/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080319.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 19, 2008, Vol. 12, No. 67 Headlines AAMES MORTGAGE: Eroding Performance Cues S&P to Junk Three Ratings AINSWORTH LUMBER: Exchange Offer Expires, Conditions not Satisfied ALLIANCE ONE: S&P Changes Outlook to Stable; Retains 'B+' Rating ALLIANCE STAFFING: Case Summary & 20 Largest Unsecured Creditors AMBAC FINANCIAL: CEO Asks Policyholders to Deal With Loss Issues AMERICAN AXLE: Work Stoppage Prompts S&P's Negative Watch Posting ATHERTON-NEWPORT: Case Summary & 20 Largest Unsecured Creditors ATLANTIC EXPRESS: Moody's Slashes Ratings to 'Caa2' From 'Caa1' AVALON INVESTMENTS: Case Summary & Four Largest Unsec. Creditors BABSON LOAN: S&P Attaches 'BB' Rating on $16.5 Mil. Class E Notes BARRERA CONSTRUCTION: Case Summary & Ten Largest Unsec. Creditors BEAR STEARNS: JP Morgan Acquisition Receives Various Comments BEAR STEARNS: Moody's Takes Various Rating Actions on Ten Classes BORCHARDT TRUCKING: Case Summary & 20 Largest Unsecured Creditors BOWNE & CO: Incurs Net Loss of $76,000 For 2007 Fourth Quarter CARIBBEAN RESTAURANTS: S&P Junks Rating on Expected Breach in Pact CHARLES OHEARN: Voluntary Chapter 11 Case Summary COMMERCIAL MORTGAGE: Moody's Confirms Junk Ratings on Two Classes CONSECO INC: Posts $210 Mil. Net Loss in Preliminary 2007 Report CONSECO INC: 2007 10-K Filing Delay Won't Affect S&P's 'B+' Rating CONSTAR INT'L: S&P Upgrades Issue-level Rating to 'B-' From 'CCC+' CSFB MORTGAGE: Moody's Junks Rating on Class O Certs. From 'B3' CSFB ABS: S&P Confirms 'BB' Rating on Class B-2 Asset-backed Notes CYBERCARE INC: Cast-Crete's Amended Disclosure Statement Denied CYBERCARE INC: Case Conversion Hearing Scheduled for Today DELTA AIR: To Cut Flights, 30,000 Jobs in Wake of Weakened Economy DIASTAR INC: Case Summary & Seven Largest Unsecured Creditors DLMR LLC: Involuntary Chapter 11 Case Summary DOMAIN INC: Four Landlords Oppose Auction of Store Leases DORIS CORTEZ: Case Summary & Three Largest Unsecured Creditors DURA AUTOMOTIVE: Files Amended First Revised Chapter 11 Plan DURA AUTOMOTIVE: Unveils Financial Projections Under Revised Plan DURA AUTOMOTIVE: Claims Treatment & Classification of Revised Plan ENRON CORP: Parties Want Trial Stayed to Avoid "Irreparable Harm" ENTERCOM COMMS: S&P Assigns 'BB-' Rating on CreditWatch Negative EVRAZ GROUP: Fitch Affirms 'BB' ID Rating on IPSCO Acquisition EXACT SCIENCES: Reports $162M Accumulated Deficit, Explores Option EXACT SCIENCES: Executive Chairman Patrick J. Zenner Resigns EXACT SCIENCES: Appoints Jeff Luber as President and CEO GALAXY ENERGY: Discloses Prepetition Loans from Bruner Family GENERAL MARITIME: S&P Changes Outlook to Negative; Holds BB Rating GENERAL MOTORS: Strike Cues S&P to List Ratings on Negative Watch GO CAPITAL: Temporarily Suspends Fund Redemption Over Market Woes HARMONY HEAVEN: Case Summary & Eight Largest Unsecured Creditors HARRAH'S ENTERTAINMENT: Reports $47.8M Net Loss for 4th Quarter HOMESTEAD HOLDINGS: Case Summary & Seven Largest Unsec. Creditors HSI ASSET: Eroding Credit Support Prompts S&P's Rating Downgrades IMPERIAL PETROLEUM: Jan. 31 Balance Sheet Upside-Down by $8.6 Mil. INNOPHOS HOLDINGS: Reports $3.9M Net Loss for 2007 4th Quarter INT'L PAPER: Moody's Gives Negative Outlook on Weyerhaeuser Deal IXIS REAL: S&P Junks Nine Ratings on Deteriorating Credit Support JL HAIR: Case Summary & Three Largest Unsecured Creditors KITTY HAWK: Court Moved Exclusive Plan Filing Period to March 28 LASALLE COMMERCIAL: Losses Prompts Moody's Four Rating Downgrades LATTICE INC: Obtains $2.4 Million Credit Line from Private Bank LEAR CORP: S&P Posts Ratings on Negative Watch on Extended Strike MASTR ABS TRUST: S&P's Rating on Class M-9 Drops to 'CCC' MAXJET AIRWAYS: To Sell Assets to MAAG for $1 Million MEDICALCV: January 31 Balance Sheet Upside-Down by $5,794,877 MERISANT COMPANY: Commences Marketing of Secured Credit Facility MERRILL LYNCH: Moody's Confirms Low-B Ratings on Six Cert. Classes MONEYGRAM INT'L: Inks Recapitalization Deal with Investment Group MONITOR OIL: U.S. Trustee & Panel Oppose Exclusivity Extension NATIONAL ENERGY: Shareholders OK Plan of Dissolution & Liquidation NEW 118TH: Court Approves Sale of The Ivy Project for $11.25MM NEWBURY STREET: Moody's Junks Rating on $48 Mil. Notes From 'A3' NATIONAL CENTURY: Ex-CEO Faces Trial on Witness Bribery NATIONAL CENTURY: Jury Convicts Five Former NCFE Executives NC POWER HOLDINGS: Involuntary Chapter 11 Case Summary NORTEL NETWORKS: Inks Settlement Agreement with Vonage NORTHWESTERN CORP: Settles Magten Asset Bankruptcy Claims for $23M ORIENTAL TRADING: Moody's Puts Negative Outlook; Holds All Ratings PACIFICNET INC: Kabani & Co. Raises Going Concern Doubt PALM HARBOR: Unit Extends Maturity of $42MM Facility to April 30 PFP HOLDINGS: Wants Court to OK Asset Sale and Bidding Procedures PIPER RESOURCES: Alberta Court Grants April 28 CCAA Extension PLASTECH ENGINEERED: Court OKs Additional $14MM Interim Financing PLASTECH ENGINEERED: Aims to Leave Bankruptcy in Six Months PLASTECH ENGINEERED: Roush Wants Stay Lifted to Recover Molds PLASTECH ENGINEERED: Wants Admin. Claims Bar Date Set to May 30 POPULAR ABS: Three Classes of Certs. Obtain S&P's Junk Ratings PORTOLA PACKAGING: S&P Retains 'B-' Rating on $60 Mil. Facility PRC LLC: Can Sell Real Property to Brett Houston for $2.2 Million PRC LLC: Wants to Reject Spirit Air Pact, Says It Has Little Value PRC LLC: Wants iEnergizer Settlement Agreement Approved PROTECTION ONE: Unit Secures $110 Mil. Senior Unsecured Term Loan PROTECTION ONE: Moody's Pares Default Probability Rating to 'B3' QWEST COMMUNICATIONS: Discloses Program Affecting 2% Workforce RADIO SYSTEMS: S&P Changes Outlook to Negative; Keeps All Ratings READER'S DIGEST: S&P Chips Rating to 'B-' on Higher Debt Levels RITE AID: Solicits Consents to Amend Terms of Credit Indentures SECURITY CAPITAL: Posts $1.1 Billion Net Loss in 4th Qtr. 2007 SEE WHY GERARD: Court Orders Mediation of Feud with Comedy Works SEQUIAM CORPORATION: Case Summary & 39 Largest Unsecured Creditors SHAPES/ARCH: Bankruptcy to be Aided by Versa's $25 Mil. DIP Fund SHARPER IMAGE: Court Approves Liquidation Deal with Hilco & Gordon SIGMA FINANCE: Pressures Spur S&P's Negative CreditWatch Listing SILVERWING ENERGY: Seeks Financing to Remedy Covenant Breach SPYRUS INC: Wants DLA Piper US as Bankruptcy Counsel STRADA 315: Files Schedules of Assets and Liabilities TC COMPUTER: Case Summary & 21 Largest Unsecured Creditors TENNECO INC: S&P Puts Ratings on Negative Watch on Work Stoppage THORNBURG MORTGAGE: May Issue Securities to Raise Funds TILLIM LLC: Has Until May 30 to File Plan and Disclosure Statement TILLIM LLC: Can Decide Until May 12 to Assume or Reject Lease TRIBUNE CO: 10% Expected Decline in Revenue Cues S&P's 'B-' Rating UNICO INC: Issues Convertible Debentures Totaling $300,000 VANGENT INC: Posts $1.99 Mil. Net Loss For The 2007 Fourth Quarter VICTORY MEMORIAL: Judge Craig Pushes Back Auction Date to March 31 VONAGE HOLDINGS: Inks Settlement Agreement with Nortel Networks WASHINGTON MUTUAL: 38 Classes Get Moody's Rating Confirmations WICKES FURNITURE: Committee Wants Sun Wickes Loans Investigated WILLIAM BOYD: Hearing on Plant Sale to Cass Hill is Today XERIUM TECHNOLOGIES: May File For Bankruptcy Protection ZIFF DAVIS: Gets Court Approval to Hire BMC as Claims Agent * February Downgrades Driven By Covenant Concerns, Moody's Says * S&P Reports Data on Leveraged Companies With High Default Risk * S&P Downgrades 47 Classes' Ratings From Five CDO Deals to 'D' * S&P Designates Ratings on 228 Classes of RMBS on Negative Watch * S&P Downgrades Ratings on 91 Classes From 23 RMBS Transactions * Fitch Says Credit Market Downturn Is Difficult for Underwriters * Fitch Says Weak Housing Environment Will Continue to Take a Toll * CorporateDefaults.com Reports Default Chances for Bear Stearns * CRG's Gray Named Fellow of American College of Bankruptcy * Beard Audio Presents "Understanding CDS Contract Risks" Seminar * Upcoming Meetings, Conferences and Seminars ********* AAMES MORTGAGE: Eroding Performance Cues S&P to Junk Three Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on 11 classes from three Aames Mortgage Trust deals. S&P also affirmed its ratings on two classes from one of the downgraded deals. The other classes from these transactions are not affected by these rating actions. The downgrades reflect collateral performance that has eroded available credit support during recent months. As of the February 2008 remittance period, cumulative losses for series 2001-4 were 4.40%, or $10.33 million of the original pool balance. Losses for this series have outpaced excess interest for 11 out of 12 most recent months and overcollateralization (O/C) is currently 5.4x below its $1.4 million target. As of the February 2008 remittance period, cumulative losses for series 2005-1 and 2005-4 were $13.37 million and $19.16 million of the original pool balances, respectively, and serious delinquencies (90-plus days, foreclosures, and REOs) for these series were $58.47 million and $146.84 million of the current pool balances, respectively. O/C is currently below its target for both deals. Subordination, O/C, and excess spread provide credit support for these series. The collateral for these transactions consists of pools of conventional, first- and second-lien, adjustable- and fixed-rate, fully amortizing residential mortgage loans. Ratings Lowered Aames Mortgage Trust 2001-4 Rating ------ Class To From ----- -- ---- M-1 A AA+ M-2 B BB Aames Mortgage Investment Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-1 B1 BB BBB+ 2005-1 B2 B BB+ 2005-1 B3 CCC B 2005-4 M6 A AA- 2005-4 M7 BBB A+ 2005-4 M8 BB A 2005-4 M9 B BBB+ 2005-4 B1 CCC BB 2005-4 B2 CCC B Ratings Affirmed Aames Mortgage Trust 2001-4 Class Rating ----- ------ A4 AAA B CCC AINSWORTH LUMBER: Exchange Offer Expires, Conditions not Satisfied ------------------------------------------------------------------ Ainsworth Lumber Co. Ltd. disclosed that its exchange offer and consent solicitation relating to its outstanding senior unsecured notes has expired without the conditions to the offer being satisfied. "Although we are disappointed that the exchange offer was not successful as currently structured, it did provoke constructive dialogue with noteholders and we remain optimistic that we will find a refinancing structure that is mutually satisfactory. In the meantime, the company has a number of other alternatives that it will now pursue as well," Robert Allen, chief financial officer of the company, said. "The company and its supportive noteholders remain contractually committed notwithstanding the expiry of the offer, and we expect that will facilitate getting to a solution," Mr. Allen added. As reported in the Troubled Company Reporter on Feb. 19, 2008, Ainsworth Lumber commenced an exchange offer for any and all of its outstanding: * $153.5 million aggregate principal amount of senior unsecured floating rate notes due 2010, * $275 million aggregate principal amount of 7.25% senior unsecured notes due 2012, * $75 million aggregate principal amount of senior unsecured floating rate notes due 2013, * $210 million aggregate principal amount of 6.75% senior unsecured notes due 2014, and * $110 million aggregate principal amount of 6.75% senior unsecured notes due 2014. Pursuant to the exchange offer, holders of existing notes could exchange their existing notes for the company's 14% senior secured second lien notes due June 24, 2014, which would be issued in an aggregate principal amount of up to $596.0 million. When issued, the new notes would be the company's senior obligations and would be secured by a second priority lien on real property, plant and equipment, other than certain excluded assets, and a third priority lien on the inventory and accounts receivable currently pledged under the company's existing term loan credit facility. The new notes would be unconditionally guaranteed by the company's material subsidiaries. In connection with the exchange offer, the company solicited consents from holders of the existing notes to certain amendments to the indentures governing the existing notes, including the removal of substantially all of the restrictive covenants and certain events of default. The exchange offer was conditioned upon, among other things, the holders of at least 50.1% of the aggregate outstanding principal amount of existing notes tendering existing notes in the exchange offer and the holders of not less than a majority in the aggregate outstanding principal amount of each class of existing notes that vote together for purposes of effecting amendments delivering consents in the consent solicitation. Holders of approximately one third of the existing notes agreed with the company to tender their existing notes in the exchange offer and deliver consents in the consent solicitation. Concurrent with the exchange offer and consent solicitation, the company offered $50 million aggregate principal amount of its senior secured first lien notes due 2014 to "qualified institutional buyers" in the United States and "accredited investors" in Ontario, Canada. The net proceeds of the concurrent offering would be used for working capital and general corporate purposes. Certain holders of existing notes agreed to backstop the concurrent offering. As consideration for their agreement to backstop the concurrent offering, the holders would receive warrants to purchase up to 7,887,998 of the company's common shares, representing approximately 35% of the company's currently outstanding common shares assuming full exercise of the warrants, at an exercise price of CDN$0.01 per share. The number of common shares into which the warrants may be exercised would be adjusted proportionately if the company issues common shares or securities convertible into common shares at less than 95% of the then fair market value of the common shares on the Toronto Stock Exchange. The warrants would expire on June 24, 2014. The company has the right to redeem the warrants in full prior to the date that is five years following the date of issuance of the warrants. Barclays Capital Inc. is acting as a financial advisor to the company in connection with the exchange offer and consent solicitation, and Global Bondholder Services Corporation is acting as exchange agent and information agent in connection with the exchange offer and consent solicitation. Headquartered in Vancouver, British Columbia, Ainsworth Lumber Co. Ltd. (TSE:ANS) -- http://www.ainsworth.ca/-- manufactures structural-engineered wood products, including oriented strand board, and specialty overlaid plywood. The company owns and operates six OSB manufacturing facilities, three in Canada and three in northern Minnesota. It has a 50% ownership interest in an OSB facility, located in High Level, Alberta. Ainsworth is also a manufacturer of specialty overlaid concrete-form plywood products in North America. Ainsworth's business is focused on the structural wood panels sector. It offers value-added products, such as OSB webstock, rimboard, radiant barrier OSB panels, jumbo OSB panels, export-standard OSB and specialty overlaid plywood. * * * As reported in the Troubled Company Reporter on Nov. 15, 2007, Moody's Investors Service downgraded Ainsworth Lumber Co. Ltd.'s corporate family rating to Caa1 from B2. At the same time, the ratings on the senior unsecured notes were downgraded to Caa1 from B2 and the rating on the secured term loan was downgraded to B2 from Ba3. Standard & Poor's Ratings Services placed Ainsworth Lumber Co. Ltd.'s long-term foreign and local issuer credit ratings at 'CCC+' in March 2007. The outlook is negative. The ratings still hold to date. ALLIANCE ONE: S&P Changes Outlook to Stable; Retains 'B+' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Alliance One International Inc. and its wholly owned subsidiary, Intabex Netherlands B.V., to stable from negative. At the same time, the ratings on the Morrisville, North Carolina-based company, including the 'B+' corporate credit rating, were affirmed. "The outlook revision principally reflects steady reduction in debt leverage since the acquisition of Standard Commercial in May 2005, and improved liquidity," said Standard & Poor's credit analyst Kenneth Shea. The ratings on Alliance One reflect the challenging business environment in which the company operates, marked by global competition, political unrest in certain leaf-tobacco producing countries, the weak U.S. dollar, and declining cigarette consumption in most mature markets, including the U.S. and Western Europe. In addition, there is customer concentration risk and relatively high debt leverage. These concerns are tempered by the company's position as one of the two leading independent leaf tobacco merchants; its sourcing diversification; and solid customer relationships with the leading cigarette manufacturers. ALLIANCE STAFFING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Alliance Staffing Inc. 999 Remington Boulevard, Suite F Bolingbrook, IL 60440 Bankruptcy Case No.: 08-06100 Chapter 11 Petition Date: March 14, 2008 Court: Northern District of Illinois (Chicago) Judge: Bruce W. Black Debtor's Counsel: Beverly A. Berneman, Esq. bberneman@querrey.com Robert R. Benjamin. Esq. rbenjamin@querrey.com Querrey & Harrow Ltd. 175 West Jackson Boulevard Suite 1600 Chicago, IL 60604 Tel: 312-540-7000 Fax: (312)540-0578 Total Assets: $2,327,280 Total Debts: $3,716,512 Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Department of the Treasury 941s for 2nd, $1,365,509 IRS 3rd, 4th quarter Cincinnati, OH 45999 2007 and year through March 14, 2008 Fifth Third Bank 2006 operating $380,000 P.O. Box 630337 loan Cincinnati, OH 45263 Alfred Garza loans to company $236,000 13245 Lake Shore Drive Plainfield, IL 60586 Illinois Dept. of Employment unemployment $216,006 September, 2006 through December, 2007 Alfred A. Garza loans to $175,000 corporation CIT Technology Services lessor of $147,662 personal property First Insurance Funding Corp. insurance $89,457 Eric Garza loans to $85,000 corporation ALAP Limited loans to $83,314 corporation Michael Pazur loans to $77,685 corporation American Express 37003 credit card $8,386 obligations Charter One $47,000 Eagle Personnel subcontracted $31,560 labor St. James Hospital & Health employee workers $26,489 Center compensation claims VIP Remington Lakes LLC lessor of non- $25,996 residential real estate Artex Risk Solutions Inc. insurance $22,369 Blue Cross Blue Shield insurance $18,225 ATI utilities $11,794 Pluymert, Piercey, MacDonald professional fees $10,301 & Amato Schwab Rehabilitation Hospital employee workers $4,360 compensation claims AMBAC FINANCIAL: CEO Asks Policyholders to Deal With Loss Issues ---------------------------------------------------------------- Michael A. Callen, Ambac Financial Group Inc.'s chairman and chief executive officer, in his letter, urged policyholders, clients, shareholders and friends, to deal with a lot of misinformation and self-serving agendas of others in the marketplace. Mr. Callen relates that (i) loss projections read and hear about are simply projections, based on limited data and the numbers on the headlines are stress case losses, not expected losses; (ii) Ambac never considered a "bailout;" and (iii) lost issues in Ambac's portfolio arise largely from four transactions, the "CDO- squareds," that account for the vast majority of our potential losses. "In this difficult environment, Ambac was able to achieve its immediate objectives of enhancing its capital position and improving its position with the rating agencies," Mr. Callen continued. "With the capital raise in place, Ambac, in our view, now has the resources from which to build its future, including the ability to capitalize on attractive, sound opportunities as they arise in the financial guarantee business." Along with the company's capital raising efforts, the company is undertaking an examination of all aspects of Ambac's business its organization, business focus, systems and processes. While the company's work in this regard is ongoing, it has implemented some important changes, Mr. Callen stated. "We have created a new risk management structure and we are refocusing our business, including the exiting of certain businesses, with the objective of improving the quality of our portfolio and reducing the volatility of our earnings," Mr. Callen concluded. "This process will take time, but will benefit all of our constituents." About Ambac Financial Based in New York City, Ambac Financial Group, Inc. is a holding company whose affiliates provide financial guarantees and financial services to clients in both the public and private sectors around the world. For the nine months ended Sept. 30, 2007, Ambac reported net income of $26 million. As of Sept. 30, 2007, Ambac had shareholders' equity of approximately $5.65 billion. * * * On Jan. 18, Fitch Ratings downgraded Ambac to double-A after the insurer put off plans to raise equity capital. As reported by the Troubled Company Reporter on Jan. 17, 2008, Moody's Investors Service placed the Aaa insurance financial strength ratings of Ambac Assurance Corporation and Ambac Assurance UK Limited on review for possible downgrade. In the same rating action, Moody's also placed the ratings of the holding company, Ambac Financial Group, Inc. (senior debt at Aa2), and related financing trusts on review for possible downgrade. Moody's stated that this rating action follows Ambac's announcement of record losses, a capital raising plan, and the retirement of its CEO. AMERICAN AXLE: Work Stoppage Prompts S&P's Negative Watch Posting ----------------------------------------------------------------- Standard & Poor's Ratings Services placed the ratings on General Motors Corp., American Axle & Manufacturing Holdings Inc., Lear Corp., and Tenneco Inc. on CreditWatch with negative implications. The CreditWatch placement reflects S&P's decision to review the ratings in light of the extended American Axle (BB/Watch Neg/--) strike. The work stoppage that began Feb. 25 at American Axle's U.S. United Auto Workers plants has forced closure of many GM (B/Watch Neg/--) plants, as well as plants of certain GM suppliers. The strike began after the expiration of the four-year master labor agreement with American Axle. Although S&P still expect American Axle and the UAW to reach an agreement that will reflect more competitive labor costs, the timing is unknown. The two sides resumed negotiations last week. "We believe the strike has gone on long enough to possibly begin to affect the financial resources of GM and those suppliers most exposed to the automaker," said Standard & Poor's credit analyst Robert Schulz. To resolve the CreditWatch listings, Standard & Poor's will assess the strike's impact on the companies' credit profiles, particularly liquidity, once production resumes. S&P could lower the ratings any time prior to a resolution of the Axle strike if the liquidity of the companies becomes compromised, although downgrades are not likely for another several weeks. ATHERTON-NEWPORT: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Atherton-Newport Fund 124, LLC 4 Park Plaza, Suite 1050 Irvine, CA 92614 Bankruptcy Case No.: 08-11280 Chapter 11 Petition Date: March 18, 2008 Court: Central District Of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: Stephen R. Wade, Esq. (dp@srwadelaw.com) 400 North Mountain Avenue, Suite 214B Upland, CA 91786 Tel: (909) 985-6500 Fax: (909) 985-2865 http://www.srwadelaw.com/ Estimated Assets: $1 million to $50 million Estimated Debts: $1 million to $50 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Legg Mason Real Estate real estate $11,443,122 Investors 10880 Wilshire Boulevard, Suite 1760 Los Angeles, CA 90024 Tempe Paint $22,349 6515 South Rural Road Tempe, AZ 85283 City of Henderson $19,065 P.O. Box 95011 Henderson, NV 89009 Gaia Tech, Inc. $16,218 Home Depot Supply $14,178 Escalera Landscaping $12,665 Wilmar $10,737 James Stevens & Daniels $9,793 For Rent Magazine $8,789 Cox Communication $6,769 Classic Design Group $6,227 The Glidden Co. $5,917 Lamb Asphalt Maintenance $5,909 Preferred Electric $5,685 Republic Services of South $5,554 Nevada Apartment Guide $5,175 Consumer Source $5,175 EZ Maintenance $4,860 Cherokee Blind & Door $4,354 Lange Plumbing $4,227 ATLANTIC EXPRESS: Moody's Slashes Ratings to 'Caa2' From 'Caa1' --------------------------------------------------------------- Moody's Investors Service downgraded the probability of default and corporate family ratings of Atlantic Express Transportation Corp. to Caa2 from Caa1. The rating on Atlantic Express' $185 million senior secured floating rate notes due April 2012 has been downgraded to Caa2 LGD 4, 53% from Caa1 LGD 4, 52%. The outlook is negative. The downgrades reflect the magnitude of Atlantic Express' debt service requirements relative to its expected earnings level and weakened liquidity profile. The company's earnings have declined significantly. A combination of high fuel prices that cannot be fully passed through to customers, and high labor costs combined with slight declines in bus route service requirements has caused last three months ended Dec. 31, 2007 EBITDA of $6.9 million versus last three months ended Dec. 31, 2006 EBITDA of $11.7 million; EBIT to interest declined to 0.3 times from 1.0 times. Moody's anticipates that the company will rely on its revolving credit facility in coming months to fund internal cash flow deficits while the potential for a credit facility covenant breach has risen with the weakened earnings. The negative outlook reflects Moody's view that fuel prices will likely remain elevated near term and, at the current earnings level, the company's ability to maintain access to its revolving credit facility over the seasonally low July-September period, and to meet its October 2008 interest payment of approximately $11.5 million, will be challenging. The Caa2 rating reflects Atlantic Express' small size, high leverage and weak liquidity profile. The ratings also acknowledge that school bus transportation is a basic service with stable demand. Should the company manage through the financially tight period upcoming, fuel prices may decline or enough customer contracts may be renewed at higher prices such that profit margins and debt service capability could improve. With minimal cash on hand, the company's liquidity needs are supported by a $35 million receivables-based revolving credit facility. The revolver has a $26 million minimum EBITDA test which springs if availability declines below certain levels. As of Dec. 31, 2007, last twelve month EBITDA, as defined, was $25.9 million. As of Jan. 31, 2008, the company had $0.7 million borrowed under the credit facility and had $21.1 million of borrowing availability. During the summer months bus route service requirements decline, and credit facility's borrowing base declines. Atlantic Express Transportation Corporation, headquartered in Staten Island, New York, is the third largest provider of outsourced school bus transportation in the United States. The company also provides para-transit services to public transit systems. AVALON INVESTMENTS: Case Summary & Four Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Avalon Investments LLC P.O. Box 313 North Hampton, NH 03833 Bankruptcy Case No.: 08-10663 Chapter 11 Petition Date: March 14, 2008 Court: District of New Hampshire Live Database (Manchester) Debtor's Counsel: William S. Gannon, Esq. William S. Gannon PLLC 889 Elm Street, 4th Floor Manchester, NH 03101 Tel: (603) 621-0833 Fax: (603) 621-0830 bgannon@gannonlawfirm.com Estimated Assets: less than $50,000 Estimated Debts: $1,000,001 to $10 million Debtor's list of its Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Town of Hampton taxes $21,549 100 Winnacunnet Road Hampton, NH 03842 Town of Exeter taxes $18,048 10 Front Street Exeter, NH 03833 Jones & Beach Eng. services $6,804 P.O. Box 219 Stratham, NH 03885 Northern Utilities Inc. utility $4,451 BABSON LOAN: S&P Attaches 'BB' Rating on $16.5 Mil. Class E Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Babson Loan Opportunity CLO Ltd. and Babson Loan Opportunity CLO Inc.'s $508.5 million floating-rate notes due 2018. The preliminary ratings are based on information as of March 17, 2008. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The expected commensurate level of credit support in the form of subordination to be provided by the rated notes and the subordinated notes junior to the respective classes; -- The cash flow structure, which was subjected to various stresses requested by Standard & Poor's; -- The collateral manager's experience; and -- The transaction's legal structure, including the issuer's bankruptcy remoteness. Preliminary Ratings Assigned Babson Loan Opportunity CLO Ltd. Babson Loan Opportunity CLO Inc. Class Rating Amount (million) ----- ------ ---------------- A AAA $421.0 B AA $24.5 C A $24.5 D BBB $22.0 E BB $16.5 Subordinated notes NR $41.5 NR Not rated. BARRERA CONSTRUCTION: Case Summary & Ten Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Barrera Construction & Development Corp. 45 West 34th Street Suite 708 New York, NY 10105 Bankruptcy Case No.: 08-1092 Chapter 11 Petition Date: March 17, 2008 Court: Southern District of New York (Manhattan) Judge: Martin Glenn Debtor's Counsel: Bruce Weiner, Esq. Rosenberg, Musso & Weiner, LLP 26 Court Street Suite 2211 Brooklyn, NY 11242 Tel: (718) 855-6840 Fax: (718) 625-1966 rmwlaw@att.net Total Assets: $171,000 Total Debts: $2,234,602 Debtor's list of its Ten Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Olancho Construction Corp. $478,112 2343 Valentine Avenue, Suite 2B Bronx, NY 10458 The State Insurance Fund $430,000 199 Church Street Station New York, NY 10007 Sanruf Restoration Corp. $398,240 19 West 44th Street Suite 1500 New York, NY 10036 Bras_Al Construction Corp. $375,289 14 Cortland Street Newark, NJ 07105 JR Construction & Waterproofing $235,081 Worldwide Construction Corp. $175,103 Total Structural Concepts $84,777 Jeffrey S. Eisenberg, Esq. $33,000 Mendonca & Suarez LLC $7,000 Fifth Third Bank $3,000 BEAR STEARNS: JP Morgan Acquisition Receives Various Comments ------------------------------------------------------------- J.P. Morgan Chase & Co.'s planned acquisition of Bear Stearns Companies Inc. for $2 per share, or $236 million, received various comments from shareholders and analysts. The Wall Street Journal reported that shareholders are posed to object the deal saying JP Morgan's offer "is derisory" and that Bear Stearn's value hasn't dipped that much. At Monday's trading, Bear Stearns shares were priced at $4.81, more than twice JP Morgan's offer, WSJ related. According to the report, shareholders might shake up JP Morgan to raise its lowly offer. On Tuesday, WSJ said, speculators drove up the stock 23% to $5.91. WSJ said speculators are betting that JP Morgan will have to pay up to seal its deal to acquire Bear Stearns. Andrew Sorkin at The New York Times reported Sunday that Bear Stearns is prepared to file for chapter 11 protection if a deal fell through at that time. "If an agreement is not reached and Bear Stearns files for bankruptcy, it could cause an even deeper global scare over the fate of the financial system," Mr. Sorkin said. There could be more value for Bear Stearns' shareholders if the company files for chapter 11 protection. Bear Stearns disclosed total assets of $397,090,987,000 and total debts of $384,090,529,000 as of August 31, 2007, resulting in total shareholder equity of roughly $13,000,000,000. Bear Stearns recorded net income for the fiscal year ending Nov. 30, 2007, of $233,000,000 on net revenues of $5,900,000,000. Investor Joseph Lewis, who holds 9.4% interest at Bear Stearns, told WSJ in an interview that he is rejecting JP Morgan's buyout proposal since it's not representative of the company's "true value." Mr. Lewis told WSJ that he believes other shareholders will not approve the buyout either. Private Capital Management Inc. CEO Bruce Sherman also commented JP Morgan was well aware that Bear Stearns "is more valuable than" its $2 per share offer, WSJ says. According to WSJ's report, employees holding an aggregate of 30% stake in Bear Stearns intend to reject the transaction. However, some analysts stated that Bear Stearns may not have other options and that "a better deal is unlikely," WSJ reports. Based on the report, JP Morgan's promise to back up Bear Stearns' trading obligations for a year won't end even if the acquisition is not approved. Operating alone, Bear Stearns will continue to face other liquidity concerns and may go bankrupt, WSJ notes. Once bankrupt, WSJ relates, the ability of Bear Stearns' shareholders to recover their money will be very limited since they'll be last in the distribution line. JP Morgan has reserved $6 billion for future litigation and other costs involved in the Bear Stearns deal, WSJ adds. Bear Stearns shareholders have less than two months to vote on the deal. JP Morgan's $236 Million Buy Offer As reported in the Troubled Company Reporter on March 17, 2008, Bear Stearns has agreed to be bought by JP Morgan. The boards of directors of both companies have unanimously approved the transaction. The transaction will be a stock-for-stock exchange. JP Morgan will exchange 0.05473 shares of JP Morgan common stock per one share of Bear Stearns stock. Based on the closing price of March 15, 2008, the transaction would have a value of roughly $2 per share. JP Morgan's bid of $2 per share represents a 97.5% discount to Bear Stearns book value of $80.0 that the firm has reported. The transaction values Bear Stearns at just $236 million based on the number of shares outstanding as of Feb. 16. At the close on March 14, 2008, Bear Stearns' stock-market value was about $3.54 billion, and the company finished at $30 a share at 4 p.m. in the New York Stock Exchange composite trading. The Federal Reserve, the Office of the Comptroller of the Currency and other federal agencies have given all necessary approvals. In addition to the financing the Federal Reserve ordinarily provides through its discount window, the Fed will provide special financing in connection with the JP Morgan transaction. The Fed has agreed to fund up to $30 billion of Bear Stearns' less liquid assets. U.S. Treasury Secretary Pleased with JP Morgan-Bear Stearns Deal Reuters reports that the U.S. Treasury Secretary Henry Paulson is pleased with the JP Morgan's planned acquisition of Bear Stearns and with the Federal Reserve's move to stabilize the market. Mr. Paulson commented that market players "are addressing challenges," Reuters says. First Quarter 2008 Report Canceled Bear Stearns canceled its previously scheduled plan to announce first quarter 2008 financial results on Monday, March 17, 2008, "in light of entering into an agreement to merge with JP Morgan Chase." About Bear Stearns New York City-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- is a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The company's core business lines include institutional equities, fixed income, investment banking, global clearing services, asset management, and private client services. The company has approximately 14,000 employees worldwide. * * * As reported in the Troubled Company Reporter on Dec. 28, 2007, Fitch Ratings' affirmed its Negative Outlook for The Bear Stearns Companies Inc. following the announcement of the company's fiscal year earnings for 2007. On Nov. 14, 2007, Fitch affirmed Bear Stearns' long-term credit ratings, along with its subsidiaries. Fitch also downgraded the short-term rating to 'F1' from 'F1+', and Individual rating to 'B/C' from 'B'. BEAR STEARNS: Moody's Takes Various Rating Actions on Ten Classes ----------------------------------------------------------------- Moody's Investors Service upgraded the rating of two classes, downgraded the rating of one class and affirmed the ratings of seven classes of Bear Stearns Commercial Mortgage Securities Inc., Commercial Mortgage Pass-Through Certificates, Series 1999-C1: -- Class A-2, $270,234,986, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $23,900,199, affirmed at Aaa -- Class C, $17,925,149, affirmed at Aaa -- Class D, $21,510,179, upgraded to Aa2 from Aa3 -- Class E, $5,975,050, upgraded to A1 from A2 -- Class G, $4,780,040, affirmed at Ba3 -- Class H, $3,585,030, affirmed at B2 -- Class I, $9,560,080, downgraded to Caa3 from Caa2 -- Class J, $1,552,561, affirmed at C Moody's is upgrading Classes D and E due to increased subordination levels, improved overall pool performance and an increased percentage of defeased loans. Moody's is downgrading Class I due to realized losses on classes J and K. As of the Feb. 14, 2008 distribution date, the transaction's aggregate principal balance has decreased by approximately 22.1% to $372.2 million from $478.0 million at securitization. The Certificates are collateralized by 110 loans, ranging in size from less than 1.0% to 5.0% of the pool, with the top 10 loans representing 27.4% of the pool. Forty loans, representing 44.4% of the pool, have defeased and been replaced with U.S. Government securities. Three loans have