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/raid1/www/Hosts/bankrupt/TCR_Public/080312.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, March 12, 2008, Vol. 12, No. 61 Headlines ABITIBIBOWATER INC: Commences Offers to Exchange 15% Senior Notes ABITIBIBOWATER: S&P Assigns 'B-' Corp. Rating; Negative Outlook AEGIS MORTGAGE: Wants Court to Extend Plan-Filing Period to June 8 ALCATEL-LUCENT: Inks Deal to Acquire ReachView Technologies AMDL INC: Receives $1M in Private Offering of Common Shares AMERICAN AXLE: Union Won't Accept Terms, Halts Labor Talks AMERICAN LAFRANCE: Disclosure Statement Hearing Set Today AMERICAN HOME: Continues to Accept Bids for Non-Performing Loans AMERICAN HOME: BofA Wants to Sell $584MM of Mortgage Loans AMERICAN HOME: Gets Court Approval of Indymac Settlement AMERICREDIT CORP: Board Approves Appointment of Two New Directors ANNA GARTRELL: Case Summary & Five Largest Unsecured Creditors ARAMARK CORP: Fitch Holds and Withdraws 'B' Issuer Default Rating ASCENDIA BRANDS: Daniel Platt Succeeds Michael Gross as Director ASSET ACCEPTANCE: Amends Credit Deal to Permanently Waive Defaults AVANTAIR INC: Inks Floor Plan Finance Pact with Midsouth Services AVITAR INC: Sells $310,000 of 8.0% Secured Convertible Notes BASIC ENERGY: S&P Lifts Corp. Rating to 'BB-' on Good Risk Profile BEAR STEARNS: Moody's Lowers Ratings on 163 Tranches From 15 Deals BEARINGPOINT INC: Dec. 31 Balance Sheet Upside Down by $469.2 Mil. BENTLEY GROUP: To Close 120 Stores, Lay Off 520 Employees BLB MANAGEMENT: Interest Payment Default Spurs Moody's Junk Rating CAPRI CONDOMINIUM: Wants to Hire Burr & Forman as Special Counsel CARIBBEAN RESTAURANTS: Moody's Pares Ratings to 'B3' From 'B2' CASH TECHNOLOGIES: Unit Agrees to Acquire Turbocharger Assets CATAPULT COMMS: Discloses Reduction in Global Workforce by 11% CENTERSTAGING: Voluntary Chapter 11 Case Summary CERADYNE INC: Board Approves Repurchase of $100 Mil. Common Stock CSFB ABS: Realized Losses Spurs S&P's Rating Cuts on Two Classes CHAMPION ENTERPRISES: Buys ModularUK with $4 Mil. Debt Assumptions CHARLES RIVER: Moody's Changes Outlook to Stable; Retains Ratings CHARTER COMMS: Moody's Holds Junk Ratings on Adequate Liquidity CHARTER COMMS: S&P Changes Outlook to Neg on Liquidity Concerns CHARTER COMMUNICATIONS: Plans to Borrow $275 Million in Term Loans CHARTER COMMUNICATIONS: Plans to Issue $500 Mil. of 2nd Lien Notes CHARYS HOLDING: Can Hire Richards Layton as Bankruptcy Co-Counsel CHARYS HOLDING: Allowed to Hire Michael Brenner as Special Counsel CHRYSLER LLC: Idles Facility in Delaware Due to Axle Labor Strike COMPLETE PRODUCTION: S&P Upgrades Corporate Credit Rating to 'BB-' COUNTRYWIDE FINANCIAL: FBI Digs Deep Into Evidence; Finds Errors CREDIT SUISSE: Moody's Junks Ratings on Two Certificate Classes CRUM & FORSTER: Strong Earnings Cues S&P's Positive Watch Listing CSFB: Fitch Junks Ratings on Two Certificate Classes CUNNINGHAM LINDSEY: S&P Alters Outlook to Stable; Holds B- Rating DIOGENES CDO: $120 Mil. Notes Get Moody's Junk Rating DLJ MORTGAGE: Fitch Holds 'BB+' Rating on Class B3 Certificates DOUGLAS ARMSTRONG: Case Summary & Largest Unsecured Creditor DIABLO GRANDE: Voluntary Chapter 11 Case Summary DURA AUTOMOTIVE: Seeks $230 Mil. Financing to Execute Revised Plan ENCYSIVE PHARMA: Regains Compliance Under Nasdaq's Listing Rules ENESCO GROUP: Plan Confirmation Hearing Deferred to April 9 EPICOR SOFTWARE: S&P Withdraws Ratings Upon Company's Request EVELYN DONALDSON: Case Summary & 15 Largest Unsecured Creditors FAIRFAX FINANCIAL: S&P Designates Ratings on Positive CreditWatch FEDDERS CORP: Wants Committee's $150 Million Lawsuit Denied FESTIVAL FUN: Bond Repayments Cues Moody's to Withdraw All Ratings FIRST FRANKLIN: Seven Classes of Certs. Gets S&P's Junk Ratings FOCUS ENHANCEMENTS: Inks Pact for $6.5 M. Loan with Heritage Bank FRANCIS LEE CO: Voluntary Chapter 11 Case Summary GENCORP INC: Terry Hall Steps Down as Chief Executive Officer GENCORP INC: Agrees with Steel Partners on Board Nominations GENCORP INC: S&P Retains 'B+' Rating; Changes Outlook to Negative GLOBAL MOTORSPORT: Has Approval to Sell Assets to Dae-II for $16MM GPS INDUSTRIES: Obtains $3.0 Million Loan from Silicon Valley Bank GRAHAM PACKAGING: Fitch Affirms Ratings with Stable Outlook GSC CDO: Moody's Slashes Ratings on Deteriorating Credit Quality H&E EQUIPMENT: Marginal Declines Cue Moody's To Hold 'B1' Ratings HAVEN HEALTHCARE: Committee Can Hire Deloitte as Financial Advisor HEARTLAND AUTO: BNC et al. Protest on $10 Million DIP Financing IMMUNICON CORP: Cuts Staff by 40% to Mitigate Risks and Expenses INDEPENDENCE COUNTY: S&P Chips Rating on $29.285 Mil. Bonds to BB- KAYDON CORP: Moody's Keeps Low-B Ratings; Alters Outlook to Stable LANCER FUNDING: Eroding Credit Quality Prompts Moody's Rating Cuts LASALLE COMMERCIAL: Two Cert. Classes Obtains Moody's Junk Ratings LAS VEGAS SANDS: Completes Sale of The Palazzo to General Growth LEVITT AND SONS: Mechanic Lienholders' Dismissal Request Denied LEVITT AND SONS: Wants to Employ Bilzin Sumberg as Tax Counsel LIBERTY MEDIA: Board Approves Repurchase of Common Stock LILLIAN VERNON: Taps Morris Nichols as Bankruptcy Counsel LOUIS PEARLMAN: To Plead Guilty This Week for Fraud Allegations LSI CORP: Inks Asset Purchase Agreement with Infineon Technologies MAGNA ENT: Reports $42.9 Million Net Loss for 2007 Fourth Quarter MANCHESTER INC: Gets Interim Ok to Employ Eric Liepins as Counsel MERRILL LYNCH: Moody's Confirms Low-B Ratings on Six Cert. Classes MERRILL LYNCH: Moody's Confirms Low-B Ratings on Three Classes META HEALTH: To Sell Theramed Unit to Reduce Debt Load META HEALTH: Shareholders to Review Rogan Buyout Offer on April 7 METHANEX CORP: Paying $0.14/Share Quarterly Dividend on March 31 METROPOLITAN MORTGAGE: Reaches Settlement with PwC, Receives $30MM MICRON TECH: S&P Assigns 'BB-' Corporate Rating on Negative Watch MONEYGRAM INT'L: Agrees to Amend Agreement with Investment Group MORTGAGE ASSISTANCE: Inks Two Note Agreements for $600,000 NATIONAL CINEMEDIA: Dec. 27 Balance Sheet Upside Down by $572.4MM NEWPARK RESOURCES: Buyer Seeks More Time to Arrange Financing NEWPARK RESOURCES: Postponed Sale Won't Affect S&P's 'B+' Rating NEW YORK UNITED: Judge Hardin Confirms Chapter 11 Liquidation Plan NOMURA ASSET: Fitch Holds 'B-' Rating on $27.9MM Class B-6 Certs. NRG ENERGY: Earns $104 Mil. For 2007 Fourth Quarter Ended Dec. 31 ORECK CORP: Debt Under $215MM Credit Pact Sold At Almost 50% Off PEDRO'S OF BROOKFIELD: Case Summary & 20 Largest Unsec. Creditors PHARMED GROUP: Exclusive Plan Filing Period Extended to April 25 PILGRIM'S PRIDE: Sells Pennsylvania Facility & Exits Turkey Biz PLASTECH ENGINEERED: Court Okays Allard & Fish as Local Counsel PLASTECH ENGINEERED: Wants JCI Contractual Disputes Resolved PLASTECH ENGINEERED: Wants Non-cooperating Vendors Summoned PLASTECH ENGINEERED: Wells Fargo Seeks Equipment Lease Payments PNM RESOURCES: Fitch Cuts Issuer Default to BB+ from BBB- POWERLINX INC: Inks Asset Purchase Agreement with Zone Defense LLC PRB ENERGY: Wants to Access PRB Funding's $300,000 Loan Facility PRIMARY ENERGY: Posts $21.0MM Net Loss for Year 2007 Ended Dec. 31 QUEBECOR WORLD: Court OKs Rejection of Banc of America Lease Pact QUEBECOR WORLD: Court Approves Creditor Information Protocol QUEBECOR WORLD: Can Pay Non-Employee Sales Brokers' Commissions RAMP SERIES: 18 Tranches Acquire Moody's Rating Downgrades RH DONNELLEY: Moody's Holds Ratings; Revises Outlook to Negative SHARON DE EDWARDS: Case Summary & 20 Largest Unsecured Creditors SHARPER IMAGE: Gets Authority to Obtain $60,000,000 DIP Financing SILVER MARLIN: Moody's Junks Rating on $21.5 Mil. Notes From 'Aa2' SILVER STATE: Owner Fails to Appear at Tuesday's Hearing SIRVA INC: Triple Net to Appeal Order Allowing $150M DIP Financing SIRVA INC: Triple Net to Appeal Approval of Claims Payment Order SIX FLAGS: Stockholders' Deficit Rises to $252 Mil. at December 31 SOLOMON DWEK: 56 Residential Homes to Be Sold on April 2 SOLOMON TECH: Agrees to Accelerate Debentures Held by Harborview SOLUTIA INC: Inks Amended Monsanto and Retiree Agreements SOLUTIA INC: Issues New Common Stock Under Confirmed Plan SOLUTIA INC: Terminates Pre-Emergence Stock and Select Deals SPECTRUM BRANDS: Inks Standstill Agreement with Harbinger Capital SPENCER ARRINGTON: Case Summary & Eight Largest Unsec. Creditors STEEL DYNAMICS: Board Authorizes Two-For-One Common Stock Split STRUCTURED ASSET: Nine Tranches Acquire Moody's Junk Ratings TEQUESTA CAPITAL: Facing Liquidation After Missing Margin Calls TLC VISION: Shareholder Joffe Endorses Himself as Board Nominee TOUSA INC: Bigwater Partners Balk at $135MM DIP Financing TOUSA INC: Gets Court Permission to Continue to Sell Homes TOUSA INC: Court Approves Berkowitz Amended Employment Agreement TOUSA INC: Court Approves Sale of Note to PRN for $13,500,000 TPF GENERATION: S&P Keeps 'BB-' Rating on $1.15BB Sr. Facilities TRICOM SA: Wants to Employ Squire Sanders as Dominican Counsel TRICOM SA: Seeks Court Authority to Hire Sotomayor as Auditors TRICOM SA: Reports 19 Largest Unsecured Creditors; List Amended TRUMAN CAPITAL: Two Cert. Classes Get S&P's Rating Cuts on Losses TWL CORP: To Merge Newly Acquired Divergent with Unit UNIVISION COMMS: Moody's Keeps B1 Ratings; Gives Negative Outlook US STEEL: Unit Backs Out From Talks to Sell Wabush Mine Stake USG CORP: Enough Cushion on Liquidity Cues S&P to Hold BB+ Rating VITESSE SEMICONDUCTOR: To Complete Audit in Second Quarter 2008 WCI COMMUNITIES: Sees at Least $410,000,000 4th Qtr Pre-Tax Loss WELLCARE HEALTH: Appoints O'Neill as SVP, Gen Counsel & Secretary WELLCARE HEALTH: 10 Units File Health Reports with State Agencies WICKES FURNITURE: Landlords Complain Over Erroneous Lease Notices WOLFE PLUMBING: Case Summary & 20 Largest Unsecured Creditors WORNICK CO: Ad Hoc Committee, Sopakco Object Sale Bid Procedures WR GRACE: To Pay $250 Million for Cleanup of Asbestos in Montana ZIFF DAVIS: Seeks Authority to Use Noteholders' Cash Collateral ZIFF DAVIS: Seeks April 21 Extension of Schedules Filing Deadline ZIFF DAVIS: Seeks Permission to Pay Prepetition Wages & Benefits ZIFF DAVIS: Wants Utility Companies Barred from Halting Services * S&P Downgrades 87 Tranches' Ratings From 15 Cash Flows and CDOs * S&P Ratings on 95 Classes From 89 RMBS Deals Tumbles to 'D' * Fitch Says Student Loan Trust Still Resilient Despite Disruption * Banks Still Cautious on Hedge Fund Debts Despite U.S. Backing * Kilpatrick's Subprime Team Adds White Collar Crime Lawyers * Upcoming Meetings, Conferences and Seminars ********* ABITIBIBOWATER INC: Commences Offers to Exchange 15% Senior Notes ----------------------------------------------------------------- AbitibiBowater Inc. commenced private offers to exchange notes in a private placement for a combination of cash and new 15% Senior Notes due 2010 to be issued by Abitibi-Consolidated Company of Canada. Old notes include: -- 6.95% Senior Notes due 2008 of Abitibi-Consolidated Inc., a subsidiary of ABH; -- 5.25% Senior Notes due 2008 of ACCC, a subsidiary of ACI; and -- 7.875% Senior Notes due 2009 of Abitibi-Consolidated Finance L.P., a subsidiary of ACI. The exchange offers are being made only to qualified institutional buyers and institutional accredited investors inside the United States and to certain non-U.S. investors located outside the United States. Each exchange offer will expire at 11:59 p.m., New York City time, on April 4, 2008, unless extended. Eligible holders who validly tender and do not withdraw their old notes on or prior to 5:00 p.m., New York City time, on March 26, unless extended, will also receive additional cash payments in lieu of a portion of the new notes. The cash to be paid and principal amount of new notes to be issued to eligible holders for each $1,000 principal amount, or principal amount at maturity, as applicable, of old notes accepted in exchange well as the cash to be paid to eligible holders who validly tender their old notes on or prior to the consent payment deadline. The company is also soliciting consents to amend the supplemental indentures governing the old notes and agreement from the holders of the old notes not to exercise any remedies under the old notes or their respective supplemental indentures until April 8, 2008. Consideration per $1,000 principal amount of old notes exchanged Title of old notes to be exchanged: 6.95% Senior Notes due 2008 CUSIP No.: 003924AA5 Aggregate Principal Amount Outstanding:$195,612,000 If Tendered by the Consent payment Deadline Principal Amount of new notes to be issued: $500 Cash Payment: $500 If Tendered after the Consent payment Deadline Principal Amount of new notes to be issued: $600 Cash Payment: $400 Title of old notes to be exchanged: 5.25% Senior Notes due 2008 CUSIP No.: 003669AB4 Aggregate Principal Amount Outstanding: $150,000,000 If Tendered by the Consent payment Deadline Principal Amount of new notes to be issued: $500 Cash Payment: $500 If Tendered after the Consent payment Deadline Principal Amount of new notes to be issued: $600 Cash Payment: $400 Title of old notes to be exchanged: 7.875% Senior Notes due 2009 CUSIP No.: 003672AA0 Aggregate Principal Amount Outstanding: $150,000,000 If Tendered by the Consent payment Deadline Principal Amount of new notes to be issued: $750 Cash Payment: $250 If Tendered after the Consent payment Deadline Principal Amount of new notes to be issued: $850 Cash Payment: $150 The purpose of these private exchange offers is to improve ABH's financial flexibility by extending the maturities of its overall indebtedness and reducing the amount of its outstanding indebtedness with maturities in 2008 and 2009. Tendered old notes may be validly withdrawn at any time prior to 5:00 p.m., New York City time, on March 26, 2008. Old notes tendered after the consent payment deadline may not be withdrawn. Each of the exchange offers is conditioned upon, among other things, there being validly tendered and not withdrawn prior to the expiration of the exchange offers at least 90% principal amount of each series of old notes tendered into the exchange. ACCC will enter into a registration rights agreement pursuant to which it will agree to file an exchange offer registration statement with the Securities and Exchange Commission with respect to the new notes. The new notes will be senior unsecured obligations of ACCC, and will be guaranteed by ACI and ACF, ranking equal in right of payment with old notes not tendered in the exchange offers. The new notes will mature on July 15, 2010, and will bear interest at a rate per annum equal to 15%. Interest on the new notes will be payable on July 15 and January 15 of each year, beginning on July 15, 2008. The other terms of the new notes will be substantially similar to the terms of the 5.25% Senior Notes due 2008 of ACCC, except that the new notes will be guaranteed by ACI and certain subsidiaries and affiliates of ACI. The new notes have not been and will not be registered under the Securities Act or any state securities laws, may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements, and will therefore be subject to substantial restrictions on transfer. About AbitibiBowater Headquartered in Montreal, Canada, AbitibiBowater Inc. (NYSE:ABH) -- http://www.abitibibowater.com/-- was formed as a result of the combination of Abitibi-Consolidated Inc. and Bowater Incorporated. Pursuant to the transaction, Abitibi-Consolidated Inc. and Bowater Incorporated became subsidiaries of AbitibiBowater. The company produces a range of forest products marketed in more than 80 countries around the world. The company's customers include many publishers, commercial printers, retailers, consumer products companies and building supply outlets. AbitibiBowater is also a recycler of newspapers and magazines. The company owns or operates 32 pulp and paper mills and 35 wood products facilities in North America and offshore. The company manages its business in five segments: coated papers, specialty paperBs, newsprint, market pulp and lumber. * * * As reported in the Troubled Company Reporter on Feb. 25, 2008, Fitch Ratings downgraded the ratings of AbitibiBowater Inc. and subsidiaries as: Abitibi-Consolidated Inc.; IDR to 'CCC' from 'B-'; senior unsecured debt to 'CCC/RR4 from 'B-/RR4'; secured revolver to 'CCC+/RR3' from 'B/RR3'. Bowater Incorporated: IDR to 'CCC' from 'B-'; senior unsecured debt to 'CCC/RR4' from 'B-/RR4'; secured revolver to 'B/RR1' from 'BB-/RR1'. Bowater Canadian Forest Products Inc.: IDR to 'CCC' from 'B-'; senior unsecured debt to 'B-/RR2' from 'B+/RR2; secured revolver to 'B/RR1' from 'BB-/RR1'. All ratings have been placed on rating watch negative. ABITIBIBOWATER: S&P Assigns 'B-' Corp. Rating; Negative Outlook --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' long-term corporate credit rating to recently formed, Montreal-based AbitibiBowater Inc. The outlook is negative. AbitibiBowater is the parent company of Abitibi-Consolidated Inc. and Bowater Inc., which continue to operate as its subsidiaries. S&P also lowered the long-term corporate credit and senior unsecured debt ratings on both subsidiaries to 'B-' from 'B', and placed Abitibi-Consolidated on CreditWatch with negative implications. The outlook on Bowater is negative. "The CreditWatch placement on Abitibi-Consolidated reflects our uncertainty that parent AbitibiBowater will be able to complete its recently announced refinancing plan in time to address more than US$1 billion in upcoming debt maturities and bolster liquidity, given current credit market conditions," said Standard & Poor's credit analyst Jatinder Mall. "We are not placing the ratings on AbitibiBowater and Bowater on CreditWatch as the current capital structure does not allow for movement of cash flows from Bowater to Abitibi-Consolidated, or vice versa, and there are no cross default triggers between the two subsidiaries," Mr. Mall added. The ratings reflect AbitibiBowater's participation in the declining newsprint market, a highly leveraged capital structure, liquidity concerns, and weak cash flow generation. These risks are partially offset by its leading market position in the newsprint market and expectations that synergies and high-cost mill closures could lead to improved profitability. AbitibiBowater is the largest newsprint producer in North America with annual capacity of about 5.3 million metric tons. The company also produces coated and uncoated paper, pulp, and wood products. It has 27 pulp and paper, and 35 wood product facilities in Canada, the U.S., South Korea, and the U.K. S&P will monitor the developments of AbitibiBowater's refinancing plans in order to resolve the CreditWatch on Abitibi-Consolidated. S&P could lower the ratings on Abitibi-Consolidated if it is unable to meet its maturing debt obligations. The negative outlook on both AbitibiBowater and Bowater reflects weak market conditions for the newsprint and lumber business segments and the significant challenges the companies face in rationalizing production capacity to meet deteriorating demand. S&P could lower the ratings on both the parent and subsidiaries if newsprint and lumber prices and demand decline severely and the merged company is unable to realize synergies and reduce debt as stated. An upgrade, although unlikely, would require meaningful deleveraging of the company's balance sheet. AEGIS MORTGAGE: Wants Court to Extend Plan-Filing Period to June 8 ------------------------------------------------------------------ Aegis Mortgage Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend to (i) June 8, 2008, the period during which they have the exclusive right to file a Chapter 11 plan, and (ii) Aug. 7, 2008, the period during which they have the exclusive right to solicit acceptances of that plan. Pursuant to Del.Bankr.LR 9006-2, the Exclusive Plan Filing Period is automatically extended until the conclusion of the hearing on the Debtors' request. The Court will convene a hearing on April 14, 2008, at 10:30 a.m., Eastern Time, to consider the requested 90-day extensions. Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, says that the brief extension will further the intent of Section 1121 of the Bankruptcy Code, which gives the Debtors opportunity to negotiate with their creditors and to propose and confirm a consensual plan. Mr. Cairns says the request is appropriate since the Debtors met the requirements for a valid extension. He argues that: (1) the Debtors' cases involved the liquidation of the assets of a company engaged in complex financial transactions; (2) the Debtors are generally paying their postpetition obligations as they become due; (3) the Debtors have acted in good faith to maximize the value of estates for the creditors' benefits and they continue to expeditiously move their cases forward; and (4) the extension is not sought to pressure creditors. Deadline to submit objections to the Exclusivity Motion is on April 7, 2008 at 4:00 p.m., Eastern Time. Headquartered in Houston, Texas, Aegis Mortgage Corporation -- http://www.aegismtg.com/-- offers a variety of mortgage loan products to brokers through its subsidiaries. The company together with 10 affiliates filed for chapter 11 protection on Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119) Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl, & Jones, L.L.P., serve as counsel to the Debtors. The Official Committee of Unsecured Creditors is represented by Landis Rath & Cobb LLP. In schedules filed with the Court, Aegis disclosed total assets of $138,265,342 and total debts of $4,125,470. The Debtors' exclusive period to file a plan of reorganization expires on April 9, 2008. (Aegis Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ALCATEL-LUCENT: Inks Deal to Acquire ReachView Technologies ----------------------------------------------------------- Alcatel-Lucent signed an agreement to acquire ReachView Technologies, a service assurance consulting and integration firm in North America. The financial terms of the agreement are not being disclosed. The company relates that upon completion this acquisition will enhance Alcatel-Lucent's current professional services consulting practice, specifically, OSS/BSS and software integration, enabling the company to deliver advanced service assurance solutions to carriers and industry and public sector customers. "Communications service providers are looking for advanced services assurance solutions, and by acquiring ReachView, Alcatel- Lucent will be able to more quickly meet that need," said Andy Williams, president of Alcatel-Lucent's Services business. "The skills of ReachView complement our own service assurance competence centers. Together we will be able to offer carriers the premier consulting and integration expertise they are looking for, no matter where they are located." "Carriers and large enterprises have complex networking, services and business challenges, and they are looking for a partner that can help them with their operations requirements," said Ian Bresnahan, ReachView's chief executive officer. "ReachView is excited to be joining Alcatel-Lucent to offer customers our expertise in delivering quality of service and service assurance solutions, Mr. Bresnahan added. "Our combined skills, knowledge, network expertise and access to multi-vendor labs, will give us a competitive advantage in taking on very large and complex transformation projects." Mr. Bresnahan and the two other principle partners, Todd Cochran and Josh Shipman, of ReachView will continue with Alcatel-Lucent after the acquisition. Alcatel-Lucent's service assurance solution provides tools to ensure that end-user services provided by a carrier or enterprise are continuously available and performing to service level agreements and quality of service performance levels. The tools monitor performance, availability and quality of experience, detect possible failures while at the same time assess services and impact on the user experience. Alcatel-Lucent related that with ReachView it will be able to provide a total consulting practice that will help operators isolate, prioritize and resolve network & server issues faster, through root cause isolation and resolution management. These solutions are tailored to match each operator's operational and business process environment. According to the company, integrating a solution into an operator's network, taking into consideration existing systems, service definitions and adapting to the carrier's processes is a unique competency of the combined companies. The closing, which is subject to the satisfaction of certain conditions, is expected to be April 1, 2008. About ReachView Technologies Headquartered in Atlanta and Dallas, ReachView Technologies -- http://www.reachview.com/-- specializes in best practices around service assurance and performance management consulting, technology solutions and integration. For service providers and enterprise customers, reachview technologies mission is to provide its clients with solutions that assure quality service delivery to their customers. The company has approximately 85 employees. About Alcatel-Lucent Headquartered in Paris, Alcatel Lucent -- http://www.alcatel- lucent.com/ -- (NYSE:ALU) fka Alcatel, provides solutions that enable service providers, enterprises and governments, to deliver voice, data and video communication services to end users. It offers end-to-end solutions that enable communications services for residential, business and mobile customers. It has operations in more than 130 countries Alcatel-Lucent is organized around three business groups and four geographic regions. The Wireless, Wireline and Convergence groups, which make up the Carrier Business Group, are dedicated to serving the needs of the world's service providers. The Enterprise Business Group focuses on meeting the needs of business customers. The Services Business Group designs, deploys, manages and maintains networks worldwide. The Company's geographic regions are Europe and North, Europe and South, North America, and Asia-Pacific. * * * Moody's Investor Service placed Alcatel-Lucent's probability of default rating at 'Ba2' in March 2007. The rating still holds to date with a stable outlook. AMDL INC: Receives $1M in Private Offering of Common Shares ----------------------------------------------------------- AMDL Inc. disclosed Friday that it conducted the second closing of a combined private offering under Regulation D and Regulation S of 323,626 shares of common stock and warrants to purchase 161,813 shares of common stock, receiving $1,000,004 in aggregate gross proceeds from the sale. In the first closing on Dec. 24, 2007, the company generated net proceeds of approximately $5,433,000, in a private unit offering of 2,007,508 shares of common stock and warrants to purchase 1,003,755 shares of common stock. In the second closing, the shares of AMDL common stock were sold at $3.09 per share to one purchaser and the company issued to the purchaser warrants to purchase 161,813 shares at an exercise price of $4.74 per share. All of the shares sold and warrants isssued in the second closing to the purchaser were at the same price and on the same terms as the shares and warrants issued in the first closing of the offering. In connection with the offer and sale of securities to the purchaser in the second closing, the company relied on the exemption from registration provided by Section 4(2)and Regulation D of the Securities Act of 1933, as amended. The investor was introduced to the company by a finder who received a fee of $100,000 for introducing the investor. In connection with the offering, the company agreed to file a registration statement with the Securities and Exchange Commission on Form S-3 covering the secondary offering and resale of the shares and the warrant shares sold in the offering. The registration statement was filed on Feb. 27, 2008, and included all of the shares and warrant shares issued in the first closing and the shares to be issued in the second closing as the purchaser had been identified by that time. In addition, the company agreed that if the registration statement was not declared effective on or before the earlier of (i) the 120th day following the closing of the offering or (ii) the date which is within five (5) business days after the date on which the SEC informs the company in writing (a) that the SEC will not review the registration statement, or (b) that the company may request acceleration of the registration statement, then the company would be obligated to issue as "liquidated damages" to each purchaser, additional warrants in an amount equal to 1.5% of the warrant shares issuable on exercise of warrants issued to each purchaser for each 30 day period during which such failure to be declared effective had occurred and is continuing, up to a maximum of a total of six percent (6%) of the number of warrant shares issuable to each purchaser in the offering. About AMDL Inc. Based in Tustin, California, AMDL Inc. (AMEX: ADL) -- http://www.amdl.com/-- together with Jade Pharmaceutical Inc., engages in the development, manufacture and marketing of proprietary pharmaceutical and diagnostic products. Through its Jade subsidiaries, AMDL Inc. currently holds licenses for 133 products that are manufactured as large volume injection fluids, tablets and other related products. It currently manufactures over 20 key generic, over the counter and supplemental pharmaceutical products under certified Chinese Good Manufacturing Practice (CGMP) standards. The company's near and long-term operating strategies focus on (i) obtaining Food and Drug Administration and China's State Food and Drug Administration approval for its proprietary diagnostic tumor- marker test kit DR-70(R), (ii) seeking a large pharmaceutical partner for its combination immunogene therapy technology, (iii) increasing sales of JPI's existing products and expanding JPI's distribution networks, (iv) funding the research and development, licensing and/or purchase of new products, and (v) wholesale distribution to retail stores known as "Jade Healthy Supermarkets." * * * Corbin & Company LLP, in Irvine, Calif., expressed substantial doubt about AMDL Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's significant operating losses and negative cash flows from operations through Dec. 31, 2006, and accumulated deficit at Dec. 31, 2006. As reported in the Troubled Company Reporter on Feb. 26, 2008, during the nine months ended Sept. 30, 2007, the company generated aggregate net revenues of $9.65 million, compared to $54,105 in the same period in 2006. The company's net loss was $2.67 million, as compared to a net loss of $2.57 million for the nine months ended Sept. 30, 2006. AMERICAN AXLE: Union Won't Accept Terms, Halts Labor Talks ---------------------------------------------------------- American Axle & Manufacturing Holdings Inc. and the United Auto Workers union representatives have ceased negotiations yesterday after a bargaining that lasted three days failed to produce results, Terry Kodrosky and Neal Boudette of The Wall Street Journal report. Union officials weren't happy with the terms proposed by the auto parts company. The talks would have resolved the two-week old protest of the 3,650 employees at master-contract plants in Michigan and New York. American Axle, which earned $37 million on $3.25 billion sales in 2007, wants a deal like those UAW gave General Motors Corp., Ford Motor Co., Chrysler LLC, and parts makers Delphi Corp. and Dana Corp., insisting that cutting labor costs is essential to be competitive, The Associated Press relates. The auto parts supplier is asking the union to approve $20 to $30 hourly wage cuts from $73 per hour to $27 per hour, arguing that its original U.S. locations incurred losses for three years. WSJ says no one is certain if talks would resume today. As reported in the Troubled Company Reporter on Feb. 27, 2008, UAW union president Ron Gettelfinger and Vice President James Settles disclosed that members at American Axle began an unfair labor practices strike at 12:01 a.m. on Feb. 26, 2008, following expiration of a four-year master labor agreement, which expired at 11:59 p.m., Feb. 25, 2008. GM has about 29 facilities affected by the strike at Axle as the supplier attempts to negotiate with the union. Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE:AXL) -- http://www.aam.com/-- and its wholly owned subsidiary, American Axle & Manufacturing, Inc., manufactures, engineers, designs and validates driveline and drivetrain systems and related components and modules, chassis systems and metal-formed products for light trucks, sport utility vehicles and passenger cars. In addition to locations in the United States (in Michigan, New York and Ohio), the company also has offices or facilities in Brazil, China, Germany, India, Japan, Luxembourg, Mexico, Poland, South Korea and the United Kingdom. * * * As reported in the Troubled Company Reporter on Nov. 27, 2007, Moody's Investors Service affirmed American Axle & Manufacturing Holdings, Inc.'s Corporate Family rating of Ba3 as well its senior unsecured rating of Ba3 to American Axle & Manufacturing Inc.'s notes and term loan. At the same time, the rating agency revised the rating outlook to stable from negative and renewed the Speculative Grade Liquidity rating of SGL-1. AMERICAN LAFRANCE: Disclosure Statement Hearing Set Today --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will hold a hearing today at 10:00 AM to consider the adequacy of the Disclosure Statement explaining American LaFrance, LLC's Plan of Reorganization. American LaFrance delivered to the Court a Plan of Reorganization and supporting Disclosure Statement on February 3, 2008. The Plan contemplates satisfaction in full of all senior secured debt, administrative claims, and priority claims. Only the Official Committee of Unsecured Creditors has filed an objection to the ALF Plan and Disclosure Statement, asserting that the Plan is unconfirmable. Judge Brendan Linehan Shannon originally scheduled the Disclosure Statement hearing for March 3, and later adjourned it to March 10 at 2:00 p.m. Creditors Committee Objects The Official Committee of Unsecured Creditors of American LaFrance has urged the Court to deny approval of any Disclosure Statement at this stage of the Debtor's case. James C. Carignan, Esq., at Pepper Hamilton LLP, in Wilmington, Delaware, argues, that in filing the Debtor's Plan without any prior discussion with non-insider creditors, Patriarch Partners Agency Services is attempting to ram through an inequitable plan process without any meaningful opportunity for creditor input. Patriarch is the Debtor's insider lender. Mr. Carignan contends that prior to the Petition Date, "Patriarch replaced virtually all of the Debtor's senior executives with persons employed by Patriarch, then carefully crafted a proposed chapter 11 plan that would perpetuate its complete control of the Debtor's assets and wipe out over $57 million in unsecured claims." Mr. Carignan asserts that the Debtor's Plan and Disclosure Statement cannot be approved for these reasons: (1) The Plan is facially unconfirmable under Section 1129 of the Bankruptcy Code. (2) The Disclosure Statement does not contain "adequate information" as required by Section 1125 of the Bankruptcy Code. (3) The proposed Solicitation and Voting Procedures are not designed to permit impaired creditors to determine the outcome of the Plan. (4) The Debtor has failed to propose the Plan in good faith. Non-Conformity to Section 1129 The Plan does not conform to Section 1129 because it contains broad release provisions, which releases not only the Debtor but also its prepetition lenders, Mr. Carignan argues. "Such releases are particularly offensive, where, as here, the parties in interest have been denied any meaningful opportunity to investigate the claims to be released." Section 1123 of the Bankruptcy Court provides that a plan must provide the same treatment for each claim or interest of a particular class. The Plan violates Section 1123, Mr. Carignan adds, in that it depends on the affirmative vote of holders of unsecured claims but provides that no Class 4 unsecured creditor who votes to accept the Plan will be entitled to participate in Plan distributions. "Ironically, then, the only unsecured creditors that will receive a distribution under the Plan are those that vote against the Plan, but those creditors will not have the benefit of a release of preference liability that is enjoyed by creditors voting in favor of the Plan," Mr. Carignan points out. He notes that the Disclosure Statement also includes a "Preference Election" provision that refers both to a waiver of distribution rights and a shield from preference exposure. It seems that the option to take the preference election is only available to creditors voting to approve the Plan, Mr. Carignan relates. "It is therefore apparent that the Debtor is attempting to engineer confirmation by favoring creditors in Class 4 that vote in favor of the Plan over dissenting creditors," he says. The Committee emphasizes that the Plan and Disclosure Statement should fully explain, pursuant to Section 1129(a)(5), whether, and if so, why, the people operating the Debtor post-confirmation will be appointees of Patriarch and Lynn Tilton similar to those persons that operated the company prepetition. The Committee also complains that it has not been afforded sufficient time to determine the adequacy of the Debtor's liquidation analysis, pursuant to Section 1129(a)(7). However, given the absence of any Lender lien on avoidance actions and the possibility that the Committee's incipient investigation of Patriarch could well yield a basis for recharacterization or subordination of Patriarch's liens and claims, it is possible that dissenting unsecured creditors would fair better in a Chapter 7 liquidation, Mr. Carignan informs the Court. The Committee cites that if the Class 4 General Unsecured Creditors reject the Plan, the Plan cannot be confirmed because it then would not satisfy Section 1129(a)(10). That is because Class 4 is the only class of non-insider claims that is impaired under the Plan, according to Mr. Carignan. Section 1129(a)(10) requires that at least one impaired class under the plan must accept the plan, without including acceptance by an insider. The Plan provides that the Debtor will seek to cramdown the Plan upon dissenting creditors in the event that one or more impaired classes of creditors votes to reject the Plan. The Committee asserts that the Debtor's Plan cannot be "crammed down" as currently proposed because it does not meet the "fair and equitable" requirement of Section 1129(b). Although Class 4 unsecured creditors are impaired and will not receive payment in full on account of their claims, the Debtor's equity holders retain their interests under the Plan and will not be impaired. Thus, Section 1129(b) cram-down over the dissenting vote of Class 4 will not be an option available to the Debtor, Mr. Carignan points out. Inadequate Information Mr. Carignan emphasizes that the Disclosure Statement should be denied because it lacks "adequate information:" * All of the information in the Disclosure Statement is suspect because the Debtor seeks its approval prior to non- insider entities having been afforded an adequate opportunity to scrutinize either Plan alternatives, or the accuracy and completeness of the information contained in the Disclosure Statement. * The Disclosure Statement does not adequately set forth the numerous insider connections among Debtor, management, secured lenders and equity owners. * The Debtor does not disclose the nature, scope or results of any investigation it conducted into potential causes of action against parties to receive releases under the Plan, or the potential value of such claims. * The Debtor does not disclose the nature, scope or results of any investigation it conducted into potential causes of action to be retained by the Reorganized Debtor under the Plan, or the potential value of those claims. * The Disclosure Statement fails to apprise holders of Class 4 Claims that the Plan cannot be confirmed without the affirmative vote of Class 4. * The Disclosure Statement fails to adequately disclose the aggregate amount of Class 4 Claims. * The Disclosure Statement fails to adequately identify and disclose the the Excluded Liabilities, and fails to apprise holders of Class 4 Claims of the likely value, if any, of the Trust Property that will be available for them under the Plan after payment of Excluded Liabilities. * The Disclosure Statement does not account for the possibility that the alleged liens and security interests of the Lenders may not extend to certain or any of the Debtor's assets, nor for the possibility that they may be recharacterized or otherwise subordinated. * The "best interests" analysis in the Disclosure Statement is inadequate because the liquidation analysis does not account for, among other things, Chapter 5 causes of action and claims against the Debtor's Lenders and insiders. * The Disclosure Statement is insufficient with respect to the preference election and the consequences of a vote by an unsecured creditor to approve the Plan. Modify Solicitation Procedures The Committee contends that if the Court is otherwise inclined to allow the Plan process to move forward at this time, the Voting and Solicitation Procedures must be modified so that all unsecured creditors are entitled to vote the full amount of their claims. The Committee asserts that: -- The commencement of the Plan Solicitation and the Voting Deadline occurs far too soon. It should be pushed back to shortly prior to the proposed confirmation date. -- The Debtor should not be permitted to mail solicitation packages until after the proof of claim bar date so that all entities that file proofs of claim will be provided with an adequate opportunity to vote. -- The Debtor's proposal that the only entities that will be sent a solicitation package are the holder of claims entitled to vote on the Plan, would permit the Debtor to disenfranchise entities with claims that enjoy a presumption of validity from participating in the confirmation process. -- The form of ballot the Debtor proposes is confusing, incomplete and should be revised. -- The form of ballot does not highlight the requirement that a creditor must provide trade credit to obtain the benefits of the preference waiver, and thus must be revised. -- The proposed solicitation package does not provide sufficient information to voters. "The Debtor should be required to include in the solicitation package a separate cover letter prepared by the Committee, advising Class 4 creditors of the committee's concerns regarding the Plan and urging creditors to vote against the Plan," Mr. Carignan maintains. About American LaFrance Headquartered in Summerville, South Carolina, American LaFrance LLC -- http://www.americanlafrance.com/-- is one of the oldest fire apparatus manufacturers and one of the top six suppliers of emergency vehicles in North America. The company filed for Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No. 08-10178). Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at Haynes and Boone LLP, are the Debtor's proposed Lead Counsel. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, are the Debtor's proposed local counsel. In its schedules of assets and debts filed Feb. 4, 2008, the Debtor disclosed $188,990,680 in total assets and $89,065,038 in total debts. The Debtor's exclusive period to file a plan expires on May 27, 2008. American LaFrance LLC will pursue a sale of its business operations in the event that the company's plan of reorganization is not confirmed. The Debtor filed its plan of reorganization on Feb. 3. (American LaFrance Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Continues to Accept Bids for Non-Performing Loans ---------------------------------------------------------------- American Home Mortgage Investment Corp. and its debtor-affiliates -- in consultation with the Official Committee of Unsecured Creditors appointed in their cases -- will continue to accept final bids with respect to their unencumbered non-performing loans until March 25, 2008. The U.S. Bankruptcy Court for the District of Delaware will convene a hearing March 27, 2008, to consider approval of the sale of the Debtors' unencumbered non-performing loans. The Debtors anticipate the sale to close on March 28. As reported in the Troubled Company Reporter on Feb. 13, 2008, the Bankruptcy Court originally set 4:00 p.m., Eastern Time, on Feb. 26, 2008, as the final deadline for parties to submit a bid on American Home's non-performing loans. The Court authorized the sale of the Debtors' non-performing loans, subject to higher and better offers for each pool of non- performing loans, on Feb. 1, 2008. Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. American Home is currently seeking an extension of its exclusive period to file a plan of reorganization through June 2, 2008; and its exclusive period to solicit and obtain acceptances for that plan through July 31, 2008. (American Home Bankruptcy News, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: BofA Wants to Sell $584MM of Mortgage Loans ---------------------------------------------------------- Bank of America, N.A. -- agent of the lenders under American Home Mortgage Investment Corp.'s Second Amended and Restated Credit Agreement dated August 10, 2006, that were owed about $1,104,550,000 as of the Debtors' bankruptcy filing -- intends to sell the rights to 3,400 mortgage loans with outstanding $584,000,000 that were pledged by the Debtors as collateral for their prepetition loan. Accordingly, Bank of America asks the U.S. Bankruptcy Court for the District of Delaware to lift the automatic stay under Section 362(d)(1) of the Bankruptcy Code to allow it to market and sell the loans and the servicing rights to those loans to protect the Secured Lenders from further erosion of their collateral. Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, in Wilmington, Delaware, tells the Court that the value of the loans has "declined precipitously" due to the Debtors' refusal to take steps to sell the BofA mortgage loans as soon as possible. Ms. Silverstein notes that since the Petition Date, the Debtors have liquidated their assets systematically, except for the BofA mortgage loans. She points out that while Kevin Nystrom, the Debtors' director of restructuring, has testified that the value of many of the Debtors' assets are extremely volatile, the Debtors still refused to sell the BofA mortgage loans, or provide adequate protection to the Secured Lenders from diminution of the value of their collateral. The Debtors have said that they won't sell the BofA mortgage loans until market conditions improve. BofA, however, objects to the game plan set by the Debtors, citing the Secured Lenders should not be required to rely on the Debtors' "baseless predictions" in a very unpredictable market. Debtors Object The Debtors object to Bank of America, N.A.'s request to outline the appropriate legal standard for determining whether BofA, as agent for certain secured lenders, has made its prima facie case for "cause" to lift the automatic stay to effect the sale of the mortgage loans valued at $584,000,000. The Debtors assure the Court that and parties-in-interest that the Debtors' rejection of BofA's proposed course of action with respect to the mortgage loans at issue is not the result of laziness, incompetence, reckless optimism, or leadership vacuum. The Debtors point out that BofA has not provided evidence or even alleged facts sufficient to establish "cause" to lift the stay. BofA's request is "chock-full of irrelevant accusations but is silent as to critical elements of its case," James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, argues. As a result, he contends that it is difficult for the Debtors to formulate a complete and meaningful response to BofA's request. Mr. Patton also contends that the Debtors' rejection of BofA's course of action regarding the mortgage loans is a result of the deliberate exercise of the Debtors' business judgment, after consideration of all relevant factors, including the current market conditions. Mr. Patton says that if the Court is inclined to lift the stay as to the Mortgage Loans, the Court should decline BofA's invitation to endorse any proposed plan of liquidation for those loans. He adds that what BofA does after receiving relief from the stay is governed exclusively by non-bankruptcy law and is not a matter for the Bankruptcy Court. "If the Administrative Agent wishes to wrest the servicing of the Mortgage Loans from AH Mortgage Acquisition Co., Inc. and transfer servicing to its own designee pending a sale of the Mortgage Loans for an unreasonably low price in a depressed market, it must proceed at its own peril and at its own expense," the Debtors argue. The Debtors reserve their rights to amend, modify, or supplement the Objection based upon information obtained from BofA, or as a result of subsequent developments. The Debtors also reserve the right to challenge the commercial reasonableness of any disposition of the Mortgage Loans by BofA. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. American Home is currently seeking an extension of its exclusive period to file a plan of reorganization through June 2, 2008; and its exclusive period to solicit and obtain acceptances for that plan through July 31, 2008. (American Home Bankruptcy News, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Gets Court Approval of Indymac Settlement -------------------------------------------------------- American Home Mortgage Investment Corp. and its debtor-affiliates presented to the U.S. Bankruptcy Court for the District of Delaware a settlement that will allow Indymac Bank F.S.B. to proceed with an earlier agreement to occupy certain of the Debtors' loan offices. Pursuant to Sections 105(a), 363, 365 and 554 of the Bankruptcy Code and Rule 9019 of the Federal Rules of Bankruptcy Procedure, the Debtors sought and obtained Judge Christopher Sontchi's consent to: -- modify their letter agreement dated August 7, 2007, with Indymac; -- modify the terms of his prior order authorizing the assumption and assignment of certain real property leases and the sale of furniture, fixtures and equipment located at the premises to Indymac; and -- reject certain unexpired leases of nonresidential real property, effective February 29, 2008, and to abandon any property remaining at the rejected premises. James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, relates that in the days leading up to the Petition Date, the Debtors were in contact with certain entities in the mortgage industry that expressed an interest in taking immediate control of the Debtors' production offices. In the weeks prior to their bankruptcy filing, the Debtors operated hundreds of leased loan production offices at locations in 47 sates and the District of Columbia. However, shortly after filing for bankruptcy, the Debtors discontinued their loan origination business and began liquidating their assets. The Debtors and Indymac negotiated a potential sale of the office leases. The parties entered into the Letter Agreement, wherein Indymac agreed and was bound to take assignment of, and assume the liabilities under, 98 office leases and to purchase the furniture, fixtures and equipment left by the Debtors at the premises. The Parties also entered into a license agreement, which would allow Indymac to use the loan offices, until the time of the closing of the sale or termination of the sale agreement. The Debtors have stood ready to close the sale since Sept. 30, 2007, Mr. Patton says. Indymac, however, asked for revisions to the Letter Agreement to exclude 15 leases. As a result, the Debtors asked the Court to compel Indymac to comply with their prior agreements, asserting Indymac stalled the sale by failing to pay the $2,000,000 purchase price, among other things. As a result to their latest negotiations, the Debtors agreed to withdraw their request to enforce, and instead, seek the Court's authority to modify the terms of the Letter Agreement to exclude the 15 leases, but only upon these conditions and terms: -- Indymac must execute an Asset Purchase Agreement with the Debtors; -- The consummation of the transactions contemplated by the APA would take place in two phases: * the closing with respect to the office leases, with the exception of the Excluded Office Leases, and the sale of related office assets set February 22, 2008; and * the closing with respect to office leases that were not removed by the Court will be on March 3; -- Indymac agrees that it has the unequivocal obligation to perform its obligations with respect to the Phase II Closing, if the Court does not fully approve the Debtors' request to exclude certain leases by March 2; -- Upon execution of the APA, Indymac will deliver to Wilmington Trust Company, as escrow agent: * a deposit amounting to $168,499 for the estimated post- closing adjustments; and * additional deposit for $1,000,000 for the estimated indemnification expenses of the Debtors; and -- Upon approval of the request, the Letter Agreement will be modified to, among other things, provide that: * the Debtors immediately receive the Additional Deposit; * the Rejected Office Leases will be removed from the list of Office Leases to be assumed and assigned to Indymac; * the Rejected Office Leases are deemed rejected effective February 29, 2008; and * any FF&E not removed by Indymac prior to February 29, will be deemed abandoned. The Debtors submit that the modifications to the Letter Agreement represent a compromise between the Parties, and are reasonable and in the best interest of the Debtors, the bankruptcy estates, creditors and other parties-in-interest. Mr. Patton notes that upon approval of the request, the Debtors will receive a guaranteed payment of approximately $3,000,000, which includes the purchase price, and an additional $1,000,000 to cover any damages related to the Debtors' rejection of the Rejected Office Leases. Absent Court-approval of the request to exclude the Rejected Office Leases from the sale, the Debtors will still have received a guaranteed payment of approximately $2,000,000, plus the ability to draw on the Additional Deposit with respect to Indymac's indemnity obligations. Under either scenario, the Debtors are receiving a significant cash infusion for the estates and creditors, Mr. Patton points out. After a hearing on the Parties' settlement, the Court approves: (i) The Phase I closing of the sale, and the assumption and assignment of 75 of 95 leases -- (i) seven leases were excluded because the leases expired prior to closing of the transaction, due to the leases expired prior to closing of the transaction and (ii) 13 leases were among the Excluded Office Leases; (ii) the rejection of 13 of the Excluded Office Leases; and (iii) Phase II Closing, on March 3, 2008, on the assumption and assignment of the two remaining Excluded Leases to premises located at: -- 3053 Center Point Road, in Grand Rapids, Iowa, and -- 111 Pacifica, in Irvine, California. The Court instructs Wilmington Trust, the escrow agent, to distribute from the Additional Deposit (i) $393,593 to the Debtors, and (ii) $606,407 to AH Mortgage Acquisition Co., Inc., payable upon and contingent on the Phase II Closing. Counterparties to to the Rejected Leases are directed to submit proofs of claim for damages arising from the rejection of their leases by March 27, 2008. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. American Home is currently seeking an extension of its exclusive period to file a plan of reorganization through June 2, 2008; and its exclusive period to solicit and obtain acceptances for that plan through July 31, 2008. (American Home Bankruptcy News, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICREDIT CORP: Board Approves Appointment of Two New Directors ----------------------------------------------------------------- AmeriCredit Corp.'s board of directors approved the appointment of Ian M. Cumming and Justin R. Wheeler as directors effective immediately. AmeriCredit's board now has nine directors. Mr. Cumming is chairman of the board of directors of Leucadia National Corporation, a diversified holding company engaged in a variety of businesses including manufacturing, real estate activities, medical product development and winery operations. He also serves as chairman of the board of directors of The FINOVA Group Inc., a middle-market lender. In addition, Mr. Cumming is a member of the board of directors of Skywest Inc., a Utah-based regional air carrier, and HomeFed Corporation, a real estate development company. Mr. Cumming is a graduate of Harvard Business School. Mr. Wheeler is president of Leucadia National Corporation's Asset Management Group and is a member of the board of directors of International Assets Holding Corporation. Mr. Wheeler holds bachelor degrees in Finance and French from the University of Utah and a master's degree in business administration from Brigham Young University. "We're delighted to add professionals of this caliber to our board of directors," AmeriCredit chairman Clifton H. Morris Jr., said. "They are both well respected, accomplished leaders with outstanding experience, and I'm confident that our company and shareholders will benefit greatly from their counsel and knowledge." About AmeriCredit Based in Fort Worth, Texas, AmeriCredit Corp. (NYSE: ACF) -- http://www.americredit.com/-- is an independent automobile finance company that provides financing solutions indirectly through auto dealers and directly to consumers in the United States and Canada. AmeriCredit has over one million customers and more than $16.0 billion in managed auto receivables. The Company was founded in 1992. * * * As reported in the Troubled Company Reporter on Jan. 25, 2008, Standard & Poor's Ratings Services revised its outlook on AmeriCredit Corp. to negative from stable. At the same time, Standard & Poor's affirmed its 'BB-' long-term counterparty credit rating on AmeriCredit. ANNA GARTRELL: Case Summary & Five Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Anna Vakas Gartrell 5214 Redwing Drive Alexandria, VA 22312 Bankruptcy Case No.: 08-11158 Chapter 11 Petition Date: March 9, 2008 Court: Eastern District of Virginia (Alexandria) Judge: Robert G. Mayer Debtor's Counsel: Kevin A. Lake, Esq. Vandeventer Black, LLP Eighth & Main Building 707 East Main Street, Suite 1700 P.O. Box 1558 Richmond, VA 23218-1558 Tel: (804) 237-8811 Fax: (804) 237-8801 klake@vanblk.com Estimated Assets: $1 million to $10 million Estimated Debts: $500,000 to $1 million Debtor's list of its Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ IRS - Richmond Insolvency Groups Federal Income $15,532 400 North 8th Street, Box 76 Tax and related Stop room 898 penalties Richmond, VA 23240 Dare County Courts Guardianship $2,000 Attn: Bankruptcy Department admin. fees and 962 Marshall Collins Drive taxes Gray & Lloyd, LLP Professional $1,500 3120 North Croatan Highway Services Suite 101 Kill Devil Hills, NC 27948 Alridge, Seawell, Spence & Professional $1,250 Felthousen Services North Carolina Department of possible income Unknown Revenue tax liabilities ARAMARK CORP: Fitch Holds and Withdraws 'B' Issuer Default Rating ----------------------------------------------------------------- Fitch Ratings has affirmed ARAMARK Corporation's ratings as: -- Long-term Issuer Default Rating 'B'; -- $600 million revolving senior secured credit facility due 2013 'BB-/RR2'; -- $4.15 billion senior secured term loans due 2014 'BB-/RR2'; -- $200 million senior secured synthetic letter of credit facility due 2014 'BB-/RR2'; -- $1.78 billion senior unsecured notes due 2015 'B-/RR5'; -- $250 million senior unsecured notes due 2012 'CCC+/RR6'. The Rating Outlook is Stable. Fitch has simultaneously withdrawn the IDR rating for ARAMARK Services, Inc., which is no longer a debt issuing entity. These rating actions affect approximately $6.0 billion of debt at Dec. 28, 2007. ARAMARK's ratings and Outlook incorporate its high financial leverage, below average operating risk and Fitch's expectations that credit statistics will remain at levels consistent with the company's current ratings in the near term. ARAMARK significantly increased debt levels following its $8.6 billion management-led leverage buy-out in 2007. However, ARAMARK's strong global market share in food service, entrenched position in the North American uniform rental business and high customer retention rates provide considerable and relatively stable on-going cash flow generation. For the latest twelve month period ended Dec. 28, 2007, ARAMARK's total debt-to-operating earnings before interest, taxes, depreciation and amortization ratio was 5.8 times and its operating EBITDA-to-gross interest expense ratio was 2.1x. Total adjusted debt-to-operating earnings before interest, taxes, depreciation, amortization and rental expense, which accounts for operating leases and balances outstanding under ARAMARK's $250 million accounts receivable securitization program, was 6.3x. During this same period, ARAMARK generated approximately $500 million of cash flow from operations and $180 million of free cash flow. ARAMARK's funds from operations fixed charge coverage ratio was 1.8x. Although ARAMARK's debt obligations increased considerably over the previous 12 month period, Fitch views its credit protection measures as adequate for the current ratings level. Good liquidity, a proven ability to manage through various economic cycles and a diversified customer base should help mitigate any negative ramifications from above average food cost inflation and a slowing U.S. economy. ARAMARK is in compliance with all of its debt covenants. The most significant financial covenant in ARAMARK's bank facility is a maximum consolidated secured debt ratio of 5.875x through March 31, 2008, stepping down to 4.25x by Dec. 31, 2013. At Dec. 28, 2007, the actual ratio was 3.86x, leaving the company significant cushion under this agreement. ARAMARK's ability to incur additional debt and make restricted payments is limited by a minimum interest coverage ratio of 2.0x. At Dec. 28, 2007, the actual ratio was 2.1x. The recovery ratings for ARAMARK's debt consider bondholder recovery in a distressed situation. Given assumptions regarding the company's enterprise value as a going concern, Fitch anticipates 71%-90% or superior recovery for ARAMARK's first priority secured bank debt and 11%-30% or below average recovery for its 8.5% and floating rate unsecured notes due 2015. Conversely, the recovery rating for ARAMARK's 5% unsecured notes due 2012 has been notched lower at 'RR6' to reflect their subordinate position in the company's capital structure and Fitch's expectation that recovery for these bondholders would be negligible in a financial restructuring. Unlike the 2015 notes, which are fully and unconditionally guaranteed by substantially all of the companies domestic material subsidiaries, the 2012 notes are only guaranteed by ARAMARK and its holding company. ASCENDIA BRANDS: Daniel Platt Succeeds Michael Gross as Director ---------------------------------------------------------------- Ascendia Brands Inc. appointed Daniel Platt as director of the company, succeeding Michael J. Gross, who resigned effective Feb. 21, 2008. Mr. Platt, age 35, has been employed by Prentice Capital Management LP since May 2006. His responsibilities at Prentice Capital include sourcing acquisition targets, structuring debt and equity for full or partial acquisitions, and oversight of debt financings for Prentice Capital's portfolio. Mr. Platt also sits on the board of directors of certain of Prentice Capital's portfolio companies. Prior to joining Prentice Capital, Mr. Platt was employed by Banc of America Securities Consumer & Retail Division where his responsibilities included originating new business, structuring transactions, leading underwritings and portfolio management. Prior to joining Banc of America in 1999, Mr. Platt held various positions with May Department Stores. Mr. Platt received his B.A. in Finance with a minor in Japanese from the University of Massachusetts in Amherst. Headquartered in Hamilton, New Jersey, Ascendia Brands Inc. -- http://www.ascendiabrands.com/-- is a leader in the value and premium value segments of the health and beauty care products sector. In November 2005, Ascendia expanded its range of product offerings through the acquisition of a series of brands, including Baby Magic(R), Binaca(R), Mr. Bubble(R) and Ogilvie(R), and in February 2007 it acquired the Calgon(TM)* and the healing garden(R) brands. The company operates two manufacturing facilities, in Binghamton, New York, and Toronto, Canada. Senior Lenders Waive Default As reported in the Troubled Company Reporter on Jan. 3, 2008, Ascendia Brands Inc. reached agreement with its senior lenders to restructure $160 million first and second lien debt facilities. Under the agreement, Ascendia's senior lenders will waive certain existing covenant defaults and adjust financial covenant levels through the end of Ascendia's fiscal year ending Feb. 28, 2009. The TCR reported on Dec. 17, 2007 that Ascendia Brands notified its senior lenders that it is in default of certain covenants contained in its first and second lien credit facilities and is unable to make certain representations and warranties deemed to be made when drawings are made under its revolving credit facility. ASSET ACCEPTANCE: Amends Credit Deal to Permanently Waive Defaults ------------------------------------------------------------------ Asset Acceptance Capital Corp. entered into an amendment to its credit agreement. As reported by the Troubled Company Reporter on Feb. 22, 2008, Asset Acceptance obtained a temporary waiver of non-compliance with its total liabilities to tangible net worth covenant until March 17, 2008, to permit it time to obtain the amendment. The amendment to its credit agreement, pursuant to which Asset Acceptance maintains a $100 million revolving credit facility and a $150 million term loan facility, resets two financial covenants and increases the rate of interest the company pays on borrowings under the credit facility by 25 basis points or 0.25%. The two financial covenants reset by the amendment are: (1) the ratio of consolidated total liabilities to tangible net worth; and (2) the leverage ratio. The amendment also permanently waives the earlier default on the consolidated total liabilities to tangible net worth covenant. During the fourth quarter 2007, Asset Acceptance said it took advantage of what it believed to be a favorable debt purchasing environment. The increased level of purchasing funded by borrowings on the revolving credit facility, coupled with the step down in the ratio of consolidated total liabilities to tangible net worth at Dec. 31, 2007, from 3.0:1.0 to 2.5:1.0, resulted in the company not passing the total liabilities to tangible net worth covenant. "We are pleased to have worked with our lenders to quickly resolve the non-compliance with our loan covenant and to give us the additional flexibility to pursue our planned level of debt purchasing for 2008," Mark A. Redman, chief financial officer, commented. As of March 10, 2008, outstanding borrowings on the company's revolving credit facility and term loan facility were $25 million and $149.3 million. About Asset Acceptance Headquartered in Warren, Michigan, Asset Acceptance Capital Corp. (Nasdaq: AACC) -- http://www.AssetAcceptance.com/-- purchases charged-off