. About Columbia Sussex Crestview Hills, Kentucky-based Columbia Sussex Corp. -- http://www.columbiasussex.com/-- develops and manages more than 60 hotels and casinos in about 30 states. Its hotels operate under banners such as Hilton, Marriott, and Starwood. The company's casino properties are located in Mississippi (Lighthouse Point), Louisiana (Amelia Belle), and Nevada (Lake Tahoe Horizon), among other states. Columbia Entertainment, the casino affiliate of Columbia Sussex, turned heads in 2007 when it purchased Aztar Corporation, owner of the Las Vegas Tropicana, for a staggering $2.1 billion. President and CEO William J. Yung, III, and his family own Columbia Sussex. Mr.Yung founded the Kentucky-based company in 1972. About Tropicana Entertainment Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada and Atlantic City, New Jersey. TROPICANA ENT: Moody's Pares Corp. Family Rating to Caa3 From Caa1 ------------------------------------------------------------------ Moody's Investors Service downgraded Tropicana Entertainment LLC's corporate family rating to Caa3 from Caa1. The downgrade reflects the Delaware Court of Chancery's ruling that Tropicana did breach section 4.06 (Asset Dispositions) of the senior subordinate note indenture as it relates to the transfer of title of Adamar - the entity that holds the Atlantic City property. The Court found the transfer of title to have occurred when it was transferred to the Trustee appointed to manage the operations of the Atlantic City casino after the company lost its New Jersey gaming license, constituting a technical default under the notes. Failure to cure this technical default within a 60 day period will constitute an "event of default", and will allow the noteholders to accelerate payment of their claim. If Tropicana is unable to cure the default, a bankruptcy filing is possible. Thus, Tropicana's probability of default has increased sufficiently to warrant a downgrade due to the court ruling. Moody's notes that even if the Company can avoid default under the senior subordinate note indenture and sell its Atlantic City, Evansville and Vicksburg properties as planned, Tropicana's credit profile will deteriorate significantly. The ratings will remain on review for possible further downgrade given the existence of the technical default under the senior subordinate note indenture and the potential need for further accommodation from creditors to avoid a possible bankruptcy filing. The review will focus on the company's ability to cure the default, progress with respect to planned asset sales, and maintain adequate liquidity and operating performance. Moody's also downgraded Tropicana Las Vegas Resort & Casino, LLC's corporate family rating to Caa1 from B3 because the probability of default is correlated with that of Tropicana. If an event of default under Tropicana's senior subordinate notes causes the holders thereof to accelerate, it would trigger a default under Tropicana's senior credit facilities. If the senior lenders accelerate, it may also cause an event of default under the Trop Las Vegas term loan. Moody's used a family recovery rate of 50% for Tropicana, but a higher family recovery rate of 75% for Trop Las Vegas because in Moody's view Trop Las Vegas has higher recovery prospects. Previously Moody's employed the standard 65% family recovery rate for an all bank capital structure. The implementation of a higher recovery rate reflects the value of approximate 34 acres of land on the Las Vegas strip that is owned by Trop Las Vegas. The land value is expected to result in a high recovery rate even in the event that Trop Las Vegas is pushed into a bankruptcy filing. These ratings were downgraded and remain on review for further possible downgrade. Tropicana Entertainment LLC -- Corporate Family Rating to Caa3 from Caa1 -- Probability of Default Rating to Caa3 from Caa1 -- First lien senior secured revolving credit facility to Caa2 from B2 -- First lien senior secured term loan to Caa2 from B2 -- Senior Subordinate notes to Ca from Caa3 Tropicana Las Vegas Resort and Casino, LLC -- Corporate Family Rating to Caa1 from B3 -- Probability of Default Rating to Caa3 from Caa1 -- First lien senior secured term loan to Caa1from B3 Tropicana Entertainment, headquartered in Kentucky, is a privately owned gaming company that owns and operates eleven casino properties, ten of which form the Restricted Group. The properties are located in Atlantic City, New Jersey, Baton Rouge, Louisiana, and Vicksburg and Greenville, Mississippi, Laughlin and Lake Tahoe, Nevada, Las Vegas, Nevada, and Evansville, Indiana. TYCO INTERNATIONAL: Sells Nippon Dry to Daiwa Securities' Unit -------------------------------------------------------------- Tyco International Ltd. sold its subsidiary, Nippon Dry-Chemical Co. Ltd., to the SPC owned by Daiwa Securities SMBC Principal Investments Co. Ltd., a subsidiary