been liquidated from the pool resulting in aggregate realized losses of approximately $5.6 million. There are no loans in special servicing at this time. Fourteen loans, representing 11.0% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2006 operating results for 91.2% of the performing loans and partial year 2007 operating results for 74.3% of the performing loans. Moody's weighted average loan to value ratio is 65.5% compared to 68.0% at Moody's last full review in May 2006 and compared to 76.0% at securitization. The top three non-defeased loans represent 7.9% of the outstanding pool balance. The largest loan is the Clemens Place Apartments Loan ($12.7 million - 3.4%), which is secured by a 583-unit multifamily property located in Hartford, Connecticut. The property was built between 1915 and 1971 and was renovated in the early 1980s. As of September 2007, occupancy was 97.0% compared to 93.0% at last review and 97.0% at securitization. The loan is due in February 2009 and has amortized 9.9% since securitization. Moody's LTV is 64.9%, compared to 66.9% at last review and compared to 85.0% at securitization. The second largest loan is the Washington Commons Loan ($8.4 million -- 2.3%), which is secured by a 54,752 square foot property consisting of a shopping center and a 26-unit apartment building located in Dumont, New Jersey. As of December 2006, occupancy was 96.0% compared to 100.0% at securitization. The largest tenant is Grand Union (80.8% of NRA, lease expiring October 2017). The loan is due in November 2008 and has amortized 10.6% since securitization. Moody's LTV is 93.3%, compared to 98.3% at last review and compared to 91.5% at securitization. The third loan is the Hamilton Station Apartments Loan ($8.2 million -- 2.2%), which is secured by 17 two and three-story apartment buildings with 284 units located in Columbus, Georgia. As of December 2007, occupancy was 93.0% compared to 95.1% at securitization. Property performance has improved since securitization due to increased rental income and amortization. The average monthly rent is $723 per month compared to $569 per month at securitization. The loan is due in October 2013 and has amortized 13.5% since securitization. Moody's LTV is 69.5%, compared to 74.5% at last review and compared to 80.7% at securitization. BORCHARDT TRUCKING: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Borchardt Trucking, Inc. N3231 Nymph Road Lake Geneva, WI 53147 Tel: (262) 249-0819 Bankruptcy Case No.: 08-22373 Type of Business: The Debtor offers trucking services. See http://borchardttrucking.com Chapter 11 Petition Date: March 17, 2008 Court: Eastern District of Wisconsin (Milwaukee) Judge: Pamela Pepper Debtor's Counsel: Leonard G. Leverson, Esq. Leverson & Metz S.C. 225 East Mason Street Suite 100 Milwaukee, WI 53202 Tel: (414) 271-8503 lgl@levmetz.com 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 ------ ------------ Couri Insurance Agency, Inc. $79,926 379 West main Street Waukesha, WI 53186 Fleet One $25,149 5042 Linbar Drive Nashville, TN 37211-5099 American International Co. $20,529 22427 Network Place Chicago, IL 60673-1224 The Illinois State Toll Highway Authority $14,928 Fuel Express South $14,593 American Express $13,712 Pete's Tire Service, Inc. $10,832 Discover $10,665 Carlson & Halpern CPA's, S.C. $10,083 Assurant Health $8,426 M&I Bank Credit Card $8,249 AFLAC Remittance Processing Services $6,589 Meier Bros. Tire Service $6,511 Kirk Tire Sales $6,270 Capitol One Bank $4,578 Registration Fee Trust $3,913 Midway Truck Parks $3,833 La Beau Bros., Inc. $2,969 Sprint $2,272 Bumper to Bumper $1,417 BOWNE & CO: Incurs Net Loss of $76,000 For 2007 Fourth Quarter -------------------------------------------------------------- Bowne & Co. Inc. reported net loss of $76,000 for the 2007 fourth quarter ended Dec. 31 compared to $2.234 million for the 2006 fourth quarter. For the full fiscal year ended Dec. 31, 2007, the company's net income was at $27.104 million compared to $1.768 million net loss in 2006. For the year ended Dec. 31, 2007, revenue was $850.6 million, up $16.9 million from $833.7 million in 2006. Gross margin improved to 37.5% from 34.8% and segment profit increased 29.7%, or $16.2 million, to $70.6 million in 2007 compared to 2006. Income from continuing operations increased to $27.3 million from $12.2 million in 2006. For the fourth quarter, revenue increased to $194.7 million from $191.4 million. Gross margin improved to 38.0% from 34.7% and segment profit increased 45.4%, or $3.6 million to $11.4 million in 2007 from $7.9 million in 2006. "2007 was a year of strong operating performance and we effectively positioned the company for future growth," David J. Shea, chairman and chief executive officer, said. "Since 2006, we have successfully implemented our strategic vision by introducing new products and services, completing several strategic acquisitions and continuing to grow our non-transactional revenue." "During this two-year period of growth, we have also streamlined and automated many processes thereby improving efficiencies while reducing costs," Mr. Shea continued. "Client demand for more of our services increasingly overlaps; the technology serving them and the marketing and channel requirements for reaching them are virtually identical," William P. Penders, president of Bowne, said. "Last year, we announced several significant changes to our organizational structure and manufacturing capabilities to consolidate our operations into a unified model that supports our ability to market and deliver our full range of services." For the year ended Dec. 31, 2007, cash and marketable securities increased $18.1 million from Dec. 31, 2006. The company had net cash provided by operating activities of $98.4 million for the year ending Dec. 31, 2007 as compared to $3.6 million for the year ending Dec. 31, 2006. This $95 million increase was primarily driven by the improvement in operating results and by the reduction in accounts receivable resulting from higher collections of receivables during 2007 and as a result of improved billing and collection efforts. Accounts receivable decreased approximately $18.7 million from December 2006 principally due to lower days sales outstanding. Days sales outstanding improved 10 days to 62 days in December 2007 from 72 days in December 2006. Financial Communications work-in-process inventory was $15.5 million at Dec. 31, 2007 compared to $18.7 million at Dec. 31, 2006. The company had no borrowings outstanding under its $150 million five-year senior, unsecured revolving credit facility as of Dec. 31, 2007. The share repurchase authorization was completed in 2007. From December 2004, the inception of the company's share repurchase program, through Dec. 31, 2007, Bowne spent $196.3 million to repurchase 12.9 million shares. In 2007, the company spent $51.7 million repurchasing 3.1 million shares at an average price per share of $16.52, of which approximately 700,000 shares were purchased in the fourth quarter. Total shares outstanding as of Feb. 29, 2008 were 26,307,627. As of Dec. 31, 2007, the company's balance sheet showed total assets of $509.417 million, total liabilities of $258.938 million and a total stockholders' equity of $250.479 million. About Bowne & Co. Inc. Headquartered in New York City, Bowne & Co. Inc. (NYSE: BNE) -- http://www.bowne.com/ -- provides financial, marketing and business communications services around the world. The company has 3,200 employees and 60 offices worldwide. * * * Bowne & Co. Inc. still carries Moody's 'Ba3' corporate family rating which was affirmed in January 2007. The outlook remains positive. CARIBBEAN RESTAURANTS: S&P Junks Rating on Expected Breach in Pact ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on San Juan, Puerto Rico-based Caribbean Restaurants LLC to 'CCC+' from 'B'. The outlook remains negative. "The downgrade reflects the distinct possibility that the company will breach financial covenants of its bank facility at its fiscal year-end," said Standard & Poor's credit analyst Jackie E. Oberoi. The company's fiscal year ends on April 30, 2008. Moreover, these covenants become increasingly restrictive at the end of July 2008. "The downgrade also reflects the company's continued weak performance, which has been driven by a soft Puerto Rican economy coupled with increased labor, utility, and commodity costs," added Ms. Oberoi. CHARLES OHEARN: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Charles John OHearn 140 South Moore Road Coppell, TX 75019 Bankruptcy Case No.: 08-31283 Chapter 11 Petition Date: March 16, 2008 Court: Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Edwin Paul Keiffer, Esq. (pkeiffer@wgblawfirm.com) Wright, Ginsberg, Brusilow, PC 1401 Elm Street, Suite 4750 Dallas, TX 75202 Tel: (214) 651-6517 Fax: (214) 744-2615 http://www.wgblawfirm.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of its largest unsecured creditors. COMMERCIAL MORTGAGE: Moody's Confirms Junk Ratings on Two Classes ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Commercial Mortgage Acceptance Corp., Commercial Mortgage Pass-Through Certificates, Series 1998-C1: -- Class A-2, $15,709,857, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $59,611,000, affirmed at Aaa -- Class C, $59,612,000, affirmed at Aaa -- Class D, $62,593,000, affirmed at Aaa -- Class E, $20,862,000, affirmed at Aaa -- Class L, $11,924,000, affirmed at Caa2 -- Class M, $8,940,000, affirmed at C As of the Feb. 15, 2008 distribution date, the transaction's aggregate principal balance has decreased by approximately 71.7% to $337.6 million from $1.2 billion at closing. The Certificates are collateralized by 101 loans ranging in size from less than 1.0% to 10.9% of the pool, with the top 10 loans representing 38.0% of the pool. Nine loans have been liquidated from the pool, resulting in aggregate realized losses of approximately $11.8 million. Three loans, representing 2.9% of the pool, are in special servicing. Moody's has estimated aggregate losses of approximately $400,000 from the specially serviced loans. Forty-six loans, representing 39.2% of the pool, are on the master servicer's watchlist. The majority of the loans watchlisted, thirty-six loans representing 29.6% of the pool, are due to near-term maturity. Nine of these loans, representing 7.3% of the pool, also have low debt service coverage. Moody's was provided with year-end 2006 and partial year 2007 operating results for 96.3% and 77.7% of the performing loans in the pool, respectively. Moody's weighted average loan to value ratio is 73.4%, compared to 75.3% at Moody's last full review in May 2006 and 84.0% at securitization. Moody's is affirming all rated classes. The top three loans represent 19.3% of the outstanding pool balance. The largest loan is the Two Chatham Center Loan ($36.9 million -- 10.9%), which is secured by a leasehold mortgage on a 280,000 square foot office building located in downtown Pittsburgh, Pennsylvania. The property is located in a mixed-use complex which contains a 200-unit high-rise condominium, two office towers totaling 505,000 square feet and a 404-room hotel. The office component was 90.0% occupied as of June 2007, compared to 83.0% at last review. The largest tenants are Travelers Insurance Company (20.0% NRA; lease expiration September 2012) and UPMC Health Plan (16.0% NRA; lease expiration June 2010). The property's performance has improved since last review based on increased rental revenues and amortization. Moody's LTV is 89.5%, compared to 98.6% at last review. The second largest loan is the Piazza Carmel Shopping Center Loan ($15.9 million -- 4.7%), which is secured by a 138,000 square foot retail property located in San Diego, California. The property was 99.0% occupied as of November 2007, essentially the same as at last review. The center is anchored by Safeway, Inc., which occupies 36.1% of the premises through June 2011. Moody's LTV is 43.0%, compared to 54.7% at last review. The third largest loan is the Shrewsbury Plaza Loan ($12.2 million -- 3.6%), which is secured by a 225,000 square foot retail property located in Shrewsbury, New Jersey. The property was 96.0% leased as of November 2007, compared to 100.0% at last review. Major tenants include Marshall's (17.0% GLA; lease expiration January 2013), ACME (15.0% GLA; lease expiration February 2013) and Linens 'N Things (14.0% GLA; lease expiration January 2013). Moody's LTV is 53.9%, compared to 64.7% at last review. CONSECO INC: Posts $210 Mil. Net Loss in Preliminary 2007 Report ---------------------------------------------------------------- Conseco Inc. reported preliminary results for the fourth quarter and year ended Dec. 31, 2007. Preliminary Fourth Quarter 2007 Results -- Net operating income before valuation allowance for deferred tax assets: $18.8 million; -- Net operating income before valuation allowance for deferred tax assets per diluted share: 10 cents; -- Net loss applicable to common stock: $72.2 million (including $23.0 million of net realized investment losses and $68.0 million valuation allowance for deferred tax assets); -- Net loss per diluted share: 39 cents (including 12 cents of net realized investment losses and 37 cents of valuation allowance for deferred tax assets); -- Income before net realized investment losses, corporate interest and taxes: $51.6 million; and -- Sales: $87.3 million. Preliminary Full-Year 2007 Results -- Net operating loss before valuation allowance for deferred tax assets: $50.2 million; -- Net operating loss before valuation allowance for deferred tax assets per diluted share: 37 cents; -- Net loss applicable to common stock: $210.1 million (including $77.8 million of net realized investment losses and $68.0 million valuation allowance for deferred tax assets); -- Net loss per diluted share: $1.21 (including 45 cents of net realized investment losses and 39 cents of valuation allowance for deferred tax assets); -- EBIT (2): $(6.3) million; and -- Sales (3): $415.5 million Preliminary financial strength at Dec. 31, 2007, includes book value per diluted share, excluding accumulated other comprehensive income of $24.28 and debt-to-total capital ratio, excluding accumulated other comprehensive income of 21.0%. The company currently estimates that adjustments to reflect the SEC staff's view may have the effect of reducing the preliminary loss reported above for the fourth quarter of 2007 by up to $5 million, or 3 cents per share, and reducing the preliminary loss for the year ended Dec. 31, 2007 by up to $15 million, or 9 cents per share. The company said it is working diligently to complete its financial statements and Form 10-K for the year ended Dec. 31, 2007, as soon as possible. It expects to make the filing no later than March 28, 2008. Sales Results At Bankers Life, total sales in 4Q07 were $58.3 million, up 4% over 4Q06. For the year, Bankers' sales were up 10% from 2006, to $294.4 million. In addition to the sales of proprietary products, Bankers Life, through a partnership with Coventry Health Care, distributes risk-share Medicare prescription drug program and private-fee-for-service plan through their career agents. At Conseco Insurance Group, total sales, including sales of PDP through Coventry, in 4Q07 were $19.7 million, down 18% from 4Q06. For the year, sales fell 21% from 2006, to $78.8 million. This segment continues to focus sales efforts on higher-margin products. At Colonial Penn, total 4Q07 sales were $9.3 million, up 25% over 4Q06 as we continue to benefit from our investment in marketing. For the year, sales rose 27% over 2006, to $42.3 million. "Overall, we continue to make steady progress on our plans to position Conseco for future growth," CEO Jim Prieur said. "New business continues to be strong at Bankers and at Colonial Penn, and the expected future margins related to new business increased at Conseco Insurance Group despite declining sales. Asset quality has remained a high priority and our portfolio continues to perform within expectations. This is not to say that we are not without our challenges. We will continue to move forward with our strategies to further stabilize our long-term care closed block of business and fully remediate the material weakness in internal controls." Delay of Annual Report Filing As reported in the Troubled Company Reporter on March 6, 2008, Conseco Inc. extended the due date of its Annual Report on Form 10-K to March 17, 2008. In a Form 12b-25 filing, the company said it has not yet finalized its Dec. 31, 2007, financial statements and is completing several items, including its analysis to determine the possible need to increase the deferred income tax asset valuation allowance. At that time, Conseco estimated that its net income or loss for the three months ended Dec. 31, 2007, will be approximately breakeven, including estimated net realized investment losses, after related amortization and taxes, of $25 million, but before any adjustments which may result from finalizing the incomplete items. Preliminary Results Subject to Change The company has been consulting with the staff of the Securities and Exchange Commission's Office of the Chief Accountant regarding its accounting policy for long-term care premium rate increases, as described in the Summary of Significant Accounting Policies in Conseco's 2006 Form 10-K. Conseco has used a method which prospectively changes reserve assumptions for long-term care policies when premium rate increases differ from original assumptions. On Feb. 28, 2008, the SEC staff informed Conseco of their view that the use of this method is not consistent with the guidance of Statement of Financial Accounting Standards No. 60, "Accounting and Reporting by Insurance Enterprises." The company is continuing to evaluate the SEC staff's view, including its effects on the preliminary earnings reported and the possible effects in prior periods. Due to this ongoing evaluation, the company has not completed its financial statements for the year ended Dec. 31, 2007. As a result, Conseco said all financial results should be considered preliminary, and are subject to change to reflect any necessary adjustments that are identified before the company completes its financial statements and files its Form 10-K for the year ended Dec. 31, 2007. "The delay in completing our financial statements is as frustrating for management as it is for shareholders. There is no difference in the economics of the long-term care business arising from the SEC's position; no changes at all in the cash flows or capital requirements -- it is all about the timing of the recognition of earnings for a long term business," said Jim Prieur. Restatement of Past Financial Reports Conseco said on Feb. 25, 2008, that due to the significance of errors identified in completing its Dec. 31, 2007 financial statements, it would restate its financial statements for the years ended Dec. 31, 2006 and 2005, along with affected selected financial data for 2004 and 2003 and the first three quarters of 2007. The previously issued financial statements of the company for those periods should no longer be relied upon. In the fourth quarter of 2007, several items had noteworthy impacts on the company's results: -- Earnings in the Conseco Insurance Group segment were negatively affected by the adjustments it made to its estimates of future profits for certain interest-sensitive life blocks of business. These adjustments resulted in increases to amortization expense and policyholder benefits totaling approximately $17 million. -- Earnings in the Conseco Insurance Group segment were also negatively affected by $4.2 million of trading losses related to the termination of interest rate swap agreements held in the company's trading portfolio. -- Earnings in the Colonial Penn segment were negatively impacted by $8.4 million of expense related to the introduction of Medicare Advantage products through this distribution channel. -- Based on the company's evaluation of deferred tax assets, Conseco determined the need to increase the valuation allowance by $68.0 million (primarily related to tax benefits resulting from the losses recognized in 2007). -- Conseco recognized net realized investment losses of $23.0 million, including losses related to impairments of $16.1 million. About Conseco Inc. Headquartered in Carmel, Indiana, Conseco Inc. (NYSE: CNO) -- http://www.conseco.com/-- is the holding company for a group of insurance companies operating throughout the United States that develop, market and administer supplemental health insurance, annuity, individual life insurance and other insurance products. The company became the successor to Conseco Inc. (Old Conseco), in connection with its bankruptcy reorganization. CNO focuses on serving the senior and middle-income markets. The company sells its products through three distribution channels: career agents, professional independent producers and direct marketing. CNO operates through its segments, which includes Bankers Life, Conseco Insurance Group, Colonial Penn, other business in run-off and corporate operations. * * * As reported in the Troubled Company Reporter on Dec. 28, 2007, Fitch Ratings downgraded the Issuer Default Rating, senior debt, preferred stock, and insurer financial strength ratings of Conseco Inc. and its subsidiaries. The preferred stock rating is being withdrawn as there are no current outstanding issues and no plans for issuance. The rating action affects approximately $1.2 billion in outstanding debt. The outlook remains negative. CONSECO INC: 2007 10-K Filing Delay Won't Affect S&P's 'B+' Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services said that the announcement by Conseco Inc. (B+/Negative/--) that it will delay its 2007 Form 10-K filing with the SEC will not affect the ratings on the company. The filing delay is the result of the company's ongoing evaluation of the SEC staff's view regarding the appropriate accounting treatment for additional active life reserves that Conseco set up related to long-term care rate increases. S&P expects the 10-K to be filed by March 28. Based on unaudited results for the year, including an expected range for long-term care earnings, Standard & Poor's believes Conseco's performance in 2007 was consistent with the current rating. The negative outlook on Conseco continues to reflect S&P's concerns regarding the company's financial performance during the next six-12 months. Given a weak operating environment and lower operating results in the past two years in Conseco's core life companies, 2008 will be challenging. S&P expects that moderately lower profitability in the core operations will be offset by more stability in the run-off long-term care block. As previously noted, if significant losses in the long-term care run-off block continue, or if the company makes additional, significant reserve strengthenings in any other line of business, the ratings will likely be lowered by one notch. CONSTAR INT'L: S&P Upgrades Issue-level Rating to 'B-' From 'CCC+' ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its issue-level rating on Constar International Inc.'s senior secured notes to 'B-' (same as the corporate credit rating on the company) from 'CCC+' and assigned a recovery rating of '3' to the notes, indicating the expectation for meaningful recovery (50% to 70%) in the event of a payment default. S&P affirmed the 'B-' corporate credit rating on Constar. The outlook is negative. "The ratings on Constar reflect its highly leveraged financial profile, low cash flow generation, weak margins, and vulnerable business profile," said Standard & Poor's credit analyst Henry Fukuchi. Philadelphia, Pennsylvania-based Constar manufactures blow-molded containers, mainly producing polyethylene terephthalate containers for carbonated beverages and water. The company operates in the fragmented and highly competitive rigid plastic packaging industry. Constar's vulnerable business profile reflects its dependence on a narrow product line (containers for soft drinks and water account for 80% of its sales) and a high level of customer concentration. The largest customer--PepsiCo Inc.--accounts for about 35% of revenues, and the top 10 customers contribute about 75% of revenues, limiting pricing flexibility. The company's margins have been lower than those of its rated peers, because of a product mix emphasizing high-volume, commodity-type, lower-margin carbonated beverage containers. Operating margins before depreciation and amortization remain low. For the 12 months ended Sept. 30, 2007, the operating margin was approximately 7%. CSFB MORTGAGE: Moody's Junks Rating on Class O Certs. From 'B3' --------------------------------------------------------------- Moody's Investors Service downgraded the rating of one Class and affirmed the ratings 18 Classes of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2004-C1: -- Class A-2, $193,679,267, affirmed at Aaa -- Class A-3, $156,544,000, affirmed at Aaa -- Class A-4, $885,151,000, affirmed at Aaa -- Class A-SP, Notional, affirmed at Aaa -- Class A-X, Notional, affirmed at Aaa -- Class A-Y, Notional, affirmed at Aaa -- Class B, $44,586,000, affirmed at Aa1 -- Class C, $18,240,000, affirmed at Aa3 -- Class D, $36,480,000, affirmed at A2 -- Class E, $18,240,000, affirmed at A3 -- Class F, $22,293,000, affirmed at Baa1 -- Class G, $16,213,000, affirmed at Baa2 -- Class H, $18,240,000, affirmed at Baa3 -- Class J, $8,107,000, affirmed at Ba1 -- Class K, $8,106,000, affirmed at Ba2 -- Class L, $6,080,000, affirmed at Ba3 -- Class M, $10,134,000, affirmed at B1 -- Class N, $4,053,000, affirmed at B2 -- Class O, $4,053,000, downgraded to Caa1 from B3 As of the Feb. 15, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 9.4% to $1.47 billion from $1.62 billion at securitization. The Certificates are collateralized by 253 mortgage loans, ranging in size from less than 1.0% to 9.1% of the pool, with the top 10 loans representing 37.6% of the pool. Nineteen loans, representing 9.0% of the pool, have defeased and are collateralized with U.S. Government securities. The pool includes four shadow rated loans comprising 26.2% of the pool and 60 residential coop loans, representing 10.1% of the pool. One loan has been liquidated from the pool resulting in a $2.2 million realized loss. Currently there is one loan, representing 1.5% of the pool, in special servicing. Moody's is not anticipating a loss from this specially serviced loan. Thirty loans, representing 9.6% 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 99.5% and 86.8% of the performing loans, respectively. Moody's loan to value ratio for the conduit component is 93.9% compared to 90.7% at Moody's last full review in January 2007 and 89.0% at securitization. Moody's is downgrading Class O due to realized losses and LTV dispersion. Based on Moody's analysis, 22.8% of the conduit component has an LTV greater than 100.0%, compared to 10.1% at last review and 5.0% at securitization. The largest shadow rated loan is the Bay Plaza Community Center Loan ($133.8 million -- 9.1%) which is secured by a mixed use development consisting of a 385,000 square foot retail component and a 125,000 square foot office component. The property is located in the Bronx, New York. The retail component is anchored by Pathmark, AMC Theatres, Linens-n-Things and Levitz Furniture. The center was 94.7% occupied as of September 2007 compared to 91.7% at last review. Moody's current shadow rating is Baa2, the same as at last review. The second largest shadow rated loan is the Beverly Center Loan ($97.3 million -- 6.6%) which represents a 32.6% participation interest in a $298.1 million first mortgage loan. The loan is secured by a leasehold interest in an 855,000 square foot regional mall located in Los Angeles, California. The mall is anchored by Bloomingdale's, Macy's, and Macy's Men. The mall's in-line space was 92.7% leased as of September 2007 compared to 98.9% at last review. Financial performance has improved since securitization due to increased revenues and stable expenses. Moody's current shadow rating is A2 compared to Baa2 at last review. The third largest shadow rated loan is the Stanford Shopping Center Loan ($90.0 million -- 6.1%) which represents a 54.4% participation interest in a $165.0 million first mortgage loan. The loan is secured by a leasehold interest in a 1.4 million square foot open-air regional mall located in Palo Alto, California. The mall is anchored by Bloomingdale's, Macy's, Nordstrom and Neiman Marcus. The mall's in-line space was 98.9% occupied as of October 2007, essentially the same as at last review. Financial performance has improved since securitization due to increased revenues and stable expenses. Moody's current shadow rating is A2 compared to A3 at last review. The fourth largest shadow rated loan is the Mayfair Mall Loan ($63.2 million - 4.3%) which represents a 35.0% participation interest in a $180.6 million first mortgage loan. The loan is secured by a 1.3 million square foot mixed-use property that consists of an 858,000 square foot regional mall and a 419,000 square foot office complex. The property is located approximately seven miles northwest of Milwaukee in Wauwatosa, Wisconsin. The mall is anchored by Macy's and the Boston Store and is the dominant mall in its trade area. The property was 97.1% occupied as of September 2007 compared to 98.0% at last review. Moody's current shadow rating is Aa2 compared to Aa3 at last review. The top three conduit loans represent 5.2% of the pool. The Northfield Square Mall Loan ($29.5 million -- 2.0%) is secured by the borrower's interest in a 558,000 square foot regional mall located in Bourbonnais, Illinois. The center is anchored by Carson Pirie Scoot, J.C. Penney and Sears. Performance has declined since last review principally due to higher expenses. Moody's LTV is 95.3% compared to 88.5% at last review. The West Coast Portfolio (Red Lion Hotel) Loan ($23.4 million -- 1.6%) is secured by four full service hotels totaling 1,013 rooms. The properties are located in Washington, Utah and California. Performance has improved since last review due to higher revenues. Moody's LTV is 90.5% compared to 99.0% at last review. The Encino Commons Loan ($23.3 million - 1.6%) is secured by a 324 unit multifamily property located in San Antonio, Texas. The property was 81.0% occupied as of January 2008. The property is on the master servicer's watchlist due to low debt service coverage. The loan sponsor is Michael Smuck, a major owner of multifamily properties in southwest U.S. Moody's LTV is in excess of 100.0%, the same as at last review. CSFB ABS: S&P Confirms 'BB' Rating on Class B-2 Asset-backed Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on three classes of asset-backed notes from CSFB ABS Trust 2002-HI23 and removed the rating on class B-2, one of the affirmed ratings, from CreditWatch with negative implications. Over the past year, realized losses for this transaction have moderated. Three-, six-, and 12-month average losses were $19,727, $31,293, and $55,681, respectively, as of the February 2008 remittance period. Overcollateralization for series 2002- HI23 is $712,370, or 3.23x the amount of severely delinquent loans (90-plus days, foreclosures, and REOs). As of the February 2008 remittance period, 5.66% of the original pool balance remained, and cumulative losses were $11,926,330, or 9.78% of the original pool balance. Subordination, overcollateralization, and excess interest cash flow provide credit support for these transactions. The collateral consists of closed-end, fixed- and adjustable-rate first-lien mortgage loans with original terms to maturity of no more than 30 years. Rating Affirmed and Removed From CreditWatch Negative CSFB ABS Trust 2002-HI23 Asset-backed notes Rating ------ Class To From ----- -- ---- B-2 BB BB/Watch Neg Ratings Affirmed CSFB ABS Trust 2002-HI23 Asset-backed notes Class Rating ----- ------ M-2 A+ B-1 BBB+ CYBERCARE INC: Cast-Crete's Amended Disclosure Statement Denied --------------------------------------------------------------- Cast-Crete Corporation, which expects to receive 100% of the equity interest in reorganized CyberCare Inc. and CyberCare Technologies Inc., failed to obtain approval of its First Amended Disclosure Statement dated Jan. 31, 2008, explaining its First Amended Joint Chapter 11 Plan of Reorganization. The Hon. Michael G. Williamson of the United States Bankruptcy Court for the Middle District of Florida was advised that Cast- Crete's Amended Disclosure Statement did not resolve Manford Investments LLC's objection. As reported in the Troubled Company Reporter on March 3, 2008, Manford Investments, which holds at least $25 million of claim against the Debtors, argued that its security interest securing its claim are not perfected and the claims may be unsecured. Judge Williamson gave Cast-Crete and Manford Investments enough time to reach an agreement and resolve any remaining issues. Otherwise, the Debtors' Chapter 11 cases may converted to a Chapter 7 liquidation proceeding or dismissed, he said. As reported in the Troubled Company Reporter on Feb. 12, 2008, Cast-Crete delivered to the Court an Amended Joint Plan for the Debtors and an Amended Joint Disclosure Statement explaining that plan. Under Cast-Crete's Plan, the Debtors' creditors will be paid from: -- exit funds; -- administrative claim funds; -- a judgment lien creditors settlement fund; -- recoveries of causes of action; and -- issuance of new stock in reorganized CyberCare. The primary distribution of Unsecured Claims against CyberTech is by the issuance of licensee stock in pro rata of the ownership interest of a newly formed entity that will receive ownership of all intellectual property and technology owned by CyberTech. Cast-Crete's proposed plan also contemplates the acquisition of 65% of the stock of reorganized CyberCare in exchange for: i) the funding of a "Cast-Crete Plan Fund" in the amount of $200,000 for payment of Judgment Lien Creditors and Allowed Administrative Expense Claims; ii) the agreement to provide "Exit Financing" of up to $500,000 to pay other Administrative Claims and providing working capital to reorganized CyberCare; and iii) the agreement by Cast-Crete to joint venture with Reorganized CyberCare for the development, manufacture and distribution of products. Cast-Crete's Plan further provides for the distribution of: i) 8% of the stock of reorganized CyberCare to holders of Allowed Equity Interests in CyberCare; and ii) 17% to the holders of Allowed Unsecured Claims. Under Cast-Crete's Plan, 10% of the new stock will be reserved for a management incentive program, and the acquisition of 100% of the stock of reorganized CyberTech by Cast-Crete in full of its prepetition loan to CyberCare. On the other hand, 100% of the new stock of CyberTech will be distributed to Cast-Crete in satisfaction of its prepetition claim. A full-text copy of Cast-Crete's First Amended Chapter 11 Plan of Reorganization is available for a free at: http://ResearchArchives.com/t/s?289f A full-text copy of its First Amended Disclosure Statement is available for a free at http://ResearchArchives.com/t/s?289e Headquartered in Tampa, Florida, CyberCare, Inc., fka Medical Industries of America, Inc. (PINKSHEETS: CYBR) is a holding company that owns service businesses, including a physical therapy and rehabilitation business, a pharmacy business, and a healthcare technology solutions business. The Company and its debtor- affiliate, CyberCare Technologies, Inc., filed for chapter 11 protection on Oct. 14, 2005 (Bankr. M.D. Fla. Case No. 05-27268). Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser represents the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtors' case. When the Debtors filed for protection from their creditors, they listed $5,058,955 in assets and $26,987,138 in debts. CYBERCARE INC: Case Conversion Hearing Scheduled for Today ---------------------------------------------------------- The Hon. Michael G. Williamson of the United States Bankruptcy Court for the Middle District of Florida will convene a hearing today at 10:30 a.m., whether to dismiss or convert CyberCare Inc. and CyberCare Technologies Inc.'s Chapter 11 cases to Chapter 7 liquidation proceedings. The hearing will be held in Courtroom 10B, Sam M. Gibbons Courthouse, 801 N. Florida Avenue in Tampa, Florida. About CyberCare Headquartered in Tampa, Florida, CyberCare, Inc., fka Medical Industries of America, Inc. (PINKSHEETS: CYBR) is a holding company that owns service businesses, including a physical therapy and rehabilitation business, a pharmacy business, and a healthcare technology solutions business. The Company and its debtor- affiliate, CyberCare Technologies, Inc., filed for chapter 11 protection on Oct. 14, 2005 (Bankr. M.D. Fla. Case No. 05-27268). Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser represents the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtors' case. When the Debtors filed for protection from their creditors, they listed $5,058,955 in assets and $26,987,138 in debts. DELTA AIR: To Cut Flights, 30,000 Jobs in Wake of Weakened Economy ------------------------------------------------------------------ Delta Air Lines Inc. chief executive officer, Richard Anderson, and president and chief financial officer, Edward H. Bastian, wrote a statement on March 18, 2008, to the company's global staff discussing the company's move to address record fuel prices and the weakening U.S. economy. In the statement, the executives said that despite the significant momentum at Delta, the rapid increase in fuel costs to record highs and the weakening U.S. economy are placing pressure on the business. In the past three months, fuel prices have climbed nearly 20% and 2008 fuel bill is now expected to increase by nearly $900 million compared to the business plan (based on $90 per barrel fuel) and more than $2 billion over 2007. Messrs. Anderson and Bastian said Delta must act quickly and decisively, as speed in execution leads to success. With fuel expected to remain at approximately $100 per barrel for the foreseeable future, the officers indicated that they must take action to keep Delta strong. The executives are scheduled to announce the plans to manage revenues, capacity, fleet and costs at an investor conference in New York. They said that efforts are focused on four key areas: continued international expansion, further domestic capacity rationalization, improving RASM to more than 100% of industry average, and a heightened focus on cost and cash flow discipline, which will include voluntary reductions in staff. Voluntary Headcount Reductions The executives disclosed plans to reduce cost and domestic capacity will change the number of people needed to operate the airline. To manage these reductions, in April the company will offer two comprehensive voluntary programs for U.S., non-pilot employees: 1. The 60-Point Retirement Program for those who are already eligible for retirement or for those whose age and years of service add up to at least 60, with 10 or more years of service. 2. The Early Out Program for frontline employees with 10 or more years of service and for administrative and management employees with one or more years of service. According to the statement, both programs offer a severance payment, travel privileges, and additional benefits to manage career transitions. Specifics differ based on age, retirement eligibility and years of service. Approximately 30,000 employees will be eligible for one of the two voluntary programs. In addition to meeting the company's business needs, these programs are influenced by the many requests for early retirement and early out programs that give an opportunity to make a career choice that benefits the worker, their family and the company. Importantly, for frontline employees, the company expects to achieve the necessary reduction of approximately 1,300 positions through attrition, retirements, limited hiring and the introduction of these voluntary programs. The number of frontline employees who want to participate in these programs will not be limited. For the administrative and management teams, the company has even more aggressive productivity improvement targets, including the reduction of more than 700 merit positions. The executives hope these enhanced voluntary programs will minimize the need for involuntary reductions for the merit group. In the next few weeks Delta workers will have opportunities to learn more about these programs prior to the April 14 to May 12 enrollment window. Beginning March 31, DeltaNet will be updated with more information and the Employee Service Center will be available to answer questions. These programs reflect yet another aspect of the Delta Difference. The company's overall flexibility allows it to offer creative, generous, employee-focused solutions to achieve the necessary reductions voluntarily. In addition to these initiatives, the company said it is deferring any decision on 2008 pay increases until it better understands the outlook for its business. Delta, according to the statement, remains committed to moving toward industry standard pay over time; however, it is important that it proceeds cautiously in the current economic and fuel climate. Domestic Rationalization Domestically, fuel prices -- combined with a weakening domestic economy -- have put significant pressure on the profitability of Delta's U.S. network. Because of this, the company is reducing 2008 domestic capacity by an additional 5% by August, resulting in a 10% year-over-year domestic reduction. These reductions will be made through a combination of decreased utilization and parking 15-20 mainline aircraft and 20-25 regional jets. Delta will continue to be an aggressive domestic competitor and will complete these capacity reductions primarily by thinning frequencies and reducing point-to-point routes. As with past schedule reductions, changes will also be focused at off-peak times or in markets where regional jets are not profitable at the current fuel levels. International Expansion The executives also stated that this summer more than 40% of Delta's capacity will be dedicated to international flying where fares more readily cover higher fuel costs. They said they firmly believe that global expansion, and the network diversity that it provides, is key to long-term success. Delta is in its third consecutive year of record international expansion, including the important additions of Shanghai and Heathrow in the first quarter, the statement revealed. Delta's international growth will continue to be supported by investments in its fleet, including the continued delivery of 22 international-capable 737-700s, 757-200-ETOPS and 777-200LRs through 2009. Because of their importance in achieving the company's international growth, Delta has no plans to defer or delay the delivery of these aircraft. While the company will make small adjustments to its international plans to ensure it is focused on the most profitable routes, the company will still increase international capacity by more than 15% in 2008. Any adjustments to international flying will focus on reducing frequencies or eliminating select seasonal routes, the statement said. For example, Delta will serve Edinburgh this summer from the company's JFK hub but will not reinstate seasonal flights from Edinburgh to Atlanta. RASM Improvement Based on the statement, Delta made significant progress in closing its unit revenue gap versus the industry, moving from 86% of industry average in 2005 to 95% last year. So far this year, the company has reached 98% of industry RASM and it must accelerate efforts to improve RASM performance to more than 100% of industry average in 2008 -- up from Delta's original goal of 98%. Delta, the statement asserted, is aggressively acting to recover the fuel price increase in its fare structure. In the past year, the company has regularly increased systemwide domestic fares, boosted fuel surcharges, increased international fares, and increased select service fees. Cost and Cash Flow Discipline While Delta will partially offset fuel's impact through fare increases and long-term fuel hedging program, the domestic environment limits the company's ability to increase fares to cover the full cost of fuel, the statement warned. Delta's current fuel hedges for 2008 have a value of approximately $300 million and cover 25% of its 2008 requirements. According to the statement, Delta must look to all areas of its business for cost savings and revenue enhancements. Delta has now targeted $550 million in productivity initiatives for 2008, a $150 million increase over its plan. Every Delta employee will play a role in achieving productivity goal, the statement stressed. The company is also taking a prudent approach to cash outflows and have identified $200 million in capital expenditures to be deferred or eliminated, the statement revealed. Delta will sell mainline and regional aircraft as they are removed from the schedule. By selling these aircraft, Delta said it can improve its liquidity and eliminate overhead. Exploring Strategic Options The doard of directors and senior management will continue to explore Delta's strategic options, the statement asserted. As the company has previously stated, it supports industry consolidation as a vehicle to ensure Delta remains an industry leader. The special committee of the board continues to work with senior leadership team on strategic alternatives, based on the statement. The board, at its discretion, will act in the best interest of all Delta stakeholders, Delta assured. While the rise in fuel and the weakening economy present near-term challenges, Delta's long-term view remains that consolidation may be the right course of action. At the end of the statement, Messrs. Anderson and Bastian comforted employees by saying that through all of Delta's many challenges, the employees have shown unquestionable commitment and unparalleled service. About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News, Issue No. 92; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on Jan. 17, 2008, Standard and Poor's said that media reports that Delta Air Lines Inc. (B/Positive/--) entered into merger talks with UAL Corp. (B/Stable/--) and Northwest Airlines Corp. (B+/Stable/--) will have no effect on the ratings or outlook on Delta, but that confirmed merger negotiations would result in S&P's placing ratings of Delta and other airlines involved on CreditWatch, most likely with developing or negative implications. DIASTAR INC: Case Summary & Seven Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Diastar, Inc. 6117 Harrison Place West New York, NJ 07093 Tel: (201) 854-6611 Bankruptcy Case No.: 08-14641 Type of Business: The Debtor manufactures and distributes jewelry. Chapter 11 Petition Date: March 17, 2008 Court: District of New Jersey (Newark) Debtor's Counsel: Gilberto M. Garcia, Esq. (krickogarcia@aol.com) Garcia & Kricko 560 Sylvan Avenue Englewood Cliffs, NJ 07632 Tel: (201) 894-1998 Fax: (201) 894-1942 Total Assets: Unknown Total Debts: $10,042,834 Debtor's Seven Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Diastar Jewelry, Ltd. $2,106,993 Pradip Jain and Pramod Jain $860,000 Eurostar Belgium, Inc. $830,436 Guangong Arts and Crafts Corp. $336,401 Padmavati Diamonds USA $133,134 Kingston e Gem Importers $71,810 State of New Jersey Division $30,000 of Tax DLMR LLC: Involuntary Chapter 11 Case Summary --------------------------------------------- Alleged Debtor: DLMR, LLC 1703 Magnolia Drive North Myrtle Beach, SC 29582 Case Number: 08-01575 Involuntary Petition Date: March 17, 2008 Court: District of South Carolina (Charleston) Judge: John E. Waites Petitioner's Counsel: R. William Metzger, Jr., Esq. (bankruptcy@robinsonlaw.com) Robinson, McFadden & Moore, P.C. P.O. Box 944 Columbia, SC 29202 Tel: (803) 779-8900 Fax: (803) 252-0724 http://www.robinsonlaw.com/ Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ Branch Banking and Trust Co. mortgage loan $5,423,906 Attn: Michael J. Hennessy 200 West Second Street 6th Floor Winston-Salem, NC 27101 DOMAIN INC: Four Landlords Oppose Auction of Store Leases --------------------------------------------------------- Four landlords of Domain Inc. and debtor-affiliate Domain Home Holding Co., LLL, objected to the proposed schedule of the auction of the Debtors' store leases, Bill Rochelle of Bloomberg News reports. The complainants ask the U.S. Bankruptcy Court for the District of Delaware to extend the length of time between the proposed March 24 bid deadline and proposed March 25 auction. The Landlords want a five-day delay for them to be able to evaluate the winning bid and file an objection, if necessary. The Debtors have proposed that a sale hearing be held March 28, 2008. Norwood, Massachussetts-based Domain Inc., dba Domain Home/Domain Home Furnishings/Domain-Home.com -- http://www.domain-home.com/ -- operate a chain of 27 home furnishing stores across seven states in the Northeast and Mid-Atlantic regions of the US, including suburbs of major metropolitan markets such as Boston, New York, Philadelphia and Washington, D.C. The Debtor and its affiliate, Domain Home Holding Co., LLC, filed for chapter 11 bankruptcy on Jan. 18, 2008 (Bankr. D. Del. Case Nos. 08-10132 and 08-10133). J. Kate Stickles, Esq., and Mark Minuti, Esq., at Saul Ewing LLP represent the Debtors in their restructuring efforts. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors for these cases. When the Debtors filed for bankruptcy, they listed assets and debts between $10 million and $50 million. DORIS CORTEZ: Case Summary & Three Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Doris Cortez Richard Cortez 4770 Sea Ridge Court Seaside, CA 93955 Bankruptcy Case No.: 08-51221 Chapter 11 Petition Date: March 14, 2008 Court: Northern District of California (San Jose) Judge: Arthur S. Weissbrodt Debtor's Counsel: Patrick Calhoun, Esq. (calhounonekgatty@aol.com) 262 East Hamilton Avenue, Suite #H Campbell, CA 95008 Tel: (408) 866-4868 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Washington Mutual real estate; value of $1,142,000 California Reconveyance Co. security: $900,000 9200 Oakdale Avenue, North 116012 Chatsworth, CA 91311 Country Wide real estate; value of $482,983 P.O. Box 10219 security: $760,000; Van Nuys, CA 91410-0219 value of senior lien: $435,983 National City real estate; value of $146,000 P.O. Box 856176 security: $900,000; Louisville, KY 40285 value of senior lien: $1,142,000 DURA AUTOMOTIVE: Files Amended First Revised Chapter 11 Plan ------------------------------------------------------------ DURA Automotive Systems, Inc., and its debtor affiliates filed an amended First Revised Joint Plan of Reorganization and Disclosure Statement explaining the Plan on March 13, 2008. The Hon. Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware will convene a hearing on April 3, 2008, to determine whether the Disclosure Statement contains adequate information. Disclosure Statement Objections must be filed on or before March 28. The Debtors will begin soliciting votes on the Revised Plan upon approval of the Disclosure Statement. According to Lawrence A. Denton, DURA's chairman, president and chief executive officer, despite the Debtors' progress -- with the overwhelming support of their creditor constituencies -- to the very cusp of confirmation, they were unable to proceed further with the Original Plan, filed Aug. 22, 2007, because they could not obtain the sufficient exit financing on acceptable terms in view of tightening credit markets and a deteriorating outlook in the North American automotive sector. The Original Plan had contemplated payment in cash, in full, of all Class 2 - Second Lien Facility Claims, a backstopped rights offering open to certain Class 3 Claims and certain Class 5 claims, and an equity or cash distribution equal to approximately 55% for the Class 3 Claims and 22% for the Class 5 Claims. However, without the level of exit financing envisioned by the Original Plan, these recoveries are no longer realistic. The Debtors and their creditor constituencies, therefore, devised the Revised Plan based upon equitizing claims in Classes 2, 3 and 5. Exit Financing The Revised Plan contemplates that on or before the Effective Date, the Reorganized Debtors will enter into definitive documentation with respect to: (a) an exit credit facility comprised of: -- a $150,000,000, first lien term loan, and -- a $110,000,000, revolving credit facility, which includes a $25,000,000, letter of credit sub facility; and (b) a New Money Second Lien Loan with certain existing creditors that will provide a second lien secured term loan with a new capital infusion of $80,000,000, and a face amount of $100,000,000. $440-Mil. to $550-Mil. Reorganization Value DURA, with the help of its financial advisor, Miller Buckfire & Co., LLC, prepared a valuation of the company's going concern value post-confirmation. Miller Buckfire estimates that the total enterprise value of the Reorganized Debtors will be between $440,000,000, and $550,000,000, with a mid-point of $495,000,000, as of an assumed May 31, 2008 Effective Date. In August 2007, Miller Buckfire estimated that the total enterprise value of the Reorganized Debtors is between $540,000,000 and $660,000,000, with a $600,000,000 mid-point, as of an assumed Effective Date of November 1, 2007. Miller Buckfire also estimates that the range of total equity is between $257,000,000 and $367,000,000, with a mid-point of $312,000,000. To calculate the estimated value of common equity, Mr. Denton relates that Miller Buckfire deducted Convertible Preferred Stock at its liquidation preference as of the Effective Date of $228,000,000, from total equity value. Miller Buckfire estimates the range of common equity value to be between $29,000,000 and $319,000,000, with a mid-point of $84,000,000. Pension Plans The Reorganized Debtors will continue to sponsor and maintain pension plans unless terminated before the entry of the Confirmation Order. All Compensation and Benefits Programs will be treated as executory contracts and deemed assumed on the Effective Date, except for, among others, Compensation and Benefits Programs specifically rejected pursuant to the Plan and all employee equity or equity based incentive plans. Mr. Denton relates that each of the Debtors is either a sponsor or a controlled group member of a sponsor of four pension plans covered by the Employee Retirement Income Security Act: Pension Plan EIN-PN ------------ ------ DURA Master Pension Plan 382961431/001 DURA Automotive Systems, Inc. 382961431/004 Mancelona Union-Represented Employees' Pension Plan Atwood Mobile Products, Inc. 364334203/005 Supplementary Retirement Plan DURA Retirement Plan for 364334203/024 La Grange Bargaining Employees Mr. Denton says the Pension Benefit Guaranty Corporation has the authority to initiate termination proceedings, subject to certain statutory rights, regarding the Pension Plans. If the Pension Plans were to terminate before the date of Plan confirmation, certain claims, including claims that may be entitled to priority under various Bankruptcy Code provisions, would arise. In the event that the Pension Plans do not terminate before the Confirmation Date, all claims of, or with respect to, the Pension Plans, including the PBGC's claims for unfunded benefit liabilities, for termination premiums, and for unpaid contributions owing to the Pension Plans, will become obligations of the Reorganized Debtors and each member of any controlled group, and will be unaffected by the confirmation of the Plan. There will be no discharge in favor of any Reorganized Debtors with respect to any fiduciary Claims under ERISA, any Pension Plan-related Claims, and any PBGC Claims. Special Transaction Committee The Revised Plan provides that a Special Transactions Committee will be created to initiate a redemption of Convertible Preferred Stock at any time, provided that the post-transaction cost of funds meets certain customary parameters for refinancing indebtedness typically found in an indenture. Any redemption using funds from debt senior to the Convertible Preferred Stock if the size of the proposed redemption is less than $112,500,000, must be approved by the entire Board of Directors. Canadian Creditor Distribution The Revised Plan also provides that cash will be distributed pro rata to holders of Allowed Canadian General Unsecured Claims equal to the higher of (a) the median value of Dura Automotive Systems (Canada), Ltd.'s assets in a liquidation; or (b) the median value of the Dura Canada's assets in a liquidation. Allowed Canadian General Unsecured Claims are claims filed against Dura Canada. Mr. Denton says no claims, other than intercompany claims, are pending against the other Dura affiliates in reorganization under the Canadian Companies' Creditors Arrangement Act. Proposed Confirmation Timeline DURA asks the Court to set this time line for the solicitation of votes and confirmation of its Plan: April 10, 2008 -- Commencement of solicitation on the Plan May 2, 2008 -- Confirmation Objection Deadline May 7, 2008 -- Voting Deadline May 13, 2008 -- Confirmation Hearing Mr. Denton asserts that a "fast-paced confirmation time line" is needed to accommodate the terms of the $170,000,000 Replacement Facility extended by Ableco Finance LLC. The Replacement Financing provides that DURA has to have the revised Disclosure Statement approved by May 15 and the Plan confirmed by June 9. The Replacement Financing gives DURA until June 20 to exit from Chapter 11. The Replacement Financing will mature on June 30. A full-text copy of a blacklined version of the Plan is available for free at http://bankrupt.com/misc/DURAblacklinedPlan.pdf A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/DURA_AmendedDiscStatement.pdf About DURA 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. 49; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Unveils Financial Projections Under Revised Plan ----------------------------------------------------------------- For the purpose of demonstrating the feasibility of the Revised First Amended Joint Plan of Reorganization, DURA Automotive Systems, Inc. and its debtor-affiliates, with the help of various professionals, prepared financial projections for the seven-month ended Dec. 31, 2008, and the three years ending Dec. 31, 2009, 2010, and 2011: Reorganized Debtors Unaudited Projected Consolidated Balance Sheet (in millions) At December 31 ---------------------------------- 2008 2009 2010 2011 ------- ------- ------- ------- ASSETS: Cash & Equivalents $88.3 $98.9 $148.5 $188.1 Net Accounts Receivable, Trade 241.1 230.8 229.3 221.3 Other Accounts Receivable 20.7 19.7 19.3 18.6 Net Inventory 124.4 122.5 120.9 118.7 Other Current Assets 98.6 95.1 92.4 89.3 ------- ------- ------- ------- Total Current Assets 573.2 567.1 610.3 636.1 Net Property, Plant & Equipment 397.2 369.8 348.8 324.8 Other Long-term Assets 49.2 35.3 26.6 16.0 ------- ------- ------- ------- Total Assets $1,019.5 $972.2 $985.8 $976.9 ======= ======= ======= ======= LIABILITIES: Accounts Payable $180.1 $166.8 $169.6 $166.1 Exit Line of Credit 11.5 - - - Foreign Debt 4.8 4.5 6.6 7.8 Accruals 143.8 139.1 133.6 123.4 Short-Term Deferred Taxes 7.0 6.6 6.3 6.1 ------- ------- ------- ------- Total Current Liabilities 347.2 317.1 316.2 303.4 First Lien Term Debt 149.3 147.8 146.3 144.8 Second Lien Term Debt 111.2 133.2 159.6 191.2 Long-term Deferred Taxes 8.9 8.6 8.4 8.1 Other Long-term Liabilities 96.2 87.4 79.8 71.2 ------- ------- ------- ------- Total Liabilities 712.7 694.1 710.3 718.7 Convertible Preferred Stock 255.6 310.7 377.7 459.1 ------- ------- ------- ------- Total Equity 51.2 (32.6) (102.1) (200.9) ------- ------- ------- ------- Total Liabilities & Equity $1,019.5 $972.2 $985.8 $976.9 ======= ======= ======= ======= Reorganized Debtors Unaudited Projected Consolidated Statement of Operations (in millions) For the seven For the year ended December 31 mos. ended ------------------------------ 12/31/08 2009 2010 2011 -------- -------- -------- -------- Total Sales $975.9 $1,600.6 $1,593.4 $1,576.4 Direct Manufacturing Costs 618.2 995.5 988.4 981.0 -------- -------- -------- -------- Contribution Margin 357.7 605.1 605.0 595.4 Manufacturing Overhead and Selling, General & Administrative 284.9 465.1 463.1 455.7 -------- -------- -------- -------- EBITDA 72.8 139.9 141.9 139.7 Other Expense (Income) 3.3 (1.5) (1.3) (0.0) Professional Fees 4.1 - - - Interest Expense (Net) 28.0 47.8 51.4 56.4 Restructuring Cost 13.2 13.9 1.0 - Depreciation 46.8 74.2 73.3 70.7 -------- -------- -------- -------- Pre-Tax Income (22.7) 5.6 17.5 12.6 Income Tax Expense 4.3 5.3 4.8 6.0 -------- -------- -------- -------- Net Income ($27.0) $0.3 $12.7 $6.6 ======== ======== ======== ======== Reorganized Debtors Unaudited Projected Statement of Cash Flows (in millions) For the For the year seven ended December 31 mos. ended ---------------------- 12/31/08 2009 2010 2011 -------- ------ ------ ------ Net Income ($27.0) $0.3 $12.7 $6.6 Depreciation 46.8 74.2 73.3 70.7 Other 0.1 (6.4) (5.4) (9.5) Changes in Working Capital: Accounts Receivable 37.8 (0.5) (4.2) (0.5) Inventory 2.7 (3.8) (1.4) (2.1) Accounts Payable (3.8) (3.2) 7.9 4.3 All Other (35.4) 0.2 (2.1) (6.3) -------- ------ ------ ------ Cash flow from Operations 21.2 60.7 80.9 63.1 Capital Expenditures (33.2) (59.2) (58.5) (55.2) Proceeds from Sale of Assets - - - - -------- ------ ------ ------ Cash flow from Investing (33.2) (59.2) (58.5) (55.2) Change in Exit Revolver 3.4 (11.5) - - Foreign Debt - 0.0 2.3 1.6 First Lien Debt Amortization (0.8) (1.5) (1.5) (1.5) Second Lien Debt 11.2 22.0 26.4 31.6 -------- ------ ------ ------ Cash flow from Financing 13.8 9.1 27.2 31.7 Net Cashflow 1.8 10.6 49.6 39.6 Beginning Cash 86.5 88.3 98.9 148.5 -------- ------ ------ ------ Ending Cash $88.3 $98.9 $148.5 $188.1 ======== ====== ====== ====== A full-text copy of the Financial Projections is available for free at http://bankrupt.com/misc/DURAFinancialProjections.pdf About DURA 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. 49; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Claims Treatment & Classification of Revised Plan ------------------------------------------------------------------ The First Revised Joint Plan of Reorganization of Dura Automotive Systems Inc. and its debtor-affiliates contemplate this classification and treatment of claims: Projected Recovery Projected Treatment of ------------------- Allowed Claim Under Revised Original Class Claim Amt. Revised Plan Plan Plan ----- ---------- ------------ --------- -------- DIP - Paid in full 100% 100% Facility in cash. Claims Administrative $28.5MM Paid in full in 100% 100% Claims cash unless otherwise specified by agreement. Priority Tax $5.2MM Paid in full 100% 100% Claims in cash. Other Priority $0 Paid in full 100% 100% Claims in cash. Class 1 - $0.8MM Holder of Allowed 100% 100% Other Secured Other Secured Claim Claims will receive either: * the collateral securing the Claim; * the cash equivalent of the collateral; * the treatment that leaves the Claim reinstated or unimpaired. Class 2 - $228.1MM Holder of Allowed 100% 100% Second Lien Second Lien Facility Facility Claims Claim will receive its pro rata share of the Second Lien Distribution. Class 3 - $418.7MM Holder of Allowed 19% 55% Senior Notes Senior Notes Claims Claims will receive its pro rata share of the Senior Notes Distribution. Class 4 - $560.7MM Holders of Subordinated 0% 0% Subordinated Notes Claims will neither Notes Claims receive nor retain any property under the Revised Plan pursuant to contractual subordination provisions contained in the Subordinated Notes Indenture. Class 5A - $60MM Holders will receive 8% 22% U.S. Other their pro rata share General of the U.S. Unsecured Unsecured Creditor Equity Claims Distribution. Class 5B - $2.4MM Holders will receive [10.5]% 22% Canadian their pro rata share General of the Canadian Creditor Unsecured Distribution. Claims If an Allowed Claim is filed against both the Canadian Operating Debtor and the U.S. Debtors, holder of that Claim will receive a pro rata share of either the Canadian Creditor Distribution or the U.S. Equity Distribution, whichever is the highest. Class 6 - $58.3MM Holders of Convertible 0% 0% Convertible Subordinated Debentures Subordinated Claims will neither Debentures receive nor retain any Claims property under the Plan. Class 7 - - Holders of Claims will 0% 0% Section 510 not receive any property Subordinated under the Plan. Claims Class 8 - N/A Holders of Interests 0% 0% Equity will not receive any Interests property under the Plan. About DURA 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. 49; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). ENRON CORP: Parties Want Trial Stayed to Avoid "Irreparable Harm" ----------------------------------------------------------------- Citigroup, Inc., and its affiliates and related entities, ask the Honorable Arthur J. Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York, to stay the pre-trial proceedings and trial in Enron Corp.'s bankruptcy case until the District Court has decided on Citigroup's motion to withdraw the reference. As reported in the Troubled Company Reporter on Jan. 31, 2008, Citigroup Inc., Citibank, N.A. Citigroup Global Markets Inc., Citicorp North America, Inc., Citigroup Financial Products, Inc., CXC LLC, Corporate Asset Funding Company, LLC, Corporate Receivables Corporation, LLC, and Citigroup Global Markets Ltd., asked the Bankruptcy Court to grant summary judgment on all of Enron and its debtor-affiliates' intentional and constructive fraudulent conveyance claims and certain preferential transfer claims. Citigroup said the Debtors' attempt to avoid 81 transfers, worth $3,000,000,000, does not provide a coherent basis for avoidance. The Debtors cannot "bootstrap" the allegations it made with respect to the common law claims to underpine these avoidance claims, because these allegations do not support their claim that it engaged in the 81 transfers with the actual intent to hinder, delay or defraud their creditors, Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York., argued, on Citigroup's behalf. However, Claudia L. Hammerman, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York, tells Judge Gonzalez in a Court-filed letter that a stay is appropriate to conserve the resources of the parties and to avoid substantial prejudice to Citigroup, given the imminence of the trial, the escalating costs to the parties, and the fact that the Motion to Withdraw the Reference may obviate the need for a trial. Ms. Hammerman asserts that pursuant to Rule 5011(c) of the Federal Rules of Bankruptcy Procedure, a stay of Bankruptcy Court proceedings is proper while the District Court considers a motion to withdraw the reference, and that decision is committed to the Bankruptcy Court in the first instance. According to Ms. Hammerman, Citigroup is likely to prevail on its Motion to Withdraw the Reference and asserts its Seventh Amendment right to a jury trial. She adds that the complexity and duration of the trial constitute sufficient bases for withdrawing the reference. Additionally, Ms. Hammerman argues that contrary to the Bankruptcy Court's ruling, the Debtors' common law tort claims do not fall within the Bankruptcy Court's core jurisdiction since they arose prepetition and seek to vindicate private rights arising under state law. Ms. Hammerman contends that Citigroup will suffer irreparable harm in the absence of a stay, whereas a stay will cause no harm to the Debtors. The balance of hardship is in Citigroup's favor, she insists, and Citigroup should only have to defend itself a trial once and not expend resources for a trial that may not take place. Ms. Hammerman further states that a trial will serve the public interest, in the economical use of judicial resources. On the Debtors' behalf, David M. Stern, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP in Los Angeles, California, points out that Citigroup's presumption relating to Rule 5011(c) is the opposite of the Rule, which specifically states that the administration of the case and proceeding will not be stayed pending consideration, citing In re TJN, Inc. v. Superior Container Corp. (In re TJN, Inc.), 207 B.R. 499, 500 (Bankr. D.S.C. 1996). Mr. Stern argues that Citigroup is unlikely to prevail in the Motion to Withdraw the Reference. He adds that Citigroup will not suffer irreparable harm in the absence of a stay and that the "harm" Citigroup maintains it will suffer, that is, being forced to face the reality that a trial is just about to start before the Court, is largely of its own construct. On the other hand, Mr. Stern says the Debtors will be harmed by the need to reschedule and retool. He notes that the bankruptcy case has been ongoing for more than six years and the costs to keep the estates open are significant. Moreover, Mr. Stern maintains that the public interest factor is neutral for Citigroup, because although there is a public interest in conserving and efficiently using scarce judicial resources, there is also the public interest that is best served by prompt resolution of bankruptcy proceedings. Court Issues Protective Order for Citi Employee At the Debtors' behest, the Bankruptcy Court issued a protective order to enable former Citigroup employees to provide their identities, as well as any information they may have that is relevant to the proceeding. William J. McSherry, Jr., Esq., at Crowell & Moring LLP, in New York, stated that one former Citigroup employee had come forward with information relevant to the proceeding against Citigroup, provided that its identity be undisclosed. The Debtors sought to interview the Employee to determine that the information will be potentially useful in the Proceeding. Consistent with the provisions of the Minute Order dated Oct. 18, 2007, the Debtors' request was supported by a declaration of the Employee. The Debtors asked the Bankruptcy Court's permission for that Declaration to be filed under seal, on the Employee's fear that Citigroup will enforce a separation agreement prior to a Court order or otherwise retaliate against the Employee. The Bankruptcy Court's protective order provided that the information disclosed by the Employee will not give Citigroup any right or remedy against the Employee, notwithstanding any separation agreement clauses which may otherwise prohibit the provision of that information. Debtors Dismiss Claims against Deutsche Bank Pursuant to a stipulation between the parties, the Debtors dismissed with prejudice all claims, causes of action, counterclaims, and objections against Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Bank Securities Inc., Deutsche Bank Luxembourg, S.A., Deutsche Bank Trust Company Delaware, Deutsche Bank Trust Corporation, Bankers Trust International plc, BT Commercial Corp., DB Green, Inc., Deutsche Leasing New York Corp., Seneca Delaware, Inc., Deutsche Bank S.A., DB Ever, Inc., and Seneca Leasing Partners, L.P. Judge Gonzalez subsequently approved the Stipulation. About Enron Corp. Based in Houston, Texas, Enron Corporation filed for chapter 11 protection on Dec. 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen, Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler, Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP, Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L. Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP represent the Debtors. Jeffrey K. Milton, Esq., Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On Jan. 9, 2004, they filed their fifth Amended Plan and on the same day the Court approved the adequacy of the Disclosure Statement. On July 15, 2004, the Court confirmed the Debtors' Modified Fifth Amended Plan and that plan was declared effective on Nov. 17, 2004. (Enron Bankruptcy News, Issue No. 203; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENTERCOM COMMS: S&P Assigns 'BB-' Rating on CreditWatch Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Entercom Communications Corp., including the 'BB-' corporate credit rating, on CreditWatch with negative implications. The Bala Cynwyd, Pennsylvannia-based radio broadcaster had roughly $973.5 million of debt outstanding at Dec. 31, 2007. "The CreditWatch placement reflects Entercom's narrow margin of covenant compliance for the total debt leverage ratio under the credit facility because of debt financed acquisitions and EBITDA deterioration," explained Standard & Poor's credit analyst Michael Altberg. As of Dec. 31, 2007, pro forma for Entercom's acquisition of 15 radio stations from CBS for $262 million, the divestiture of its Austin FM station, and subsequent debt repayment in January 2008, leverage per lenders' calculations was 5.6x compared to a covenant of 6.0x, leaving only a 6% cushion against further EBITDA decline. The company projects a mid-single-digit percentage rate decline in revenues for the seasonally weak first quarter of 2008. Although the company's conversion of EBITDA to free cash flow is strong, at 56% in 2007, the company converted only 18% of EBITDA to discretionary cash flow, due to its sizable dividend payout. The company's dividend consumed 69% and 39% of free cash flow and EBITDA, respectively, in 2007, which has hampered debt repayment. In resolving the CreditWatch listing, Standard & Poor's will assess Entercom's ability to restore its debt to EBITDA ratio to around 5x and to maintain an adequate cushion of covenant compliance amid broad cyclical and secular pressures on radio advertising demand. EVRAZ GROUP: Fitch Affirms 'BB' ID Rating on IPSCO Acquisition -------------------------------------------------------------- Fitch Ratings has affirmed Luxembourg-based Evraz Group SA's Long- term Issuer Default and senior unsecured ratings at 'BB' and Short-term IDR at 'B'. The affirmation follows the company's announcement of the acquisition of IPSCO's Canadian plate and pipe business from SSAB for a net cost of $2.3 billion. At the same time, Fitch has affirmed the ratings of Mastercroft Limited (Evraz's core subsidiary with most of its assets concentrated in Russia) at Long-term IDR 'BB' and Short-term IDR 'B'. Evraz Securities SA's senior unsecured rating is affirmed at 'BB'. The Outlooks for Evraz's and Mastercroft Limited's Long-term IDRs are Stable. Fitch views positively the increase in scale of Evraz's operations as well as the increasing geographical diversification of the company's business. Synergies will derive from the combination of IPSCO Canada and Evraz's existing North American operations as well as group operations. Historically, the agency has viewed Evraz as committed to a prudent financial policy. With the Delong and IPSCO acquisitions, Evraz will exceed its previously stated gross leverage target of 1.5x, reducing the rating headroom within the current 'BB' rating level. Nonetheless, the agency takes comfort from the company's positive track record of acquisition debt repayment. The ratings also take into account previously stated concerns, such as increasing pace of large scale acquisitions and target integration risk. Under the structure of the agreed transaction, Evraz will acquire the IPSCO Tubulars business from SSAB for $4.025 billion. Evraz has entered into back-to-back agreements with TMK, Russia's largest pipe producer, to sell parts of the US operations for $1.2 billion and it will also sell certain remaining acquired US assets to TMK for $0.5 billion in 2009. Finally, Evraz will become the owner of IPSCO's Canadian plate and pipe business, owning the plants in Regina, Calgary and Red Deer. At the moment, IPSCO Canada is a leading North American producer of steel plate as well as pipe for the oil and gas industry. The transaction will be financed by the combination of a bridge loan raised at the Evraz level, as well as a non-recourse term loan arranged at the acquired company level. Evraz is Russia's largest vertically integrated steel producer by domestic output and the 13th-largest worldwide. Through recent acquisitions, Evraz has gained a footprint in the US, Canada, Italy, Czech Republic, China and South Africa. Its FY06 revenue was $8.3 billion. In H107, revenue amounted to $6 billion with EBITDA of $2.1 billion. EXACT SCIENCES: Reports $162M Accumulated Deficit, Explores Option ------------------------------------------------------------------ Exact Sciences Corporation disclosed in its annual report for the year ended Dec. 31, 2007, that its independent auditors have expressed substantial doubt about the company's ability to continue as a going concern, and it may be unable to raise additional capital on acceptable terms in the future. The company stated it has incurred losses since it was formed and has had only modest product and royalty fee revenues since the commercial launch of its PreGen-Plus, a non-invasive stool-based DNA testing service for the detection of colorectal cancer, in August 2003. From its date of inception on February 10, 1995 through December 31, 2007, it has accumulated a total deficit of approximately $162.7 million. The company said it expects that its losses will continue for at least the next several years and, depending upon its strategic direction, it may need to invest significant additional funds toward other areas in the oncology testing business. The company has licensed certain of its technologies, on an exclusive basis through December 2010, to Laboratory Corporation of America Holdings in connection with the commercial testing service for Pre-Gen-Plus. Royalties from LabCorp's sales of PreGen-Plus, and other license fees from LabCorp, represent the company's primary source of revenue. The company said the Food and Drug Administration approval path for its colorectal cancer screening technology is likely to involve significant time as well as research and development expenditures. Given its current levels of cash and revenues, and without raising additional capital, it said it will not be able to spend the amounts that it believes will likely be necessary to fund these investments and there can be no assurance that LabCorp will invest sufficient amounts in sales and marketing activities for PreGen-Plus or other future testing services based on our technologies. The company said that, while it believes it is permitted, from a regulatory standpoint, to promote stool-based DNA testing services generically, its inability to market the brand "PreGen-Plus" under current FDA regulations may limit its return on amounts that it has invested or may invest in sales and marketing activities. If its revenue does not grow significantly, it will not be profitable. The company said it cannot assure that the revenue from the sale of any of its technologies will be sufficient to make it profitable. The company said its future revenues will depend, in large part, upon whether PreGen-Plus or other testing services offered by LabCorp based on its technologies are broadly ordered by medical practitioners and requested by patients. Retention of Leerink Swann LLC to Explore Options EXACT Sciences announced on March 18, 2008, that it has retained Leerink Swann LLC to assist the Board of Directors in its evaluation of strategic alternatives for the business, including, but not limited to, the sale of EXACT or merger with another entity. EXACT does not anticipate making another announcement in regard to this matter unless its Board has approved a definitive transaction. Jeffrey Luber, the company's new president and chief executive officer, commenting on the inclusion of the company's DNA-based technology in the American Cancer Society's updated guidelines for colon cancer screening, told the MetroWest Daily News: "We think it's a really good time to leverage that endorsement to increase shareholder value." Investors reacted positively, pushing the company's stock up 45 percent in a day, Greg Turner of the Daily News noted. Its stock market value on March 17 was about $75 million, according to the report. Mr. Luber, commenting on the search for potential business parter, said there is no particular time frame to make a deal. "We are moving forward with dispatch," he said, according to the report. "We've had to keep the operations very lean," Mr. Luber said. A full copy of the company's annual report is available at: http://ResearchArchives.com/t/s?2956 About Leerink Swann Boston, Massachussetts-based Leerink Swann LLC -- http://www.leerink.com/-- provides clients insights and perspectives that enable them to make well-informed investment and business decisions. It is recognized as a leading investment bank to both emerging and established healthcare companies. About Laboratory Corporation of America Holdings Headquartered in Burlington, North Carolina, Laboratory Corporation of America Holdings -- http://www.labcorp.com/-- is a pioneer in genomic testing and the commercialization of new diagnostic technologies. LabCorp is one of the world's largest clinical laboratories, with annual revenues of $4.1 billion in 2007. LabCorp has approximately 26,000 employees and offers a broad range of genomic/esoteric tests. Listed under the ticker symbol LH on the New York Stock Exchange (NYSE), LabCorp tests more than 370,000 specimens daily for over 220,000 clients nationwide. About EXACT Sciences Corporation Headquartered in Marlborough, Massachusetts, EXACT Sciences Corporation -- http://www.exactsciences.com-- uses applied genomics to develop effective, patient-friendly screening technologies for use in the detection of cancer. Certain of its technologies have been licensed to Laboratory Corporation of America Holdings (LabCorp) for a stool-based DNA assay developed by LabCorp for colorectal cancer screening in the average-risk population and marketed by LabCorp under the name PreGen-Plus. EXACT Sciences believes its genomics-based technologies will help enable earlier detection of colorectal cancer so that more people can be effectively treated. EXACT Sciences is based in Marlborough, Mass. PreGen-Plus, the non-invasive colorectal cancer screening testing service offered by LabCorp, has not been approved or cleared by the U.S. Food & Drug Administration. The company has cash and cash equivalents of $4,486,000 for the year ended Dec. 31, 2007. It has assets of $14,595,000, liabilities of $4,406,000 and a total deficit of approximately $162.7 million since its inception in February 1995. It employs 14 people after slashing its workforce to half last year. EXACT SCIENCES: Executive Chairman Patrick J. Zenner Resigns ------------------------------------------------------------ On March 18, 2008, Patrick J. Zenner, the Executive Chairman of the Board of Directors of EXACT Sciences Corporation, stepped down from his position as interim Chief Executive Officer of the Company. Mr. Zenner retained his current position on the company's Board of Directors. About EXACT Sciences Corporation Headquartered in Marlborough, Massachusetts, EXACT Sciences Corporation -- http://www.exactsciences.com-- uses applied genomics to develop effective, patient-friendly screening technologies for use in the detection of cancer. Certain of its technologies have been licensed to Laboratory Corporation of America Holdings for a stool-based DNA assay developed by LabCorp for colorectal cancer screening in the average-risk population and marketed by LabCorp under the name PreGen-Plus. EXACT Sciences believes its genomics-based technologies will help enable earlier detection of colorectal cancer so that more people can be effectively treated. EXACT Sciences is based in Marlborough, Mass. PreGen-Plus, the non-invasive colorectal cancer screening testing service offered by LabCorp, has not been approved or cleared by the U.S. Food & Drug Administration. The company has cash and cash equivalents of $4,486,000 for the year ended Dec. 31, 2007. It has assets of $14,595,000, liabilities of $4,406,000 and a total deficit of approximately $162.7 million since its inception in February 1995. It has retained Leerink Swann LLC to assist the Board of Directors in its evaluation of strategic alternatives for the business, including, but not limited to, the sale of EXACT or merger with another entity. It employs 14 people after slashing its workforce to half last year. EXACT SCIENCES: Appoints Jeff Luber as President and CEO -------------------------------------------------------- EXACT Sciences Corporation promoted Jeffrey R. Luber to president and chief executive officer on March 18, 2008. Mr. Luber will serve until his successor is duly elected and qualified or until his earlier resignation or removal. Mr. Luber, 41, has served as President since July 2007, Senior Vice President, Chief Financial Officer and Treasurer from April 2006 to July 2007, and as General Counsel and Secretary from November 2002 to July 2007. >From February 2000 to November 2002, Mr. Luber served as Vice President of Finance and Administration, Legal Counsel and Secretary for Kaon Interactive Inc. From March 1999 to February 2000, Mr. Luber was General Counsel for Community Rehab Centers, a private outpatient physical therapy company with operations in several states. From December 1996 to March 1999, Mr. Luber was employed by Concentra Managed Care, Inc., a publicly-traded nationwide provider of managed care services, most recently as Assistant Vice President and Associate General Counsel. Mr. Luber received his BS in business administration from Southern Connecticut State University, and his J.D. and M.B.A. from Suffolk University. On March 18, 2008, based on the recommendation of the Corporate Governance and Nominating Committee of the Company, the Board of Directors of the Company elected Mr. Luber to its Board of Directors. Mr. Luber has not been elected to any committees of the Company's Board of Directors. There are no understandings or arrangements between Mr. Luber and any other person pursuant to which Mr. Luber was elected as a director. About EXACT Sciences Corporation Headquartered in Marlborough, Massachusetts, EXACT Sciences Corporation -- http://www.exactsciences.com-- uses applied genomics to develop effective, patient-friendly screening technologies for use in the detection of cancer. Certain of its technologies have been licensed to Laboratory Corporation of America Holdings for a stool-based DNA assay developed by LabCorp for colorectal cancer screening in the average-risk population and marketed by LabCorp under the name PreGen-Plus. EXACT Sciences believes its genomics-based technologies will help enable earlier detection of colorectal cancer so that more people can be effectively treated. EXACT Sciences is based in Marlborough, Mass. PreGen-Plus, the non-invasive colorectal cancer screening testing service offered by LabCorp, has not been approved or cleared by the U.S. Food & Drug Administration. The company has cash and cash equivalents of $4,486,000 for the year ended Dec. 31, 2007. It has assets of $14,595,000, liabilities of $4,406,000 and a total deficit of approximately $162.7 million since its inception in February 1995. It has retained Leerink Swann LLC to assist the Board of Directors in its evaluation of strategic alternatives for the business, including, but not limited to, the sale of EXACT or merger with another entity. It employs 14 people after slashing its workforce to half last year. GALAXY ENERGY: Discloses Prepetition Loans from Bruner Family ------------------------------------------------------------- Bankrupt Galaxy Energy Corporation disclosed that on March 13, 2008, it executed an unsecured promissory note for $145,000 in favor of Bruner Family Trust UTD March 28, 2005. Interest accrues at the rate of 8% per annum and the note matures on July 11, 2008. One of the trustees of Bruner Family Trust UTD March 28, 2005 is Marc E. Bruner, the president and a director of the company. On March 3, 2008, the company executed a subordinated unsecured promissory note for $600,000 in favor of Bruner Family Trust UTD March 28, 2005. Interest accrues at the rate of 8% per annum and the note matures on the later of July 1, 2008, or the time at which the company's senior debt has been paid in full. In connection with this loan, the registrant and the lender have submitted a subordination agreement for execution by the holders of the senior debt. Proceeds of both loans were intended to support the company's operations. About Galaxy Energy Denver, Colorado-based Galaxy Energy Corp. is an independent oil and gas companies founded in 2002. Galaxy Energy and Dolphin Energy Corp. acquire, explore, develop, and produce crude oil and natural gas primarily in the U.S. They have operations in the Piceance Basin of western Colorado and the Powder River Basin located in Wyoming and Montana. They also own interests in Neues Bergland exploration permit covering an area of 149,000 acre leaseholding near Kusel in southwest Germany; and Jiu Valley project covering an area of 21,500 acre coalbed methane project in Romania. As Nov. 30, 2006, they had proved reserves of approximately 320 barrels of oil and 1,005,421 thousand cubic feet of gas. As April 1, 2007, they had interests in 175 completed wells, 60 wells in various stages of completion, and 8 water disposal wells. Galaxy Energy and Dolphin Energy filed for chapter 11 protection on March 14, 2008 (Bankr. D. Co. Case Nos. 08-13164 and 08-13166). Alice A. White, Esq., and Douglas W. Jessop, Esq., represent the Debtors in their restructuring efforts. Galaxy Energy listed total assets of $43,797,124 and total debts of $54,378,324 as of the bankruptcy filing. GENERAL MARITIME: S&P Changes Outlook to Negative; Holds BB Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on General Maritime Corp. to negative from stable. S&P affirmed the 'BB' long-term corporate credit rating. "The outlook revision reflects the shipping company's aggressive financial policy, characterized by share repurchases and material dividend payouts despite reduced earnings," said Standard & Poor's credit analyst Funmi Afonja. Management stated in its 2007 earnings release that it will continue to pay out dividends at the targeted level of $2 per share (approximately $63 million annually), look for opportunities to further implement its share- repurchase program, and draw upon its consolidation success to seek opportunities to grow the fleet. The financing of General Maritime's share repurchases and dividend payouts has contributed to increased debt leverage and weakened its credit measures. The company has about $123.5 million remaining under its current share-repurchase program, which can be used at management's discretion, subject to the terms of the credit facility. Management's comments to further grow the fleet imply that the company will likely make vessel purchases or acquisitions. Ratings on New York, New York-based General Maritime reflect the company's aggressively leveraged financial profile, shareholder- friendly policies, and participation in the capital-intensive, highly fragmented, volatile, and competitive shipping industry. Positive credit factors include satisfactory liquidity and somewhat stable cash flows from an increasing proportion of time-charter contracts with customers. General Maritime provides international shipping of crude oil. At Dec. 31, 2007, its fleet consisted of 21 vessels, comprised of 10 Aframax and 11 Suezmax tankers (both midsize vessels), with a total cargo carrying capacity of 2.7 million deadweight tons. Management has largely completed its effort to transform the company's fleet to exclusively double-hull vessels, which comply with increasingly strict environmental controls on oil shipping. The average age of the fleet was about 9.6 years at Dec. 31, 2007, somewhat younger than the industry average. The company's financial profile has weakened as a result of share repurchases and material dividend payouts despite reduced earnings. A further material weakening because of lower-than- expected earnings or a moderate to large-sized acquisition would likely result in a downgrade. S&P considers an outlook revision to stable unlikely unless earnings were to recover or the company adopts a less-aggressive financial policy. GENERAL MOTORS: Strike Cues S&P to List Ratings on Negative Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed the ratings on General Motors Corp., American Axle & Manufacturing Holdings Inc., Lear Corp., and Tenneco Inc. on CreditWatch with negative implications. The CreditWatch placement reflects S&P's decision to review the ratings in light of the extended American Axle (BB/Watch Neg/--) strike. The work stoppage that began Feb. 25 at American Axle's U.S. United Auto Workers plants has forced closure of many GM (B/Watch Neg/--) plants, as well as plants of certain GM suppliers. The strike began after the expiration of the four-year master labor agreement with American Axle. Although S&P still expect American Axle and the UAW to reach an agreement that will reflect more competitive labor costs, the timing is unknown. The two sides resumed negotiations last week. "We believe the strike has gone on long enough to possibly begin to affect the financial resources of GM and those suppliers most exposed to the automaker," said Standard & Poor's credit analyst Robert Schulz. To resolve the CreditWatch listings, Standard & Poor's will assess the strike's impact on the companies' credit profiles, particularly liquidity, once production resumes. S&P could lower the ratings any time prior to a resolution of the Axle strike if the liquidity of the companies becomes compromised, although downgrades are not likely for another several weeks. GO CAPITAL: Temporarily Suspends Fund Redemption Over Market Woes ----------------------------------------------------------------- GO Capital Asset Management BV, the fund manager of the Global Opportunities Fund, decided to temporarily suspend the redemption of units of the Fund. Bloomberg News comments that GO Capital is the seventh hedge fund in the past month guarding itself from the crisis in the financial market. With immediate effect, GO Capital disclosed that no requests for redemptions will be accepted before Dec. 1, 2008. As a result, as of mid July 2008 no redemption payments will be made up until and including March 31, 2009. The decision was taken jointly with the Depositary of the Fund, Stichting Bewaarbedrijf Guestos, and after consultation with the Advisory Board, GO Capital revealed. The fund manager stated that it believes a temporary suspension of redemptions is the best defensive measure to protect the interests of the participants, in view of the current illiquid nature of some of the Fund's investments. The measure aims to prevent any prejudicial effects of redemption to the interests of the unit holders both individually and as a whole. Current market circumstances do not allow the Fund to sell investments at a reasonable price. The Fund is not leveraged, GO Capital asserted. Furthermore, GO Capital said the Fund is under no obligation from its service providers or other counter parties to sell any of its investments. GO Capital said it is fully committed to steer the Fund through the coming period by closely monitoring and managing its investments. Unit holders are invited to an informative meeting to be held on March 31, 2008 at 10:30 a.m. in the Hilton Hotel, Apollolaan 138, 1077 BG Amsterdam. The meeting will be conducted in the Dutch language. Participants are kindly requested to register for the meeting by e-mail to info@go-capital.nl, by fax: +31 (0)20- 5703047 or by mail to GO Capital Asset Management, Johannes Vermeerstraat 14, 1071 DR in Amsterdam, The Netherlands. A full-text copy of the company's press release can be obtained at http://ResearchArchives.com/t/s?294c About GO Capital Global Opportunities Capital Asset Management BV, aka GO Capital, -- http://www.gocapital.nl/-- is a Dutch based asset manager which specializes in the field of hedge funds. Since November 2000 GO Capital Asset Management manages the hedge fund Global Opportunities Fund. GO Capital has a permit from the Autoriteit Financiele Markten. The AFM is responsible for regulating behavior on the financial markets in the Netherlands. The Fund may use all possible investment strategies and methods in aiming to achieve the investment objective. These include short selling as well as investing with borrowed monies to leverage investments. The Fund was established on Sept. 25, 2000, as a contractual investment fund. HARMONY HEAVEN: Case Summary & Eight Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Harmony Heaven LLC P.O. Box 699 Cascade Locks, OR 97014 Bankruptcy Case No.: 08-31119 Chapter 11 Petition Date: March 17, 2008 Court: District of Oregon Judge: Trish M. Brown Debtor's Counsel: Kent V. Snyde, Esq. 24 NW 19th Avenue Portland, OR 97209 Tel: (503) 225-0880 court@ksnyder.com Total Assets: $3,753,000 Total Debts: $2,404,751 Debtor's list of its Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Karen Dickinson-Kidder Business Debt $125,000 12301 Louise Street Garden Grove, CA 92841 Penny King Business Debt $50,000 c/o Irene Jankus 1140 Chinookan Drive Cascade Locks, OR 97014 Irene Jankus Business Debt $40,000 1140 Chinookan Drive Cascade Locks, OR 97014 Brad Lawrence Commission from $15,000 brokered loan Kiwi Fence Contractors Detention Pond Repair $3,000 Cathy Riley Business Debt $2,400 Pioneer Surveying and Professional Services $840 Engineering Bell Design Company Professional Services $472 HARRAH'S ENTERTAINMENT: Reports $47.8M Net Loss for 4th Quarter --------------------------------------------------------------- Harrah's Entertainment Inc. reported a fourth-quarter net loss of $47.8 million, compared with net income of $47.6 million in the 2006 fourth quarter. On a GAAP basis, fourth-quarter income from operations was $145.8 million, compared with $229.7 million in the year-ago quarter. The fourth-quarter 2007 loss was due to impairment charges of $169.6 million recorded in the period for certain intangible assets. On January 28, 2008, Harrah's Entertainment was acquired by affiliates of Apollo Global Management, LLC and TPG Capital, LP in a transaction valued at $29.7 billion, including assumption of $12.4 billion of debt but excluding transaction costs. Harrah's stockholders received $90 cash for each share of common stock, or a total of $17.3 billion. Harrah's Entertainment, Inc. -- http://www.harrahs.com-- is the world's largest provider of branded casino entertainment. Since its beginning in Reno, Nevada, more than 70 years ago, Harrah's has grown through development of new properties, expansions and acquisitions, and now owns or manages casinos on four continents. The Company's properties operate primarily under the Harrah's, Caesars and Horseshoe brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker. * * * As reported in the Troubled Company Reporter on Jan. 21, 2008, Standard & Poor's Ratings Services lowered its ratings on Harrah's Entertainment Inc. and its wholly owned subsidiary, Harrah's Operating Co. Inc. The corporate credit rating on each entity was lowered to 'B+' from 'BB'. In addition, S&P's senior unsecured and subordinated debt ratings on approximately $4.6 billion of existing notes, which will be rolled over as part of the leveraged buyout, were both lowered to 'B-', from 'BB' and 'B+'. The ratings were removed from CreditWatch, where they were placed with negative implications on Oct. 2, 2006. The rating outlook is stable. The TCR reported on Jan 22. 2008 that Fitch Ratings withdrew these ratings for Harrah's Entertainment, Inc. and Harrah's Operating Co.: -- HET Issuer Default Rating 'BB+'; -- HOC Issuer Default Rating 'BB+'; -- Senior Unsecured bank credit facilities 'BB+'; -- Senior Unsecured notes 'BB+' -- Senior Unsecured subordinated notes 'BB-' Fitch said that based on publicly available information regarding the proforma capital structure for the leveraged buyout by Apollo Management LP and Texas Pacific Group, Fitch believes that HET's IDR would be rated no higher than 'B' and the existing $4.6 billion of unsecured debt that is being rolled over in the transaction would be rated no higher than 'CCC+'. However, Fitch withdrew its ratings because it believes that disclosure of financial information is inadequate for Fitch to maintain ratings or rate the LBO transaction, which is valued at roughly $31.2 billion including sponsor equity and rollover debt. HOMESTEAD HOLDINGS: Case Summary & Seven Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Homestead Holdings, LLC 2250 East Duece of Clubs Show Low, AZ 85901 Bankruptcy Case No.: 08-02703 Type of Business: The Debtor is a land developer. Chapter 11 Petition Date: March 17, 2008 Court: District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: Brian N. Spector, Esq. (bspector@jsslaw.com) Jennings, Strouss & Salmon, PLC The Collier Center, 11th Floor 201 East Washington Street Phoenix, AZ 85004-2385 Tel: (602) 262-5977 Fax: (602) 495-2654 http://www.jsslaw.com/ Estimated Assets: $520,141 Estimated Debts: $6,283,147 Debtor's Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Chester Zito Civil Judgment $6,272,862 Attn: Eduardo H. Coronado 4700 West White Mountain Boulevard, Suite A Lakeside, AZ 85929 Vision Quest Investment Corp. Loans $7,689 2250 East Deuce of Clubs Show Low, AZ 85901 American Reliable Insurance Casualty insurance $1,381 8655 East Via De Ventura, Suite E-200 AZ 85238 Navajo County Treasurer $1,215 Baron C. Laetzsch Loans Unknown Navopache Electric Electric service Unknown Ronald G. Bishop, Sr. Loans Unknown HSI ASSET: Eroding Credit Support Prompts S&P's Rating Downgrades ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 10 classes of mortgage pass-through certificates from HSI Asset Securitization Corp. Trust 2005-NC1. The other outstanding ratings on this transaction are not affected. The downgrades reflect collateral performance that has eroded available credit support during recent months. As of the February 2008 remittance period, cumulative losses were $5.035 million, or 0.80% of the original principal balance. Serious delinquencies (90-plus days, foreclosures, and REOs) were $66.313 million, up 3x from a year ago. Losses have consistently outpaced excess interest for seven out of the 12 most recent months, and this has led to continuous erosion of overcollateralization (O/C), which is now $1.24 million below its $3.16 million target and 34.5x less than the amount of serious delinquencies. Subordination, O/C, and excess spread provide credit support for this deal. The loan pool consists of conventional, fixed- and adjustable-rate mortgage loans secured by first liens on one- to four-family residential real properties. Ratings Lowered HSI Asset Securitization Corp. Trust 2005-NC1 Mortgage pass-through certificates Rating ------ Class To From ----- -- ---- M-3 A AA M-4 BBB AA M-5 BB AA- M-6 BB- A+ M-7 B+ A M-8 B A- M-9 B BBB M-10 B- BB M-11 CCC B M-12 CCC B Other Outstanding Ratings HSI Asset Securitization Corp. Trust 2005-NC1 Mortgage pass-through certificates Class Rating ----- ------ I-A-1,I-A-2,II-A-1,II-A-2,II-A-3,II-A-4 AAA M-1, M2 AA+ IMPERIAL PETROLEUM: Jan. 31 Balance Sheet Upside-Down by $8.6 Mil. ------------------------------------------------------------------ Imperial Petroleum Inc.'s consolidated balance sheet at Jan. 31, 2008, showed $5,776,477 in total assets and $14,369,398 in total liabilities, resulting in a $8,592,921 total stockholders' deficit. At Jan. 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $825,518 in total current assets available to pay $2,720,403 in total current liabilities. The company reported a net loss of $537,893 on oil and gas revenue of $587,991 for the second quarter ended Jan. 31, 2008, compared with a net loss of $729,945 on oil and gas revenue of $216,166 for the same period ended Jan. 31, 2007. Oil and gas production operating expenses were $386,746 for the quarter ended Jan. 31, 2008, compared to $323,893 for the quarter ended Jan. 31, 2007, and represent increased costs in the quarter on the company's remediation and repair workover program in North Louisiana. General and administrative costs were $190,840 for the three months ending Jan. 31, 2008, compared to $163,047 for the same period a year earlier. Interest expense for the quarter was $430,767 in 2008 compared to $330,367 for the same period in 2007. Full-text copies of the company's consolidated financial statements for the quarter ended Jan. 31, 2008, are available for free at http://researcharchives.com/t/s?2941 About Imperial Petroleum Headquartered in Evansville, Ind., Imperial Petroleum Inc. (OTC BB: IPMN) operates as a diversified energy and mineral mining company in the United States. It oil and natural gas properties include the Coquille Bay field located in Plaqumines Parish, Louisiana; the Haynesville field located in Claiborne and Webster Parishes in north Louisiana; the Bastian Bay field located in Plaquemines parish, Louisiana; LulingField located in Guadalupe county, Texas; and the Shrewsbury field in Grayson County and the Claymour field in Todd County, western Kentucky. INNOPHOS HOLDINGS: Reports $3.9M Net Loss for 2007 4th Quarter -------------------------------------------------------------- Innophos Holdings, Inc. reported net loss of $3.9 million for the fourth quarter 2007 and net loss of $5.487 million for full year 2007. Net sales for the fourth quarter 2007 were $143.9 million, an increase of $12.3 million, or 9.4%, as compared to $131.6 million for the same period in 2006. Operating income for the fourth quarter 2007 was $6.4 million, an increase of $10.3 million, compared to an operating loss of $3.9 million for the comparable period in 2006. The fourth quarter 2007 was negatively affected by approximately $10.5 million from planned and unplanned outages at the Company's Coatzacoalcos, Mexico facility, with approximately $5.4 million coming from maintenance costs, $4.0 million from reduced volumes and $1.1 million from raw material replacement costs, and $2.4 million in legal fees to comply with a sodium tripolyphosphate (STPP) document request subpoena from the U.S. Department of Justice. The fourth quarter 2006 was negatively affected by $13.3 million of unusual expense items primarily related to the Company's termination of a management advisory agreement and its initial public equity offering. Net loss for the fourth quarter 2007 was $3.9 million, an improvement of $20.8 million compared to a net loss of $24.7 million for the same period in 2006. Diluted loss per share for the fourth quarter 2007 was $0.19. Innophos had 20.9 million shares issued and outstanding at December 31, 2007. Cash and Cash Equivalents As of December 31, 2007, Innophos had $15.7 million of cash and cash equivalents. Net debt at the end of the fourth quarter 2007 was $368.8 million, a reduction of $4.3 million from $373.1 million at September 30, 2007. Capital expenditures for the fourth quarter 2007 were $5.3 million versus $6.0 million in the same quarter of 2006. Full Year Results Full year 2007 net sales were $579.0 million, an increase of $37.2 million, or 6.9%, as compared to $541.8 million in 2006. Operating income for the year ended December 31, 2007 was $47.7 million, an increase of $16.8 million, or 54.4%, as compared to $30.9 million in 2006. Included in 2007 results are $10.2 million of unusual expense items versus $17.6 million unusual expense items in 2006 results. Included in 2007 income (loss) before income taxes are unusual expense items totaling $13.9 million, resulting from the Company's termination of the pharma sales agency agreement, Mexican workforce reorganization and port tax settlements, and debt retirement, all of which occurred in the first and second quarters of 2007. Included in 2006 income (loss) before income taxes are unusual expense items totaling $24.6 million, primarily due to the Company's termination of a management advisory agreement and its November 2006 initial public equity offering and related debt retirement. Balance Sheet Innophos reported total assets of $542.699 million, total liabilities of $497.995 million and total stockholders' equity of $44.704 million About Innophos Holdings, Inc. Headquartered in Cranbury, New Jersey, Innophos Holdings, Inc.