consumer debt from credit issuers, and then uses proprietary methods to collect on these receivables. * * * Moody's Investor Service placed Asset Acceptance Capital Corp.'s long-term corporate family and bank loan debt ratings at 'B1' in May 2007. The rating still holds to date with a stable outlook. AVANTAIR INC: Inks Floor Plan Finance Pact with Midsouth Services ----------------------------------------------------------------- Avantair Inc. disclosed in a regulatory filing Friday, that it entered into a Floor Plan Finance Agreement with Midsouth Services Inc., effective March 3, 2008. Pursuant to the agreement, Midsouth Services agrees to extend credit to the company in the amount of $5,345,000 to be used towards the purchase of new Piaggio P-180 aircraft, provided that the company shall relinquish the debt for the prior aircraft prior to Midsouth Services loaning the funds for the subsequent aircraft. The company agrees to pay Midsouth Services a monthly fee of $75,000 during the term of the agreement, which commenced on March 3, 2008, the first actual delivery date of the aircraft, and will end six (6) months from the first actual delivery date of the aircraft. Midsouth Services has also agreed, at the option of the Avantair Inc. to provide an additional loan to the company in the amount of $5,345,000, for a total amount of $10,690,000. The terms and conditions of the additional loan shall be substantially similar to the terms of the existing loan. A full-text copy of the Floor Plan Finance Agreement is available for free at http://researcharchives.com/t/s?28e6 About Avantair Inc. Based in Clearwater, Florida, Avantair Inc. (OTC BB: AAIR) -- http://www.avantair.com/-- offers private travel solutions for individuals and companies at a fraction of the cost of whole aircraft ownership. The company is the sole North American provider of fractional aircraft shares in the Piaggio Avanti P.180 aircraft. The company currently manages a fleet of 39 fractional aircraft plus 7 core planes, with another 63 Piaggio Avanti IIs on order through 2012. It also has announced an order of 20 Embraer Phenom 100s. * * * Avantair Inc.'s consolidated balance sheet at Dec. 31, 2007, showed $192.8 million in total assets, $200.7 million in total liabilities, and $14.4 million in Series A convertible preferred stock, resulting in a $22.3 million total stockholders' deficit. AVITAR INC: Sells $310,000 of 8.0% Secured Convertible Notes ------------------------------------------------------------ Avitar Inc. entered into a Securities Purchase Agreement and related agreements dated Feb. 22, 2008, as part of a $310,000 private placement with AJW Partners LLC, AJW Master Fund Ltd., and New Millennium Capital Partners II LLC. The company entered into private placements with the same or related parties in 2005, 2006 and 2007. The securities issued in the private placement are $310,000 of Secured Convertible Notes and 10,000,000 seven-year Warrants. The Notes bear interest at 8.0%, mature three years from the date of issuance, and are convertible into the company's common stock at any time, at the Purchasers' option, at 35% of the average of the three lowest intraday trading prices for the common stock for the 20 trading days ending the day before the date that the investors elect to convert. In addition, the conversion prices of outstanding notes payable to the same or related holders in the aggregate principal amount of approximately $6,978,000 issued from September 2005 through December 2007 were adjusted from 40% to 35% of the average of the three lowest intraday trading prices of the common stock for the 20 trading days preceding the date that the holders elect to convert. The full principal amount of the Notes, plus a default interest rate of 15%, is due upon a default under the terms of the Notes. The company has a right to prepay the Notes under certain circumstances at a premium ranging from 20% to 35% depending on the timing of such prepayment. In addition, the company granted the Purchasers a security interest in substantially all of its assets. The company is further required to file the Registration Statement with the Securities and Exchange Commission within 30 days of receipt of demand from the Purchasers. If the Registration Statement is not filed on time or not declared effective within 120 days from the date of receipt of such demand, the company is required to pay to the Purchasers damages in common stock or cash, at the election of the company, in an amount equal to 2% of the outstanding principal amount of the Notes per month plus accrued and unpaid interest. The Warrants are exercisable until seven years from the date of issuance at a purchase price of $0.01 per share. The Purchasers may exercise the Warrants on a cashless basis if the shares of common stock underlying the Warrants are not then registered pursuant to an effective registration statement. In the event the Purchasers exercise the Warrants on a cashless basis, the company will not receive any proceeds. In addition, the Warrants are subject to standard anti-dilution provisions. The Purchasers have agreed to restrict their ability to convert their Notes or exercise their Warrants and receive shares of the company's common stock such that the number of shares of common stock held by them and their affiliates in the aggregate after such conversion or exercise does not exceed 4.9% of the then issued and outstanding shares of common stock. These equity securities transactions are exempt from registration requirements pursuant to Section 4(2) and/or Rule 506 of Regulation D promulgated under the Securities Act of 1933, as amended. A full-text copy copy of the Securities Purchase Agreement is available for free at http://researcharchives.com/t/s?28e7 About Avitar Inc. Avitar Inc. (OTC BB: AVRN.OB)-- http://www.avitarinc.com/-- develos, manufactures and markets proprietary products in the oral fluid diagnostic market, disease and clinical testing market, and customized polyurethane applications used in the wound dressing industry. * * * BDO Seidman LLP, in Boston, expressed substantial doubt about Avitar Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Sept. 30, 2007. The auditing firm reported that the company has suffered recurring losses from operations and has working capital and stockholder deficits as of Sept. 30, 2007. As reported in the Troubled Company Reporter on Feb. 22, 2008, Avitar Inc.'s consolidated balance sheet at Dec. 31, 2007, showed $1,452,056 in total assets, $9,335,504 in total liabilities, and $3,215,490 in convertible preferred stock and redeemable convertible preferred stock, resulting in an $11,098,938 total stockholders' deficit. BASIC ENERGY: S&P Lifts Corp. Rating to 'BB-' on Good Risk Profile ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its ratings on oilfield services company Basic Energy Services Inc., including the corporate credit rating to 'BB-' from 'B+'. The senior unsecured rating on the company was raised to 'B+' from 'B', and the rating on its senior secured $225 million revolving credit facility was raised to 'BB+' from 'BB'. The recovery rating on Basic Energy's revolving credit facility remains unchanged at '1', reflecting S&P's expectation of very high (90% to 100%) recovery in the event of a payment default. The outlook is stable. "The upgrade reflects the company's strengthened business risk profile, achieved through an expanded scale of operations and an enhanced portfolio of products and services," said Standard & Poor's credit analyst Jeffrey B. Morrison. "The rating action also incorporates management's adherence to relatively moderate debt in funding its growth initiatives." As of Dec. 31, 2007, Midland, Texas-based Basic Energy had $436 million in total debt, after adjusting for capital and operating lease obligations. The ratings on Basic Energy reflect its status as a small, though growing, competitor in historically cyclical U.S. oilfield services markets, and its acquisitive growth strategy. Somewhat offsetting concerns are an improving competitive position within several domestic basins, an expanding suite of products and services, and a consistent track record of free cash flow generation when excluding acquisition outlays. BEAR STEARNS: Moody's Lowers Ratings on 163 Tranches From 15 Deals ------------------------------------------------------------------ Moody's Investors Service downgraded the ratings of 163 tranches from 15 transactions issued by Bear Stearns ALT-A Trust. Seventy eight downgraded tranches remain on review for possible further downgrade. Additionally, 155 tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. Complete rating actions are: Issuer: Bear Stearns ALT-A Trust 2005-7 -- Cl. I-M-1, Downgraded to A1 from Aa2, -- Cl. I-M-2, Downgraded to Ba1 from A2, -- Cl. I-B-1, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade, -- Cl. I-B-2, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade, -- Cl. I-B-3, Downgraded to Ca from Ba2, -- Cl. II-B-2, Downgraded to A2 from Aa2, -- Cl. II-B-3, Downgraded to A3 from Aa3, -- Cl. II-B-5, Downgraded to Ba1 from A2, -- Cl. II-B-6, Downgraded to Ba3 from A3, -- Cl. II-B-4, Downgraded to Baa2 from A1, -- Cl. II-B-7, Downgraded to B3 from Baa1, -- Cl. II-B-8, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade, -- Cl. II-B-9, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade, Issuer: Bear Stearns ALT-A Trust 2005-8 -- Cl. I-1A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-2A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-M-1, Downgraded to Ba3 from Aa2, -- Cl. I-M-2, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade, -- Cl. I-B-1, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade, -- Cl. I-B-2, Downgraded to Caa2 from Baa3; Placed Under Review for further Possible Downgrade, -- Cl. I-B-3, Downgraded to Ca from Ba2, -- Cl. II-B-1, Downgraded to Aa3 from Aa1, -- Cl. II-B-2, Downgraded to Baa1 from Aa2, -- Cl. II-B-3, Downgraded to B1 from A2, -- Cl. II-B-4, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade, -- Cl. II-B-5, Downgraded to Ca from Ba2, Issuer: Bear Stearns ALT-A Trust 2005-9 -- Cl. I-1A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-M-1, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. I-M-2, Downgraded to Caa1 from A2; Placed Under Review for further Possible Downgrade, -- Cl. I-B-1, Downgraded to Caa2 from Baa2; Placed Under Review for further Possible Downgrade, -- Cl. I-B-2, Downgraded to Caa2 from Baa3; Placed Under Review for further Possible Downgrade, -- Cl. I-B-3, Downgraded to Ca from Ba2, -- Cl. II-1A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-1A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-2A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-4A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-5A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-5A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-6A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-6A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-M-1, Downgraded to A2 from Aa1, -- Cl. II-M-2, Downgraded to Baa1 from Aa2, -- Cl. II-M-3, Downgraded to Baa3 from Aa3, -- Cl. II-M-4, Downgraded to Ba3 from A1, -- Cl. II-M-5, Downgraded to B3 from A2, -- Cl. II-B-1, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade, -- Cl. II-B-2, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade, -- Cl. II-B-3, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade, Issuer: Bear Stearns Alt-A Trust 2005-10 -- Cl. I-1A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-M-1, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. I-M-2, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade, -- Cl. I-B-1, Downgraded to Ca from B1, -- Cl. I-B-2, Downgraded to Ca from B3, -- Cl. II-1A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-1A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-2A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-2A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-3A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-4A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-4A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-4X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-5A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-5X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-B-1, Downgraded to Baa3 from Aa1, -- Cl. II-B-2, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. II-B-3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade, -- Cl. II-B-4, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade, -- Cl. II-B-5, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade, -- Cl. II-B-6, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade, -- Cl. II-B-7, Downgraded to Ca from Ba3, -- Cl. II-B-8, Downgraded to Ca from B3, -- Cl. II-B-9, Downgraded to Ca from B3, Issuer: Bear Stearns Alt-A 2006-1 -- Cl. I-1A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-M-1, Downgraded to B1 from Aa2, -- Cl. I-M-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade, -- Cl. I-B-1, Downgraded to Ca from B1, -- Cl. I-B-2, Downgraded to Ca from Caa1, -- Cl. II-1A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-1X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-1A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-1X-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-1A-3, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-2A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-2A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-2X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-3X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-B-1, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. II-X-B1, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. II-B-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade, -- Cl. II-X-B2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade, -- Cl. II-B-3, Downgraded to Ca from B1, -- Cl. II-X-B3, Downgraded to Ca from B1, Issuer: Bear Stearns Alt-A Trust 2006-2 -- Cl. I-1A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-M-1, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. I-M-2, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade, -- Cl. I-B-1, Downgraded to Ca from B2, -- Cl. I-B-2, Downgraded to Ca from Caa1, -- Cl. II-1A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-1A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-2A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-2A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-2X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-4A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-4A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-4X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-B-1, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. II-X-B1, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. II-B-2, Downgraded to Ca from Ba1, -- Cl. II-X-B2, Downgraded to Ca from Ba1, -- Cl. II-B-3, Downgraded to Ca from B3, Issuer: Bear Stearns Alt-A Trust 2006-3 -- Cl. I-A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-M-1, Downgraded to Caa1 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. I-M-2, Downgraded to Caa2 from Baa2; Placed Under Review for further Possible Downgrade, -- Cl. I-B-1, Downgraded to Ca from Ba3, -- Cl. I-B-2, Downgraded to Ca from B3, -- Cl. I-B-3, Downgraded to Ca from Caa3, -- Cl. II-1A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-1A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-1X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-2A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-2A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-2X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-4A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-4A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-B-1, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. II-X-B1, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. II-B-2, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade, -- Cl. II-X-B2, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade, -- Cl. II-B-3, Downgraded to Ca from B3, -- Cl. III-1A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-1A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. III-1X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-2A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-2A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. III-2X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-3A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-3A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. III-4A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-4A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. III-4X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-5A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-5A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. III-6A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-6A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-B-1, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. III-B-2, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade, -- Cl. III-B-3, Downgraded to Ca from B2, Issuer: Bear Stearns Alt-A Trust 2006-4 -- Cl. I-1A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-1A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-2A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-2A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-3A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-3A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-M-1, Downgraded to Caa1 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. I-M-2, Downgraded to Caa2 from Baa3; Placed Under Review for further Possible Downgrade, -- Cl. I-B-1, Downgraded to Ca from B2, -- Cl. I-B-2, Downgraded to Ca from Caa2, -- Cl. II-1A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-1A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-1X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-2A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-2A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-2X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-2X-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3A-3, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3A-4, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3A-5, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3X-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-B-1, Downgraded to B1 from Aa1; Placed Under Review for further Possible Downgrade, -- Cl. II-B-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. II-B-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade, -- Cl. II-B-4, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade, -- Cl. II-B-5, Downgraded to Ca from Ba1, -- Cl. II-B-6, Downgraded to Ca from B1, -- Cl. II-B-7, Downgraded to Ca from B3, -- Cl. II-B-8, Downgraded to Ca from B3, -- Cl. III-1A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-1A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. III-2A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-2A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. III-3A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-3A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-3A-3, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-3A-4, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. III-3X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-3X-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-B-1, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. III-B-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade, -- Cl. III-B-3, Downgraded to Ca from B1, Issuer: Bear Stearns Alt-A Trust 2006-5 -- Cl. I-A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-M-1, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. I-M-2, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade, -- Cl. I-B-1, Downgraded to Ca from B2, -- Cl. I-B-2, Downgraded to Ca from Caa1, -- Cl. I-B-3, Downgraded to Ca from Caa3, -- Cl. II-A-3, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-X-3, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-B-1, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. II-B-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade, -- Cl. II-B-3, Downgraded to Ca from B1, Issuer: Bear Stearns Alt-A Trust 2006-6 -- Cl. I-M-1, Downgraded to Caa1 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. I-M-2, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade, -- Cl. I-B-1, Downgraded to Ca from B2, -- Cl. I-B-2, Downgraded to Ca from Caa1, -- Cl. I-B-3, Downgraded to Ca from Caa2, -- Cl. II-A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-B-1, Downgraded to B2 from Aa2, -- Cl. II-BX-1, Downgraded to B2 from Aa2, -- Cl. II-B-2, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade, -- Cl. II-BX-2, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade, -- Cl. II-B-3, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade, -- Cl. III-1X-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-1X-3, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-1X-4, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-1X-5, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-1X-6, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-1A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-2X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-2X-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-2X-3, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-2X-4, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-2X-5, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-2X-6, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-2A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-2A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-B-1, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade, -- Cl. III-BX-1, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade, -- Cl. III-B-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. III-BX-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. III-B-3, Downgraded to Ca from Ba1, -- Cl. III-BX-3, Downgraded to Ca from Ba1, -- Cl. III-B-4, Downgraded to Ca from B3, Issuer: Bear Stearns Alt-A Trust 2006-7 -- Cl. I-A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-M-1, Downgraded to Caa1 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. I-M-2, Downgraded to Ca from Ba1, -- Cl. I-B-1, Downgraded to Ca from B3, -- Cl. II-1A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-1A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-1X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-2A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-3A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-2X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-3X-1, Placed on Review for Possible Downgrade, currently Aaa, Issuer: Bear Stearns Alt-A Trust 2006-8 -- Cl. I-A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-M-1, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. I-M-2, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade, -- Cl. I-B-1, Downgraded to Ca from Ba3, -- Cl. I-B-2, Downgraded to Ca from B2, -- Cl. I-B-3, Downgraded to Ca from Caa1, -- Cl. II-A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-B-1, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. II-BX-1, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. II-B-2, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade, -- Cl. II-BX-2, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade, -- Cl. II-B-3, Downgraded to Ca from Ba2, -- Cl. III-A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. III-B-1, Downgraded to Ba1 from Aa2, -- Cl. III-B-2, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade, -- Cl. III-B-3, Downgraded to B1 from Baa2; Placed Under Review for further Possible Downgrade, Issuer: Bear Stearns Alt-A Trust 2007-1 -- Cl. I-A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-M-1, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. I-M-2, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade, -- Cl. I-B-1, Downgraded to Ca from Ba2, -- Cl. I-B-2, Downgraded to Ca from Ba3, -- Cl. I-B-3, Downgraded to Ca from B3, -- Cl. I-B-4, Downgraded to Ca from Caa3, -- Cl. II-1A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-1X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-2A-2, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-2X-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. II-B-1, Downgraded to B1 from Aa2, -- Cl. II-BX-1, Downgraded to B1 from Aa2, -- Cl. II-B-2, Downgraded to B1 from Baa1; Placed Under Review for further Possible Downgrade, -- Cl. II-B-3, Downgraded to Ca from B1, Issuer: Bear Stearns ALT-A Trust 2007-2 -- Cl. I-A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-M-1, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. I-M-2, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade, -- Cl. I-B-1, Downgraded to Ca from Ba3, -- Cl. I-B-2, Downgraded to Ca from B2, -- Cl. I-B-3, Downgraded to Ca from Caa2, -- Cl. I-B-4, Downgraded to Ca from Caa3, -- Cl. II-A-3, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-X-3, Placed on Review for Possible Downgrade, currently Aa1, -- Cl. II-B-1, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. II-BX-1, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. II-B-2, Downgraded to Ca from Ba1, -- Cl. II-B-3, Downgraded to Ca from B3, Issuer: Bear Stearns ALT-A Trust 2007-3 -- Cl. I-A-1, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. I-A-2, Placed on Review for Possible Downgrade, currently Aaa, -- Cl. M-1, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade, -- Cl. M-2, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade, -- Cl. B-1, Downgraded to Ca from Ba1, -- Cl. B-2, Downgraded to Ca from Ba2, -- Cl. B-3, Downgraded to Ca from B2, -- Cl. B-4, Downgraded to Ca from Caa2, -- Cl. II-A-1, Placed on Review for Possible Downgrade, currently Aaa. BEARINGPOINT INC: Dec. 31 Balance Sheet Upside Down by $469.2 Mil. ------------------------------------------------------------------ BearingPoint Inc. reported that on Dec. 31, 2008, the company had total assets of $1,981.4 million, total liabilities of $2,450.6 million resulting to a total stockholders' deficit of $469.2 million. For the fourth quarter of fiscal 2007 ended Dec.31 , the company realized a net loss of $169.0 million, which was significantly above the average of its net losses incurred in the first three quarters of fiscal 2007. Proactive management actions taken in the fourth quarter and intended to drive further cost savings in 2008 contributed significantly to the magnitude of this loss. These fourth quarter management actions included, among other things, lease and facilities restructuring costs of $20.6 million and additional severance costs of $14.4 million. Also contributing to the fourth-quarter loss was $58.8 million in contract write-downs and loss accruals, a notable net year-over- year increase over the fourth quarter of fiscal 2006. Notwithstanding these fourth-quarter increases, total contract write-downs and loss accruals for the full fiscal year continued to show improvement, as compared to contract write-downs and loss accruals for 2006 and 2005. The company incurred a net loss of $362.7 million for the fiscal year ended Dec. 31, 2007 compared to $213.4 million net loss for fiscal 2006. Contributing to the net loss for 2007 were bonuses accrued and payable to the company's employees, in part for 2006, as well as 2007; non-cash compensation expense related to the vesting of stock-based awards; lease and facilities restructuring charges; external costs related to the preparation of its financial statements, and its auditors' review of the company's financial statements and the testing of internal controls. Year- over-year external accounting costs were down significantly and the company expects continued improvement in these costs in 2008. "Today marks an important milestone for BearingPoint as we are once again timely with our SEC filings," Ed Harbach, BearingPoint's chief executive officer, said. "In 2007, we also significantly reduced our SG&A expenses and exceeded our year-end cash balance target for 2007, ending the year with cash on hand of $468.5 million. "While last year's financial results were disappointing overall, we have a lot to build on. In 2008, we are focused on controlling costs, increasing cash flow and improving utilization of our talented workforce," Mr. Harbach continued. "We are investing in our people, in our systems and in our technology—all of which will lead to a stronger and more flexible organization. "We have some strong momentum entering the year, which we will use to strategically leverage our global footprint and capitalize on areas where we have a differentiated portfolio of expertise, particularly our strong Public Services practice," Mr. Harbach added. "We will execute our plan, lead with our strengths and make profitability our first priority. "We are now at a clear inflection point in our business and in our history. We are excited about what our future holds,"Mr. Harbach concluded. About BearingPoint Inc. Headquartered in Mclean, Virginia, with approximately $3.4 billion in revenues for the twelve months ended September 2007, BearingPoint, Inc. provides I/T consulting and managed services to commercial and governmental entities worldwide. * * * As reported in the Troubled Company Reporter on Dec. 11, 2007, Moody's confirmed BearingPoint's B2 corporate family rating and assigned a negative rating outlook. In doing so, Moody's has concluded its review for possible downgrade of the company's ratings. The B2 rating confirmation is supported by the likelihood that, irrespective of a potential further slowdown in the U.S. economy, the company's Public Services, EMEA, and Asia Pacific divisions will continue to provide support for the company's overall revenue growth and achievement of operating profitability. The confirmation also reflects the likelihood that the company will continue reduce its high finance, accounting, and infrastructure costs, raise staff utilization levels, and lower capital expenditures, thereby improving its overall financial operating performance. On Dec. 3, 2007, the company reestablished and expects to maintain current financial reporting status. BENTLEY GROUP: To Close 120 Stores, Lay Off 520 Employees --------------------------------------------------------- Canadian luggage retailer Bentley Group is planning to shutter 120 of its 550 stores, displacing 500 full- and part-time employees plus 20 head office members, Mike King of The Gazette reports. The move is part of the company's efforts to restructure its operations and to shut down half of its uprofitable Xcetera brand. The Gazette discloses that the company has already closed 10 stores and plans to close another 30 stores by the end of March. The rest of the stores will be shut down by the end of June. Bentley Group's subsidiary Bentley Leathers Inc. filed for bankruptcy in January 2008, proposing a plan to pay about 400 creditors that were owed more than $58 million. Based in St-Laurent, Quebec, The Bentley Group is a chain of retail stores operating throughout Canada. Started in 1987, the company retails luggage, wallets, purses, backpacks and related accessories under various banners. These banners include Bentley, Access, Xcetera, Inglot, Collacutt, Jovin, Porters, Unic and Evex. BLB MANAGEMENT: Interest Payment Default Spurs Moody's Junk Rating ------------------------------------------------------------------ Moody's Investors Service lowered BLB Management's Corporate Family Rating to Caa2 from B2 reflecting the company's default on payment of interest on its first and second lien bank facilities. Additionally, the company will likely be unable to maintain compliance with financial covenants, as well as other terms of its first and second lien bank loan agreements, unless amended. BLB has been generating lower EBITDA and has incurred higher capital expenditures than Moody's previous expectations which caused the company to exhaust its liquidity cushion. The banks have agreed to forbear from exercising remedies through March 21, 2008. The sponsor group which owns BLB has offered to inject up to $8.0 million to support near term obligations, if Lenders agree to forbear from exercising remedies through Sept. 1, 2008. The company has engaged Lazard to explore strategic alternatives and may engage a financial turnaround firm to assist with operational improvements. The ratings remain on review for further possible downgrade. The review will focus on the outcome of the company's negotiations with its lenders, its near term liquidity profile, as well as BLB's longer term prospects for improving operating performance and improving its overall credit profile. BLB recently completed the redevelopment of the Twin River racino near Providence, Rhode Island. Operating performance has been hurt by construction disruption, food and beverage revenues and EBITDA well below projected levels and a slower ramp up of gaming revenues. Ratings downgraded: -- Corporate Family Rating to Caa2 from B2 -- Probability of Default rating to D from B2 -- 1st Lien Revolving Credit Facility to Caa1 from B1 -- 1st Lien Term Loan to Caa1 from B1 -- 2nd Lien Term Loan to Ca from Caa1 BLB Management Services, Inc. is a joint venture holding company comprised of Kerzner International Limited, Starwood Capital Group, and Waterford Group LLC. BLB's restricted operating subsidiary, UTGR, Inc., owns and operates the Twin River racino, located near Providence, Rhode Island. BLB recently completed a significant renovation of Twin River which included expanded gaming space, and improved non-gaming amenities. CAPRI CONDOMINIUM: Wants to Hire Burr & Forman as Special Counsel ----------------------------------------------------------------- The Capri Condominium Limited Partnership asks authority from the U.S. Bankruptcy Court for the Middle District of Florida to employ Carol H. Stewart at Burr & Forman as its special counsel. Burr & Forman is expected to: a) advise the Debtor and its general bankruptcy counsel in connection with any legal issues relating to the sale of Units, including but not limited to those issues relating to Alabama real estate law; b) document, and represent the Debtor at, any closings of the Units; and c) otherwise advise and assist the Debtor and its general bankruptcy counsel in connection with any relating to Alabama law. The firm's billing rate ranges from $125 to $375 per hour. However, specific professionals have these billing rates: Professionals Hourly Rates ------------- ------------ Carol H. Stewart $375 Derek Meek $350 Marc Solomon $300 Melinda Eubanks $220 Staci Duke $125 To the best of the Debtor's knowledge, the firm holds no interest adverse to the Debtor and its estate and is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Burr & Forman LLP 420 North 20th Street, Suite 3400 Birmingham, AL 35203 Tel: (205) 251-3000 Tampa, Florida-based The Capri Condominiums LP owns and manages condominiums. Capri is operated by Euro American Investors Group in The Netherlands, which runs an office in Tampa, Florida. Euro American Investors -- http://www.eaig.nl/-- is an international company that offers a complete package property with the focus on the United States and Europe. Since its launch in 1979, Euro American Investors built a diversified portfolio of properties, apartments, offices, commercial buildings, and shopping malls. Capri Condominiums sought protection under chapter 11 on Feb. 6, 2008 (Bankr. M.D. Fla. Case No. 08-01553). Maureen A. Vitucci, Esq., at Gray Robinson PA represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed assets and debts between US$10 million and US$50 million. CARIBBEAN RESTAURANTS: Moody's Pares Ratings to 'B3' From 'B2' -------------------------------------------------------------- Moody's Investors Service downgraded Caribbean Restaurants, LLC's Corporate Family Rating to B3 from B2, probability of default rating to B3 from B2, and changed rating outlook to negative. Concurrently, Moody's affirmed the B1 rating of the company's $210 million senior secured credit facilities. The downgrade of CFR to B3 reflects that Caribbean's continuously declining operating performance is resulting in deteriorating credit metrics that are more commensurate with a low single B rating. Moody's anticipates that the key contributing factors to the company's underperformance, such as recessionary economic conditions in Puerto Rico, a high inflationary environment and the ever-intensified competitions among quick service restaurants, are likely to persist over an extended period, thus keeping the company from improving its performance and credit metrics within the rating horizon. The rating action also reflects Moody's increasing concern on the company's liquidity position as it approaches a potential covenant violation under its credit agreement. The B3 CFR continues to incorporate the strong name recognition and leading position of Burger King brand in the Puerto Rico QSR segment and the company's exclusive development agreement within Puerto Rico, offset by its geographic concentration and limited scale and revenue base. The negative ratings outlook encompasses challenges Caribbean may face in the coming 12-18 months to stabilize its margin and improve cash flow. Moody's expects the unfavorable macroeconomic conditions, such as the local recession along with the escalating unemployment rate and rising inflation will likely continue to weigh on incomes and hurt consumers' disposable income, thus imposing further strains on the company's operating performance. The outlook also incorporates the company's weakening liquidity position as represented by its very tight covenant. Moody's cautions that the continued weak operating results may force the company to seek a waiver or amendment from its lenders to avoid the covenant breach. A failure of obtaining an amendment could result in further negative rating action. The B1 rating on the senior secured credit facilities reflect the facilities' perfected first lien priority security interest in substantially all the assets of the company as well as guarantee provided by its parent and subsidiaries. The B1 rating on the facilities benefits from their priority position in the capital structure relative to its substantial junior debt obligation such as $73.5 million subordinated notes, lease obligation and trade payables. The following ratings are affected: Caribbean Restaurants, LLC -- Corporate Family Rating: downgraded to B3 from B2; -- Probability of Default rating: downgraded to B3 from B2; -- $210 million senior secured credit facilities due July 2009: affirmed at B1 -- Rating Outlook: changed to negative from stable Caribbean Restaurants, LLC (Caribbean), through an exclusive territorial development agreement with Burger King Corporation, is the sole franchisee of Burger King restaurants in Puerto Rico with approximately 170 units as of fiscal year-end April 30, 2007. CASH TECHNOLOGIES: Unit Agrees to Acquire Turbocharger Assets ------------------------------------------------------------- Cash Technologies, Inc. disclosed that its newly formed CPI Holdings, LLC, subsidiary has entered into an agreement with Turbomotive, Inc. and Robert McKeirnan, its president, to purchase certain assets related to Turbomotive's turbocharger technology for $1.75 million, of which $100,000 will be paid in cash and $1.65 million will be paid in preferred stock of Cash Technologies. McKeirnan is a top turbocharger developer, holds numerous patents in bearing and other mechanical technologies and formerly operated a leading supplier of aftermarket turbochargers. Cash Technologies previously reported its plan to acquire the assets (and restore the operations) of Champion Parts, Inc., the fuel-system components remanufacturer in the U.S. prior to its bankruptcy, and integrate fuel-efficiency products to take advantage of Champion's extensive retail network. The first of such products are the Turbomotive turbochargers, which are based on patented technology that management believes makes the products the most efficient and reliable available. The market for so-called "green" automotive products that increase fuel efficiency and reduce toxic emissions is large and rapidly growing. Tougher regulatory standards, higher fuel prices and popular demand for lower-carbon-footprint vehicles have made green products a dynamic sector and continued expansion is likely into the foreseeable future. Turbochargers increase fuel efficiency by 25% (60% for diesel engines), reduce emissions by 25%, increase engine power by 50% and keep the engine cleaner which reduces maintenance costs. Most vehicle manufacturers are now designing cars and trucks that include turbos, allowing engines to be smaller, lighter and meet tougher environmental standards while improving performance. The turbo market reached approximately $5 billion last year, with more than 17 million units produced, and is expected to increase by more than 50% within 5 years. Demand for turbochargers is international and a turbo unit manufactured for a foreign car or truck can be sold anywhere in the world where the same engine is used. OEM and international markets can multiply the turbocharger sales potential of Champion. The emerging use of alternative fuels will also increase the demand for turbochargers. By leveraging Champion's manufacturing capabilities, recognized brand name and extensive national retail distribution which reaches more than 20,000 stores, management believes that Champion is the ideal conduit for delivering advanced products to the market and generating substantial sales. Cash Tech first entered the automotive products market in November 2004 when its TAP Holdings, LLC subsidiary acquired certain assets of Tomco Auto Products, Inc. for $2.5 million. TAP sold the Tomco assets in November 2006 to Champion for approximately $10.8 million. The Champion bankruptcy caused Cash Tech to write off the approximate $8 million balance of the Champion note receivable, but has created the opportunity to re-acquire the Tomco and Champion assets at a substantial discount and exploit Champion's retail relationships in order to distribute new products. The assets being acquired consist of patents, purchase orders, manufacturing processes, other intellectual property and tooling. The preferred stock which constitutes $1.65 million of the Turbomotive purchase will have a conversion price equal to the market price of Cash Tech's common stock at the time of conversion, with a floor of $0.75 per share and a ceiling of $1.50 per share. CPI also intends to hire the Turbomotive principals, including McKeirnan, to operate the turbo assets and oversee manufacturing and distribution. "This is the first of several green products that we intend to produce and distribute through Champion and is an important part of our Champion strategy," Bruce Korman, CEO of Cash Technologies, stated. "Through this channel, the sale of efficient and ethical products can have enormous market potential and great upside for Cash Tech shareholders." The closing of the transaction, scheduled to take place on or about April 1, 2008, is subject to certain conditions, including the completion of the Champion acquisition. There can be no assurance that the transaction will be completed. About Cash Technologies Headquartered in Los Angeles, Cash Technologies Inc. (AMEX: TQ) -- http://www.cashtechnologies.com/-- develops and markets innovative data processing solutions in the healthcare and financial services industries. The company's consolidated balance sheet at Nov. 30, 2007, showed $6.4 million in total assets, $10.9 million in total liabilities, and ($111,479) in minority interest, resulting in a $4.4 million total stockholders' deficit. Going Concern Doubt As reported in the Troubled Company Reporter on Sept. 17, 2007, Vasquez & Company LLP expressed substantial doubt about Cash Technologies Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended May 31, 2007. The auditing firm noted that the company has suffered significant recurring losses and is in immediate need of substantial working capital to continue its business and operations. CATAPULT COMMS: Discloses Reduction in Global Workforce by 11% -------------------------------------------------------------- Catapult Communications Corporation is reducing its global workforce by up to 25 employees through layoffs and early retirements. This restructuring represents a reduction in the number of employees of up to 11%. Included in the restructuring is the closing of the company's Australian research and development office. The company expects that this restructuring will reduce annualized pre-tax expenses by up to approximately $4.8 million, including up to approximately $465,000 in non-cash stock option expenses. The company expects to record total restructuring costs of up to approximately $1.9 million in the current fiscal quarter ending March 31, 2008. "We continue to believe that the next generation of global wireless telephony, LTE, will be positive for Catapult, and we will continue to invest significant research and development resources in this technology" Dr. Richard A. Karp, Catapult's chairman and chief executive officer, said. "However, because revenue from this technology will not occur as quickly as originally anticipated due to delays in finalizing the standards, we have taken steps to reduce our expenses in the short term." About Catapult Communications Based in Mountain View, California, Catapult Communications Corporation (NASDAQ: CATT) -- http://www.catapult.com/-- designs, develops, manufactures, markets and supports software-based test systems for the global telecommunications industry. Its DCT2000 and MGTS products are digital communications test systems designed to enable equipment manufacturers and network operators to deliver digital telecommunications equipment and services cost- effectively. Its software and hardware assist customers in the design, integration, installation and acceptance testing of a range of digital telecommunications equipment and services by performing test functions, including design and feature verification; conformance testing; interoperability testing; load and stress testing, and monitoring and analysis. Catapult markets its products through its direct sales force with offices in the United States, Canada, the United Kingdom, Germany, France, Finland, Sweden, Japan, China and India. In other markets, the company uses distributors or sales agents. As of September 30, 2007, the company employed 220 full-time employees, including 83 in research and development, 18 in application engineering customer support, 79 in sales and sales support, 10 in marketing, 19 in administration and 11 in manufacturing. Of these employees, 136 were employed in North America, where our head office and our principal research and development and manufacturing facilities are located, 32 in the United Kingdom and Europe, 16 in Australia, 15 in Japan, 13 in China, 6 in the Philippines and 2 in India. * * * Catapult Communications' latest form 10-k filing showed total assets of $126,970,000 and total liabilities of $15,194,000. Its consolidated statements of operations showed net loss of $4,421,000 for the year ended Sept. 30, 2007 and net loss of $10,666,000 for the year ended Sept. 30, 2006. Last week, the company announced that its chief technology officer, Glenn Stewart, would retire at the end of the month. Mr. Stewart managed the worldwide engineering organization from 1992 through 2003 and has been the CTO from 2003 to present. At the company's 10-k filing Mr. Stewart is described as Vice President and Chief Technology Officer. In January, Catapult Communications announced that, in order to significantly reduce its accounting expenses, it has dismissed its previous independent registered public accounting firm, Deloitte & Touche LLP, and has engaged the firm of Stonefield Josephson, Inc. The Company said it has had no disagreements with Deloitte & Touche LLP during their tenure. It said it opted to change its accountant to save on cost. The company said that expenses it incurred in connection with the audit and internal control review work performed by Deloitte & Touche LLP in fiscal year 2007 totaled approximately $1,076,000, and the Company estimates that these expenses would approximate $985,000 for the current fiscal year without a change in accounting firms. Based on estimates from the two firms, the Company currently believes that the potential savings for fiscal 2008 from the change in firms will be in the range of 43% - 49%. CENTERSTAGING: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: CenterStaging Musical Productions, Inc. 3407 Winona Avenue Burbank, CA 91504 Bankruptcy Case No.: 08-13019 Type of Business: The Debtor is a Burbank-based rehearsal and production services company. See http://www.centerstaging.com/ Chapter 11 Petition Date: March 10, 2008 Court: Central District Of California (Los Angeles) Judge: Vincent P. Zurzolo Debtor's Counsel: Lewis R. Landau, Esq. (lew@landaunet.com) 23564 Calabasas Road, Suite 104 Calabasas, CA 91302 Tel: (888) 822-4340 Fax: (888) 822-4340 http://www.landaunet.com/ Estimated Assets: $1 million to $100 million Estimated Debts: $1 million to $100 million The Debtor did not file a list of its largest unsecured creditors. CERADYNE INC: Board Approves Repurchase of $100 Mil. Common Stock ----------------------------------------------------------------- Ceradyne Inc.'s board of directors has authorized the repurchase of up to $100 million of Ceradyne common stock in open market transactions, including block purchases, or in privately negotiated transactions. The stock repurchase program does not include specific price targets or timetables and may be suspended or terminated at any time prior to completion. Ceradyne intends to use cash on hand and excess free cash flow to acquire the shares. Repurchased shares will be added to Ceradyne's treasury and cancelled. "We believe a repurchase program is an appropriate use of our cash and underscores our belief in the long-term value of our stock," Joel P. Moskowitz, Ceradyne's chairman and chief executive officer, commented. "At our current trading levels, our board of directors believes that Ceradyne stock is an attractive investment for Ceradyne and its shareholders." Based in Costa Mesa, California, Ceradyne Inc. (Nasdaq: CRDN) -- http://www.ceradyne.com/-- develops, manufactures and markets advanced technical ceramic products and components for defense, industrial, automotive and consumer applications. * * * Moody's Investor Services placed Ceradyne Inc.'s long-term corporate family and bank loan debt ratings at "Ba3" in July 2004. This rating holds to this date. CSFB ABS: Realized Losses Spurs S&P's Rating Cuts on Two Classes ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class M-1 and M-2 mortgage pass-through certificates from CSFB ABS Trust Series 2001-HE16. In addition, S&P affirmed its ratings on the class A and B certificates from the same transaction. The downgrades reflect realized losses that continue to exceed monthly excess interest cash flow. This has reduced overcollateralization (O/C) for CSFB ABS Trust Series 2001-HE16 to $158,170. The three-, six-, and 12-month average realized losses are $111,895, $70,312, and $84,099, respectively, and they continue to adversely affect the transaction. As of the February 2008 remittance period, the transaction had experienced cumulative realized losses of $12,014,009, or 4.25% of the original pool balance. The transaction has sizable loan amounts that are severely delinquent (90-plus days, foreclosures, and REOs), suggesting that the unfavorable performance trend will continue. Severe delinquencies total $3.948 million, or 26.43% of the current pool balance. Severe delinquencies have improved 22.7% from $5.110 million one year ago, but are still 12.2% higher than the $3.517 million reported six months ago. Subordination, O/C, and excess interest cash flow provide credit support for this transaction. Additionally, loans with original loan-to-value ratios exceeding 60% benefit from loan-level primary mortgage insurance issued by Mortgage Guaranty Insurance Corp. (MGIC, 'AA-/Watch Neg' financial strength rating {FSR}). In this series, 64.05% of such loans were covered at origination. Furthermore, the class A certificates have additional support from a bond insurance policy issued by Financial Security Assurance Inc. ('AAA' FSR). The affirmation of the rating on the bond- insured class is based on the financial strength of the related insurer. The collateral for this transaction consists of closed- end, fixed- and adjustable-rate first-lien mortgage loans with original terms to maturity of no more than 30 years. Ratings Lowered CSFB ABS Trust Series 2001-HE16 Mortgage pass-through certificates Rating ------ Class To From ----- -- ---- M-1 BB BBB M-2 B BB Ratings Affirmed CSFB ABS Trust Series 2001-HE16 Mortgage pass-through certificates Class Rating ----- ------ A* AAA B CCC * Bond-insured class. CHAMPION ENTERPRISES: Buys ModularUK with $4 Mil. Debt Assumptions ------------------------------------------------------------------ Champion Enterprises Inc. expanded its international segment through the acquisition of ModularUK Building Systems Limited for a nominal initial cash payment and the assumption of approximately $4 million of debt. In connection with the acquisition, it has entered into a lease agreement for three additional buildings near Driffield, East Yorkshire, approximately 60 miles northeast of Champion's existing U.K. operations. While ModularUK operates leased manufacturing facilities located in East Yorkshire, the business will be relocated to the new Driffield site upon completion of leasehold improvements, occupying one of the three new buildings. The two remaining buildings, upon completion, will provide approximately 25% additional manufacturing capacity for the company's Caledonian operations. The new Driffield site is expected to be fully operational later this year. "ModularUK brings to Champion not only strong, profitable current operations but additional management depth and much needed manufacturing capacity to continue to grow and expand our U.K. operations," William Griffiths, chairman, president and chief executive officer of Champion Enterprises Inc., stated. "In addition, entry into the modular healthcare and education construction sectors will help fuel the future growth of our international segment and the continued diversification of Champion," Mr. Griffiths added. "We are proud to have the ModularUK team join with Caledonian's management in leading our growing business abroad." About ModularUK Building Systems Limited Headquartered in United Kingdom, ModularUK Building Systems Limited -- http://www.modularuk.com/-- designs, produces and installs steel-framed modular and volumetric buildings serving clients in the healthcare, education and commercial sectors throughout the United Kingdom. ModularUK operates two manufacturing facilities in East Yorkshire, England. About Champion Enterprises Inc. Based in Auburn Hills, Michigan, Champion Enterprises Inc. (NYSE: CHB) -- http://www.championhomes.com/-- operates 31 manufacturing facilities in North America and the United Kingdom working with independent retailers, builders and developers. The Champion family of builders produces manufactured and modular homes, as well as modular buildings for government and commercial applications. * * * As reported in the Troubled Company Reporter on Dec. 12, 2007, Standard & Poor's Ratings Services raised its ratings on Champion Enterprises Inc.'s senior notes due 2009 and on Champion Home Builders Co.'s senior secured credit facility to 'B+' from 'B'. At the same time, S&P upgraded the recovery ratings on the senior notes and the credit facility to '3' from '5'. Concurrently, S&P affirmed the 'B+' corporate credit ratings. The outlook for both entities is stable. CHARLES RIVER: Moody's Changes Outlook to Stable; Retains Ratings ----------------------------------------------------------------- Moody's Investors Service revised the outlook of Charles River Laboratories International, Inc. to stable from negative and affirmed the existing ratings. Moody's also affirmed Charles River's speculative grade liquidity rating of SGL-1 reflecting S&P's belief that the company should continue to have very good liquidity throughout 2008. The change in outlook to stable reflects several favorable trends in Charles River's business since Moody's changed the outlook to negative in December 2006. For example, demand for Charles River's research models and services has continued to strengthen, in particular for transgenic models, which had been weak at the time of the negative outlook. Moody's also believes that Charles River should begin to benefit more meaningfully in 2008 from its capital investments as new facilities and capacity expansions begin to ramp up. The Ba1 Corporate Family Rating continues to reflect Charles River's leading market positions in its core preclinical research services markets, low customer concentration, relatively stable business profile and strong operating cash flow generation. The ratings are constrained by the high level of capital investment and limited free cash flow, the risk of shareholder friendly policies and the company's limited scale relative to investment grade health care companies. The affirmation of the ratings and stable outlook do not incorporate the expectation for any meaningful increase in adjusted leverage in the near-term. Ratings Affirmed/LGD Assessments Revised: Charles River Laboratories International, Inc. -- Corporate Family Rating, Ba1 -- Probability of Default Rating, Ba1 -- Speculative Grade Liquidity Rating, SGL-1 -- Senior Secured $200 million Revolving Credit Facility due 2011, Baa3 (LGD2, 20%) -- Senior Secured $156 million Term Loan facility ($109.2 million outstanding at 12/31/2007) due 2011, Baa3 (LGD2, 20%) Charles River Laboratories Preclinical Services Montreal (subsidiary) -- Canadian Revolving Credit Facility (CAD $12 million), Baa3 (LGD2, 20%) Charles River Laboratories Preclinical Services Edinburgh (subsidiary) -- GBP Revolving Credit Facility (GBP 6 million), Baa3 (LGD2, 20%) The rating outlook is stable. Charles River, headquartered in Wilmington, Massachusetts, provides research tools and integrated support services for drug discovery and development. The company's business segments are Research Models and Services, which involves the commercial production and sale of animal research models; and Preclinical Services, which involves the research, development and safety testing of drug candidates. The company reported revenues of $1,231 million for the twelve months ended Dec. 29, 2007. CHARTER COMMS: Moody's Holds Junk Ratings on Adequate Liquidity --------------------------------------------------------------- Moody's Investors Service assigned B1 and B3 ratings, respectively, to the new $275 million senior secured (1st lien) term loan and $500 million of senior secured (2nd lien) notes, both due 2014, to be issued by Charter Communications Operating, LLC, an indirect majority-owned subsidiary of Charter Communications, Inc. Moody's also affirmed many of its existing ratings for the current debt of Charter and its numerous intermediate holding and operating company subsidiaries, as outlined below, although existing ratings for approximately $8.3 billion of combined secured and unsecured term debt at CCO and other intermediate holding companies were lowered by one notch. Charter Communications, Inc. -- Corporate Family Rating:Affirmed Caa1 -- Probability-of-default Rating: Affirmed Caa2 -- Senior unsecured notes: Affirmed Ca, LGD5 - 87% Charter Communications Holdings, LLC. -- Senior unsecured notes: Affirmed Ca, LGD5 - 84% CCH I Holdings, LLC. -- Senior unsecured notes: Affirmed Caa3, LGD5 - 77% (changed from LGD5 - 76%) CCH I, LLC. -- Senior secured notes: Downgraded to Caa3, LGD5 - 77%, from Caa2, LGD4 - 58% CCH II, LLC. -- Senior notes: Downgraded to Caa2, LGD3 - 41%, from Caa1, LGD3 - 40% CCO Holdings, LLC. -- 8 ¾% Senior notes due 2013: Affirmed Caa1, LGD3 - 32% (changed from LGD3 - 30%) -- Term Loan Due 2014: Affirmed Caa1, LGD3 - 32%, (changed from LGD3 - 30%) Charter Communications Operating, LLC. -- New $500 million 2nd lien notes due 2014: Assigned B3, LGD2 - 23% -- $275 million incremental Term Loan facility due 2014: Assigned B1, LGD1 - 6% -- Senior 8% 2nd lien notes due 2012: Downgraded to B3, LGD2 - 23%, from B2, LGD2 - 22% -- Senior 8 3/8% 2nd lien notes due 2014: Downgraded to B3, LGD2 - 23%, from B2, LGD2 - 22% -- $6.5 billion existing Term Loan facility due 2014: Affirmed B1, LGD1 - 6% -- $1.5 billion revolving credit facility due 2013: Affirmed B1 - LGD1 - 6% -- Outlook: Stable -- Speculative Grade Liquidity Rating - Affirmed SGL-3 Rating affirmations, proforma for the assumed successful completion of the pending transactions, are significantly influenced by the maintenance of an "adequate" liquidity profile as incorporated in the SGL-3 speculative grade liquidity rating, with existing external committed lines of credit now again able to cover the cash absorptive funding needs of the company over the SGL rating horizon through the first half of 2009. Rating downgrades for a portion of the company's debt instruments resulted from higher assumed loss rates stemming from the effective and/or structural subordination of these claims to a larger and still growing amount of senior-ranking claims, both at present and as anticipated in an event of default scenario. In the absence of raising new money and subsequently freeing up availability under the existing $1.5 billion revolving credit facility to fund ongoing free cash flow deficits, Moody's believes that liquidity may have fully eroded by the around the middle of 2009. "Although not expected, if the transactions fail to clear the market, downward rating pressure reflecting the subsequently weaker forward-looking liquidity profile and higher embedded default risk are increasingly likely, and on a rather imminent basis," noted Moody's Senior Vice President Russell Solomon. "As they have for many years now, Charter's ratings continue to reflect a high probability of default (as evidenced by the Caa2 probability of default rating) and a fundamental mismatch between its liability structure and its business model," Solomon added. Notwithstanding Charter's balance sheet challenges, though, the proposed transactions -- if successfully completed -- will again provide evidence of the company's continued access to the debt capital markets, even under what are arguably now some of the most difficult current market conditions in recent history. The company has been able to opportunistically enhance near-to- intermediate term liquidity over the past few years by effecting various debt exchanges, refinancings and asset sales, mitigating the risk of what might otherwise have been a larger requisite restructuring following an actual payment default in the absence thereof. In recent periods, such liquidity-enhancing transactions benefited from strong market liquidity, accompanied by noteworthy improvements in operating performance, albeit off of a historically depressed base. Nonetheless, Moody's continues to believe that such a right-sizing of the balance sheet liabilities is still needed and may ultimately be forthcoming, particularly as the increasingly competitive operating environment exacerbates the company's rapidly rising debt service costs and refinancing requirements in the out years of Moody's rating horizon, with perhaps as much as $7 billion of current debt obligations now likely a candidate for being equitized in some form, at some future date. Headquartered in St. Louis, Missouri, Charter Communications is a domestic multiple system cable operator serving approximately 5.2 million basic video subscribers (and 5.6 million customers). CHARTER COMMS: S&P Changes Outlook to Neg on Liquidity Concerns --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' corporate credit rating on Charter Communications Inc. and revised its outlook to negative from stable. The outlook revision reflects increased concerns about the company's liquidity given expected cash outflows, current credit market conditions and the sizeable maturities beginning in 2010. At the same time, S&P lowered the second and third lien senior secured bank loan ratings at various Charter entities due to proposed new issuances. In addition, Charter Communication Operating LLC.'s senior second lien notes were lowered to 'B' (one notch higher than the 'B-' corporate credit rating) from 'B+'. The recovery rating was revised to '2', indicating that lenders can expect substantial (70%-90%) recovery in the event of a payment default, from 1. The issue rating on CCO Holdings LLC's $350 million third lien term loan was lowered to 'CCC' (two notches below the corporate credit rating), from 'B+'. The recovery rating was revised to '6', indicating expectations of negligible (0%-10%) recovery in the event of a default, from '1'. Finally, S&P assigned a 'B+' issue rating to Charter Communications Operating LLC's proposed $275 million first lien incremental term loan B, with a recovery rating of '1', indicating expectations for very high recovery in the event of default. S&P assigned a 'B' issue rating, one notch above the CCR, to Charter Communications Operating LLC's proposed $500 million senior second lien notes due 2014 with a '2 recovery rating, indicating expectations for substantial (70%-90%) recovery in the event of a payment default. S&P also assigned a '6' recovery rating, indicating expectations for negligible (0%-10%) recovery in the event of default to the existing 11% senior notes due 2015 issued by CCHI LLC. CHARTER COMMUNICATIONS: Plans to Borrow $275 Million in Term Loans ------------------------------------------------------------------ Charter Communications, Inc.'s subsidiary, Charter Communications Operating, LLC, plans to borrow up to $275 million principal amount of incremental term loans under the Charter Operating credit facilities. The net proceeds of the proposed Incremental Term Loans will be used to reduce borrowings, but not commitments, under the revolving portion of the Charter Operating credit facilities and for general corporate purposes. As proposed, the Incremental Term Loans will have a final maturity of March 6, 2014, and prior to this date will amortize in quarterly principal installments totaling 1% annually beginning on June 30, 2008. The Incremental Term Loans will bear interest at rates to be agreed with the lenders of the Incremental Term Loans and will otherwise be governed by and subject to the existing terms of the Charter Operating credit facilities. The closing of the Incremental Term Loans is expected shortly after the completion of the proposed $500 million principal amount of 2nd lien notes offering by Charter Operating, announced separately this morning. The Company expects, subject to market conditions, that the sale of the Incremental Term Loans would be completed in approximately one to two weeks. The closing of the offering of the Notes is not conditioned upon the closing of the Incremental Term Loans. Headquartered in St. Louis, Missouri, Charter Communications Inc. (NASDAQ: CHTR) -- http://www.charter.com/-- is a broadband communications company and a publicly traded cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. At Dec. 31, 2007, the company's balance sheet showed stockholders' deficit of $7.8 billion, compared to a deficit of $6.2 billion in Dec. 31, 2006. CHARTER COMMUNICATIONS: Plans to Issue $500 Mil. of 2nd Lien Notes ------------------------------------------------------------------ Charter Communications, Inc.'s subsidiary, Charter Communications Operating, LLC, intends to offer for sale an aggregate of $500 million principal amount of 2nd lien notes due 2014, which are to be guaranteed by CCO Holdings, LLC and certain subsidiaries of Charter Operating. The net proceeds of this proposed issuance will be used to repay, but not permanently reduce, the outstanding debt balances under the existing revolving credit facility of Charter Operating. Headquartered in St. Louis, Missouri, Charter Communications Inc. (NASDAQ: CHTR) -- http://www.charter.com/-- is a broadband communications company and a publicly traded cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. At Dec. 31, 2007, the company's balance sheet showed stockholders' deficit of $7.8 billion, compared to a deficit of $6.2 billion in Dec. 31, 2006. CHARYS HOLDING: Can Hire Richards Layton as Bankruptcy Co-Counsel ----------------------------------------------------------------- Charys Holding Company Inc. and Crochet & Borel Services Inc. obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ Richards Layton & Finger P.A. as their bankruptcy co-counsel, nunc pro tunc to Feb. 14, 2008. As the Debtors' co-counsel, RL&F is expected to: a) advise the Debtors of their rights, powers and duties as debtors and debtors in possession; b) take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of any actions in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; c) prepare on behalf of the Debtors all necessary motions, applications, answers, orders, reports and papers in connection with the administration of the Debtors' estates; and d) perform all other necessary legal services in connection with the Chapter 11 cases. Mark D. Collins, Esq., a director of RL&F, assured the Court that the firm does not hold any interest adverse to the Debtors or their estates, and that the firm is a "disinterested person" as such term is defined under Sec. 101(14) of the Bankruptcy Code. Prior to the bankruptcy filing, the Debtors paid RL&F a total retainer of $75,000 in connection with the Debtors' Chapter 11 filing. A portion of this payment has been applied to outstanding balances as of the petition date. As compensation for their services, RL&F's professionals bill: Professional Hourly Rate ------------ ----------- Mark D. Collins Esq. $560 Paul N. Heath, Esq. $400 Chun I. Jang, Esq. $260 Barbara J. Witters $175 Mr. Collins can be reached at: Mark D. Collins, Esq. Richards, Layton & Finger P.A. One Rodney Square 920 North King Street Wilmington, DE 19801 Tel: (302) 651-7531 Fax: (302) 498-7531 email: Collins@rlf.com About Charys Holding Headquartered in Atlanta, Georgia, Charys Holding Co., Inc., -- http://www.charys.com/-- provide remediation & reconstruction and wireless communications & data infrastructure. The company and its Crochet & Borel Services, Inc. subsidiary filed for Chapter 11 protection on Feb. 14, 2008 (Bankr. Del. Case No.08-10289). Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in these cases to date. When the Debtors filed for protection against their creditors, it listed total assets of $245,000,000 and total debts of $255,000,000. CHARYS HOLDING: Allowed to Hire Michael Brenner as Special Counsel ----------------------------------------------------------------- Charys Holding Company Inc. and Crochet & Borel Services Inc. obtained authority from the United States Bankruptcy Court for the District of Delaware to employ Michael Brenner, Esq., as their special counsel, nunc pro tunc to Feb. 14, 2008. As the Debtors' special counsel, Michael Brenner is expected to provide legal advice in connection with, but not limited to: a) general corporate transactions and matters arising outside of bankruptcy; b) non-bankruptcy related matters in coordination with the Debtors' general bankruptcy counsel, with respect to legal matters arising in or relating to the Debtors' ordinary course of business, including employee benefit matters, attendance at senior management meetings, meeting with the Debtors' advisors and meeting with the Charys Holding's Board of Directors and any other matters that the Debtors deem appropriate; c) any necessary consultation with the Debtors' bankruptcy counsel, as needed, regarding issues arising in connection with postpetition transactions; and d) additional services within the area of corporate, certain litigation and related matters that may arise in connection with the chapter 11 cases, as the Debtors and Brenner may agee from time to time. Prior to bankruptcy filing, the board of directors of Charys Holding Co. Inc. authorized the payment of a $450,000 bonus to Michael Brenner, of which $100,000 was paid in January 2008. Mr. Brenner has advised the Debtors that he will waive his claim to the balance of the bonus. As payment for his services, Mr. Brenner will bill the Debtors at the hourly rate of $125. Mr. Brenner received an advance payment for professional services performed and to be performed, in connection with his representation of the Debtors and their non- debtor affiliates. As of bankruptcy filing, Mr. Brenner has a $50,000 remaining credit balance for future professional services. Michael Brenner, Esq., assured the Court that he does not hold any interest adverse to the Debtors or their estates, and that he is a "disinterested person" as such term is defined under Sec. 101(14) of the Bankruptcy Code. Mr. Brenner can be reached at: Michael Brenner, Esq. 314 Clematis Street Suite 200, West Palm Beach Florida 33401 Tel: (561) 471-5383 About Charys Holding Headquartered in Atlanta, Georgia, Charys Holding Co., Inc., -- http://www.charys.com/-- provide remediation & reconstruction and wireless communications & data infrastructure. The company and its Crochet & Borel Services, Inc. subsidiary filed for Chapter 11 protection on Feb. 14, 2008 (Bankr. Del. Case No.08-10289). Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in these cases to date. When the Debtors filed for protection against their creditors, it listed total assets of $245,000,000 and total debts of $255,000,000. CHRYSLER LLC: Idles Facility in Delaware Due to Axle Labor Strike ----------------------------------------------------------------- Chrysler LLC will temporarily close its vehicle assembly facility in Newark, Delaware, this week, as the strike among members of the United Auto Workers union at American Axle & Manufacturing Inc. stretches, Terry Kosdrosky of The Wall Street Journal reports. WSJ relates citing spokeswoman Michele Tinson, American Axle supplies Chrysler components for the Dodge Durango and Chrysler Aspen sport utility vehicles in Newark and two versions of the Dodge Ram pickup made in Saltillo, Mexico. As reported in the Troubled Company Reporter on Feb. 27, 2008, UAW union president Ron Gettelfinger and Vice President James Settles disclosed that members at American Axle began an unfair labor practices strike at 12:01 a.m. on Feb. 26, 2008, following expiration of a four-year master labor agreement, which expired at 11:59 p.m., Feb. 25, 2008. American Axle, which earned $37 million on $3.25 billion sales in 2007, wants a deal like those UAW gave General Motors Corp., Ford Motor Co., Chrysler LLC, and parts makers Delphi Corp. and Dana Corp., insisting that cutting labor costs is essential to be competitive, according to The Associated Press. The auto parts supplier is asking the union to approve $20 to $30 hourly wage cuts from $73 per hour it pays now to $27 per hour, saying that its original U.S. locations incurred losses for three years. TCR relates that a Chrysler assembly plant in Windsor, Ontario was forced to temporarily shut down after Canadian Auto Workers union members of TRW Automotive Inc. went on strike on Feb. 28, 2008, due to failed wage increase talks. TRW supplies Chrysler suspension modules for Dodge Caravan and Town & Country minivans. Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Nov. 12, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC and removed it from CreditWatch with positive implications, where it was placed Sept. 26, 2007. S&P said the outlook is negative. COMPLETE PRODUCTION: S&P Upgrades Corporate Credit Rating to 'BB-' ------------------------------------------------------------------ Standard & Poor's Ratings Services raised the corporate credit rating on oilfield services company Complete Production Services to 'BB-' from 'B+'. At the same time, S&P raised the rating on Complete's $650 million 8% senior unsecured notes to 'B+' from 'B'. The outlook is stable. "The upgrade reflects Complete's growing completion and production segment," said Standard & Poor's credit analyst Aniki Saha- Yannopoulos. "Also, the company's geographic markets are expanding, and we expect that it will continue to improve its business and operational diversity while maintaining a strong financial profile." As of Dec. 31, 2007, the Houston-based company had $887 million of debt, adjusted for operating-lease expenses. The ratings on Complete reflect the company's weak business position as an oilfield services provider with an aggressive growth strategy in this historically cyclical, capital-intensive, and highly competitive industry. Slightly mitigating these weaknesses are the company's diversified product lines in the currently favorable well-servicing environment, and its improved financial profile. COUNTRYWIDE FINANCIAL: FBI Digs Deep Into Evidence; Finds Errors ---------------------------------------------------------------- The U.S. Federal Bureau of Investigation is fielding evidence from its investigation of Countrywide Financial Corp., which potentially exposes the company's slipshod and dubious lending practices, Glenn R. Simpson of The Wall Street Journal reports. According to WSJ, the FBI discovered that many loan documents bear incorrect and faulty information on the mortgage clients the mortgage lender was servicing. The FBI is also mulling over the company's practice of originating and selling home loans to people who have questionable credit histories, says WSJ. Countrywide, aside from being the top company in loan originations, seemed to be the "most aggressive" in pursuing the sale of loans to barely unqualified mortgage buyers, WSJ relates. These "subprime" loans are then packaged into securities and sold off to investors. The FBI is honing its lenses on these securitizations, which can be fraught with "disclosure issues", WSJ cites former U.S. Department of Justice fraud investigator Joshua Hochberg. "You have to disclose what percentage of the loans are performing and the adequacy of how the loans are underwritten. So there could be fraud if there are knowing and intentional lies in those financial statements," WSJ quotes Mr. Hochberg as saying. "The SEC will always look to see whether there is insider trading at a time when you have reason to believe that the loan portfolio is crumbling," he added. As reported in the Troubled Company Reporter on March 11, 2008, Countrywide CEO Angelo Mozilo testified before a congressional panel late last week regarding allegations of executing a $141- million stock bailout just before the company got hit by the mortgage crisis. The House Oversight and Government Reform Committee, which investigates and keeps an eye on bloated executive compensation packages, alleged that Mr. Mozilo altered his stock trading plans, allowing him to cash in on his stock before Countrywide shares plunged. "When you securitize a pool of loans, you vouch for the quality of those loans," WSJ quotes Constance Wilson, Interthinx Inc. fraud expert, as saying. Ely & Associates analyst Bert Ely remarked, "If Countrywide's got a problem, everybody's got a problem," he told WSJ, referring to dubious lending practices already widespread in the industry. 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. CREDIT SUISSE: Moody's Junks Ratings on Two Certificate Classes --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of two classes and affirmed the ratings of 18 classes of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2004-C3: -- Class A-2, $29,024,982, affirmed at Aaa -- Class A-3, $209,402,000, affirmed at Aaa -- Class A-4, $102,918,000, affirmed at Aaa -- Class A-5, $694,474,000, affirmed at Aaa -- Class A-1-A, $321,053,152, affirmed at Aaa -- Class A-X, Notional, affirmed at Aaa -- Class A-SP, Notional, affirmed at Aaa -- Class B, $45,084,000, affirmed at Aa2 -- Class C, $14,345,000, affirmed at Aa3 -- Class D, $28,690,000, affirmed at A2 -- Class E, $16,395,000, affirmed at A3 -- Class F, $20,493,000, affirmed at Baa1 -- Class G, $16,394,000, affirmed at Baa2 -- Class H, $22,542,000, affirmed at Baa3 -- Class J, $8,198,000, affirmed at Ba1 -- Class K, $6,147,000, affirmed at Ba2 -- Class L, $8,198,000, affirmed at Ba3 -- Class M, $6,148,000, affirmed at B1 -- Class N, $6,147,000, downgraded to Caa1 from B2 -- Class O, $2,050,000, downgraded to Caa2 from B3 As of the Feb. 15, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 3.6% to $1.58 billion from $1.64 billion at securitization. The Certificates are collateralized by 171 mortgage loans ranging in size from less than 1.0% to 9.4% of the pool, with the top 10 loans representing 33.2% of the pool. The pool includes one investment grade shadow rated loan, representing 3.2% of the outstanding pool balance. Twenty-two loans, representing 22.8% of the pool, have defeased and are secured by U.S. Government securities. One loan has been liquidated from the pool, resulting in a minimal loss of approximately $262,000. Currently there are five loans, representing 2.4% of the pool, in special servicing. The sponsor of four of the specially serviced loans is Michael B. Smuck, a major owner of multifamily properties in the U.S. southwest. Moody's is projecting an aggregate loss of $6.8 million from the specially serviced loans. Twenty-nine loans, representing 13.1% of the pool, are on the master servicer's watchlist. Moody's was provided with full-year 2006 and partial-year 2007 operating results for 97.1% and 79.3% of the performing loans, respectively. Moody's loan to value ratio for the conduit component is 91.7%, the same as at last review in March 2007, compared to 91.1% at securitization. Moody's is downgrading Classes N and O due to anticipated losses from specially serviced loans and LTV dispersion. Based on Moody's analysis, 28.2% of the conduit pool has an LTV greater than 100.0%, compared to 17.1% at last review and 14.3% at securitization. The shadow rated loan is the Mizner Park Loan ($50.3 million - 3.2%), which is secured by a leasehold interest in a 504,500 square foot mixed-use property located in Boca Raton, Florida. The collateral is part of a larger property known as Mizner Park, which includes office, retail and residential components. The office (53.1%) and retail (46.9%) components secure this loan. As of March 2007 the collateral was 85.7% leased, compared to 88.4% at last review. Moody's current shadow rating is Baa2, the same as at last review. The three largest conduit loans represent 16.9% of the pool. The largest conduit loan is the Pacific Design Center Loan ($148.8 million -- 9.4%), which is secured by a 916,000 square foot office and design showroom complex located in West Hollywood, California. In addition to the showroom and office space, the property also houses a 384-seat theater and screening room, conference facilities, a two-story gallery leased to the Museum of Contemporary Art, a fitness facility and two restaurants. The property was 89.0% leased as of January 2008, compared to 87.4% at last review. The three largest leases are with affiliates of the marketing firm, Interpublic Group, and represent 15.8% of the premises (lease expirations in June 2012, July 2015 and January 2017). Moody's LTV is 80.2%, the same as at last review. The second largest conduit loan is the 160 West 24th Street Loan ($72.4 million - 4.6%), which is secured by a 204-unit multifamily property located in the Chelsea submarket of New York City. The property is 100.0% master leased to ExecuStay through January 2017. The lease can be terminated at any time subject to a termination fee of $15.6 million that is guaranteed by Marriott International, Inc. (Moody's senior unsecured rating Baa2; stable outlook). Moody's LTV is 85.8%, compared to 87.1% at last review. The third largest conduit loan is the Centerpointe Mall Loan ($45.0 million -- 2.8%), which is secured by a 774,000 square foot retail center located in Grand Rapids, Michigan. The center is a hybrid mall/power center that includes nine big box tenants as well as five tenants that exceed 10,000 square feet. The in-line tenancy is 166,000 square feet. The largest tenants are Klingman's Furniture Company (24.2% GLA; lease expiration June 2008), Menard Corporation (10.5% GLA; lease expiration July 2008) and Toys R Us (5.6% GLA; lease expiration January 2009). The in- line space was 85.5% occupied as of December 2007, compared to 90.0% at securitization. The loan is on the servicer's watchlist due to issues with the largest tenant, Klingman's. Klingman's has exercised an early termination option effective June 1, 2008. Moody's LTV is in excess of 100.0%, compared to 85.3% at last review. CRUM & FORSTER: Strong Earnings Cues S&P's Positive Watch Listing ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its counterparty credit and financial strength ratings on Crum & Forster Holdings Corp., and Fairfax Financial Holdings Ltd., FFH's operating insurance companies on CreditWatch with positive implications. "The CreditWatch is based on strong earnings in 2007, and we expect 2008 to be another strong year," said Standard & Poor's credit analyst Damien Magarelli. Fairfax exhibited strong and improved underwriting and a combined ratio of 94% in 2007. Investment results in 2007 were very strong, due to significant increased net investment gains related to credit default swaps of $1.1 billion, which Fairfax sold for proceeds of $199 million in 2007 and $651 million through Feb. 15, 2008. Thus, earnings will likely be very strong for Fairfax in 2008 due to investment earnings alone. The combination of strong underwriting and investment returns has contributed to 2007's shareholders' equity increasing 49% to $4.1 billion from $2.8 billion, and this further supports the CreditWatch. Following a further review of governance, a one- notch upgrade might be possible in the next three months if the review highlights that this area does not restrict the rating. If the governance review concludes that this function and related management controls are not consistent with a higher rating, the outlook will likely be revised to stable. The rating is based on a good competitive position that is diversified geographically and by sector, as well as reduced debt leverage. Fairfax historically measured very high debt leverage, but this has been steadily declining the past few years and at year-end 2007 was 28%--now a strength to the rating. This is expected to be maintained at less than 30%. Standard & Poor's also expects strong underwriting performance with a combined ratio of less than 100%, while strong holding company liquidity is maintained with at least $250 million in cash. Negative factors to the rating are governance, which though improving, is still a concern; high reinsurance recoverables, although declining; and the historical use of finite reinsurance, although many of these contracts have been commuted. * * * Crum & Forster Holdings Corp. holds Standard and Poor's 'BB+' long term local issuer credit rating. CSFB: Fitch Junks Ratings on Two Certificate Classes ---------------------------------------------------- Fitch Ratings has taken rating actions on these CSFB transactions: CSFB 2002-18 Group 2 -- Class A affirmed at 'AAA'; -- Class II-B-1 affirmed at 'AA'; -- Class II-B-2 affirmed at 'A'; -- Class II-B-3 downgraded to 'CC/DR2' from 'B'; -- Class II-B-4 remains 'C/DR6'; -- Class II-B-5 remains 'C/DR6'. CSFB 2002-22 Groups 3 and 4 -- Class A affirmed at 'AAA'; -- Class D-B-1 affirmed at 'AA'; -- Class D-B-2 downgraded to 'CC/DR2' from 'A'; -- Class D-B-3 remains 'C/DR6'; -- Class D-B-4 remains 'C/DR6'. The affirmations, affecting approximately $38.4 million of outstanding certificates, reflect a stable relationship between credit enhancement and future loss expectations. The downgrades, affecting approximately $2.3 million in outstanding certificates, reflect deterioration in the relationship between CE and loss expectation. The collateral of the above transactions primarily consists of 30- and 15-year fixed-rate mortgage loans extended to Prime Alt-A borrowers and are secured by first liens, primarily on one- to four-family residential properties. As of the February 2008 distribution date, the above transactions are seasoned from 66 (series 2002-22 Groups 3 and 4) to 68 (series 2002-18 Group 2) months. The pool factors range from 7% (series 2002-18 Group 2) to 8% (series 2002-22 Groups 3 and 4). Chase Home Finance LLC (rated 'RPS1' by Fitch) is the servicer on both of the transactions. CUNNINGHAM LINDSEY: S&P Alters Outlook to Stable; Holds B- Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Cunningham Lindsey Group Inc. to stable from negative. Standard & Poor's also said that it affirmed its 'B-' counterparty credit rating on LIN. "The rating on LIN reflects its operations' weak earnings and dependency on weather-related claims activity for certain branches," said Standard & Poor's credit analyst Damien Magarelli. "It is also based on LIN's weak stand-alone liquidity, extremely high financial leverage, and low interest coverage. Offsetting these weaknesses are LIN's diversified global claims services network and track record of financial support from Fairfax Financial Holdings Ltd. and prospective additional financial flexibility expected from Stone Point." On Dec. 31, 2007, Fairfax and LIN closed the transaction pursuant to an agreement with Trident IV L.P., a private equity fund managed by Stone Point, and certain affiliated entities. Under this transaction, a new holding company domiciled in the Cayman Islands, which owns the operating businesses of LIN, has been established. Fairfax, through 100% ownership of LIN, owns 45% of the holding company after contributing a net amount of CDN$12.4 million, and Stone Point owns 51% with its CDN$88 million capital contribution. The senior management of LIN owns the remaining 4%. Proceeds from this transaction were used to repay $72.8 million in an unsecured term loan facility due in March 2008 and for working capital. LIN's CDN$125 unsecured Series B debentures due in June 16, 2008, remain outstanding. However, if refinancing is not available by June 16, 2008, Stone Point and Fairfax are expected to pay the existing debt off at 51% and 49%, respectively. This is the overwhelming reason for the stable outlook, as LIN's ability to pay off the debt in June 2008 relies heavily on support from the new holding company's majority owners, Stone Point and Fairfax. DIOGENES CDO: $120 Mil. Notes Get Moody's Junk Rating ------------------------------------------------------ Moody's Investors Service downgraded ratings of eleven classes of notes issued by Diogenes CDO III, Ltd., and left on review for possible further rating action ratings of one of these classes of notes. The notes affected by this rating action are: Class Description: Up to $360,000,000 Class A-1a Floating Rate Notes Due August 2046 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: B3, on review with future direction uncertain Class Description: $120,000,000 Class A-1b Floating Rate Notes Due August 2046 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: C Class Description: $34,400,000 Class A-1c Floating Rate Notes Due August 2052 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: C Class Description: $72,000,000 Class A-2 Floating Rate Notes Due August 2052 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: C Class Description: $36,800,000 Class B-1 Floating Rate Notes Due August 2052 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: C Class Description: $26,400,000 Class B-2 Deferrable Floating Rate Notes Due August 2052 -- Prior Rating: Ca -- Current Rating: C Class Description: $36,000,000 Class C-1 Deferrable Floating Rate Notes Due August 2052 -- Prior Rating: Ca -- Current Rating: C Class Description: $26,400,000 Class C-2 Deferrable Floating Rate Notes Due August 2052 -- Prior Rating: Ca -- Current Rating: C Class Description: $24,000,000 Class D-1 Deferrable Floating Rate Notes Due August 2052 -- Prior Rating: Ca -- Current Rating: C Class Description: $8,000,000 Class D-2 Deferrable Floating Rate Notes Due August 2052 -- Prior Rating: Ca -- Current Rating: C Class Description: $8,000,000 Class E Deferrable Floating Rate Notes Due August 2052 -- 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 Dec. 11, 2007, of an event of default caused by the Class A Overcollateralization Ratio falling below 100% pursuant to Section 5.1(h) of the Indenture dated August 3, 2007. This event of default is still continuing. Diogenes CDO III, Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain interests in the transaction may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. In this regard the Trustee reports that a majority of the Aggregate Outstanding Amount of the Controlling Class has directed the Trustee to declare the principal of all the Notes together with all accrued and unpaid interest thereon immediately due and payable. Furthermore, according to the Trustee, on Feb. 6, 2008 a majority of the Aggregate Outstanding Amount of the Controlling Class together with the holders of at least 66 2/3% of the Aggregate Outstanding Amount of the Class D-2 Notes, directed the Trustee to commence the process of the sale and liquidation 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 A-1a Notes remain on review for possible further action. DLJ MORTGAGE: Fitch Holds 'BB+' Rating on Class B3 Certificates --------------------------------------------------------------- Fitch Ratings has taken rating actions on these DLJ Mortgage Acceptance Corporation Mortgage pass-through certificates, series 1993-19: -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AAA'; -- Class B1 affirmed at 'AA+'; -- Class B2 affirmed at 'BBB+'; -- Class B3 affirmed at 'BB+'; -- Class B4 remains 'CC/DR5'. The affirmations, affecting approximately $3.7 million of outstanding certificates, reflect a stable relationship between credit enhancement and future loss expectations. DOUGLAS ARMSTRONG: Case Summary & Largest Unsecured Creditor ------------------------------------------------------------ Debtor: Douglas C. Armstrong 760 Southeast 22nd Avenue Pompano Beach, FL 33062 Bankruptcy Case No.: 08-12800 Chapter 11 Petition Date: March 10, 2008 Court: Southern District of Florida (Fort Lauderdale) Judge: Raymond B. Ray Debtor's Counsel: John A. Moffa, Esq. (trusteeattorney@gmail.com) 7771 West Oakland Park Boulevard, Suite 141 Sunrise, FL 33351 Tel: (954) 634-4733 Fax: (954) 634-4741 Estimated Assets: $1 million to $10 million Estimated Debts: $500,000 to $1 million Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Fixel & La Rocco Legal fees $2,045 3850 Hollywood Boulevard divorce Suite 300 Hollywood, FL 33021 DIABLO GRANDE: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Diablo Grande, LP 9521 Morton Davis Drive Patterson, CA 95363 Bankruptcy Case No.: 08-90365 Chapter 11 Petition Date: March 10, 2008 Court: Eastern District of California (Modesto) Judge: Robert S. Bardwil Debtor's Counsel: Michael H. Ahrens, Esq. 4 Embarcadero Center 17th Floor San Francisco, CA 94111 Tel: (415) 434-9100 Estimated Assets: $50 million to $100 million Estimated Debts: $50 million to $100 million The Debtor did not file a list of its largest unsecured creditors. DURA AUTOMOTIVE: Seeks $230 Mil. Financing to Execute Revised Plan ------------------------------------------------------------------ DURA Automotive Systems, Inc., will obtain $230 million of new financing to implement the revised Chapter 11 Plan of Reorganization the company, which was filed March 7. The new financing consists of a $150,000,000 first lien term loan and an $80 million second lien loan. The $230 million new financing may come from the existing banks in negotiations with DURA, including Cerberus Capital Management's Ableco Finance, LLC, the Associated Press said quoting DURA spokesperson Christina Stenson. Ableco has also extended a $170 million bankruptcy loan to DURA in late January. To recall, DURA intended, but failed, to obtain $425 million of financing to implement the Chapter 11 Plan it filed in August 2007. As a result of the failure to obtain the loans, DURA scrapped its exit plan and came up with a new one. The Revised Plan proposes to distribute DURA's new common stock to holders of claims under the six-year $150 million senior secured second term loan, dated May 3, 2005, holders of 8.625% senior notes due April 15, 2012, and other general unsecured claimants. DURA's August 2007 Plan intended to pay top level creditors in full. Rochester Hills, Michigan-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. The Debtors have asked the Court to extend their plan filing period to April 30, 2008. (Dura Automotive Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). ENCYSIVE PHARMA: Regains Compliance Under Nasdaq's Listing Rules ---------------------------------------------------------------- On March 5, 2008, Encysive Pharmaceuticals Inc. received notification from NASDAQ that it had regained compliance with NASDAQ's continued listing requirements under Marketplace Rule 4450(a)(5). The company regained compliance after the closing bid price of the company's common stock was $1.00 per share or greater for at least 10 consecutive business days and, accordingly, NASDAQ advised the company that this matter is now closed. As reported in the Troubled Company Reporter on Dec. 28, 2007, Encysive Pharmaceuticals Inc. received a delisting warning letter from the Nasdaq Stock Market, notifying it that the company's closing price per share for its common stock was below the $1 minimum bid price for 30 consecutive trading days. Encysive was given 180 calendar days, or until June 16, 2008, to regain compliance. About Encysive Pharmaceuticals Headquartered in Houston, Texas, Encysive Pharmaceuticals Inc. (Nasdaq: ENCY) -- http://www.encysive.com/-- is a biopharmaceutical company engaged in the discovery, development and commercialization of novel, synthetic, small molecule compounds to address unmet medical needs. The company's research and development programs are predominantly focused on the treatment and prevention of interrelated diseases of the vascular endothelium and exploit the company's expertise in the area of the intravascular inflammatory process, referred to as the inflammatory cascade, and vascular diseases. Going Concern Doubt KPMG LLP, in Houston, expressed substantial doubt about Encysive Pharmaceuticals Inc.'s ability to continue as a going concern after auditing the company's consolidated 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. ENESCO GROUP: Plan Confirmation Hearing Deferred to April 9 ----------------------------------------------------------- The United States Bankruptcy Court for the Northern District of Illinois deferred to April 9, 2008, at 10:00 a.m. the hearing to consider confirmation of Enesco Group, Inc. and its debtor- affiliates' Second Amended Chapter 11 Plan of Liquidation. The hearing will be held at 219 South Dearborn, Courtroom 613 in Chicago, Illinois. As reported in the Troubled Company Reporter on Oct. 25, 2007, the Court originally set Nov. 28, 2007, to consider confirmation of the Debtors' amended plan. Overview of the Plan Under the Plan, the Debtors propose to liquidate their remaining assets and distribute the proceeds to the holders of the allowed claims. The principal source of the distributions will be: a) cash on hand as of the effective date of the Plan; b) proceeds from the Debtors' lender settlement; c) proceeds and tax refunds arising out of the resolution of the Hong Kong Tax Dispute; d) proceeds from the Contingency Litigation Agreement; and e) Litigation Trust Proceeds. Summary Treatment of Claims Under The Plan The Plan proposes that all holders of allowed administrative claims, allowed priority claims, other than the Internal Revenue Service, and the allowed non-tax priority claims will have their allowed claims paid in full on or about the effective date of the plan from the proceeds of the Lender Settlement. In addition, within 60 days of the effective date, general unsecured creditors will receive their pro-rate share of $480,000 from the proceeds of the Lender Settlement. The Debtors say that general unsecured creditors are expected to receive 27% of their claims. Unsecured creditors will further be entitled to receive additional future distribution. Within the same time frame, the Internal Revenue Service will receive $650,000 from the proceeds of the Lender Settlement and will be entitled to receive additional future distribution. Additional contributions, the Debtors say, are however, contingent on future recoveries by the Debtors and are not guaranteed. The Contingency Litigation Trust, the Debtors add, are also not guaranteed. Summary Creditor Treatment if Plan is Not Confirmed The Debtors tell the Court that if the Plan is not confirmed, then they are not substantively consolidated for purposes of the Plan or their cases are converted to ones under Chapter 7 of the Bankruptcy Code. At the conclusion of the Chapter 7 cases, administrative claims will still be paid in full. However, tax priority claims holders will only receive 4.9% of their claims. General Unsecured Creditors on the other hand, will receive nothing. The Debtors reveal that the primary reasons for the significantly smaller distributions under this scenario are: 1) the proceeds and other benefits from the: -- Lender Settlement; -- the Contingency Litigation Agreement; and -- the resolution of the Hong Kong Tax Dispute, will be substantially compromised or lost, resulting in a significantly smaller recovery by the Debtors' estates; and 2) there will be additional administrative costs if the Plan is not confirmed. About Enesco Group Based in Itasca, Illinois, Enesco Group, Inc. -- http://www.enesco.com/-- is a producer of giftware, and home and garden decor products. Enesco's product lines include some of the world's most recognizable brands, including Disney, Heartwood Creek, Nickelodeon, Cherished Teddies, Lilliput Lane, Border Fine Arts, among others. Enesco distributes products to a wide array of specialty gift retailers, home decor boutiques and direct mail retailers, as well as mass-market chains. The company serves markets operating in Europe, particularly in the United Kingdom and France, as well in the Asia Pacific in Australia and Hong Kong. The company also has Latin-American operations in Mexico. Enesco Group and its two affiliates, Enesco International Ltd. and Gregg Manufacturing, Inc., filed for chapter 11 protection on Jan. 12, 2007 (Bankr. N.D. Ill. Lead Case No. 07-00565). Shaw Gussis Fishman Glantz Wolfson & Tow and Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors. Epiq Bankruptcy Solutions, LLC, acts as the Debtors' claims and noticing agent. Adelman & Gettleman Ltd. represents the Official Committee of Unsecured Creditors as bankruptcy counsel. In schedules of assets and debts filed with the Court, Enesco disclosed total assets of $61,879,068 and total debts of $231,510,180. EPICOR SOFTWARE: S&P Withdraws Ratings Upon Company's Request ------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on Epicor Software Corp., including its 'BB-' corporate credit rating and 'B' senior unsecured rating. The rating withdrawal comes at the request of the company. EVELYN DONALDSON: Case Summary & 15 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Evelyn Donaldson fka Evelyn Smardon 700 Weybridge Circle Severna Park, MD 21146 Bankruptcy Case No.: 08-13270 Chapter 11 Petition Date: March 10, 2008 Court: District of Maryland (Baltimore) Judge: James F. Schneider Debtor's Counsel: Linda M. Dorney, Esq. (ldorney@rosenblattlaw.com) Richard B. Rosenblatt, Esq. 30 Courthouse Square Ste. 302 Rockville, MD 20850 Tel: (301) 838-0098 http://www.rosenblattlaw.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ EMC Mortgage Real property and $281,000 P.O. Box 293150 improvements; value Lewisville, TX 75029 of security: $690,000; value of senior lien: $570,000 PNC Bank Real property and $150,000 P.O. Box 747032 improvements; value Pittsburgh, PA 15274 of security: $725,000; value of senior lien: $579,000 Flagstar Bank Real property and $110,00 5151 Corporate Drive improvements; value Troy, MI 48098 of security: $290,000; value of senior lien: $233,000 Chase Auto Finance 2006 Porsche 911; $85,000 value of security: $65,000 American Express Credit card charges $64,496 Chevy Chase Bank 2004 Jaguar XKR; $42,500 value of security: $25,000 Citicards Credit card charges $31,450 Bank of America Credit card charges $28,000 Chase Card Member Services Credit card charges $20,600 100 Harborview Drive Condomium Condominium fees $15,000 McLean Gardens Condominium Condominium fees $15,000 Unit Owners Montecito Palm Beach Condominium fees $15,000 Condominium Association Cityline at Tenley Condominium fees $8,000 Atlantis Condominium Condominium fees $5,800 Association Regatta Condominium Condominium fees $5,000 Association FAIRFAX FINANCIAL: S&P Designates Ratings on Positive CreditWatch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its counterparty credit and financial strength ratings on Fairfax Financial Holdings Ltd., FFH's operating insurance companies, and Crum & Forster Holdings Corp. on CreditWatch with positive implications. "The CreditWatch is based on strong earnings in 2007, and we expect 2008 to be another strong year," said Standard & Poor's credit analyst Damien Magarelli. Fairfax exhibited strong and improved underwriting and a combined ratio of 94% in 2007. Investment results in 2007 were very strong, due to significant increased net investment gains related to credit default swaps of $1.1 billion, which Fairfax sold for proceeds of $199 million in 2007 and $651 million through Feb. 15, 2008. Thus, earnings will likely be very strong for Fairfax in 2008 due to investment earnings alone. The combination of strong underwriting and investment returns has contributed to 2007's shareholders' equity increasing 49% to $4.1 billion from $2.8 billion, and this further supports the CreditWatch. Following a further review of governance, a one- notch upgrade might be possible in the next three months if the review highlights that this area does not restrict the rating. If the governance review concludes that this function and related management controls are not consistent with a higher rating, the outlook will likely be revised to stable. The rating is based on a good competitive position that is diversified geographically and by sector, as well as reduced debt leverage. Fairfax historically measured very high debt leverage, but this has been steadily declining the past few years and at year-end 2007 was 28%--now a strength to the rating. This is expected to be maintained at less than 30%. Standard & Poor's also expects strong underwriting performance with a combined ratio of less than 100%, while strong holding company liquidity is maintained with at least $250 million in cash. Negative factors to the rating are governance, which though improving, is still a concern; high reinsurance recoverables, although declining; and the historical use of finite reinsurance, although many of these contracts have been commuted. * * * Standard and Poor's rating on Fairfax Financial is 'BB+' for its long term foreign and local issuer credit. FEDDERS CORP: Wants Committee's $150 Million Lawsuit Denied ----------------------------------------------------------- Fedders Corporation and its debtor-affiliates object to a lawsuit filed by Official Committee of Unsecured Creditors against certain of the Debtors' directors, officers and lenders alleged to have caused up to $150 million in damages to the Debtors. The Debtors tell the Court that the Committee has failed to show the benefits of pursuing the litigation and failed to provide an explanation as to how it obtained the $150 million figure. At this juncture, the Debtors face two primary concerns: i) unnecessary and meritless litigation, with its related drain on the estate's limited resources, must be avoided. ii) individual defendants note that they have just recently been able to secure legal representation, and that their counsel has not had a full and fair opportunity to evaluate the merits of the claims raised in the proposed litigation. The Debtors' prepetition and postpetition lenders are currently in talks whether the Committee has asserted colorable claims and permitting the litigation to proceed would justify and outweigh the significant cost that will follow. Nroman L. Pernick, Esq., at Cole Schotz Meisel Forman & Lenoard P.A., in Wilmington, Delaware, said that the claims are "highly speculative." Accordingly, the Debtors ask the Court to deny the Committee's standing motion without prejudice. A hearing is set on March 19, 2008, at 11:00 a.m., whether to approve the request. About Fedders Corporation Based in Liberty Corner, New Jersey, Fedders Corporation -- http://www.fedders.com/-- manufactures and markets air treatment products, including air conditioners, air cleaners, dehumidifiers, and humidifiers. The company has production facilities in the United States in Illinois, North Carolina, New Mexico, and Texas and international production facilities in the Philippines, China and India. The company filed for Chapter 11 protection on Aug. 22, 2007, (Bankr. D. Del. Case No. 07-11182). Its debtor-affiliates filed for separate Chapter 11 cases. Norman L. Pernick, Esq., Irving E. Walker, Esq., and Adam H. Isenberg, Esq., of Saul, Ewing, Remick & Saul LLP represents the Debtors in their restructuring efforts. The Debtors have selected Logan & Company Inc. as claims and noticing agent. The Official Committee of Unsecured Creditors is represented by Brown Rudnick Berlack Israels LLP. When the Debtors filed for protection from its creditors, it listed total assets of $186,300,000 and total debts of $322,000,000. FESTIVAL FUN: Bond Repayments Cues Moody's to Withdraw All Ratings ------------------------------------------------------------------ Moody's Investors Service withdrew all ratings for Festival Fun Parks, LLC, including the B2 corporate family rating and the B3 rating on its $150 million of 10 7/8% senior unsecured bonds, due April 2014. In conjunction with the sale of Festival's parent company, Palace Entertainment Holdings, Inc, to Centaur Holdings United States, Inc., substantially all of those bonds were tendered and repaid. Festival Fun Parks, LLC -- Corporate Family Rating, Withdrawn, previously rated B2 -- Probability of Default Rating, Withdrawn, previously rated B2 -- 10 7/8% Senior Unsecured Bonds due April, 2014, Rating Withdrawn, previously rated B3, LGD4, 59% -- Outlook, Changed To Rating Withdrawn From Developing FIRST FRANKLIN: Seven Classes of Certs. Gets S&P's Junk Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 14 classes of certificates issued by three First Franklin Mortgage Loan Trust transactions. At the same time, S&P affirmed its ratings on five additional classes from these series. The downgraded transactions have sizable loan amounts that are severely delinquent (90-plus days, foreclosures, and REOs). As of the February 2008 remittance report, the severe delinquencies are as follows (series: severe delinquency amount, percentage of current pool balance): -- 2003-FF4: $10.852 million, 15.95%; -- 2005-FF4: $99.256 million, 21.31%; and -- 2005-FF10: $187.896 million, 24.32%. In addition, class M-6 from series 2003-FF4 realized a principal loss of $336,598.72 during the February 2008 remittance period. Severe delinquencies for series 2005-FF4 and 2005-FF10 have increased by 48.76% and 110.1%, respectively, since August 2007. Severe delinquencies are 27.6x and 19.8x the overcollateralization (O/C) for series 2005-FF4 and 2005-FF10, respectively, indicating that current support levels will not be adequate to sustain potential realized losses. Furthermore, realized losses for the transactions have been accelerating over the past year, exceeding available excess interest and reducing O/C for each transaction. Average losses are as follows (series: three-, six-, 12-month average realized losses: -- 2003-FF4: $0.498, $0.409, $0.382; -- 2005-FF4: $1.647, $1.302, $1.045; and -- 2005-FF10: $2.139, $1.689, $1.129. Finally, series 2005-FF4 and 2005-FF10 have failed a delinquency trigger for four and seven consecutive months, respectively. If this trend continues, it will impede the ability to disburse principal payments to the subordinate classes of the transaction after the step-down date, which causes the classes to be increasingly susceptible to realizing principal losses. Subordination, O/C, and excess interest cash flow provide credit support for these transactions. The collateral for these series consists of a pool of fixed- and adjustable-rate, fully amortizing, and balloon payment mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered First Franklin Mortgage Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2003-FF4 M-2 B B+ 2003-FF4 M-3 CCC B 2003-FF4 M-6 D CCC 2005-FF4 M-7 BBB- BBB+ 2005-FF4 M-8 B BBB 2005-FF4 M-9 CCC BBB- 2005-FF4 B-1 CCC BB 2005-FF10 M-1 A AA+ 2005-FF10 M-2 BB AA 2005-FF10 M-3 B A+ 2005-FF10 M-4 CCC A 2005-FF10 M-5 CCC A- 2005-FF10 M-6 CCC BBB- 2005-FF10 M-7 CCC B+ Ratings Affirmed First Franklin Mortgage Loan Trust Series Class Rating ------ ----- ------ 2003-FF4 M-1 AA 2003-FF4 M-4 CCC 2003-FF4 M-5 CCC 2005-FF4 B-2 CCC 2005-FF10 M-8 CCC FOCUS ENHANCEMENTS: Inks Pact for $6.5 M. Loan with Heritage Bank ----------------------------------------------------------------- Focus Enhancements Inc., in a regulatory filing last week, disclosed that it has finalized a Loan and Security Agreement dated Feb. 22, 2008, with Heritage Bank of Commerce. Under the Loan Agreement, the company may borrow up to $6.5 million through one or more advances through Feb. 21, 2009, which is the maturity date. Carl Berg, a director of the company, has personally guaranteed the Loan Agreement. Payment terms under the Loan Agreement are interest only until maturity. Interest is payable under the Loan Agreement at prime plus 1%. Obligations under the Loan Agreement are secured by the company's accounts and accounts receivable. In addition, the company is required to issue a warrant to the Bank to purchase 75,000 shares of the company's common stock at $0.80 per share. In connection with Mr. Berg's extension of his personal guarantee, the company has agreed to continue Mr. Berg's first priority security interest in all of the company's assets, which he shares on a pro-rata basis with the Senior Secured Note Holders, except for the security interest in the company's accounts and accounts receivable, which have been subordinated to the Bank's security interest in the accounts and accounts receivable. The company has also agreed to issue to Mr. Berg a warrant to purchase 200,000 shares of common stock at an exercise price of $0.40 per share through March 4, 2013. The company's $6.5 million credit facility with Venture Banking, a division of Greater Bay Bank, matured on Feb. 23, 2008, and was not renewed. A full-text copy of the Loan and Security Agreement between Heritage Bank of Commerce and Focus Enhancements Inc., dated Feb. 22, 2008, is available for free at: http://researcharchives.com/t/s?28f0 About Focus Enhancements Headquartered in Campbell, California, Focus Enhancements, Inc. (NASDAQ: FCSE) -- http://www.Focusinfo.com/-- is a leading designer of world class-solutions in advanced, proprietary video and wireless video technologies. The company's Semiconductor Group develops wireless IC chip set based on WiMedia UWB standard and design as well as markets portable ICs to the video convergence, portable media, navigation systems and smartphone markets. The company's System Group develops video products for the digital media markets, with customers in the broadcast, video production, digital signage and digital asset management markets. * * * Burr, Pilger & Mayer LLP, in San Jose, California, expressed substantial doubt about Focus Enhancements Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations, net capital deficiency and accumulated deficit. For the nine months ended Sept. 30, 2007, the company incurred net losses of $12.0 million and used cash in operating activities of $10.8 million. FRANCIS LEE CO: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Francis A. Lee Company, A Corporation fka Francis A. Lee Exterior Restoration Corp. 6851 Jericho Turnpike Suite 225 Syosset, NY 11791 Bankruptcy Case No.: 08-71108 Chapter 11 Petition Date: March 7, 2008 Court: Eastern District of New York (Central Islip) Judge: Carla E. Craig Debtor's Counsel: Barton Nachamie, Esq. Todtman Nachamie Spizz & Johns PC 425 Park Avenue New York, NY 10022 Tel: (212) 754-9400 bnachamie@tnsj-law.com Estimated Assets: $1 million to $ 10 million Estimated Debts: $10 million to $50 million The Debtor did not file a list of its 20 Largest Unsecured Creditors. GENCORP INC: Terry Hall Steps Down as Chief Executive Officer ------------------------------------------------------------- Terry L. Hall resigned as chief executive officer and president of GenCorp Inc. and as a member of the board, effective immediately. J. Scott Neish, vice president of GenCorp and president of Aerojet-General Corporation, will serve as interim chief executive officer and interim president of GenCorp. The board has formed a search committee, chaired by Mr. Lichtenstein, to identify qualified candidates to fill this position on a permanent basis. Once appointed, the new chief executive officer will be added as the ninth member of the board. "We are pleased that this matter has been resolved in a manner that serves the best interests of the company and all GenCorp shareholders," Mr. Wicks, chairman of the board of GenCorp, said. "This agreement increases shareholder representation on our board and is consistent with our commitment to good corporate governance and accountability to shareholders." "We look forward to working with our new directors to build value for all GenCorp shareholders," Mr. Wicks added. "We are grateful to Terry for his leadership, his service and his many contributions to GenCorp. On behalf of the entire board, I want to wish Terry well in his future endeavors." "This agreement is a positive step forward for GenCorp and will allow the company to focus on creating value for its shareholders," Mr. Lichtenstein, the managing member of the general partner of Steel Partners, said. "Steel Partners has been an investor in GenCorp since September 2000 and is the largest shareholder of the company." "We are confident that the GenCorp board can represent the interests of all shareholders," Mr. Lichtenstein continued. Mr. Neish, 60, has served as president of Aerojet-General Corporation, the largest subsidiary of GenCorp, since Dec. 1, 2005. Mr. Neish joined Aerojet in 2002 when Aerojet acquired the in-space propulsion business from general dynamics and has been a leader in the propulsion industry for more than 20 years. Prior to relocating to Sacramento in 2004 as vice president in operations, Mr. Neish was responsible for the performance of numerous technical and management roles at Aerojet's Redmond, Washington operation and its predecessors: general dynamics - OTS; Primex Aerospace company; Olin Aerospace; and Rocket Research company. About GenCorp Headquartered in Rancho Cordova, California, GenCorp Inc. (NYSE:GY) -- http://www.gencorp.com/-- manufactures aerospace and defense systems with a real estate segment that includes activities related to the entitlement, sale, and leasing of its excess real estate assets. The company's operations are organized into two segments: aerospace and defense, and real estate. Aerospace and defense includes the operations of Aerojet-General Corporation, which develops and manufactures propulsion systems for defense and space applications, armament systems for precision tactical weapon systems and munitions applications. Its primary customers served include major prime contractors to the United States government, the Department of Defense, and the National Aeronautics and Space Administratio. Real estate includes activities related to the entitlement, sale, and leasing of its excess real estate assets. GENCORP INC: Agrees with Steel Partners on Board Nominations ------------------------------------------------------------ GenCorp Inc. and Steel Partners II L.P. entered into an agreement to settle the contest with respect to the election of directors at the upcoming annual meeting of GenCorp shareholders. Under the terms of the agreement, the GenCorp board of directors named to the board three nominees recommended by Steel Partners. The new board members are Warren G. Lichtenstein, James R. Henderson and Martin Turchin. Three current directors, Charles F. Bolden Jr., James J. Didion and James M. Osterhoff will not stand for re-election at the company's March 26, 2008 annual meeting. Mr. Bolden previously disclosed his plans not to stand for re- election. The size of the board will decrease to eight at the upcoming annual meeting. The GenCorp board of directors will recommend that shareholders vote for these slate of directors at the annual meeting: Mr. Henderson; Mr. Lichtenstein; David A. Lorber; Todd R. Snyder; Mr. Turchin; Timothy A. Wicks; Sheila E. Widnall; and Robert C. Woods. Steel Partners has agreed to vote its shares in favor of this slate and has also agreed not to commence any contest with respect to the election of directors of GenCorp before the 2010 annual meeting subject to the conditions set forth in the agreement with GenCorp. About GenCorp Headquartered in Rancho Cordova, California, GenCorp Inc. (NYSE:GY) -- http://www.gencorp.com/-- manufactures aerospace and defense systems with a real estate segment that includes activities related to the entitlement, sale, and leasing of its excess real estate assets. The company's operations are organized into two segments: aerospace and defense, and real estate. Aerospace and defense includes the operations of Aerojet-General Corporation, which develops and manufactures propulsion systems for defense and space applications, armament systems for precision tactical weapon systems and munitions applications. Its primary customers served include major prime contractors to the United States government, the Department of Defense, and the National Aeronautics and Space Administratio. Real estate includes activities related to the entitlement, sale, and leasing of its excess real estate assets. Steel Partners II L.P. is the largest shareholder in GenCorp Inc. and has been an investor of the company since September 2000. GENCORP INC: S&P Retains 'B+' Rating; Changes Outlook to Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including the 'B+' corporate credit rating, on GenCorp Inc. At the same time, the outlook was revised to negative from stable. "The outlook revision reflects increased concerns about the company's financial and strategic policy, following the resignation of the CEO and the addition of three directors representing an activist shareholder to the GenCorp board," said Standard & Poor's credit analyst Christopher DeNicolo. On March 5, 2007, GenCorp announced that it reached an agreement with affiliates of Steel Partners LLC, which owns 14% of the firm's shares, to end a proxy contest over director nominations. GenCorp agreed to immediately appoint three of Steel Partners' nominees to the board. In exchange, Steel Partners agreed, with some unspecified exceptions, to not contest the election of directors before 2010. In addition, the CEO of GenCorp, Terry Hall, resigned and was replaced on an interim basis by the head of Aerojet, the company's main unit. A search committee, which will be led by one of the new Steel Partners directors, has been formed to find a permanent replacement. GenCorp's board already includes three directors representing Pirate Capital, another activist investor. In a preliminary proxy filing prior to the settlement, Steel Partners stated that it was not satisfied with GenCorp's management, operating performance, efforts to realize the value of the Sacramento real estate, and share price performance, but did not propose any specific actions to address these matters, except to remove the CEO. "It is not clear yet what impact the new directors and permanent CEO will have on GenCorp's strategic or financial policy," said Mr. DeNicolo. The ratings on Sacramento, California-based GenCorp reflect a weak financial profile, driven by high leverage and weak profitability, limited diversity, and a modest scale of operations compared with competitors. Ratings also reflect ongoing pressures from outside shareholders. These factors are offset somewhat by solid niche positions in aerospace propulsion, and significant real estate holdings. GLOBAL MOTORSPORT: Has Approval to Sell Assets to Dae-II for $16MM ------------------------------------------------------------------ The United States Bankruptcy Court for the District of Delaware authorized Global Motorsport Group Inc. and its debtor-affiliates to sell all their assets to Dae-II USA Inc. for $16 million, according to Bloomberg News. The Debtor did not receive any competing offers at the February 28 auction. Bloomberg, citing the Official Committee of Unsecured Creditors of the Debtors, says that the sale could result in no recovery to the Committee. As reported in the Troubled Company Reporter on Feb. 19, 2008 the Court approved the Debtors' proposed bidding procedure for the sale of substantially all of their assets, subject to better and higher offers. As reported in the Troubled Company Reporter on Feb. 6, 2008, the Debtors told the Court that they agreed to sell all their assets for $16 million as stated in the asset purchase agreement dated Jan. 28, 2008, that they entered into with Dae-II. The Debtors also asked the Court to approve a $500,000 break-up fee and $300,000 expense reimbursement pursuant to the terms of the agreement. About Global Motorsport Headquartered in Morgan Hill, California, Global Motorsport Group Inc. -- http://www.gmgracing.com/home.shtml-- are dealers of European model sports cars. The company is also known as Global Motorsport Parts Inc. The company and three of its affiliates filed for protection on Jan. 31, 2008 (Bankr. D. Del. Lead Case No. 08-10192). The Debtors selected Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, as counsel. The U.S. Trustee for Region 3 has yet to appoint creditors to serve on an Official Committee of Unsecured Creditors in these cases. Bayard P.A. represents the Committee in these cases. When the Debtors filed for protection against their creditors, it listed assets between $50 Million to $100 Million and debts between $100 Million to $500 Million. GPS INDUSTRIES: Obtains $3.0 Million Loan from Silicon Valley Bank ------------------------------------------------------------------ In a regulatory filing with the Securities and Exchange Commission dated March 6, 2008, GPS Industries Inc. disclosed that it has entered into a Loan and Security Agreement with Silicon Valley Bank. Under the Loan Agreement, Silicon Valley agreed to make available to the company advances under a revolving line of credit of up to $3,000,000. The Revolving Line terminates in February 2010 at which time all advances and unpaid interest are due. The principal amount outstanding accrues interest at a floating rate per annum of the greater of 1% above the prime rate or 6%, with interest payable monthly. The obligations of the company under the Revolving Line (up to $1,500,000) are guaranteed by Douglas Wood, the company's chief executive officer, director and shareholder. The obligations of the company under the Revolving Line are also secured by a first priority security interest on the assets of the company, and certificates of deposit in the principal amount of $1,500,000 provided by Hansen Inc. The Agreement provides for customary covenants. The company will use $1,500,000 of the Revolving Line to repay a credit facility from HSBC Bank which is secured by a letter of credit from Hansen Inc. A full-text copy of the Loan and Security Agreement between Silicon Valley Bank and GPS Industries Inc. is available for free at http://researcharchives.com/t/s?28f1 About GPS Industries Inc. Headquartered in Surrey, B.C. Canada, GPS Industries Inc. (OTC BB: GPSN.OB) -- http://www.gpsindustries.com/-- develops and markets GPS and Wi-Fi multimedia solutions to enable managers of golf facilities, resorts, and residential communities to improve operational efficiencies and generate significant new revenue streams. * * * Sherb & Co. LLP, in New York, expressed substantial doubt about GPS Industries Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's significant losses and working capital deficiency. As reported in the Troubled Company Reporter on Nov. 28, 2007 GPS Industries Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $13.9 million in total assets and $14.9 million in total liabilities, resulting in a $1.0 million total shareholders' deficit. GRAHAM PACKAGING: Fitch Affirms Ratings with Stable Outlook ----------------------------------------------------------- Fitch Ratings has affirmed Graham Packaging Company, L.P.'s Issuer Default Rating and ratings on the senior secured credit facility and senior subordinated notes as: Graham Packaging Company, L.P and subsidiary GPC Capital Corp. I -- IDR 'B-'; -- Senior secured revolving credit facility 'B/RR3'; -- Senior secured term loan 'B/RR3'; -- Senior subordinated notes 'CCC/RR6'. Fitch has also revised these rating: -- Senior unsecured notes downgraded to 'CCC/RR6' from 'CCC+/RR5'. The Rating Outlook is Stable. Approximately $2.5 billion of debt is covered by the ratings. The affirmation of Graham's 'B-' IDR and current ratings are supported by the company's leading market shares across its product categories, strong customer relationships, on-site integration with many customers, investment in proprietary technology, and favorable product packaging trends toward plastics. Rating concerns include high leverage, weak free cash flow, resin price volatility, customer concentration, and moderate or declining sales growth in three out of four product categories, as well as moderating growth in the historically strongest food and beverage segment. The Stable Outlook reflects the relatively steady demand in Graham's key end markets, and the company's ability to generate improving free cash flow in recent quarters. The Recovery Ratings and notching in the debt structure reflect Fitch's recovery expectations under a scenario in which Graham's operating performance has been stressed, and the distressed enterprise value is allocated to the various debt classes. The ratings action on the senior unsecured notes was taken following a recent update to Fitch's recovery analysis for Graham, in which the allocation of the estimated distressed enterprise value was modified. Previously, Fitch assumed there would be concession payments to holders of unsecured and subordinated debt obligations, but Fitch now estimates that concession payments to junior noteholders are not likely given that in Fitch's distressed scenario the senior secured bank debt would possibly not obtain full recovery and is rated 'RR3' (estimated 51% to 70% recovery). Without concession payments, the unsecured and subordinated classes are likely to obtain very little, if any recovery, qualifying both classes as 'RR6' (estimated 0% to 11% recovery). The downgrade to 'CCC' from 'CCC+' is based on Fitch's recovery methodology wherein the notching for a debt obligation rated 'RR6' is two levels below the IDR. As of Sept. 30, 2007 Graham had liquidity of $318 million consisting of $78.7 million of cash and $239.3 million of revolver availability. By Fitch calculations, LTM operating EBITDA of $382.5 million grew 9.6% over the fiscal year-end 2006 figure, while margin improved 162 basis points to 15.46%. Total Debt to operating EBITDA improved to 6.6 times at Sept. 30, 2007 from 7.3x at Dec. 31, 2006. Covenant compliance EBITDA was $434.3 million at Sept. 30, 2007, yielding a total leverage ratio of 5.8x. Fitch will conduct further analysis of Graham's financial performance when fiscal 2007 results are released in the next few weeks. GSC CDO: Moody's Slashes Ratings on Deteriorating Credit Quality ---------------------------------------------------------------- Moody's Investors Service downgraded ratings of nine classes of notes issued by GSC CDO 2007-1r, Ltd., and left on review for possible further downgrade the ratings of three of these classes of notes. The notes affected by this rating action are: Class Description: $375,000,000 Class A-1LA VFN Senior Secured Floating Rate Notes Due 2039 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: A3, on review for possible downgrade Class Description: $57,000,000 Class A-1LB Senior Secured Floating Rate Notes Due 2039 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $150,000,000 Class A-1LC Senior Secured Floating Rate Notes Due 2039 -- Prior Rating: B2, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Class Description: $57,000,000 Class A-2L Senior Secured Floating Rate Notes Due 2039 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: Ca Class Description: $36,000,000 Class A-3L Secured Deferrable Floating Rate Notes Due 2039 -- Prior Rating: Ca -- Current Rating: C Class Description: $18,000,000 Class B-1L Mezzanine Secured Deferrable Floating Rate Notes Due 2039 -- Prior Rating: Ca -- Current Rating: C Class Description: $12,000,000 Class B-2L Mezzanine Secured Deferrable Floating Rate Notes Due 2039 -- Prior Rating: Ca -- Current Rating: C Class Description: $12,000,000 Class B-3L Mezzanine Secured Deferrable Floating Rate Notes Due 2039 -- Prior Rating: Ca -- Current Rating: C Class Description: $6,000,000 Class C Mezzanine Secured Deferrable Floating Rate Notes Due 2039 -- Prior Rating: Ca -- Current Rating: C The rating downgrade actions reflect, among other factors, deterioration in the credit quality of the underlying portfolio, as well as the occurrence on Nov. 5, 2007, as reported by the Trustee, of an event of default described in Section 5.01(h) of the Indenture dated April 18, 2007. GSC CDO 2007-1r, Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS 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(h) 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 notification from the Trustee that it has received notice of acceleration of maturity from the majority of the controlling class. The rating downgrades taken reflect the expected loss associated with each tranche and reflect also the changes to the priority of payments that apply upon an acceleration of note maturity. 