of Japan-based investment bank Daiwa Securities SMBC Co. Ltd., pursuant to an agreement entered into on Feb. 19, 2008. Financial terms were not disclosed. Nippon Dry-Chemical manufactures and sells dry chemical fire extinguishers, fire trucks and security systems for the Japan market. The Tokyo-headquartered firm has about 420 employees. Nippon Dry-Chemical has been treated as a discontinued operation in Tyco's financial statements beginning with the first quarter of fiscal 2008. The sale of Nippon Dry-Chemical is one of a series of steps Tyco is taking to divest or exit certain non-core fire business in Asia and Latin America. These actions are part of a portfolio refinement strategy that includes the sale of Tyco's Infrastructure Services unit well as small bolt-on acquisitions of two technology businesses - TridentTek and Retail Expert - in Tyco's core electronic security business. About Daiwa Securities SMBC Co. Ltd. Headquartered in TOkyo, Japan, Daiwa Securities SMBC Co. Ltd. -- http://www.daiwasmbc.co.jp/-- is a securities company that offers equity products, including equities, futures, options and over- the-counter equity derivatives. The company also offers corporate finance services, including financial and business strategy proposals, advices on equity and bond issues, and underwriting and syndication services; merger and acquisition services. Its parent company is Daiwa Securities Group Inc. About Tyco International Limited Headquartered in Hamilton, Canada, Tyco International Limited (NYSE:TYC) -- http://www.tyco.com- provides five segment products and services to customers, which are ADT worldwide, fire protection services, flow control, safety products, and electrical and metal products. ADT worldwide designs, sells, installs, services and monitors electronic security systems to residential, commercial, industrial and governmental customers. Fire protection services designs, sells, installs and services fire detection and fire suppression systems to commercial, industrial and governmental customers. Flow control designs, manufactures, sells and services valves, pipes, fittings, valve automation and heat tracing products. Safety products designs, manufactures and sells fire protection, security and life safety products. Electrical and metal products designs, manufactures and sells steel tubing and pipe products, as well as cable products. As of June 29, 2007, the company completed the spin-offs of Covidien and Tyco Electronics. * * * As reported in the Troubled Company Reporter on Dec. 21, 2007, in its annual report for the year ended Sept. 28, 2007, Tyco said that on Nov. 8, 2007, The Bank of New York delivered to the company a notice of events of default. The notice claims that the actions taken by the company in connection with its separation into three public entities constitute events of default under the indentures. US ENERGY: Gets Court Final Approval to Access Cash Collateral -------------------------------------------------------------- The Hon. Robert D. Drain of the United States Bankruptcy Court for the Southern District of New York authorized U.S. Energy Systems Inc. and its debtor-affiliates to access, on a final basis, the cash collateral of Credit Suisse Cayman Islands Branch, as lien administrative agent and lien collateral agent; and Credit Suisse Securities (USA) LLC, as sole lead arranger and sole bookrunner. The Debtors have borrowed up to $143,000,000 in the aggregate from Credit Suisse. The Debtors were indebted and liable to Credit Suisse of $144,774,038 in the aggregate under a certain credit agreement as of the Debtors' bankruptcy filing. The Debtors have an urgent need to use Credit Suisse's cash collateral to provide sufficient financing to their United Kingdom Subsidiaries to allow them to continue to operate. As adequate protection, the Debtor entitled Credit Suisse replacement liens equal to the aggregate value of the prepetition collateral. The Debtors' authority to use the cash collateral will terminate on March 31, 2008. Kroll Talbot Hughes Limited has been named independent advisors to monitor and provide cash flow forecasting and reports for the Debtors. A full-text copy of the 13 Week Short Term Cash Flow is available for free at http://ResearchArchives.com/t/s?28d5 About U.S. Energy Based in Avon, Connecticut, U.S. Energy Systems Inc. (Pink Sheets: USEY) -- http://www.usenergysystems.com/-- owns green power and clean energy and resources. USEY owns and operates energy projects in the United States and United Kingdom that generate electricity, thermal energy and gas production. The company filed for Chapter 11 protection on Jan. 9, 2008 (Bank. S.D.N.Y. Case No. 08-10054). There are 34 affiliates who filed for separate Chapter 11 petitions. Peter S. Partee, Esq., at Hunton & Williams LLP, represents the Debtor in its restructuring efforts. Jefferies & Company, Inc. serves as the