-- http://www.innophos.com-- the holding company for a North American manufacturer of specialty phosphates, serves a diverse range of customers across multiple applications, geographies and channels. Innophos offers a broad suite of products used in a wide variety of food and beverage, consumer products, pharmaceutical and industrial applications. Innophos has manufacturing operations in Nashville, Tenn.; Chicago Heights, Ill.; Chicago (Waterway), Ill.; Geismar, La.; Port Maitland, Ontario (Canada); and Coatzacoalcos, Veracruz and Mission Hills, Guanajuato (Mexico). * * * As reported by the Troubled Company Reporter on April 17, 2007 Standard & Poor's Ratings Services assigned its 'CCC+' rating to $66 million of senior unsecured notes due 2012 to be issued by Innophos Holdings, parent company of Innophos Inc. The rating still holds to date. S&P also affirmed the 'B' corporate credit rating and other ratings on Innophos Inc. The TCR reported on April 18, 2008 that Moody's Investors Service assigned a B1 corporate family rating to Innophos Holdings, Inc. and a B3 rating to the company's new $66 million senior unsecured notes due 2012. The ratings still hold to date. The new notes are being issued by Innophos Holdings to refinance $61 million of debt of its subsidiary, Innophos Investments Holdings, Inc. INT'L PAPER: Moody's Gives Negative Outlook on Weyerhaeuser Deal ---------------------------------------------------------------- Moody's Investors Service affirmed International Paper Company's Baa3 senior unsecured debt ratings and Prime-3 commercial paper ratings and revised the rating outlook to negative from stable following the company's announcement that it had entered into a definitive purchase agreement to acquire Weyerhaeuser Company's containerboard, packaging and recycling operations. The purchase price is approximately $6.0 billion and IP proposes to fund the transaction entirely with debt. The proposed acquisition is expected to magnify IP's existing ratings' strengths and challenges, with already strong aggregate scale increasing even further, and margin stability benefiting from the increased proportion of packaging paper in the product mix. The increased scale of the packaging business should help to facilitate operational and asset rationalization with significant synergies being realized. IP's growing expertise in managing logistics should also contribute to synergy realization. Margins should improve modestly should income tax efficiencies and synergies be realized as planned. In the short term however, with incremental debt being incurred immediately while synergies are realized only over time, the largest ratings influence will come from the increased debt load and, with debt increasing by a greater proportion than cash flow, credit protection measures will deteriorate. While the resulting magnitude of credit metric dilution would often be sufficient to warrant a ratings downgrade, IP has pledged to maintain adequate liquidity and reduce debt within a relatively short period of time so that credit protection measures can be restored to levels appropriate for the existing Baa3 senior unsecured rating. However, while this allows IP's Baa3 senior unsecured rating to be affirmed, execution risks related to successfully integrating the acquisition, realizing synergy benefits, repaying debt, and restoring credit protection measures to appropriate levels within an appropriate time period are such that a negative outlook is warranted. It is noted that the acquisition is subject to regulatory approval. Absent materially adverse macroeconomic conditions, the ratings outlook would be stabilized were the transaction not to proceed. The transaction is expected to close in the third quarter of 2008. Outlook Actions: Issuer: Champion International Corporation -- Outlook, Changed To Negative From Stable Issuer: Federal Paper Board Co., Inc. -- Outlook, Changed To Negative From Stable Issuer: International Paper Capital Trust II -- Outlook, Changed To Negative From Stable Issuer: International Paper Capital Trust III -- Outlook, Changed To Negative From Stable Issuer: International Paper Capital Trust IV -- Outlook, Changed To Negative From Stable Issuer: International Paper Capital Trust VI -- Outlook, Changed To Negative From Stable Issuer: International Paper Company -- Outlook, Changed To Negative From Stable Issuer: Union Camp Corporation -- Outlook, Changed To Negative From Stable International Paper Company, headquartered in Memphis, Tennessee, is a large global marketer and producer of paper and packaging products. In 2007, the company generated annual sales of approximately $21.9 billion. IP proposes to acquire the containerboard and packaging operations of Weyerhaeuser Company in an all-cash transaction valued at approximately $6.0 billion. In 2007, annual sales for Weyerhaeuser's containerboard and packaging business were $5.2 billion. * * * Moody's Investors Service placed International Paper Co.'s senior subordinate rating at 'Ba1' in December 2005. The rating still holds to date with a stable outlook. IXIS REAL: S&P Junks Nine Ratings on Deteriorating Credit Support ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 23 classes of mortgage pass-through certificates from four IXIS Real Estate Capital Trust deals. All other outstanding ratings from the four series are not affected. The downgrades reflect collateral performance that has eroded available credit support during recent months. As of the February 2008 remittance period, cumulative losses ranged from 1.39% (series 2005-HE1) to 2.06% (series 2005-HE4) of the original principal balances. Serious delinquencies (90-plus days, foreclosures, and REOs) ranged from $35.1 million (series 2005- HE1) to $113.3 million (series 2005-HE4) of the current principal balances. Losses are consistently outpacing excess interest for all four series and have been steadily rising and eroding overcollateralization (O/C), which is currently below its target for all these deals. Subordination, O/C, and excess spread provide credit support for these series. In addition, the A1 class from series 2005-HE3 is bond insured. The collateral for these transactions consists of fixed- and adjustable-rate conventional, fully amortizing and balloon mortgage loans secured by first and second liens on one- to four-family residential properties. Ratings Lowered IXIS Real Estate Capital Trust Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2005-HE1 M-4 A- A+ 2005-HE1 M-5 BB+ A 2005-HE1 M-6 B A- 2005-HE1 B-1 CCC BBB+ 2005-HE1 B-2 CCC BB 2005-HE1 B-3 CCC B 2005-HE2 M-6 BBB A- 2005-HE2 B-1 BB BBB+ 2005-HE2 B-2 B BBB 2005-HE2 B-3 CCC BB+ 2005-HE2 B-4 CCC B 2005-HE3 M-6 BBB A+ 2005-HE3 B-1 BB A- 2005-HE3 B-2 B+ BBB+ 2005-HE3 B-3 B BBB 2005-HE3 B-4 CCC BB 2005-HE4 M-4 BBB AA- 2005-HE4 M-5 BB A+ 2005-HE4 M-6 B A 2005-HE4 B-1 B- A- 2005-HE4 B-2 CCC BB 2005-HE4 B-3 CCC BB 2005-HE4 B-4 CCC B JL HAIR: Case Summary & Three Largest Unsecured Creditors --------------------------------------------------------- Debtor: Janet Lucille Hair Jeffrey Lee Hair aka J.L. Hair Realty 6804 Winona Drive Indianapolis, IN 46236 Bankruptcy Case No.: 08-02584 Chapter 11 Petition Date: March 14, 2008 Court: Southern District of Indiana (Indianapolis) Judge: Basil H. Lorch III Debtor's Counsel: Eric C. Redman, Esq. (ksmith@batorredman.com) Bator, Redman, Bruner, Shive & Ludwig 151 North Delaware Street, Suite 1106 Indianapolis, IN 46204 Tel: (317) 685-2426 http://www.batorredman.com/ Total Assets: $3,143,415 Total Debts: $5,797,904 Debtor's Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Washington Mutual/Providian Credit card $17,608 P.O. Box 9180 purchases Pleasanton, CA 94566 Associates/Citibank Credit card $13,870 P.O. Box 6003 purchases Hagerstown, MD 21747 BB&T Credit card $9,674 P.O. Box 2306 purchases Wilson, NC 27894 KITTY HAWK: Court Moved Exclusive Plan Filing Period to March 28 ---------------------------------------------------------------- The Hon. Russell F. Nelms of the United States Bankruptcy Court for the Northern District of Texas, Fort Worth Division, further extended the exclusive periods of Kitty Hawk Inc. and its debtor- affiliates to: a) file a Chapter 11 plan until March 28, 2008; and b) solicit acceptances of that plan until May 27, 2008. According to the Debtors, they are in talks with several entities that could result in the structure of the plan. The Debtors have sold certain de minimis personal properties and abandoned inconsequential properties in 2007. At present, they are trying to sell additional properties. Jason S. Brookner, Esq., at Andrews Kurth LLP, says the Debtors completely discontinued business operations as of Jan. 13, 2008. The Debtors' exclusive right to file a plan expired on Feb. 12, 2008. About Kitty Hawk Headquartered in Texas, Kitty Hawk Inc. (AMEX: KHK) -- http://www.kittyhawkcompanies.com/-- is a holding company providing corporate planning and administrative services. It operates through its three wholly owned bankrupt subsidiaries, Kitty Hawk filed for Chapter 11 protection on May 1, 2000 (Bank. N.D. Tex. Case No. 00-42141). On Aug. 5, 2002, the Court confirmed the Debtor's Plan which became effective on Sept. 30, 2002. The Debtor, along with four affiliates, filed new voluntary chapter 11 petitions on Oct. 15, 2007 (Bankr. N.D. Tex. Case Nos. 07-44536 to 07-44540). Gogi Malik, Esq., and Jason S. Brookner, Esq., at Andrews & Kurth, LLP, represent the Debtors. The Official Committee of Unsecured Creditors has selected Munsch, Hardt, Kopf & Harr, P.C., as its counsel. As of Aug. 31, 2007, the Kitty Hawk's balance sheet showed total assets of $40 million and total liabilities of $31 million. LASALLE COMMERCIAL: Losses Prompts Moody's Four Rating Downgrades ----------------------------------------------------------------- Moody's Investors Service downgraded four classes and affirmed the ratings of nine classes of Lasalle Commercial Mortgage Securities, Inc., Commercial Mortgage Pass-Through Certificates, Series 2005- MF1: -- Class A, $280,510,495, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $7,263,000, affirmed at Aa2 -- Class C, $10,168,000, affirmed at A2 -- Class D, $6,779,000, affirmed at Baa1 -- Class E, $2,905,000, affirmed at Baa2 -- Class F, $2,905,000, affirmed at Baa3 -- Class G, $4,842,000, affirmed at Ba1 -- Class H, $1,936,000, affirmed at Ba2 -- Class J, $1,937,000, Downgraded to B1 from Ba3 -- Class K, $968,000, Downgraded to B2 from B1 -- Class L, $1,937,000, Downgraded to B3 from B2 -- Class M, $969,000, Downgraded to Caa2 from Caa1 Moody's is downgrading Classes J, K, L, and M due to actual realized losses and projected losses on specially serviced loans. This deal is approximately 0.05% of the $840 billion in outstanding commercial mortgage backed securities. Moody's classifies this deal as a small balance commercial loan securitization. Small balance deals represent approximately 0.5% of the outstanding CMBS universe. As of the Feb. 20, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 15.2% to $328.4 million from $387.3 million at securitization. The Certificates are collateralized by 300 mortgage loans with the top 10 loans representing 9.8% of the pool. No loans were defeased from the trust. One loan has been liquidated from the trust resulting in aggregate realized losses of approximately $525,000. Twelve loans, representing 2.7% of the pool, are in special servicing. Moody's is estimating $2.2 million of losses from all the specially serviced loans. One hundred and twenty-two loans, representing 39.0% of the pool, are on the master servicer's watchlist. Moody's was provided with full-year 2006 operating results for 91.0% of the pool. LATTICE INC: Obtains $2.4 Million Credit Line from Private Bank --------------------------------------------------------------- Lattice Incorporated said in a regulatory filing with the Securities and Exchange Commission that Private Bank of Peninsula has agreed to extend a line of credit of up to $2.4 million to the company. The company said that this amount may be increased up to a maximum of $4.0 million should Private Bank enter into a participation agreement pursuant to which Private Bank may transfer to another financial institution a participating interest in the line of credit. Pursuant to the Loan and Security Agreement, the company can request advances on the line of credit, which in the aggregate do not exceed 85% of the company's eligible accounts. About Lattice Incorporated Headquartered in N. Pennsauken, N.J., Lattice Incorporated (OTC BB: LTTC) -- http://latticeincorporated.com/-- is a provider of advanced information and communications technology solutions to the government and commercial markets. The company's technology services division designs, deploys and manages advanced technological solutions at key government agencies and for mid- to large-sized enterprises. Lattice's technology products division consists of several core proprietary platforms used to develop customized software software applications with military grade security in a number of different markets. Going Concern Disclaimer As reported in the Troubled Company Reporter on May 3, 2007, Peter C. Cosmas Co. CPAs expressed substantial doubt about Lattice Incorporated'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 reported that the company has generated significant losses and requires additional working capital to continue operations. LEAR CORP: S&P Posts Ratings on Negative Watch on Extended Strike ----------------------------------------------------------------- Standard & Poor's Ratings Services placed the ratings on General Motors Corp., American Axle & Manufacturing Holdings Inc., Lear Corp., and Tenneco Inc. on CreditWatch with negative implications. The CreditWatch placement reflects S&P's decision to review the ratings in light of the extended American Axle (BB/Watch Neg/--) strike. The work stoppage that began Feb. 25 at American Axle's U.S. United Auto Workers plants has forced closure of many GM (B/Watch Neg/--) plants, as well as plants of certain GM suppliers. The strike began after the expiration of the four-year master labor agreement with American Axle. Although S&P still expect American Axle and the UAW to reach an agreement that will reflect more competitive labor costs, the timing is unknown. The two sides resumed negotiations last week. "We believe the strike has gone on long enough to possibly begin to affect the financial resources of GM and those suppliers most exposed to the automaker," said Standard & Poor's credit analyst Robert Schulz. To resolve the CreditWatch listings, Standard & Poor's will assess the strike's impact on the companies' credit profiles, particularly liquidity, once production resumes. S&P could lower the ratings any time prior to a resolution of the Axle strike if the liquidity of the companies becomes compromised, although downgrades are not likely for another several weeks. MASTR ABS TRUST: S&P's Rating on Class M-9 Drops to 'CCC' --------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class M-8 and M-9 mortgage pass-through certificates from MASTR Asset Backed Securities Trust 2005-WF1. The other outstanding ratings on this transaction are not affected. The downgrades reflect collateral performance that has eroded available credit support during recent months. As of the February 2008 remittance period, cumulative losses were $5.3 million, or 0.58% of the original principal balance. Serious delinquencies (90-plus days, foreclosures, and REOs) were $54.7 million, up from $30.9 million a year ago. Subordination, overcollateralization, and excess spread provide credit support for this series. The collateral for this transaction is a pool of conventional, first- and second-lien, adjustable- and fixed-rate, fully amortizing residential mortgage loans. Ratings Lowered MASTR Asset Backed Securities Trust 2005-WF1 Mortgage pass-through certificates Rating ------ Class To From ----- -- ---- M-8 BB BBB M-9 CCC BB Other Outstanding Ratings MASTR Asset Backed Securities Trust 2005-WF1 Mortgage pass-through certificates Class Rating ----- ------ A-1-A,A-2-A,A-2-B,A-2-C,A-2-D AAA M-1 AA+ M-2 AA M-3 AA- M-4 A+ M-5 A M-6 A- M-7 BBB+ M-10 CCC MAXJET AIRWAYS: To Sell Assets to MAAG for $1 Million ----------------------------------------------------- MAXjet Airways Inc. asks the United States Bankruptcy Court for the District of Delaware to approve the sale of all personal property free and clear of lien and claims, and the assumption and assignment of contracts and leases to MAXjet Airways Acquisition Group LLC. The Debtors have determined MAAG's bid was the highest and best offer during the March 12 auction, according to a court filing. MAAG will pay $1,000,000 for the purchased assets at the closing of the transaction. As reported in the Troubled Company Reporter on March 14, 2008, all proceeds from the sale of the Debtor's assets will be for the benefit of its creditors, but not for the shareholders. On March 25, 2008, MAAG is required to transfer $736,000 of non- refundable payment to pay the Debtor's operational cost incurred for the during the period March 12, 2008, until April 23, 2008. The Debtor tells the Court that any balance remaining after all cost accrued until April 23, 2008, are paid will be returned to MAAG. A hearing has been set on March 25, 2008, at 3:00 p.m., to consider approval of the Debtor's request. Objection to approval must be filed no later than 12:00 p.m., on March 20, 2008. A full-text copy of the asset purchase agreement is available for free at http://ResearchArchives.com/t/s?294b About MAXjet Airways Headquartered in Dulles, Virginia, MAXjet Airways Inc. -- http://www.maxjet.com/-- is an all-business class, long-haul airline company. It has introduced scheduled services with flights from London Stansted Airport to New York. As of December, 2006, it leased five B767 aircraft. Its customers are both business and leisure travelers. At the airport, its product features check-in facilities located in primary terminals, security and a business class departure lounge and arrivals facility. Its flights features deep-recline seats (170 degree) spaced at a 60 inch pitch, portable entertainment systems, stowage space and business class catering. The Debtor filed for chapter 11 protection on Dec. 24, 2007 (Bankr. D. Del. Case No. 07-11912). The Debtor selected Pachulski Stang Ziehl & Jones LLP and Pillsbury Winthrop Shaw Pittman LLP as its bankruptcy counsels. The Debtor selected Epiq Bankruptcy Services LLC as claims, noticing and claims agent. Arent Fox LLP represents the Official Committee of Unsecured Creditors. The Debtor's summary of schedules shows assets of $14,836,147 and debts of $23,601,824. MEDICALCV: January 31 Balance Sheet Upside-Down by $5,794,877 ------------------------------------------------------------- MedicalCV Inc.'s consolidated balance sheet at Jan. 31, 2008, showed $5,325,030 in total assets and $11,299,907 in total liabilities, resulting in a $5,794,877 total stockholders' deficit. The company reported a net loss of $4,512,364 on revenues of $24,534 for the third quarter ended Jan. 31, 2008, compared with a net loss of $2,691,788 on revenues of $9,604 for same period ended Jan. 31, 2007. Sales and marketing expenses were $625,416 and $361,824 in the three months ended Jan. 31, 2008, and 2007, respectively. General and administrative expenses were $1,348,277 and $899,799 in the three months ended Jan. 31, 2008, and 2007, respectively. Research and development expenses were $1,735,263 and $1,456,710 in the three months ended Jan. 31, 2008, and 2007, respectively. Interest expense was $866,495 in the three months ended Jan. 31, 2008, compared to interest expense of $27,234 in the three months ended Jan. 31, 2007. Full-text copies of the company's consolidated financial statements for the quarter ended Jan. 31, 2008, are available for free at http://researcharchives.com/t/s?2942 Going Concern Doubt As reported in the Troubled Company Reporter on Aug. 2, 2007, Minneapolis-based Laurie Besikof Lapidus & Company LLP expressed substantial doubt about MedicalCV Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended April 30, 2007, and 2006. The auditing firm reported that the company has incurred operating losses and negative cash flows from operations in recent years and will require additional funds to finance its working capital and capital expenditure needs. About MedicalCV Inc. Headquartered in Inver Grove Heights, Minn., MedicalCV Inc. (OTC BB: MCVI.OB) -- http://www.medcvinc.com/-- is a medical device company that develops, manufactures and sells innovative, laser-based surgical ablation systems to create precise, clinically relevant lesions, or scars, in both soft and cardiac tissue. The company's core products are the SOLAR(TM) and ATRILAZE(TM) Surgical Ablation Systems for use in soft and cardiac tissue ablation procedures, respectively. Both the SOLAR(TM) and ATRILAZE(TM) Systems have been utilized in concomitant open-heart and, by some cardiothoracic surgeons, in minimally invasive cardiac surgery procedures. MERISANT COMPANY: Commences Marketing of Secured Credit Facility ---------------------------------------------------------------- Merisant Company launched the marketing of a new senior secured credit facility. Proceeds from the new credit facility will be used to retire outstanding loans under the existing Amended and Restated Credit Agreement dated May 9, 2007. Merisant has engaged Credit Suisse as the arranger and sole book runner for the refinancing. In addition, Merisant estimates that its capital expenditures for the year ended Dec. 31, 2007, will be approximately $7 million and that it held approximately $51 million in cash and cash equivalents at Dec. 31, 2007. Headquartered in Chicago, Illinois, Merisant Company -- http://www.merisant.com/-- is a player in marketing of low- calorie tabletop sweeteners. The company's premium-priced brands include Equal and Canderel. In addition to Equal and Canderel, Merisant Company markets its products under 18 other regional brands. The company sells its brands in over 90 countries. * * * Moody's Investor Service placed Merisant Company's senior subordinate rating at 'Ca' in February 2006. The rating still holds to date. Standard & Poor's placed Merisant Company's long term foreign and local issuer credit ratings at 'CCC' in September 2006. The ratings still hold to date. MERRILL LYNCH: Moody's Confirms Low-B Ratings on Six Cert. Classes ------------------------------------------------------------------ Moody's Investors Service affirmed these ratings of 20 classes of Merrill Lynch Mortgage Trust 2004-MKB1, Commercial Mortgage Pass- Through Certificates, Series 2004-MKB1: -- Class A-1, $17,473,072, affirmed at Aaa -- Class A-1A, $152,084,482, affirmed at Aaa -- Class A-2, $379,800,000, affirmed at Aaa -- Class A-3, $65,000,000, affirmed at Aaa -- Class A-4, $169,657,000, affirmed at Aaa -- Class XP, Notional, affirmed at Aaa -- Class XC, Notional, affirmed at Aaa -- Class B, $26,946,000, affirmed at Aaa -- Class C, $11,023,000, affirmed at Aa2 -- Class D, $25,721,000, affirmed at A2 -- Class E, $11,024,000, affirmed at A3 -- Class F, $13,473,000, affirmed at Baa1 -- Class G, $12,248,000, affirmed at Baa2 -- Class H, $11,023,000, affirmed at Baa3 -- Class J, $3,675,000, affirmed at Ba1 -- Class K, $4,899,000, affirmed at Ba2 -- Class L, $4,899,000, affirmed at Ba3 -- Class M, $4,899,000, affirmed at B1 -- Class N, $2,450,000, affirmed at B2 -- Class P, $3,674,000, affirmed at B3 As of the Feb. 12, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 4.7% to $933.4 million from $979.9 million at securitization. The Certificates are collateralized by 69 mortgage loans ranging in size from less than 1.0% to 16.2% of the pool, with the top 10 non-defeased loans representing 43.1% of the pool. The pool includes two shadow rated loans representing 22.0% of the pool. Eleven loans, representing 23.1% of the pool, have defeased and are secured by U.S. Government securities. There have been no losses since securitization. Currently there is one loan, representing 0.7% of the pool, in special servicing. Moody's is estimating a loss of approximately $3.0 million from this specially serviced loan. Three loans, representing 2.1% 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 approximately 96.5% and 87.1% of the pool, respectively. Moody's loan to value ratio for the conduit component is 90.6% compared to 89.4% at Moody's last full review in April 2007 and compared to 93.4% at securitization. The largest shadow rated loan is the Great Mall of the Bay Area Loan ($151.0 million - 16.2%), which is secured by the borrower's interest in a 1.3 million square foot regional mall located in Milpitas, California. The loan matures in September 2008 and is interest only for its entire five year term. There is also $24.0 million held outside the trust. Moody's current shadow rating is Baa2, the same as at last review and securitization. The second shadow rated loan is the Galileo Pool #2 Loan ($54.0 million - 5.8%), which is secured by ten anchored retail properties totaling 993,000 square feet. The properties are located in eight states including Florida, Connecticut, Georgia, Iowa, Louisiana, Massachusetts, Tennessee and Virginia. There were 14 properties at securitization. However, seven properties were released and three loans were substituted into the pool. As of September 2007, occupancy was 96.6% compared to 96.8% at securitization. The loan's sponsor is Centro Properties Group. The loan matures in November 2010 and is interest only for its entire seven year term. Moody's current shadow rating is A2, the same as at last review and securitization. The top three non-defeased conduit loans represent 13.3% of the outstanding pool balance. The largest conduit loan is the Galileo Pool #1 Loan ($77.0 million - 8.3%), which is secured by 11 anchored retail properties totaling 1.26 million square feet and located in eight states including Kentucky, Georgia, Tennessee, Kansas, New Hampshire, South Carolina, Texas and West Virginia. There were 13 properties with a total of 1.28 million square feet at securitization. However, five properties have been released and three loans were substituted into the pool. As of June 2007 occupancy was 95.5% compared to 98.1% at securitization. The loan's sponsor is Centro Properties Group. The loan matures in November 2008 and is interest only for its entire five year term. Moody's LTV is 81.6% compared to 76.1% at last review and at securitization. The second largest conduit loan is the West Point Crossing Shopping Center Loan ($26.5 million - 2.8%), which is secured by a 241,000 square foot retail center located in Tucson, Arizona. Moody's LTV is 90.9% compared to 92.4% at last review and 95.7% at securitization. The third largest conduit loan is the GFS Marketplace Portfolio Loan ($20.4 million - 2.2%), which is secured by 17 single-tenant retail properties with a total of 272,000 square feet located in Ohio, Michigan Indiana, and Illinois. All the properties are leased to GFS Holdings, Inc., a foodservice distributor, under leases expiring September 2028. The loan amortizes on a 25-year schedule and has an anticipated repayment date of August 2013. Moody's LTV is 59.2% compared to 59.4% at last review and 72.7% at securitization. MONEYGRAM INT'L: Inks Recapitalization Deal with Investment Group ----------------------------------------------------------------- MoneyGram International Inc. entered into an amended definitive 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 transaction, which was disclosed on March 10, is expected to close on March 25. Components of the recapitalization include these: * The Investors, which include affiliates of THL and affiliates of Goldman Sachs, will purchase $760 million of Series B and Series B-1 Preferred Stock, which will initially be convertible, at a price of $2.50 per share, into approximately 79% of the common equity of the company. * The company has also entered into an agreement with affiliates of Goldman Sachs to provide $500 million in debt financing. * The company is expected to obtain an additional $250 million in senior debt financing prior to the close of the transaction. * The company also expects to have $350 million outstanding or available under its existing credit agreement, and is seeking amendments from its existing lenders to modify certain terms and to permit those amounts to remain outstanding or available. At its meeting on March 16, 2008, the board of directors of MoneyGram unanimously approved the company's entry into the amended purchase agreement with the Investors and the amended note purchase agreement with affiliates of Goldman Sachs. The board retained J.P. Morgan Securities Inc. and Duff & Phelps LLC as financial advisors, each of whom confirmed their delivered fairness opinions. J.P. Morgan Securities Inc. also acted as placement agent to MoneyGram on the transaction. Upon closing of the transaction, the Investors will receive both voting and nonvoting preferred stock. The convertible preferred stock will pay a cash dividend of 10%, which the company may elect to accrue at a rate of 12.5% during the first five years in lieu of paying in cash. After five years, the dividends will accrue at a rate of 15% if the company is unable to pay dividends in cash. The company expects it is likely that dividends will accrue for at least 5 years. The convertible preferred stock will be convertible into shares of common stock or non-voting common equivalents of the company at a price of $2.50 per common share. The committed debt from affiliates of Goldman Sachs provides for 13.25% senior second lien notes with a 10-year term, and is not callable by the company for 5 years. The interest rate on the $250 million of additional senior debt is expected to be no more than LIBOR plus 5% and may be sold at a discount. The transaction is structured as a purchase of convertible preferred stock in a one-step transaction, as opposed to a two- step transaction under the original terms. 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 company is relying on an exception to the NYSE's Shareholder Approval Policy available where the delay involved in securing shareholder approval would jeopardize the financial viability of the company. In accordance with the NYSE's rule providing for this exception, the audit committee of the company's board of directors has expressly approved, and the full board of directors has unanimously concurred with, the company's reliance of the exception. The NYSE has also confirmed the availability of the exception to the company. The company expects the amended transaction to close on March 25, 2008, upon the conclusion of a shareholder notice period required by the NYSE when utilizing this exception. The definitive agreement does not prevent the company from soliciting or receiving superior proposals prior to the close of the transaction. MoneyGram has agreed that the fees paid to the Investors and to Goldman Sachs in respect of the equity financing and $500 million of debt financing upon signing of the original transaction shall not be refunded to the company if the amended transaction fails to close for any reason. After the closing of the transaction, the Investors will appoint two representatives and two observers to the company's board of directors and will, at their discretion, have the ability to take control of the full board at any time after the closing. Concurrent with the closing, the company will reduce the size of its board of directors such that it includes three independent directors and the chief executive officer, in addition to the members appointed by the Investors. Investment Portfolio Update The company completed the sales of certain portfolio assets required to be sold under the terms of the agreement with the Investors at a total loss of approximately $1.6 billion. As a result of these portfolio sales, the company has determined that it is no longer in compliance with the minimum net worth requirements of the states in which it is licensed to conduct its money transfer and other payment services businesses. This failure to meet minimum net worth requirements may result in the states imposing certain fines and other penalties on the company. No state has taken any action or informed the company of its intention to take any action at this time. Immediately after the closing of the transaction, the company anticipates it will be in compliance with the minimum net worth requirements. Wal-Mart Stores Inc. and Money Transfer Update The company and Wal-Mart Stores Inc. have entered into an agreement re-confirming the amendment which extends the term of their money services agreement to 2013, effective upon the closing of the recapitalization transaction. The company has reached a new milestone of 150,000 global money transfer agent locations and transaction growth continues to exceed 20%. Closing Conditions Closing of the recapitalization transaction is conditioned upon, among other conditions: * The additional $250 million in debt financing and amendment of its $350 million credit agreement discussed above; * There being no law or injunction prohibiting the closing; * No notice from any state to the effect that the company can no longer conduct its money transfer business; receipt by the Investors of such assurances as they may deem necessary in their sole discretion from the states in which the company is licensed to conduct money transfer or payment services business to the effect that such states will not revoke the company's license or impose adverse conditions or fines; and a determination that, after giving effect to the recapitalization, the company will have all licenses required to conduct its business and will be in compliance with all financial ratio and similar requirements imposed by the states; * Investors being satisfied that the company will have at least $150 million in "Unrestricted Assets" and $100 million in undrawn borrowing availability under the its revolving credit line; * No material adverse change having occurred in the business of the company or its customers, from Sept. 30, 2007, except as disclosed to the Investors, as determined in the sole discretion of the Investors; in addition no "Termination Development" shall have occurred from the date of the revised agreement, which includes any circumstance, event, change, development or effect that, individually or in the aggregate, is adverse to the financial position, results of operations, business, prospects, assets or liabilities of the company or the company's subsidiaries and any negative development related to the company's or its subsidiaries' agents, official check customers, clearing banks or regulators, each as determined in the sole discretion of any of the Investors; * Upon receipt of funds into escrow at the Closing, delivery to the company of an unqualified opinion from its auditor on the 2007 financials; * Investors being satisfied with the company's internal controls and procedures; * Wal-Mart Stores Inc. having confirmed to the company in writing that as of the closing date its money services agreement with the company will be in full force and effect and that the transaction does not give Wal-Mart the right to terminate the money services agreement; * The company having purchased D&O and run-off insurance in agreed upon amounts; * The company delivering unaudited interim financial statements for the one-month period ended Jan. 31, 2008, and for the one-month period ended Feb. 29, 2008 in a form satisfactory to the Investors. Although the company believes that it has made substantial progress in fulfilling the conditions, there can be no assurances that the conditions will be satisfied and the transaction will close. 