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 a future event of default remedy that may be pursued by certain Noteholders. Because of this uncertainty, the ratings assigned to Class A-1LA Notes, Class A-1LB Notes and Class A-1LC Notes remain on review for possible further action. H&E EQUIPMENT: Marginal Declines Cue Moody's To Hold 'B1' Ratings ----------------------------------------------------------------- Moody's affirmed the B1 corporate family and probability of default ratings of H&E Equipment Services, Inc. In addition, the B3 LGD5 rating on H&E's $250 million 8.375% senior unsecured notes due 2016 has been affirmed. The outlook is stable. The affirmation and stable outlook acknowledge a recent decline in operating margins and an expectation of flat to slightly negative nonresidential construction growth rates in 2008 with potential for a weak 2009. The decline in operating margins has followed lower dollar utilization rates and higher than expected cost required to convert J.W. Burress, which was acquired in September 2007, from a dealership to an integrated dealership and rental operation. Nevertheless, H&E's possesses low leverage for its B1 rating category, a good liquidity profile and the company plans to significantly reduce its capital spending in 2008; these factors should help to sustain the ratings as the economy weakens and as H&E works to integrate J.W. Burress. For the last twelve months ended September 2007, H&E had debt to EBITDA of 2.2 times on a Moody's adjusted basis. The company has a $320 million secured, asset-based revolving credit facility that matures in August 2011. As of March 3, 2008, availability under the revolving credit facility was $169 million. The ratings would be subject to downward pressure if operating performance were to materially fall short of expectation, or if the company were to use its strong balance sheet to fund an aggressive acquisition or fleet expansion strategy. Additionally, downward rating pressure would mount if the company were to forego using the bulk of its free cash flow over the next 12 months for debt reduction, in order to reward shareholders. H&E is a multi-regional equipment rental company with 63 locations throughout the Intermountain, Southwest, Gulf Coast, Mid Atlantic, West Coast and Southeast regions of the United States. H&E has over 20,000 pieces of equipment having an original acquisition cost of approximately $803 million at December 2007. The company is a distributor for JLG, Gehl, Genie Industries (Terex), Komatsu, Bobcat, Yale Material, and Manitowoc. HAVEN HEALTHCARE: Committee Can Hire Deloitte as Financial Advisor ------------------------------------------------------------------ The Official Committee of Unsecured Creditors in Haven Healthcare Management LLC and its debtor-affiliates' bankruptcy cases obtained authority from the United States Bankruptcy Court for the District of Connecticut to retain Deloitte Financial Advisory Services LLP as its financial advisor. Deloitte Financial is expected to assist the Committee in connection with: a) the assessment of the Debtors' cash and liquidity requirements, as well as the Debtors' financing requirements; b) the monitoring of the Debtors' financial and operating performance, including their current operations, monthly operating reports, and other financial and operating analyses or periodic reports; c) the evaluation of the Debtors' business, operational and financial plans, including with respect to actual results versus forecast, capital expenditure requirements, and cost reduction opportunities; d) the evaluation of the Debtors' statements of financial affairs and supporting schedules, executory contracts and claims; e) the evaluation of the Debtors' operating structure, business configuration and strategic alternatives; f) the evaluation of the Debtors' restructuring-related alternatives; g) reorganization-related negotiations including the analysis, preparation or evaluation of any plans or reorganization proposed by the Debtors, the Committee or a third party; h) the analysis of issues related to claims filed against the Debtors; i) auction procedures or sale transaction, including the identification of additional potentially interested parties for the Debtors' assets, negotiation of asset purchase agreement provisions including working capital adjustments, valuation issues and other related matters; and j) analysis of the potential recovery of funds from voidable transactions. In addition, the firm is also expected to: a) attend and participate in meetings of the Committee and hearings before this Court, as may be required; and b) perform other services as may be required and are deemed to be in the interest of the Committee in accordance with the Committee's powers and duties. The professionals of the firm have agreed to perform services at $325 per hour, while paraprofessionals at $75 per hour. Daniel O'Brien, a director of the firm, assured the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Headquartered in Middletown, Connecticut, Haven Healthcare Management LLC -- http://www.havenhealthcare.com/-- provide nursing care to the elderly in New England, Connecticut. The company operates health centers and assisted living facilities. In addition, the company specializes in short-term rehabilitative care and long-term care. The company and 46 of its affiliates filed for Chapter 11 protection on November 22, 2007 (Bankr. D. Conn. Lead Case No. 07-32719). Moses and Singer LLP serves as the Debtors' counsel. Kurtzman Carson Consultants LLC is the Debtors' claims and noticing agent. The U.S. Trustee for Region 2 appointed nine creditors to serve on an Official Committee of Unsecured Creditors in this case. Pepper Hamilton LLP represents the Creditors Committee. When the Debtors sought protection from their creditors, they listed assets and debts between $1 Million to $100 Million. The Debtors' consolidated list of 50 largest unsecured creditors showed total claims of more than $20 million. HEARTLAND AUTO: BNC et al. Protest on $10 Million DIP Financing --------------------------------------------------------------- BNC New England LLC and three of its affiliates ask the United States Bankruptcy Court for the Northern District of Texas to bar Heartland Automotive Holdings Inc. and its debtor-affiliates from obtaining up to $10 million in debtor-in-possession financing on a superpriority basis from an affiliate of Quad-C Partners VI LP. BNC opposes the Debtors' proposal to grant the DIP lender a security interest in the Debtors' leaseholds in agreement of the leases. The Debtors have leased 10 non-residential real property with BNC. According to BNC, if the Debtors' defaulted in their obligation under the proposed loan financing, the DIP lender may seek to foreclose on its collateral and assigns the leases to a third party of its choice. BNC assert that the DIP lender should be limited to a security interest in the proceeds of any future disposition of the Debtors' real property leases with BNC. Michael D. Warner, Esq., at Warner Stevens LLP in Forth Worth, Texas, says that a lien on the proceeds is more than enough to protect the DIP lender's interest, in support to BNC's assertion. As reported in the Troubled Company Reporter on Jan. 16, 2008 the Debtors ask the Court for permission to secure a $10 million debtor-in-possession financing on a superpriority basis from an affiliate of Quad-C. The Debtors revealed that Quad-C's affiliate is their current major equity holder and has offered to provide the DIP financing. The Debtors say that they failed to obtain DIP financing from their major existing prepetition secured lenders. HAS Funding LLC acts as the administrative and collateral agent under the DIP facility. Terms of the DIP Facility The DIP facility is a $10 million term loan facility that matures on the earlier of: a) Jan. 9, 2009; b) the effective date of a chapter 11 plan of reorganization or liquidation; and c) the date that the loans become due and payable under the DIP facility. The maturity date may be extended upon payment of an extension fee of 1% of the principal amount of the outstanding term loan. The DIP facility carries an interest at the base rate plus 3.5%. At the event of a default, the outstanding term loans bear interest at a rate equal to 2% per annum plus applicable rate. About $5 million will be available on an interim basis upon entry of an interim DIP order with the remained available upon entry of final DIP order. The loans are available in multiple draws of not less than $1 million. No amount of term loans, once repaid, may be re-borrowed. About 0.5% of the total amount of the DIP facility is payable upon entry of the interim DIP order. According to the Debtors, as of the bankruptcy filing, they generated $8.4 million cash from operations. However, the cash is subject to purported encumbrances asserted by prepetition lenders seeking, among others, interim authority to use cash, whether or not the cash is cash collateral. About Heartland Automotive Based in Omaha, Nebraska, Heartland Automotive Holdings Inc. -- http://www.heartlandjiffylube.com/-- and its debtor-affiliates are franchisees of Jiffy Lube International Inc. since 1980. The Debtors operate 438 quick-oil-change stores in 20 states across the Eastern, Midwestern and Western U.S. They employed in excess of 4,000 employees. The company and its nine affiliates filed for Chapter 11 protection on Jan. 7, 2008 (Bank. N.D. Tex. Lead Case No. 08-40057). Jeff P. Prostok, Esq., at Forshey & Prostok, LLP represents the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims, noticing and balloting agent. The U.S. Trustee for Region 6 appointed creditors to serve on an Official Committee of Unsecured Creditors on these cases. The Committee selected Cadwalader Wickersham & Taft LLP as counsel. As of Nov. 29, 2007, the Debtors' financial statements reflected assets totaling about $334 million and liabilities totaling about $396 million. IMMUNICON CORP: Cuts Staff by 40% to Mitigate Risks and Expenses ---------------------------------------------------------------- Immunicon Corporation reduced staff levels and incurred certain expenses in order to better facilitate the company's current strategy, near-term outlook and ongoing operations. This initiative, the company explained, principally includes a workforce reduction of approximately 40% of the company's full- time equivalent staff, primarily in platform development programs, research and development of new products, marketing of current and new products and related roles at the company. The workforce reduction reflects, and is a result of the detailed analysis of, several factors, including: -- Immunicon's revenue outlook and current expense structure; -- the adverse March 3, 2008 final decision in the company's arbitration with Veridex LLC, a Johnson & Johnson company, and the potential effect of the final decision on Immunicon's commercialization efforts; -- Immunicon's desire to reduce its cost structure; -- Immunicon's desire to preserve stockholder value; and -- management's assessment of continued risk and uncertainty regarding the ability at the present time to extrapolate with confidence instrument placement and revenue growth rates. Immunicon anticipates taking a charge in the first fiscal quarter of 2008 of between approximately $1.3 and $1.5 million for severance and other costs related to the realignment of staff levels and workforce reduction. About Immunicon Corporation Immunicon Corporation (NASDAQ: IMMC) -- http://www.immunicon.com/ -- develops and commercializes proprietary cell- and molecular- based human diagnostic and life science research products with an initial focus on cancer disease management. Immunicon has developed platform technologies for selection and analysis of rare cells in blood, such as circulating tumor cells and circulating endothelial cells that are important in many diseases and biological processes. Immunicon's products and underlying technology platforms also have application in the clinical development of cancer drugs and in cancer research and may have applications in other fields of medicine, such as cardiovascular and infectious diseases. INDEPENDENCE COUNTY: S&P Chips Rating on $29.285 Mil. Bonds to BB- ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its underlying rating on Independence County, Arkansas' $29.285 million power revenue bonds due 2033 to 'BB-' from 'BB+' and removed it from CreditWatch negative. The outlook is negative. The issuer of the bonds is Independence County, Arkansas. The bonds are not general obligations, but are special obligations secured by the trust estate that includes the County's interests in the physical assets, contracts including the purchase power agreement, and gross receipts. The bonds are insured by ACA Financial Guaranty Corp. (CCC/Watch Dev/--). The project consists of three run-of-the river power generation facilities on the White River in Arkansas. The project has experienced significant challenges in terms of cost and schedule overruns. Additional junior lien bonds were issued in 2005 partly to settle a $4.4 million claim with Mobley Contractors Inc. Final completion of the facilities is expected at the end of March/early April 2008. The remaining scope of work mostly consists of the installation by Gerace of a three-foot cap on Dam 3. Once the cap is on, the project will apply for insurance coverage. Currently the project is using the retainage from the Mobley contract to fund this work. Litigation risk exists due to an additional $10 million claim by Mobley. "Our analysis of this litigation risk concludes that the security interests that are pledged to the senior bondholders offset this risk at a level commensurate with the rating," said Standard & Poor's credit analyst Trevor D'Olier-Lees. The negative outlook reflects Standard & Poor's view that the project faces a number of key challenges in the near term, in particular the completion and insurance of the cap on Dam 3, and if these are not resolved in the favor of the project then S&P could lower the rating. KAYDON CORP: Moody's Keeps Low-B Ratings; Alters Outlook to Stable ------------------------------------------------------------------ Moody's Investors Service affirmed Kaydon Corporation's ratings, including the Ba2 corporate family rating and the Ba3 rating of the $200 million convertible senior subordinated notes. The rating outlook was also changed to stable from positive. The rating affirmation reflects Moody's expectation that Kaydon's gross debt protection measures will remain strong in the intermediate term, partly offsetting the company's very small size, lack of geographic diversification and its exposure to volatile end-markets. The change in outlook to stable factors in the expected gradual reduction of Kaydon's large cash balances through initiatives enhancing shareholders' returns, which together with moderate free cash flow generation in the near term, will somewhat lower the company's flexibility in its rating category. The rating agency believes that Kaydon will remain solidly position in the Ba2 rating category, supported by strong leverage and interest coverage metrics balancing to some degree weaknesses with regards to the business profile. However, Moody's expects Kaydon's very small revenue base, limited geographic diversification and exposure to volatile end-markets to remain key constraining rating factors in the intermediate term. The stable outlook considers that Kaydon's flexibility will somewhat reduce in its rating category, as Moody's believes that the company could reduce its ample cash balance through bolt-on acquisitions and share buy-backs. It also factors in moderate free cash flow generation in the near term due to large growth capital expenditures in wind energy. In Moody's opinion, major setbacks in its wind energy development projects or a transforming debt-funded acquisition could put negative pressures on the ratings. While the convertible notes are puttable in May 2008, Kaydon's cash on balance sheet and unused revolver should provide sufficient liquidity cushion. Ratings affirmed: -- Ba2 corporate family rating -- Ba2 probability of default rating -- Ba3 $200 million convertible senior subordinated notes (LGD5/75%) Kaydon is a manufacturer of custom-engineered, performance- critical metal components for a broad range of industrial end markets. The company reported consolidated net sales of approximately $451 million in 2007. LANCER FUNDING: Eroding Credit Quality Prompts Moody's Rating Cuts ------------------------------------------------------------------ Moody's Investors Service downgraded ratings of six classes of notes issued by Lancer Funding II, Ltd., and left on review for possible further rating action the rating of two of these classes of notes. The notes affected by this rating action are: Class Description: $39,000,000 Class X Senior Secured Fixed Rate Notes Due 2013 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: B1, on review for possible future action, direction uncertain Class Description: $600,000,000 Class A1S Variable Funding Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Class Description: $275,000,000 Class A1J Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: C Class Description: $38,000,000 Class A2 Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Ca -- Current Rating: C Class Description: $42,000,000 Class A3 Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Ca -- Current Rating: C Class Description: $27,000,000 Class B Mezzanine Secured Deferrable Interest Floating Rate Notes Due 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. 8, 2007, as reported by the Trustee, of an event of default caused by a failure of the Senior Credit Test to be satisfied, as described in Section 5.1(h) of the Indenture dated May 24, 2007. Lancer Funding II, Ltd. is a collateralized debt obligation backed primarily by a portfolio of 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, 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 a majority of the controlling class directed the trustee to accelerate the notes and to also liquidate the collateral, as provided in the applicable provisions of the Indenture. 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 Class A1S Notes and Class X Notes remain on review for possible further action. LASALLE COMMERCIAL: Two Cert. Classes Obtains Moody's Junk Ratings ------------------------------------------------------------------ Moody's Investors Service downgraded the rating of six classes and affirmed the ratings of seven classes of LaSalle Commercial Mortgage Securities, Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-MF2: -- Class A, $363,220,205, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $8,745,000, affirmed at Aa2 -- Class C, $12,493,000, affirmed at A2 -- Class D, $8,120,000, affirmed at Baa1 -- Class E, $3,748,000, affirmed at Baa2 -- Class F, $4,998,000, affirmed at Baa3 -- Class G, $5,621,000, downgraded to Ba3 from Ba1 -- Class H, $3,124,000, downgraded to B1 from Ba2 -- Class J, $1,874,000, downgraded to B2 from Ba3 -- Class K, $1,249,000, downgraded to B3 from B1 -- Class L, $1,874,000, downgraded to Caa2 from B2 -- Class M, $1,249,000, downgraded to Caa3 from Caa1 As of the Feb. 20, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 14.6% to $423.2 million from $495.5 million at securitization. The Certificates are collateralized by 431 mortgage loans with the top 10 loans representing 8.3% of the pool. No loans were defeased or liquidated from the trust. Moody's was provided with full-year 2006 operating results for 88.1% of the pool. One hundred and fifty-nine loans, representing 35.8% of the pool, are on the master servicer's watchlist. Twenty-nine loans, representing 9.6% of the pool, are in special servicing. Moody's is estimating $6.7 million of losses from all the specially serviced loans. Moody's is downgrading Classes G, H, J, K, L and M due to the large number of specially serviced loans and the projected losses. LAS VEGAS SANDS: Completes Sale of The Palazzo to General Growth ---------------------------------------------------------------- Las Vegas Sands disclosed in a regulatory filing with the Securities and Exchange Commission last week that it has completed the sale to General Growth Properties of the retail, entertainment and dining complex located within The Palazzo known as The Shoppes at The Palazzo, and certain other restaurant and retail space in The Palazzo, totaling approximately 536,000 square feet of space, for an initial cash payment of approximately $290.8 million. Under the terms of the purchase agreement with General Growth Properties, additional purchase price payments will be made periodically for potentially as long as 4 years after the consummation of the Palazzo Mall Sale, potentially longer in certain circumstances, with the final purchase price to be calculated by applying an agreed-upon cap rate to the net operating income derived from the assets sold during months 19-30 of operations. On Feb. 29, 2008, concurrently with the closing of the Palazzo Mall Sale, certain subsidiaries of Las Vegas Sands Corp. entered into the Fourth Amended and Restated Reciprocal Easement, Use and Operating Agreement with certain subsidiaries of General Growth Properties. The Operating Agreement establishes the terms and requirements related to the separate ownership but integrated operation of the company's Las Vegas integrated resort, including agreements with respect to, among other things, encroachments, easements, operating standards, maintenance requirements, insurance requirements, casualty and condemnation events, parking, joint marketing, consent and approval rights, handling of disputes and the sharing of some facilities and related costs. The Operating Agreement was amended in connection with the Palazzo mall sale to include The Palazzo and The Shoppes at The Palazzo, in addition to The Venetian, The Sands Expo Center, The Congress Center and The Grand Canal Shoppes. About Las Vegas Sands Headquartered in Las Veags, Nevada Las Vegas Sands Corp. (NYSE:LVS) -- http://www.lasvegassands.com/-- owns and operates The Venetian Resort-Hotel-Casino and the Sands Expo and Convention Center in Las Vegas and The Venetian Macao Resort-Hotel and the Sands Macao in the People's Republic of China Special Administrative Region of Macao. The company is constructing three additional integrated resorts: The Palazzo Resort-Hotel-Casino in Las Vegas; Sands Bethworks(TM) in Bethlehem, Pennsylvania; and The Marina Bay Sands(TM) in Singapore. LVS is also creating the Cotai Strip(TM), a master-planned development of resort-casino properties in Macao. Additionally, the companyis working with the Zhuhai Municipal People's Government of the PRC to master-plan the development of a leisure resort and convention complex on Hengqin Island in the PRC. * * * Las Vegas Sands Corp. still carries Standard & Poor's Ratings Services 'BB-' long-term foreign and local issuer credit ratings, which were placed on April 17, 2007. Rating outlook is stable. LEVITT AND SONS: Mechanic Lienholders' Dismissal Request Denied --------------------------------------------------------------- The Honorable Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida denied, without prejudice, the request of certain mechanic's lienholders to dismiss or convert the Chapter 11 cases of certain Levitt and Sons LLC debtor- affiliates into Chapter 7 liquidation proceedings. As reported in the Troubled Company Reporter on March 3, 2008, Wachovia Bank N.A., certain Levitt and Sons LLC debtor-affiliates, and the Official Committee of Unsecured Creditors asked the Court to deny the lienholder group's request for dismissal or conversion of these cases. These mechanic's lienholders include Ferguson Enterprises, Inc., Phillips and Jordan, Inc., and American Woodmark Corporation. The Wachovia Debtors are Levitt and Sons of Horry County, LLC, Levitt and Sons of Hall County, LLC, Levitt and Sons of Cherokee County, LLC, Levitt and Sons of Paulding County, LLC, Levitt and Sons at World Golf Village, LLC, and Levitt and Sons of Manatee County, LLC. On Feb. 13, 2008, the Court entered a final order: -- granting certain Debtors' request for a DIP Financing; -- denying the Debtors' request to abandon certain of their property subject to liens held by Wachovia Bank, N.A.; and -- denying Wachovia Bank's request to lift the automatic stay to exercise its rights. Wachovia Bank asserted that the potential abandonment of the Wachovia Debtors' properties does not constitute cause for the dismissal or conversion of the Wachovia Debtors' bankruptcy cases. The contention that continued activity in the Debtors' Chapter 11 cases inures to the benefit of Wachovia Bank alone is unsupportable, Wachovia Bank said. With the approval of the DIP Financing, the Debtors' estates will receive a minimum of $4,000,000 in guaranteed payments. Wachovia Bank added that it is very likely that homes will be completed and sold, which (i) will reduce claims against the Wachovia Debtors' estates, (ii) benefit contract holders who want to purchase their homes, and (iii) increase the value of the collateral. Wachovia Bank has committed to authorize funding for the completion of at least 80 homes. The Debtors' estates may also receive additional funds to the extent the infusion of capital from the DIP Financing generates higher sales prices for the Wachovia Debtors' properties, Wachovia said. It noted that the Court has expressly found that the DIP Loan is being extended to the Wachovia Debtors and that they will have capable and adequate control over the funds at all time through their Chief Administrator, Soneet Kapila. The Lienholders have offered no basis for finding substantial or continuing loss to or diminution of the Debtors' estates or the absence of a reasonable likelihood of rehabilitation, Wachovia emphasized. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. The Debtors are seeking to extend their exclusive period to file a plan of reorganization to April 10, 2008. (Levitt and Sons Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LEVITT AND SONS: Wants to Employ Bilzin Sumberg as Tax Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors in Levitt and Sons LLC and its debtor-affiliates Chapter 11 cases seeks authority from the U.S. Bankruptcy Court for the Southern District of Florida to retain Samuel C. Ullman, Esq., and the law firm Bilzin Sumberg Baena Price & Axelrod LLP, as its special tax counsel, nunc pro tunc to Feb. 13, 2008. The Creditors Committee relates that its investigation indicates that there are several complex tax and tax-related issues related to the Debtors and their non-debtor affiliates that need to be analyzed and addressed as part of its efforts to maximize recovery for all creditors. Paul J. Battista, Esq., at Genovese Joblove & Battista, P.A., in Miami, Florida, tells the Court that Mr. Ullman and Bilzin have substantial experience and expertise in all tax and tax-related matters, specifically in the context of complex Chapter 11 cases in Florida and throughout the United States. Mr. Ullman and Bilzin are "well-known to the this Court and the legal community" for their tax experience and expertise, Mr. Bilzin adds. The proposed Special Tax Counsel will, among other things: -- advise the Creditors Committee with respect to all tax and tax-related matters involving the Debtors, their estates and certain non-debtor affiliates, including in regard to the recovery and allocation of substantial tax refunds in the Debtors' Chapter 11 cases; -- assist and advise the Creditors Committee in its consultations with the Debtors and other parties relative to those tax matters; and -- represent the Creditors Committee at all hearings on all tax and tax-related matters. Mr. Ullman, the Bilzin partner who will be principally responsible for the representation of the Creditors Committee, will be paid an hourly rate of $560. The current hourly rates of other Bilzin professionals are: Designation Hourly Rate ----------- ----------- Attorneys $225 - $700 Legal assistants and paralegals $165 - $205 The firm typically adjusts its rates annually on January 1. Jay M. Sakalo, a partner at Bilzin, discloses that the firm represented Cascades of the Groveland and Levitt and Sons, LLC, in connection with legal advice regarding voice, video and data services. The representation terminated before the Petition Date. The firm does not hold a prepetition claim against the Debtors, he says. Bilzin has also represented and continues to represent Cypress Creek Capital, Inc., a real estate investment banking and investment company and a wholly owned subsidiary of BFC Financial Corporation, in matters unrelated to the Debtors' cases, Mr. Sakalo states. Mr. Ullman and Bizlin do not hold or represent any interest adverse to the Debtors or their estates on any matters in which they are to be engaged. The firm will not represent other entities in connection with the Debtors' Chapter 11 cases, Mr. Sakalo assures the Court. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. The Debtors are seeking to extend their exclusive period to file a plan of reorganization to April 10, 2008. (Levitt and Sons Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LIBERTY MEDIA: Board Approves Repurchase of Common Stock -------------------------------------------------------- Liberty Media Corporation's board of directors authorized the repurchase of up to $1 billion of Liberty Entertainment common stock and up to $300 million of Liberty Capital common stock. The authorization replaces the prior repurchase authorization of Liberty Capital common stock. The existing Liberty Interactive repurchase authorization remains in effect and was not affected by this action. The specific timing and amount of actual future share repurchases will vary based on market conditions, securities law limitations and other factors. The repurchases will be made using Liberty's cash resources, and the buyback program may be suspended or discontinued at any time without prior notice. About Liberty Media Headquartered in Englewood, Colorado, Liberty Media Corporation (NasdaqGS: LINTA) -- http://www.libertymedia.com/-- owns interests in a broad range of electronic retailing, media, communications and entertainment businesses. Those interests are attributed to two tracking stock groups: the Liberty Interactive group, which includes Liberty's interests in QVC, Provide Commerce, IAC/InterActiveCorp, and Expedia, and the Liberty Capital group, which includes Liberty's interests in Starz Entertainment, News Corporation, and Time Warner. * * * Fitch Ratings assigned a BB long-term issuer default rating and a BB senior unsecured debt rating to Liberty Media Corporation on Dec. 22, 2006. The ratings still hold as of Jan. 29, 2007. LILLIAN VERNON: Taps Morris Nichols as Bankruptcy Counsel --------------------------------------------------------- Lillian Vernon Corp. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware for authority to employ Morris, Nichols, Arsht and Tunnell LLP, as their bankruptcy counsel, nunc pro tunc to Feb. 20, 2008. As the Debtors' bankruptcy counsel, Morris Nichols will: a) perform all necessary services as the Dbtors' counsel, including, without limitation, providing the Debtors with advice, representing the Debtors, and preparing necessary documents on behalf of the Debtors in the areas of debtor in possession financing, corporate law, real estate, employee benefits, business and commercial litigation, tax, debt restructuring, bankruptcy and asset dispositions; b) take all necessary actions to protect and preserve the Debtors' estate during these Chapter 11 cases, including the prosecution of actions by the Debtors, the defense of any actions commenced against the Debtors, negotiations concerning litigation in which the Debtors are involved and objecting to claims filed against the estates; c) prepare or coordinate preparation on behalf of the Debtors, as debtors in possession, necessary motions, applications, answers, orders, reports and papers in connection with the administration of these chapter 11 cases; d) counsel the Debtors with regard to their rights and obligations as debtors in possession; and e) perform all other necessary legal services. As compensation for their services, Morris Nichols' professionals bill: Designation Hourly Rate ----------- ----------- Partners $440-$725 Associates $250-$415 Paraprofessionals $180-$195 Case Clerks $120 In the year prior to bankruptcy filing, Morris Nichols has been paid approximately $390,386.77 in fees and costs in connection with the preparationa snd filing of these cases. Morris Nichols currently holds up to approximately $178,194.51 as an advance for services to be rendered and expenses to be incurred in connection with its representation of the Debtors. Robert J. Dehney, Esq., a partner in Morris Nichols, assures the Court that the firm does not hold or represent any interest adverse to the Debtors or their estates, and that the firm is a "disinterested person" as such term is defined under Sec. 101(14) of the Bankruptcy Code. Mr. Dehney can be reached at: Robert J. Dehney, Esq. Morris, Nichols, Arsht & Tunnell LLP 1201 North Market Street Wilmington, DE 19801 Tel: (302) 351-9353 Fax: (302) 425-4673 email: rdehney@mnat.com About Lillian Vernon Based in Virginia Beach, Virginia, Lillian Vernon Corp. -- http://www.lillianvernon.com/-- and its affiliates are direct mail specialty catalog and online companies concentrating on the marketing of gifts, holiday products, toys and children's products, personal and home accessories, kitchen and houseware products and garden and outdoor products. They have developed a proprietary customer database containing information about its customers, including such data as order frequency, size and date of last order and type of products purchased. The database contains information with respect to over 27 million customers, gift recipients and people who have requested its catalogs. In the fiscal year ended February 22, 2003, they published 33 catalog editions and mailed approximately 150,000,000 catalogs to past and prospective customers. They also offer products over the Internet. The company and six of its affiliates filed for Chapter 11 protection on Feb. 20, 2008 (Bankr. D.D., Delaware, Case No. 08- 10323). Ann C. Cordo, Esq., Daniel B. Butz, and Esq., J. Dehney, Esq. at Morris, Nichols, Arsht & Tunnell, L.L.P. represent the Debtors in their restructuring efforts. Lillian Vernon's parent, Sun Capital Partners Inc., a privately held investment company with offices in Boca Raton, Fla., is not included in the bankruptcy filing. The company listed assets of $1 million to $100 million and debts of $1 million to $100 million in its bankruptcy filing. LOUIS PEARLMAN: To Plead Guilty This Week for Fraud Allegations --------------------------------------------------------------- Louis J. Pearlman acquiesced and will formally plead guilty on Thursday before a federal court in Florida for alleged investment fraud, various reports say. The former boy band manager of pop icons Backstreet Boys, N'Sync, and Take 5 will face a sentence of 25 years in prison and a fine of $1 million, Reuters reports. As reported in the Troubled Company Reporter, Sept. 13, 2007, Mr. Pearlman was arrested in Indonesia and sent to jail after being indicted on three counts of bank fraud and single counts of mail and wire fraud. Florida investigators alleged that Mr. Pearlman defrauded more than 1,000 investors of more than $315 million. Banks have also declared that they are collectively owed more than $120 million by Mr. Pearlman. According to Reuters, these banks who loaned amounts to Pearlman included, among others, First International Bank & Trust, MB Financial Bank N.A., HSBC Bank, Integra Bank N.A., and Bank of America. Reuters relates that, according to a plea agreement, Pearlman defrauded investors and financial institutions by setting up non- existent companies -- Transcontinental Airlines Travel Services Inc. and Transcontinental Airlines Inc. -- and goading them to invest in these companies. In addition, Pearlman created a fictitious accounting firm Cohen & Siegel to support his Ponzi scheme, Reuters says. Mr. Pearlman also agreed, as part of his restitution, to help the U.S. government identify and seize his vehicles, relates Reuters. A bankruptcy trustee was appointed in Mr. Pearlman's bankruptcy case to manage and sell various assets, including Pearlman's properties in Atlantic City and Orlando for over $7 million. About Louis Pearlman Louis Pearlman started Trans Continental Records which managed boy bands such as the Backstreet Boys, 'N Sync, O-Town, Lyte Funky Ones (LFO), Take 5, Natural and US5. Other artists on the Trans Continental's label included Aaron Carter, Jordan Knight, C Note, and Smilez & Southstar. On March 1, 2007, creditors Tatonka Capital Corporation, First National Bank & Trust Co. of Williston, and American Bank of St. Paul, and Integra Bank filed an involuntary chapter 11 petition against Mr. Pearlman and his company, Trans Continental Airlines, Inc. (Bankr. M.D. Fla. Case Nos. 07-00761 and 07-00762). The creditors disclosed an aggregate of more than $40 million in claims. Tatonka Capital is represented by Derek F. Meek, Esq., and Robert B. Rubin, Esq., at Burr & Forman LLP, and Richard B Webber, II, Esq., Zimmerman Kiser & Sutcliffe PA. First national Bank is represented by Raymond V. Miller, Esq., at Gunster Yoakley & Stewart PA, and Richard P. Olson, Esq., at Olson & Burns PC. American Bank of St. Paul is represented by William P. Wassweiler, Esq., at Rider Bennett LLP. Integra bank is represented by Lawrence E. Rifken, Esq., at McGuire Woods LLP. Soneet R. Kapila, the Chapter 11 trustee appointed to oversee Mr. Pearlman's estate, is represented by Denise D. Dell-Powell, Esq., and Jill E. Kelso, Esq., at Akerman Senterfitt, and Gregory M. Garno, Esq., and Paul J. Battista, Esq., at Genovese Joblove & Battista PA. The Official Committee of Unsecured Creditors of Trans Continental is represented by Robert J. Feinstein, at Pachulski Stang Ziehl & Jones LLP. LSI CORP: Inks Asset Purchase Agreement with Infineon Technologies ------------------------------------------------------------------ LSI Corporation signed a definitive agreement to acquire the assets of the hard disk drive semiconductor business of Infineon Technologies AG. Financial terms were not disclosed. "Through the addition of the Infineon HDD business, LSI has taken another significant step toward becoming the leading worldwide provider of silicon solutions for hard disk drive makers," said Ruediger Stroh, executive vice president and general manager, Storage Peripherals Group, LSI. "We expect the acquisition to immediately accelerate revenue with a top-tier customer, Hitachi Global Storage Technologies, while enhancing our competitive position in the desktop and enterprise space." The agreement calls for LSI to purchase the assets and intellectual property of the Infineon HDD business, which includes product designs, related software, inventory and test equipment. LSI also will enter into additional agreements with Infineon, including intellectual property, design services, transition services, and supply agreements. The transaction is expected to close within 60 days and is subject to the satisfaction of customary closing conditions and regulatory approvals. LSI expects the acquisition to be neutral to slightly accretive to non-Generally Accepted Accounting Principles earnings per share in 2008. The company expects to provide further details in April when it reports first quarter results. About Infineon Technologies AG Headquartered in Neubiberg, Infineon Technologies AG (FSE/ NYSE: IFX) -- http://www.infineon.com/-- is a semiconductor company. The company designs, develops, manufactures and markets a range of semiconductors and complete systems solutions used in a variety of microelectronic applications, including computer systems, telecommunications systems, consumer goods, automotive products, industrial automation and control systems, and chip card applications. Its products include standard commodity components, full-custom devices, semi-custom devices and application-specific components for memory, analog, digital and mixed-signal applications. The company has operations, investments and customers located in Europe, Asia and North America. Infineon's core business is conducted through its Automotive, Industrial & Multimarket segment, and its Communication Solutions segment. Infineon's memory products business is conducted through its majority owned subsidiary, Qimonda AG About LSI Corporation Headquartered in Milpitas, California, LSI Corporation (NYSE:LSI) fka LSI Logic Corporation -- http://www.lsi.com/-- designs, develops and markets complex, high-performance semiconductors and storage systems. The company is a provider of silicon-to-system solutions. It offers a portfolio of semiconductors, including custom and standard product integrated circuits, for use in consumer applications, high-performance storage controllers, enterprise hard disk controllers and a range of communication devices. The company also offers external storage systems and software applications for storage area networks. The company operates in two segments: the Semiconductor segment and the Storage Systems segment. The company's products are marketed to original equipment manufacturers that sell products to its target markets. * * * As reported in the Troubled Company Reporter on Oct. 15, 2007, Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating and other ratings on LSI Corp. and revised the outlook to stable from positive. MAGNA ENT: Reports $42.9 Million Net Loss for 2007 Fourth Quarter ----------------------------------------------------------------- Magna Entertainment Corp. reported net loss of $42.9 million for the 2007 fourth quarter ended Dec. 31 compared to $12.4 million net loss for the 2006 fourth quarter. For the year ended Dec. 31, 2007 the company posted a net loss of $113.7 million from $87.3 million. The company generated revenues of $114.3 million for the 2007 fourth quarter from $101.3 million for the 2006 fourth quarter. For the fiscal 2007, the company's total revenues are $617.2 million from $569.2 million revenues for 2006. Revenues from continuing operations were $117.3 million for the three months ended Dec. 31, 2007, an increase of $14.7 million or 14.4% compared to $102.6 million for the three months ended Dec. 31, 2006. Revenues from continuing operations were $625.7 million for the year ended Dec.31, 2007, an increase of $51.5 million or 9.0% compared to $574.2 million for the year ended Dec. 31, 2006. The increased revenues for the year ended Dec. 31, 2007 compared to the prior year are primarily due to a $34.1 million increase in Florida revenues as the Gulfstream Park casino facility generated $32.1 million of additional gaming revenues in 2007 compared to the prior year and a $28.8 million increase in PariMax revenues as a result of a full year of results of AmTote in 2007, as Magna completed the acquisition of the remaining 70% equity interest in AmTote in July 2006, and increased revenues at XpressBet(R) as a result of a 14% growth in handle. Cash used for investing activities during the three months ended Dec. 31, 2007 was $17.2 million, which included $18.1 million of real estate property and fixed asset additions and $1.5 million of other asset additions, partially offset by $2.5 million of proceeds on the sale of real estate and fixed assets. Cash provided from financing activities during the three months ended Dec. 31, 2007 of $45.5 million includes net borrowings of $25.4 million from Magna's controlling shareholder, $19.6 million of net proceeds received from a private placement of class A subordinate voting stock to Fair Enterprise Limited and net borrowings of $13.3 million from bank indebtedness, partially offset by net repayments of $12.8 million of long-term debt. "We remain firmly committed to implementing our debt elimination plan, although the weak U.S. real estate and credit markets have adversely impacted our progress to date on asset sales," Frank Stronach, MEC's chairman and interim chief executive officer, commented. During the fourth quarter, the company completed a $20.0 million private placement of equity. In addition, Magna entered into an agreement to sell 225 acres of excess real estate in Ebreichsdorf, Austria for a purchase price of EUR20.0 million or $29.4 million. This transaction is expected to close during the first quarter of 2008 following the satisfaction of customary closing conditions including the receipt of all necessary regulatory approvals. The company has also closed the sales of three parcels of excess real estate in Porter, New York for aggregate net proceeds of $1.7 million and have engaged real estate brokers and listed for sale Great Lakes Downs and our real estate properties in Dixon, California and Ocala, Florida. Also, the company is marketing its interest in Portland Meadows for sale and have engaged a U.S. investment bank to sell Remington Park and Thistledown. "We also remain focused on improving operations," Ron Charles, MEC's chief operating officer, added. "While we are encouraged by the profitability improvements this quarter at our PariMax operations, including XpressBet(R), AmTote and HRTV(TM), we continue to be disappointed with the operating results at Gulfstream Park." "Gulfstream Park's slot and racing operations have been impacted by the ongoing construction of The Village at Gulfstream Park(TM), a lifestyle mixed-use development, the first phase of which is scheduled to be completed by February 2009," Mr. Charles added. "Gulfstream Park's weak results have continued during its 2008 race meet as on-track attendance and handle have declined." "Santa Anita Park has also had a challenging 2008 race meet because of track drainage problems caused by the installation of a new synthetic racing surface," Mr. Charles continued. "Santa Anita Park has cancelled eleven days of live racing in 2008, which has negatively impacted results." "However, we have made up three live race days since then and expect to make up additional live race days during the remainder of Santa Anita Park's 2008 race meet," Mr. Charles stated. "We plan to implement a permanent solution for the racing surface later this year." During the three months ended Dec. 31, 2007 cash used for operations was $14.0 million, which improved $6.0 million from cash used for operations of $20.0 million in the fourth quarter of 2006, primarily due to the increase in loss from continuing operations being more than offset by increases in items not involving current cash flows and changes in non-cash working capital balances in 2007 relative to the prior year period. As of Dec. 31, 2007, the company's balance sheet showed total assets of $1,242.6 million, total liabilities of $879.9 million and a total shareholders' equity of $362.7 million. About Magna Entertainment Headquartered in Aurora, Ontario, Magna Entertainment Corp. (TSE:MEC.A) -- http://www.magnaent.com/-- owns and operates horse racetracks in California, Florida, Maryland, Texas, Oklahoma, Ohio, Michigan, Oregon and Ebreichsdorf, Austria. It operates a Pennsylvania racetrack previously owned by the company. In addition, it operates off-track betting facilities, a United States national account wagering business known as XpressBet, which permits customers to place wagers by telephone and over the internet on horse races at over 100 North American racetracks and internationally on races in Australia, South Africa and Dubai, and a European account wagering service known as MagnaBet. Pursuant to a joint venture with Churchill Downs Incorporated, it also owns a 50% interest in HorseRacing TV, a television network focused on horse racing. To support certain of its thoroughbred racetracks, it owns and operates thoroughbred training centers situated near San Diego, California, in Palm Beach County, Florida and in the Baltimore, Maryland area. Going Concern Doubt Chartered accountants, Ernst & Young LLP, expressed substantial doubt about Magna Entertainment's ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring operating losses and working capital deficiency. MANCHESTER INC: Gets Interim Ok to Employ Eric Liepins as Counsel ----------------------------------------------------------------- The United States Bankruptcy Court for the Northern District of Texas granted permission, on an interim basis, to Manchester Inc. and its debtor-affiliates to employ Eric A. Liepins and the law firm of Eric A. Liepins P.C. as the Debtors' local counsel. As the Debtors' local counsel, Eric A. Liepins P.C. will provide legal assistance on a variety of legal matters relating to the assets and liabilities of the Debtors' estates. No other details were provided. Eric. A. Liepins, Esq., the sole shareholder with Eric A. Liepins P.C., assured the Court that the firm does not hold or represent any interest adverse to the Debtors or their estates, and that the firm is a "disinterested person" as such term is defined under Sec. 101(13) of the bankruptcy code. As compensation for their services, Eric A. Liepins P.C.'s professionals bill: Professional Hourly Rate ------------ ----------- Eric A. Liepins, Esq. $250 Paralegals/Legal Assistants $30-$50 The firm has been paid a retainer of $25,000 plus the filing fees. 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). Winston & Strawn LLP represents the debtors in their restructuring efforts. Eric A. Liepins, Esq., is the Debtors' local counsel. As of the debtors' bankruptcy filing, it listed total assets of $131,582,157 and total debts of $123,881,668. MERRILL LYNCH: Moody's Confirms Low-B Ratings on Six Cert. Classes ------------------------------------------------------------------ Moody's Investors Service affirmed the ratings of Merrill Lynch Financial Assets, Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-Canada 18: -- Class A-1, $38,535,476, affirmed at Aaa -- Class A-2, $192,000,000, affirmed at Aaa -- Class A-3, $269,500,000, affirmed at Aaa -- Class XP-1, Notional, affirmed at Aaa -- Class XP-2, Notional, affirmed at Aaa -- Class XC, Notional, affirmed at Aaa -- Class B, $14,100,000, affirmed at Aa2 -- Class C, $12,500,000, affirmed at A2 -- Class D, $16,279,000, affirmed at Baa2 -- Class E, $3,688,000, affirmed at Baa3 -- Class F, $4,427,000, affirmed at Ba1 -- Class G, $2,951,000, affirmed at Ba2 -- Class H, $1,475,000, affirmed at Ba3 -- Class J, $1,476,000, affirmed at B1 -- Class K, $1,475,000, affirmed at B2 -- Class L, $2,951,000, affirmed at B3 As of the Feb. 12, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 3.6% to $568.7 million from $590.2 million at securitization. The Certificates are collateralized by 83 mortgage loans ranging in size from less than 1.0% to 10.4% of the pool, with the top 10 loans representing 44.1% of the pool. The pool includes one investment grade shadow rated loan, representing 2.2% of the outstanding pool balance. Two loans, representing 3.1% of the pool, have defeased and are secured by Canadian Government securities. There have been no losses to the pool and currently there are no loans in special servicing. Seven loans, representing 4.5% of the pool, are on the master servicer's watchlist. Moody's received full-year 2006 operating results for 85.0% of the pool. Moody's loan to value ratio for the conduit component is 91.6%, essentially the same as at securitization. Moody's is affirming all classes due to overall stable pool performance. The shadow rated loan is the Regency Retirement Residence Loan ($12.7 million - 2.2%), which is secured by an 82-unit assisted living facility located in Mississauga, Ontario. The property was 93.0% occupied as of January 2007, essentially the same as at securitization. Moody's current shadow rating is Baa3, the same as at securitization. The three largest conduit loans represent 22.7% of the pool. The largest conduit loan is the TransGlobe Portfolio Loan ($59.4 million -- 10.4%), which is secured by 28 multifamily properties located in Ontario and Nova Scotia. The properties total 2,491 units. The portfolio was 97.6% leased as of December 2006, essentially the same as at securitization. Moody's LTV is 95.0%, essentially the same as at securitization. The second largest conduit loan is the Anchored Retail Portfolio Loan ($41.0 million -- 7.2%), which is secured by a 14 anchored retail properties located in the province of Quebec and Ontario. The two largest tenants are Jean Coutu Pharmacy (34.2% GLA through 2020) and IGA (7.5% through 2016). The portfolio was 100.0% occupied as of March 2007, compared to 96% at securitization. Moody's LTV is 90.8%, compared to 96.4% at securitization. The third largest conduit loan is the Halifax Marriott Loan ($28.7 million -- 5.1%), which is secured by a 353-room full service hotel located in Halifax, Nova Scotia. Financial performance has declined since securitization due to a decline in occupancy. Occupancy and RevPAR for calendar year 2006 was 68.0% and $104.00, respectively, compared to 78.2% and $111.04 at securitization. Moody's LTV is 95.2%, compared to 87.5% at securitization. MERRILL LYNCH: Moody's Confirms Low-B Ratings on Three Classes -------------------------------------------------------------- Moody's Investors Service affirmed the ratings of 21 classes of Merrill Lynch Mortgage Trust 2005-LC1, Commercial Mortgage Pass- Through Certificates, Series 2005-LC1: -- Class A-1, $4,405,770, affirmed at Aaa -- Class A-2, $104,847,000, affirmed at Aaa -- Class A-3, $43,000,000, affirmed at Aaa -- Class A-3FL, $119,667,000, affirmed at Aaa -- Class A-1A, $222,609,535, affirmed at Aaa -- Class A-SB, $88,067,000, affirmed at Aaa -- Class A-4, $425,698,000, affirmed at Aaa -- Class A-4FC, $25,000,000, affirmed at Aaa -- Class AM, $154,625,000, affirmed at Aaa -- Class AJ, $94,708,000, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $32,858,000, affirmed at Aa2 -- Class C, $15,463,000, affirmed at Aa3 -- Class D, $28,992,000, affirmed at A2 -- Class E, $15,463,000, affirmed at A3 -- Class F, $25,126,000, affirmed at Baa1 -- Class G, $19,329,000, affirmed at Baa2 -- Class H, $21,261,000, affirmed at Baa3 -- Class J, $7,731,000, affirmed at Ba1 -- Class K, $5,798,000, affirmed at Ba2 -- Class L, $5,799,000, affirmed at Ba3 As of the Feb. 12, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 3.4% to $1.49 billion from $1.55 billion at securitization. The Certificates are collateralized by 141 loans, ranging in size from less than 1.0% to 8.2% of the pool, with the top 10 loans representing 38.3% of the pool. The pool includes one shadow rated loan, representing 8.1% of the pool. One loan, representing 0.9% of the pool, has defeased and been replaced with U.S. Government securities. The pool has not realized any losses since securitization. Two loans, representing 4.8% of the pool, are in special servicing. Moody's is estimating $1.5 million of losses from all the specially serviced loans. Eighteen loans, representing 6.8% of the pool, are on the master servicer's watchlist. Moody's was provided with full-year 2006 and partial-year 2007 operating results for 97.6% and 93.5% of the pool respectively. Moody's weighted average loan to value ratio for the conduit component is 103.7% compared to 102.9% at Moody's last full review in June 2007 and compared to 103.8% at securitization. The shadow rated loan is the Glendale Galleria Loan ($121.6 million -- 8.1%), which is secured by the borrower's interest in a 1.3 million square foot, regional mall (661,000 square feet of retail and office collateral) located in Glendale, California. The loan represents a 44.0% pari-passu interest in a $270.2 million loan. There is also an approximately $86.3 million non-pooled junior component and $30.0 million of mezzanine debt held outside the trust. As of December 2007, the mall's in-line retail space and office space were 93.0% leased compared to 92.0% and 90.0% at last review and 90.0% and 78.0% at securitization. Moody's current shadow rating is A3, the same as at last review and compared to Baa2 at securitization. The top three conduit loans represent 16.1% of the pool. The largest conduit loan is the Colonial Mall Bel Air Loan ($122.4 million -- 8.2%), which is secured by the borrower's interest in a 1.3 million square foot, regional mall (1.0 million square feet of collateral) located in Mobile, Alabama. Moody's LTV is in excess of 100.0%, the same as at last review and at securitization. The second largest conduit loan is the Four Forest Plaza and Lakeside Square Loan ($60.5 million -- 4.0%), which is secured by two office buildings totaling 792,000 square feet located in Dallas, Texas. The loan is currently in special servicing due the borrower modifying a major lease without consent. The loan is scheduled to be returned to the master servicer as issues relating to the lease termination have been resolved. Moody's is not projected losses at the present time. Moody's LTV is in excess of 100.0%, the same as at last review and at securitization. The third largest conduit loan is the CNL-Cirrus MOB Portfolio Loan ($57.7 million -- 3.9%), which is secured by seven medical office buildings and one surgical center totaling 338,000 square feet located in Dallas and Oklahoma City. Moody's LTV is in excess of 100.0%, the same as at last review and at securitization. META HEALTH: To Sell Theramed Unit to Reduce Debt Load ------------------------------------------------------ Meta Health Services Inc. said that, in light of substantial debt obligations, it has successfully negotiated and executed an agreement for the sale of its wholly owned subsidiary, Theramed Corporation to Rogan Holdings Corporation, conditional on, among other things, receiving shareholder approval. The company revealed that for some time both the company and Theramed have been in financial difficulty. In 2001, in order to continue its operations, the company and Theramed received several loans from Rogan, a major shareholder in the company, the loans in an aggregate amount of $1,565,941. In each case, these funds were to assist the company to satisfy the operating expenses of Theramed. The company and Theramed again faced financial difficulties beginning in September 2006 due to an unexpected loss of sales opportunities resulting from the drug "Plendil" becoming genericized and the drug "Bellergal" being unavailable for sale for several months during the year. In November 2006, the company's board of directors met to review its strategic options. On Dec. 28, 2006, a loan of $452,851 was provided to Theramed from Rogan at an interest rate of 10% per annum. The company began to implement cost-cutting measures, and, in January 2007, Theramed laid-off 19 employees, comprising most of its sales staff. In early 2007, as a result of its continuing financial difficulties, Theramed was unable to repay a loan from the Bank of Nova Scotia in the amount of $940,000. The Scotia Bank loan was guaranteed by the company and Rogan. When Scotia Bank called in the loan, the company was unable to make payment. On March 1, 2007, Rogan advanced $1,000,000 to the company, evidenced by a promissory note and at an interest rate of 10% per annum, most of which was used to repay the Scotia Bank loan. Another loan from Rogan was provided to Theramed on March 9, 2007, for $184,500 at an interest rate of 10% per annum. As of Feb. 29, 2008, the total financial obligations owed by Meta Health to Rogan is $751,375, and the total financial obligations owed by Theramed to Rogan is $3,527,836. The company anticipates that it can satisfy these debt obligations by way of a restructuring. About Meta Health Services Mississauga, Ontario-based Meta Health Services Inc. (TSX-V: MHS), through its wholly owned subsidiary, Theramed Corporation, is in the business of acquiring pharmaceutical products from multinational pharmaceutical and biotech companies by purchasing the intellectual property, assuming ownership, manufacturing and distribution of the products. The company's products incldue Cytomel, Delatestryl, Viroptic, Synercid, Bellergal and Estrace, Rhinocort, Plendil, and Cylosporine. META HEALTH: Shareholders to Review Rogan Buyout Offer on April 7 ----------------------------------------------------------------- In 2007, the board of directors of Meta Health Services Inc. formed a committee composed of independent directors who reviewed possible restructuring options and who retained independent financial advisors to, if appropriate, provide a fairness opinion in respect of a possible transaction. Presently, the company and Rogan Holdings Corporation, its lender, have executed, upon approval of the the special committee and Meta Health's board of directors, a share purchase agreement in respect of a restructuring of the company. This agreement is conditional upon the approval of the company's shareholders. Pursuant to this agreement, the company would sell all of its shares in the capital of Theramed to Rogan in exchange for the release of the financial obligations owed by Meta Health to Rogan. The agreement contains covenants and conditions that are customary to share purchase transactions. These conditions include receipt of approval of the transaction by a majority of the shareholders of Meta Health, including the approval of a majority of disinterested shareholders. In addition, the company said that no material adverse change with respect to Meta Health will have occurred since the date of this share purchase agreement. The transaction amounts to the sale of substantially all of the assets of Meta Health. This restructuring may result in the company no longer having any active operations. The company has issued a notice calling a meeting of the common shareholders on April 7, 2008, at which the shareholders would be asked to approve a resolution to approve the transaction. About Meta Health Services Mississauga, Ontario-based Meta Health Services Inc. (TSX-V: MHS), through its wholly owned subsidiary, Theramed Corporation, is in the business of acquiring pharmaceutical products from multinational pharmaceutical and biotech companies by purchasing the intellectual property, assuming ownership, manufacturing and distribution of the products. The company's products incldue Cytomel, Delatestryl, Viroptic, Synercid, Bellergal and Estrace, Rhinocort, Plendil, and Cylosporine. METHANEX CORP: Paying $0.14/Share Quarterly Dividend on March 31 ---------------------------------------------------------------- Methanex Corporation's board of directors declared a quarterly dividend of $0.14 per share that will be payable on March 31, 2008, to holders of common shares of record on March 17, 2008. Vancouver-based Methanex Corp. (Toronto: MX) (NASDAQGM: MEOH) -- http://www.methanex.com/-- is a publicly-traded company engaged in the production, distribution, and marketing of methanol. The company's stock also trate on foreign securities market of the Santiago Stock Exchange in Chile under the trading symbol "Methanex". * * * Moody's Investor Services placed Methanex Corporation's probability of default rating at 'Ba1' in September 2006. The rating still holds to date with a stable outlook. METROPOLITAN MORTGAGE: Reaches Settlement with PwC, Receives $30MM ------------------------------------------------------------------ PricewaterhouseCoopers LLP and the Metropolitan Mortgage & Securities Co. Investors' Trust reached a deal wherein the accounting firm will pay $30 million to the Trust for its alleged part in the Spokane lender's tumble into bankruptcy in 2004, John Stucke of the SpokesmanReview.com reports. As reported in the Troubled Company Reporter on Sept. 28, 2005, directors of Met Trust and its debtor-affiliate Summit Securities Inc. filed a lawsuit against their former accountants and auditors, PricewaterhouseCoopers, over audit work performed in 1999 and 2000 that failed to warn the two companies were on the verge of bankruptcy. The lawsuit was filed in the U.S. District Court in Spokane, Washington, on Sept. 21, 2005. The two companies asserted in their lawsuit that: a) PwC was negligent in its duties as their independent auditors by misrepresenting the truth in the Firm's audit reports that Metropolitan and Summit were in deep financial trouble; and b) PwC advised the Metropolitan and Summit to set up a questionable tax shelter plan that was later disallowed by the Internal Revenue Service, which further drove the two companies into filing for bankruptcy. Met Mortgage filed for bankruptcy in February 2004, devastating nearly 10,000 investors throughout the Pacific Northwest who had invested approximately $450 million in the once high-flying real estate company. In 2005, the Securities and Exchange Commission filed civil fraud charges against former executives and third party business associates of Met Mortgage. The SEC's civil complaint, filed in the U.S. District Court for the Western District of Washington, alleges that Metropolitan's management falsified the company's 2002 financial results by reporting profits from circular real estate sales where Metropolitan purported to sell property to buyers who, in fact, received all of the money to pay for the purchase from Metropolitan or its affiliates. The fraud made Metropolitan appear profitable -- facilitating further sales of its bonds and preferred stock to investors -- when in reality the company was encountering its third straight year of mounting losses and on the verge of financial collapse. As reported in the Troubled Company Reporter on Feb. 15, 2006, the Hon. Patricia C. Williams of the U.S. Bankruptcy Court for the Eastern District of Washington confirmed, on Feb. 13, 2006, Met Mortgage and Summit Securities Inc.'s Amended Joint Plan of Reorganization. The Plan provided for the establishment of two trusts: 1) the Metropolitan Creditors' Trust, whose sole beneficiaries are certain unsecured creditors of Metropolitan, primarily the holders of Metropolitan's Debt Securities; and 2) the Summit Creditors' Trust, whose sole beneficiaries are certain unsecured creditors of Summit Securities, primarily the holders of Summit's Debt Securities. General unsecured claims of Met Mortgage, totaling approximately $357,245,839, received a pro rata beneficial interest in the Metropolitan Creditors' Trust. The general unsecured claims of Summit Securities, totaling around $157,909,000, will also receive a pro rata beneficial interest in the Summit Creditors' Trust. According to the SpokesmanReview.com, the money will be distributed among the investors that took a huge loss in Met Mortgage's bankruptcy. Both parties will brief the Honorable Fred Van Sickle of the U.S. District Court in Spokane about the settlement agreement. Met Trust and PwC declined to comment on the details on the settlement agreement, SpokesmanReview.com relates. Based in Spokane, Washington, Metropolitan Mortgage & Securities Co., Inc., owns insurance businesses. Metropolitan filed for Chapter 11 protection (Bankr. E.D. Wash. Case No. 04-00757), along with Summit Securities Inc., on Feb. 4, 2004. Bruce W. Leaverton, Esq., at Lane Powell Spears Lubersky LLP and Doug B. Marks, Esq., at Elsaesser, Jarzabek, Anderson, Marks, Elliot & McHugh represent the Debtors in their restructuring efforts. When Metropolitan Mortgage filed for Chapter 11 protection, it listed total assets of $420,815,186 and total debts of $415,252,120. MICRON TECH: S&P Assigns 'BB-' Corporate Rating on Negative Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Micron Technology Inc., including the 'BB-' corporate credit rating, on CreditWatch with negative implications. The action reflects challenging market conditions in Boise, Idaho- based Micron's key markets: DRAM (dynamic random access memory) chips used in personal computers; NAND flash chips used in portable music players, cell phones, and other electronic devices; and CMOS image sensors, used in phones and cameras. A degree of economic diversity among the three markets has benefited ratings in the past. However, concurrent weakness in all