company's financial advisor. The Debtor also selected Epiq Bankruptcy Solutions LLC as noticing, claims and balloting agent. The Official Committee of Unsecured Creditors has yet to be appointed in these cases by the U.S. Trustee for Region 2. When the Debtors filed for protection from their creditors, they listed total assets of $258,200,000 and total debts of $175,300,000. VESTA INSURANCE: FSIA Liquidation Voting Deadline Set to March 18 ----------------------------------------------------------------- At Florida Select Insurance Agency's behest, Judge Thomas B. Bennett sets March 18, 2008, at 4:00 p.m., Central Time, as the deadline by which entities can vote to accept or reject Florida Select's Plan of Liquidation. The Debtors have previously sent out notices and ballots indicating March 17 as the Voting Deadline. Judge Bennett clarifies that the rescheduling of the Voting Deadline does not alter any other provisions of the Disclosure Statement. As reported by the Troubled Company Reporter on Feb. 22, 2008, Judge Bennett approved the schedule for the voting, tabulation, and confirmation process of Florida Select Insurance's First Amended Plan of Liquidation. All voting classes will send their ballots to: Tyronia M. Morrison Parker, Hudson, Rainer & Dobbs LLP 1500 Marquis Two Tower 285 Peachtree Center Avenue, N.E. Atlanta, Georgia 30303 Disclosure Statement As reported by the TCR on Feb. 22, 2008, Judge Bennett of the U.S. Bankruptcy Court for the Northern District of Alabama, Southern Division, approved the Disclosure Statement explaining Florida Select Insurance Agency, Inc.'s Plan of Liquidation on Feb. 15, 2008. Judge Bennett found that the Disclosure Statement contained adequate information, as required by Section 1125 of the Bankruptcy Code, to enable creditors to make an informed decision on whether to accept or reject the Florida Select Plan. At the hearing on Feb. 15, the Debtors presented to the Court an Amended Plan of Liquidation and the accompanying Disclosure Statement to reflect "immaterial" modifications of the Plan originally filed in December 2007. The First Amended Plan includes additional Plan exhibits, including: (a) a notice fixing the time for submitting acceptances or rejections of the Plan, the time for filing objections to the Plan, and the date and time of the hearings to consider confirmation of the Plan and related matters; and (b) a ballot for voting on acceptance or rejection of the Plan. A full-text copy of the First Amended FSIA Plan of Liquidation is available for free at: http://bankrupt.com/misc/FSIA1stAmendedCh11LiquidationPlan.pdf A full-text copy of the First Amended FSIA Disclosure Statement is available for free at: http://bankrupt.com/misc/FSIA1stAmendedDisclosureStatement.pdf Copies of the Plan Exhibits are available for free at: http://bankrupt.com/misc/FSIANonVotingStatus.pdf http://bankrupt.com/misc/FSIANoticeofPlanConfirmationHearing.pdf http://bankrupt.com/misc/FSIAShareholderBallot.pdf http://bankrupt.com/misc/FSIAUnsecuredBallot.pdf About Vesta Insurance Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc. (Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding company for a group of insurance companies that primarily offer property insurance in targeted states. Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership III, L.P., filed an involuntary chapter 7 petition against the company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517). The case was converted to a voluntary chapter 11 case on Aug. 8, 2006 (Bankr. N.D. Ala. Case No. 06-02517). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, represents the petitioning creditors. In its schedules of assets and liabilities, Vesta listed $14,919,938 in total assets and $214,278,847 in total liabilities. J. Gordon Gaines Inc. is a Vesta Insurance-owned unit that manages the company's numerous insurance subsidiaries and employs the headquarters workers. The company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represent the Debtor in its restructuring efforts. In its schedules of assets and liabilities, Gaines listed $19,818,094 in total assets and $16,046,237 in total liabilities. On Aug. 1, 2006, the District Court of Travis County, Texas entered an order appointing the Texas Commissioner of Insurance as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries: Vesta Fire Insurance Corporation; The Shelby Insurance Company; Shelby Casualty Insurance Corporation; Texas Select Lloyds Insurance Company; and Select Insurance Services, Inc. On Oct. 11, 2006, both Vesta and Gaines filed separate Plans of Liquidation and Disclosure Statements. They filed an amended Plan on Nov. 7, 2006, and a Second Amended Plan on Nov. 10, 2006. The Court approved the Disclosure Statements of Vesta and Gaines on Nov. 10, 2006. On Dec. 22, 2006, the Court confirmed the Third Amended Plans of Vesta and Gaines. Florida Select Insurance