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. MONITOR OIL: U.S. Trustee & Panel Oppose Exclusivity Extension -------------------------------------------------------------- Diana G. Adams, U.S. Trustee for Region 2, and the Official Committee of Unsecured Creditors appointed in Monitor Oil Plc and its debtor-affiliates' bankruptcy cases, ask the U.S. Bankruptcy Court for the Southern District of New York to deny the Debtors' request to further extend their exclusive rights to file a Chapter 11 plan until June 17, 2008, and solicit acceptances of that plan until Aug. 18, 2008, Bill Rochelle of Bloomberg News reports. As reported in the Troubled Company Reporter on March 17, 2008, the Debtors said that they have not had the time to look into their restructuring alternatives, and to develop and negotiate a plan of reorganization with their major creditor groups. Michael Foreman, Esq., at Dorsey & Whitney LLP in New York, said that the Debtors will continue to push the business plan which involved the marketing of a fully-packaged single-lift vessel and power buoys projects despite additional cost problems. The Debtors' exclusive plan filing deadline will expire today, March 19, 2008. A hearing has been set on March 21, 2008, at 10:00 a.m., to consider approval of the Debtors' extension request. Mr. Rochelle relates that U.S. Trustee insists that the Debtors have not provided creditors a "credible" business plan. While, the committee notes that there is "no possible confirmable plan that could be proposed." According to a Court filing, former Chairman Bjorn Q. Aaserod, who will take over the Board of Directors, has proposed a plan providing for the immediate distribution of cash to creditors, Mr. Rochelle recounts. A more detailed term sheet for a reorganization plan may be given creditors before the March 21 exclusivity extension hearing. About Monitor Oil Headquartered in the Cayman Islands, Monitor Oil, Plc -- htpp://www.monitoroil.com/ -- an oil and gas service company that provides oil and gas production solutions, offshore services and engineering services. The Monitor Group has operations in London, England; Aberdeen, Scotland; Stavanger, Norway; Caldicot, Wales; Shanghai, China and New York, United States. The company and two of its affiliates, Monitor Single Lift 1, Ltd., and Monitor US FinCo, Inc., filed for Chapter 11 Protection on Nov. 21, 2007 (Bankr. S.D.N.Y. Case No. 07-13709). Eric Lopez Schnabel, Esq., at Dorsey & Whitney, L.L.P., represents the Debtor. The U.S. Trustee for Region 2 appointed five creditors to serve on an Official Committee of Unsecured Creditors in the Debtors' cases. Ira L. Herman, Esq., at Thompson & Knight, LLP, represents the Committee. As of Dec. 31, 2007, the company disclosed total assets of $98,340,000 and total debts of $56,125,000. NATIONAL ENERGY: Shareholders OK Plan of Dissolution & Liquidation ------------------------------------------------------------------ The shareholders of National Energy Group Inc. approved, by the requisite vote required under Delaware law at a special meeting of the company's shareholders, the Plan of Complete Dissolution and Liquidation of National Energy Group Inc. and the dissolution and liquidation of the company in accordance with the Plan. Company shareholders of record as of the close of business on Dec. 27, 2007, which was the record date for the Special Meeting established by the company, were entitled to notice of and to vote at the special meeting. The company will begin the process of effectuating the Dissolution pursuant to the Plan under the continued supervision of the company's board of directors and officers. In accordance with the Plan, the company intends to file a certificate of dissolution with the Delaware Secretary of State on March 25, 2008. The board has determined that 5:00 p.m., Eastern Time, on this date shall be the final record date for determination of those company shareholders entitled to receive liquidation distributions, if and when determined by the board, under the Plan. Distributions to company shareholders pursuant to the Plan will be in complete cancellation of all of the outstanding shares of the company's common stock. From and after the final record date, and subject to applicable law, the company's common stock will no longer be treated as outstanding and each holder of the company's common stock shall cease to have any rights in respect thereof, except the right to receive distributions pursuant to and in accordance with the Plan. Also effective as of the final record date, the company's share transfer books will be closed and the company's transfer agent, Wells Fargo, will no longer process share transfer requests. The company also intends to submit a Certification and Notice of Termination of Registration on Form 15 to the Securities and Exchange Commission on March 26, 2008, for the purpose of deregistering its securities under the Securities Exchange Act of 1934, as amended. As a result, the company will immediately suspend the filing of any further periodic reports under the 1934 Act and, absent contrary action by the SEC, its status as a 1934 Act reporting company will be terminated within 90 days following its filing of the Form 15. In addition, the company has been advised that trading in the company's common stock on the OTC Bulletin Board will terminate within two days after its filing of the Form 15. The company will not make any liquidation distributions to shareholders pursuant to the Plan and the Dissolution until the board, at a future meeting thereof and by majority vote, determines that the company has paid, or made adequate provision for the payment of its liabilities and obligations, including any liabilities relating to the purported stockholder derivative and class action lawsuit styled Andrew T. Berger v. Icahn Enterprises LP, et al. (Case No. 3522-VCS) and the company's possible indemnification obligations to the current and former officers and directors named as defendants to the lawsuit. After the company's filing of its certificate of dissolution with the Delaware Secretary of State and the cessation of the company's reporting obligations under the 1934 Act, the company will provide periodic updates on the status of its dissolution process via press release and mailing to former company shareholders as of the Final Record Date. About National Energy Group Inc. Headquartered in Dallas, Texas, National Energy Group Inc. (OTC:NEGI) -- http://www.negx.com/-- was a management company engaged in the business of managing the exploration, development, production and operations of oil and natural gas properties, primarily located in Texas, Oklahoma, Arkansas and Louisiana (both onshore and in the Gulf of Mexico). The company managed the oil and natural gas operations of NEG Operating LLC, National Onshore LP, formerly TransTexas Gas Corporation and National Offshore LP, formerly Panaco Inc., all of which are affiliated entities. Its principal assets were its unconsolidated non-controlling 50% membership interest in NEG Holding LLC and the management agreements with Operating LLC, National Onshore and National Offshore. On Nov. 21, 2006, NEGI completed the sale of its non-controlling 50% membership interest in NEG Holding LLC to NEG Oil & Gas LLC, paid its debt obligations in full, terminated its management agreements with NEG Operating LLC, National Onshore LP and National Offshore LP and terminated the employment of the majority of its employees. Subsequent to Nov. 21, 2006, NEGI has no business operations and its principal assets consist of cash and short-term investment balances. NEW 118TH: Court Approves Sale of The Ivy Project for $11.25MM -------------------------------------------------------------- The Hon. Stuart M. Berstein of the U.S. Bankruptcy Court for the Southern District of New York approved the sale of New 118th LLC and its debtor-affiliates' condominium project known as "The Ivy," free and clear of all liens, claims and encumbrances, to Robert Wolf, winning bidder at the auction, for $11,250,000. The Court further approved the backup contract between the Debtors and stalking horse bidder Grasso Holdings Acquisitions, LLC. Richard L. Wasserman, the Debtors' Chapter 11 trustee, determined at the auction that Mr. Wolf's offer was the highest and best bid. He also determined that stalking horse Grasso Holdings, which offered $10,975,000, was the second highest bid. The backup contract provides for the sale of The Ivy to Grasso Holdings if Mr. Wolf fails to timely close on the sale under the terms of the winning contract. The Ivy is a partially completed condominium project located on real property in the East Harlem section of New York City at the corner of Second Avenue and East 11th Street. The Chapter 11 trustee asserts that the sale of The Ivy is a prerequisite to the Chapter 11 Trustee's ability to confirm and consummate a plan or plans of liquidation in these jointly administered cases. The Chapter 11 Trustee further asserts that the sale of The Ivy is therefore an integral and necessary part of the plan or plans of liquidation to be confirmed in the Debtors' cases. Headquartered in New York, New 118th LLC owns real property in New York, which comprised of residential apartment buildings and an occupied condominium project. M. Salvioli Trust et al. filed an involuntary Chapter 11 case on July 30, 2008, against New 118th LLC and its 19 affiliates (Bankr. S.D.N.Y. Lead Case No.07-12333 through 07-12350). Joseph Corneu, Esq., and Tracy L. Klestadt, Esq., at Klestadt & Winter LLP in New York, represents the petitioners. On Aug. 1, 2007, the Court appointed Richard L. Wasserman as Chapter 11 Trustee and, subsequently, a final order was entered with regard to Mr. Wasserman's appointment on Aug. 9, 2007. On Aug. 27, 2007, the Court entered an order for Chapter 11 relief and directed the Chapter 11 Trustee to file schedules along with a list of creditors when the Debtor failed to answer within the time prescribed by the Bankruptcy Code. The U.S. Trustee for Region 2 appointed seven creditors to serve on an Official Committee of Unsecured Creditors in these cases. Massey Knakal Realty Services represents the Committee as special real estate counsel. NEWBURY STREET: Moody's Junks Rating on $48 Mil. Notes From 'A3' ---------------------------------------------------------------- Moody's Investors Service downgraded ratings of seven classes of notes issued by Newbury Street CDO 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: $1,000,000,000 Class A-1 First Priority Senior Secured Floating Rate Delayed Draw Notes due 2053 -- Prior Rating: Aaa -- Current Rating: Aa1, on review for possible downgrade Class Description: $800,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2053 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $50,625,000 Class A-3 Third Priority Senior Secured Floating Rate Notes Due 2053 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Class Description: $59,375,000 Class A-4 Fourth Priority Senior Secured Floating Rate Notes Due 2053 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: $48,000,000 Class B Fifth Priority Senior Secured Floating Rate Notes Due 2053 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Ca Class Description: $15,000,000 Class C Sixth Priority Senior Secured Deferrable Floating Rate Notes Due 2053 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: C Class Description: $17,000,000 Class D Seventh Priority Mezzanine Deferrable Secured Floating Rate Notes Due 2053 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: C The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence on March 4, 2008, as reported by the Trustee, of an event of default described in Section 5.1(i) of the Indenture dated March 8, 2007. Newbury Street CDO 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, certain parties to the transaction may be entitled to direct the Trustee to declare the maturity of the notes to be accelerated and 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 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. NATIONAL CENTURY: Ex-CEO Faces Trial on Witness Bribery ------------------------------------------------------- The trial of Lance K. Poulsen on witness tampering charges began Monday before Judge Algenon Marbley of the United States District Court for the Southern District of Ohio, The Associated Press reports. Mr. Poulsen, former owner and chief executive officer of National Century Financial Enterprises, Inc., and his longtime associate, Karl A. Demmler, were arrested on federal conspiracy, obstruction of justice, and witness tampering charges, on October 22, 2007. Mssrs. Poulsen and Demmler allegedly tried to bribe a federal government witness and proposed to pay the witness $500,000 to lie on the stand. According to the criminal complaint of the Federal Bureau of Investigation, Mr. Demmler had told the witness at a meeting on July 13, 2007, in Columbus, Ohio, that "it's not what you make up, it's what you forget." He also suggested that the witness had an "amnesia." AP reports that Mr. Poulsen allegedly told Mr. Demmler that one of the best things the witness could say was that she was unfamiliar with the indictment and charges against Mr. Poulsen. Although the witness was not identified in the complaint or in the indictment of Mr. Poulsen, Andrew Welsh-Huggins of AP notes that Mr. Demmler's meetings match the dates with Sherry L. Gibson's meetings as indicated in the U.S. Government's 162-item exhibit list. As previously reported, Ms. Gibson, National Century's former executive vice president for compliance, testified that investors, auditors, clients and courts were fed with lies by executives at National Century. Ms. Gibson's testimony, among other testimonials, led to the recent conviction of the company's five former executives and owners -- Donald H. Ayers, Rebecca S. Parrett, Randolph H. Speer, Roger S. Faulkenberry and James E. Dierker. After the tampering case, Mr. Poulsen is scheduled to face trial on multiple counts of conspiracy, wire and securities fraud, and money laundering in August 2008. Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust, is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represented the Debtors. (National Century Bankruptcy News, Issue No. 81; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) NATIONAL CENTURY: Jury Convicts Five Former NCFE Executives ----------------------------------------------------------- A federal jury has found five former executives of National Century Financial Enterprises guilty of conspiracy, fraud and money laundering, following a six-week trial and less than two days of deliberation, Assistant Attorney General Alice S. Fisher and U.S. Attorney Gregory G. Lockhart of the Southern District of Ohio announced on March 13, 2008. Defendants face these maximum penalties: * Donald H. Ayers, 55 years in prison and $2.25 million in fines; * Rebecca S. Parrett, 75 years in prison and $2.5 million in fines; * Randolph H. Speer, 140 years in prison and $4.25 million in fines; * Roger S. Faulkenberry, 85 years in prison and $2.5 million in fines; and * James E. Dierker, 65 years in prison and $1.75 million in fines. The case was prosecuted by Assistant U.S. Attorney Douglas Squires of the Southern District of Ohio, Senior Trial Attorney Kathleen McGovern and Trial Attorney Wes R. Porter of the Fraud Section, with assistance from Fraud Section Paralegal Specialists Crystal Curry and Sarah Marberg, FBI agents Matt Daly, Ingrid Schmitt, and Tad Morris, IRS Inspectors Greg Ruwe and Mark Bailey, U.S. Postal Inspector Dave Mooney and ICE Agent Celeste Koszut. The Columbus, Ohio, jury returned the guilty verdict on all charges contained in a 27-count superseding indictment stemming from a scheme to deceive investors about the financial health of NCFE. The company, which was based in Dublin, Ohio, was one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002. Donald H. Ayers, 71, of Fort Meyers, Fla., an NCFE vice chairman, chief operating officer, director and an owner of the company, was found guilty on charges of conspiracy, securities fraud and money laundering. Rebecca S. Parrett, 59, of Carefree, Ariz., an NCFE vice chairman, secretary, treasurer, director and an owner of the company, was found guilty on charges of conspiracy, securities fraud, wire fraud and money laundering. Randolph H. Speer, 58, of Peachtree City, Ga., NCFE's chief financial officer, was found guilty on charges of conspiracy, securities fraud, wire fraud and money laundering. Roger S. Faulkenberry, 46, of Dublin, Ohio, a senior executive responsible for raising money from investors, was found guilty on charges of conspiracy, securities fraud, wire fraud and money laundering. James E. Dierker, 40, of Powell, Ohio, associate director of marketing and vice president of client development, was found guilty on charges of conspiracy and money laundering. "These convictions send a clear message to corporate America that executives will be brought to justice for lying to investors and misrepresenting the actions taken in their normal course of business," said Deputy Attorney General Mark Filip, chairman of the President's Corporate Fraud Task Force. "These are the latest successes in our efforts to improve the integrity of our financial markets." "By holding accountable those who break the law, today's convictions help restore some of the faith and trust the public loses every time corporate executives defraud their investors. The jury's verdict demonstrates that the public will not stand by while company executives commit billion dollar frauds, leaving the honest investors to bear the losses they create," said Assistant Attorney General Alice S. Fisher. "I would like to thank the trial attorneys from the Fraud Section and the U.S. Attorney's Office as well as the FBI, IRS, Immigration and Customs Enforcement and U.S. Postal Inspection Service for their diligent and successful work on this case." "The jury convicted company executives of building a financial house of cards and deceiving investors using financial sleight of hand," said Gregory G. Lockhart, United States Attorney for the Southern District of Ohio. "I commend the agents, investigators and prosecutors from the Fraud Section and our office for their hard work on this lengthy and complex case." "This case is one of the largest corporate fraud investigations involving a privately held company headquartered in small town America," said Assistant Director Kenneth W. Kaiser of the FBI Criminal Investigative Division. "The FBI continues to leverage its corporate fraud expertise gained through large-scale investigations such as Enron and WorldCom, to ensure that corporations represent their true health. From Dublin, Ohio, to Houston, Texas to New York, New York, the message is clear that the FBI will not stand by as corporate executives manipulate their financial statements and conceal illegal activities from criminal and regulatory authorities." "IRS aggressively pursues corporations and their officers who use their positions of trust for illegal activities. This kind of fraud touches the lives of many unsuspecting citizens and the public should know that the government is serious about holding corporations and their executives accountable," said Eileen C. Mayer, chief, Internal Revenue Service Criminal Investigation. At trial, the government presented evidence that the defendants engaged in a scheme to deceive investors and rating agencies about the financial health of NCFE and how investor monies would be used. Between May 1998 and May 2001, NCFE sold notes to investors with an aggregate value of $4.4 billion, which evidence presented at trial showed were worth approximately six cents on the dollar at the time of NCFE's bankruptcy in November 2002. NCFE presented a business model to investors and rating agencies that called for NCFE to purchase high-quality accounts receivable from healthcare providers using money NCFE obtained through the sale of asset-backed notes to institutional investors. The evidence at trial showed that NCFE advanced money to health care providers without receipt of the requisite accounts receivable, oftentimes to healthcare providers that were owned in whole or in part by the defendants. The evidence further showed that the defendants lied to investors and rating agencies in order to cover up this fraud. The evidence at trial showed that NCFE concealed from investors the shortfalls produced by this fraud by moving money back and forth between accounts, fabricating data in investor reports, incorporating false information into the accounting system, and making other false statements to investors and rating agencies. Moreover, the defendants' compensation was tied to the amount of money they advanced to healthcare providers and those providers' outstanding balance owed to NCFE. The government presented evidence at trial that showed that the defendants knew that the business model NCFE presented to the investing public differed drastically from the way NCFE did business within its own walls and that NCFE was making up the information contained in monthly investor reports to make it appear as though NCFE was in compliance with its own governing documents. About National Century Financial Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust, is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represented the Debtors. (National Century Bankruptcy News, Issue No. 81; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) NC POWER HOLDINGS: Involuntary Chapter 11 Case Summary ------------------------------------------------------ Alleged Lead Debtor: North Carolina Power Holdings, LLC 120 Penmarc Drive, Suite 118 Raleigh, NC 27603 Case Number: 08-01789 Alleged debtor-affiliates also filed with involuntary Chapter 11 petitions: Entity Case No. ------ -------- Lumberton Power, LLC 08-01790 Elizabethtown Power, LLC 08-01791 Type of Business: The Debtor owns and manages coal-fired power plants in the Atlantic coast region. The plants currently utilize coal as well as tire-derived fuel to generate steam and electricity. Vulcan Capital Management -- a diversified private equity investment firm based in New York -- acquired NCPH in 2003. See http://www.vulcancapital.com/ Involuntary Petition Date: March 17, 2008 Court: Eastern District of North Carolina (Wilson) Judge: A. Thomas Small Petitioners' Counsel: John A. Northen, Esq. (jan@nbfirm.com) Northen Blue, LLP P.O. Box 2208 Chapel Hill, NC 27515-2208 Tel: (919) 968-4441 Fax: (919) 942-6603 http://www.nbfirm.com/ A. North Carolina Power Holdings, LLC's List of Petitioners: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Vulcan Power Group, LLC loans, advances, $7,015,153 Attn: Kevin Davis payments of NCPH 150 East 52nd Street, bills, etc. 11th Floor New York, NY 10022 Vulcan Management, Inc. expenses paid and $951,735 Attn: Ford Graham accrued on behalf of 150 East 52nd Street, NCPH, etc.; accrued 11th Floor and unpaid New York, NY 10022 management fee Engeneration loans, advances, $202,348 Attn: Jerry Campbell payments of NCPH 12 Pinecrest Drive bills, etc. Fairmont, NC 28340 TDF & Coal loans, advances, $84,881 Attn: Scott Campbell payments of NCPH 12 Pinecrest Drive bills, etc. Fairmont, NC 28340 B. Lumberton Power, LLC's List of Petitioners: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Vulcan Power Group, LLC loans, advances, $3,935,461 Attn: Kevin Davis payments of NCPH 150 East 52nd Street, bills, etc. 11th Floor New York, NY 10022 Vulcan Management, Inc. expenses paid and $475,868 Attn: Ford Graham accrued on behalf of 150 East 52nd Street, NCPH, etc.; accrued 11th Floor and unpaid New York, NY 10022 management fee Engeneration loans, advances, $101,174 Attn: Jerry Campbell payments of NCPH 12 Pinecrest Drive bills, etc. Fairmont, NC 28340 TDF & Coal loans, advances, $42,441 Attn: Scott Campbell payments of NCPH 12 Pinecrest Drive bills, etc. Fairmont, NC 28340 C. Elizabethtown Power, LLC's List of Petitioners: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Vulcan Power Group, LLC loans, advances, $3,169,692 Attn: Kevin Davis payments of NCPH 150 East 52nd Street, bills, etc. 11th Floor New York, NY 10022 Vulcan Management, Inc. expenses paid and $475,868 Attn: Ford Graham accrued on behalf of 150 East 52nd Street, NCPH, etc.; accrued 11th Floor and unpaid New York, NY 10022 management fee Engeneration loans, advances, $101,174 Attn: Jerry Campbell payments of NCPH 12 Pinecrest Drive bills, etc. Fairmont, NC 28340 TDF & Coal loans, advances, $42,441 Attn: Scott Campbell payments of NCPH 12 Pinecrest Drive bills, etc. Fairmont, NC 28340 NORTEL NETWORKS: Inks Settlement Agreement with Vonage ------------------------------------------------------ Vonage Holdings Corp. said in a regulatory filing that on March 10, 2008, the company, Nortel Networks Inc., and Nortel Networks Limited entered into a settlement agreement effective Jan. 1, 2008, to implement the terms of a Memorandum of Understanding entered into by the parties on Dec. 28, 2007. Pursuant to the terms of the agreement, the company and Nortel agree to file within five days of the agreement between the parties joint stipulations for dismissal, without costs, dismissing without prejudice all claims and counterclaims in: -- Vonage Holdings Corp. v. SBC Internet Services Inc., et al., pending in the United States District Court for the Northern District of Texas, Fort Worth Division; and -- Vonage Holdings Corp. v. Nortel Networks Inc., et al., pending in the United States District Court for the District of Delaware. Further, the company agrees to dismiss without prejudice Central Telephone Company of Texas from all claims related to three of the company's patents in the Texas Action. Pursuant to the agreement, the company grants to Nortel and its affiliates a worldwide, non-exclusive, paid-up, transferable -- subject to certain limitations -- license under three of the company's patents relating to Voice over Internet Protocol technology. Nortel has the right to grant limited sublicenses to its customers to use the licensed products and services when manufactured or sold by Nortel, and to transfer the license rights in conjunction with a change of control of Nortel. Pursuant to the agreement, Nortel grants to the company and its affiliates a worldwide, non-exclusive, paid-up, transferable license under three of Nortel patents relating to VoIP technology. The company has the right to grant limited sublicenses to its customers to use the licensed products and services, and to transfer the license rights in conjunction with a change of control of the company. Either party may terminate the licenses described above if the other party: (a) brings a patent infringement suit against that party with respect to patents not licensed thereunder; or (b) brings a patent infringement suit against a third party which third party asserts a good faith claim of indemnification against either the Company or Nortel or any of their affiliates. The company covenants not to sue Nortel customers for patent infringement of the three licensed Vonage Patents by reason of Nortel customers using licensed products or services and will not seek any damages or costs either during the term of the license or prior to Jan. 1, 2008, from Nortel customers for such use; provided, however, such covenant will become ineffective should Nortel bring a patent infringement suit against the company or any of its customers, prior to the company bringing any such suit against Nortel. Nortel covenants not to sue suppliers of products or services to the company, during the term of any Nortel Patent, for infringement of any Nortel Patent to the extent the company indemnifies them for patent infringement for providing products or services to the company. The company also releases Central Telephone Company of Texas and its customers from all claims, demands and rights of action with respect to any act of infringement or alleged infringement of any of the Vonage Patents by Central Telephone Company of Texas or its customers prior to Jan. 1, 2008. About Vonage Holdings Headquartered in Holmdel, New Jersey, Vonage Holdings Corp. (NYSE:VG) -- http://www.vonage.com/-- provides broadband telephone services with nearly 2.6 million subscriber lines. The company's Residential Premium Unlimited and Small Business Unlimited calling plans offer consumers unlimited local and long distance calling, and features like call waiting, call forwarding and voicemail for a flat monthly rate. Vonage's service is sold on the web and through national retailers including Best Buy, Circuit City, Wal-Mart Stores Inc. and Target and is available to customers in the U.S., Canada and the United Kingdom. * * * At Dec. 31, 2007, the company had $462.3 million in total assets and $537.4 million in total liabilities, resulting in a $75.1 million total stockholders' deficit. About Nortel Networks Corporation Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries including Indonesia, Australia, China, Hong Kong, India, Philippines, Singapore, Taiwan and Thailand. * * * Nortel Networks Corp. still carries Moody's Investors Service's B3 senior unsecured debt rating assigned on July 6, 2005. Outlook is Stable. NORTHWESTERN CORP: Settles Magten Asset Bankruptcy Claims for $23M ------------------------------------------------------------------ NorthWestern Corporation, dba NorthWestern Energy, reached a settlement that would resolve a litigation related to Magten Asset Management's claims in NorthWestern's Chapter 11 bankruptcy case. NorthWestern has filed a motion with the U.S. Bankruptcy Court for the District of Delaware for an order authorizing and approving a settlement agreement by and among, inter alia, Northwestern, Magten, Law Debenture Trust Company of New York and the Plan Committee. The Motion will be heard along with a separate motion to approve an agreement with the Plan Committee providing, among other things, for the reimbursement of certain of NorthWestern's litigation defense costs, at a hearing scheduled for April 9, 2008. If approved, NorthWestern would receive a reimbursement of incurred legal fees of approximately $3.5 million to $4.0 million. Under the settlement agreement, if approved, the holders of the Quarterly Income Preferred Securities (QUIPS), and Magten and Law Debenture, collectively, will receive approximately $23 million. The payment would come from cash principally funded through the sale of shares of NorthWestern held in the disputed claim reserve established under NorthWestern's Plan of Reorganization. It is anticipated that there will be a supplemental distribution from the disputed claim reserve, soon as is reasonably practicable after the approval of the Motion, to all unsecured creditors and debt holders who have already received an allowed claim distribution of NorthWestern stock or a cash payment. The amount of the supplemental distribution to each of these unsecured creditors and debt holders is not presently known. "We believe this settlement is in the best interest of NorthWestern and its shareholders as it brings to closure this protracted legal dispute and resolves the last major claim from the 2003 bankruptcy", Michael J. Hanson, president and chief executive officer, said. It is anticipated that NorthWestern's bankruptcy case will close by the end of 2008. More information on this filing and all proceedings on this matter can be found at http://www.kccllc.net/northwestern. About NorthWestern Corporation Headquartered in Sioux Falls, South Dakota, NorthWestern Corporation (Nasdaq: NWEC) -- http://www.northwesternenergy.com/ -- is a provider of electricity and natural gas in the Upper Midwest and Northwest, serving approximately 650,000 customers in Montana, South Dakota and Nebraska. The Debtor filed for Chapter 11 petition on Sept. 14, 2003, (Bankr. D. Del. Case No.: 03-12872) Scott D. Cousins, Esq., Victoria Watson Counihan, Esq. and William E. Chipman, Jr., Esq. at Greenberg Traurig LLP, and Jesse H. Austin, III, Esq. and Karol K. Denniston, Esq. at Paul, Hastings, Janofsky & Walker LLP represent the Debtor in its restructuring efforts. * * * Moody's Investors Service placed NorthWestern Corporation's senior unsecured bank credit facility rating at the Ba2 in December 2007. The ratings still holds to date. ORIENTAL TRADING: Moody's Puts Negative Outlook; Holds All Ratings ------------------------------------------------------------------ Moody's Investors Service revised its rating outlook for Oriental Trading Company, Inc. to negative from stable. At the same time, Moody's upgraded the rating on the company's 2nd lien Term Loan to Caa1 from Caa2. All other ratings were affirmed. "The rating outlook revision to negative from stable reflects the company's recent operating pressures, resulting from increased costs as well as a more challenging macro economic environment, which Moody's is concerned could lead to a period of sustained weaker operating performance," said Moody's Senior Analyst Scott Tuhy. He added, "The company's significant debt burden remaining from the July, 2006 leveraged buy-out give the company limited flexibility to absorb weaker market conditions. However this affirmation of OTC's B3 corporate family rating acknowledges the company's brand equity in the industry and the company's ability to maintain positive free cash flow despite weakened operating performance." The upgrade of the company's second lien term loan reflects the improved loss given default assessment (to LGD 5, 77% from LGD 5, 79%). The improvement in the LGD assessment primarily reflects the prepayment of approximately $20 million in first lien term debt since the July, 2006 acquisition of the company by an investor group led by The Carlyle Group. This ratings were affirmed: -- Corporate Family Rating and Probability of Default rating at B3 This ratings were affirmed, and LGD assessments amended: -- 1st lien Credit facilities at B1 (LGD 2, 29% from LGD 2, 30%) This rating was upgraded and LGD assessments amended: -- 2nd lien Term Loan to Caa1 (LGD 5, 77%) from Caa2 (LGD 5, 79%) Headquartered in Omaha, Nebraska, Oriental Trading Company, Inc. is the largest direct marketer of party supplies, novelties, toys and children's arts and crafts, and a leading direct marketer of school supplies and value-priced home d�cor and giftware. Revenues for the 12 month period ending Dec. 31, 2007 were approximately $629 million. PACIFICNET INC: Kabani & Co. Raises Going Concern Doubt ------------------------------------------------------- Los Angeles-based Kabani & Company, Inc., raised substantial doubt about the ability of PacificNet, Inc., to continue as a going concern after it audited the company's financial statements, as restated, for the year ended Dec. 31, 2006. The auditor pointed out that the company incurred net losses, had a negative cash flow in operating activities amounting to negative $8,190,000 in the year ended Dec. 31, 2006, and the company's accumulated deficit was $51,090,000 as of Dec. 31, 2006. In addition, the company is in default on its convertible debenture obligation. PacificNet Restates 2006 Financials On March 13, 2008, PacificNet filed on Form 10-K/A a second amendment to its annual report for the year ended Dec. 31, 2006, with the Securities and Exchange Commission. In its revised report, PacificNet posted a net loss of $12,415,000 on total revenues of $42,738,000 for the year ended Dec. 31, 2006, as compared with a net loss of $5,145,000 on total revenues of $17,307,000 in the prior year. At Dec. 31, 2006, the company's balance sheet showed $36,926,000 in total assets, $20,080,000 in total liabilities, and $13,977,000 in stockholders' equity. The company's consolidated balance sheet at Dec. 31, 2006, also showed strained liquidity with $17,041,000 in total current assets available to pay $17,376,000 in total current liabilities. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?293c About PacificNet, Inc. PacificNet, Inc., (NasdaqGM: PACT) -- http://www.pacificnet.com-- provides gaming and mobile game technology worldwide. The company, through its subsidiaries, offers solutions in casino equipment supply; and the development, installation, and support of systems and game content for the casino, lottery, and amusement with prizes (AWP) markets. PacificNet enables customers to integrate gaming operations; and link electronic gaming machines, tables, and networks. PacificNet's gaming clients include hotels, casinos, and gaming operators. In addition, the company, through its other subsidiaries, operates call centers and ecommerce businesses in China. The company was founded in 1987 and is headquartered in Beijing, the People's Republic of China with additional offices in Hong Kong, Shanghai, Shenzhen, Guangzhou, Macau, and Zhuhai, China; the United States; and the Philippines. PALM HARBOR: Unit Extends Maturity of $42MM Facility to April 30 ---------------------------------------------------------------- Palm Harbor Homes Inc.'s CountryPlace Mortgage Ltd., its lending subsidiary, negotiated an extension on its warehouse borrowing facility with its provider until April 30, 2008. The total amount outstanding under this facility is $42.2 million. The facility was originally scheduled to expire on March 14, 2008. During the extension period, CountryPlace will stop taking applications for non-conforming chattel loans, but will continue to originate conforming mortgage loans. "We are pleased with the cooperation of our provider in extending the CountryPlace warehouse facility in spite of very difficult credit market conditions created by the sub-prime mortgage crisis," Larry H. Keener, chairman and chief executive officer of Palm Harbor Homes, remarked. "We believe this support reflects directly on the consistent performance of CountryPlace's portfolio." "CountryPlace has a solid five-year track record as a chattel and mortgage lender, originating and servicing high quality, fixed rate, fully-documented, and fully-verified chattel loans and mortgages, with average credit scores exceeding 700," Mr. Keener added. "Since 2002, CountryPlace has originated approximately 5,000 loans of these loans totaling $351.9 million. At the end of the third quarter of fiscal 2008, CountryPlace serviced 4,312 loans with outstanding balances of $290.5 million." "Because of our careful underwriting and intense servicing, default rates and losses have been significantly lower than those experienced with manufactured home loans securitized in the late '90s, or than those experienced recently in the sub-prime mortgage industry," Mr. Keener realted. "CountryPlace has historically originated approximately 20% of the chattel and non-conforming mortgages for homes sold by the retail division of Palm Harbor. Because of the high quality of these loans and the availability of other retail financing sources, it is not anticipated that this will affect company retail sales." "Both of our securitized loan portfolios continue to perform extremely well," Mr. Keener added. "Through Dec. 31, 2007, our 2005 securitization has experienced a 2.10% cumulative loss, and our 2007 securitization has experienced a 0.14% cumulative loss. Because of the strong historical performance of the securitizations, the high quality of the assets and our significant equity position in the loans, we have received strong interest from several financing sources and are negotiating financing alternatives. We are confident that we will have a final commitment in the foreseeable future." About Palm Harbor Homes Inc. Headquartered in Addison, Texas, Palm Harbor Homes Inc. (NASDAQ: PHHM) -- http://www.palmharbor.com/-- is a manufacturer and marketer of factory-built homes in the United States. As of March 30, 2007, the company operated 14 manufacturing facilities in eight states that sell homes in 27 states through 107 of its company-owned retail superstores and builder locations and approximately 350 independent retail dealers, builders and developers. Through its 80%-owned subsidiary, CountryPlace Mortgage Ltd., it offers chattel and non-conforming land and home loans to purchasers of factory-built homes sold by Company-owned retail superstores and certain independent retail dealers, builders and developers. PFP HOLDINGS: Wants Court to OK Asset Sale and Bidding Procedures ----------------------------------------------------------------- P.F.P. Holdings Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Arizona to approve the proposed bidding procedures to sell assets free and clear of liens, claims, encumbrances and other interests, subject to higher or better offers. Additionally, the Debtors ask the Court to: i) approve T2 Homes LLC, the buyer, as the stalking horse bidder; ii) approve the payment of a break up fee; and iii) authorize the bid procedures for the sale of assets; The Debtors tell the Court that in order to maximize the value of the properties, they have decided to sell: a) Franklin Asset Package, the Debtors' personal property which Franklin Bank, SSB; RBC Centura Bank; Wachovia Bank N.A.; Charter Bank; Reliance Standard Life Insurance Co.; and Comerica Bank assert a lien; b) BofA/Cooley Station Asset Package, the assets in which Bank of America N.A. asserts a first-priority mortgage and security interest; c) AmTrust/Copperleaf Asset Package, the assets in which AmTrust Bank asserts a first-priority mortgage and security interest; d) Keybank Asset Package, the assets in which Keybank National Association asserts a first-priority mortgage and security interest; e) Villa Siena Asset Package, the assets in which Compass Bank asserts a first-priority mortgage and security interest, and Manele Reinsurance Co. Ltd., Kapalua Reinsurance Co. Ltd., and Koele Reinsurance Co. Ltd. assert a second-priority mortgage and security interest; f) Zions Asset Package, assets in which Zions First National Bank asserts a lien; and g) ACC Asset Package, assets in which ACC Capital Corp. asserts a lien. The Debtors propose that the sale of all or portions of the assets be made through separate asset purchase agreements with different buyers. The