three markets, coupled with high capital expenditures to expand and upgrade manufacturing facilities, has led to substantial negative cash flows. Prefinancing cash flows were negative $1.2 billion in the four quarters ended Nov. 30, 2007, including the benefit of capital contributions by Intel Corp. to the companies' NAND flash memory joint venture. Micron had cash balances of $2 billion as of Nov. 30, 2007, and debt of $2.5 billion. "We will meet with management to review anticipated business conditions and capital expenditure plans, and will assess the company's likely cash requirements over the intermediate term to resolve the CreditWatch," said Standard & Poor's credit analyst Bruce Hyman. "In the event that we lower the rating, it is unlikely to be by more than one notch." MONEYGRAM INT'L: Agrees to Amend Agreement with Investment Group ---------------------------------------------------------------- MoneyGram International Inc. agreed to amend its agreement with an investment group led by Thomas H. Lee Partners L.P. and Goldman Sachs & Co., concerning a comprehensive recapitalization of the company. The revised agreement comes after the failure of the company to meet certain conditions required to close the agreement, including the requirement that MoneyGram have, on a pro forma basis for the transaction, at least $150 million of unrestricted assets. MoneyGram and the Investors have agreed to make these material changes to the original agreement as disclosed on Feb. 12, 2008: * The agreement will contemplate that the Investors will purchase $760 million of Series B and Series B-1 Preferred Stock, which will initially be convertible into approximately 79% of the common equity of the company. * The Investors' convertible voting preferred stock will be convertible into shares of common stock of the company at a price of $2.50 per share, as opposed to $5 per share under the original terms. * If the company is unable to pay a cash dividend on the Series B and Series B-1 Preferred Stock at a time at which it is required to do so, dividends will accrete at 15%, as opposed to 12.5% under the original terms. * The company is not prohibited from soliciting or discussing alternative proposals. * The company will be required to raise an incremental $50 million of debt on terms and conditions acceptable to the Investors. The transaction would be structured as a purchase of convertible preferred stock in a one-step transaction, as opposed to a two- step transaction under the original terms in which the Investors would have exchanged shares of common stock and nonconvertible preferred stock purchased at the closing for convertible preferred stock upon shareholder approval. While the rules of the New York Stock Exchange generally require shareholder approval prior to the issuance of securities that are convertible into more than 20% of the outstanding shares of a listed company, the NYSE's Shareholder Approval Policy provides an exception in cases where the delay involved in securing shareholder approval would jeopardize the financial viability of the company. In accordance with the NYSE's rule providing that exception, the Audit Committee of the company's board of directors has approved, and the full board of directors has unanimously concurred with, the company's intended use of the exception. The company expects the amended transaction to close upon the conclusion of a shareholder notice period required by the NYSE when utilizing this exception, which is expected to occur no later than March 25, 2008. The transaction will be conditioned upon the receipt of confirmation by the NYSE that the company may rely on the exception. The transaction will also be conditioned upon other mutually acceptable terms and closing conditions to be negotiated by the parties prior to March 14, 2008. No assurances can be given that these terms and closing conditions will be agreed upon or that any transaction will be consummated. MoneyGram has also agreed to reimburse the Investors for transaction-related expenses. Portfolio Update The company completed the sales of certain portfolio assets required to be sold under the terms of the agreement at total loss of approximately $1.6 billion, including $1.2 billion of other- than-temporary impairments recorded in the fourth quarter 2007 as a charge to earnings and realized losses of approximately $350 million in the first quarter of 2008. The investment portfolio consists of cash and cash equivalents, U.S. agencies and agency residential mortgage backed securities. The company expects to file its Dec. 31, 2007 Form 10-K upon funding of the capital transaction. About MoneyGram International Headquartered in Minneapolis, Minnesota, MoneyGram International Inc. -- http://www.moneygram.com/-- (NYSE: MGI) is a payment services company. The company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram had approximately 143,000 money transfer agent locations in 170 countries and territories. * * * As reported in the Troubled Company Reporter on Jan. 18, 2008, Standard & Poor's Ratings Services lowered its long-term counterparty credit rating on MoneyGram International to 'BB' from 'BBB'. The rating will remain on creditwatch negative, where it was placed on Dec. 13, 2007. As reported in the Troubled Company Reporter on Jan. 17, 2008, Fitch Ratings downgraded these ratings for MoneyGram International Inc.: (i) issuer default rating to 'BB-' from 'BBB-'; and (ii) senior unsecured credit facility to 'BB-' from 'BBB-'. These ratings remain on rating watch negative. MORTGAGE ASSISTANCE: Inks Two Note Agreements for $600,000 ---------------------------------------------------------- Effective Feb. 12, 2008, Mortgage Assistance Center Corporation entered into two Note Agreements pursuant to which the company may borrow up to an aggregate of $600,000 through one or more advances. The Note Agreements provide that the company may, from time to time, request advances up to the Funding Commitment; provided, among other things, that (a) no more than two advances may be requested during any calendar month, and (b) no advance shall be less than $25,000. The first advances under the Note Agreements, in an aggregate amount of $300,000, were received by the company on Feb. 12, 2008. Amounts outstanding under the Note Agreements bear interest at the rate of 15.0% p.a., compounded monthly. All outstanding principal and accrued interest on advances is due and payable on demand. Repayment of advances under the Note Agreements is secured by a pledge of the membership or other equity interests held by the company in various joint ventures formed by the company for the purpose of acquiring and holding portfolios of distressed, single- family real estate and non-performing mortgages that the company manages. In connection with the Note Agreements, the company has granted to each lender thereunder, the right, exercisable at any time after the earlier to occur of (a) a going private transaction, or (b) Feb. 12, 2009, to purchase 12.5% of the capital stock of the company for a nominal consideration. The issuance by the company of each option was made in reliance upon the exemption available from registration under Section 4(2) of the Securities Act of 1933. A full-text copy of the Promissory Note dated Feb. 12, 2008, is available for free at http://researcharchives.com/t/s?28e9 A full-text copy of the second Promissory Note also dated Feb. 12, 2008, is available for free at: http://researcharchives.com/t/s?28ea About Mortgage Assistance Mortgage Assistance Center Corporation (OTC BB: MTGC.OB) through its subsidiary, Mortgage Assistance Corporation, operates as a financial services company in the United States. The company purchases, manages, and resells pools of distressed real estate secured mortgages and promissory notes. It acquires both priority and subordinate mortgage loans or liens from banks and other lending institutions. Mortgage Assistance Center primarily purchases nonperforming, charged-off, and subprime mortgages, which are between 90 days and 2 years past due; and secured by residential real estate. The company was founded in 2003 and is based in Dallas, Texas. * * * Sutton Robinson Freeman & Co. P.C., in Tulsa, Oklahoma, expressed substantial doubt about Mortgage Assistance Center Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and accumulated stockholders' deficit at Dec. 31, 2006. At Sept. 30, 2007, the company's consolidated balance sheet showed $9,530,074 in total assets, $11,904,692 in total liabilitis, resulting in a $2,374,618 total stockholders' deficit. NATIONAL CINEMEDIA: Dec. 27 Balance Sheet Upside Down by $572.4MM ----------------------------------------------------------------- National CineMedia Inc.'s balance sheet contained total assets of $463.6 million, total liabilities of $1,036.0 million resulting to a stockholders' deficit of $572.4 million at Dec. 27, 2007. Total revenue for the fourth quarter 2007 increased 27.5% to $94.5 million from $74.1 million for the comparable quarter last year. Total advertising revenue for the fourth quarter 2007 increased 42.7% to $85.6 million from $60.0 million for the comparable quarter last year. Meetings and events revenue decreased 31.0% to $8.9 million in the fourth quarter of 2007 compared to $12.9 million in the comparable quarter last year. National advertising inventory utilization for the quarter increased to 104.4% from 93.7% in the comparable quarter last year. Cost per thousand advertising rates increased 2.1% in the quarter compared to the prior year. Net income for the fourth quarter 2007 was $8.2 million compared to net income of $0.7 million in the comparable quarter last year. For the fiscal year ended Dec. 27, 2007, total revenue was $308.3 million for the post-IPO period and $23.6 million for the pre-IPO period, compared to $219.3 million for the full fiscal year ended Dec. 28, 2006. National advertising inventory utilization for fiscal 2007 increased to 87.0% from 77.5% in 2006. CPM advertising rates increased 1.6% compared to the prior year. For the fiscal year ended Dec. 27, 2007 net income for the post- IPO period was $24.8 million and the net loss for the pre-IPO period was $4.2 million, compared to a net loss of $10.5 million for the full fiscal year ended Dec. 28, 2006. The company's board of directors has authorized the company's fourth quarter cash dividend of $0.15 per share of common stock, payable on March 26, 2008, to stockholders of record on March 12, 2008. "During 2007 we exceeded our original expectations with pro forma adjusted EBITDA growth for the year of over 30%," Kurt Hall, chairman and chief executive officer, said. "This growth reflected the successful execution of our strategy to increase both the depth and breadth of our client base, expand the geographic reach and coverage of our digital network, and continue to improve the experience for theatre patrons." "In 2008, we will continue to further reinforce our market position with the addition of Lowes and Kerasotes screens to our network." Mr. Hall continued. "This strengthening of our theatre network along with our new Internet initiative and other out-of- home digital network platforms that are being incubated will allow us to capture an increasing share of the shift in media spending from traditional media platforms to new digital platforms." About National CineMedia Headquartered in Centennial, Colorado, National CineMedia Inc. (NASDAQ: NCMI) -- http://www.ncm.com/-- is the managing member and owner of 44.8% of National CineMedia LLC, the operator of the digital in-theatre network in North America. The company sells, distributes, produces, and develops on-screen cinema advertising through its network of screens, and provides promotional services to advertisers in theater lobbies. National CineMedia is one of the in-theater networks in North America, with 30-year contracts with the three largest national movie exhibitors in the U.S.: Regal, AMC, and Cinemark. NEWPARK RESOURCES: Buyer Seeks More Time to Arrange Financing ------------------------------------------------------------- Newpark Resources Inc. disclosed that the Hart Scott Rodino waiting period for the sale of Newpark Environmental Services to Trinity TLM Acquisitions LLC has expired. Although all other closing conditions have been or are expected to be satisfied before the end of the first quarter of 2008, Newpark has been advised by Trinity that Trinity will require additional time to arrange financing for this transaction. On Oct. 11, 2007, Newpark Resources reached an agreement to sell its U.S. Environmental Services business to Trinity TLM. Under the terms of the agreement, Newpark will receive $81.5 million in cash, subject to a working capital adjustment and could earn up to an additional $8 million under the terms of a five-year earn out provision in the agreement. Trinity intends to combine the acquired operations with Trinity Storage Services L.P., a waste disposal business based in Texas. As disclosed in March 2007, the company had concluded that the Environmental Services business did not fit its long-term growth strategy. Without waiving its rights under the Membership Interest Purchase Agreement, Newpark has agreed to accommodate the request from Trinity for additional time to arrange for the financing of its acquisition of Newpark Environmental Services. "The continued uncertainty surrounding the credit markets has delayed Trinity's ability to arrange financing," Paul Howes, Newpark's president and chief executive officer, stated. "Although there is no guarantee of a transaction occurring, we currently expect the deal to close before the end of the second quarter of 2008." About Newpark Resources Headquartered in Metarie, Louisiana, Newpark Resources Inc. (NYSE: NR) -- http://www.newpark.com/-- provides drilling fluids, temporary worksites and access roads for oilfield and other commercial markets, and environmental waste treatment solutions. * * * Standard and Poor's placed its long term foreign and local issuer credit rated at B+ in November 2006. The ratings still hold to date. NEWPARK RESOURCES: Postponed Sale Won't Affect S&P's 'B+' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings and outlook on Newpark Resources Inc. (B+/Stable/--) are not affected by the company's announcement that it is postponing the sale of its environmental services division until the second quarter of 2008. S&P views the proposed sale, for approximately $80 million, as favorable for credit because a portion of the proceeds will be applied toward debt repayment under the senior secured facilities, and because exiting the segment allows the company to focus more closely on its core drilling fluids operations. If the company defers the sale further, S&P will comment on the rating and outlook at that time. NEW YORK UNITED: Judge Hardin Confirms Chapter 11 Liquidation Plan ------------------------------------------------------------------ The Hon. Adlai S. Hardin, Jr., of the United States Bankruptcy Court for the Southern District of New York confirmed the Joint Chapter 11 Plan of Liquidation proposed by New York United Hospital Medical Center and its debtor-affiliate, U.H. Housing Corp. As reported in the Troubled Company Reporter on Dec. 17, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement explaining their Joint Plan of Liquidation. The Debtors selected Mark D. Hammond as the plan administrator. Mr. Hammond will bill $200 per hour for his services. Treatment of Claims Under the Plan, Administrative Claims, totaling $1.75 million, will be paid in full on the effective date. At the sole option of the plan administrator, Holders of Secured Claims, totaling $25,000, will be entitled to receive, either: a) the collateral securing the claim; b) cash in an amount up to the allowed amount of the claim; or c) other treatment as may be agreed upon by the plan administrator and the holder. Each holder of Priority Claims, totaling $350,000, will receive cash from the available fund after all valid claims have been paid. Holders of UH Housing Corp.'s General Unsecured Claims have already received full payment on account of their allowed claim. Holders of New York United Hospital Medical Center General Unsecured Claims, totaling $50 million, will be entitled to receive it ratable share of available cash on the effective date. Holders of these claims will be expected to recover between 30% and 35%. A full-text copy of the Disclosure Statement is available for a fee at http://ResearchArchives.com/t/s?28f2 About New York United Headquartered in Port Chester, New York, New York United Hospital Medical Center is a community healthcare provider and a member of the New York-Presbyterian Healthcare System, serving several Westchester communities, including Port Chester, Rye, Mamaroneck, Rye Brook, Purchase, Harrison and Larchmont. The Company filed for chapter 11 protection on Dec. 17, 2004 (Bankr. S.D.N.Y. Case No. 04-23889). Burton S. Weston, Esq., at Garfunkel, Wild & Travis P.C. and Lawrence M. Handelsman, Esq., at Stroock & Stroock & Lavan LLP represent the Debtor in its restructuring efforts. Craig Freeman, Esq. and Martin G. Bunin, Esq., at Alston & Bird LLP represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $39,000,000 and total debts of $78,000,000. NOMURA ASSET: Fitch Holds 'B-' Rating on $27.9MM Class B-6 Certs. ----------------------------------------------------------------- Fitch Ratings upgraded Nomura Asset Securities Corp.'s commercial mortgage pass-through certificates, series 1998-D6, as: -- $37.2 million class B-2 to 'AA+' from 'A+'. In addition, Fitch affirmed these classes: -- $486.6 million class A-1B at 'AAA'; -- $382.7 million class A-1C at 'AAA'; -- Interest-only class PS-1 at 'AAA'; -- $223.4 million class A-2 at 'AAA'; -- $204.8 million class A-3 at 'AAA'; -- $167.5 million class A-4 at 'AAA'; -- $55.8 million class A-5 at 'AAA'; -- $37.2 million class B-3 at 'BBB+'; -- $18.6 million class B-5 at 'B'; -- $27.9 million class B-6 at 'B-'. Class A-1A has been paid in full. Fitch does not rate the interest-only class A-CS1, the $158.2 million class B-1, the $65.2 million class B-4, the $11.2 million class B-7, or the $241 B-7H certificates. The upgrade is attributable to 37.7% of additional paydown since Fitch's last rating action. As of the February 2008 distribution date, the pool has paid down by 48.2% to $1.9 billion from $3.7 billion at issuance. Forty-seven loans (41.8%) have fully defeased since issuance, including the two largest loans in the pool. In addition, one loan (0.45%) is partially defeased. There are two specially serviced loans, both have expected losses. The largest specially serviced loan is secured by a 318,390 square foot retail shopping center located in Utica, Michigan. The loan was transferred in December 2007 for imminent default when its largest tenant expired. The borrower is negotiating a modification. The second largest specially serviced loan is secured by an 82,868 sf retail shopping center located in Sterling Heights, Michigan. The loan was transferred in January 2008 for imminent default because the largest tenant's lease has expired. Fitch has identified and is monitoring twenty six loans of concern (13.8%) that are experiencing declines in occupancy and/or debt service coverage ratios. The largest loan of concern (4.3%) is secured by a retail shopping center located in Springfield, Missouri. The loan is current, but the property has experienced cash flow declines since 2005 due to falling occupancy. At issuance, the transaction included six shadow rated loans that comprised 10.1% of the pool. Four have paid in full; Fox Plaza, Bristol/French Quarter, Westminister Center, and Morris Corporate Center. The two remaining shadow rated loans are fully defeased; the Innkeepers Suites Portfolio (1.7%), and Westin Casaurina (0.7%). NRG ENERGY: Earns $104 Mil. For 2007 Fourth Quarter Ended Dec. 31 ----------------------------------------------------------------- NRG Energy Inc. reported net income of $104 million for the 2007 fourth quarter ended Dec. 31 compared to $30 million net loss for the same period in 2006. For the 2007 fiscal year ended Dec. 31, net income is at $586 million from $621 million income in 2006. Total operating revenues for the 2007 fourth quarter is at $1,382 million from $1,135 million for the 2006 fourth quarter. For the 2007 fiscal year, the company's total operating revenues are $5,989 million from $5,585 million revenues for 2006. Net income from continuing operations for the quarter ended Dec. 31, 2007 of $100 million compared to a net loss of $35 million for fourth quarter of 2006. The fourth quarter of 2006 included an $85 million after-tax charge on the net settlement of hedges from resetting certain legacy Texas hedges to market. Fourth quarter 2007 results include the after-tax impacts of a $24 million reimbursement for development costs for South Texas Project units 3&4 and a $7 million after-tax impairment charge related to commercial paper investments. For the year ended Dec. 31, 2007, the company reported $569 million in net income from continuing operations compared to 2006 net income from continuing operations of $543 million. Annual operating results for 2007 were favorably impacted by higher generation and capacity revenues in the Northeast region and the inclusion of an additional month for NRG Texas since this business was acquired on Feb. 2, 2006. This year's operating results included $21 million of after-tax refinancing expenses, while net income for 2006 was unfavorably impacted by $112 million in after-tax refinancing expenses incurred as part of the NRG Texas acquisition, partially offset by $44 million in after-tax, one-time gains related to the resolution of disputes and litigation. Net cash flow from operations for the 12 months ended Dec. 31, 2007 was $1,517 million, after posting $125 million of collateral, as compared to adjusted cash flow from operations in 2006 of $1,473 million, after collecting $454 million of collateral. "Our 2007 results demonstrate our ability to stay focused on delivering strong operating results while moving aggressively to position NRG for the future," David Crane, NRG president and chief executive officer, commented. "Particularly gratifying to me was the top quartile safety performance achieved across our entire fleet." Liquidity at Dec. 31, 2007 was approximately $2.7 billion, up $417 million since Sept. 30, 2007 and up approximately $488 million since the end of 2006. Letter of credit availability increased during the fourth quarter 2007 as counterparties on trading hedges that previously required a combination of LCs and a second lien position against the company's assets as collateral were provided a first lien position in exchange for the return of the posted LCs. During February 2008, the company moved an additional counterparty to the first lien position that resulted in an additional return of $65 million in LCs. As part of NRG's amended and restated credit agreement executed on June 8, 2007, the company obtained the ability to move its existing second lien counterparty exposure to a first lien position. The $72 million net cash decrease during the fourth quarter of 2007 resulted from cash used to pay down debt, repurchase shares and fund capital expenditures, which more than offset strong cash flow from operations. Cash used for financing activities during the fourth quarter amounted to $439 million and included $347 million of debt repayments, $85 million for the repurchase of 2,037,700 shares of common stock and $14 million in preferred dividends. Having experienced significant financial, organizational and operational growth since emerging from bankruptcy in 2003, the company is implementing several enhancements to the company's management structure to position the company for further gains through initiatives such as RepoweringNRG and FORNRG while supporting future growth. "Four years ago we engaged in revolutionary management change at NRG; today we announce an evolutionary change intended to focus our top management team on the extraordinary opportunities available to NRG," Mr Crane stated. "We are dedicated to achieving a new wave of value creation for our shareholders." As of Dec. 31, 2007, the company's balance sheet showed total assets of $19.2 billion, total liabilities of $13.5 billion and a total stockholders' equity of $5.5 billion. About NRG Energy Hearquartered in Princeton, New Jersey, NRG Energy Inc. (NYSE: NRG) -- http://www.nrgenergy.com/-- owns and operates a diverse portfolio of power-generating facilities, primarily in Texas and the Northeast, South Central and West regions of the U.S. Its operations include baseload, intermediate, peaking, and cogeneration and thermal energy production facilities. NRG also has ownership interests in generating facilities in Australia, Germany and Brazil. * * * On January, 2006, Moody's Investor's Service assigned to NRG Energy Inc. its 'Ba3' long term corporate family rating and its 'B1' senior unsecured debt rating. Moody's gave its negative outlook on May, 2007. These rating actions still holds to date. ORECK CORP: Debt Under $215MM Credit Pact Sold At Almost 50% Off ---------------------------------------------------------------- One or more members of the current lending syndicate under Oreck Corporation's $215,000,000 Credit Agreement dated Feb. 2, 2005, sold their participations for 51.7 cents-on-the-dollar last week, according to syndicated loan pricing data compiled by The Wall Street Journal. Royal Bank of Scotland serves as the Administrative Agent under the revolving and term loan facility, and the original lenders were Chase Manhattan and GE Capital, according to data provided by Bloomberg News. As reported by the Troubled Company Reporter on July 27, 2007, Standard & Poor's Ratings Services withdrew all ratings on Oreck, including its 'CCC-'corporate credit ratings, at the company's request. Before the action, Oreck's Corporate Credit was rated 'CCC-' with a negative outlook and its Senior Secured Local Currency was rated 'CCC-.' In 2005, the TCR reported that S&P placed the 'B+' corporate credit and senior secured debt ratings on Oreck on CreditWatch with negative implications. S&P's credit analyst Alison Sullivan then said "The CreditWatch placement follows the aftermath of Hurricane Katrina and reflects the potential damage to the company's headquarters and more importantly, to its primary manufacturing facility, and our concerns pertaining to the length and magnitude of disruption of its business." The TCR reported on July 26, 2007 that Moody's Investors Service withdrew all ratings of Oreck because Moody's believes it lacks adequate information to maintain a rating. The ratings withdrawn were: -- Corporate Family Rating, previously rated Caa1 -- Probability of Default Rating, previously rated Caa2 -- $20 million Senior Secured Revolver due Jan. 31, 2011, previously rated Caa1 (LGD3, 32%) -- $195 million Senior Secured Term Loan due Jan. 31, 2012, previously rated Caa1 (LGD3, 32%) Based in New Orleans, Louisiana, Oreck Corporation -- http://www.oreck.com/-- manufactures and markets vacuum cleaners and air purifiers under the "Oreck" brand name. It has its principal manufacturing facilities in Cookeville, Tennessee. The company was founded by David Oreck in the U.S. in 1963. The family-owned corporation began as a company manufacturing upright vacuum cleaners for the hotel industry in the U.S. Oreck now sells throughout North America and South America, as well as in Europe and Asia. PEDRO'S OF BROOKFIELD: Case Summary & 20 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Pedro's of Brookfield, Inc. fdba Brookfield Restaurant, Inc. W297 N1915 Glen Cove Rd. Pewaukee, WI 53072 Bankruptcy Case No.: 08-22069 Type of Business: The Debtor is a restaurant. Chapter 11 Petition Date: March 9, 2008 Court: Eastern District of Wisconsin (Milwaukee) Debtor's Counsel: Dayten P. Hanson, Esq. Hanson & Payne, LLC 1841 N. Prospect Avenue Milwaukee, WI 53202 Tel: (414) 271-4550 Fax: (414) 271-7731 dayten@ameritech.net Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's list of its 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Anchor Bank $700,000 25 West Main Street Madison, WI 53703 Sysco Food Services of Baraboo LLC $90,363 910 South Boulevard Baraboo, WI 53913 Thomas and Christine Beckmann $84,000 W 297 N1915 Glen Cove Road Pewaukee, WI 53072 Inland Commercial Property Management $34,510 Rewards Network $25,000 Mark Zierath $20,000 Edward Don & Co $8,262 Pedro's Mexican Reataurant, Inc. $7,151 City of Brookfield $6,455 El Rey Mexian Products, Inc. $6,114 Wisconsin Department of Revenue $5,775 WE Energies $4,901 Clipper Magazine $4,247 ASC1 $3,409 Los Altos Agave $2,952 WOW Distributing Co, Inc. $2,876 International Produce $2,648 Capital Husting Company, Inc. $1,968 Humana Inc. $1,515 Mawicke & Goisman, S.C. $1,400 PHARMED GROUP: Exclusive Plan Filing Period Extended to April 25 ---------------------------------------------------------------- The Honorable Robert Mark of the United States Bankruptcy Court for the Southern District of Florida further extended Pharmed Group Holdings Inc. and its debtor-affiliates' exclusive period to file a Chapter 11 plan until April 25, 2008, Bloomberg News reports. Bloomberg says that Court also extended the Debtors' exclusive period to solicit acceptances of that plan until May 25, 2008. As reported in the Troubled Company Reporter on Feb. 29, 2008, the Debtors told the Court that they need sufficient time to finalized and file a disclosure statement and proposed Chapter 11 plan. The Debtors and the Official Committee of Unsecured Creditors in their cases are in talks regarding the terms of a joint liquidating plan. The Debtors said that they have made good progress towards reorganization and complied with all of the operating guidelines of the United States Trustee. The Debtors stated that no creditors in interest will be prejudiced by the extension of their exclusive periods. About Pharmed Group Headquartered in Miami, Florida, Pharmed Group Holdings Inc. -- http://www.pharmed.com/-- and its affiliates sends drugs and medical supplies on Caribbean cruises. They distribute medical, rehabilitative, and surgical supplies throughout the southeastern U.S., as well as Caribbean, and Central and South American countries. They deliver products made by Dynatronics, Welch Allyn, and Smith & Nephew. In addition to their distribution businesses, they make and distribute vitamins, minerals, nutraceuticals, and dietary supplements. The company and four debtor-affiliates filed for chapter 11 protection on Oct. 26, 2007 (Bankr. S.D. Fl. Case Nos. 07-19187 through 07-19191). Paul Steven Singerman, Esq., and Brian Rich, Esq., at Berger Singerman PA, represent the Debtors. Trumbull Group LLC serves as the Debtors' claims and noticing agent. The U.S Trustee for Region 21 appointed creditors to serve on an Official Committee of Unsecured Creditors on these cases. Shane Reed/Hank Hacgerich represents the Committee. When the Debtors filed for protection against their creditors, it listed assets between $1 million to $100 million and debts of more than $100 million. PILGRIM'S PRIDE: Sells Pennsylvania Facility & Exits Turkey Biz --------------------------------------------------------------- Pilgrim's Pride Corporation disclosed the sale of its turkey production facility and distribution center in New Oxford, Pennsylvania, to New Oxford Foods, LLC, a subsidiary of Hain Pure Protein Corp. Financial terms were not disclosed, and there was no material gain or loss as a result of this transaction. As a result of the sale, which is effective immediately, Pilgrim's Pride is no longer a producer of turkey, a business it entered in 2001 with the purchase of WLR Foods, Inc. Pilgrim's Pride reported total U.S. turkey sales of $122.3 million for fiscal 2007. The New Oxford facility processes 175,000 turkeys per week and employs approximately 530 workers, including the distribution center. "The sale of the New Oxford complex will allow Pilgrim's Pride to focus on our long-term strategy of building our core chicken business," said Clint Rivers, president and chief executive officer. "Despite the positive improvements made in our turkey business over the past few years, we found that our small size and scale in this segment made it difficult to achieve acceptable levels of profitability on a consistent basis." Mr. Rivers said the sale of the New Oxford complex is not expected to have any significant short-term impact on Pilgrim's Pride's current turkey customers. As part of the sale agreement, New Oxford Foods will continue to co-pack product for Pilgrim's Pride through the end of September, and Pilgrim's Pride will work closely with customers to avoid unexpected interruptions in delivery of frozen turkeys through Thanksgiving. Under the terms of the agreement, New Oxford Foods will offer positions to all New Oxford employees and will honor all current contracts with Pilgrim's Pride turkey growers. "We believe the New Oxford turkey operation will present an excellent opportunity for New Oxford Foods to concentrate its resources on building its all-natural business for the long term and unlocking its true growth potential in this unique market segment," Mr. Rivers said. 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. PLASTECH ENGINEERED: Court Okays Allard & Fish as Local Counsel --------------------------------------------------------------- Plastech Engineered Products Inc. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Eastern District of Michigan to employ Allard & Fish P.C., as their local bankruptcy counsel, nunc pro tunc to Feb. 1, 2008. As reported in the Troubled Company Reporter on Feb. 15, 2008, the firm is expected to: (a) advise the Debtors regarding their various relationships with vendors, existing supply contracts, continuity of supply issues and related matters, and negotiate and deal with vendors; (b) advise the Debtors on matters relating to the evaluation of the assumption, rejection or assignment of unexpired leases and executory contracts; (c) advise the Debtors with respect to their powers and duties as debtors in possession in the continued management and operation of their business and properties; (d) attend meetings and negotiate with representatives of creditors and other parties in interest; (e) take all necessary action to protect and preserve the Debtors' estates, including prosecuting actions on the their behalf, defending any action commenced against the Debtors and representing their interests in negotiations concerning all litigation in which the Debtors are involved, including, objections to claims filed against the estates; (f) prepare motions, applications, answers, orders, reports, and papers necessary to the administration of the Debtors' estates; (g) take any necessary action on behalf of the Debtors to obtain confirmation of the Debtors' proposed plan of reorganization; (h) represent the Debtors in connection with obtaining post petition loans if necessary; (i) advise the Debtors in connection with any potential sale of assets; (j) appear before the Bankruptcy Court, any appellate courts and the United States Trustee, and protect the interests of the Debtors' estates before those courts and the U.S. Trustee; and (k) perform all other necessary legal services and provide all other legal advice to the Debtors in connection with the Debtors' Chapter 11 cases. Allard & Fish will exert efforts to avoid duplication of its services with those of the Debtors' proposed lead bankruptcy counsel, Skadden, Arps, Slate, Meagher & Flom LLP, or the Debtors' proposed special corporate and litigation counsel, Jones Day. Allard & Fish intends to apply for compensation for professional services rendered to the Debtors in connection with their Chapter 11 cases, subject to the Court's approval and in compliance with applicable provisions of the Bankruptcy Code and the Local Rules and orders of the Court. For the contemplated services, Allard & Fish will be paid based on the firm's hourly rates: Designation Hourly Rate ----------- ----------- Attorney $375 Expert Witness $450 Paraprofessionals $80 Deborah L. Fish, Esq., a member of Allard & Fish, related that the firm received a $30,000 retainer. Ms. Fish assured the Court that Allard & Fish is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code and does not hold or represent any interest adverse to the Debtors' estates. 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. (Plastech Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLASTECH ENGINEERED: Wants JCI Contractual Disputes Resolved ------------------------------------------------------------ Plastech Engineered Products Inc. and its debtor-affiliates disagree with Johnson Controls, Inc.'s contentions and its characterizations of the Debtors' performance and ability to perform under the parties' contracts. JCI, in its request for immediate assumption or rejection of its contracts with the Debtors, had claimed before the U.S. Bankruptcy Court for the Eastern District of Michigan: (i) that the Debtors cannot perform under the Plastic Components Sourcing Agreement, dated October 5, 2001, without financial accommodations from JCI and other major customers; (ii) that without assumption of the PCSA, the Debtors cannot reorganize and therefore an early election to assume or reject the JCI Contracts will not affect the Debtors' ability to reorganize; and (iii) that allowing the Debtors until plan confirmation to assume or reject the Contracts would cause "overwhelming hardship" to JCI. On behalf of the Debtors, Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, contends it was JCI who failed to perform under the JCI Contracts, which undermined the Debtor's liquidity position. The Debtors, however, say they agree with JCI that a reasonable time be given in order to determine the meaning and terms of the JCI Contracts, a task which is critical to the company's reorganization efforts. Thus, the Debtors aver that the Court should set a reasonable time by which the Debtors must elect to assume or reject the PCSA and the parties' operating agreement, dated April 1, 2007. The Debtors assert that Court, before directing them to either assume or reject the JCI Contracts, should resolve the numerous outstanding contractual disputes between the parties. Plastech relates it is prepared to litigate its contractual disputes with JCI on an expedited basis. The Court asks the Court to hear the parties' underlying contractual disputes with respect to the JCI Agreements no later than June 30, 2008. The Debtors propose that any Order to Compel be entered not more than seven days after the Court enters an order regarding the terms and conditions of the JCI Agreements. 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. (Plastech Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLASTECH ENGINEERED: Wants Non-cooperating Vendors Summoned ----------------------------------------------------------- Plastech Engineered Products Inc. and its debtor-affiliates sent notices to four vendors requiring them to appear before the Honorable Phillip J. Shefferly of the U.S. Bankruptcy Court for the Eastern District of Michigan due to their refusal to continue providing goods and services post-bankruptcy. As reported in the Troubled Company Reporter on Feb. 25, 2008, the Debtors sought authority from the Court to set up procedures to address those vendors who repudiate and refuse to honor their postpetition contractual obligations. To maintain a continuous and timely supply chain, the Debtors worked diligently to preserve its existing relationships with certain suppliers whose products and services are critical for their ongoing business operations, the Debtors related. Since the bankruptcy filing, some of the Debtors' critical vendors and suppliers, notwithstanding the fact that there may not be any contracts obligating them to continue to supply the Debtors, have nonetheless honored their past relationship with the Debtors. However, several critical vendors have refused to continue to supply goods to the Debtors unless the Debtors agree to pay their prepetition claims in full. The Debtors said they paid the alleged claims of the four "repudiating vendors", but these parties have discontinued providing services to the Debtors pursuant to their contracts. Vendor Claims Paid ------ ----------- Marquadt Switches, Inc., $240,400 Fenix Development LLC $54,651 Kautex (Guangzhou) Plastic Technology Co., Ltd, and, Kautex Textron CVX, Ltd. $51,614 Kautex Textron CVS, Ltd., and/or, Kautex Hengoed $40,835 Plastech, at the hearing, will demonstrate that it has one or more enforceable contracts with the repudiating vendors, and, that the vendors are in violation of the contracts and of Sections 362 and 365 of the U.S. Bankruptcy Code. Marquadt, et al., are directed to appear before Judge Shefferly on April 2, 2008, at 9:30 a.m. The Debtors contended that those vendors that are parties to enforceable contracts with the Debtors should not be permitted to extract additional, non-contractual concessions from the Debtors. 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. (Plastech Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLASTECH ENGINEERED: Wells Fargo Seeks Equipment Lease Payments --------------------------------------------------------------- Wells Fargo Equipment, Inc., asks the U.S. Bankruptcy Court for the Eastern District of Michigan to direct Plastech Engineered Products Inc. and its debtor-affiliates to pay all obligations related to their lease contract, and to compel Debtors' decision to assume or reject the lease. Wells Fargo Equipment claims $219,158 in receivables, for equipment it leases to the Debtors, for the Feb. 29, 2008 due date. The Debtors have not advised Wells Fargo Equipment of their intention to pay the March 31, 2008 lease nor future postpetition obligations under the contract, relates Marc M. Bakst, Esq., at Bodman LLP, in Detroit, Michigan, counsel for Wells Fargo Equipment. In addition, Mr. Bakst tells the Court, Wells Fargo Equipment requested inspection of the leased equipment, but was denied permission, despite repeated requests. The lessor believes Plastech is using the equipment in its business operation. Mr. Bakst notes that there is a disparate treatment in the payment of administrative claims as, citing that the Debtors are paying other administrative claims that are entitled to no greater priority than their lease obligations with Wells Fargo Equipment. 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. (Plastech Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PNM RESOURCES: Fitch Cuts Issuer Default to BB+ from BBB- --------------------------------------------------------- Fitch has downgraded PNM Resources and subsidiaries Public Service Company of New Mexico and Texas New Mexico Power Company as: PNMR -- Issuer Default Rating downgraded to 'BB+' from 'BBB-'; -- Short-term IDR to 'B' from 'F3'. PNM -- IDR downgraded to 'BB+' from 'BBB-'; -- Short-term IDR to 'B' from 'F2'; -- Senior unsecured to 'BBB-' from 'BBB'; -- Preferred rating to 'BB+' from 'BBB-' -- Short-term debt rating to 'B' from 'F2'. TNMP -- IDR downgraded to 'BB+' from 'BBB-'; -- Senior unsecured to 'BBB-' from 'BBB'. The Rating Outlook is Stable. The ratings take into consideration the significant operating challenges to PNMR's regulated and unregulated operations and better reflect the company's relatively weak credit metrics and business risk profile. The Stable Rating Outlook assumes regulatory outcomes in pending and prospective New Mexico and Texas rate proceedings will result in credit metrics that are consistent with the new ratings. The ratings assume future investment will result in a regulated/unregulated business mix consistent with current proportions and will be funded with a balanced mix of equity and debt similar to PNMR's existing capital structure. Fitch notes that the recent decline in the company's stock price and lower per share earnings forecast has made PNMR's access to equity markets more expensive. In addition, pending rate case outcomes and/or failure to address recent operating difficulties could lead to financial pressure. Operating challenges include: i)under-budget performance of certain base load generating facilities owned by PNM; ii) growing reliance on natural gas-fired generation and purchase power resources to meet above-average jurisdictional load growth coupled with the absence of a fuel adjustment clause; and iii) lower 2007 earnings comparisons at unregulated retail electric supply subsidiary First Choice Power. Commodity price risk at FCP is a source of concern, in Fitch's view. Fitch anticipates PNMR will continue its super regional strategy to grow its presence in regulated and unregulated electric markets in Texas and the West. The recently announced transaction with Continental Energy Systems, in which PNMR is to sell its New Mexico natural gas distribution utility and acquire certain ERCOT and non-ERCOT electric utility assets in Texas, is consistent with this strategy. Fitch views this transaction favorably as it should improve the balance sheet. Importantly, Fitch expects PNMR's core electric utility operation in New Mexico to evolve into a more traditional regulatory structure. Under that arrangement, PNM was able to own, develop and jointly dispatch regulated and non jurisdictional generating assets. In addition, the rate plan set rates, phasing in a 6.5% rate cut, through 2007. Toward that end, PNM has recently announced the sale of several wholesale contracts for $6.8 million and will decide on what direction to proceed with regard to its ownership interest in Luna and Lordsburg gas-fired generating facilities. Choices include adding the assets to rate-base, sale to a third party or transfer to an unregulated affiliate within the PNMR corporate family. PNM filed its general rate case in February 2007 to determine post-rate plan revenues and is currently supporting a $77 million rate increase based on a 10.75% authorized return on equity and a 51% equity ratio as a percentage of total capitalization. PNM requested that new rates take effect at the conclusion of the rate freeze scheduled for Dec. 31, 2007. However, in a negative development, the New Mexico Public Regulation Commission directed the utility to file supplemental testimony, delaying a final order and effectively extending the rate freeze until May 2008. On March 6, 2008 the administrative law judge in the GRC issued its proposed order recommending a $24 million (4.3%) rate increase based on a 9.71% authorized ROE. The PRC staff supports an $18.3 million (3%) rate increase based on a 9.1% authorized ROE. Both the ALJ PO and staff recommendation reject PNM's request to implement a fuel adjustment clause. Fitch notes that the commission is not bound by either the ALJ PO or staff recommendation. Nonetheless, commission approval of a final order consistent with the ALJ PO or staff recommendation would result in lower than projected revenues, earnings and cash flows and greater cash flow volatility. POWERLINX INC: Inks Asset Purchase Agreement with Zone Defense LLC ------------------------------------------------------------------ Powerlinx Inc. has sold all of the raw material and finished goods inventory relating to its Zone Defense accident avoidance systems business, pursuant to the terms of an Asset Purchase Agreement with Zone Defense LLC, dated Feb. 29, 2008. As consideration, Zone Defense LLC provided the company with a promissory note in the principal amount of $62,200 bearing interest at 6% per annum due 33 months from the date of issuance. In addition, pursuant to the terms of the Asset Purchase Agreement, Zone Defense LLC will be obligated to make certain "Earn Out" payments to the company. Pursuant to the terms of the Asset Purchase Agreement, Zone Defense LLC agreed to the cancellation of $133,598 in notes due to it. In addition, Zone Defense LLC agreed to forego certain other amounts totaling $48,609. Thus, the aggregate liabilities cancelled or forgiven by Zone Defense LLC in relation to the Asset Purchase Agreement totaled $189,142. A full-text copy of the Asset Purchase Agreement by and between Powerlinx Inc. and Zone Defense LLC dated Feb. 29, 2008, is available for free at http://researcharchives.com/t/s?28f5 About Powerlinx Inc. Headquartered in St. Petersburg, Florida, PowerLinx Inc. (OTC BB: PWLX) -- http://www.power-linx.com/-- develops, manufactures and markets products and applications that transmit voice, video, audio and data either individually or in any and all combinations over power lines, twisted-pair wires and coax in AC and DC power environments, on any and all power grids. The company has also developed, manufactured, and marketed different kinds of underwater video cameras, lights and accessories for the marine, commercial and consumer retail markets as well as accident avoidance systems for small and large vehicles. * * * As reported in the Troubled Company Reporter on May 10, 2007, Aidman, Piser & Company PA, in Tampa, Florida, expressed substantial doubt about Powerlinx 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 auditor pointed to the company's recurring losses, strained liquidity, and stockholders' deficit. As reported in the Troubled Company Reporter on Jan. 3, 2008, Powerlinx Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $1.65 million in total assets and $4.81 million in total liabilities, resulting in a $3.16 million total stockholders' deficit. PRB ENERGY: Wants to Access PRB Funding's $300,000 Loan Facility ---------------------------------------------------------------- PRB Energy Inc. asked the United States Bankruptcy Court for the District of Colorado for permission to access $300,000 in postpetition financing from PRB Funding LLC, The Associated Press reports. The Debtor told the Court that prior to the bankruptcy filing, PRB Funding extended the money, which is currently deposited with the Colorado State Bank account, AP relates. According to the report, the Debtor intends to use the money for its operational expenses. PRB Funding's officers, Gus Blass, Reuben Sandler and Jim Schadt are also part of the Debtor's board of directors, AP reveals. 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. About PRB Energy Headquartered in Denver, PRB Energy, Inc., formerly PRB Gas Transportation Inc., -- http://www.prbenergy.com/-- operates as independent energy companies engaged in the acquisition, exploitation, development and production of natural gas and oil. In addition, the company and its affiliates 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. They owe 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. PRIMARY ENERGY: Posts $21.0MM Net Loss for Year 2007 Ended Dec. 31 ------------------------------------------------------------------ Primary Energy Recycling Corporation reported a $21.0 million net loss for the fiscal year ended Dec. 31, 2007 compared to $18.4 million net loss for fiscal 2006. For the 2007 fiscal year, the company generated revenues of $75.0 million decreased 13.8% from $87.0 million total revenues in 2006. As of Dec. 31, 2007, the company's consolidated balance sheet reflected a total shareholders' equity of $93.0 million. "The fourth quarter was our best quarter in a year," John Prunkl, president of the company, said. "Throughout 2007, the company's facilities generally performed effectively. "However, we had disappointing financial performance at Harbor Coal, as well as a 35-day unplanned outage at our North Lake facility which also impacted results," Mr. Prunkl continued. "We continue to work to amend the Harbor Coal agreement with a goal of providing a more simplified tolling formula that is intended to yield improved stability and a more predictable cash flow. "It is our understanding all senior management approvals have been obtained by our customer and the amendment is now before their board for final ratification," Mr. Prunkl added. "While progress has been encouraging and the process is coming to a conclusion, the agreement will not be executed as of Feb. 29, 2008. "As a result, the company is subject to provisions outlined in the second amendment and limited waiver to credit agreement that may result in cash sweeps and additional interest costs depending upon financial results," Mr. Prunkl stated. "If the Harbor Coal amendment is executed subsequent to Feb. 29, 2008, the cash sweep and increased interest provisions are eliminated." During 2007, the company paid distributions of CDN$0.83 per EIS to unitholders which compares favorably to the current annualized CDN$0.80 distribution level. At year-end 2007, the company had cash on-hand of $15.3 million and $12.0 million of undrawn revolver capacity. In the fourth quarter of 2007, the company earned revenue of $21.2 million, an increase of 15.8% from the fourth quarter of 2006 primarily due to increased Energy Service revenue at the company's Harbor Coal facility. Total operating and maintenance expenses for the fourth quarter of 2007 were $7.6 million, up 12.5% from the fourth quarter of 2006 due to additional service fee expense at the Harbor Coal facility. General and administrative expenses for the fourth quarter of 2007 were $2.9 million, an increase of 46.9% over the same period in the prior year which is the result of 2007 additional property tax expenses and professional fees totaling $0.3 million combined with a fourth quarter 2006 management incentive fee expense reduction of $0.6 million. For the full year of 2007, operating and maintenance expenses in 2007 were $30.1 million, down 4.1% over 2006 primarily due to lower production costs at the company's Harbor Coal facility. General and administrative expenses for the year were $11.1 million, an increase of 19.0% from the prior year primarily related to a $2.2 million property tax settlement realized in 2006 which did not recur in 2007. About Primary Energy Based in Oak Brook, Illinois, Primary Energy Recycling Corporation (TSX: PRI.UN) -- http://www.primaryenergyrecycling.com/-- indirectly owns and operates four recycled energy projects and a 50% interest in a pulverized coal facility. The projects have a combined electrical generating capacity of 283 megawatts and a combined steam generating capacity of 1.8 MMlbs/hour. Primary Energy captures and recycles waste energy from industrial and electric generation processes and converts it into reliable and economical electricity and thermal energy for its customers' use. The company owns a majority interest in Primary Energy Recycling Holdings LLC. * * * As reported in the Troubled company Reporter on Nov. 8, 2007, Primary Energy Recycling Corporation disclosed that a default under its senior debt credit agreement is likely once the preliminary inventory adjustment information it received from the site host of its Harbor Coal facility proves to be accurate. The preliminary information, which the company believes to be true, indicates that the company's financial results for the period ended Sept. 30, 2007 will demonstrate failure to comply with the PERC Consolidated Leverage Ratio covenant under its senior credit facility. QUEBECOR WORLD: Court OKs Rejection of Banc of America Lease Pact ----------------------------------------------------------------- Quebecor World Inc. and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to reject an aircraft lease agreement with Banc of America Leasing and Capital, LLC. As reported in the Troubled Company Reporter on March 6, 2008, the Debtors asked the Court to lift the automatic stay so that Banc of America can exercise its rights to the Aircraft Lease Agreement, which includes one Bombardier CL-601-3A aircraft, two General Electric CF34-3A engines and certain appliances, parts, instruments, appurtenances, accessories, furnishings, seats and other equipment incorporated to the aircraft. The Aircraft Lease expired on January 18, 2008. The Debtors want to reject the Aircraft Lease effective as of Jan. 21, 2008, out of an abundance of caution, and to confirm that their bankruptcy estates do not retain any equitable interest in the aircraft or the Aircraft Lease. The Debtors sought clarification that Banc of America's exercise of remedies under the Aircraft Lease and actions to take possession of the aircraft will not be construed as a violation of the automatic stay under Section 362 of the Bankruptcy Code. As of Jan. 7, 2008, the Debtors owed $12,218,351 under the Lease. According to Michael Canning, Esq., at Arnold & Porter LLP, in New York, the aircraft is not operational and is hangared in Montreal, Canada. The Debtors are also continuing to incur costs associated with its storage and insurance. 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. 8; 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: Court Approves Creditor Information Protocol ------------------------------------------------------------ The Hon. James Peck of the U.S. Bankruptcy Court for the Southern District of New York approved a stipulation allowing a Creditor Information Protocol in the bankruptcy case of Quebecor World Inc. and its debtor-affiliates. Creditor Information Protocol is effective as of March 6, 2008, however, its terms will also apply to information in the Official Committee of Unsecured Creditors' possession prior to March 6, 2008. As reported in the Troubled Company Reporter on March 5, 2008, the Debtors and the Committee asked the Court to approve the protocol asserting that it will ensure the Committee compliance with its obligations under Section 1102(b)(3)(A) of the Bankruptcy Code and to protect the Debtors' confidential, privileged or proprietary information. The Debtors will assist the Committee in identifying, receiving any information from any entity in connection with an examination pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure. Requests for information may be addressed to: Arnold & Porter LLP Attn: Michael J. Canning 399 Park Avenue, New York, New York 10022 quebecorservice@aporter.com The stipulation also governs the release of confidential information of third parties and exculpation provisions. A full-text copy of the Creditor Information Protocol is available for free at http://ResearchArchives.com/t/s?28b0 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. 8; 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: Can Pay Non-Employee Sales Brokers' Commissions --------------------------------------------------------------- Quebecor World Inc. and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to pay commissions that accrued prepetition to non-employee sales brokers. As reported in the Troubled Company Reporter on March 7, 2008, the Debtors' sales and marketing efforts are done through both employees and third-party brokers. The Debtors previously sought and obtained the Court'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. Michael Canning, Esq., at Arnold & Porter LLP, in New York, related 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 said. 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. 8; 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. RAMP SERIES: 18 Tranches Acquire Moody's Rating Downgrades ---------------------------------------------------------- Moody's Investors Service downgraded the ratings of eighteen tranches issued in six transactions under the RAMP 2004-RS shelf. The collateral backing each tranche consists primarily of first lien adjustable-rate and fixed-rate mortgage loans acquired by Residential Funding Corporation under the Negotiated Conduit Asset Program. The NCA Program was established for the acquisition of loans that do not comply with some of the criteria of RFC's standard programs. The deals being reviewed have experienced an increasing proportion of severely delinquent loans while the amount of available credit enhancement has been reduced from losses and stepdown. The timing of losses coupled with the passing of stepdown triggers has caused the protection available to the subordinated bonds to be diminished. Complete rating actions are: Issuer: RAMP Series 2004-RS6 Trust -- Cl. M-II-2; downgraded from A2 to Baa1 -- Cl. M-II-3; downgraded from A3 to Baa3 -- Cl. M-II-4; downgraded from Baa1 to B1 -- Cl. M-II-5, downgraded from Baa2 to Caa1 Issuer: RAMP Series 2004-RS8 Trust -- Cl. M-I-3; downgraded from Baa2 to Ba1 Issuer: RAMP Series 2004-RS9 Trust -- Cl. M-II-3; downgraded from A3 to Baa3 -- Cl. M-II-4; downgraded from Baa1 to Ba2 -- Cl. M-II-5, downgraded from Baa2 to B1 Issuer: RAMP Series 2004-RS10 Trust -- Cl. M-II-2; downgraded from A2 to Baa2 -- Cl. M-II-3; downgraded from A3 to Ba1 -- Cl. M-II-4; downgraded from Baa1 to B1 -- Cl. M-II-5, downgraded from Baa2 to Caa2 Issuer: RAMP Series 2004-RS11 Trust -- Cl. M-3; downgraded from A2 to Baa2 -- Cl. M-4; downgraded from A3 to Baa3 -- Cl. M-5; downgraded from Baa1 to Ba3 Issuer: RAMP Series 2004-RS12 Trust -- Cl. M-II-5; downgraded from A3 to Baa1 -- Cl. M-II-6; downgraded from Baa1 to Baa3 -- Cl. M-II-7; downgraded from Baa2 to Ba3 RH DONNELLEY: Moody's Holds Ratings; Revises Outlook to Negative ---------------------------------------------------------------- Moody's Investors Service affirmed all of R.H. Donnelley Corporation's ratings, including its B1 Corporate Family rating while changing the rating outlook to negative. Details of the rating action are: Ratings affirmed: R. H. Donnelley Corporation -- Corporate Family rating: B1 -- PDR: B1 -- Speculative Grade Liquidity rating: SGL-1 -- 8.875% series A-4 senior notes due 2017: B3, LGD5, 84% -- 6.875% senior notes due 2013: B3, LGD5, 84% -- 6.875% Series A-1 senior discount notes due 2013: B3, LGD5, 84% -- 6.875% Series A-2 senior discount notes due 2013: B3, LGD5, 84% -- 8.875% Series A-3 senior notes due 2016: B3, LGD5, 84% R. H. Donnelley Inc. -- Senior secured revolving credit facility due 2009: Ba1, LGD2, 15% -- Senior secured term loan A due 2009: Ba1, LGD2, 15% -- Senior secured term loan D due 2011: Ba1, LGD2, 15% Dex Media West LLC -- Senior secured revolving credit facility due 2009: Ba1, LGD2, 15% -- Senior secured term loan A due 2009: Ba1, LGD2, 15% -- Senior secured term loan B due 2010: Ba1, LGD2, 15% -- Senior secured term loan B-1 due 2010: Ba1, LGD2, 15% -- 8.5% senior unsecured notes due 2010: Ba3, LGD3, 41% -- 5.875% senior unsecured notes due 2011: Ba3, LGD3, 41% -- 9.875% senior subordinated notes due 2013: B1, LGD3, 49% Dex Media East LLC -- $100 million senior secured revolving credit facility due 2013: Ba1, LGD2, 15% -- $750 million senior secured delayed draw term loan A due 2013: Ba1, LGD2, 15% -- $350 million senior secured delayed draw term loan B due 2014: Ba1, LGD2, 15% Dex Media, Inc. -- 8% senior unsecured global notes due 2013: B2, LGD4, 61% -- 9% senior discount global notes due 2013: B2, LGD4, 61% The rating outlook is changed to negative from stable. The change in rating outlook to negative follows Donnelley's recently- lowered guidance for 2008 financial results, and management's expectation of further cuts in customer spending on yellow pages print advertising in most of its markets, especially hard-hit sub-prime markets in Florida, California and Arizona. In addition the negative outlook underscores Moody's assessment that softening business conditions will preclude a reduction of leverage below 6.5 times debt to EBITDA over the rating horizon. Moody's estimates that the company would currently need to reduce debt by at least $1.5 billion to attain this leverage metric, based upon LTM results. R. H. Donnelley's ratings continue to reflect the company's high leverage (exceeding 7.0 times debt to EBITDA), its vulnerability to the limited growth prospects of the directory publishing business, the increasing threat posed by competing directory publishers and web-based directory service providers in virtually all its markets, a recent erosion of equity support provided to debtholders as a result of the substantial decline in the market value of the company's equity, and the dependence of the holding companies (R.H. Donnelley Corporation and Dex Media, Inc.) upon continued covenant- compliant restricted payments from the three major operating companies in order to service their debt obligations. Over the past few months, Donnelley has completed the repurchase of $96 million of shares and financed a $345 million acquisition of Business.com with debt. The company also announced, but later rescinded, a 2008 dividend program of up to 25% of free cash flow. Notwithstanding these actions, Moody's considers that debt-holders will face a moderation of future event risk, given management's current focus on debt reduction. The B1 CFR is supported by Donnelley's scale, the strong market position conferred by its exclusive publishing agreements with Embarq Corporation, Qwest Communications, and AT&T Inc. as the "official" yellow pages directory within a number of their incumbent markets. In addition the ratings reflect Donnelley's very good liquidity profile; its diversified customer and geographic market base; and strong cash flow generation. The B1 CFR could be downgraded if Donnelley is unable to cut costs in response to a weakening business environment, if its free cash flow generation continue to worsen, if it is unable to successfully defend it market share or if it deploys cash for purposes other than the repayment of debt. Headquartered in Cary, North Carolina, R. H. Donnelley is one of the largest US yellow page directory publishing companies. The company reported revenues of $2.6 billion for the FYE 2007. SHARON DE EDWARDS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtors: Sharon Y. de Edwards dba Sharon de Edwards, M.D. FACOG Fernando Anthony Edwards dba Law Offices of F. Anthony Edwards 715 Castle Rock Road Walnut Creek, CA 94598 Bankruptcy Case No.: 08-41073 Chapter 11 Petition Date: March 7, 2008 Court: Northern District of California (Oakland) Judge: Leslie J. Tchaikovsky Debtors' Counsel: Charles D. Novack, Esq. Law Offices of Charles Novack 409 13th Street 10th Floor Oakland, CA 94612 Tel: (510) 465-1000 Charles@cnovack.com Estimated Assets: $1 million to $ 10 million Estimated Debts: $1 million to $ 10 million Debtors' list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Contra Costa County Bar $19,250 Association c/o Eskanos & Adler 2325 Clayton Road Concord, CA 94520 Meharry Medical College Tuition $16,628 Student Finanacial Services Office of the Treasurer 1005 Drive D.B. Todd Jr. Boulevard Nashville, TN 37208-3599 CBSJ Financial Corp. Medical $7,350 299 Stockton Avenue San Jose, CA 95126 Washington Mutual/Providian Credit Card $5,736 Esquire Deposition Services, LLC deposition services $3,987 Superior Court of California Case Nos. 369189; $3,405 350327 and 369189 NCC Business Services, Inc. The Cumberland $3,243 Atkinson Baker $2,843 Zandonella Reporting Service Inc deposition $2,459 reporting services U.S. Legal Support $1,898 American Revenue Management $1,560 Collection - California Enterprise Rent $1,549 Legalink, Inc. a Merrill Company Inv. Nos. 20061554 $1,327 and 20042555 Quest Discovery Services $560 Collection - Massachusetts Progressive Insurance $555 Co. I.C. Systems, Inc. Critter Control $740 Fresno CB Collection FCRA Medical $408 Loislaw $355 First Premier Credit Card $201 Trojan Professional Services Medical $185 SHARPER IMAGE: Gets Authority to Obtain $60,000,000 DIP Financing ----------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware, on a final basis, authorized Sharper Image Corp. to borrow up to an aggregate of $60,000,000 comprised of a senior revolving credit facility with a sublimit for letters of credit up to $10,000,000, in accordance with the terms and conditions of a debtor-in-possession credit agreement, by and among Sharper Image, as borrower, Wells Fargo Retail Finance LLC, as agent, and the Lenders party. The Debtor is authorized to use the proceeds of the DIP Facility in accordance with the Budget solely for (a) working capital and general corporate purposes, (b) payment of costs of administration of the Case, to the extent set forth in the Budget, (c) all prepetition letters of credit issued under the Pre-Petition Financing Agreement, which will be deemed issued under the DIP Credit Agreement, and (d) Adequate Protection Payments on account of the Pre-Petition Debt. The DIP Agent, for the benefit of the DIP Lenders, will have (i) first priority, valid, perfected and enforceable liens, subject only to the Carve-Out and the Prior Permitted Liens, upon all of the Debtor's real and personal property, and (ii) superpriority administrative claim status in respect of all DIP Obligations, subject to the Carve Out. The Carve Out is: (a) the allowed administrative expenses pursuant to 28 U.S.C. Section 1930(a)(6); (b) allowed actual and necessary expenses incurred by members of the Creditors Committee; and (c) allowed reasonable fees and expenses of attorneys and financial advisors employed by the Debtor and the Official Committee of Unsecured Creditors pursuant to Sections 327 and 1103 of the Bankruptcy Code up to an aggregate amount under clauses (b) and (c) not to exceed $1,000,000, provided that the fees and expenses are ultimately approved by the Bankruptcy Court. All (i) DIP Obligations of the Debtor to the DIP Lenders will be immediately due and payable, and (ii) authority to use the proceeds of the DIP Financing Agreements and to use cash collateral will cease, both on the date that is the earliest to occur of: (1) August 20, 2008, provided that if the Borrower has filed a Plan of Reorganization or a motion to sell substantially all of its assets under Section 363 of the Bankruptcy Code, in each case containing terms acceptable to the DIP Secured Parties, the August 20 Termination Date will be extended, at the option of the Borrower, until Nov. 20, to permit confirmation of the Plan of Reorganization or consummation of the sale of assets; (2) the date on which the maturity of the Obligations is accelerated and the Commitments are irrevocably terminated in accordance with the DIP Credit Agreement; or (3) the date of substantial consummation of a plan of reorganization confirmed by a final order. The Debtor will strictly perform in accordance with the Budget subject to these factors: (a) (i) the Debtor's actual sales and cash receipts will not be less than 87.5% of the projected amounts set forth in the Budget on a cumulative basis; and (ii) the the Debtor's actual total expenses and cash expenditures will not be greater then 112.5% of the projected amounts set forth in the Budget on a cumulative basis, all of the foregoing measured on a weekly basis; and (b) the Borrowers' actual inventory levels will not be less than 87.5% and not greater than 112.5% of the projected amounts set forth in the Budget on a cumulative basis, as measured on a monthly basis at the end of each fiscal month of the Debtor, provided that for the first 21 days after the Petition Date only, the reference to 87.5% will rather be 85%. The foregoing will be tested each week or month, as applicable, pursuant to the Variance Report delivered by the Debtor to the Agent on Wednesday of each week for the immediately preceding week with respect to clause (a), and on the fifth day of each fiscal month of the Borrower for the immediately preceding fiscal month with respect to clause (b), said Judge Kevin Gross. The Final DIP Order further provides that on or before March 5, 2008, the Debtor will have filed a motion seeking authority to establish bidding procedures, in connection with the liquidation of inventory in store closing sales of not less than 90 stores and will diligently proceed thereafter to obtain an order approving the sale to a professional liquidator on an equity bid basis within 14 days after the entry of the Bankruptcy Court order establishing the bidding procedures, all of these on times reasonably acceptable to the Agent. The Debtor filed their Motion to Approve Bid Procedures on March 4, 2008. A full-text copy of the Final DIP Order is available for free at: http://bankrupt.com/misc/SI_FinalDIPOrder.pdf Objections Are Overruled Prior to the Court's entry of its Final Order, the Committee complained that the DIP Credit Facility and the proposed final order approving the facility contain numerous business and legal provisions which are objectionable. To resolve the objection, the Debtor, the Creditors' Committee and the DIP Secured Parties agreed that the DIP Credit Agreement is amended to reflect, among other things, that: 1. Applicable Prepayment Premium means $525,000, provided that if all Obligations and all Pre-Petition Obligations are indefeasibly paid in full and all Commitments terminated by virtue of a refinancing -- and not a liquidation of Collateral or sale under Section 363 of the Bankruptcy Code -- on or before the date that is (a) 45 days after the Petition Date, the Applicable Prepayment Premium will be $0; (b) 60 days after the Petition Date, the Applicable Prepayment Premium will be $250,000; and (c) 75 days after the Petition Date, the Applicable Prepayment Premium will be $425,000. 