Agency Inc., an affiliate, filed for chapter 11 protection on April 24, 2007 (Bankr. N.D. Ala. Case No. 07-01849). Rufus Dorsey, IV, Esq., at Parker Hudson Rainer & Dobbs LLP, represents Florida Select. FSIA's exclusive period to file a plan of reorganization expired Dec. 20, 2007. (Vesta Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) VESTA INSURANCE: FSIA's Solicitation Period Extended to May 19 -------------------------------------------------------------- Judge Thomas B. Bennett extended the period within which Florida Select Insurance Agency may solicit acceptances of its Plan of Liquidation until May 19, 2008. Judge Bennett ruled that, during the Extended Solicitation Period, no creditor of Florida Select or any party-in-interest may solicit votes for any plan, unless authorized by the Court. In its extension request, Florida Select has told Judge Bennett that extension of its solicitation period is needed to, among other things, allow its creditors to have ample time to analyze whether to accept or reject the Plan. Florida Select has assured the Court that it has sufficient liquidity to pay its postpetition debts as they come due; hence, the Extended Solicitation Period will not jeopardize the rights of the Debtor's postpetition creditors. As reported by the Troubled Company Reporter on Feb. 22, 2008, Judge Bennett of the U.S. Bankruptcy Court for the Northern District of Alabama, Southern Division, approved the schedule for the voting, tabulation, and confirmation process of Florida Select Insurance Agency, Inc.'s First Amended Plan of Liquidation as: February 15, 2008 -- Record Date to determine creditors and interest holders entitled to receive Solicitation Packages and vote to accept or reject the Plan and Solicitation Package Mailing Date March 17, 2008 -- Voting Deadline March 18, 2008 -- Plan Confirmation Objection Deadline March 20, 2008 -- Plan Confirmation Hearing The Voting Deadline has been extended to March 18, 2008, at 4:00 p.m., Central Time. Solicitation Packages will include a notice of the confirmation hearing, a copy of the Court-approved Disclosure Statement, and a voting ballot. In lieu of the Solicitation Package, Florida Select will distribute a Notice of Non-Voting Status to: -- holders of Administrative Claims, -- holders of Priority Tax Claims, -- holders of Class A Priority Non-Tax Claims, -- holders of Class B Secured Claims, and -- all known parties to executory contracts and unexpired leases who do not hold filed or scheduled claims, excluding claims scheduled as contingent, unliquidated or disputed. All voting classes will send their ballots to: Tyronia M. Morrison Parker, Hudson, Rainer & Dobbs LLP 1500 Marquis Two Tower 285 Peachtree Center Avenue, N.E. Atlanta, Georgia 30303 Parker Hudson is expected to file with the Court the voting results on the Florida Select Plan on March 19, 2008. About Vesta Insurance Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc. (Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding company for a group of insurance companies that primarily offer property insurance in targeted states. Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership III, L.P., filed an involuntary chapter 7 petition against the company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517). The case was converted to a voluntary chapter 11 case on Aug. 8, 2006 (Bankr. N.D. Ala. Case No. 06-02517). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, represents the petitioning creditors. In its schedules of assets and liabilities, Vesta listed $14,919,938 in total assets and $214,278,847 in total liabilities. J. Gordon Gaines Inc. is a Vesta Insurance-owned unit that manages the company's numerous insurance subsidiaries and employs the headquarters workers. The company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represent the Debtor in its restructuring efforts. In its schedules of assets and liabilities, Gaines listed $19,818,094 in total assets and $16,046,237 in total liabilities. On Aug. 1, 2006, the District Court of Travis County, Texas entered an order appointing the Texas Commissioner of Insurance as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries: Vesta Fire Insurance Corporation; The Shelby Insurance Company; Shelby Casualty Insurance Corporation; Texas Select Lloyds Insurance Company; and Select Insurance Services, Inc. On Oct. 11, 2006, both Vesta and Gaines filed separate Plans of Liquidation and Disclosure Statements. They filed an amended Plan on Nov. 7, 2006, and a Second Amended Plan on Nov. 10, 2006. The Court approved the Disclosure Statements of Vesta and Gaines on Nov. 10, 2006. On Dec. 22, 2006, the Court confirmed the Third Amended Plans of Vesta and Gaines. Florida Select Insurance Agency Inc., an affiliate, filed for chapter 11 protection on April 24, 2007 (Bankr. N.D. Ala. Case No. 07-01849). Rufus Dorsey, IV, Esq., at Parker Hudson Rainer & Dobbs LLP, represents Florida Select. FSIA's exclusive period to file a plan of reorganization expired Dec. 20, 2007. (Vesta Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WAMU ASSET-BACKED: Fitch Lowers Ratings on $2.3 Bil. Certificates ----------------------------------------------------------------- Fitch Ratings has taken rating actions on WAMU mortgage pass- through certificates. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are removed. Downgrades total $2.3 billion. Additionally, $1.3 billion was placed on Rating Watch Negative. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: WaMu Asset-Backed Certificates, WaMu Series 2007-HE2 -- $444.1 million class I-A downgraded to 'B' from 'A' (BL: 32.60, LCR: 0.94); -- $288.1 million class II-A1 downgraded to 'AA' from 'AAA', remains on Rating Watch Negative (BL: 50.65, LCR: 1.47); -- $125.3 million class II-A2 downgraded to 'BBB' from 'AAA' (BL: 42.46, LCR: 1.23); -- $199.4 million class II-A3 downgraded to 'BBB' from 'AAA', remains on Rating Watch Negative (BL: 34.81, LCR: 1.01); -- $118 million class II-A4 downgraded to 'B' from 'A' (BL: 31.61, LCR: 0.92); -- $51 million class M-1 downgraded to 'CCC' from 'BBB+' (BL: 28.00, LCR: 0.81); -- $44.6 million class M-2 downgraded to 'CC' from 'BBB' (BL: 24.75, LCR: 0.72); -- $27.1 million class M-3 downgraded to 'CC' from 'BBB-' (BL: 22.68, LCR: 0.66); -- $23.9 million class M-4 downgraded to 'CC' from 'BB' (BL: 20.71, LCR: 0.6); -- $23.1 million class M-5 downgraded to 'CC' from 'B' (BL: 18.74, LCR: 0.54); -- $21.5 million class M-6 downgraded to 'C' from 'B' (BL: 16.89, LCR: 0.49); -- $20.7 million class M-7 downgraded to 'C' from 'CCC' (BL: 15.19, LCR: 0.44); -- $12.7 million class M-8 downgraded to 'C' from 'CCC' (BL: 14.20, LCR: 0.41); -- $17.5 million class M-9 downgraded to 'C' from 'CCC' (BL: 13.07, LCR: 0.38). Deal Summary -- Originators: WAMU: 100% -- 60+ day Delinquency: 19.77% -- Realized Losses to date (% of Original Balance): 1.07% -- Expected Remaining Losses (% of Current balance): 34.50% -- Cumulative Expected Losses (% of Original Balance): 32.91% WaMu Asset-Backed Certificates, WaMu Series 2007-HE3 -- $342.5 million class I-A1 downgraded to 'BBB' from 'AA-', remains on Rating Watch Negative (BL: 36.94, LCR: 1.15); -- $123.3 million class II-A1 rated 'AAA', remains on Rating Watch Negative (BL: 57.19, LCR: 1.78); -- $51.4 million class II-A2 downgraded to 'AA' from 'AAA' (BL: 48.38, LCR: 1.51); -- $85.5 million class II-A3 downgraded to 'BBB' from 'AAA', remains on Rating Watch Negative (BL: 38.75, LCR: 1.21); -- $33.1 million class II-A4 downgraded to 'BBB' from 'AA-', remains on Rating Watch Negative (BL: 36.49, LCR: 1.14); -- $184.2 million class II-A5 downgraded to 'BBB' from 'AA-', remains on Rating Watch Negative (BL: 36.49, LCR: 1.14); -- $53.6 million class M-1 downgraded to 'B' from 'A+' (BL: 31.37, LCR: 0.98); -- $37.5 million class M-2 downgraded to 'CCC' from 'A-' (BL: 27.73, LCR: 0.86); -- $21.9 million class M-3 downgraded to 'CCC' from 'BBB+' (BL: 25.53, LCR: 0.8); -- $19 million class M-4 downgraded to 'CC' from 'BBB' (BL: 23.53, LCR: 0.73); -- $19 million class M-5 downgraded to 'CC' from 'BBB-' (BL: 21.46, LCR: 0.67); -- $15 million class M-6 downgraded to 'CC' from 'BB' (BL: 19.70, LCR: 0.61); -- $16.1 million class M-7 downgraded to 'CC' from 'B' (BL: 17.74, LCR: 0.55); -- $10.9 million class M-8 downgraded to 'CC' from 'B' (BL: 16.53, LCR: 0.52); -- $16.1 million class M-9 downgraded to 'C' from 'B' (BL: 15.07, LCR: 0.47). Deal Summary -- Originators: WAMU: 100% -- 60+ day Delinquency: 14.65% -- Realized Losses to date (% of Original Balance): 0.51% -- Expected Remaining Losses (% of Current balance): 32.07% -- Cumulative Expected Losses (% of Original Balance): 30.59% The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions. The updated assumptions better capture the deteriorating performance of pools from 2007, 2006 and late 2005 with regard to continued poor loan performance and home price weakness. WASTE SERVICES: Completes $57 Mil. Sale of Jacksonville Assets -------------------------------------------------------------- Waste Services Inc. completed the sale of its Jacksonville, Florida area hauling and materials recycling operations and construction demolition debris landfill to Advanced Disposal Services Inc. and has used $42.5 million of the proceeds to reduce its term loans. As reported in the Troubled Company Reporter on March 3, 2008, Waste Services signed a definitive agreement for the sale of its Jacksonville, Florida area hauling and materials recycling operations and construction and demolition debris landfill to Advanced Disposal Services Inc. for $57.5 million. The company will retain ownership of the Jacksonville materials recycling and hauling facilities and lease them to the purchaser. The transaction is subject to lender approvals and customary closing