Debtors also suggest that the initial bid for the assets be $65,150,000. Interested parties may submit bidding documents to: -- Bryan Cave LLP Attn: Robert Miller Suite 2200, Two North Central Avenue Phoenix, AZ 85004; -- Odyssey Capital Group LLC Attn: Grant Lyon 3440 E. Grandview Mesa, AZ 85213 -- Mariscal Weeks McIntyre & Friedlander PA Attn: David Lansky Suite 200, 2901 North Central Avenue, Phoenix, AZ 85012 -- counsel to the Official Committee of Unsecured Creditors The Debtors relate that the proposed sale were reasonable and in the best interest of the Debtors' estates, all creditors and all other parties in interest. PFP Holdings Inc., is a homebuilder based in Phoenix, Arizona. The company does business under names including Trend Homes and Regency. Documents filed in Court indicate that the Debtor generated $309 million in revenue during 2007 while delivering almost 1,100 homes. PFP and its debtor-affiliates filed for separate Chapter 11 bankruptcy protection on Jan. 31, 2008, (Bankr. D. Ariz. Case No. 08-00899). Robert J. Miller, Esq., at Bryan Cave, L.L.P., represents the Debtor. Upon its bankruptcy filing, it listed $50 million to $100 million in estimated assets and debts. PIPER RESOURCES: Alberta Court Grants April 28 CCAA Extension ------------------------------------------------------------- Piper Resources Ltd. disclosed that the Alberta Court of Queen's Bench has extended Piper's creditor protection under the Companies Creditors Arrangement Act (Canada), for an additional period to April 28, 2008. While under CCAA protection, Piper continues with its day-to-day operations. If, by April 28, 2008, Piper has not filed a plan of arrangement under the CCAA, or obtained an extension of the CCAA protection, creditors and others will no longer be stayed from enforcing their rights. The company will issue a further press release on or before April 28, 2008 which will provide an update. As reported in the Troubled Company Reporter on Feb. 20, 2008, after consideration of all available alternatives, the board of directors of Piper Resources determined that it is in the best interests of all stakeholders to seek creditor protection under the CCAA. The company has obtained creditor protection pursuant to an order from the Alberta Court of Queen's Bench. About Piper Resources Headquartered in Calgary, Alberta, Piper Resources Ltd. is a non- listed exploration, development and production company pursuing conventional oil and natural gas opportunities in western Canada. The company's core areas are focused in the Peace River arch area of northwestern Alberta, with operated production in the Gordondale, Pouce Coupe and Sinclair areas. PLASTECH ENGINEERED: Court OKs Additional $14MM Interim Financing ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan approved Plastech Engineered Products Inc. and its debtor- affiliates' request to obtain additional interim financing of up to $14,000,000 above the existing cap on aggregate outstandings at any time, or up to an aggregate amount of $49,151,000, from the DIP Lenders. The Debtors requested for additional financing to continue their business operations beyond March 14, 2008, and up to the final hearing on the DIP financing on April 2, 2008. The interim financing is being provided by Bank of America, N.A., as administrative agent and a syndicate of lenders consisting of the same parties who funded the Debtors' $200,000,000 Revolving Credit Facility entered into on Feb. 12, 2007. The Debtors, who are seeking to obtain longer-term financing, are still negotiating a favorable final finalizing with lenders. The Debtors will present the final terms of the DIP Facility at the Final DIP Hearing Hearing, which has already been three times. At the parties' behest, the Court authorizes the Debtors to remit for application of the Debtors' prepetition debt the $10,000,000 in aggregate amount paid by Plastech's major customers between March 14 and March 17 to BofA, in its capacity as successor-in- interest to Goldman Sachs Credit Partners, LP, as administrative under the Prepetition Revolving Credit Facility. Major Customers to Provide Financing Until June 2008 Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, informs the Court that the Debtors are negotiating an agreement to enter into a final debtor in possession financing facility with certain of the Debtors' major customers. The Debtors did not identify the Participating Customers; i.e., which of their major customers will provide the Debtors with the Final DIP Facility. Major customers of the Debtors include General Motors Corporation, Ford Motor Company, Johnson Controls, Inc., and Chrysler LLC. The Debtors believe that the Final DIP Facility will enable the Debtors to continue their operations through June 2008 while the Debtors work with the Participating Customers, their lenders and other creditors on a restructuring plan. The Final DIP Facility contemplates that a company controlled by the Participating Customers will purchase the obligations of the Revolving DIP Lenders under the Prepetition Revolving Facility and the DIP Facility. Prior to making the commitment, the Participating Customers require: (i) the Court's approval of the validity, amount, and perfection of the liens and security interests granted under the Revolving Credit Facility and the DIP Facility and (ii) a waiver and release of all claims and causes of action arising from or relating to the Prepetition Revolving Facility or the DIP Facility against the Revolving Lenders and the Revolving DIP Lenders. Participating Customers Want Order That BofA Lenders Have Perfected Collateral in Debtors' Assets The Debtors ask the Court to enter an order: (i) confirming that the prepetition debt incurred by the Debtors pursuant to the Revolving Credit Facility is (a) allowable as a fully secured claim against the Debtors and (b) is not subject to offset, counterclaim, recoupment, recharacterization or equitable subordination; (ii) approving the waiver and release of any and all claims of the Debtors' estates against the Revolving Lenders and their agents under or in connection with the Revolving Credit Facility and against the Revolving DIP Lenders and their agents under or in connection with the DIP Facility, in each case including any and all claims under contract or tort lender liability theories or pursuant to Sections 105, 510, 544, 547, 548, 549, 550 or 553 of the Bankruptcy Code; and (iii) confirming that (x) the Revolving DIP Lenders' liens and security interests in the Debtors' assets and (y) the prepetition liens and security interests of the Revolving Lenders in the Debtors' assets are legal, valid, binding, enforceable, perfected and non-avoidable Liens; and (iv) approving a waiver of all claims, if any there be, of rights to surcharge under Section 506(c) or otherwise. Prior to the date of bankruptcy, the Debtors and their advisors, Jones Day Limited Partnership, conducted an analysis of the liens of the Revolving Lenders. As a result of the investigation, the Debtors believe that the liens of the Revolving Lenders are valid and properly perfected. The Revolving Lenders have provided the Official Committee of Unsecured Creditors with relevant lien documents to allow the Committee to investigate the validity, priority, and amount of the Revolving Lenders' liens. The Participating Customers and the Revolving Lenders have agreed to provide the Committee's professionals sufficient time, until March 26, 2008, to investigate the Liens. Mr. Galardi notes that while the Debtors have not conducted an exhaustive investigation of potential claims or causes of actions against either the Revolving Lenders or the Revolving DIP Lenders, the Debtors are presently aware of no valid claims or causes of action against the Revolving DIP Lenders who have been supportive of the Debtors both before and after the Petition Date. The Debtors, accordingly, find no basis to contest the validity or allowability of the Prepetition Debt as a fully secured claim against the Debtors. In exchange for the purchase and release of claims, the Revolving DIP Lenders, in turn have agreed to waive any and all right to receive any proceeds from the Debtors' causes of action under Chapter 5 of the Bankruptcy Code, effective upon closing of the Customer Financing. The Debtors assert that the prepetition debt of the Revolving Lenders is a legal, valid and fully secured claim that should be allowed to provide adequate protection for the Participating Customers, pursuant to Section 364 of the Bankruptcy Code. Absent court approval of the Debtors' agreement to waive and release the potential claims, the Participating Customers will not consummate the Customer Financing, Mr. Galardi notes. "In such an instance, the Debtors would be left with no source of financing with which to conduct their businesses and operations. This, in turn, might require the Debtors to cease their business operations to the detriment of their creditors, employees, and other parties in interest." The Court will consider the merits of the Debtors' request at the April 2 hearing. Participating Customers Want to Avoid Potential Claims According to Bloomberg News, the need to relinquish claims results from a decision in August by U.S. District Judge Shira Scheindlin in New York in the aftermath of the Enron Corp. liquidation. Judge Scheindlin ruled that anyone who buys a bank loan after bankruptcy will be subject to any claims that could have been made against the original lenders. 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. 12; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLASTECH ENGINEERED: Aims to Leave Bankruptcy in Six Months ----------------------------------------------------------- Counsel to Plastech Engineered Products Inc. and its debtor- affiliates said at a meeting with creditors that Plastech intends to leave bankruptcy by Aug. 31, 2008, The Detroit Free Press reports. Jewel Gopwani at The Detroit Free Press says the key to Plastech's reorganization is determining its future business with its customers, particularly Johnson Controls Inc., which accounts for more than half of Plastech's sales. Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, told creditors that Plastech will oppose General Motors Corp.'s request for authority to take back equipment from Plastech. The Debtors earlier won approval from the U.S. Bankruptcy Court for the Eastern District of Michigan to stop Chrysler, LLC, from removing equipment from their plants. Plastech obtained short term loans, set to expire April 2, from Bank of America, N.A., and a syndicate of lenders who have previously provided Plastech with a $200,000,000 revolving credit facility. Plastech's major customer have agreed to provide financing to Plastech and assume the Debtors' obligations to BofA on the condition that the Court confirms that the collateral Plastech previously pledged to BofA, and which will be assigned to the customers, have been fully perfected. Plastech says that the financing from their major customers will provide them sufficient cash to continue operations by June 30. 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. 12; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLASTECH ENGINEERED: Roush Wants Stay Lifted to Recover Molds ------------------------------------------------------------- Roush Manufacturing, Inc. asks the U.S. Bankruptcy Court for the Eastern District of Michigan to lift the automatic stay to allow it to recover molds that Plastech Engineered Products Inc. and its debtor-affiliates use in the production of parts for particular vehicles manufactured by Chrysler LLC, following service of a 90- day notice. Before the bankruptcy filing, Roush manufactured and supplied the Debtors with certain molds worth $245,305, says Adam K. Keith, Esq., at Honigman Miller Schwartz and Cohn LLP, in Detroit, Michigan. Pursuant to the Michigan Mold Lien Act, Roush is entitled to a lien on account of which, Roush has first-priority statutory security for the full amount of the molds. Accordingly, neither the Debtors nor Chrysler has paid for the molds, Mr. Keith asserts. The molds were designed and are used for the production of specific and unique parts for particular vehicles manufactured only by one or more of Chrysler LLC, Chrysler Motors Company, LLC, and Chrysler Canada. Mr. Keith asserts that cause exist to lift the stay pursuant to Section 362(d)(1) of the Bankruptcy Code. He contends that the Debtors did not provide adequate protection to Roush's interest in the molds. Mr. Keith adds that Roush believes Chrysler will likely replace the molds from an alternative source so that Chrysler would be protected in the event the Debtors are unable or unwilling to make orderly resourcing. Furthermore, the molds could be replaced in as little as 90 days, he says. Mr. Keith assures the Court that Roush's request would not cause deleterious consequences because the molds represent a very small portion of the tooling used in the Debtors' businesses affecting only two of Chrysler's parts, and which possible detrimental impact could be avoided if Chrysler or the Debtors pay Roush for the molds. 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. 12; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLASTECH ENGINEERED: Wants Admin. Claims Bar Date Set to May 30 --------------------------------------------------------------- Plastech Engineered Products Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Michigan to set May 30, 2008, as the deadline wherein creditors may file administrative expense claims under Section 503(b)(9) of the U.S. Bankruptcy Code, or in the alternative, 30 days after the service and publication of notice to creditors. In addition, the Debtors ask the Court to: (a) authorize them to implement procedures for the filing of Section 503(b)(9) claims; (b) approve the form, manner, and sufficiency of the notice of the Section 503(b)(9) bar date; and (c) authorize them to pay valid Section 503(b)(9) claims of parties with whom the Debtors continue to do business and agree to provide trade terms by allowing Section 503(b)(9) claimants to apply the Debtors' postpetition payments to unpaid prepetition invoices. Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, asserts that the Debtors believe the proposed time period is adequate and appropriate under the circumstances because: -- Rule 2002 of the Federal Rules of Bankruptcy Procedure only requires 20 days notice of a claims bar date; and -- holders of reclamation claims are provided by the statute 20 days to file for reclamation, noting that Section 503(b)(9) may overlap with reclamation claims. Mr. Galardi informs that the Debtors will promptly serve to creditors, and publish, the Section 503(b)(9) Bar Date Notice upon approval of their request. The Debtors propose these procedures: (a) All Section 503(b)(9) Claimants must specify these on their request, accompanied with valid documentations to their claims: (i) the amount of Section 503(b)(9) Claim; (ii) the particular Debtor against which the Section 503(b)(9) Claim is asserted; and (iii) the value of the goods the claimant contends the Debtor received within 20 days before the Petition Date; (b) Any Section 503(b)(9) Claim request that is not timely filed and served so as to be actually received on or before the Bar Date in the required manner will be disallowed, and the Claimant be forever barred, estopped, and permanently enjoined from asserting the Section 503(b)(9) Claim; (c) The Debtors be afforded 60 days following the Bar Date, to review and respond to the Section 503(b)(9) requests, and that any objection will be scheduled for the next omnibus hearing that is at least 20 days from the date of filing the related response, or the omnibus hearing, which ever comes later, and which date the Debtors find mutually agreeable; and (d) Responses to Section 503(b)(9) objections will be filed and served so as to be received by the Debtors on or before the date that is five days prior to the omnibus hearing. The Debtors also intend to enter into trade terms that are necessary to procure essential goods or services or are otherwise in the best interest of their estate which will facilitate in their ongoing business, further their restructuring efforts, and increase the trade credit available to them. Accordingly, the Debtors ask the Court to authorize them to pay immediately or before the confirmation of a reorganization plan, Section 503(b)(9) claimants who provide the Debtors with those trade terms. Furthermore, the Debtors seek the Court's authority to allow the Claimants to apply postpetition payments by the Debtors to outstanding, unpaid prepetition invoices. The Section 503(b)(9) Claimants would then be left with a paid prepetition claim, subject to the trade terms, and an administrative expense claim for the goods shipped and invoiced to the Debtors after Petition Date. This mechanism, Mr. Galardi explains, will likely avert the filing of countless suits, liens, and motions by claimants seeking payment of or priority for their claims on various grounds, and in effect will facilitate the orderly administration of the Debtors' Chapter 11 cases. The Debtors propose that Section 503(b)(9) Claimants be allowed to apply postpetition payments to prepetition invoices if the Claimants continue to supply the Debtors goods and services on terms that are consistent with the historical trade terms existing between the parties within 180 days prior to the Petition Date, or to terms as are mutually acceptable to both parties. However, the Debtors reserve the right to negotiate different trade terms with any Section 503(b)(9) Claimant, to the extent the Debtors deem to be in the best interest of their estates. If the Section 503(b)(9) Claimant refuses to supply good or services to the Debtors on the agreed trade terms, or comply with the trade agreement, the Debtors seek the Court's authority, in their discretion and without further Court order but with notice to the affected Claimant, to: (a) declare the trade agreement immediately terminated; or (b) declare any payments made to the Claimant on account of the Section 503(b)(9) Claimant's claim to have been in applied to the outstanding postpetition obligations owed. In the event that the Debtors exercise either right to apply or reject the trade agreement, the Debtors request that the Section 503(b)(9) Claimant against which the the Debtors' right is exercised, be required to return to the Debtors any excess of the payments made over the amount of postpetition amounts then owed without the right of offset or reclamation. 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. 12; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) POPULAR ABS: Three Classes of Certs. Obtain S&P's Junk Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 14 classes of mortgage pass-through certificates issued by Popular ABS Mortgage Pass-Through Trust's series 2005-5 and 2005-6. At the same time, S&P affirmed its ratings on one additional class from series 2005-5. 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 for these two series are (series: severe delinquency amount, percentage of current pool balance): -- 2005-5: $58.201 million, 30.10%; (collateral group II); and -- 2005-6: $69.228 million, 19.95%. Severe delinquencies for series 2005-5 (collateral group II) and 2005-6 have increased by 42.3% and 45.9%, respectively, since August 2007. Severe delinquencies are 50.95x and 5.07x the respective overcollateralization (O/C) levels for series 2005-5 and 2005-6, 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 (series: three-, six-, 12-month average realized losses {mil.}): -- 2005-5: $1.674, $0.992, $0.615; (collateral group II); and -- 2005-6: $1.909, $1.128, $0.685. Finally, series 2005-5 and 2005-6 have failed their delinquency triggers for nine and six consecutive months, respectively. If this trend continues, it will impede each transaction's ability to disburse principal payments to the subordinate classes 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 pools 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 Popular ABS Mortgage Pass-Through Trust Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2005-5 MV-4 BBB BBB+ 2005-5 MV-5 BBB- BBB 2005-5 MV-6 BB BBB- 2005-5 BV-1 B BB+ 2005-5 BV-2 B- BB+ 2005-5 BV-3 CCC BB+ 2005-6 M-2 BBB+ A 2005-6 M-3 BBB A- 2005-6 M-4 BB+ BBB+ 2005-6 M-5 BB BBB 2005-6 M-6 B+ BBB- 2005-6 B-1 B BB+ 2005-6 B-2 CCC BB+ 2005-6 B-3 CCC B Rating Affirmed Popular ABS Mortgage Pass-Through Trust Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2005-5 BV-4 CCC PORTOLA PACKAGING: S&P Retains 'B-' Rating on $60 Mil. Facility --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' issue-level rating on Portola Packaging Inc.'s $60 million revolving credit facility. The issue rating is two notches higher than the corporate credit rating on Portola, and the recovery rating on this debt remains unchanged at '1', indicating the expectation for very high (90% to 100%) recovery in the event of a payment default. The corporate credit rating on the company is 'CCC' and the outlook is negative. "The ratings on Portola reflect its highly leveraged financial profile, constrained liquidity, modest-size operations, and narrow product line, partially offset by defensible niche positions and favorable geographic diversity," said Standard & Poor's credit analyst Henry Fukuchi. PRC LLC: Can Sell Real Property to Brett Houston for $2.2 Million ----------------------------------------------------------------- The U.S Bankruptcy Court for the Southern District of New York granted PRC LLC and its debtor-affiliates' request to assume an amended agreement on the sale of about three acres of undeveloped real property to J. Brett Houston for $2,275,000, free and clear of liens. The Court approved the Sale Agreement and the contemplated transactions, and ruled that there are no existing defaults under the Sale Agreement that must be cured pursuant to Section 365(b) of the U.S. Bankruptcy Code. The Court overruled all objections to the Debtors' request, including an objection filed by the Official Committee of Unsecured Creditors. In its objection, the Creditors Committee asserted that Court approval of the Debtors' request should be subject to and conditioned upon the preservation of the sales proceeds as unencumbered asset, which should be escrowed, segregated, among others, as an asset to be preserved and made available toward a recovery by the general unsecured creditors. In response, the Debtors asserted that the Creditors Committee's arguments are misplaced for these reasons: (i) The property is encumbered by new liens granted to the Postpetition Lenders under the Interim DIP Order. (ii) The Debtors anticipate using the funds obtained from the sale to fund costs of administration, which will reduce their need to borrow under their postpetition financing facility and incur additional interest expenses. (iii) The Creditors Committee ignored the basic priority rules by seeking to elevate the claims of unsecured creditors above secured and administrative expense priority claims. As reported in the Troubled Company Reporter on Feb. 11, 2008, the sale agreement provides that: i) Mr. Houston will provide earnest money deposits for $250,000 with Shutts & Bowen LLP, to be credited toward the purchase price at closing or retained by the Debtors as liquidated damages in the event of Mr. Houston's material breach or default. ii) Aside from the real property, other assets to be sold include the buildings and improvements located in the area, if any; the Debtors' right, title and interest in easements, tenements, and appurtenances pertaining to the property; all fixtures found in the property, if any; and the Debtors' right, title and interest in all documents, including licenses, permits, architectural and engineering plans, among others. iii) The sale agreement may be terminated by the Debtors or by Mr. Houston in the event of a material breach or default by the other party. iv) The Debtors should pay $182,000 in brokerage fees and commissions due to ComReal Miami, and Dave Colonna Properties, Inc. About PRC LLC Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC -- http://www.prcnet.com/-- is a leading provider of customer management solutions. PRC markets its services to brand-focused, Fortune 500 U.S. corporations and delivers these services through a global network of call centers in the U.S., Philippines, India, and the Dominican Republic. PRC is the sole member of each of PRC B2B, LLC, and Precision Response of Pennsylvania, LLC, and the sole shareholder of Access Direct Telemarketing, Inc., each of which is a debtor and debtor- in-possession in PRC's joint Chapter 11 cases. Panther/DCP Intermediate Holdings, LLC, is the sole member of PRC. PRC, together with its operating subsidiaries PRC B2B, Access Direct, and PRC PA, is a leading provider of complex, consultative, outsourced services in the Customer Care and Sales & Marketing segments of the business process outsourcing industry. Since 1982, the company has acquired and grown customer relationships for some of the world's largest and most brand-focused corporations in the financial services, media, telecommunications, transportation, and retail industries. The company and four of its affiliates filed for Chapter 11 protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08- 10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. The Debtors chose Stephen Dube, at CXO LLC, as their restructuring and turnaround advisor. Additionally, Evercore Group LLC provides investment and financial counsel to the Debtors. The Debtors' consolidated financial condition as of Dec. 31, 2007 showed total assets of $354,000,000 and total debts of $261,000,000. The Debtors submitted to the Court a Chapter 11 Plan of Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PRC LLC: Wants to Reject Spirit Air Pact, Says It Has Little Value ------------------------------------------------------------------ PRC LLC and its debtor-affiliates ask permission from the U.S. Bankruptcy Court for the Southern District of New York to reject a letter of authorization relating to services they provide to Spirit Air Lines, Inc., effective as of March 13, 2008. The Debtors and Spirit Air Lines executed the Letter of Authorization on June 8, 2007, to formalize a master services agreement, statements of work, and other documents relating to services to be rendered by the Debtors. No formal arrangements, however, have been executed by the parties to date. "The Debtors and Spirit Air Lines could not formalize the letter of authorization because they could not agree on profitable terms for the Debtors to provide the services Spirit Air Lines requires," says Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, in Houston, Texas. He maintains that there is little value in the Spirit Air Lines Agreement for the Debtors' reorganization. A Court ruling approving the rejection of the letter of authorization on the target date will expedite the Debtors' relief from onerous obligations, he says. Mr. Perez maintains that Spirit Air Lines will not be prejudiced by the proposed rejection since it will receive reasonable transition services from the Debtors to assist it after the rejection date. About PRC LLC Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC -- http://www.prcnet.com/-- is a leading provider of customer management solutions. PRC markets its services to brand-focused, Fortune 500 U.S. corporations and delivers these services through a global network of call centers in the U.S., Philippines, India, and the Dominican Republic. PRC is the sole member of each of PRC B2B, LLC, and Precision Response of Pennsylvania, LLC, and the sole shareholder of Access Direct Telemarketing, Inc., each of which is a debtor and debtor- in-possession in PRC's joint Chapter 11 cases. Panther/DCP Intermediate Holdings, LLC, is the sole member of PRC. PRC, together with its operating subsidiaries PRC B2B, Access Direct, and PRC PA, is a leading provider of complex, consultative, outsourced services in the Customer Care and Sales & Marketing segments of the business process outsourcing industry. Since 1982, the company has acquired and grown customer relationships for some of the world's largest and most brand-focused corporations in the financial services, media, telecommunications, transportation, and retail industries. The company and four of its affiliates filed for Chapter 11 protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08- 10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. The Debtors chose Stephen Dube, at CXO LLC, as their restructuring and turnaround advisor. Additionally, Evercore Group LLC provides investment and financial counsel to the Debtors. The Debtors' consolidated financial condition as of Dec. 31, 2007 showed total assets of $354,000,000 and total debts of $261,000,000. The Debtors submitted to the Court a Chapter 11 Plan of Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PRC LLC: Wants iEnergizer Settlement Agreement Approved ------------------------------------------------------- PRC LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to approve a settlement agreement they entered into with iEnergizer (USA), Inc., and Granada Services Limited. In a contract dated January 2005, iEnergizer agreed to provide the Debtors various contact center services, including inbound and outbound customer-communications management, customer-program management, and data networking. Performance under the Contract is guaranteed by Granada Services, iEnergizer's offshore affiliate in India. As of Jan. 23, 2008, the Debtors relate that they owe iEnergizer $840,503 for services performed under the Contract. The Debtors believe that their relationship with iEnergizer is a valuable asset because of the lower costs inherent in performing the services through a foreign guarantor. The value of the Contract to the Debtors' estates also increases in direct proportion to the volume of Services provided by iEnergizer, Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, in Houston, Texas, relates. However, in view of their Chapter 11 cases, the Debtors are reluctant to assume the Contract if iEnergizer will not enhance the benefits provided under the Contract. In this light, the parties enter into a Settlement Agreement to resolve their dispute. The salient terms of the Agreement are: (a) The Debtors agree to assume the Contract, subject to specific conditions; (b) The total cure amount required under Section 365 of the Bankruptcy Code to assume the Contract will be $840,503; (c) The Debtors will pay the cure amount by making six non- refundable monthly payments in an amount equal to the indexed rate; (d) The Indexed Rate will be calculated as: * subject to adjustment, a payment of $125,000 per month for the first five months after the effective date of the Settlement Agreement, and $215,503 for the sixth month after the Settlement Effective Date -- Base Payment -- provided that the jointly approved invoice for iEnergizer's services is $250,000 per month -- Base Invoice; and * the base payment will be increased or decreased by the same percentage that the jointly approved invoice for iEnergizer's Services increases or decreases from the base invoice, provided that, in the event of an increase or decrease, the sixth monthly payment will be adjusted to pay the balance of the cure amount in full; (e) At any time after the Settlement Effective Date, the Debtors retain the right to reject the Contract upon written notice to iEnergizer, without Court order, and if the Debtors reject the Contract, the amount of iEnergizer's claims which remain outstanding after the Settlement Effective Date will be satisfied as general unsecured claims in accordance with the terms of a confirmed reorganization plan; (f) If the Debtors have not exercised their right to reject the Contract by the effective date of a confirmed Chapter 11 plan in the cases, any unpaid portion of the cure amount will be payable in full on the date that a Chapter 11 plan becomes effective; (g) The Contract will continue in full force and effect between the parties unless and until it is rejected by the Debtors. The Settlement Agreement is a product of an arm's-length and protracted negotiations between the parties that allows the Debtors to satisfy the cure obligations through monthly payment, instead of one lump-sum payment, Mr. Perez maintains. Mr. Perez adds that the cure payments will be directly linked to iEnergizer's performance, thereby giving a kind of incentive to maintain or exceed the volume of work it currently performs. The Agreement also allows the Debtors a to reject the contract at a later date, a flexibility which is critical to the protection of the Debtors' estate, he avers. About PRC LLC Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC -- http://www.prcnet.com/-- is a leading provider of customer management solutions. PRC markets its services to brand-focused, Fortune 500 U.S. corporations and delivers these services through a global network of call centers in the U.S., Philippines, India, and the Dominican Republic. PRC is the sole member of each of PRC B2B, LLC, and Precision Response of Pennsylvania, LLC, and the sole shareholder of Access Direct Telemarketing, Inc., each of which is a debtor and debtor- in-possession in PRC's joint Chapter 11 cases. Panther/DCP Intermediate Holdings, LLC, is the sole member of PRC. PRC, together with its operating subsidiaries PRC B2B, Access Direct, and PRC PA, is a leading provider of complex, consultative, outsourced services in the Customer Care and Sales & Marketing segments of the business process outsourcing industry. Since 1982, the company has acquired and grown customer relationships for some of the world's largest and most brand-focused corporations in the financial services, media, telecommunications, transportation, and retail industries. The company and four of its affiliates filed for Chapter 11 protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08- 10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. The Debtors chose Stephen Dube, at CXO LLC, as their restructuring and turnaround advisor. Additionally, Evercore Group LLC provides investment and financial counsel to the Debtors. The Debtors' consolidated financial condition as of Dec. 31, 2007 showed total assets of $354,000,000 and total debts of $261,000,000. The Debtors submitted to the Court a Chapter 11 Plan of Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PROTECTION ONE: Unit Secures $110 Mil. Senior Unsecured Term Loan ----------------------------------------------------------------- Protection One Inc.'s operating subsidiary, Protection One Alarm Monitoring Inc., completed a new $110.3 million senior unsecured term loan from a syndicate of lenders led by Highfields Capital Management and Arlon Group. Quadrangle Group and Monarch Alternative Capital, the company's largest shareholders, are also participants in the facility. Borrowings under the new five-year term loan will be used to fund the redemption of all of the company's outstanding 8-1/8% Senior Subordinated Notes due 2009. The company intends to utilize its cash balance, which was approximately $41 million at the end of 2007, to fund debt issuance and redemption costs of approximately $7 million. The new instrument carries an interest rate of Prime + 11.5% and can be retired at par after one year. Principal is due at maturity. Based on current interest rate forecasts, the company expects that its cash interest expense in 2008 will not be significantly higher than its cash interest expense in 2007, on a pro forma basis assuming the IASG merger occurred on Jan. 1, 2007. The earliest scheduled maturity of the company's three credit instruments is now November 2011. "We are pleased to have completed this financing despite extremely difficult and harsh financial market conditions," Richard Ginsburg, president and CEO, said. "This transaction substantially enhances the company's financial flexibility and allows the company to continue its focus on building operating momentum through market segmentation, technology-differentiated security systems and strategic acquisitions." "With the commitments from our new partners, Highfields Capital Management and Arlon Group, we were able to push out a critical maturity, while retaining the ability to refinance on an opportunistic basis with limited redemption costs," Mr. Ginsburg added. "[Mr.] Ginsburg and his team are successfully executing a plan to further enhance recognition of the Protection One brand and expand the company's customer base in the growing electronic security market," Matthew B. Botein, managing director at Highfields Capital Management, said. "Our support of the company is consistent with Highfields' strategy of making long-term investments in companies with solid fundamentals and the ability to deliver strong, sustainable performance." Bear, Stearns & Co. Inc. and Lehman Brothers Inc. were joint lead arrangers and joint bookrunners. About Protection One Headquartered in Lawrence, Kansas, Protection One Inc. (NASDAQ:PONE) -- http://www.ProtectionOne.com/-- is a vertically integrated national providers of