2. The definition of "Borrower Collateral" is amended by deleting clause (k) and substituting: (k) All proceeds realized by the Borrower from the sale, transfer or other disposition of the Borrower's Leasehold Interests. 3. The Debtor may, from time to time, on at least one business day's written notice or telephonic notice to Agent not later than 11:00 a.m., Massachusetts time, on that day, reduce the unused Commitments in whole or in part, provided that the Debtor will be required to pay the Applicable Prepayment Premium, if any, only if the Commitments are terminated in whole. 4. Well Fargo will furnish copies of any appraisals and valuations it obtains to counsel for the Creditors Committee, as long as it will not breach any confidentiality obligations to the Persons undertaking the appraisals and valuations in furnishing the copies. 5. The Debtor or the Creditors Committee may cause additional appraisals of the assets included in the Borrowing Base to be undertaken at the Debtor's sole expense. As such, appraisals will be conducted by Persons selected by the Debtor, in consultation with the Creditors Committee, and will be subject to the prior written approval of the Agent. In the event that the results of the appraisal differ from the results of the appraisal conducted by or on behalf of the Agent, the parties will use reasonable efforts to resolve the differences, but nothing will obligate the Agent to utilize the results of the appraisal of the Debtor's Appraiser in calculating the Borrowing Base. All objections to the DIP Motion to the extent not withdrawn or resolved, are overruled, Judge Gross said. 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. The company has operations in Australia, Brazil and Mexico. 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 US$251,500,000 and total debts of US$199,000,000. (Sharper Image Bankruptcy News Issue No. 6, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) SILVER MARLIN: Moody's Junks Rating on $21.5 Mil. Notes From 'Aa2' ------------------------------------------------------------------ Moody's Investors Service downgraded ratings of nine classes of notes issued by Silver Marlin CDO I 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: $625,000,000 Class A-1 First Priority Senior Secured Floating Rate Delayed Draw Notes due 2050 -- Prior Rating: Aaa -- Current Rating: Aa1, on review for possible downgrade Class Description: $437,500,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2050 -- Prior Rating: Aaa, -- Current Rating: B1, on review for possible downgrade Class Description: $62,500,000 Class A-3 Third Priority Senior Secured Floating Rate Notes Due 2050 -- Prior Rating: Aaa -- Current Rating: Caa2, on review for possible downgrade Class Description: $67,000,000 Class A-4 Fourth Priority Senior Secured Floating Rate Notes Due 2050 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: $21,500,000 Class B Fifth Priority Senior Secured Floating Rate Notes Due 2050 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Ca Class Description: $9,400,000 Class C Sixth Priority Senior Secured Floating Rate Notes Due 2050 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: Ca Class Description: $8,900,000 Class D Seventh Priority Mezzanine Deferrable Secured Floating Rate Notes Due 2050 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: C Class Description: $4,000,000 Class E Eighth Priority Mezzanine Deferrable Secured Floating Rate Notes Due 2050 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: C Class Description: $14,400,000 Class F Ninth Priority Mezzanine Deferrable Secured Floating Rate Notes Due 2050 -- Prior Rating: Baa2, 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 on Feb. 20, 2008, as reported by the Trustee, of an event of default described in Section 5.1(i) of the Indenture dated March 29, 2007. Silver Marlin CDO I Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS Securities and ABS CDO Securities for which the primary exposure is to RMBS 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 commence the process of sale and liquidation of the collateral. 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 remedy pursued by the controlling class following the event of default. Because of this uncertainty, the ratings assigned to the Class A-1, A-2, A-3 and A-4 Notes remain on review for possible further action. SILVER STATE: Owner Fails to Appear at Tuesday's Hearing -------------------------------------------------------- Jerry Airola, owner of bankrupt Silver State Helicopters, failed to appear before the U.S. Bankruptcy Court for the District of Nevada at scheduled hearing yesterday, March 11, 2008, Chris Saldana at Las Vegas Now reports. The reason behind the owner's no-show was not disclosed. According to the report, around 200 of the Debtor's former students initially waited for the hearing to commence at a Foley Federal Building but due to their number, the hearing was moved to a bigger venue at nearby The Loyd D. George Federal Courthouse. Closure of Operations As reported in the Troubled Company Reporter on Feb. 6, 2008, the company closed all operations on Feb. 3, 2008. This action followed a rapid, unprecedented downturn in the U.S. credit markets, which severely curtailed the availability of student loans for the company's flight academy students and resulted in a sharp and sudden downturn in new student enrollment. "The decision to shut down operations was made only after the company explored its other available alternatives," said Elizabeth Trosper, company spokesperson. "Information for former employees and students will be disseminated as it becomes available." Students Move to Get Their Money Back The Class Action Reporter stated on Feb. 7, 2008, that thousands of Silver State students nationwide worry that they will never get their money back. Silver State students were required to pay their $70,000 tuition up front for helicopter training that would certify them as flight instructors and commercial pilots. Most of these students took out loans to pay for the school. Student Garett Oberg and his lawyer, Dan Reed, Esq., are filing a class action lawsuit. Several other students have hired legal counsels as well demanding the return of their tuition fees, some of which are from student loans. SLX Won't Write Off Student Loans Student Loan Xpress in San Diego, California, said it will not write off the loans it extended to Silver State students, Sign On San Diego reports. SLX advised the students to file proofs of claim against the Debtor for "unearned" tuition, Sign On relates. SLX added that it is willing to entertain students who want to discuss "repayment plans," according to the report. Alleged Fraud Behind Student Loans Michael Berger, Esq., counsel to the Debtor's students told Sign On that he plans to investigate the possibility of fraud involved the bankruptcy case. According to Mr. Berger, some student loans were granted prior, on and after the bankruptcy date of Silver State. The government and the state attorneys are also investigating Silver State's operations, Sign On reveals, citing Mr. Berger. About Silver State Helicopters Las Vegas, Nevada-based Silver State Helicopters -- http://www.silverstatehelicopters.com/-- operated flight academies at more than thirty locations in 15 states. It filed chapter 7 liquidation petition in February 2008. SIRVA INC: Triple Net to Appeal Order Allowing $150M DIP Financing ------------------------------------------------------------------ Triple Net Investments IX, LP, notifies the U.S. Bankruptcy Court for the Southern District of New York that it will take an appeal to the U.S. District Court for the Southern District of New York from Judge James M. Peck's final order allowing Sirva Inc. and its debtor-affiliates to obtain up to $150,000,000 of postpetition financing, authorizing them to use cash collateral, and grant adequate protection to secured parties prior to the Debtors' bankruptcy filing. Triple Net Investments IX, LP, holds a claim against one of the Debtors, North American Van Lines, Inc. As reported by the Troubled Company Reporter on March 5, 2008, the Bankruptcy Court approved, on a final basis, the debtor-in- possession credit facility of the Debtors. Triple Net wants the District Court to clarify if: -- given the fast track confirmation for the Debtors' proposed plan of reorganization, it will be denied due process or a meaningful opportunity to have an appellate review of orders, if the leave to appeal is denied; and -- in the event that Triple Net is denied immediate appellate review of the Orders, there is a likelihood that an appellate review at the conclusion of the case will have effectively been rendered moot by the entry of subsequent court orders, including orders approving the disclosure statement and confirmation of the proposed Plan. Triple Net Wants Order Stayed In a separate filing, Triple Net asks the Bankruptcy Court to stay the Final DIP Order pending a ruling on its appeal. Robert E. Nies, Esq., at Wolff & Samson PC, in New York, tells the Bankruptcy Court that as a result of the Final DIP Order, Triple Net is in default of its mortgage on certain leased properties, and is likely lose its investment -- an investment predicated from the outset on the Debtor North American Van Lines, Inc. -- being a tenant for another nine years. Mr. Nies maintains that the Final DIP Order has a disastrous and irreversible effect on Triple Net. Triple Net had opposed the entry of the Final DIP Order, arguing that it will be prejudiced, since absent the Order, North American will be able to pay Triple Net's claim in full. Triple Net reiterates its assertion that the Final DIP Order insulates a $65,000,000 postpetition transfer to prepetition secured lenders. Triple Net insists that the transfer was preferential and made in bad faith, since the Debtors knew that Prepetition Secured Lenders were grossly undersecured at the time of the transfer. Mr. Nies notes that the Debtors' proposed plan of reorganization provides no recovery for general unsecured creditors, including Triple Net. Mr. Nies tells the Bankruptcy Court that the failure to obtain a stay pending Triple Net's appeal will render the appeal moot under Section 364(e) of the Bankruptcy Code, as well as any appeal from the confirmation of the Debtors' proposed Plan, even though Triple Net submits that the credit extended under the Final DIP Order was done in bad faith by the Debtors and Prepetition Secured Lenders. Additionally, Mr. Nies says, the Final DIP Order effects a substantive consolidation of the Debtors' assets and liabilities, which will result in a zero recovery for Triple Net. Triple Net believes it would have been paid in full for its $2,021,546 claim against North American, either outside of bankruptcy, or in bankruptcy but absent the substantive consolidation. Triple Net Seeks To Consolidate Appeals Triple Net asks the Bankruptcy Court to consolidate its appeal from the Final DIP Order and the Reconsideration Motion, since they share a common record and are integral to the proposed Plan. Triple Net also seeks to shorten the time for notice and a hearing on the Stay Motion, to enable the Bankruptcy Court to timely consider its merits and maintain the status quo. Debtors Respond The Debtors argue that Triple Net is directing its request to the wrong court since the District Court has the jurisdiction to hear appeals. Rule 8003(b) of the Federal Rules of Bankruptcy Procedures requires that the bankruptcy court clerk transmit the motion to the district court clerk. Additionally, although the Motion is properly before the Bankruptcy Court, the request seeking for leave to appeal makes it procedurally defective, and thus should be denied. To the extent that the Bankruptcy Court deems the Motion to be procedurally sufficient, with respect to the request for leave, and that the Motion may be transmitted to the District Court, the Debtors ask that that they be granted additional time to respond. 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 has operations in Costa Rica. 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. An official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for bankruptcy, it reported total assets of US$924,457,299 and total debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007. (Sirva Inc. Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SIRVA INC: Triple Net to Appeal Approval of Claims Payment Order ---------------------------------------------------------------- Triple Net Investments IX, LP, notifies the U.S. Bankruptcy Court for the Southern District of New York that it will take an appeal to the U.S. District Court for the Southern District of New York from Judge James M. Peck's approval of a stipulation resolving the reconsideration request filed by the Official Committee of Unsecured Creditors in the Chapter 11 cases of Sirva Inc. and its debtor-affiliates, and the Official Committee of Unsecured Creditors of 360networks (USA) Inc. The 360networks Committee had sought to vacate the Court's order authorizing the payment of pre-bankruptcy unsecured claims. Triple Net Investments IX, LP, holds a claim against one of the Debtors, North American Van Lines, Inc. 360networks Committee's Reconsideration Motion As reported by the Troubled Company Reporter on Feb. 26, 2008, the 360networks Committee and its debtor-subsidiaries asked the Court to reconsider its order authorizing the payment of the Debtors' pre-bankruptcy filing unsecured claims dated Feb. 5, 2008, pursuant to Rules 59 and 60 of the Federal Rules of Civil Procedure. The 360networks Committee holds an unliquidated claim against Debtor SIRVA Relocation LLC resulting from an action captioned "The Official Committee of Unsecured Creditors of 360networks (USA) Inc., et al. v. U.S. Relocation Services, Inc.," Adv. Pro. No. 03-03127 (ALG), pending before Judge Allan L. Gropper before the United States Bankruptcy Court for the Southern District of New York. In the Preference Action before Judge Gropper, the 360networks Committee, on behalf of itself and 360networks (USA), Inc., and 360fiber Inc. and their debtor subsidiaries, sought the avoidance, recovery and return, from U.S. Relocation Services, Inc. -- now known as SIRVA Relocation LLC -- of $1,863,014 in preferential transfers made by 360 to U.S. Relocation, plus prejudgment interest at the highest applicable rate from March 26, 2002, plus sanctions in connection with counsel for U.S. Relocation's conduct in defending the Preference Action, for a total claim against U.S. Relocation estimated to be in the excess of $2,200,000. The Preference Action, prior to it being stayed by the commencement of the Sirva bankruptcy proceedings, had been sub judice with Judge Gropper on fully-briefed cross motions for summary judgment. On behalf of the 360networks Committee, Norman N. Kinel, Esq., at Dreier LLP in New York, asserted that the Debtors' proposed treatment of unsecured creditors is discriminatory and impermissible under applicable law. The Debtors propose, in their Plan of Reorganization dated Jan. 28, 2008, that in the two classes of unsecured creditors -- one will receive a 100% distribution, and the other will receive no distribution. Mr. Kinel explained that although debtors are permitted to pay unsecured prepetition debts to critical vendors, the relief sought and obtained by the Debtors in the Prepetition Claims Order classifies an open-ended category of creditors as critical, without adequate basis. Moreover, the Prepetition Claims Order was entered without due notice to the parties-in-interest that are adversely affected, including the 360networks Committee, depriving them of the opportunity to object or be heard, Mr. Kinel stated. "[T]he 360networks Committee is not even listed as a creditor in the Debtors' list of thirty (30) largest creditors attached to their petitions, even though the 360networks Committee is in fact one of the 10 largest creditors of the Debtors, notwithstanding that such claim is presently unliquidated," Mr. Kinel maintained. Debtors Oppose Reconsideration Motion As reported by the TCR on March 4, the Debtors opposed the Reconsideration Motion, asserting that it failed to demonstrate extreme and undue hardship required for its approval, and is merely the creditor's attempt to enhance its recovery. Representing the Sirva Debtors, Marc Kieselstein, P.C., at Kirkland and Ellis LLP in Chicago, Illinois, said pursuant to Rule 59 and 60 of the Federal Rules of Civil Procedure, the Court may grant extraordinary remedies in extraordinary circumstances to prevent extreme and undue hardship, citing In re Miller, No. 07- 13481, 2008 WL 110907 (Bankr. S.D.N.Y. Jan. 4,2008). He points out that the relief provided by the order dated February 5, 2008, authorizing the payment of prepetition unsecured claims, is not extraordinary, and is a "typical first day order." According to Mr. Kieselstein, the 360networks Committee has not demonstrated that the Debtors' ability to honor their existing obligations in the ordinary course of business creates the level of harm necessary to warrant a reconsideration; and does not make specific allegations with respect to its disputed, unliquidated, and unsecured claim. In addition, the Debtors had complied with the notice requirements by providing copies of their first day pleadings to the United States Trustee two business days in advance of the Petition Date. Accordingly, the Debtors ask the Court to deny the Reconsideration Motion with prejudice. Parties React The 360networks Committee said all debtors, including the Debtors in the Chapter 11 cases, must meet the burdens of the Bankruptcy Code and Bankruptcy Rules, as well as the requirements of due process. According to the 360networks Committee, the Debtors have improperly taken advantage of standard first-day orders, by including unnecessary and discriminatory terms, and failing to provide any advance notice to parties-in-interest that are adversely affected. The Prepetition Claims Order was entered without advance notice to any party other than the United States Trustee and the Debtors' prepetition secured lenders, enabling the Debtors to pay certain chosen unsecured prepetition creditors at will. The 360networks Committee believes that it was improper for the Prepetition Claims Order to be entered on a final basis, without giving any other party-in-interest aside from the U.S. Trustee and the Debtors' Prepetition Secured Lenders, an opportunity to be heard and object. The Official Committee of Unsecured Creditors of the Debtors' Chapter 11 cases, on the other hand, told Judge Peck that the Prepetition Claims Order gives the Debtors authority to pay unsecured claims which cannot be argued as critical. According to the Committee, the Debtors have justified the relief they sought by asserting that it is typical in "prepackaged" bankruptcy cases. However, the Committee says, not all prepackaged cases are the same. In fact, the Debtors' case is unusual since they propose to pay nothing to a broad group of unsecured creditors under their Plan. The Committee maintained that neither the Bankruptcy Code, nor any necessity doctrine or general Court order, support the proposition that debtors can make unlimited and unspecified cash payments to unidentified general unsecured creditors, in the context of a cram-down plan. Accordingly, the Committee insists that a reconsideration of the Prepetition Claims Order is warranted. Similarly, Triple Net Investments IX, LP, supports the 360networks Committee's request stating that the Prepetition Claims Order was entered without notice and with no opportunity for affected creditors, including itself, to be heard. Judge Peck Approves Stipulation As reported by the TCR on March 6, 2008, Judge Peck approved a Stipulation entered by the Debtors regarding payments of the claims. The 360network Committee withdrew its Motion, and the Sirva Creditors' Committee withdrew its joinder to the Motion. The Debtors agreed that all future payments pursuant to the Prepetition Claims Order will be made only if those payments are necessary to avoid material, near term, and foreseeable harm to the Debtors' estates. The parties also agreed that: -- the payments will be treated as made under any plan of reorganization; -- neither the Creditors' Committee nor any other creditor will be estopped from objecting to the confirmation of a Plan, by virtue of entry of the Prepetition Claims Order; -- certain Class 4 Claims, or a similar unimpaired class of unsecured creditors, will remain outstanding at the time of confirmation; -- the Debtors will not argue that payments made under the Prepetition Claims Order will render moot any confirmation objection by the Creditors' Committee or any creditor; -- the Debtors will not amend a Plan to eliminate Class 4 without the consent of Creditors' Committee and the 360networks Committee. Triple Net's Reconsideration Motion Triple Net wants to determine whether: -- given the fast track confirmation for the Debtors' proposed plan of reorganization, it will be denied due process or a meaningful opportunity to have an appellate review of orders, if the leave to appeal is denied; and -- in the event that Triple Net is denied immediate appellate review of the Orders, there is a likelihood that an appellate review at the conclusion of the case will have effectively been rendered moot by the entry of subsequent court orders, including orders approving the disclosure statement and confirmation of the proposed Plan. 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 has operation in Costa Rica. 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. A Committee of Unsecured Creditors has been appointed in the case. At its bankruptcy filing, the company reported total assets of US$924,457,299 and total debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007. (Sirva Inc. Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SIX FLAGS: Stockholders' Deficit Rises to $252 Mil. at December 31 ------------------------------------------------------------------ Six Flags Inc.'s total stockholders' deficit at Dec. 31, 2007, was $252.62 million compared to $6.21 million in December 2006. The company reported operating results for its fourth quarter and twelve months ended Dec. 31, 2007. In quarter ended Dec. 31, 2007, the company incurred net loss of $126.88 million compared to net loss of $189.72 million for the same period last year. The company's net loss from continuing operations for the quarter was $130.8 million, compared to a loss of $100.5 million in the fourth quarter of 2006, reflecting increased non-cash charges for losses on fixed assets from the decision to remove certain inefficient rides and attractions, and higher stock-based compensation costs, partially offset by increased revenue. Other expenses also increased, reflecting severance and benefits costs related to a reduction in the company's full-time workforce through an early retirement program, well as accruals for certain contingencies. Net loss applicable to common stock in the fourth quarter 2007 was $132.4 million compared to net loss applicable to common stock of $195.2 million in the prior-year period, which included $89.2 million of loss from discontinued operations. For the year ended Dec. 31, 2007, the company's net loss was $253.15 million compared to $305.61 million in the prior year. For the year ended Dec. 31, 2007, total costs and expenses, including cost of sales, depreciation, amortization, stock-based compensation and loss on fixed assets, increased $43.9 million to $939.5 million for 2007 compared to 2006. The key drivers of the change were increased advertising expense of $25.6 million, non- cash loss on fixed assets of $16 million, and park-wide labor of $15.3 million, partially offset by prior-year management change costs of $13.9 million. Net loss applicable to common stock for 2007 was $275.1 million compared to a net loss applicable to common stock of $327.6 million in the prior year. The decreased net loss of $52.5 million reflects a reduced loss from discontinued operations of $88.5 million and an increased loss from continuing operations of $37.1 million driven by higher costs and expenses. Cash and Liquidity As of Dec. 31, 2007, the company had $5 million outstanding on its $275 million revolving credit facility, excluding letters of credit in the amount of $27.3 million, and had $28.4 million in unrestricted cash. About Six Flags Headquartered in New York City, Six Flags Inc. (NYSE: SIX) -- http://www.sixflags.com/-- is the world's largest regional theme park company with 21 parks across the United States, Mexico and Canada. Founded in 1961, Six Flags has provided world class entertainment for millions of families with cutting edge, record- shattering roller coasters and appointment programming with events like the popular Thursday and Sunday Night Concert Series. Now 47 years strong, Six Flags is recognized as the preeminent thrill innovator while reaching to all demographics -- families, teens, tweens and thrill seekers alike -- with themed attractions based on the Looney Tunes characters, the Justice League of America, skateboarding legend Tony Hawk, The Wiggles and Thomas the Tank Engine. * * * As reported in the Troubled Company Reporter on Nov. 13, 2007, Moody's Investors Service downgraded the corporate family rating for Six Flags Inc. to Caa1 from B3 and its probability of default rating to Caa1 from B3. The outlook is stable. SOLOMON DWEK: 56 Residential Homes to Be Sold on April 2 -------------------------------------------------------- Charles A. Stanziale, Jr., as Chapter 11 Trustee of Solomon Dwek and its debtor affiliates' cases, said that an auction will be held on April 2, 2008, at 1:00 p.m., to sell 56 of the Debtors' single family homes, condos and land located in Lakewood, New Jersey. Keen Consultants, the real estate division of KPMG Corporate Finance LLC, has been retained as the Trustee's special real estate consultant and has been assisting the Trustee with the disposition of all of Mr. Dwek's real estate assets. MSL Management of Lakewood, New Jersy is being retained as the Trustee's local representative in the auction sale. "There has been a great deal of interest in the Dwek assets. The April 2nd auction gives buyers a great opportunity to purchase the available properties through a simple, straightforward process and on excellent terms. All properties will be sold on the auction date," said Craig Fox, Director, KPMG Corporate Finance LLC. On March 2, 2007, Mr. Stanziale was appointed Chapter 11 Trustee of the Debtors' bankruptcy and related cases by Kelly Beaudin Stapleton, United States Trustee for Region 3. As Chapter 11 Trustee has been overseeing the sale and disposition of approximately 240 portfolio of real estate owned by Solomon Dwek and related entities. To date, approximately 59 properties totaling $71,000,000 in gross proceeds have been sold. For information regarding the sale of the Debtors' real estate assets, Keen Consultants/KPMG Corporate can be reached at: Keen Consultants/KPMG Corporate Finance LLC Attn: Craig Fox 1305 Walt Whitman Road, Suite 200 Melville, NY 11747 Tel: (631) 351-7800 Fax: (631) 794-2464 http://www.kpmg.com Solomon Dwek is a real estate developer. Mr. Dwek was accused of defrauding P.N.C. Bank by depositing a bad $25-million check on April 24, 2006 and then transferring out most of the money the next day. An involuntary chapter 7 petition was filed against Mr. Dwek on Feb. 9, 2007 with the U.S. Bankruptcy Court for the District of New Jersey. On Feb. 22, 2007, the Court converted the case to a chapter 11 reorganization under supervision of a trustee (Bankr. D. N.J. Case No: 07-11757). Following conversion, around 62 affiliates filed separate chapter 11 petitions. Timothy P. Neumann, Esq. at Broege, Neumann, Fischer & Shaver, L.L.C. and Michael S. Ackerman, Esq., at Zucker, Goldberg & Ackerman represent the Debtor. Charles A. Stanziale, Jr. was appointed chapter 11 trustee. He is represented by lawyers at Greenberg Traurig LLP and McElroy, Deutsch, Mulvaney & Carpenter. Ben Becker, Esq., at Becker, Meisel LLC represents the Official Committee of Unsecured Creditors. SOLOMON TECH: Agrees to Accelerate Debentures Held by Harborview ---------------------------------------------------------------- On Feb. 29, 2008, Solomon Technologies Inc. entered into an Amendment Agreement with Harborview Master Fund L.P. as successor- in-interest to Nite Capital LP with respect to the company's Variable Rate Self-Liquidating Senior Secured Convertible Debentures due April 17, 2009. Harborview is a holder of Debentures. Under the Agreement, the company and Harborview agreed to accelerate the maturity of the Debentures to Feb. 29, 2008, and to issue to Harborview a total of 1,744,543 shares of common stock, par value $0.001 per share in full redemption of these Debentures, including all accrued interest. On March 3, 2008, the company entered into a second Amendment Agreement with Harborview with respect to the company's Debentures held by Harborview for its own account. Under the Second Agreement, the company and Harborview agreed to accelerate the maturity of such Debentures to March 5, 2008, and to issue to Harborview a total of 1,746,469 shares of common stock in full redemption of these Debentures, including all accrued interest. On March 3, 2008, the company also issued an aggregate of 1,311,814 shares of common stock to true-up the March 1, 2008, redemption payments previously made for seven holders of Debentures in accordance with the provisions of Section 6 thereof. About Solomon Technologies Tarpon Springs, Florida Solomon Technologies Inc. (OTC BB: SOLM.OB) http://www.solomontechnologies.com/-- through its Motive Power and Power Electronics divisions, develops, licenses, manufactures and sells precision electric power drive systems. * * * At Sept. 30, 2007, the company had total assets of $11,789,312 and total liabilities of $15,636,933, resulting in a $3,847,621 total stockholders' deficit. SOLUTIA INC: Inks Amended Monsanto and Retiree Agreements --------------------------------------------------------- In accordance with its fifth amended joint plan of reorganization, Solutia Inc. entered into an amended and restated Monsanto settlement agreement; indemnification agreement with Pharmacia Corporation; and first amended and restated retiree settlement agreement with certain parties, Rosemary L. Klein, Solutia's senior vice president, general counsel and secretary, discloses in a regulatory filing with the U.S. Securities and Exchange Commission. The Monsanto Settlement Agreement and the Pharmacia Indemnity Agreement between Solutia and Monsanto Company provide that Monsanto will fund post-emergence the environmental remediation obligations and related environmental liabilities at sites owned, operated or used by Pharmacia, but which Solutia never owned, operated or used. Solutia and Monsanto will share the environmental remediation obligations and related environmental liabilities for the Anniston, Alabama, and Sauget, Illinois offsite remediation projects, according to Ms. Klein. Pursuant to the Monsanto Settlement Agreement, Monsanto has agreed to assume financial responsibility for all litigation relating to property damage, personal injury, products liability or premises liability or other damages related to asbestos, PCB, dioxin, and other chemicals manufactured before Solutia's spin off from Pharmacia on Sept. 1, 1997. Monsanto's funding of the environmental remediation activities and the resulting claim against Solutia, which Monsanto has asserted, are being resolved through the Plan, Ms. Klein relates. Solutia will remain responsible for the environmental liabilities at sites that it owned or operated after the Spin-off. A full-text copy of the Monsanto Settlement Agreement is available for free at http://ResearchArchives.com/t/s?28f6 Retiree Settlement In accordance with the Plan, Solutia entered into the Retiree Settlement Agreement with the Official Committee of Retirees. A 2008 Retiree Welfare Plan has been agreed upon as a result of the Retiree Settlement Agreement. The 2008 Retiree Plan provides post-retirement health and life insurance benefits to certain retirees, Ms. Klein says. A full-text copy of the 2008 Retiree Plan is available for free at http://ResearchArchives.com/t/s?28f7 The terms of the Retiree Settlement Agreement provide that Solutia will contribute $175,000,000 in cash and an amount equivalent to the recovery on a $35,000,000 general, unsecured claim with a specific distribution of new employer stock to the voluntary employees' beneficiary association -- Retiree Trust. The Retiree Trust will be comprised of two sub-accounts, which will be funded by Solutia or the Retiree Shares and sales proceeds. A full-text copy of the Retiree Settlement Agreement is available for free at http://ResearchArchives.com/t/s?28f8 Registration Rights Agreement In connection with the issuance of 2,489,977 shares of New Common Stock to Monsanto, Solutia entered into a Registration Rights Agreement with Monsanto, pursuant to which, Solutia is required to file a registration statement under the Securities Act to effect the registration of the resale of the shares of New Common Stock issued to Monsanto. The registration rights granted in the Monsanto Registration Rights Agreement are subject to customary restrictions. In addition, Monsanto's registration rights are subject to a "most favored nation" clause, which provides, among other things, that Solutia may not grant registration rights to any holder of its securities that are more favorable to those holders than the registration rights granted to Monsanto without the prior written consent of holders of a majority of the shares held by Monsanto on the Effective Date. The Monsanto Registration Rights Agreement contains customary indemnification and contribution provisions, as well as representations and warranties by Solutia and by Monsanto. Solutia will be responsible for expenses relating to the registrations contemplated by the Monsanto Registration Rights Agreement, subject to certain limitations. About Solutia Inc. Based in St. Louis, Missouri, Solutia Inc. (OTCBB: SOLUQ) (NYSE: SOA-WI) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead Case No. 03- 17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP, in New York, as lead bankruptcy counsel, and David A. Warfield, Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St. Louis Missouri, as special counsel. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. The Official Committee of Retirees of Solutia, Inc., et al., is represented by Daniel D. Doyle, Esq., Nicholas A. Franke, Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne, LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E. Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, in Birmingham, Alabama. On Feb. 14, 2006, the Debtors filed their Reorganization Plan & Disclosure Statement. On May 15, 2007, they filed an Amended Reorganization Plan and on July 9, 2007, filed a 2nd Amended Reorganization Plan. The Bankruptcy Court approved the Debtors' amended Disclosure Statement on Oct. 19, 2007. On Oct. 22, 2007, the Debtor re-filed a Consensual Plan & Disclosure Statement and on Nov. 29, 2007, the Court confirmed the Debtors' Consensual Plan. Solutia emerged from chapter 11 protection Feb. 28, 2008. (Solutia Bankruptcy News, Issue No. 121; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on March 4, 2008, Standard & Poor's Ratings Services raised its corporate credit rating on Solutia Inc. to 'B+' from 'D', following the company's emergence from bankruptcy on Feb. 28, 2008, and the implementation of its financing plan. The outlook is stable. S&P also affirmed its 'B+' rating and '3' recovery rating on Solutia's proposed senior secured term loan. In addition, S&P assigned its 'B-' rating to Solutia's $400 million unsecured bridge loan facility. S&P also withdrew its 'B-' rating on the proposed $400 million unsecured notes, which have been replaced by the bridge facility in Solutia's capital structure. SOLUTIA INC: Issues New Common Stock Under Confirmed Plan --------------------------------------------------------- Solutia Inc. and 14 of its subsidiaries consummated on Feb. 28, 2008, their reorganization under Chapter 11 through transactions contemplated by their confirmed fifth amended joint plan of reorganization. On the effective date, all existing shares of common stock outstanding before the effective date were canceled pursuant to the Plan. Rosemary L. Klein, Solutia's senior vice president, general counsel and secretary, relates in a regulatory filing with the U.S. Securities and Exchange Commission that in satisfaction of creditor claims and stockholder interests, Solutia issued: (a) 29,024,446 shares of common stock, par value $0.01 per share to its general unsecured creditors and noteholders who hold the 2027 Notes and the 2037 Notes. About 831,052 of these shares are being held in a disputed claims reserve for the benefit of holders of disputed claims whose claims are subsequently allowed and any shares left over after all disputed claims have been resolved will be distributed pro rata to holders of allowed claims; (b) 1,221,492 shares of New Common Stock to the Retiree Trust; (c) 597,500 shares of New Common Stock, representing 1% of the total New Common Stock, to holders of at least 175 shares of the Old Common Stock; (d) 15,936,703 shares of New Common Stock to general unsecured creditors and noteholders pursuant to the Creditor Rights Offering; (e) 2,812,359 shares of New Common Stock to the backstop investors in the Creditor Rights Offering; (f) 7,667,523 shares of New Common Stock to holders of at least 11 shares of Old Common Stock pursuant to the Equity Rights Offering; and (g) 2,489,977 shares of New Common Stock, representing the shares of New Common Stock that were unsubscribed for in the Equity Rights Offering, to Monsanto Company. According to Ms. Klein, the general unsecured claims pool has $786,221,598 in total claims and is comprised of (i) $455,400,000 in allowed noteholder claims; (ii) $307,342,810 in allowed general unsecured claims; and (iii) $23,478,788 in disputed general unsecured claims. Solutia also issued warrants to purchase an aggregate of 4,481,250 shares of New Common Stock to holders of Old Common Stock based on a holder's prepetition stock ownership, provided that the holder held at least 24 shares of the Old Common Stock. In connection with issuance of the Warrants, Solutia entered into a Warrant Agreement with American Stock Transfer & Trust Company, as warrant agent. Pursuant to the Warrant Agreement, Warrant holders are entitled to purchase shares of New Common Stock at an exercise price of $29.70 per share. Ms. Klein says that the Warrants have five-year terms and will expire at 5:00 p.m., New York City time, on Feb. 27, 2013. The Warrants may be exercised for cash or on a net issuance basis. Ms. Klein states that the number of shares of New Common Stock issuable upon exercise of the Warrants and the exercise price will be adjusted in connection with any dividend, distribution, subdivision, combination, reclassification or recapitalization of the New Common Stock. The exercise price of the Warrants is also subject to downward adjustment in connection with any distribution to all holders of the New Common Stock evidences of indebtedness, other securities of Solutia or any cash, property or other assets. If on or before the fourth anniversary of the issue date of the Warrants, Solutia undergoes any business combination in which Solutia is not the surviving entity, or sells, transfers or otherwise disposes of all or substantially all of its assets, depending on the nature of the consideration to be paid to holders of New Common Stock and the status of the successor, the acquiring person may be required to purchase the Warrants for cash at Black-Scholes valuation upon consummation of the Organic Change, Ms. Klein discloses. For any Organic Change occurring on or after the fourth anniversary of the issue date of the Warrants, the Warrant holders will have the right to receive the consideration that they would have been entitled to receive had they exercised the Warrants immediately before the Organic Change. A copy of the Warrant Agreement is available for free at: http://ResearchArchives.com/t/s?28f9 About Solutia Inc. Based in St. Louis, Missouri, Solutia Inc. (OTCBB: SOLUQ) (NYSE: SOA-WI) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead Case No. 03- 17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP, in New York, as lead bankruptcy counsel, and David A. Warfield, Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St. Louis Missouri, as special counsel. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. The Official Committee of Retirees of Solutia, Inc., et al., is represented by Daniel D. Doyle, Esq., Nicholas A. Franke, Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne, LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E. Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, in Birmingham, Alabama. On Feb. 14, 2006, the Debtors filed their Reorganization Plan & Disclosure Statement. On May 15, 2007, they filed an Amended Reorganization Plan and on July 9, 2007, filed a 2nd Amended Reorganization Plan. The Bankruptcy Court approved the Debtors' amended Disclosure Statement on Oct. 19, 2007. On Oct. 22, 2007, the Debtor re-filed a Consensual Plan & Disclosure Statement and on Nov. 29, 2007, the Court confirmed the Debtors' Consensual Plan. Solutia emerged from chapter 11 protection Feb. 28, 2008. (Solutia Bankruptcy News, Issue No. 121; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on March 4, 2008, Standard & Poor's Ratings Services raised its corporate credit rating on Solutia Inc. to 'B+' from 'D', following the company's emergence from bankruptcy on Feb. 28, 2008, and the implementation of its financing plan. The outlook is stable. S&P also affirmed its 'B+' rating and '3' recovery rating on Solutia's proposed senior secured term loan. In addition, S&P assigned its 'B-' rating to Solutia's $400 million unsecured bridge loan facility. S&P also withdrew its 'B-' rating on the proposed $400 million unsecured notes, which have been replaced by the bridge facility in Solutia's capital structure. SOLUTIA INC: Terminates Pre-Emergence Stock and Select Deals ------------------------------------------------------------ Rosemary L. Klein, Solutia's senior vice president, general counsel and secretary, discloses in a regulatory filing with the U.S. Securities and Exchange Commission that certain indentures, credit facilities, shares of Old Common Stock and related incentive plans, and other agreements were terminated on the Effective Date. Among these are: (a) 7.375% Debentures due Oct. 15, 2027; (b) 6.72% Debentures due Oct. 15, 2037; (c) 11.25% Senior Secured Notes due July 15, 2009; (d) Indentures dated Oct. 1, 1997, and July 9, 2002; (e) Euro 200 million credit facility contemplated by a Facility Agreement, dated July 26, 2006, as amended between Solutia Europe S.A./N.V., Solutia Services International S.C.A./Comm. V.A., Citigroup Global Markets Limited, Citibank International plc, and Citibank N.A.; (f) $225,000,000 credit facility contemplated by a Flexsys Multicurrency Term and Revolving Facilities Agreement of 2007; and (g) 2006 Solutia Annual Incentive Plan. About Solutia Inc. Based in St. Louis, Missouri, Solutia Inc. (OTCBB: SOLUQ) (NYSE: SOA-WI) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead Case No. 03- 17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP, in New York, as lead bankruptcy counsel, and David A. Warfield, Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St. Louis Missouri, as special counsel. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. The Official Committee of Retirees of Solutia, Inc., et al., is represented by Daniel D. Doyle, Esq., Nicholas A. Franke, Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne, LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E. Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, in Birmingham, Alabama. On Feb. 14, 2006, the Debtors filed their Reorganization Plan & Disclosure Statement. On May 15, 2007, they filed an Amended Reorganization Plan and on July 9, 2007, filed a 2nd Amended Reorganization Plan. The Bankruptcy Court approved the Debtors' amended Disclosure Statement on Oct. 19, 2007. On Oct. 22, 2007, the Debtor re-filed a Consensual Plan & Disclosure Statement and on Nov. 29, 2007, the Court confirmed the Debtors' Consensual Plan. Solutia emerged from chapter 11 protection Feb. 28, 2008. (Solutia Bankruptcy News, Issue No. 121; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on March 4, 2008, Standard & Poor's Ratings Services raised its corporate credit rating on Solutia Inc. to 'B+' from 'D', following the company's emergence from bankruptcy on Feb. 28, 2008, and the implementation of its financing plan. The outlook is stable. S&P also affirmed its 'B+' rating and '3' recovery rating on Solutia's proposed senior secured term loan. In addition, S&P assigned its 'B-' rating to Solutia's $400 million unsecured bridge loan facility. S&P also withdrew its 'B-' rating on the proposed $400 million unsecured notes, which have been replaced by the bridge facility in Solutia's capital structure. SPECTRUM BRANDS: Inks Standstill Agreement with Harbinger Capital ----------------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission last week, Spectrum Brands Inc. disclosed that it has entered into a confidentiality and standstill agreement with Harbinger Capital Partners Master Fund I Ltd. in order to provide Harbinger with confidential information relating to certain of the company's strategic operating assets in connection with Harbinger's evaluation of a possible acquisition. In the third quarter of Spectrum Brands Inc.'s fiscal year ended Sept. 30, 2006, the company engaged advisors to assist it in exploring possible strategic options including divesting certain assets, in order to sharpen its focus on strategic growth businesses, reduce its outstanding indebtedness and maximize long- term shareholder value. No information was provided concerning which assets Harbinger Capital was considering to purchase under the agreement, which was signed on Feb. 26. About Spectrum Brands Inc. Headquartered in Atlanta, Georgia, Spectrum Brands Inc. (NYSE: SPC) -- http://www.spectrumbrands.com/-- is a supplier of batteries, portable lighting, lawn and garden products, household insect control, shaving and grooming products, personal care products and specialty pet supplies. * * * As reported in the Troubled Company Reporter on Feb. 13, 2008, Spectrum Brands Inc.'s consolidated balance sheet at Dec. 30, 2007, showed $3.27 billion in total assets and $3.41 billion in total liabilities, resulting in a $141.2 million total stockholders' deficit. SPENCER ARRINGTON: Case Summary & Eight Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Spencer Amiel Arrington 9 Wood Valley Court Reisterstown, MD 21136 Bankruptcy Case No.: 08-13161 Chapter 11 Petition Date: March 6, 2008 Court: District of Maryland (Baltimore) Judge: Nancy V. Alquist Debtor's Counsel: Howard M. Heneson, Esq. Howard M. Heneson, P.A. 810 Glen Eagles Court Suite 301 Towson, MD 21286 Tel: (410) 494-8388 Fax: (410) 494-8389 hheneson@bankruptcymd.com Total Assets: $1,578,732 Total Debts: $1,565,667 Debtor's list of its Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Chase Home Equity Loan Servicing Location: 9 Wood $420,000 P.O. Box 24714 Valley Court, ($1,400,000 Columbus, OH 43224 Reisterstown MD secured) ($1,000,000 senior lien) DP Limited Partnership Judgment $19,833 25 Hooks Lane, Suite 312 Pikesville, MD 21208 Parent of Chase Vines child support $9,725 5701 Quail Covey Lane arreareage Hurdle Mills, NC 27541 Building Improvements Depot credit $2,295 Parent of Brent A. Arrington child support arrears $1,797 Expo Design Center credit $1,503 Chase credit $352 Bank of America credit $254 STEEL DYNAMICS: Board Authorizes Two-For-One Common Stock Split --------------------------------------------------------------- Steel Dynamics Inc.'s board of directors approved a two-for-one split of the company's common stock, to be effected in the form of a 100% stock dividend, and also approved a 33% increase in the company's quarterly cash dividend. "These actions by our board are a clear indication of the confidence we have in our ability to continue driving growth and creating value for our shareholders, by capitalizing on many exciting opportunities that lie ahead," Keith Busse, chairman and CEO of Steel Dynamics, said. Two-For-One Stock Split Common shareholders of record at the close of business on March 19, 2008, will receive one additional share of common stock for each share of common stock owned as of that date. The company expects to distribute the additional shares on or about March 28, 2008. To accommodate the stock split, the board of directors also authorized a two-for-one split of the company's total authorized common shares, from 200 million to 400 million shares. The company's articles of incorporation will be amended to reflect that change. Under Indiana law, no shareholder approval is required to effect this transaction. Cash Dividend On a pre-split basis, the company paid an annual cash dividend of $.60 per common share, or a quarterly cash dividend of $.15 per common share, comprised of a $.10 regular dividend and a $.05 special dividend during 2007. Effective with the first quarter of 2008, the board of directors has authorized the elimination of the distinction between "regular" and "special" dividends and has also authorized a 33% increase in the company's quarterly cash dividend, now resulting in a pre-split regular dividend of $.20 per common share or a post-split regular dividend of $.10 per common share, payable to shareholders of record at the close of business on March 31, 2008, with an expected distribution date of April 11, 2008. All future transactions measured by reference to a specific number of common shares, such as outstanding stock options, securities convertible into common shares, the payment of dividends, shares authorized by existing share repurchase programs, as well as the related option, conversion or dividend prices or amounts will be adjusted to reflect the two-for-one split. About Steel Dynamics Headquartered in Fort Wayne, Indiana, Steel Dynamics Inc. (Nasdaq: STLD) -- http://www.steeldynamics.com/-- produces a broad array of high-quality flat-rolled, structural and bar steels at its three Indiana steel mini-mills and steel-processing operations. * * * As reported in the Troubled Company Reporter on Oct. 8, 2007, Moody's Investors Service assigned a Ba2 rating to Steel Dynamics Inc's $500 million senior unsecured guaranteed debt issuance. At the same time, Moody's affirmed SDI's Ba1 corporate family rating, its Ba1 probability of default rating, the Ba2 rating on its existing guaranteed senior unsecured bonds and debentures and the Ba2 rating on its convertible subordinated notes. The rating outlook is stable. STRUCTURED ASSET: Nine Tranches Acquire Moody's Junk Ratings ------------------------------------------------------------ Moody's Investors Service downgraded and placed under review for possible downgrade 38 tranches from 5 deals issued by Structured Asset Investment Loan Trust in 2005. All transactions are backed by first and second lien fixed and adjustable rate subprime mortgage loans. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to the projected pipeline losses of the underlying pool. The amount of seriously delinquent loans in the pools (defined as loans that are 60 days or more delinquent, in bankruptcy, foreclosure or REO) continues to grow for all of the five transactions. In addition, pending step-down on some of the transactions may make certain securities more vulnerable to pool deterioration in the future. Complete rating actions are: Issuer: Structured Asset Investment Loan Trust 2005-1 -- Cl. M1, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. M2, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. M3, Placed on Review for Possible Downgrade, currently Aa3 -- Cl. M4, Downgraded to Baa2 from A1 -- Cl. M5, Downgraded to Ba1 from A2 -- Cl. M6, Downgraded to B1 from A3 -- Cl. M7, Downgraded to B3 from Baa1 -- Cl. M8, Downgraded to Caa1 from Baa2 -- Cl. M9, Downgraded to Caa2 from Baa3 -- Cl. B, Downgraded to Caa3 from Ba2 Issuer: Structured Asset Investment Loan Trust 2005-2 -- Cl. M2, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. M3, Placed on Review for Possible Downgrade, currently Aa3 -- Cl. M4, Downgraded to Baa2 from A1 -- Cl. M5, Downgraded to Baa3 from A2 -- Cl. M6, Downgraded to Ba1 from A3 -- Cl. M7, Downgraded to B1 from Baa1 -- Cl. M8, Downgraded to B3 from Baa2 -- Cl. M9, Downgraded to Caa2 from Baa3 -- Cl. B, Downgraded to Caa3 from Ba2 Issuer: Structured Asset Investment Loan Trust 2005-3 -- Cl. M1, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. M2, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. M3, Placed on Review for Possible Downgrade, currently Aa3 -- Cl. M4, Downgraded to Baa3 from A1 -- Cl. M5, Downgraded to Ba1 from A2 -- Cl. M6, Downgraded to Ba3 from A3 -- Cl. M7, Downgraded to B3 from Baa1 -- Cl. M8, Downgraded to Caa1 from Baa2 -- Cl. M9, Downgraded to Caa2 from Baa3 Issuer: Structured Asset Investment Loan Trust 2005-4 -- Cl. M6, Downgraded to Baa1 from A3 -- Cl. M7, Downgraded to Baa3 from Baa1 -- Cl. M8, Downgraded to Ba1 from Baa2 -- Cl. M9, Downgraded to B3 from Baa3 Issuer: Structured Asset Investment Loan Trust 2005-5 -- Cl. M5, Downgraded to A3 from A2 -- Cl. M6, Downgraded to Baa2 from A3 -- Cl. M7, Downgraded to Ba1 from Baa1 -- Cl. M8, Downgraded to Ba3 from Baa2 -- Cl. M9, Downgraded to Caa3 from Baa3 -- Cl. B, Downgraded to Ca from B1 TEQUESTA CAPITAL: Facing Liquidation After Missing Margin Calls --------------------------------------------------------------- Creditors were liquidating Tequesta Capital Advisors LP, a $150 million fund, since late February 2008, after the hedge fund missed margin calls on its mortgage-backed securities, Tom Cahill and Katherine Burton of Bloomberg News report. On Feb. 22, 2008, Bloomberg says, Tequesta founder Ivan Ross was told by bank lenders to add more capital into the ailing hedge fund or they would seize their collateral. Mr. Ross failed to raise the needed capital due to the securities market crisis, Bloomberg relates. Mr. Ross told Bloomberg that it was "impossible" to get the money given the market situation and said that he was left "at the mercy of counterparties" who have the power to shut down his business. Bloomberg comments that Tequesta's story unfolded a so-called "deathtrap for hedge funds" who are in the midst of panic selling among banks wanting to dispose risky mortgage bonds and demanding additional security to the loans. Tequesta Capital Advisors LP's Web site -- http://www.tequestafund.com/-- has been temporarily taken offline for maintenance, according to a note posted there. TLC VISION: Shareholder Joffe Endorses Himself as Board Nominee --------------------------------------------------------------- Dr. Stephen N. Joffe, a Cincinnati investor and laser vision correction industry pioneer who holds 5% of the shares of TLC Vision Corporation, delivered written notice to TLC Vision for the nominations of Michael R. Henderson, Cathy Willis and himself to stand for election as a minority slate of directors at the 2008 annual meeting of shareholders. Additionally, Dr. Joffe has requested that the TLC Vision board immediately appoint one of his nominees to fill a long-vacant seat on the company's board, and endorse that nominee's election to a full term. Should they fail to do this, Dr. Joffe demands that the Board explain its rationale and provide details on the decision-making criteria it uses to select Board members. TLC Vision operates approximately 80 refractive centers in the U.S. and Canada. Dr. Joffe is the founder and past CEO of LCA- Vision, Inc., parent company of LasikPlus,TLC Vision's largest competitor. He has no current relationship with LCA-Vision, Inc. "Having built the most successful company in this industry, I understand it will take a knowledgeable and experienced leadership team to turn TLC Vision around," Dr. Joffe stated. "Michael Henderson and Cathy Willis possess the insight and requisite business acumen to help me fix the vast number of critical operational and financial issues facing the company." Dr. Joffe ended his affiliation with Cincinnati-based LCA-Vision, Inc., in early 2006. During his 10-year tenure as the company's founder, chairman and CEO, he created a company whose market value dwarfed that of TLC Vision and returned more that 4,000 percent to shareholders. The value of LCA-Vision's shares have fallen more than 75% since his February 2006 departure as the company's CEO. Headquartered in Mississauga, Ontario, TLC Vision Corporation (TSE:TLC)) -- http://www.tlcv.com/-- is an eye care services company providing eye doctors facilities, technologies and staffing support they need to deliver patient care. The majority of the company's revenues come from laser refractive surgery, which involves using an excimer laser to treat common refractive vision disorders, such as myopia, hyperopia and astigmatism. The cmpany's business models include arrangements ranging from owning and operating refractive centers to providing access to lasers through branded TLC fixed site and mobile service relationships. In addition to refractive surgery, the company is diversified into other eye care businesses. Through its MSS Inc. subsidiary, the company furnishes hospitals and other facilities with mobile or fixed site access to cataract surgery equipment, supplies and technicians. * * * As reported in the Troubled Company Reporter on Feb. 5, 2008, Standard & Poor's Ratings Services revised its outlook on Mississauga, Ontario, Canada-based TLC Vision Corp., the parent of TLC Vision Corp., to negative from positive. The 'B' corporate credit rating was affirmed. TOUSA INC: Bigwater Partners Balk at $135MM DIP Financing --------------------------------------------------------- Bigwater Partners LLC tells Judge John K. Olson of the U.S. Bankruptcy Court for the Southern District of Florida that before the bankruptcy filing of TOUSA Inc. and its debtor-affiliates, Bigwater mistakenly transferred to EH/Transeastern, LLC, an entity that later merged into Tousa Homes of Florida, LLC, seven vacant lots that the Debtor never contracted or paid for. Tousa Homes Florida received, through an inadvertent mistake, 803 lots instead of 796 lots due to surveying error and subsequent drafting error based upon the survey, Andrew M. Brumby, Esq., at Shutts & Bowen LLP, in Orlando, Florida, informs the Court, on Bigwater Partners' behalf. Bigwater Partners relates that before the Petition Date, it was in discussions with Tousa Homes Florida for the return of the seven lots. In fact, a proposed deed has been sent to the Debtor's counsel with respect to the matter, Mr. Brumby notes. Bigwater Partners believed that there was no material dispute between it and Tousa Homes Florida's prepetition management that the seven lots had been transferred to the Debtor, and needed to be reconveyed. However, Tousa Homes Florida filed for Chapter 11 before the transfer could be made. Based upon the acknowledged actual mistake, the Debtor holds, at best, bare legal title to the seven lots subject to a constructive trust in favor of Bigwater Partners, Mr. Brumby maintains. Because of the limited interest that Tousa Homes Florida holds to those seven lots, the lots should be carved out of any lien authorized pursuant to the Debtors' request to borrow as much as $135,000,000 in postpetition financing from Citigroup Global Markets Inc. -- at least until the issues related to title, ownership and the beneficial interest of Bigwater Partners may be resolved -- Mr. Brumby contends. Mr. Brumby asserts that the seven lots at issue did not become property of the estate because Tousa Homes Florida did not hold any equitable interest in those lots as of the Petition Date. Because of Bigwater Partners' constructive trust, the deed, as to the seven lots, should be subject to cancellation or a reconveyance, he maintains. Bigwater Partners thus asks the Court to sustain its limited objection to the DIP Financing Motion, and carve the seven disputed lots out of any lien granted to postpetition lenders pursuant to the DIP Financing Motion until a trial of the relevant issues may be had. As reported in the Troubled Company Reporter on Feb. 1, 2008, TOUSA received interim approval from the Bankruptcy Court to borrow under the Citigroup DIP Facility. At the request of the Official Committee of Unsecured Creditors, the Court adjourned the hearing to consider final approval of the DIP Motion to March 20, 2008. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. ( TOUSA Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). TOUSA INC: Gets Court Permission to Continue to Sell Homes ---------------------------------------------------------- Judge John K. Olson of the U.S. Bankruptcy Court for the Southern District of Florida authorized TOUSA Inc. and its affiliates, in the exercise of their business judgment, to continue to close on the sale of homes pursuant to prepetition contracts and to perform all obligations under the Prepetition Sales Contracts. The Debtors are also authorized to take any other reasonable actions that may be necessary to effectuate closings under the Prepetition Sales Contracts, including to modify the Prepetition Sales Contracts at or before closing to address market conditions or other negotiating changes consistent with the Debtors' business judgment and past practice. The Debtors are authorized to refund customer deposits up to $34,000,000, if warranted by the terms of the Prepetition Sales Contracts or the Debtors' business judgment and past practice. Prepetition Sales Contracts In the ordinary course of their business, the Debtors contract with individuals for the sale, and sometimes to-order construction, of homes. The Debtors' ability to satisfy their existing contractual obligations to customers and continue to contract for and complete the construction and sale of homes, including transferring title to homebuyers "free and clear" of liens, is the essence of their business and must continue without any interruption if there is to be a successful reorganization, Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami, Florida, says. As of their bankruptcy filing date, the Debtors were parties to approximately 2,500 contracts to build and close on the sale of homes in various states. Mr. Singerman notes that the terms of the Prepetition Sales Contracts vary by region, however, in most instances, the contracts require a prospective homebuyer to provide the Debtors with a deposit on the purchase price. If the Debtors are unable to close on the sale of a home, they may be obligated to refund a Deposit. The Debtors estimate that there is approximately $34,000,000 in outstanding Deposits related to the Prepetition Sales Contracts. To make the home buying experience easy and seamless for their customers, the Debtors also institute and adopt, from time to time, certain customer-related programs designed to incentivize new purchases, enhance customer satisfaction, sustain goodwill and ensure that the Debtors remain competitive. Certain Customer Program obligations are reflected in the Prepetition Sales Contracts. Among other things, the Customer Programs may include the Debtors' agreement to pay brokers' or other closing fees on their customers' behalf. Operational Lien Claimants As part of their homebuilding operations, the Debtors rely on, and routinely contract with, a number of third parties, who may be able to assert liens against their property to secure payment for certain prepetition goods and services delivered to them or for other prepetition claims. Many of the Operational Lien Claimants have a right under applicable state law to assert and perfect tax, construction, materialman's, mechanic's or other liens, which attach to the Debtors' unsold homes and related real property, Mr. Singerman notes. Mr. Singerman points out that pursuant to Section 362(b)(3) of the Bankruptcy Code, the act of perfecting Operational Liens, to the extent consistent with Section 546(b) of the Bankruptcy Code, is expressly excluded from the automatic stay. The Debtors inform the Court that their title insurance agents and underwriters have indicated that the agents will not proceed with home closings, unless they can provide assurance that the Operational Liens will not cloud title to the homes. The Debtors anticipate that customers and lenders would have similar concerns. Lender Liens The Debtors' properties are also subject to liens arising from their prepetition secured financing facilities under their First Lien Term Loan Credit Agreement and Amended Revolving Credit Agreement. The Debtors' indebtedness is secured by perfected, valid and binding first priority liens, mortgages, deeds of trust, deeds to secure debt and security interests in substantially all of the Debtors' existing assets and properties, including certain unsold homes. Thus, the Debtors also seek the Court's authority to satisfy lien claims out of the proceeds of the home sales and use proceeds of the Home Sales to satisfy the lien claims. Proposed Lien Procedures To protect the rights of Operational Lien Claimants with valid and enforceable Operational Liens, the Debtors proposed to the Court establish uniform procedures for the resolution and payment of Operational Lien Claims secured by valid and enforceable Operational Liens: (a) The Debtors will be authorized to sell homes to customers, free and clear of all liens, claims, encumbrances and other interests. (b) All valid and enforceable Operational Liens on a property will transfer to and will attach to the proceeds of the sale of the property at the time of closing. Claims secured by valid and enforceable Operational Liens will be deemed secured claims against the Debtors. No Operational Lien Claimant will have any claim against the Debtors' Title Insurers or any purchaser of a home with respect to any asserted Lien or other claim arising from services performed for or goods delivered to the Debtors. (c) The Debtors will pay valid and existing Operational Lien Claims. (d) Any Operational Lien Claimant who believes it has a valid Operational Lien against a particular property sold by the Debtors and who has not been paid by the Debtors may send to the Debtors a written demand for payment. (e) The Demand must be mailed to: * The Debtors TOUSA, Inc. 4000 Hollywood Boulevard, Suite 500N Hollywood, Florida 33021 Attn.: Sorana Georgescu * Kirkland & Ellis LLP 153 East 53rd Street, New York, New York 10022, Attn.: Nicole L. Greenblatt * Counsel to the DIP lender agent Chadbourne & Parke 30 Rockefeller Plaza, New York, New York 10112 Attn: Joseph Smolinsky (f) The Debtors must respond to each Demand within 10 business days after receipt of a Demand. The Debtors may pay the Lien Claim if they determine, upon consultation with the DIP Lenders and any committee appointed in these cases, it is valid or that litigating resolution of the dispute will be more costly than honoring the Demand. The Debtors, the DIP Lenders, or any other party-in-interest may also challenge the validity or extent of any Operational Lien and seek disgorgement of any payments. No actions may be brought against the Debtors' Title Insurers. (g) If the Debtors dispute the the Demand, the parties will negotiate in good faith to resolve the dispute. If the Debtors resolve the dispute at a lower value than the amount reflected in the Demand, the Debtors may pay the amount without further Court order. If the dispute is not resolved within 30 days after receipt of the Demand, either party may file a motion seeking a determination from the Court as to the validity and extent of the Operational Lien. However, if the Debtors determine during the Resolution Period that the Demand is not likely to be resolved, the Debtors may file a Demand Resolution Motion at any time before the expiration of the Resolution Period and may seek an expedited hearing. (h) The Debtors will pay the Operational Lien, if any, within five business days of the date of the order resolving the Demand Resolution Motion. (i) The Debtors are authorized to use proceeds from the sale of homes for general corporate purposes in the ordinary course of business without being required to escrow the proceeds. However, subject to any DIP order, the Debtors will maintain cash proceeds on hand in an aggregate amount sufficient to satisfy all Demands against sold properties that have been received but that remain unresolved, subject to certain provisions. The Debtors further seek that financial institutions be authorized to (i) honor and pay all checks presented for payment and electronic payment requests related to the Prepetition Sales Contracts or Lien Procedures, and (ii) rely on the Debtors' designation of any particular check or electronic payment request as appropriate. Objections The tax collector for the Miami-Dade County, Florida, and Building Materials Holding Corporation objected to the Debtors' request. The Miami-Dade Tax Collector argued that it did not receive notice of the Home Sales Motion. The MDC Tax Collector informed the Court that the real properties, which are subject of the Home Sales Motion, are subject to ad valorem taxation pursuant to Florida law. Melinda S. Thornton, Esq., assistant county attorney, noted that the payment of these taxes is secured by first priority statutory liens, effective January 1 of each taxing year. Given the lack of notice, the MDC Tax Collector said the Debtors would owe the County an amount exceeding $2,000,000 for the 2007 and 2008 taxes. Ms. Thornton said while the Home Sales Motion describes the nature of Operational Liens, it is unclear whether the language is intended to include ad valorem tax liens, which have their own unique statutory framework under Florida law, as well as their own unique lien priority. The MDC Tax Collector objected to the Debtors' request to the extent the Debtors seek to include ad valorem taxes under the definition of "Operational Liens." Moreover, the MDC Tax Collector objected to sales free and clear of liens with respect to the sales of individual homes, as it is a customary part of real estate transactions, even those conducted under the auspices of the Court, that all ad valorem taxes are paid as part of the closing procedures. The MDC Tax Collector asked the Court to clarify that there will be no disbursement of sales proceeds to secured lenders or junior lenders without specific provisions being made for satisfaction of ad valorem tax liens and payment of taxes owed. BMHC and D&D Roofing, Inc., asked the Court for more time to review the Debtors' request. Miscellaneous Provisions The Court also directed the Debtors to maintain and provide a summary list of all customer deposit refunds to counsel to the agents for their prepetition secured lenders, counsel to the agent of their postpetition secured lenders and counsel to the Official Committee of Unsecured Creditors on a bi-weekly basis, commencing on March 15, 2008. The Debtors are authorized to continue to enter into contracts for the construction and sale of homes and to sell homes in the ordinary course of business. The Debtors and any intermediary financial institution participating in any postpetition home closings may transfer title, deed property and take any other actions as may be necessary to transfer ownership to their homebuyers. The holders of any mortgage or lien under the Debtors' prepetition secured financing facilities are authorized and directed to deliver partial releases and other instruments evidencing releases of the Lender Liens upon the request and at the expense of the Debtors, as may be required under the terms of the applicable prepetition financing agreements. A full-text copy of the Final Home Sales Order is available for free at http://bankrupt.com/misc/TOUSA_FinalOrderSellHomes.pdf About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. ( TOUSA Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). TOUSA INC: Court Approves Berkowitz Amended Employment Agreement ---------------------------------------------------------------- Judge John K. Olson of the U.S. Bankruptcy Court for the Southern District of Florida permitted TOUSA Inc. and its debtor-affiliates to enter into an Amended Employment Agreement with Paul Berkowitz. As reported in the Troubled Company Reporter on March 3, 2008, Mr. Berkowitz has been the executive vice president and chief of staff of TOUSA, Inc., since January 1, 2007, under the terms of his original employment agreement. Mr. Berkowitz also holds officer- level positions with all of the other Debtors. For the 13-year period immediately preceding his employment with the Debtors, Mr. Berkowitz was a shareholder with Greenberg Traurig, P.A., with expertise in a wide variety of commercial and corporate law areas. While at Greenberg, Mr. Berkowitz provided legal services to them and was the outside counsel with primary responsibility for overseeing legal matters for them. In that capacity and in his current position, Mr. Berkowitz has gained significant and unique insight into the Debtors' operations. Mr. Berkowitz is an invaluable member of the Debtors' management team, Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami, Florida, said. According to Mr. Singerman, Mr. Berkowitz' 2007 Employment Agreement included a significant guaranteed deferred compensation portion, payable in the ordinary course of business on Feb. 15, 2008. Faced with the loss of a significant portion of earned income, in December 2007, Mr. Berkowitz informed the Debtors of his plan to resign from TOUSA, effective January 31, 2008, and to accept an offer to rejoin Greenberg as a shareholder, Mr. Singerman noted. Immediately before the bankruptcy filing, it became clear that if Mr. Berkowitz were to return to Greenberg, there would be a substantial question regarding the ability of the firm to be retained to perform the strategic and restructuring-related services that Mr. Berkowitz currently provides, Mr. Singerman said. Subsequently, Mr. Berkowitz agreed to remain with the Debtors based on certain conditions in an Amended Employment Agreement. Among other things, the timing of Mr. Berkowitz's compensation payments is shifted to provide more significant payments of base compensation throughout the year and no guaranteed deferred compensation or bonus amount. Mr. Singerman pointed out that the Amended Employment Agreement reflects only an immaterial increase in Mr. Berkowitz's total compensation package. The material terms of the Amended Employment Agreement include: (a) Mr. Berkowitz will be paid a monthly salary of $110,000, commencing on January 28, 2008. Any amounts by which the salary exceeds the amount actually paid to Mr. Berkowitz between January 28 and the date the Debtors are authorized to enter into the amended agreement will be paid to Mr. Berkowitz in a lump sum together with the next regular payment of salary to the Debtors' senior executives. (b) Mr. Berkowitz is eligible to earn an annual bonus, in the sole and absolute discretion of the Board of Directors or any relevant Board committee, but there is no guaranteed minimum bonus or other deferred compensation arrangement. (c) The employment may be terminated by the Debtors at any time, with or without reason, upon 15 calendar days' notice. Mr. Berkowitz may also terminate the employment period at any time upon 15 calendar days' notice, provided that he agrees to defer the effective date of any termination notice given by him for a reasonable period of time as the Debtors will request in order to transition Mr. Berkowitz's responsibilities. (d) Upon termination of the employment, the Debtors will pay or provide Mr. Berkowitz all "Accrued Obligations" within 30 business days after the date of termination. (e) Mr. Berkowitz and his eligible dependents are eligible to participate in all customary employee benefit plans, practices and policies in effect for all similarly situated employees. In granting the Debtors' request, Judge Olson clarified that, absent further Court order, the Debtors are not authorized to pay any deferred compensation or bonuses to Mr. Berkowitz relating to or arising from the 2007 Employment Agreement or the Amended Employment Agreement. In the event the Amended Employment Agreement is subsequently rejected, any resulting allowed claims will be considered and treated as unsecured claims pursuant to Section 502(g) of the Bankruptcy Code, the Court ruled. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. ( TOUSA Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). TOUSA INC: Court Approves Sale of Note to PRN for $13,500,000 ------------------------------------------------------------- Judge John K. Olson of the U.S. Bankruptcy Court for the Southern District of Florida granted the request of TOUSA Inc. and its debtor-affiliates to sell a promissory note to PRN Real Estate & Investments, Ltd., for $13,500,000. As reported in the Troubled Company Reporter on March 3, 2008, in early 2005, TOUSA Homes, Inc., purchased approximately 59 acres of land located on International Drive in Orlando, Florida, for $28,000,000. I-Drive, stretching 14.5 miles long, is a mixed-use commercial town place that is Orlando's main tourist strip. The purchase of the I-Drive Property was intended more as an investment opportunity than for direct development, since the was outside their standard market. TOUSA Homes was able to sell approximately 18 acres of the I-Drive Property for $7,000,000 in mid 2006. With the assistance of Century 21 Real Estate Professionals and Mid-South Realty Investors, TOUSA Homes was able to sell its remaining interest in the I-Drive Property to Cape Light Development International Drive I, LLC, for $8,000,000 in cash and a $16,300,000 promissory note dated June 22, 2007, executed by Cape Light in favor of TOUSA Homes. Cape Light, however, defaulted on the Note, failing to make the acquired interest payments for November and December 2007, according to Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami, Florida. The Debtors estimated that the process of foreclosing and then ultimately closing on a replacement sale of the Note could take approximately 12 to 14 months due to the necessary foreclosure time and the current state of the real estate market. To avoid a long and expensive foreclosure process that ultimately would result in holding land that is not core to its business, TOUSA Homes determined that the most prudent course of action was to market its interest in the Note and thereby monetize the asset. Florida Property Specialists, Inc., was hired to help facilitate the sale of the Note. The Debtors received four offers to purchase the Note, including two offers for a purchase price of $13,500,000. The Debtors identified PRN Real Estate's bid as the highest and best offer for the Note in light of PRN's willingness and ability to close on the transaction quickly, according to Mr. Singerman. Although the face value of the Note is $16,300,000, the Debtors believe that the $13,500,000 purchase price represents fair value both because of the extensive marketing process the Debtors employed and because a discounted purchase price reflects the cost, time and market risk associated with a foreclosure process. The salient terms of the Debtors' Sale Agreement with PRN include: (a) PRN will purchase the Note from TOUSA Homes for $13,500,000, including a $200,000 deposit currently held in escrow, payable at closing by completed bank wire transfer of immediately available funds. (b) The closing of the sale will take place on the 11th day after TOUSA Homes obtains the Court's approval, provided that no appeal on the order will be filed within 10 days after the order is entered. If TOUSA Homes fails to provide PRN with Closing Notice by March 20, 2008, PRN may elect to terminate the Sale Agreement and receive a refund of the Deposit or extend the closing until March 31. (c) TOUSA Homes will pay any and all brokerage fees, commissions, fees or other charges to any third party in connection with the Sale: * $379,040 to Century 21; * $40,000 to Mid-South Realty; and * $270,000 to Florida Property Specialists. (d) If PRN defaults under the Sale Agreement, TOUSA Homes will be entitled to retain the Deposit as liquidated damages as its sole exclusive remedy. If TOUSA Homes defaults under the Sale Agreement, PRN will be entitled to either (i) the return of the Deposit, or (ii) a suit for specific performance of the Debtor's obligations under the Sale Agreement as PRN's sole and exclusive remedies. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. ( TOUSA Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). TPF GENERATION: S&P Keeps 'BB-' Rating on $1.15BB Sr. Facilities ---------------------------------------------------------------- Standard & Poor's Rating Services affirmed its 'BB-' issue-level ratings on TPF Generation Holdings Inc.'s first-lien $1.15 billion senior secured credit facilities. Standard & Poor's also affirmed its 'B-' issue-level rating on the company's $495 million second-lien term loan due 2014. The recovery rating on the first-lien senior credit facilities remains at '1', indicating S&P's expectation for very high (90%-100%) recovery in the event of a payment default. The recovery rating on the second-lien term loan remains at '5' indicating S&P's expectation for modest (10%-30%) recovery in the event of a payment default. The project has made principal payments on the first-lien senior secured term loan, reducing the balance to $816 million at the end of the third quarter of 2007. The outlook on all of the facilities is stable. The ratings on the loans reflect these risks: -- The project is expected to have $334/kw of consolidated debt at maturity of the first-lien debt under the Standard & Poor's gas price stress and $218/kw under the management base case. -- Two assets, High Desert and Rio Nogales, are seen as having far greater cash-flow generating potential than the four other plants in the portfolio. -- The hedges that TPF has entered into do not leave a large cushion for capacity shortfalls or unit heat rates above expectations, creating a risk that the project could be slightly short energy or earn a negative fuel margin on dispatch, which would result in slightly overstated contracted margin. Offsetting the above risks are these strengths: -- The power purchase agreement with CDWR, the energy call option and gas hedges with J. Aron & Co, and the energy call option with Lehman Brothers Commodity Services provide strong contractual cash flows that cover projected fixed operating costs and debt service through 2010. -- Relatively new equipment with good operating histories and experienced operators offset operating risk. -- Six-month debt service reserve account provides liquidity for debt service in case of market volatility or extended outages. -- The 100% cash sweep allows creditworthiness to benefit from improving markets and seasonally-strong demand in any given year. The benefits of the sweep are partially mitigated by an annual $6 million management fee that comes after mandatory debt service (interest and scheduled principal amortization) but before principal prepayment from excess cash flow, effectively reducing the cash sweep to 80%-90% under Standard & Poor's gas stress and to about 90%-95% in the management base case. -- The portfolio has both combined-cycle gas turbines and simple-cycle combustion turbines in four different markets and earns diverse revenue streams. This is partially offset by the project's disproportionate reliance on cash flows from High Desert facility located in southern California. TRICOM SA: Wants to Employ Squire Sanders as Dominican Counsel -------------------------------------------------------------- Tricom S.A. and its U.S. debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Southern District of New York to employ Squire, Sanders & Dempsey Pena Prieto Gamundi, as their special Dominican counsel, nunc pro tunc to the bankruptcy filing date. The Debtors' proposed counsel, Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York, relates that the Debtors have engaged Squire Sanders in May 2005 in connection with their Dominican corporate and litigation matters related to restructuring, telecommunications, contractual and taxation matters, under Dominican law. The Debtors believe that Squire Sanders has become extraordinarily familiar with their business and potential Dominican legal issues that may arise in connection with the restructuring and the Chapter 11 cases. As special Dominican counsel, Squire Sanders will provide legal services to the Debtors, including advice and assistance regarding legal matters in the Dominican Republic, and implementation of the restructuring, telecommunications, contractual, taxation, litigation and other corporate matters in the Dominican Republic. The Debtors will pay Squire Sanders according to the firm's standard hourly rates: Professional Hourly Rates ------------ ------------ International Partner $295 National Partner $260 Associates $115 â€" $245 Law Clerks & Paralegals $70 â€" $115 The Debtors will also reimburse Squire Sanders for any necessary out-of-pocket expenses it incurs. >From the period beginning one year before the Petition Date, Squire Sanders billed and received from the Debtors $664,261, for services rendered and expenses incurred in the Dominican Republic. In addition, on February 28, 2008, Squire Sanders received a $114,000, retainer from the Debtors, portions of which were applied to prepetition amounts owing to Squire Sanders. Pedro O. Gamundi, Esq., a partner at Squire, Sanders & Dempsey Pena Prieto Gamundi, in Santo Domingo, Dominican Republic, assures the Court that his firm does not represent any interest adverse to the Debtors and their estates, and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Tricom Tricom, S.A., was incorporated in the Dominican Republic on January 25, 1988, as a Sociedad Anonima. Tricom is one of the pre-eminent full service communications services providers in the Dominican Republic. Headquartered in Santo Domingo, Tricom offers local, long distance, and mobile telephone services, cable television and broadband data transmission and Internet services, which are provided to more than 729,000 customers. Tricom's wireless network covers about 90% of the Dominican Republic's population. Tricom's local service network is 100% digital. The Company also owns interests in undersea fiber-optic cable networks that connect and transmit telecommunications signals between Central America, the Caribbean, the United States and Europe. Tricom USA, Inc., a wholly owned subsidiary of Tricom, was incorporated in Delaware in 1992, and at that time was known as Domtel Communications. A name change was effected in 1997 and Domtel Communications formally became Tricom USA, Inc. Tricom USA originates, transports and terminates international long-distance traffic using switching stations and other telecommunications equipment located in New York and Florida. Tricom S.A. and its U.S. affiliates filed for Chapter 11 protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08-10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York City, represent the Debtors. When the Debtors' filed for protection from their creditors, they listed total assets of $327,600,000 and total debts of $764,600,000. TRICOM SA: Seeks Court Authority to Hire Sotomayor as Auditors -------------------------------------------------------------- Tricom S.A. and its U.S. debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Southern District of New York to employ Sotomayor & Associates LLP as their auditors, nunc pro tunc to the bankruptcy filing date. Sotomayor has worked with the Debtors since 1999 on U.S. tax matters, Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York, the Debtors' proposed counsel, states. In October 2005, the Debtors engaged Sotomayor as their independent auditors. In that capacity, Sotomayor assisted the Debtors with the restatement of their 2002 financial statements, audits of their consolidated financial statement for 2002 and the succeeding fiscal years, and auditing the financial statements filed with the U.S. Securities and Exchange Commission in connection with the Debtors' filing of their Annual Report on form 20-F for the years ending 2004, 2005, and 2006. In addition, Sotomayor assisted the Debtors in connection with tax-related matters and regulatory compliance filings with the Federal Communications Commission and state public utility commissions. As a result of working closely with the Debtors since 1999, Sotomayor has become familiar with the Debtors' business financial statements as well as the tax and other accounting and regulatory matters that may arise in the ordinary course and in connection with their restructuring and Chapter 11 cases, Mr. Nashelsky says. As auditor, Sotomayor will: (a) audit the Debtors' consolidated balance sheet and related statements of operations, stockholders' equity and comprehensive income and cash flows for the fiscal year ended December 31, 2006; (b) prepare certain statements for each of the Debtors to be filed with U.S. and Dominican taxing authorities; (c) Prepare Tricom USA, Inc.'s federal tax returns in the U.S. and state returns in New York, Rhode Island, New Jersey, Ohio, Massachusetts, California, Virgin Islands, Georgia, Pennsylvania, Connecticut, Washington D.C., Delaware, Maryland, Illinois, Indiana, Florida, and Puerto Rico and states where those filings may be required; (d) prepare various regulatory filings required by the FCC and multiple state PUCs; and (e) provide other tax, accounting, and regulatory compliance services in connection with the Chapter 11 cases. The Debtors will pay Sotomayor according to the firm's customary hourly charges: Professional Hourly Rates ------------ ------------ Senior Partner $300 Partner $150 to $180 Manager $150 Senior Accountant $100 Staff Accountant $75 Administrative Staff $45 The Debtors anticipate that these Sotomayor professionals will take a lead role in their Chapter 11 cases: Name Position Hourly Rate ---- -------- ----------- Ivan Sotomayor Senior Partner $300 David Malena Partner $180 Carmen Sotomayor Partner $150 Lulu Lam Manager $150 Wanda Amarante Manager $150 Karina Sotomayor Senior Accountant $100 Damaso Mieses Senior Accountant $100 Susana Tejeda Accountant $75 Arbenys Mueses Accountant $75 Michelle Amemiya Admin. Staff $45 In addition, the Debtors will reimburse Sotomayor for any necessary out-of-pocket expenses incurred. Ivan Sotomayor, partner at Sotomayor & Associates LLP, in Santo Domingo, Dominican Republic, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, and does not represent any interest adverse to the Debtors and their estates. Mr. Sotomayor further discloses that from the period beginning one year prior to the Petition Date, his firm has billed and received from the Debtors $729,493, for prepetition services rendered and expenses incurred. About Tricom Tricom, S.A., was incorporated in the Dominican Republic on January 25, 1988, as a Sociedad Anonima. Tricom is one of the pre-eminent full service communications services providers in the Dominican Republic. Headquartered in Santo Domingo, Tricom offers local, long distance, and mobile telephone services, cable television and broadband data transmission and Internet services, which are provided to more than 729,000 customers. Tricom's wireless network covers about 90% of the Dominican Republic's population. Tricom's local service network is 100% digital. The Company also owns interests in undersea fiber-optic cable networks that connect and transmit telecommunications signals between Central America, the Caribbean, the United States and Europe. Tricom USA, Inc., a wholly owned subsidiary of Tricom, was incorporated in Delaware in 1992, and at that time was known as Domtel Communications. A name change was effected in 1997 and Domtel Communications formally became Tricom USA, Inc. Tricom USA originates, transports and terminates international long-distance traffic using switching stations and other telecommunications equipment located in New York and Florida. Tricom S.A. and its U.S. affiliates filed for Chapter 11 protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08-10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York City, represent the Debtors. When the Debtors' filed for protection from their creditors, they listed total assets of $327,600,000 and total debts of $764,600,000. TRICOM SA: Reports 19 Largest Unsecured Creditors; List Amended --------------------------------------------------------------- Tricom S.A. and its U.S. debtor-affiliates amended their list of creditors holding largest unsecured claims to (a) drop Loral Cyberstar, Inc., from the list; (b) include Capital Markets Financial Services, Ltd., Deltec Asset Management, LLC, Bear Stearns Credit Products, Inc.,Octavian Special Master Fund, LP, UBS Securities LLC, and MBIA Capital Management Corp.; and (c) adjust the claim amounts of some creditors. The Debtors originally disclosed a list of their 14 largest unsecured creditors. The 19 Largest Unsecured Creditors are: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of New York as financial claim $198,824,943 Indenture Trustee & 11-3/8% Notes for the 11-3/8% Senior Notes due September 2004 under Indenture dated August 21, 1997 between Tricom, S.A. and the BNY 101 Barclay Street Floor 21 West New York, NY 10286 Attn: Corporate Trust Trustee Administration Tel: (212) 850-2929 Deutsche Bank Trust Co. financial claim $70,066,192 Americas 60 Wall Street 3rd Floor New York, NY 10005 Attn: Charles J. Lanktree & Scott G. Martin Fax: (212) 797-4666 Stark Trading financial claim $38,533,978 3600 South Lake Drive St. Francis, WI 53235 Attn: Jeff Froemming Fax: (414) 294-7608 Citigroup financial claim $37,857,109 Attn: Dang Bui & Rafael Benavente Citigroup Global Markets, Inc. 390 Greenwich Street New York, NY 10013 Fax: (212) 723-8651, (212) 723-8036 Capital Markets Financial 11-3/8% Notes $35,513,362 Services, Ltd. Attn: Edward Farah P.O. Box 10435 APO 103 South Church Street Harbour Place, 2nd Floor Grand Cayman, Cayman Islands Fax: (305) 512-6089 Credit Suisse International financial claim $32,556,707 Attn: Sergio Delgado 11 Madison Avenue-Fourth Floor Fax: (212) 743-4138 Deltec Asset Management, LLC 11-3/8% Notes $30,642,393 Attn: Timothy S. Hall 645 Fifth Avenue, 18th Floor New York, NY 10022 Fax: (212) 546-6449 Bear Stearns Credit 11-3/8% Notes $16,547,175 Products, Inc. Attn: Ethan Garber 383 Madison Avenue, 8th Floor New York, NY 10179 Fax: (212) 272-0543 Octavian Special Master 11-3/8% Notes $12,550,000 Fund, LP Attn: Greg Racz 650 Madison Avenue New York, NY 10022 Fax: (212) 224-9665 Bancredito financial claim $12,438,105 Bancredito Panama, S.A. Via Espana 177 Edif. Piaza Regency, Piso 15 Apartado 6-6010/6-6011 El Dorado, Panama, Republica de Panama Bancredito Panama, S.A. P.O. Box 1502 Santo Domingo, RD Swift address: NCREDOSD Counsel for the Liquidator of Bancredito Panama, S.A. Kaye Scholer, L.L.P. 1999 Avenue of the Stars Suite 1700 Los Angeles, CA 90067-0048 Fax: (310) 788-1200 UBS Securities LLC 11-3/8% Notes $11,828,375 Attn: Caroline Keany 1285 Avenue of the Americas New York, NY 10019 Fax: (212) 713-1153 MBIA Capital Management Corp. 11-3/8% Notes $7,843,750 Attn: Robert Claiborne 113 King Street Armonk, NY 10504 Fax: (914) 765-3375 Morgan Stanley Senior Funding financial claim $7,688,333 Attn: Vanesa Marling & Darragh Dempsey 1 Pierrepont Plaza, 7th Floor Brooklyn, NY 11201 Fax: (718) 233-0697 Cheyne Capital Management financial claim $6,409,889 Attn: Cynthia Cox Cheyne Latam High Income Fund LP Claredon House 2 Church Street Hamilton, Bermuda HM11 Fax: (441) 334-3939 Counsel to Cheyne Capital Attention: Ronald R. Jewell Dechert LLP 30 Rockefeller Plaza New York, New York 10112 Argo Capital Investors Funds financial claim $5,669,440 S.P.C. for Argo Global Special Situations Fund SP Attn: Loucas Demetreu Jackie Court, Suite 401 10 Vasilissis Frederikis St. Nicosia 1066 Cyprus Fax: 00 357 22 44 5177 Millenium Partners, L.P. financial claim $4,281,560 Attn: Sandra Costa 666 5th Avenue, 8th Floor New York, NY 10103 Fax: (212) 841-4141 T.C.S. Fund LU S.A.R.L. financial claim $3,291,747 Attn: Tracy Howard, Investment Operations T.P.G. Credit Management, LP 4600 Wells Fargo Center 90 South Seventh Street Minneapolis, MN 55402 Fax: (612) 851-3001 Greylock Capital financial claim $1,366,559 Attn: Bruce G. Hart, Esq. 99 Park Avenue, 11th Floor New York, NY 10016 Fax: (212) 808-1801 T.C.S. Fund SP-LU S.A.R.L. financial claim $1,975,317 Attn: Tracy Howard, Investment Operations T.P.G. Credit Management, LP 4600 Wells Fargo Center 90 South Seventh Street Minneapolis, MN 55402 Fax: (612) 851-3001 About Tricom Tricom, S.A., was incorporated in the Dominican Republic on January 25, 1988, as a Sociedad Anonima. Tricom is one of the pre-eminent full service communications services providers in the Dominican Republic. Headquartered in Santo Domingo, Tricom offers local, long distance, and mobile telephone services, cable television and broadband data transmission and Internet services, which are provided to more than 729,000 customers. Tricom's wireless network covers about 90% of the Dominican Republic's population. Tricom's local service network is 100% digital. The Company also owns interests in undersea fiber-optic cable networks that connect and transmit telecommunications signals between Central America, the Caribbean, the United States and Europe. Tricom USA, Inc., a wholly owned subsidiary of Tricom, was incorporated in Delaware in 1992, and at that time was known as Domtel Communications. A name change was effected in 1997 and Domtel Communications formally became Tricom USA, Inc. Tricom USA originates, transports and terminates international long-distance traffic using switching stations and other telecommunications equipment located in New York and Florida. Tricom S.A. and its U.S. affiliates filed for Chapter 11 protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08-10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York City, represent the Debtors. When the Debtors' filed for protection from their creditors, they listed total assets of $327,600,000 and total debts of $764,600,000. TRUMAN CAPITAL: Two Cert. Classes Get S&P's Rating Cuts on Losses ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class M-3 and M-4 asset-backed certificates from Truman Capital Mortgage Loan Trust 2004-2 to 'BB' from 'A-' and to 'B' from 'BBB+', respectively. At the same time, S&P affirmed its ratings on 15 classes from three Truman Capital Mortgage Loan Trust series. The downgrades of classes M-4 and M-3 from series 2004-2 reflect continued erosion of overcollateralization (O/C), as monthly losses have consistently outpaced monthly excess interest. As a result, O/C is currently 1.81% of the transaction's original pool balance, well below its target of 2.51%. In addition, total delinquencies are approximately 35.25% of the outstanding pool balance, and severe delinquencies (90-plus days, foreclosures, and REOs) represent roughly 17.41%. Additionally, the transaction has incurred cumulative realized losses totaling approximately 5.83% of the original pool balance. This transaction is 42 months seasoned and has paid down to approximately 31.59% of its original size. The affirmations are based on credit support levels that are sufficient to support the current ratings. Subordination, O/C, and excess spread provide credit support for these deals. The underlying collateral originally consisted of first, second, or third liens on one- to four-family residential properties or multifamily properties. The pool consists of performing, subperforming, and re-performing mortgage loans. Ratings Lowered Truman Capital Mortgage Loan Trust 2004-2 Asset-backed certificates Rating ------ Series Class To From ------ ----- -- ---- 2004-2 M-3 BB A- 2004-2 M-4 B BBB+ Ratings Affirmed Truman Capital Mortgage Loan Trust Asset-backed certificates Series Class Rating ------ ----- ------ 2004-2 A-1, A-2 AAA 2004-2 M-1 AA 2004-2 M-2 A 2005-1 A AAA 2005-1 M-1 AA- 2005-1 M-2 A- 2005-1 M-3 BBB+ 2006-1 A AAA 2006-1 M-1 AA 2006-1 M-2 A 2006-1 M-3 A- 2006-1 M-4 BBB+ 2006-1 M-5 BBB 2006-1 M-6 BBB- TWL CORP: To Merge Newly Acquired Divergent with Unit ----------------------------------------------------- TWL Corporation has acquired and will merge Divergent Entertainment Inc., into the company's TWL Knowledge Group subsidiary. In addition, TWL Corp. entered into an executive employment agreement with DEI founder Danny Hammett. DEI developed an advanced personal computer-based simulation program designed to deliver realistic and accurate skills training, practice and testing in a quasi-virtual reality environment. The initial product using this technology -- Firefighter: Everybody Goes Home -- simulates real-life scenarios for firefighters. Using inexpensive PCs routinely found in fire stations, the system provides affordable training designed to augment live teaching exercises, which can be expensive and dangerous to a firefighter's safety. Each application includes ready-to-use scenarios and simulations, and quarterly updates with new scenarios and simulations will be made available, so training exercises remain current. "This simulation leverages cutting-edge games-based technology in a realistic and immersive environment and bridges a critical gap that currently exists between classroom and live training, allowing firefighters to run drills safely and repeatedly in high risk situations, while gaining practical experience in a much closer to real-life situation than the classroom setting can ever provide," Dennis Cagan, chairman, CEO and president of TWL, said. "With an estimated first year market potential of $225 million and $150 million per year thereafter, we expect this product to achieve and sustain profitability by the end of the fourth quarter." Mr. Hammett has joined TWL as senior vice president and president of the newly-formed Global Simulation Group, which includes DEI, and has been elected to the board of directors of TWL. He served as executive vice president at Vivendi Universal Games, where he created the Value/Casual Games Division, overseeing all console, PC and online product management, acquisitions, budgeting and legal affairs. Mr. Hammett also served as president of Activision Value and executive vice president of Activision, where he managed a $695 million global publishing operation with three operating divisions and a 25-person management team responsible for six worldwide offices. According to Mr. Hammett, TWL and DEI were a natural fit. "With TWL's additional vertical markets available to expand simulation products, and their experience and knowledge of providing training solutions, we felt our customers would be better served by joining TWL," Mr. Hammett said. "This simulation product will have an immediate impact with unlimited potential on the bottom line and also provide the company a tremendous advantage in visibility, thereby distancing ourselves from competition." "I'm honored and excited to be part of the TWL team, as well to work with Dennis Cagan, and look forward to using my experience and our collective expertise to deliver interactive and realistic training that is highly affordable to every fire department and firefighter across the United States," Mr. Hammett added. As the sole owner of DEI, Mr. Hammett will receive as much as $16 million in combined purchase price, executive compensation and performance incentive payments over four years, based on the new Global Simulation Group's performance, in accordance with the acquisition and executive employment agreement. I n addition to Mr. Hammett, three employees from DEI are joining TWL in various roles. "We're excited to have Danny join our team and are looking forward to being able to introduce this technology and training methodology in our other vertical markets," Mr. Cagan said. "This acquisition is the next step in our long-term strategy for company growth and to expand our products and services to better serve our customers." About Divergent Entertainment Inc. Divergent Entertainment Inc. -- http://www.divergentgames.com/-- was founded with the goal of leveraging extensive optical and electronic media, gaming, and emergency service experience to address critical and lethal training shortfalls in the Public Service Sector. About TWL Corporation Headquartered in Carrollton, Texas, TWL Corporation (OTCBB: TWLO), through its subsidiary TWL Knowledge Group Inc., is a provider of integrated workplace learning solutions for skill development, compliance, safety, and emergency preparedness in the workplace. Since 1986, the TWL Knowledge Group has met the training and education needs of more than 8 million professionals in the industrial, healthcare, automotive, fire & emergency, government, law enforcement, and the private security markets. Going Concern Doubt KBA Group LLP, in Dallas, Texas, expressed substantial doubt about TWA Corporation's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended June 30, 2007. The auditing firm reported that the company has suffered recurring losses from operations, has used significant cash flows in operating activities and has liabilities significantly in excess of assets. UNIVISION COMMS: Moody's Keeps B1 Ratings; Gives Negative Outlook ----------------------------------------------------------------- Moody's Investors Service affirmed Univision Communications, Inc.'s B1 Corporate Family rating, B1 Probability of Default rating and associated debt ratings and changed the rating outlook to negative. Moody's also assigned an SGL-3 speculative-grade liquidity rating. The change in the rating outlook reflects the likelihood that projected proceeds from the music business and other planned asset sales will be lower than Moody's had anticipated at the time of the initial rating assignment in February 2007. The asset sale shortfall and more difficult advertising market conditions could challenge Univision's ability to reduce debt-to-EBITDA (estimated at 12.3x for FY 2007 incorporating Moody's standard adjustments) to the 9.0x level for 2008 anticipated in the B1 rating and fund the maturity of the $500 million second lien asset sale bridge in March 2009. Downward rating pressure will result if liquidity weakens or if Moody's determines that Univision is not making steady progress in reaching the 9.0x leverage level. Outlook Actions: Issuer: Univision Communications, Inc. -- Outlook, Changed To Negative From Stable Assignments: Issuer: Univision Communications, Inc. -- Speculative Grade Liquidity Rating, Assigned SGL-3 Univision's B1 rating continues to be supported by the company's strong and leading market position in Spanish-language media within the United States, strong operating margins, and favorable intermediate-term growth prospects, underpinned by Hispanic demographic trends. These strengths are more reflective of an investment-grade business profile. Nevertheless, the high debt- to-EBITDA leverage and fixed financial charges resulting from the $13.5 billion March 2007 LBO place the rating in the single B range, and weakly position it at the B1 rating level. The rating assumes in the rating continuation of exclusive U.S. broadcast rights to Grupo Televisa and Venevision programming through 2017 under the programming licensing agreement. However, the recent contentious relationship and litigation between Univision and Televisa regarding the PLA is a significant potential risk. Univision's high leverage reduces flexibility to re-negotiate the terms of the PLA as part of any litigation settlement. Moody's will continue to monitor developments related to the litigation with Televisa and the jury trial that is currently scheduled to start at the end of April. A confirmation of the existing PLA would not result in upward rating movement, but a material adverse modification to the PLA not offset by compensating factors could create downward rating pressure. Maintaining adequate liquidity is critical to the rating in order to bridge any internal cash flow gaps that may arise as a result of near term cyclical fluctuations in the advertising market. The SGL-3 liquidity rating indicates Univision has adequate liquidity through March 2009. The company is reliant on net proceeds from signed asset sales and its committed external credit facilities to fund $750 million of maturities over the next 12 months. Conditions for drawing on the delayed-draw term loan to fund the $250 million October 2008 note maturity and up to $250 million of the $750 million revolver to partially fund the $500 million March 2009 asset sale bridge facility maturity include compliance with covenants and certification that no MAE has occurred (the MAE language specifically carves out the Televisa litigation). Moody's believes Univision might need to PIK the March 2009 coupon on the $1.5 billion senior unsecured notes to help fund the $500 million asset sale bridge if one or more of the planned but unsigned asset sales does not occur, the $177 million of asset sales under signed agreements do not close as expected, or if the company depletes its cash balance. Moody's estimates that Univision's EBITDA (calculated as per the terms of the credit agreement) would need to drop by at least 15% to trip the credit facility financial covenants, which the rating agency considers as unlikely given the company's track record of modest growth in the last two U.S. recessions and the fact that first quarter 2008 revenue is pacing up in the mid single digits. Univision Communications Inc., headquartered in Los Angeles, is the leading Spanish-language media company in the United States with television network operations in Miami and television and radio stations in major cities throughout the U.S. and Puerto Rico. Annual revenue approximates $2.1 billion. US STEEL: Unit Backs Out From Talks to Sell Wabush Mine Stake ------------------------------------------------------------- U.S. Steel Canada Inc., a subsidiary of United States Steel Corporation, has withdrawn from negotiations to sell its 44.6% interest in the Wabush Mines Joint Venture to ArcelorMittal Dofasco Inc. The company did not disclose the reason for its decision. Cleveland-Cliffs Inc. holds a 26.8% interest and Dofasco holds a 28.6% interest in the Wabush Mines Joint Venture. On June 6, 2007, Stelco Inc. announced that it entered into an agreement providing for the sale of its interest in the Wabush Mines joint venture to Consolidated Thompson Mines Limited for C$41 million -- roughly US$41 million. U.S. Steel acquired all of the outstanding shares of Stelco Inc. on October 31, 2007, and renamed it U.S. Steel Canada. ArcelorMittal Dofasco, one of the partners of the joint venture, had a right of first refusal over the proposed transaction, which it exercised on August 29, 2007. Completion of the transaction with Dofasco is subject to the execution of definitive agreements and the receipt of all required third party consents and regulatory approvals U.S. Steel initially expected the completion of the transaction to occur in the first half of 2008. Headquartered in Pittsburgh, Pennsylvania, United States Steel Corporation (NYSE: X) -- http://www.ussteel.com/-- manufactures a wide variety of steel sheet, tubular and tin products; coke, and taconite pellets; and has a worldwide annual raw steel capability of 26.8 million net tons. U.S. Steel's domestic primary steel operations are: Gary Works in Gary, Indiana; Great Lakes Works in Ecorse and River Rouge, Michigan; Mon Valley Works, which includes the Edgar Thomson and Irvin plants, near Pittsburgh and Fairless Works near Philadelphia, Pennsylvania; Granite City Works in Granite City, Illinois; Fairfield Works near Birmingham, Alabama; Midwest Plant in Portage, Indiana; and East Chicago Tin in East Chicago, Indiana. The company also operates two seamless tubular mills, Lorain Tubular Operations in Lorain, Ohio; and Fairfield Tubular Operations near Birmingham, Alabama. U.S. Steel produces coke at Clairton Works near Pittsburgh, at Gary Works and Granite City Works. On Northern Minnesota's Mesabi Iron Range, U.S. Steel's iron ore mining and taconite pellet operations, Minnesota Taconite and Keewatin Taconite, support the steelmaking effort, and its subsidiary ProCoil Company provides steel distribution and processing services. U.S. Steel's steelmaking subsidiaries U.S. Steel Kosice, s.r.o., in Kosice, Slovakia and U.S. Steel Serbia, d.o.o, in Sabac and Smederevo, Serbia. Acero Prime, the company's joint venture with Feralloy Mexico, S.R.L. de C.V. and Intacero de Mexico, S.A. de C.V., provides Mexico's automotive and appliance manufacturers with total supply chain management services through its slitting and warehousing facility in San Luis Potosi and its warehouse in Ramos Arizpe. * * * As reported in the Troubled Company Reporter on Dec. 10, 2007, Standard & Poor's Ratings Services assigned its 'BB+' senior unsecured rating to the proposed offering of up to $400 million in senior unsecured notes due Feb. 1, 2018, of United States Steel Corp. (BB+/Negative/--). USG CORP: Enough Cushion on Liquidity Cues S&P to Hold BB+ Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings for USG Corp., including its 'BB+' corporate credit and senior unsecured debt ratings. All ratings were removed from CreditWatch, where they were placed with negative implications on Jan. 30, 2008. The outlook is negative. "The rating actions reflect our assessment that, although the company's operating results continue to be materially hurt by the residential downturn, we expect USG's capital structure and liquidity position to provide adequate cushion until conditions improve. We do not expect that to happen, though, before 2009." Chicago, Illinois-based USG has a leading position in the U.S. gypsum wallboard and ceiling system markets, competitive cost position, and flexible capital spending needs. While the company is well positioned to benefit from the long-term fundamentals in overall construction activity and demographics, near-term prospects for housing are bleak. As a result, USG's operating performance will remain under pressure until there is a sustained rebound in wallboard volumes and prices, which S&P does not expect until 2009 at the earliest. Consequently, the company's credit metrics are likely to weaken from current levels as 2008 progresses. Mr. Nadramia said, "We could lower the rating if operating conditions over the next several quarters are materially weaker than expected, causing USG's liquidity cushion to deteriorate. We are unlikely to revise the outlook to stable until market conditions show signs of sustained improvement." VITESSE SEMICONDUCTOR: To Complete Audit in Second Quarter 2008 --------------------------------------------------------------- Vitesse Semiconductor Corporation disclosed that its evaluation of the impact of the backdating of stock options will not be completed by March 31, 2008. Accordingly, the company estimates that the audit of its financial statements for fiscal years 2006 and 2007 will be completed in the second quarter of calendar 2008. "This project remains the top priority for Vitesse's management team and audit committee," Rich Yonker, CFO of Vitesse Semiconductor, said. "We will continue to work diligently to finish the audits as soon as practicable." In its state-of-the-company conference call held on Feb. 12, 2008, Vitesse said that it was targeting March 31, 2008, as the completion date of its audited financial statements for fiscal years 2006 and 2007. The company also disclosed that there was no safety margin in the schedule and that any additional delays in completing the audits would result in a delay of the completion date to the second quarter of calendar year 2008. About Vitesse Semiconductor Corporation Headquartered in Camarillo, California, Vitesse Semiconductor Corporation (OTC:VTSS) -- http://www.vitesse.com/-- is a supplier of integrated circuits targeted at systems manufacturers in the communications and storage industries. Within the communications industry, the company's products address the enterprise, metro and core segments of the communications network, where they enable data to be transmitted, processed and switched under a range of protocols. In the storage industry, the company's products enable storage devices to be networked. * * * Moody's Investor Services placed Vitesse Semiconductor Corporation's long term corporate family rating at 'B1' and its subordinated debt rating at 'B3' in April 2002. The ratings still hold to date with a stable outlook. WCI COMMUNITIES: Sees at Least $410,000,000 4th Qtr Pre-Tax Loss ---------------------------------------------------------------- WCI Communities, Inc. (NYSE: WCI) said it generated roughly $160,000,000 to $170,000,000 of cash flow from operating and investing activities in the fourth quarter, and $220,000,000 to $230,000,000 for the full year 2007. Although the disclosed results are still subject to change, WCI Communities expects to record a pre-tax loss for the fourth quarter in the range of $410,000,000 to $460,000,000. WCI Communities has scheduled its fourth quarter earnings release and conference call for March 17, 2008. The company expects to issue the earnings press release before the market opens. Management will host a conference call on the same day commencing at 10 a.m. EDT. "Our earnings for the quarter and full year will reflect the very poor operating conditions that persist in our markets and will also include significant write downs," said Jerry Starkey, president and CEO of WCI Communities. The pre-tax loss, Mr. Starkey said, includes impairment charges of approximately $335,000,000 to $350,000,000 in the fourth quarter, composed of impairments to land and finished inventory of unsold traditional and tower homes, amenities and other assets, abandoned option deposits and related costs, and goodwill write downs. "During the fourth quarter, we also concluded that due to the uncertainty in the market regarding defaults and future absorption, one of our Florida towers, Oceanside, no longer qualified for percent of completion accounting, and we therefore fully reserved all of the income recognized on that tower from commencement of construction through the third quarter of 2007 in the amount of $38 million," Mr. Starkey said. Form 10-K Report May Be Filed Late The company expects to file its 10-K no later than March 17, 2008; however, due to the unexpected length of time needed to complete a detailed impairment analysis for each community and to complete its provision for income taxes including a tax asset allowance, WCI may not file by that date. The conference call can be accessed via the company's Web site at http://www.wcicommunities.com/in the Investor Relations section or by dialing (877) 454-8253, and asking for the WCI Communities conference call referencing conference code 37790680. The call will be available for replay on the company's Web site for a period of time after the call. About WCI Communities WCI Communities, Inc., named America's Best Builder in 2004 by the National Association of Home Builders and Builder Magazine, has been creating amenity-rich, master-planned lifestyle communities since 1946. Florida-based WCI caters to primary, retirement, and second-home buyers in Florida, New York, New Jersey, Connecticut, Maryland and Virginia. The company offers traditional and tower home choices with prices from the high-$100,000s to more than $10 million and features a wide array of recreational amenities in its communities. In addition to homebuilding, WCI generates revenues from its Prudential Florida WCI Realty Division, and title businesses, and its recreational amenities, as well as through land sales and joint ventures. The company currently owns and controls developable land on which the company plans to build more than 18,500 traditional and tower homes. * * * As reported on the Troubled Company Reporter on Jan. 11, 2008, Standard & Poor's Ratings Services said that its ratings and outlook on WCI Communities Inc. (WCI; CCC/Negative/--) continue to acknowledge the Florida-based luxury homebuilder's acute liquidity challenges. The TCR reported on Jan. 22, 2008, that S&P said its CCC rating and outlook on WCI Communities are not immediately affected by the homebuilder's announcement that it has amended the terms governing its $700,000,000 secured revolver and $263,000,000 secured bank loan. S&P acknowledged, however, that the company successfully averted a near-term liquidity event by negotiating a more liberal coverage covenant through June 30, 2009. As reported in the TCR on Nov. 12, 2007, Moody's lowered the ratings of WCI Communities Inc., including its corporate family rating to Caa2 from B3 and the ratings on its senior subordinated notes to Caa3 from Caa2. The ratings outlook is negative. WELLCARE HEALTH: Appoints O'Neill as SVP, Gen Counsel & Secretary ----------------------------------------------------------------- WellCare Health Plans, Inc. appointed Thomas F. O'Neil III, formerly a partner at DLA Piper US LLP, general counsel of the MCI Group and an Assistant United States Attorney, as the company's Senior Vice President, General Counsel and Secretary, effective April 1, 2008. "We're pleased to welcome Tom to our leadership team," said Heath Schiesser, president and chief executive officer of WellCare. "Tom brings to WellCare not only impressive legal experience garnered over a lifetime of public and private service, but, most importantly, a dedication to integrity, transparency and excellence." "I look forward to joining WellCare," said Mr. O'Neil. "It is a company that provides valuable services to its members and its government partners and serves a critical role in an ever-changing industry. I am excited about working with the entire WellCare team to develop and grow WellCare while addressing its current challenges." Prior to joining WellCare, Mr. O'Neil was a partner at DLA Piper US LLP, where he chaired the Government Affairs and Government Controversies practice groups. He also served as the Senior Vice President and General Counsel of the MCI Group, as an Assistant United States Attorney for the District of Maryland and as a law clerk to United States District Judge Alexander Harvey II. Mr. O'Neil received his A.B., magna cum laude, in 1979 from Dartmouth College and his J.D. in 1982 from Georgetown University Law Center. He is a member of the Board of Regents of Georgetown University and the Board of Visitors of Georgetown University Law Center. In connection with his employment, Mr. O'Neil will receive an inducement award in the form of (i) non-qualified stock options to purchase 100,000 shares of WellCare's common stock and (ii) 50,000 restricted shares of WellCare common stock. The non-qualified stock options will have a 10-year term and a per share exercise price based on the closing price of WellCare common stock on the date of grant. The date of grant will be Mr. O'Neil's start date, which is currently expected to be April 1, 2008. Both the non-qualified stock options and the restricted shares of common stock will vest in equal annual installments on each of the first through fourth anniversaries of the grant date of the award. The inducement awards were approved by the Compensation Committee of the Board of Directors of WellCare. In accordance with the rules of the New York Stock Exchange, the inducement award does not require stockholder approval. As reported in the Troubled Company Reporter on Jan. 28, 2008, WellCare disclosed the departure of three of its top executives: 1) Todd Farha, Chairman of the Board, Chief Executive Officer and President; 2) Paul Behrens, Chief Financial Officer; and 3) Thaddeus Bereday, General Counsel. Messrs. Farha, Behrens, and Bereday however agreed to assist in an orderly transition to new management by remaining as non- executive employees through March 31. Accordingly, the companys's Board of Directors appointed Charles G. Berg as Executive Chairman and Heath Schiesser as President and Chief Executive Officer, effective immediately, saying that it is in the best long-term interest of the company to provide new leadership. Probe October last year, federal and state agencies conducted a search of the company's headquarters in Tampa, Florida. WellCare continues to cooperate with the U.S. Justice Department, the Florida Attorney General's office, and the other agencies involved in the investigation. At the time of the search, the U.S. Attorney stated, "The ongoing investigation does not directly concern, nor should it have any impact upon, the delivery of any healthcare service to any person." The company believes that to date the investigations are principally focused on the relationships of the company's Florida health plans with the company's behavioral health subsidiary, Harmony Behavioral Health, including the calculation by the Florida plans of a behavioral health refund to the Florida Medicaid agency and on the inter-company relationships between the company's various health plans and other wholly owned subsidiaries. The company has not been advised, however, of the full scope of the government's investigation, and the company does not know whether the investigations may expand to other areas or the extent to which such investigations might lead to fines, penalties, operating restrictions or impacts on the company's historical financial statements. In addition, the company has received requests for information from the Securities and Exchange Commission. The company is also responding to subpoenas issued by the State of Connecticut Attorney General's Office involving transactions between the company and its affiliated companies and their potential impact on the costs of Connecticut's Medicaid program. A special committee of the company's Board of Directors is continuing its independent investigation into matters raised as part of the ongoing government investigations. While the special committee has provided a preliminary report with recommendations to the Board, the company is unable to predict how long the special committee's investigation will take or when it will complete its work. The Special Committee has retained the law firm of Davis Polk & Wardwell to advise and assist it in the conduct of the Special Committee's independent investigation. The TCR related on March 5, 2008, that WellCare won't be in a position to file its Form 10-K for the year ended December 31, 2007, by the required filing date prescribed in Rule 12b-25 of the General Rules and Regulations under the Securities Exchange Act of 1934, until an independent conducted by the special committee of the company's board of directors is complete. As a result of the delay, WellCare expects to be subject to the New York Stock Exchange's late filing procedures as they pertain to annual reports. WellCare also has been unable to file its Form 10-Q for the quarter ended September 30, 2007. About WellCare Health Plans Headquartered in Tampa, Florida, WellCare Health Plans Inc. (NYSE: WCG) -- http://www.wellcare.com/-- provides managed care services exclusively for government-sponsored healthcare programs, focusing on Medicaid and Medicare. For the first nine months of 2007, the company reported approximately $4.0 billion in total revenue. As of Sept. 30, 2007, shareholder's equity was $771 million and total medical membership was approximately 1.4 million members. * * * As reported in the Troubled Company Reporter on Jan. 31, 2008, Standard & Poor's Ratings Services lowered its counterparty credit rating on WellCare Health Plans Inc. to 'B+', and placed the company on CreditWatch with negative implications, as a result of the resignation of three of the company's top executives -- its chief executive officer and president; its chief financial officer, and its general counsel. The TCR reported on Jan. 30, 2008, that Moody's Investors Service downgraded the senior debt rating of WellCare to Ba2 following announcement that WellCare's board of directors has accepted the resignations of the company's top three executives. The ratings remain on review for possible further downgrade, Moody's said. WELLCARE HEALTH: 10 Units File Health Reports with State Agencies ----------------------------------------------------------------- Ten subsidiaries of WellCare Health Plans, Inc., filed on March 6, 2008, annual unaudited financial statements for the year ended December 31, 2007 -- Health Annual Statements -- with state regulatory authorities in each jurisdiction where the subsidiaries were required to be filed as of March 1, 2008: * WellCare of Connecticut, Inc.; * WellCare of Louisiana, Inc.; * WellCare of Georgia, Inc.; * WellCare of Ohio, Inc.; * WellCare Health Insurance of Illinois, Inc.; * WellCare Prescription Insurance, Inc.; * WellCare Health Insurance of Arizona, Inc.; * WellCare Health Insurance of New York, Inc.; * WellCare of Texas, Inc.; and * WellCare of New Jersey, Inc. As of March 6, WellCare has not filed a Health Annual Statement for Harmony Health Plan of Illinois, Inc. which also was required to be filed as of March 1, 2008. WellCare is in discussions with the Illinois Department of Insurance to pursue an extension for the filing and may be subject to fines or other sanctions for the delay in filing, the company said in a regulatory filing with the Securities and Exchange Commission. On October 24, 2007, several government agencies, under the supervision of the