conditions and is expected to close in early March. About Waste Service Headquartered in Burlington, Ontario, Waste Services Inc. (NASDAQ: WSII) -- http://www.wasteservicesinc.com/-- is a multi-regional, integrated solid waste services company, providing collection, transfer, landfill disposal and recycling services for commercial, industrial and residential customers in the United States and Canada. * * * Moody's Investors Service placed Waste Services Inc.'s subordinated debt rating at 'Caa1' in September 2006. The rating still hold to date with a stable outlook. * Fitch Details Its Negative Outlook on US Title Insurers --------------------------------------------------------- In a new report, Fitch Ratings details its negative outlook on U.S. title insurers. The outlook is attributable to a sharp decline in revenue and profits for the fourth quarter and full year 2007, as well as expectations for further deterioration in 2008 and 2009. The report includes a review of 2007 full year GAAP results for the five national title insurers, and the market's profitability prospects in 2008. Continued unfavorable credit and property market conditions, spurred by the subprime mortgage crisis, support the revised forecast. To coincide with Fitch's views on the title insurance industry, it holds conference call on March 7. A separate announcement with dial-in information will follow shortly. Historically, it is rare for U.S. title insurers to produce net losses. Four out of five publicly-traded, national title underwriters in Fitch's rating universe reported losses in 2007 due to declining revenues and unexpected growth in incurred claims losses. "As title insurance is a cyclical business, ratings are assigned at a level that can withstand a normal industry cycle" said Doug Pawlowski, Sector Head for title insurance ratings at Fitch. "However, the current downtrend may be unusually severe and longer in duration than past cycles, and create significant pressure on some company ratings." Leading indicators of future title insurance revenues, including mortgage origination and title insurance order flow, reveal that further challenges lie ahead. Reducing expenses remains the key element to profitability in a down market and title insurers with a greater proportion of fixed costs will be at a disadvantage and will require significant expense restructuring to restore profitability. The poor results in 2007 are also attributable to unfavorable loss reserve development from the policy years in the previous cyclical earnings peak years of 2003-2006. Higher than anticipated loss ratios in these periods indicate that underwriting quality diminished greatly when industry participants were operating at full capacity. "There is some concern that these reserve deficiencies coupled with operating losses will affect capital adequacy within the title industry," added Gerald Glombicki, Director in Fitch's Insurance Rating Group. * Hugh McDonald Joins Thacher Proffitt as Bankruptcy Partner ------------------------------------------------------------ Hugh McDonald has joined Thacher Proffitt & Wood LLP as partner in the Bankruptcy and Creditors' Rights Practice Group, resident in the New York office. Prior to joining the firm, Mr. McDonald was a partner in the New York office of Allen & Overy. In his role at Thacher Proffitt, Mr. McDonald will focus on all aspects of restructuring including workouts, bankruptcy and related issues, and bankruptcy related litigation. He will bring with him a breadth of expertise in such matters as: 1. Mirant Corporation 2. Enron Corporation 3. Blue Bird Bus "Hugh is a tremendous talent, particularly in the area of complex Chapter 11 cases, committee work and the bankruptcy aspects of structured finance, Christopher F. Graham, chair of the Bankruptcy and Creditors' Rights Practice Group, said. "He's adding depth to our practice at a time of increased restructurings and workouts." "Capital markets disruptions ebb and flow but Hugh's expertise complements our clients' business life-cycles," added Paul D. Tvetenstrand, chairman and managing partner of Thacher Proffitt. "We welcome him wholeheartedly to the Firm, and will support him in all his endeavors." Mr. McDonald focuses his practice in all aspects of restructuring including workouts, bankruptcy and related issues, and bankruptcy related litigation and has represented debtors, secured and unsecured creditors, bank groups, bond holder groups, and creditor committees. He is also experienced with asset sales in bankruptcy cases, debtor in possession financing, and the liquidation of estates. Mr. McDonald is a co-author of these published articles: -- "Lafferty's Orphan: The Abandonment of Deepening Insolvency" American Bankruptcy Institute Journal, December/January 2007/2008, with Todd S. Fishman and Laura Martin. -- "Lessons on the impact of a US bankruptcy filing on lenders' rights," Global Insolvency & Restructuring Yearbook 2004/05, page 68, with Carolyn Conner, Dennise Calderon-Barrera and Ken Coleman. -- "Off-Balance Sheet Post Enron - Game Over or Just New Rules," Project Finance International, Supp. March 2002, 11, with Ken Coleman. He earned his J.D. from New York Law School, cum laude, and his B.A. from Boston College, cum laude. About Thacher Proffitt & Wood LLP Founded in 1848, Thacher Proffitt has nearly 300 lawyers in five locations - New York, Washington, DC, White Plains, New York, Summit, New Jersey and Mexico City. The company advises clients on a range of matters involving: banking, bankruptcy, compensation and benefits, corporate and securities, international, litigation and dispute resolution - including subprime, real estate, structured finance, tax, technology and intellectual property, and trusts and estates. * KCP Advisory Appoints Jacen A. Dinoff as Principal and CEO ------------------------------------------------------------ KCP Advisory Group appointed Jacen A. Dinoff as principal and chief executive officer of its national consulting practice. Mr. Dinoff will oversee operations of KCP's national practice out of the group's Boston office. Mr. Dinoff is an experienced and highly-regarded corporate restructuring and turnaround management advisor with nearly two decades of hands-on accounting, finance, management and operations experience along with a technical expertise in bankruptcy case administration. His career has included engagements in financial an operational restructurings, asset divestitures through sale and liquidation, and senior debtor or creditor advisor roles for many well-known companies, both publicly and privately held, in a multitude of industries. "We are very excited about Jacen leading the firm," explains Andrew H. Moser, co-founder and partner of Kairos Capital Partners and chairman of KCP's Advisory Council. "I have known Jacen for ten years. He brings not only the talent and expertise necessary to manage and grow this practice, but also a sense of passion, energy and level of diligence that has made him a highly respected professional in his industry." Mr. Dinoff is an active member of the Turnaround Management Association, Association for Corporate Growth and American Bankruptcy Institute. He can be reached at the Boston office of KCP Advisory Group at (781)722-2606. About KCP Advisory Group Located in Massachussets and New York, KCP Advisory Group -- www.kcpadvisory.com/ -- provides financial advisory, corporate restructuring and business performance improvement services to lender, investor, legal and corporate stakeholders. With decades of proven experience in all aspects of corporate transactions and reorganizations, the professionals at KCP provide unique insight and complete business solutions for companies in transition or reorganization, or seeking to improve operational efficiency and profitability. The company was formed by some of the most respected and innovative leaders in lending, investing, turnaround consulting and business advisory services. * McGuireWoods and Helms Mulliss to Combine Into 900-Lawyer Firm ---------------------------------------------------------------- McGuireWoods LLP and Helms Mulliss & Wicker, PLLC plan to merge their practices into a law firm with nearly 900 lawyers and offices in 17 cities in the United States, Europe and Central Asia. The combined firm will be known as McGuireWoods LLP. The merger will be effective at the close of business on March 31, 2008. "Helms Mulliss and McGuireWoods are fortunate to have many successful clients whose legal needs are expanding and becoming more complex as their business grows, and we need to match our capabilities and geographic reach to meet those needs," said Richard Cullen, chairman of McGuireWoods LLP. "With our common traditions of excellence, our shared focus on serving clients, and our complementary expertise in capital markets, business litigation and corporate law, we believe this combination is a natural fit that will benefit clients of both firms." Peter J. Covington, chairman and managing member of Helms Mulliss, will become vice chairman of McGuireWoods. Scott Vaughn, currently the practice area leader for Helms Mulliss Wicker's finance group, will become managing partner of McGuireWoods' Charlotte office. "Helms Mulliss has had a long and proud history serving clients in North Carolina, and we're excited about the opportunity to provide an even higher level of service to our clients by joining forces with McGuireWoods," Covington said. "Charlotte's emergence as the nation's second largest financial center and the growing importance of technology and the life sciences in North Carolina are driving demand for the sophisticated tax, banking, business and regulatory services that our combined firm will be able to provide." McGuireWoods will have approximately 160 lawyers