United States Attorney's Office for the Middle District of Florida executed a search warrant and served subpoenas on the company and various related entities. The Board of Directors of the Company subsequently formed a special committee of independent directors to conduct an independent investigation. Because to date, neither the company, nor any of its subsidiaries, has been advised by the agencies as to the full scope of the investigations, the Health Annual Statements are necessarily subject to revision based upon the outcome of these investigations, the company said. In preparing the Health Annual Statements, the company has considered information about the ongoing investigations known to the company. However, the information contained in the Health Annual Statements may be subject to adjustment based on the outcome of the pending investigations or as new information becomes available. The Health Annual Statements filed in each of the states have been prepared in accordance with the requirements of each state's law and have not been prepared in accordance with accounting principles generally accepted in the United States. Additionally, the Health Annual Statements filed in each of the states should not be considered, individually or in the aggregate, as representative or indicative of the Company's results of operations or financial condition on a consolidated GAAP basis. Copies of the Health Annual Statements for each of the subsidiaries can be accessed at the company's Web site at: http://ir.wellcare.com/phoenix.zhtml?c=176521&p=irol-statfiling About WellCare Health Plans Headquartered in Tampa, Florida, WellCare Health Plans Inc. (NYSE: WCG) -- http://www.wellcare.com/-- provides managed care services exclusively for government-sponsored healthcare programs, focusing on Medicaid and Medicare. For the first nine months of 2007, the company reported approximately $4.0 billion in total revenue. As of Sept. 30, 2007, shareholder's equity was $771 million and total medical membership was approximately 1.4 million members. * * * As reported in the Troubled Company Reporter on Jan. 31, 2008, Standard & Poor's Ratings Services lowered its counterparty credit rating on WellCare Health Plans Inc. to 'B+', and placed the company on CreditWatch with negative implications, as a result of the resignation of three of the company's top executives -- its chief executive officer and president; its chief financial officer, and its general counsel. The TCR reported on Jan. 30, 2008, that Moody's Investors Service downgraded the senior debt rating of WellCare to Ba2 following announcement that WellCare's board of directors has accepted the resignations of the company's top three executives. The ratings remain on review for possible further downgrade, Moody's said. WICKES FURNITURE: Landlords Complain Over Erroneous Lease Notices ----------------------------------------------------------------- A number of landlords to certain non-residential real property leases operated by Wickes Furniture Company Inc. and its debtor- affiliates have objected to the Debtors' intention to assume and assign these unexpired leases. The landlords include, among others: -- SNMark, LLC; -- DD McHenry Square LLC; -- SM Newco Downers Grove LLC; -- DCT-IL S Gary LLC; -- Shaco Inc.; -- Principal Bank; -- IAC 1200 Bryn Mawr LLC; -- Hastings Village Investment Company L.P.; and -- The Arba Group Inc. The landlords argue that the Debtors' notices for the assumption and assignment of these leases do not provide the basic and meaningful information about the proposed treatment of the leases. Either the notices do not state the amount of cure payments due under specific leases, the proposed timing of cure payments, or the proper assignee of the lease. The landlords tell the Court that given the lack of information about the auction winner, the assignment of the leases, and the proposed use of the premises provided to date, the landlords are not in a position to make appropriate deliberations concerning the Debtors' lease decisions at this time. As reported in the Troubled Company Reporter on Feb. 12, 2008, Mr. Richard V. Clausing, senior vice president and chief financial officer of Wickes Furniture, told the Court that in order to improve their liquidity position, the Debtors will sell: a) their inventory through the conduct of "going out of business" or store closing liquidation sale; b) some or all of their assets as a going concern; and c) certain select assets, such as their interest in intellectual property rights, non-residential real property leases or lease designation rights. About Wickes Furniture Based in Wheeling, Illinois, Wickes Furniture Company, Inc. -- http://www.wickesfurniture.com/-- is one of the leading furniture retailers in the U.S. with 43 retail stores serving greater Chicago, Los Angeles, Las Vegas, and Portland. Founded in 1971, Wickes offers attractive room packages featuring complete living rooms, dining rooms, bedrooms as well as bedding, home entertainment, accessories and accent furniture. Wickes employs over 1,700 employees and offers products from leading furniture and bedding manufacturers. The company and two of its debtor-affiliates filed for Chapter 11 protection on Feb. 3, 2008 (Bankr. D. Del. Lead Case No. 08- 10213). Donald J. Detweiler, Esq., at Greenberg Traurig LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed consolidated estimated assets of $10 million to $50 million, and estimated debts of $50 million to $100 million. WOLFE PLUMBING: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Wolfe Plumbing & Heating Inc. dba Wolfe Plumbing, Heating, Air Conditioning Inc. 688 Route 17K Montgomery, NY 12549 Bankruptcy Case No.: 08-35439 Type of Business: The Debtor is a plumbing, heating and air conditioning contractor. See http://www.wolfeplumbing.com/ Chapter 11 Petition Date: March 10, 2008 Court: Southern District of New York (Poughkeepsie) Judge: Cecelia G. Morris Debtor's Counsel: Rosemarie E. Matera, Esq. (law@kmpclaw.com) Kurtzman Matera Gurock & Scuderi, LLP 2 Perlman Drive Suite 301 Spring Valley, NY 10977 Tel: (845) 352-8800 Fax: (845) 352-8865 http://www.kmpclaw.com/ Total Assets: $676,886 Total Debts: $2,093,186 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ JDKS Corp (John Heilman) $183,711 3 Keats Road Middletown, NY 10941 N&S Supply of Fishkill $180,271 205 Old Route 9 Fishkill, NY 12524 The Ral Supply Group, Inc. $177,658 Northwest 5439 P.O. Box 1450 Minneapolis, MN 55485-5439 R.E. Michel Company, Inc. $126,768 Idearc Media Corp. $123,854 Ridgewood Corp. $66,000 Berry Co. $50,147 Blake Equipment Co., Inc. $43,691 Wells Fargo Card Services, $42,859 Inc. American Express (Delta) $24,547 The Home Depot CRC/GECF $15,833 Ron Hayward $14,774 Kahn, Hoffman & Hochman, LLP $13,250 BBG&G Advertising, Inc. $12,661 Nexstar $12,387 American Express $10,846 Peerless Insurance Co. $9,877 Yellow Book USA $9,184 Warwick Valley Tel. Co. $7,367 Lowe's Business Account $6,890 WORNICK CO: Ad Hoc Committee, Sopakco Object Sale Bid Procedures ---------------------------------------------------------------- The Ad Hoc Committee of Certain Senior Secured Noteholders and Sopakco Inc. object to The Wornick Company and its debtor- affiliates' proposed bidding procedures for the sale of substantially all of their assets to Viren Acquisition Corp., as stalking horse bidder. Viren Acquisition is an entity controlled by DDJ Capital Management, LLC, and DDJ Total Return Loan Fund, L.P., and an ad- hoc group of noteholders who collectively hold more than 50% of the principal amount of $125,000,000 in 10-7/8% Senior Secured Notes due 2011 issued by the Debtors. According to the objections, the bidding procedures will either curb the number of interested bidders to participate in the public sale or frustrate them. The Ad Hoc Committee points out that the proposed bid procedures required any bidders to make an opening bid of $9.25 million more than the intended purchase price offered under the purchase asset agreement, thus, discouraging any bidders to submit their offers. Ad Hoc Committee said the bid procedures "are not tailored to maximize value for the benefit of the debtors' estates," Bloomberg News reports. Furthermore, Sopakco asserts that the bid procedures contain restrictive requirements to other interested parties. The bid procedures is unfair, Sopakco says. Since 2006, Sopakco, a primary supplier of meal, ready to eat products to the Department of Defense, has expressed its interest in considering an acquisition of the Debtors' asset but denied. Asset Sale As reported in the Troubled Company Reporter on Feb. 21, 2008, the Debtors asked Court in Cincinnati for permission to sell all of their assets to Viren, subject to higher and better offers. According to the Debtors, competing offers must be more than the aggregate of the value of the sum of: -- $50,000,000, plus the amount the Debtors actually owe under their $35 million DIP Facility, plus the amount owed under their prepetition secured loan agreement still with the DDJ Entities, excluding a Make-Whole Premium and Redemption Fee payable under the Prepetition Facility; -- $4,000,000, the amount of the Excluded Portion payable under the Prepetition Facility; -- the aggregate amount of assumed liabilities; plus -- $2,250,000, the amount of the Break-Up Fee; plus -- $1,000,000, the maximum amount of the Expense Reimbursement; plus -- a $2,000,000 the Initial Overbid. The first phase of the proposed sale would require the solicitation of bids from Qualifying Bidders for either: (i) 100% of the equity of the reorganized Debtors to be acquired under a plan of reorganization, or (ii) all or substantially all of the property and assets of the Debtors' businesses. Assuming the Debtors received at least one Qualifying Bid, in addition to the Purchase Agreement from the Purchaser, the second phase would require a formal auction of the Debtors' businesses. Bids are due on or before May 17, 2008. The Auction Date is on or before May 23, 2008. The hearing to approve the Prevailing Bid will take place in conjunction with the Plan confirmation hearing, which will not be later than June 16, 2008. About Wornick Company Headquartered in Cincinnati, The Wornick Company -- http://www.wornick.com/-- is a leading supplier of individual and group military field rations to the Department of Defense. In addition the company continues to extend its core capabilities to commercial markets where its customers include, but are not limited to, Kraft Foods, Inc., Gerber Products Company, as well as retail and grocery outlets including Walgreens Co., 7-Eleven, The Kroger Co., Publix Super Markets and Meijer. Wornick specializes in the production, packaging, and distribution of shelf-life, shelf-stable, and frozen foods in flexible pouches and semirigid products. The firm's two main lines of business are military rations (approximately 70% of revenues) and co- manufacturing for leading food brands (30%). The company produces both individual (including MRE) and group rations (including Unitized Group Rations-A or UGR-A) for the U.S. military. MREs comprise about 65% of military revenues. The company and and five of its affiliates filed for Chapter 11 protection on Feb. 14, 2008 (Bankr. S.D.O., Case No. 08-10654). Donald W. Mallory, Esq., Kim Martin Lewis , Esq., and Patrick Burns, Esq. at Dinsmore & Shohl LLP represent the Debtors in their restructuring efforts. The Debtor selected Kurtzman Carson Consultants LLC as claims, noticing and balloting agent. An official committee of unsecured creditors has not been appointed in these cases. The company listed between $100 million and $500 million assets and between $100 million and $500 million in debts in its bankruptcy filing. WR GRACE: To Pay $250 Million for Cleanup of Asbestos in Montana ---------------------------------------------------------------- W.R. Grace has agreed to pay $250 million, the highest sum in the history of the Superfund program, to reimburse the federal government for the costs of the investigation and cleanup of asbestos contamination in Libby, Montana, the Justice Department and Environmental Protection Agency (EPA) said. The action settles a bankruptcy claim brought by the federal government to recover money for past and future costs of cleanup of contaminated schools, homes and businesses in Libby. The EPA has been removing asbestos-contaminated soils and other materials in and near Libby since May 2000. The federal government filed suit against W.R. Grace in March 2001 to recover its investigation and cleanup costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly known as the "Superfund" law. The lawsuit also named Kootenai Development Corporation -- a W.R. Grace subsidiary -- as a defendant due to its ownership of three contaminated properties in Libby. In 2003, the federal district court in Montana awarded EPA over $54 million for cleanup costs incurred by EPA through Dec. 31, 2001. That award has not been paid due to W.R. Grace's bankruptcy. [Tues]day's settlement resolves the 2003 judgment as well as continuing cleanup costs EPA has incurred since Dec. 31, 2001 and will incur in the future. EPA will place the settlement proceeds into a special account within the Superfund that will be used to finance future cleanup work at the site. W.R. Grace owned and operated a vermiculite mine and vermiculite processing facilities in and near Libby from 1963 to 1990. The vermiculite ore was contaminated with asbestos. Vermiculite and asbestos have been found in various locations in and around Libby. Asbestos, a recognized human carcinogen, is known to cause lung cancer and mesothelioma, a lethal tumor of the lining of the chest and abdominal cavities. Exposure to asbestos can also cause asbestosis, a disease characterized by scarring of the lung. W.R. Grace and 61 affiliated companies filed for bankruptcy in April 2001. In March 2003, EPA filed a bankruptcy claim against the company to recover past and future cleanup costs. W.R. Grace has corporate headquarters in Columbia, Md., and employees in nearly 40 countries. The company manufactures construction chemicals, building materials and chemical additives, among other things. The settlement requires W.R. Grace to pay the $250 million within 30 days of bankruptcy court approval. The settlement agreement will be lodged in the U.S. Bankruptcy Court for the District of Delaware and is subject to court approval after a 30-day public comment period. A copy of the settlement agreement is available at http://ResearchArchives.com/t/s?2902 About W.R. Grace Headquartered in Columbia, Md., W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Debtors' Disclosure Statement began on Jan. 21, 2005. The Debtors' exclusive period to file a chapter 11 plan expired on July 23, 2007. Estimation of W.R. Grace's asbestos personal injury liabilities commenced on January 14, 2008. At Dec. 31, 2006, the W.R. Grace's balance sheet showed total assets of $3,620,400,000 and total debts of $4,189,100,000. As of November 30, 2007, W.R. Grace's balance sheet showed total assets of $3,335,000,000, and total debts of $3,712,000,000. ZIFF DAVIS: Seeks Authority to Use Noteholders' Cash Collateral --------------------------------------------------------------- Pursuant to Sections 105, 361, and 363 of the Bankruptcy Code and Rules 4001 and 9014 of the Federal Rules of Bankruptcy Procedure, Ziff Davis Media, Inc., and its debtor-affiliates seek the U.S. Bankruptcy Court for the Southern of District of New York's authority to: -- use their secured lenders' cash collateral not exceeding $5,000,000, promptly after a preliminary hearing on March 10, 2008; -- grant adequate protection to their secured lenders; and -- use, on a final basis, cash collateral pursuant to a Court-approved budget, after a final hearing to be held on March 24, 2008. The Debtors' proposed bankruptcy counsel, Carey D. Schreiber, Esq., at Winston & Strawn LLP, in New York, tells Bankruptcy Court Judge Burton R. Lifland that the Debtors need to use cash collateral to maintain their business operations and continue their restructuring efforts. The Debtors will use the cash collateral to, among other things, pay insurance, wages, rent, utility charges, and other critical operating expenses. As of the bankruptcy filing date, the Debtors have only a limited amount of unencumbered cash, which is not sufficient to fund their business operations, and to pay present operating expenses. The Debtors intend to use part of the proceeds from the sale of one their three businesses -- the Enterprise Group -- which netted the Debtors with $125,100,000. However, the assets have been pledged as collateral to U.S. Bank National Association, as collateral trustee, and certain noteholders. The Debtors owe U.S. Bank and certain noteholders, secured debt consisting of: (a) $218,950,361 outstanding under senior secured floating rate notes due 2012, secured by substantially all of the company's assets, including the assets of Enterprise Group; and (b) $23,307,000 outstanding under additional secured notes due 2012, secured by substantially all of the company's assets. After the Debtors failed to pay interest payments due under the Floating Rate Senior Secured Notes in November 2007, U.S. Bank and holders of more than 80% in principal amount of the Notes have since regulated the Debtors' use of proceeds from the Enterprise Sale. The cash collateral are kept at a special- purpose, segregated, interest-bearing account at Merrill Lynch, Pierce, Fenner & Smith Inc. The Debtors and a noteholder group -- consisting of U.S. Bank and holders of 80% of the Floating Rate Senior Secured Notes -- have agreed to the terms of the Debtors' use of the cash collateral: * Budget The Debtors' management and financial advisors have formulated a six-month budget for the postpetition use of cash collateral, a copy of which is available for free at http://bankrupt.com/misc/Ziff_CashColl_Budget.pdf The Debtors also believe that the use of Cash Collateral in accordance with the Budget will provide them with adequate liquidity to pay administrative expenses as they become due and payable during the period covered by the Budget. * Term The Debtors' right to use Cash Collateral will commence on the date of the entry of the Interim Order and expire on the earlier of (a) the entry of a subsequent interim order, (b) the entry of the Final Order or (c) March 31, 2008. * General Order No. 274 The Debtors believe that there are no extraordinary provisions in the Interim Cash Order that are required to be disclosed pursuant to the Court's Guidelines for Financial Requests, which were adopted by General Order No. M-274, dated as of September 9, 2002. Section 363(e) of the Bankruptcy Code provides that, upon request of an entity that has an interest in cash collateral sought to be used by a debtor, the Court will prohibit or condition the use of cash collateral as is necessary to provide adequate protection of the entity's interest. As adequate protection from the diminution of the Noteholders' cash collateral, the Debtors propose to: -- grant U.S. Bank, as collateral trustee, a perfected replacement security interest in and valid, binding, enforceable and perfected liens on all Post-Petition Collateral, which liens and security interests will be subject only to a Carve Out for (i) fees to the Bankruptcy Clerk and the U.S. Trustee and (ii) up to $1,250,000 for professionals retained in the Chapter 11 cases. The term "Post-Petition Collateral" means all of each Debtor's assets with the exception of, among other things, proceeds from avoidance actions under Sections 502(d), 544, 545, 547, 548, 549, 550 or 553 of the Bankruptcy Code; -- grant U.S. Bank an allowed superpriority administrative expense claim, which will have priority in the Chapter 11 cases, and in any cases under Chapter 7 of the Bankruptcy Code; -- turn over certain proceeds realized from the Enterprise Sale to U.S. Bank, subject to the Debtors keeping $5,000,000 in the Segregated Account; and -- promptly pay the reasonable fees, costs and expenses of (a) Paul, Weiss, Rifkind, Wharton & Garrison LLP, counsel to the Noteholder Group, and Houlihan Lokey Howard & Zukin, financial advisor to the Noteholder Group, and (b) U.S. Bank, including the reasonable fees and out-of- pocket expenses of its counsel, Faegre & Benson LLP, in accordance with the applicable indenture providing for the Senior Secured Notes. The Debtors assert that the Prepetition Secured Lenders are adequately protected by (i) the granting of replacement liens, to the extent their prepetition security interests are perfected and enforceable, (ii) the existence of an "equity cushion", and (iii) the continuation of the Debtors' businesses. About Ziff Davis Media, Inc. Headquartered in New York city, New York, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768). Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the Debtors in their restructuring efforts. When Ziff Davis filed for bankruptcy protection, it listed assets of between $100 million to $500 million and debts of $500 million to $1 billion. (Ziff Davis Bankruptcy News, Issue No. 2, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) ZIFF DAVIS: Seeks April 21 Extension of Schedules Filing Deadline ----------------------------------------------------------------- Section 521 of the Bankruptcy Code and Rule 1007 of the Federal Rules of Bankruptcy Procedure would ordinarily require Ziff Davis Media, Inc., and its debtor-affiliates to file their statements of financial affairs, schedules of assets and liabilities, schedules of current income and expenditures, and statements of executory contracts and unexpired leases, 15 days after the bankruptcy filing date. By this motion, the Debtors ask the the U.S. Bankruptcy Court for the Southern of District of New York to: (a) extend the time within which they are required to file their Statements and Schedules for an additional 30 days, to April 21, 2008, without prejudice to the Debtors' ability to request additional time should it become necessary; and (b) to the extent necessary, authorize the U.S. Trustee to schedule a meeting with creditors under Section 341 of the Bankruptcy Code, more than 40 days following the Petition Date -- notwithstanding Rule 2003(a) of the Federal Rules of Bankruptcy Procedure. The Debtors have more than 3,000 creditors and other parties-in- interest in their Chapter 11 proceedings, Carey D. Schreiber, Esq., at Winston & Strawn LLP, in New York, the Debtors' proposed counsel, states. Given the size and complexity of the Debtors' business operations, preparing their Statements and Schedules accurately and with sufficient detail will require significant attention from the Debtors' personnel and advisors. Without an extension of time, the preparations would distract attention from the Debtors' business operations at a critical time when the business can ill afford any disturbance. Moreover, creditors and other parties in interest will not be harmed by the Debtors' proposed extension of the filing deadline, because, even under the extended deadline, the Statements and Schedules would be filed in advance of any planned bar date or other significant event in the Debtors' bankruptcy cases. Mr. Schreiber notes that Bankruptcy Rule 2003(a) provides that in a Chapter 11 case, the United States Trustee will call a meeting of creditors to be held no fewer than 20 -- and no more than 40 --days after the Petition Date. The Debtors anticipate that the U.S. Trustee soon will schedule a meeting of creditors required by Section 341 of the Bankruptcy Code, which the U.S. Trustee may desire to call after the 40-day period, Mr. Schreiber states. To the extent necessary, and in an abundance of caution, the Debtors ask the Court to authorize the U.S. Trustee to schedule the Section 341 meeting after the 40-day deadline. About Ziff Davis Media, Inc. Headquartered in New York city, New York, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768). Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the Debtors in their restructuring efforts. When Ziff Davis filed for bankruptcy protection, it listed assets of between $100 million to $500 million and debts of $500 million to $1 billion. (Ziff Davis Bankruptcy News, Issue No. 2, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) ZIFF DAVIS: Seeks Permission to Pay Prepetition Wages & Benefits ---------------------------------------------------------------- As of the bankruptcy filing date, Ziff Davis Media, Inc., its debtor-affiliates and their non-debtor affiliates employ roughly 266 employees, of whom 258 are full-time employees, and roughly eight are part-time employees. Approximately 20 employees are paid on an hourly basis, and 246 employees are paid salary. None of the Employees are unionized, and none of the Debtors are party to any collective bargaining agreements, Carey D. Schreiber, Esq., at Winston & Strawn LLP, in New York, the Debtors' proposed counsel, tells the Court. The Employees' skills and their knowledge and understanding of the Debtors' operations, customer relations, and infrastructure are essential to the effective reorganization of the Debtors' businesses, Mr. Schreiber notes. To minimize the personal hardship that the Employees would suffer if prepetition Employee-related obligations are not paid when due, or as expected, and to maintain morale and stability in the Debtors' workforce during this critical time, the Debtors, by this Motion, seek the Court's authority to: -- pay pre-bankruptcy wages, salaries, and employee benefits; -- continue the Debtors' employee benefit programs in the ordinary course of business; -- pay all fees and costs to third-party administrators, temporary employment agencies and temporary employees. Mr. Schreiber relates that the Debtors incur payroll obligations to the Employees, which are generally comprised of wages and salaries, but may also include incentive bonuses awarded for sales productivity and goal attainment. Approximately 95% of the Debtors' payroll is made by direct deposit through electronic transfer of funds directly to Employees, with the other 5% of Employees receiving checks. On average, Mr. Schreiber tells the Court, the Debtors have gross payroll expenses of approximately $2,500,000 per month. The Debtors outsource their payroll to a payroll services company, ProBusiness Services Inc., which is also responsible for paying all the withholdings and payroll taxes to the applicable third parties. The Debtors estimate that, as of the Petition Date, roughly $290,000 in prepetition accrued wages, salaries, and other compensation earned prior to the Petition Date remains unpaid. The Debtors also seek the Court's permission to pay one Employee $11,028, notwithstanding that the amount is in excess of a monthly cap for $10,950. Under the new amendments to the Bankruptcy Code adopted on April 20, 2005, the claim amount for wages and salaries that is entitled to priority under Section 507(a) of the Bankruptcy Code was increased from $4,925 per employee to $10,000 per employee, effective immediately upon enactment. On April 1, 2007, the amount was automatically adjusted to $10,950 pursuant to Section 104(b) of the Bankruptcy Code. Deductions and Withholdings During each applicable pay period, the Debtors routinely deduct certain amounts from paychecks, including, without limitation, (i) garnishments, child support, and similar deductions, and (ii) other pre-tax and after-tax deductions payable pursuant to certain Employee benefit plans of the Debtors. The amount of the Deductions are subsequently forwarded by the Debtors to the appropriate third-party recipients. The Debtors estimate that as of the Petition Date, approximately $15,000 in Deductions have not been forwarded to the appropriate third-party recipients, Mr. Schreiber discloses. Moreover, the Debtors are required by law to withhold from an Employee's wages amounts related to federal, state and local income taxes, social security and Medicare taxes for remittance to the appropriate federal, state, or local taxing authority. According to Mr. Schreiber, the Withheld Amounts total about $660,000 per month. The Debtors estimate that as of the Petition Date, less than $10,000 in Payroll Taxes have not been forwarded to the appropriate Taxing Authorities. Reimbursement of Expenses Prior to the Petition Date and in the ordinary course of their business, the Debtors reimbursed Employees for certain reasonable and customary expenses incurred on behalf of the Debtors in the scope of their employment, including travel expenses for meals, hotels and rental cars; business development expenses; automobile gas mileage expenses and telephone expenses. The Debtors estimate that requests for reimbursement of prepetition expenses will not exceed $25,000. Prepetition Incentive Programs To incentivize their Employees, and to maximize advertising sales which constitute a significant portion of their revenue, the Debtors offer their Employees certain bonuses: * A non-management sales incentive program, under which Employees can earn in addition to base salary, for a percentage of the revenue that the Debtors recognize generated by that Employee's sales of advertising for the Debtors' print publications or Web sites; and * An annual management incentive target bonus program available to management-level employees, which is designed to focus the attention of participants on results that are directly tied to the Debtors' performance, and to share in that success by providing financial rewards to selected individuals who make major contributions toward the Debtors' goals. According to Mr. Schreiber, the Debtors' unpaid obligations under the Non-Management Sales Incentive Program is for $100,000; and an amount not exceeding $600,000 for the Annual Management Incentive Program. Employee Benefits The Debtors offer the Employees the ability to participate in a number of insurance and benefits programs, including: (a) Health Benefits The Debtors offer fully-insured and self-insured health insurance to their Employees for medical, dental and vision insurance coverage. (b) Workers' Compensation The Debtors provide workers' compensation insurance for their Employees at the statutorily-required level for each state. These benefits are currently provided for Employees through Chubb/Federal Insurance Company. Mr. Schreiber notes that the Debtors did not incur any overall costs associated with the Workers' Compensation Programs in 2007. (c) Vacation, Sick Leave and Other Leaves of Absence The Debtors provide vacation time to their Full-Time Employees and part time employees working at least 20 hours as a paid time-off benefit, which is generally determined by the Employee's length of employment. The Debtors estimate that approximately $300,000 of earned but unused Vacation Time will have accrued as of the Petition Date, according to Mr. Schreiber. (d) Employee Savings and Retirement Plans Employees are automatically eligible to participate in the 401(k) Plan, which allows for automatic pre-tax salary deductions of eligible compensation up to the limits set by the Internal Revenue Code. The Debtors estimate that as of the Petition Date, they have paid all of the prepetition matching contributions owed pursuant to the 401(k) Plan. (e) Additional Employee Benefits The Debtors provide Employees with primary life insurance, accidental death and dismemberment insurance, short and long-term disability benefits, and business accident insurance. Mr. Schreiber says that as of the Petition Date, the Debtors do not owe any amounts with respect to the Additional Employee Benefits. About Ziff Davis Media, Inc. Headquartered in New York city, New York, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768). Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the Debtors in their restructuring efforts. When Ziff Davis filed for bankruptcy protection, it listed assets of between $100 million to $500 million and debts of $500 million to $1 billion. (Ziff Davis Bankruptcy News, Issue No. 2, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) ZIFF DAVIS: Wants Utility Companies Barred from Halting Services ---------------------------------------------------------------- In connection with the operation of the businesses of Ziff Davis Media, Inc. and its debtor-affiliates, the Debtors obtain electric, water, sewer, waste removal, telephone, Internet and other similar utility services from 12 several utility providers, through approximately 19 utility accounts. The Debtors' Utility Providers are: (1) 63 Madison Associates, (2) 365 Main, (3) AT&T, (4) Cogent Communications, (5) DoubleClick, (6) Good Technology, Inc., (7) Hines 101 Second Street LP, (8) Limelight, (9) MCI Worldcom, (10) Skytel - MS (11) Sprint Data Service, and (12) Verizon-Trenton NJ. The Debtors' proposed counsel, Carey D. Schreiber, Esq., at Winston & Strawn LLP, in New York, tells the the U.S. Bankruptcy Court for the Southern of District of New York that the Debtors pay the Utility Providers, on average, approximately $244,237 per month for services rendered. "The Debtors believe they are generally current on utility payments as of the Petition Date," Mr. Schreiber notes. The Utility Providers service the Debtors' corporate headquarters in New York, and a satellite office in San Francisco, California. Preserving utility services on an uninterrupted basis is essential to the Debtors' ongoing operations and, therefore, to the success of their reorganization, Mr. Schreiber avers. Any interruption of utility services, even for a brief period of time, would disrupt the Debtors' ability to operate and maintain their portfolio of 16 Web sites, three magazines and direct marketing services for their customers, and would thereby negatively impact the Debtors' customer relationships, revenues and profits. It is, therefore, critical that the Debtors' utility services continue uninterrupted during their chapter 11 cases, Mr. Schreiber asserts. Accordingly, the Debtors ask the Court to: (a) prohibit utilities from altering, refusing, or discontinuing service to, or discriminating against, them; (b) determine that their Utility Providers have been provided with adequate assurance of payment within the meaning of Section 366 of the Bankruptcy Code; (c) approve their proposed offer of adequate assurance and procedures whereby Utility Providers may request additional or different adequate assurance; and (d) establish procedures for the Utility Providers to object to the Debtors' proposed adequate assurance procedures. The Debtors intend to pay postpetition obligations owed to the Utility Providers in a timely manner, Mr. Schreiber informs Judge Lifland. Hence, the Debtors propose to provide a deposit equal to two weeks of utility service to any Utility Company that makes a request in writing, provided that the Utility Company does not hold a deposit equal to two weeks of service, and is not currently paid in advance. If any Utility Company believes additional assurance is required, it may request assurance. Upon the Debtors' receipt of any Additional Assurance Request, the Debtors have the greater of 20 days from the receipt of the request or 30 days from the Petition Date to negotiate with the Utility Provider to endeavor to resolve that request. The Debtors may resolve any Additional Assurance Request by mutual agreement with the Utility Provider, without further Court order, by providing the Utility Provider with additional adequate assurance of future payment including cash deposits, prepayments or other forms of security. If the Debtors determine that the Additional Assurance Request is not reasonable and are not able to reach an alternative resolution with the Utility Provider during the Resolution Period, the Debtors, during or immediately after the Resolution Period, will request a hearing before the Court to determine the adequacy of assurances of payment. Any Utility Provider that objects to the Debtors' Adequate Assurance must file an objection so that it is actually received by the notice parties no later than three business days before the Court's final hearing. All Utility Providers who do not timely file a Procedure Objection are deemed to consent to, and will be bound by, the Adequate Assurance Procedures. About Ziff Davis Media, Inc. Headquartered in New York city, New York, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768). Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the Debtors in their restructuring efforts. When Ziff Davis filed for bankruptcy protection, it listed assets of between $100 million to $500 million and debts of $500 million to $1 billion. (Ziff Davis Bankruptcy News, Issue No. 2, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) * S&P Downgrades 87 Tranches' Ratings From 15 Cash Flows and CDOs ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 87 tranches from 15 U.S. cash flow and hybrid collateralized debt obligation transactions. S&P removed 65 of the lowered ratings from CreditWatch with negative implications. Additionally, S&P affirmed its ratings on one 'AAA' rated tranche and removed it from CreditWatch negative. The ratings on 15 of the downgraded tranches from three transactions remain on CreditWatch with negative implications, indicating a significant likelihood of further downgrades. The downgraded tranches have a total issuance amount of $8.956 billion. Six of the 15 transactions are mezzanine structured finance CDOs of asset-backed securities, which are CDOs of ABS collateralized in large part by mezzanine tranches of residential mortgage-backed securities and other SF securities. Three of the 15 transactions are high-grade SF CDOs of ABS, which are CDOs collateralized at origination primarily by 'AAA' through 'A' rated tranches of RMBS and other SF securities. The other six transactions are CDO of CDO transactions that were collateralized at origination primarily by notes from other CDOs, as well as by tranches from RMBS and other SF transactions. The CDO downgrades reflect a number of factors, including credit deterioration and recent negative rating actions on U.S. subprime RMBS securities. To date, including the CDO tranches listed below and including actions on both publicly and confidentially rated tranches, S&P has lowered its ratings on 2,400 tranches from 573 U.S. cash flow, hybrid, and synthetic CDO transactions as a result of stress in the U.S. residential mortgage market and credit deterioration of U.S. RMBS. In addition, 1,026 ratings from 261 transactions are currently on CreditWatch negative for the same reasons. In all, S&P has downgraded $197.602 billion of CDO issuance. Additionally, its ratings on $154.567 billion in securities have not been lowered but are currently on CreditWatch negative, indicating a high likelihood of downgrades. Standard & Poor's will continue to monitor the CDO transactions it rates and take rating actions, including CreditWatch placements, when appropriate. Rating and CreditWatch Actions Rating ------ Transaction Class To From ----------- ----- -- ---- Acacia CDO 11 Ltd. A BBB AAA/Watch Neg Acacia CDO 11 Ltd. B BB+ AA/Watch Neg Acacia CDO 11 Ltd. C B+ A/Watch Neg Acacia CDO 11 Ltd. D B- BBB/Watch Neg CAMBER 7 PLC A-1 BBB AAA/Watch Neg CAMBER 7 PLC A-2 B+ AAA/Watch Neg CAMBER 7 PLC A-3 B+ AAA/Watch Neg CAMBER 7 PLC B B- AA/Watch Neg CAMBER 7 PLC C CCC A/Watch Neg CAMBER 7 PLC D CC BBB/Watch Neg CAMBER 7 PLC E CC BB+/Watch Neg CAMBER 7 PLC S BBB+ AAA/Watch Neg Charles River CDO I Ltd. A-1A AA AAA Charles River CDO I Ltd. A-1B AA AAA Charles River CDO I Ltd. A-2F BB+ AA Charles River CDO I Ltd. A-2V BB+ AA Charles River CDO I Ltd. B-F CCC- BB+/Watch Neg Charles River CDO I Ltd. B-V CCC- BB+/Watch Neg Charles River CDO I Ltd. C CC B+/Watch Neg Charles River CDO I Ltd. Combo sec. CC AAA Class V Funding Ltd. A2 AA- AAA Class V Funding Ltd. B BBB- AA/Watch Neg Class V Funding Ltd. C BB- A/Watch Neg Class V Funding Ltd. D1 CC BBB/Watch Neg Class V Funding Ltd. D2 CC BBB/Watch Neg Davenport CDO I Ltd. ABCP B/Watch Neg A-1+/Watch Neg Davenport CDO I Ltd. Sp sr A-1 B/Watch Neg AAA/Watch Neg Davenport CDO I Ltd. Sp sr A-2 B/Watch Neg AAA/Watch Neg Davenport CDO I Ltd. Sp sr A-3 B/Watch Neg AAA/Watch Neg E*Trade ABS CDO III Ltd. B AA- AA/Watch Neg E*Trade ABS CDO III Ltd. C BB+ BBB/Watch Neg E*Trade ABS CDO III Ltd. Pref shrs B BB+/Watch Neg E*Trade ABS CDO III Ltd. Series I B BBB/Watch Neg Nieuw hAArlem CDO Ltd. A-1 B AAA/Watch Neg Nieuw hAArlem CDO Ltd. A-2 CC AAA/Watch Neg Nieuw hAArlem CDO Ltd. A-3 CC AAA/Watch Neg Nieuw hAArlem CDO Ltd. B CC AA/Watch Neg Nieuw hAArlem CDO Ltd. C CC A/Watch Neg Nieuw hAArlem CDO Ltd. D CC BBB/Watch Neg Robeco High Grade CDO I Ltd. A-2 B/Watch Neg AAA/Watch Neg Robeco High Grade CDO I Ltd. A-3 B-/Watch Neg AAA/Watch Neg Robeco High Grade CDO I Ltd. A-4 CCC+/WatchNeg AA+/Watch Neg Robeco High Grade CDO I Ltd. B CCC-/WatchNeg A+/Watch Neg Robeco High Grade CDO I Ltd. C CC A-/Watch Neg Robeco High Grade CDO I Ltd. D CC BB/Watch Neg Sharps CDO II Ltd. A-1 AA-/Watch Neg AAA/Watch Neg Sharps CDO II Ltd. A-2 A-/Watch Neg AAA/Watch Neg Sharps CDO II Ltd. A-3 BBB+/WatchNeg AA+/Watch Neg Sharps CDO II Ltd. B BBB/Watch Neg AA-/Watch Neg Sharps CDO II Ltd. C BB+/WatchNeg BBB+/Watch Neg Sharps CDO II Ltd. D-1 BB-/Watch Neg BB+/Watch Neg Sharps CDO II Ltd D-2 B-/Watch Neg B/Watch Neg Silver Elms CDO PLC A-1a CCC AAA/Watch Neg Silver Elms CDO PLC A-1b CCC AAA/Watch Neg Silver Elms CDO PLC A-2 CCC- AAA/Watch Neg Silver Elms CDO PLC A-3 CC AAA/Watch Neg Silver Elms CDO PLC B CC AA/Watch Neg Silver Elms CDO PLC C CC A/Watch Neg Silver Elms CDO PLC D-1 CC BBB/Watch Neg Silver Elms CDO PLC D-2 CC BBB/Watch Neg TAHOMA CDO III Ltd. A-1 BB- AAA/Watch Neg TAHOMA CDO III Ltd. A-2 CCC- AAA/Watch Neg TAHOMA CDO III Ltd. B CC AA/Watch Neg TAHOMA CDO III Ltd. C CC A/Watch Neg TAHOMA CDO III Ltd. D CC BBB/Watch Neg Tahoma CDO Ltd. A-1A BBB AAA/Watch Neg Tahoma CDO Ltd. A-1B BBB- AAA/Watch Neg Tahoma CDO Ltd. A-2 CCC AA+/Watch Neg Tahoma CDO Ltd. A-3 CC BBB-/WatchNeg Tahoma CDO Ltd. B CC CCC-/Watch Neg Tourmaline CDO II Ltd. C AA- AA Tourmaline CDO II Ltd. D A- A/Watch Neg Tourmaline CDO II Ltd. E BB+ BBB/Watch Neg Tricadia CDO 2006-7 Ltd. A-1 funded CCC- AAA/Watch Neg Tricadia CDO 2006-7 Ltd. A-1 unfd CCC- AAA/Watch Neg Tricadia CDO 2006-7 Ltd. A-2 CC AA-/Watch Neg Tricadia CDO 2006-7 Ltd. A-X BB AAA/Watch Neg Tricadia CDO 2006-7 Ltd. B CC BBB/Watch Neg Tricadia CDO 2006-7 Ltd. C CC BB-/Watch Neg Tricadia CDO 2006-7 Ltd. D CC CCC+/Watch Neg Tricadia CDO 2006-7 Ltd. E CC CCC-/Watch Neg West Trade Funding II CDO Ltd. A-1 AAA AAA/Watch Neg West Trade Funding II CDO Ltd. A-2 CCC AAA/Watch Neg West Trade Funding II CDO Ltd. A-3 CC AAA/Watch Neg West Trade Funding II CDO Ltd. A-4 CC A+/Watch Neg West Trade Funding II CDO Ltd. B CC BBB/Watch Neg West Trade Funding II CDO Ltd. C CC BB+/Watch Neg West Trade Funding II CDO Ltd. D CC CCC+/Watch Neg Other Outstanding Ratings Transaction Class Rating ----------- ----- ------ Class V Funding Ltd. A1 AAA E*Trade ABS CDO III Ltd. A1 AAA E*Trade ABS CDO III Ltd. A2 AAA Robeco High Grade CDO I Ltd. A-1 AAA/Watch Neg Tahoma CDO Ltd. C CC Tahoma CDO Ltd. D CC Tahoma CDO Ltd. E CC Tourmaline CDO II Ltd. A AAA Tourmaline CDO II Ltd. B AAA Tricadia CDO 2006-7 Ltd. F CC West Trade Funding II CDO Ltd. E CC West Trade Funding II CDO Ltd. F CC * S&P Ratings on 95 Classes From 89 RMBS Deals Tumbles to 'D' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings to 'D' on 95 classes from 89 residential mortgage-backed securities transactions backed by U.S. closed-end second-lien mortgage collateral. Specifically, S&P lowered its ratings on class I-B-2 and class II-M-3 from Terwin Mortgage Trust 2006-8 to 'D' from 'CC'. S&P also lowered its ratings on 85 classes from 80 deals to 'D' from 'CCC'. Moreover, S&P lowered its rating on class B-2 from Terwin Mortgage Trust 2007-3SL to 'D' from 'B-'. Additionally, S&P lowered its ratings on five classes from five deals to 'D' from 'B'. Finally, S&P lowered its ratings on class B-3 from Bear Stearns Mortgage Funding Trust 2007-SL2 to 'D' from 'B+' and class M-3 from Terwin Mortgage Trust 2007-1SL to 'D' from 'BB'. The downgrades reflect the deteriorating performance of the collateral pools as monthly net losses continue to significantly outpace monthly excess interest cash flows, resulting in the complete write-down of the overcollateralization (O/C) for these deals. Some of these transactions have already experienced a complete write-down to the principal balance of other subordinate classes over the past few months. Consequently, the classes experienced principal write-downs during the February 2008 remittance period. As of the February 2008 distribution period, cumulative realized losses ranged from 2.07% (American Home Mortgage Investment Trust's series 2006-2) to 31.67% (Long Beach Mortgage Loan Trust's series 2006-A) of the original principal balances, and total delinquencies ranged from 9.47% (Terwin Mortgage Trust's series 2005-9HGS) to 40.52% (Fremont Home Loan Trust's series 2006-B) of the current principal balances. Seasoning for these transactions ranges from 10 months (Home Equity Mortgage Trust's series 2007-2) to 47 months (Terwin Mortgage Trust's series 2004- 4SL), and these transactions have outstanding pool factors ranging from approximately 4.43% (Terwin Mortgage Trust's series 2004-4SL) to 81.82% (Home Equity Mortgage Trust's series 2007-2). If delinquencies continue to translate into realized losses, S&P will likely take further negative rating actions on these transactions. Subordination, O/C, and excess interest cash flow provide credit support for these transactions. The collateral originally consisted of 30-year, fixed-rate, closed-end second-lien mortgage loans secured by one- to four-family residential properties. Ratings Lowered ACE Securities Corp. Home Equity Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-SL3 M-8 D CCC 2007-SL1 M-10 D B American Home Mortgage Investment Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-2 IV-M-7 D CCC Bear Stearns Mortgage Funding Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-SL1 M-3 D CCC 2006-SL2 M-4 D CCC 2006-SL3 M-4 D CCC 2006-SL4 M-4 D CCC 2006-SL5 M-6 D CCC 2006-SL6 B-1 D CCC 2007-SL1 B-2 D B 2007-SL2 B-3 D B+ C-BASS Rating ------ Series Class To From ------ ----- -- ---- 2006-SL1 B-3 D CCC CWABS Asset Backed Certificates Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-SPS1 M-5 D CCC CWABS Asset-Backed Certificates Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-SPS2 M-7 D CCC First Franklin Mortgage Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-FFA M8 D CCC 2006-FFB M6 D CCC 2007-FFA B-1 D B Fremont Home Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-B SL-M3 D CCC GSAA Home Equity Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-S1 I-M-7 D CCC GSAMP Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-S2 M-4 D CCC 2006-S3 M-1 D CCC 2006-S4 M-6 D CCC 2006-S5 M-1 D CCC 2006-S6 M-3 D CCC Home Equity Mortgage Loan Asset-Backed Trust, Series INDS Rating ------ Series Class To From ------ ----- -- ---- 2006-A M-8 D CCC Home Equity Mortgage Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-1 B-2 D CCC 2005-4 M-9A D CCC 2005-4 M-9F D CCC 2005-5 M-8 D CCC 2005-HF1 B-2 D CCC 2006-1 M-9 D CCC 2006-2 1M-7 D CCC 2006-3 M-6 D CCC 2006-4 M-5 D CCC 2006-5 M-5 D CCC 2006-6 M-5 D CCC 2007-2 B-1 D B Long Beach Mortgage Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-A M-1 D CCC MASTR Second Lien Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-1 M-6 D CCC 2006-1 M-3 D CCC Merrill Lynch Mortgage Investors Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-NCB B-5 D CCC 2005-SL3 B-4 D CCC 2006-SL1 B-4 D CCC 2006-SL2 M-8 D CCC Morgan Stanley Mortgage Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-8SL B-3 D CCC 2006-10SL B-5 D CCC 2006-4SL B-4 D CCC New Century Home Equity Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-S1 M-2 D CCC Nomura Asset Acceptance Corporation, Alternative Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-S1 B-2 D CCC 2006-S2 M-6 D CCC 2006-S3 M-6 D CCC 2006-S4 B-1 D CCC 2006-S5 M-4 D CCC 2007-S1 M-8 D B Ownit Mortgage Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-OT1 B-4 D CCC SACO I Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-10 II-B-2 D CCC 2005-5 I-B-4 D CCC 2005-7 B-3 D CCC 2005-9 B-3 D CCC 2005-WM2 B-2 D CCC 2005-WM3 B-2 D CCC 2006-10 B-1 D CCC 2006-2 I-B-3 D CCC 2006-2 II-B-1 D CCC 2006-3 M-6 D CCC 2006-4 M-6 D CCC 2006-5 I-B-1 D CCC 2006-5 II-M-5 D CCC 2006-6 M-4 D CCC 2006-7 M-4 D CCC 2006-9 B-2 D CCC Structured Asset Securities Corporation Rating ------ Series Class To From ------ ----- -- ---- 2004-S4 B2 D CCC 2005-S1 B2 D CCC Structured Asset Securities Corporation Mortgage Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-S5 M8 D CCC 2005-S6 B2 D CCC 2006-S1 M7 D CCC 2006-S3 M8 D CCC Terwin Mortgage Trust Rating ------ Series Class To From ------ ----- -- ---- 2004-10SL B-3 D CCC 2004-4SL B-3 D CCC 2005-11 I-B-5 D CCC 2005-11 II-B-3 D CCC 2005-13SL B-4 D CCC 2005-3SL B-5 D CCC 2005-9HGS B-5 D CCC 2006-1 II-B-2 D CCC 2006-10SL M-3 D CCC 2006-12SL M-3 D CCC 2006-4SL B-2 D CCC 2006-6 I-B-2 D CCC 2006-6 II-M-3 D CCC 2006-8 I-B-2 D CC 2006-8 II-M-3 D CC 2006-HF-1 B-4 D CCC 2007-1SL M-3 D BB 2007-3SL B-2 D B- * Fitch Says Student Loan Trust Still Resilient Despite Disruption ------------------------------------------------------------------ Continued disruption in the auction-rate market has resulted in a historic number of auction failures causing a number of U.S. ABS trusts containing auction-rate paper to hit their available funds caps for prolonged periods of time. Despite this protracted dislocation, student loan ABS trusts with auction-rate debt continue to demonstrate resilience to the penalty rates caused by these failed auctions, according to Fitch Ratings. As a result, Fitch does not anticipate any near term ratings actions on these trusts based solely upon such increased debt costs. A number of factors are contributing to the limited impact on rating performance: -- Structural provisions: Available funds caps, average yield caps, performance triggers, diversification of debt and other credit enhancement within the structures all work in conjunction to limit investor exposure to market volatility. -- Seasoning and parity ratios: A majority of the transactions with substantial exposure to auction-rate debt are well seasoned with the ratio of assets to liabilities, or parity, in excess of 100%. -- Expiration of available funds cap waivers: Originally incorporated for short term relief of accrual of carry over interest, expiration will allow deal to return to original structural provisions in most cases reducing the failed auction- rate. -- Collateral composition and performance: The majority of auction transactions are backed by student loans originated under the Federal Family Education Loan Program which carry guarantee by the U.S. Federal Government for at least a 97% on defaulted principal and interest. Fitch anticipates performance within the FFELP product line to remain stable in 2008. While Fitch has observed a decline in the parity ratio in a number of trusts over the past few months, that decline can be attributed in most cases to the existing of the available funds cap waivers which resulted in principal receipts being used to pay interest on the debt. 'During our review of these trusts throughout the waiver process, the majority were well seasoned with parity ratios in excess of 100%,' said Gary Santo, Managing Director. 'With their waivers expiring, these trusts should be in a better position to weather these choppy markets.' Fitch will issue a special report in the coming weeks that will include more detailed discussion on the strength of underlying collateral performance, as well as include more in-depth trust analysis. Fitch plans to issue separate press releases on U.S. municipal issuer and managed funds exposure to ARS later this week. * Banks Still Cautious on Hedge Fund Debts Despite U.S. Backing --------------------------------------------------------------- Bank lenders continue to demand additional collateral on debts extended to hedge funds despite backing by the United States, Tom Cahill and Katherine Burton of Bloomberg News relate. Bloomberg notes that six hedge funds with an aggregate value of $5.4 billion have already been forced to dispose of their assets since mid-February 2008. According to Bloomberg, lenders have written off $190 billion, increased debt rates up to 10 times, and asked for "extra collateral" for loans blaming the crisis in the subprime-mortage sector. Banks have started to take precaution with "the world's safest securities" -- Treasuries -- as bond markets suffer price instability, Bloomberg says. Alex Allen, chief investment officer at Eddington Capital Management Ltd. in London, commented that a leveraged company is "stuffed," Bloomberg reports. It's a reverse bank panic where banks, instead of depositors, are fretting about their funds, Bloomberg quotes Mr. Allen as saying. Bloomberg recalls that Russia defaulted on its loan in 1998 causing the U.S. Federal Reserve to force financial institutions to get a $3.6 billion rescue fund for Long-Term Capital Management LP in Connecticut. Bloomberg adds that the present crisis affecting the $1.9 billion hedge fund industry "is the worst" saying hedge funds are pushed to liquidate their assets and eventually dissolve upon missed margin calls. Mr. Allen, according to Bloomberg, projected that more hedge funds are going to be liquidated in the coming weeks. * Kilpatrick's Subprime Team Adds White Collar Crime Lawyers ------------------------------------------------------------ The Subprime and Credit Markets Litigation Team of Kilpatrick Stockton LLP has expanded to include lawyers from the firm's Special Investigations & White Collar Crime Team including partner Scott Marrah, Esq. and other experienced, high-profile partners in Atlanta, New York, Washington, DC and North Carolina. Mr. Marrah chairs the firm's Special Investigations & White Collar Crime Team and joined the firm last year after serving as an Assistant U.S. Attorney for the Southern District of New York. "The complex challenges that subprime matters present require a team of lawyers with substantial experience in an array of legal disciplines who work together effectively across offices and traditional practice group lines," said partner Mike Crisp, the leader of the firm's complex business litigation practice. In 2007, to enhance Kilpatrick Stockton's service to clients dealing with litigation arising out of the subprime and credit markets crisis, the firm brought together lawyers from across all U.S. offices and relevant practice groups to form an interdisciplinary team tailored to solve subprime legal problems. Prior to forming the team, the firm was already representing many well-known companies in subprime related matters. The Subprime and Credit Markets Litigation Team currently represents clients in class actions, bankruptcy proceedings, insurance coverage cases, securities fraud cases, accounting negligence cases, and breach of contract disputes that arise directly out of the subprime and general credit crisis. "Kilpatrick Stockton was on the front lines of the early legal battles in this area and from that vantage point we saw a need to expand the group to include participation by lawyers with criminal and internal investigation experience. Scott and his team give us that capability in spades," added Mr. Crisp. "Even in civil cases, the expanded team will provide a unique and valuable perspective on the risks our corporate clients may face as the litigation and criminal investigations surrounding the credit crisis continue to rapidly expand." Although the Special Investigations & White Collar Crime Team will work closely on a daily basis with the Subprime and Credit Markets Litigation Team, it will remain a separate practice group in order to continue serving its own growing client base and their specific needs. About Kilpatrick Stockton Kilpatrick Stockton LLP -- http://www.kilpatrickstockton.com/-- is a full-service international law firm with more than 500 attorneys in nine offices across the globe: Atlanta and Augusta, Georgia; Charlotte, Raleigh and Winston-Salem, North Carolina; New York City; Washington, D.C.; London, England; and Stockholm, Sweden. Kilpatrick Stockton's delivery of innovative business solutions provides results-oriented counsel for corporations, from the challenging demands of financial transactions and securities to the disciplines of intellectual property management. Collaboration among Kilpatrick Stockton's corporate, litigation and intellectual property attorneys provides knowledgeable and proactive guidance for companies at every stage of the business life cycle. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Mar. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Rick Cieri of Kirkland & Ellis Jamie Sprayregan of Goldman Sachs Bankers Club of Miami, Florida Contact: 561-882-1331 or http://www.turnaround.org/ Mar. 25, 2008 TURNAROUND MANAGEMENT ASSOCIATION Dearfoam Slipper Turnaround Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ Mar. 25-29, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Ritz Carlton Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Mar. 27-30, 2008 NORTON INSTITUTES ON BANKRUPTCY LAW Bankruptcy Litigation Seminar II Las Vegas, Nevada Contact: http://www.nortoninstitutes.org/ Apr. 3, 2008 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION Annual Spring Luncheon Renaissance Hotel, Washington, District of Columbia Contact: 703-449-1316 or www.iwirc.org Apr. 3, 2008 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners - East The Renaissance, Washington, District of Columbia Contact: http://www.abiworld.org/ Apr. 3-6, 2008 AMERICAN BANKRUPTCY INSTITUTE 26th Annual Spring Meeting The Renaissance, Washington, District of Columbia Contact: http://www.abiworld.org/ Apr. 7-8, 2008 PRACTISING LAW INSTITUTE 30th Annual Current Developments in Bankruptcy & Reorganization PLI Center New York, New York Contact: http://www.pli.edu/ Apr. 10-11, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Ninth Annual Conference on Healthcare -24-24Transactions Successful Strategies for Mergers, Acquisitions, Divestitures and Restructurings The Millennium Knickerbocker Hotel, Chicago Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ Apr. 25-27, 2008 NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES NABT Spring Seminar Eldorado Hotel & Spa, Santa Fe, New Mexico Contact: http://www.nabt.com/ Apr. 29, 2008 TURNAROUND MANAGEMENT ASSOCIATION Why Prospects Become Clients Citrus Club, Orlando, Florida Contact: http://www.turnaround.org// May 1-2, 2008 TURNAROUND MANAGEMENT ASSOCIATION 2nd Annual Credit & Bankruptcy Symposium Foxwoods Resort Casino, Ledyard, Connecticut Contact: http://www.turnaround.org// May 1-2, 2008 AMERICAN BANKRUPTCY INSTITUTE Debt Symposium Hilton Garden Inn, Champagne/Urbana, Illinois Contact: 1-703-739-0800; http://www.abiworld.org/ May 9, 2008 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners - NYC Alexander Hamilton U.S. Custom House, New York Contact: 1-703-739-0800; http://www.abiworld.org/ May 12, 2008 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference Millennium Broadway Hotel & Conference Center, New York Contact: 1-703-739-0800; http://www.abiworld.org/ May 12-13, 2008 PRACTISING LAW INSTITUTE 30th Annual Current Developments in Bankruptcy & Reorganization PLI Center San Francisco, California Contact: http://www.pli.edu/ May 13-16, 2008 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Tulane University, New Orleans, Louisiana Contact: 1-703-739-0800; http://www.abiworld.org/ May 15-16, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Fifth Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel - London Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ May 18-20, 2008 INTERNATIONAL BAR ASSOCIATION 14th Annual Global Insolvency & Restructuring Conference Stockholm, Sweden Contact: http://www.ibanet.org/ May 21, 2008 TURNAROUND MANAGEMENT ASSOCIATION What Happened to My Money - The Restructuring of a Loan Servicer Marriott North, Fort Lauderdale, Florida Contact: http://www.turnaround.org// June 4-7, 2008 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 24th Annual Bankruptcy & Restructuring Conference J.W. Marriott Spa and Resort, Las Vegas, Nevada Contact: http://www.airacira.org/ June 12-14, 2008 AMERICAN BANKRUPTCY INSTITUTE 15th Annual Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: http://www.abiworld.org/ June 19 & 20, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Corporate Reorganizations Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ June 24, 2008 TURNAROUND MANAGEMENT ASSOCIATION Fraud Panel Citrus Club, Orlando, Florida Contact: http://www.turnaround.org/ June 26-29, 2008 NORTON INSTITUTES ON BANKRUPTCY LAW Western Mountains Bankruptcy Law Seminar Jackson Hole, Wyoming Contact: http://www.nortoninstitutes.org/ July 10, 2008 TURNAROUND MANAGEMENT ASSOCIATION Cynthia Jackson of Smith Hulsey & Busey University Club, Jacksonville, Florida Contact: http://www.turnaround.org/ July 10-13, 2008 AMERICAN BANKRUPTCY INSTITUTE 16th Annual Northeast Bankruptcy Conference Ocean Edge Resort Brewster, Massachussets Contact: http://www.abiworld.org/events July 29, 2008 TURNAROUND MANAGEMENT ASSOCIATION Employment Issues Following Hurricanes & Disasters Centre Club, Tampa, Florida Contact: http://www.turnaround.org/ July 31 - Aug. 2, 2008 AMERICAN BANKRUPTCY INSTITUTE 4th Annual Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay Cambridge, Maryland Contact: http://www.abiworld.org/ Aug. 16-19, 2008 AMERICAN BANKRUPTCY INSTITUTE 13th Annual Southeast Bankruptcy Workshop Ritz-Carlton, Amelia Island, Florida Contact: http://www.abiworld.org/ Aug. 20-24, 2008 NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES NABT Convention Captain Cook, Anchorage, Alaska Contact: http://www.nabt.com/ Aug. 26, 2008 TURNAROUND MANAGEMENT ASSOCIATION Do's and Don'ts of Investing in a Turnaround Citrus Club, Orlando, Florida Contact: http://www.turnaround.org// Sept. 4-5, 2008 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Four Seasons, Las Vegas, Nevada Contact: http://www.abiworld.org/ Sept. 4-6, 2008 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Four Seasons, Las Vegas, Nevada Contact: http://www.abiworld.org/ Sept. 17, 2008 TURNAROUND MANAGEMENT ASSOCIATION Real Estate / Condo Restructuring Panel Marriott North, Fort Lauderdale, Florida Contact: http://www.turnaround.org// Sept. 24-26, 2008 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION IWIRC 15th Annual Fall Conference Scottsdale, Arizona Contact: http://www.ncbj.org/ Sept. 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Desert Ridge Marriott, Scottsdale, Arizona Contact: http://www.iwirc.org/ Sept. 30, 2008 TURNAROUND MANAGEMENT ASSOCIATION Private Equity Panel Centre Club, Tampa, Florida Contact: http://www.turnaround.org// Oct. 9, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Luncheon - Chapter 11 University Club, Jacksonville, Florida Contact: http://www.turnaround.org/ Oct. 28, 2008 TURNAROUND MANAGEMENT ASSOCIATION State of the Capital Markets Citrus Club, Orlando, Florida Contact: http://www.turnaround.org// Oct. 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott New Orleans, Louisiana Contact: 312-578-6900; http://www.turnaround.org/ Oct. 30 & 31, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Physicians Agreements and Ventures Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ Nov. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Interaction Between Professionals in a Restructuring/Bankruptcy Bankers Club, Miami, Florida Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2008 AMERICAN BANKRUPTCY INSTITUTE 20th Annual Winter Leadership Conference Westin La Paloma Resort & Spa Tucson, Arizona Contact: http://www.abiworld.org/ May 7-10, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center National Harbor, Maryland Contact: http://www.abiworld.org/ June 11-13, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ BEARD AUDIO CONFERENCES 2006 BACPA Library Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES BAPCPA One Year On: Lessons Learned and Outlook Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Carve-Out Agreements for Unsecured Creditors Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Chinas New Enterprise Bankruptcy Law Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Clash of the Titans -- Bankruptcy vs. IP Rights Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Corporate Bankruptcy Bootcamp: A Nuts & Bolts Primer for Navigating the Restructuring Process Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Deepening Insolvency Widening Controversy: Current Risks, Latest Decisions Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Diagnosing Problems in Troubled Companies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Claims Trading Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Market Opportunities Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Equitable Subordination and Recharacterization Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Examining the Examiners: Pros and Cons of Using Examiners in Chapter 11 Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Handling Complex Chapter 11 Restructuring Issues Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Homestead Exemptions under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Hospitals in Crisis: The Insolvency Crisis Plaguing Hospitals Across the U.S. Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES IP Rights In Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES KERPs and Bonuses under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES New 'Red Flag' Identity Theft Rules Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Non-Traditional Lenders and the Impact of Loan-to-Own Strategies on the Restructuring Process Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Partnerships in Bankruptcy: Unwinding The Deal Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Real Estate Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergersthe New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Second Lien Financings and Intercreditor Agreements Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in E-Discovery and Records Management for Bankruptcy Practitioners and Litigators Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Technology as a Competitive Advantage For Todays Legal Processes Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Battle of Green & Red: Effect of Bankruptcy on Obligations to Clean Up Contaminated Property Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Subprime Sector Meltdown: Legal Developments and Latest Opportunities Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Twenty-Day Claims Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite Corporate Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite M&A and Insolvency Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES When Tenants File -- A Landlord's BAPCPA Survival Guide Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ * * * Featured Conferences Beard Conferences presents: April 10-11, 2008 Ninth Annual Conference on Healthcare Transactions Successful Strategies for Mergers, Acquisitions, Divestitures and Restructurings The Millennium Knickerbocker Hotel, Chicago, Illinois Brochure available soon! May 15-16, 2008 Fifth Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel - London Brochure available soon! * * * The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* 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 ***