in Charlotte following completion of the merger. McGuireWoods currently has 750 lawyers at 15 locations worldwide, including 40 in Charlotte. Helms Mulliss, established in Charlotte in 1922, has 145 lawyers, including 120 in Charlotte and 25 in offices in Raleigh and Wilmington. McGuireWoods entered the Charlotte market in 1998 following its merger with Blakeney & Alexander. The firm expanded its presence the following year, merging with Fennebresque, Clark, Swindell & Hay. The firm's North Carolina presence also includes a Raleigh office of its public affairs subsidiary, McGuireWoods Consulting. Helms Mulliss & Wicker is recognized as one of America's Best Law Firms by Corporate Board Member magazine, ranked as a Top Ten Bond Counsel by The Bond Buyer, ranked Highly Recommended in Benchmark: Litigation, The Definitive Guide to America's Leading Litigation Firms and Attorneys and is named a Go-To Law Firm by Corporate Counsel magazine. McGuireWoods LLP is a full-service law firm with offices in the United States, Europe and Central Asia providing legal counsel to clients around the world. The firm's Charlotte office is located at 100 North Tryon Street. * BOOK REVIEW: Voluntary Assignments for the Benefit of Creditors ----------------------------------------------------------------- Publisher: Beard Books Softcover: 788 pages for both volumes Price: $34.95 each volume; $49.95 set Review by Henry Berry http://www.amazon.com/exec/obidos/ASIN/189312228X/internetbankrupt http://www.amazon.com/exec/obidos/ASIN/1893122298/internetbankrupt Voluntary Assignments for the Benefit of Creditors is a 1999 update of the classic nineteenth-century work on the important financial and business instrument known as "voluntary assignments." The author of the original edition was Alexander M. Burrill, a noted legal scholar who also wrote a law dictionary and several other texts. Voluntary Assignments for the Benefit of Creditors is now in its sixth edition, with Avery-Webb authoring the update. As defined by the authors, voluntary assignments for the benefit of creditors are "transfers, without compulsion of law, by debtors, of some or all of their property to an assignee or assignees, in trust to apply the same, or the proceeds thereof, to the payment of some or all of their debts, and to return the surplus, if any, to the owner." Voluntary assignments offer businesspersons from small business owners to corporate executives great flexibility in raising capital. Considering the many ways that businesses can enter into voluntary assignments, the different ways of valuing properties "assigned," and the changing value of these properties over time, the law governing voluntary assignment is complex. The authors tackle the subject of voluntary assignments in all its breadth and depth. During the 1800s, when Burrill's work first came out, there were innumerable cases dealing with voluntary assignments. The case law of the 1800s remains authoritative, informative, and instructive today. To render it comprehensible, the authors break down the subject matter into its many facets, thereby allowing lawyers and others to quickly reference areas of interest. These cases are listed alphabetically, and comprise more than fifty pages in a front section titled "Table of Cases." Cases are also referred to in the text proper and in copious footnotes. The format of the text, including the footnotes, is the standard followed by many legal texts and handbooks, notably the multi-volume American Jurisprudence. The sections are numbered consecutively in forty- five chapters. There are 458 sections in all. The sections are relatively short, even though the subject of voluntary assignments is complex and there is bountiful case law. Readers can peruse general topics such as execution of the assignment, construction of assignments, sale of the assigned property, and the rights, duties, and powers of the assignee. More specific, detailed topics can be accessed using the index. There are two appendices. The first contains synopses of the statutes of every state and territory on voluntary assignments. The second appendix contains nearly thirty standard forms that can be used for various aspects of assignments. Although voluminous and rigorous in its commentary and legal citations, the two-volume Voluntary Assignments for the Benefit of Creditors is neither dense nor ungainly. Like a good lawyer breaking down a case so it can be comprehended by a jury of average persons, so does Burrill and Avery-Webb deal with the topic of voluntary assignments. Born in 1868 in Tennessee, James Avery-Webb (d. 1953) had a career as a prominent attorney in New York City. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, Philline P. Reluya, Joseph Medel C. Martirez, Ma. Cristina I. Canson, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2008. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***