sales, installation, monitoring, and maintenance of electronic security systems to homes and businesses. Network Multifamily, Protection One's wholly owned subsidiary, is a security provider to the multifamily housing market. The company also owns the provider of wholesale monitoring services, the combined operations of CMS and Criticom International. * * * At Sept. 30, 2008. the company's balance sheet showed total assets of $674.735 million and total liabilities of $687.312 million, resulting to a total shareholders' deficit of $12.577 million. PROTECTION ONE: Moody's Pares Default Probability Rating to 'B3' ---------------------------------------------------------------- Moody's Investors Service affirmed the B2 Corporate Family Rating of Protection One Alarm Monitoring, Inc. and lowered the Probability of Default Rating to B3 from B2. Protection One recently announced the issuance of a new $110 million senior unsecured term loan priced at Prime plus 11.5%. The proceeds from the loan along with about $9 million of cash will be used to fund the redemption of the $110 million of 8.125% senior subordinated notes due 2009 and pay related expenses. The affirmation of the B2 CFR reflects Moody's expectation of high recovery rates for the debt capitalization in a default scenario and steady growth in recurring monthly revenues from the commercial sector. Moody's raised the ratings on the $300 million bank credit facility to Ba2 from Ba3 reflecting the increase in the expected family recovery rate in a default scenario. The lowering of the PDR reflects weak credit metrics for the rating category and a capital structure comprised of nearly 80% floating rate debt. If the company's variable interest rate exposure is not capped or hedged, a material increase in LIBOR rates could lead to negative free cash flow and pressure covenants in the bank facility. Although liquidity is currently adequate, a weak economy, the loss of the BellSouth alliance and high attrition rates in the acquired IASG portfolio could pressure recurring monthly revenues over the intermediate term. Moody's took these rating actions: -- Affirmed Corporate Family Rating, B2 -- Downgraded Probability of Default Rating, to B3 from B2 -- Upgraded $300 million senior secured term loan B due 2012, to Ba2 (LGD 2, 14%) from Ba3 (LGD 2, 26%) -- Upgraded $25 million senior secured revolver due 2010, to Ba2 (LGD 2, 14%) from Ba3 (LGD 2, 26%) -- Affirmed $115 million second lien notes due 2011, to B3 (LGD 4, 51%) from B3 (LGD 5, 72%) -- Affirmed $110 million senior subordinated notes due 2009, Caa1 (LGD 6, 91%)- rating to be withdrawn upon closing of the redemption. Headquartered in Lawrence, Kansas, Protection One Alarm Monitoring, Inc. provides security alarm monitoring services, which includes sales, installation and related servicing of security alarm systems for residential and business customers. For the twelve months ended Sept. 30, 2007, the company reported revenues of approximately $324 million. QWEST COMMUNICATIONS: Discloses Program Affecting 2% Workforce -------------------------------------------------------------- Qwest Communications International Inc. and the Communications Workers of America have agreed to a voluntary separation program to be offered to certain employees in Qwest's traditional local telephone business. The program, which offers financial incentives based on years of service, would impact less than 2% of the company's total work force. The Wall Street Journal reports that this 2% reduction is equivalent to at least 700 workers. The program offer is expected to be completed March 27, 2008. "Over the years, we have turned first to its natural attrition rate to balance the loss of traditional access lines," said Bob Tregemba, Qwest's executive vice president of Network Operations. "This program is part of our continuing effort to match our workforce to our work load." "We are always saddened by the loss of even one job, but the continued loss of access lines is a reality of the entire industry," said Reed Roberts, Administrative Director to Vice President of CWA District 7. "With that in mind we are pleased that we were able to reach agreement with Qwest on a viable solution that addresses the reality of the marketplace and provides a voluntary opportunity for those of our members who were considering either retirement or moving to other endeavors." The company is committed to maintaining exceptional customer service levels and is proceeding with its broadband deployment plans, including fiber-to-the-node buildout. About Qwest Communications Based in Denver, Colorado, Qwest Communications International Inc. (NYSE: Q) -- http://www.qwest.com/-- offers a combination of managed voice and data solutions for businesses, government agencies and consumers - nationwide and globally. The company operates most of its business within its local service area, which consists of the 14-state region of Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming. The company operates through three segments: wireline services, wireless services and other services. Qwest's business customers include local, national and global businesses, governmental entities, and educational institutions. * * * As reported in the Troubled Company Reporter on Dec. 17, 2007, Fitch Ratings affirmed Qwest Communications International, Inc.'s Issuer Default Rating at 'BB'. Additionally Fitch affirmed the IDRs of Qwest's wholly owned subsidiaries including Qwest Corporation as well as the specific issue ratings. The Rating Outlook for Qwest and its subsidiaries remains Stable. RADIO SYSTEMS: S&P Changes Outlook to Negative; Keeps All Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Knoxville, Tennessee-based Radio Systems Corp. to negative from stable. At the same time, Standard & Poor's affirmed all of its ratings on the company, including its 'B' corporate credit rating. "The outlook revision reflects the company's very limited cushion under its bank financial covenants," said Standard & Poor's credit analyst Christopher Johnson. Radio Systems' credit metrics remain stronger than the medians for the 'B' rating category, yet the expected EBITDA cushion under the company's leverage ratio for the June 30, 2008, measurement date is very limited. As a result, the company is seeking a waiver from its bank group to allow for a sale and leaseback transaction that would generate sufficient proceeds for debt reduction and improve the cushion on its covenants. "We are concerned about Radio Systems' ability to secure this waiver in a cost effective manner given the current credit market environment, and the company's ability to transact a sale leaseback in order to reach adequate covenant cushion," said Mr. Johnson. The ratings on Radio Systems reflect its exposure to technology risk, overall narrow product focus, a highly competitive operating environment, moderate customer concentration with the company's key retailers, and some vulnerability to weak economic and retail environments. Somewhat offsetting these risks are the company's leading market share in the niche pet containment and training industry, as well as favorable demographic industry trends in pet ownership and spending. READER'S DIGEST: S&P Chips Rating to 'B-' on Higher Debt Levels --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Reader's Digest Association Inc., including its corporate credit rating to 'B-' from 'B'. The rating outlook is stable. Pleasantville, New York-based Reader's Digest publishes the world's highest circulating, paid magazine and is a leading direct marketer of books, music, and videos. Total debt was $2.084 billion as of Dec. 31, 2007. "The downgrade is based on the company's higher debt levels, slightly lower EBITDA, and negative discretionary cash flow in the 12 months ended Dec. 31, 2007," said Standard & Poor's credit analyst Hal F. Diamond. He also mentioned Standard & Poor's concerns regarding management's ability to stem business declines at its school and educational services operations, complete restructuring initiatives, and resume profitability growth over the near term. RITE AID: Solicits Consents to Amend Terms of Credit Indentures --------------------------------------------------------------- Rite Aid Corporation disclosed a solicitation of consents to amend the terms of the indentures for its 8.125% senior secured notes due 2010 (CUSIP 767754BFO) and its 7.5% senior secured notes due 2015 (CUSIP 767754BK9). To date, $360 million principal amount of the 2010 Notes and $200 million principal amount of the 2015 Notes were outstanding. The purpose of the consent solicitations is to obtain the consent of the holders of each series of Notes to amend the lien covenant in the indentures governing the Notes to eliminate a discrepancy between the debt incurrence covenant and the lien covenant that exists in these indentures. The proposed amendments will not increase the aggregate amount of debt permitted to be incurred by Rite Aid or the subsidiary guarantors but will instead provide Rite Aid the ability to secure approximately $320 million of debt that Rite Aid is already permitted to incur under these indentures and is permitted to incur and secure under its other existing indentures. The proposed amendments will not alter the interest rate or maturity date of the Notes, Rite Aid's obligation to make principal and interest payments on the Notes or the substantive effect of any other covenant or provision in the indentures designed to afford protection to holders. The record date for the consent solicitation is 5:00 p.m., New York City time, March 14, 2008. The consent solicitation will expire at 5:00 p.m., New York City time, March 28, 2008, unless extended with respect to either or both series of Notes. Under certain circumstances where the requisite consents with respect to either series of Notes have been obtained, withdrawal rights of the holders of one or both series of Notes may expire prior to the applicable Expiration Time. Rite Aid is offering a consent fee of $5 per $1,000 of principal amount of Notes to each holder of record as of the record date who has delivered, and has not validly revoked, a valid consent prior to the applicable Expiration Time. Rite Aid's obligations to accept consents and pay a consent fee is conditioned on the receipt of consents to the amendments from holders of at least a majority in aggregate principal amount of both series of Notes, and other conditions. Questions from holders regarding the consent solicitation or requests for additional copies of the Consent Solicitation Statement, the Consent Form or other related documents should be directed to the information agent for the consent solicitation: Global Bondholder Services Corporation Suite 723, 65 Broadway New York, NY 10006 Tel (866) 873-6300 (toll free) (212) 430-3774 (call collect) Questions from holders regarding the consent solicitation may also contact the solicitation agent, Citi at (800) 558-3745 (toll free) or (212) 723-6106 (call collect). About Rite Aid Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- is a drugstore chain with more than 5,000 stores in 31 states and the District of Columbia. * * * Rite Aid Corp. continues to carry Standard & Poor's Ratings Services 'B' long term foreign and local issuer credit ratings which were placed on May 8, 2007. SECURITY CAPITAL: Posts $1.1 Billion Net Loss in 4th Qtr. 2007 -------------------------------------------------------------- Security Capital Assurance Ltd. reported results for the three- month and full-year periods ended Dec. 31, 2007. The net loss in the fourth quarter of 2007 was $1.1 billion versus net income of $35.8 million in the fourth quarter of 2006. For the full-year 2007, the company reported a net loss of $1.2 billion versus net income of $117.4 million for the full-year 2006. As of Dec. 31, 2007, the company had total shareholders' equity of $427.1 million and common shareholders' equity of $180.5 million. "The extraordinary and rapid deterioration in U.S. residential mortgage- related credits led us to incur record levels of case reserves in the fourth quarter of last year," said Security Capital's president and chief executive officer, Paul S. Giordano. "We are continuing to explore our strategic options to generate or raise capital and improve our ratings. In the interim, we are in the process of realigning our cost structure to reflect the current business conditions and have made the strategic decision to cease writing new business for a period of time to preserve capital." For the fourth quarter of 2007, the company had an operating loss of $678.1 million compared to operating income of $37.1 million for the fourth quarter of 2006. For the full-year 2007, the operating loss was $530.3 million compared to operating income of $141.9 million for the full year 2006. The fourth quarter and full-year 2007 operating losses were primarily due to the $651.5 million net case loss provision associated with the CDO of ABS portfolio and the $37.2 million net case loss provision that was incurred during the fourth quarter for HELOC and CES transactions. The fourth quarter 2007 net case loss provisions totaling $9.5 million, associated with the company's third party reinsurance business, also contributed to the operating loss. Mark-to-Market and Case Loss Provisions: The net loss during the quarter was primarily due to a $518.8 million unrealized mark-to- market adjustment on financial guarantee obligations executed in credit derivative form, and additional net case loss provisions of $698.2 million. The unrealized mark-to-market adjustment is attributable to significant changes in the estimated fair value of the company's credit derivative exposures since the quarter ended Sept. 30, 2007. The gross case loss reserve provisions of $838.6 million, $651.5 million net of reinsurance, are related to thirteen of Security Capital's high grade multi-sector CDO of ABS transactions. Reinsurance from various subsidiaries of XL Capital Ltd. and other reinsurers with respect to these CDO of ABS transactions is expected to result in a $187.1 million recoverable. In addition, the company recorded a gross case loss provision of $216.7 million relating to insured HELOC and CES transactions. Reinsurance from XL Capital Ltd. and other reinsurers with respect to these HELOC and CES transactions is expected to result in a $179.5 million recoverable, which would reduce this amount to a net loss provision of $37.2 million. The $9.5 million net case loss provision in the company's third party reinsurance business represents a full-limit loss, and was associated with two related transactions in the international transportation sector. Cash Flow from Operations: For the 12 months ended Dec. 31, 2007, net cash flow from operations was $285.5 million compared to $393.5 million in the comparable 12 month period in 2006. The decline was driven by upfront insurance premiums received, which decreased by approximately $55.4 million for the full-year 2007 compared to the full-year 2006. Holding Company Liquidity: As of Dec. 31, 2007, Security Capital Assurance Ltd., on a stand alone basis, had total assets of $434.1 million and total liabilities of $7.1 million. Cash and cash equivalents were $23.5 million while investments in subsidiaries were $409.5 million. Election Not to Declare Common and Preference Share Dividends: Security Capital's board of directors elected not to declare either a quarterly dividend with respect to its common shares or a semi-annual dividend with respect to the SCA Series A Preference Shares. The company expects that this election by the company's board of directors will reduce cash outflow by approximately $9.9 million for the period ended March 31, 2008. Any future dividends will be subject to the discretion and approval of the board of directors, applicable law and regulatory requirements. Update on Recent Events Ratings Actions: During the fourth quarter of 2007, developments in the credits and mortgage markets had a material adverse impact on the insured portfolios and business, results of operations, and financial condition throughout the financial guarantee insurance industry, including Security Capital. As a result, the rating agencies have updated their analyses and ratings models for the industry. Based on their revised analysis, the following actions were taken with respect to Security Capital and its subsidiaries, XL Capital Assurance Inc., XL Capital Assurance (UK) Limited and XL Financial Assurance Ltd. On March 4, 2008, Moody's Investors Service announced that it placed the "A3" (Negative outlook) insurance financial strength ratings of XL Capital Assurance Inc., XL Capital Assurance (UK) and XL Financial Assurance Ltd. on review for downgrade. Previously, on Feb. 7, 2008, Moody's downgraded the IFS ratings of XL Capital Assurance Inc., XL Capital Assurance (UK), and XL Financial Assurance Ltd. from "Aaa" to "A3" (Negative Outlook). On Feb. 25, 2008, Standard & Poor's downgraded the "AAA" financial strength, financial enhancement and issuer credit ratings of XL Capital Assurance Inc., XL Financial Assurance Ltd. and XL Capital Assurance (UK) to "A-" (CreditWatch with negative implications). On Jan. 23, 2008, Fitch Ratings downgraded the insurer financial strength ratings of XL Capital Assurance Inc., XL Financial Assurance Ltd. and XL Capital Assurance (UK) to "A" (Rating Watch Negative) from "AAA." The company's capital position has been determined by the rating agencies to be insufficient to maintain its historic triple-A ratings. It requires additional capital, which may not be available or may be available only on unfavorable terms. The IFS ratings downgrades have, and will likely continue to have, material adverse effects on Security Capital's business, including that, at the current time, the company has temporarily suspended writing substantially all new business. 10-K Update: In the company's filing with the Securities and Exchange Commission on Feb. 29, 2008, for an extension of the due date to file its 10-K, the company indicated that its independent auditors were evaluating whether their opinion on the financial statements would include a "going concern" explanatory paragraph. The company filed it's annual report on Form 10-K on March 17, 2008. Security Capital expects that the company's independent auditors' opinion will not contain a going concern explanatory paragraph. The company also expects that such opinion will be unqualified, but will include an explanatory paragraph highlighting the company's decision to cease writing new business at the present time. Total Premiums Written and Net Premiums Written Total premiums written, which are comprised of gross premiums written and reinsurance premiums assumed, declined 31% to $91.9 million in the fourth quarter of 2007 versus $133.6 million in the fourth quarter of 2006. During 2007, total premiums written were $378.3 million, 8% lower than the premiums written during the year in 2006, which totaled $409 million. Total premiums written fell in the fourth quarter of 2007 primarily due to a decrease in "upfront" premium business derived from several large International transactions written during the fourth quarter of 2006, which were not repeated in the fourth quarter of 2007. Upfront premium transactions represented nearly 55% of total premiums written in the fourth quarter of 2007, versus approximately 78% in the fourth quarter of 2006. Net premiums written, which comprise total premiums written less ceded premiums written, decreased 38% to $74 million in the fourth quarter of 2007 compared to $119.4 million in the fourth quarter of 2006. Net premiums written decreased 23% to $306.1 million in the 12 months ended Dec. 31, 2007, compared to $395.9 million of net premiums written in the 12 months ended Dec. 31, 2006. Balance Sheet Due to the significant case loss provisioning that occurred during the fourth quarter of 2007, the company's gross loss reserves, including unallocated loss reserves, increased to $1.2 billion at year-end 2007, from $178.5 million at the prior year-end. Gross case loss reserves were $1.1 billion at year-end, versus $85.4 million at the end of 2006, while net case loss reserves were $709.4 million versus $14.5 million, respectively. The difference between gross case loss reserves and net case loss reserves are amounts that the company expects to recover under various reinsurance contracts. Net unallocated loss reserves totaled $92.9 million at the year-end of 2007 versus $75.4 million at the year-end of 2006. As of Dec. 31, 2007, total assets were $3.604 billion, up 44% from $2.497 billion in total assets as of Dec. 31, 2006. Book value, as measured by common shareholders' equity, decreased to $180.5 million as of Dec. 31, 2007, from $1.367 billion at the end of 2006. Book value attributable to common shareholders per share was $2.81 as of Dec. 31, 2007, versus $21.31 at Dec. 31, 2006. The company's total shareholder equity as of Dec. 31, 2007, was $427.1 million. Security Capital's adjusted book value, was $1.501 billion as of Dec. 31, 2007, versus $2.448 billion as of Dec. 31, 2006. Adjusted book value is a non-GAAP financial measure defined as shareholders' equity (book value), plus the after-tax value of deferred premiums, net of prepaid reinsurance premiums and deferred acquisition costs, plus the after-tax net present value of estimated future installment premiums in force discounted at 7%. Book value and adjusted book value per share as of Dec. 31, 2007, were based on the company's issued and outstanding shares of 64,169,788. This compares to 64,136,364 shares outstanding as of year-end 2006. A full-text copy of the company's annual report for 2007 is available for free at: http://ResearchArchives.com/t/s?2943 About Security Capital Assurance Ltd. Security Capital Assurance Ltd. (NYSE: SCA) -- http://www.scafg.com-- is a Bermuda-domiciled holding company whose primary operating subsidiaries, XL Capital Assurance Inc. and XL Financial Assurance Ltd, provide credit enhancement and protection products to the public finance and structured finance markets throughout the United States and internationally. * * * As reported in the Troubled Company Reporter on Feb. 8, 2008, Moody's Investors Service downgraded the provisional rating on senior debt to (P)Baa3 from (P)Aa3, provisional rating on subordinated debt to (P)Ba1 from (P)A1 and preference shares to Ba2 from A2, for Security Capital Assurance Ltd. The TCR said on Feb. 27, 2008, that Standard & Poor's Ratings Services took rating actions on several monoline bond insurers following additional stress tests with respect to their domestic nonprime mortgage exposure. The financial strength ratings on the operating subsidiaries of Security Capital Assurance Ltd -- XL Capital Assurance Inc. and XL Financial Assurance Ltd. -- were lowered to 'A-' from 'AAA' and remain on CreditWatch with negative implications. The financial strength rating on Financial Guaranty Insurance Co. was lowered to 'A' from 'AA' and remains on CreditWatch with developing implications. The 'AAA' financial strength rating on MBIA Insurance Corp. was removed from CreditWatch and a negative outlook was assigned. The 'AAA' financial strength rating on Ambac Assurance Corp. was affirmed and remains on CreditWatch with negative implications. The 'AAA' financial strength ratings on CIFG Guaranty, CIFG Europe, and CIFG Assurance North America Inc. were affirmed and retain a negative outlook. SEE WHY GERARD: Court Orders Mediation of Feud with Comedy Works ---------------------------------------------------------------- U.S. Bankruptcy Judge Robert E. Littlefield Jr. last week ordered The Comedy Works' owner Tom Nicchi and the owner of bankrupt See Why Gerard LLC, Chaim Ausch, to settle their arguments through mediation, Michael DeMasi writes for The Albany Business Review. According to the report, the mediation sessions are held private and the judge will only be informed of whether a settlement has been reached or not. The dispute will be tried in court absent a settlement, Business Review says. Background to the Dispute As reported in the Troubled Company Reporter on Dec. 21, 2007, Judge Littlefield set a hearing on Feb. 1, 2008, to resolve a dispute between See Why Gerard LLC and The Comedy Works. The feud arose when Comedy Works owner Tom Nicchi refused to vacate DeWitt Clinton, an 11-story apartment at Albany owned by See Why Gerard. See Why Gerard intends to turn the DeWitt property into a hotel, which it acquired at a $5.3 million in April 2006. However, Mr. Nicchi said he holds a five-year lease deal with DeWitt's former owner that matures in December next year and has shelled out at least $500,000 in renovation expenses. See Why Gerard had asked the Court to reject the lease of Comedy Works saying that its $3,000 monthly rate is not enough for the its occupied space of 6,000 square feet. Mary C. Kenney, Esq., and Steve Waite, Esq., at Waite & Associates represent Comedy Works. Mr. Waite stated in a letter dated Feb. 13, 2008, that a day without resolution heats up the issue and harms the business, reports Business Review. About The Comedy Works Tom Nicchi, runs The Comedy Works through GRAMRO Entertainment Corp. since April 2004. He also operates a 6,000-square-foot banquet facility in the building called The State Room. About See Why Gerard Brooklyn, New York-based See Why Gerard LLC is a real estate holding and development company. It filed for chapter 11 bankruptcy on Nov. 14, 2007 (Bankr. N.D. NY Case No. 07-13113). Richard H. Weiskopf, Esq., at O'Connell & Aronowitz represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed total assets of $4,817,000 and total debts $5,296,273. SEQUIAM CORPORATION: Case Summary & 39 Largest Unsecured Creditors ------------------------------------------------------------------ Lead Debtor: Sequiam Corporation 300 Sunport Lane Orlando, FL 32809 Bankruptcy Case No.: 08-01984 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Sequiam Biometrics, Inc 08-01985 Type of Business: The Debtor through its subsidiaries, develops, markets, and supports biometric fingerprint unlocking devices that enable users to gain access using their personal identity. It also provides Internet access and hosting services, and custom software development services. See http://www.sequiam.com Chapter 11 Petition Date: March 15, 2008 Court: Middle District of Florida (Orlando) Debtors' Counsel: R. Scott Shuker, Esq. Latham Shuker Eden & Beaudine LLP Post Office Box 3353 Orlando, FL 32802 Tel: (407) 481-5800 Fax: (407) 481-5801 bankruptcynotice@lseblaw.com Sequiam Corporation's financial condition: Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million A. Sequiam Corporation's list of its 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Greenberg Traurig Attorney Fees $90,805 450 South Orange Avenue 6th Floor, Suite 650 Orlando, FL 32801 Accume Partners Sarbanes Oxley $51,693 341 New Albany Road Compliance Moorestown, NJ 08057 McGladrey & Pullen, LLP Auditor Fees $35,000 5155 Paysphere Circle Chicago, IL 32819 United Healthcare Employee Health $16,435 Insurance Lightmaker Orlando Inc. Website Maintenance $9,000 EastGroup Properties, LP Leasehold Build-Out $5,820 JR Young Bld Contractor Leasehold Build-Out $3,328 Blytheco LLC Accounting Software $2,784 Training Verizon Business Office Telephones $1,557 Krystal Cleaning Services Inc. Janitorial Services $675 Printing USA Business Cards $609 Canon Financial Services Inc Copier Lease $575 Payment EDGARiling, Ltd. SEC Filing $445 Quill Corporation Office Supplies $388 Waste Management Orlando Waste Removal $321 Canon Bus Solutions Inc Copier Monthly $159 Charges Ceridian COBRA Management $73 Hulett Environmental Services Pest Control $64 Protocol Answering Service $50 B. Sequiam Biometrics, Inc's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ JWR Innovative Enterprises Ltd Purchase of $201,712 15 Laurel Bluff Court Inventory Columbia, SC 29229 Kevin Henderson Wages $140,483 300 Sunport Lane Orlando, FL 32809 Kwikset Purchase of $106,349 12340 Collections Center Drvie Inventory Chicago, IL 60693 Arrow Electronics, Inc. Parts for Product $57,319 Development Davenport Sales International Sales Commission $28,800 FedEx Shipping/Handling $9,625 Panalpina, Inc. Shipping/Handling $7,716 Baker & Hostetler LLP Attorney Fees $7,395 UPS Shipping/Handling $4,188 NovelCAD Services Inc. Electrical Engineering $3,120 EMA Design Automation Software $2,836 Gunn Systems, Inc. Programming $2,805 Product Safety Engining Inc Prodcut Testing $2,445 T&N Enterprises Sales Commission $2,443 JHT, Inc. Marketing Video $2,250 Time Warner Telecom Telecommunications $1,829 Voxeo Corporation Colocation Services $1,825 Sprint Telecommunications $1,125 Underwriters Lab Inc Warehouse/Product $1,100 Inspections Global Source Link Marketing Materials $858 SHAPES/ARCH: Bankruptcy to be Aided by Versa's $25 Mil. DIP Fund ---------------------------------------------------------------- Shapes/Arch Holdings LLC filed for chapter 11 with the U.S. Bankruptcy Court for the District of New Jersey to restructure its finances through Versa Capital Management Inc.'s support, The Philadelphia Inquirer reports. Versa Capital promised to extend $25 million postpetition financing to the Debtor in exchange for an 80% controlling vote on the reorganized company, Inquirer cites court documents. Shapes/Arch blamed its bankruptcy on the economic slump that hit the country and the increase in imported goods' prices, Inquirer says. Shapes/Arch CEO Stephen Grabell told Inquirer that "it's business as usual" at the company, that has at least 1,000 workers at its plants in Delair and Bensalem, New Jersey. The company generated $274 million revenue in 2007, down from $322 million revenue in 2006, and was struggling to pay its bills and current debts, Inquirer relates, citing documents filed with the Court. Based on the report, among the Debtor's lenders who are owed about $60 million are CIT Group, JP Morgan Chase & Co., and Textron Corp. About Versa Capital Philadelphia, Pennsylvania-based Versa Capital Management Inc. invests in troubled companies. It was formerly called Chrysalis Capital Partners LP and is an affiliate of Independence Capital Partners, a Philadelphia investment group founded by Ira Lubert and his partners. Investors include Pennsylvania's state workers and state teachers' pension systems, SERS and PSERS. It specializes in the restructuring and reorganization of commercial enterprises experiencing or otherwise requiring organizational or financial transition. About Shapes/Arch Holdings Delair, New Jersey-based Shapes/Arch Holdings LLC -- http://www.ultrahardware.com/-- or -- http://www.delairgroup.com/ -- and -- http://www.accuweld.com/-- produce custom aluminum extrusions for a variety of industries, including road and rail transportation and commercial and residential construction. They also manufacture maintenance free aluminum fence systems, for residential and commercial use, and above-ground pools. They also manufacture made-to-order vinyl replacement windows and steel doors. They also supply hardware products, including locksets, door and window hardware and other decorative hardware. The company and four affiliates sought protection under chapter 11 on March 16, 2008 (Bankr. D.N.J. Case No. 08-14631 through 08-14635). The debtor-affiliates are Shapes LLC, Ultra LLC, Delair LLC, and Accu-Weld LLC. The Hon. Gloria M. Burns is the presiding judge. Jerrold N. Poslusny, Jr., Esq., at Cozen O'Connor represents the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed assets between $10 million and $50 million and debts between $50 million and $100 million. SHARPER IMAGE: Court Approves Liquidation Deal with Hilco & Gordon ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware authorized Sharper Image Corp. on March 14, 2008, to enter into a liquidation agreement with a joint venture comprised of Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC, the highest and best bidder at the auction held March 13. Sharper Image operates 184 stores in 38 states and the District of Columbia, of which four are outlet stores that sell slow-moving, discontinued, reconditioned, and irregular merchandise. As reported by the Troubled Company Reporter on March 7, 2008, prior to the company's bankruptcy filing, the Debtor began an examination of the performance of its Retail Business Operations to identify unprofitable stores. As a consequence of this analysis and in light of the severe liquidity restraints the Debtor currently faces, the Debtor believes it is imperative to conduct store closing or similar sales to aid its reorganization efforts, the Debtor's proposed counsel, Steven K. Kortanek, Esq., at Womble Carlyle Sandridge & Rice, PLLC, in Wilmington, Delaware, related. The Debtor, thus, asked the Court to enter an order on an expedited basis to approve proposed auction procedures; set the time, date, and place of the auction; approving the form of notice of the Auction and notice of the Store Closing Sales; and set the March 14, 2008 the hearing to consider the approval of the Sale. Judge Kevin Gross approved the parties' Liquidation Agreement in its entirety. The Liquidation Agreement provides, among other things, that: 1. The Debtor is authorized to sell the merchandise located in its stores under the terms of the Liquidation Agreement pursuant to the store closing sales procedures. A full-text of the court-approved Store Closing Procedures is available for free at: http://bankrupt.com/misc/SI_ApprovedStoreClosingProcedures.pdf 2. Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC, as Liquidator or exclusive Agent, are authorized and empowered to conduct the Store Closing Sales, provided that written agreements between the Agent and any Landlord or overlandlord of the Closing Locations modifying the terms of the Sale Guidelines at applicable locations will govern the conduct of the Store Closing Sales. 3. As a guaranty of the its performance, the Agent guarantees that the Debtor will receive 37% of the aggregate retail price of all merchandise included in the Store Closing Sale. 4. All proceeds of the Store Closing Sale will be deposited in Debtor's existing accounts and disbursed in accordance with the Liquidation Agreement, provided, however, that as soon as practicable after the sale commencement date, the Debtor will establish segregated accounts for deposit of the proceeds of the sale. The Debtor will commence to pay to the Agent all proceeds on a daily basis, commencing on the first business day after the payment of the initial guaranty payment and delivery of the Guaranty L/C and Expense L/C. 5. The Guaranty Percentage has been calculated and agreed upon based upon the aggregate Retail Price of the Merchandise not being less than $40,250,000 nor greater than $47,750,000. To the extent that the aggregate Retail Price of the Merchandise is less than the Minimum Inventory Amount or greater than the Maximum Inventory Amount, the Guaranty Percentage will be adjusted in accordance with the terms and conditions of the Liquidation Agreement. 6. On the Sale Commencement Date, the Debtor will provide $1,000 in cash in each of its stores. Within 10 days of the Sale Commencement Date, the Agent will reimburse the Debtor for all of the cash. Moreover, the Debtor and the Agent will cooperate to develop mutually agreeable procedures to verify the amounts. A full-text copy of the Liquidation Agreement is available for free at: http://bankrupt.com/misc/SharperImage_LiquidationAgreement.pdf The Court also approved the Debtor's Lease Rejection Procedures, a full-text copy of which is available for free at: http://bankrupt.com/misc/SI_LeaseRejectionProcedures.pdf The Court further held that despite anything in the Liquidation Agreement, the sale termination date for the Debtor's store located in Danbury, Connecticut, will be April 7, 2008. The Agent and the Debtor will relinquish possession of the Danbury Store by the Danbury Termination Date. Moreover, the Agent and the Debtor will only be obligated to pay occupancy expenses through the Danbury Termination Date for the Danbury Store. As of April 7, the lease for the location will be deemed terminated and merchandises or furnishings, trade fixtures, equipment and improvements to real property remaining in the Store will be deemed abandoned. The selection of the Agent was made on March 13, 2008, pursuant to court-approved auction and bidding procedures. Interested parties submitted bids and proposed liquidation agreements on March 7. All Bids were accompanied by an earnest money deposit equal to 5% of the total guaranteed amount in the form of a certified check or wire transfer payable to the Debtor. Prior to the March 14 Sale Hearing, the Debtor entered into a liquidation agreement with Hudson Capital Partners, LLC. However, Hilco placed the highest and best bid at the March 13 Auction. Objections are Overruled Objections were filed prior to the Court's approval of the Debtor's auction procedures. The objecting entities include: * Kelly Beaudin Stapleton, United States Trustee for Region 3, * PPF OFF 345 Spear Street, LP, * Simon Property Group, * EklecCo Newco, L.L.C, * The Macerich Company, RREEF Management Company, Cousin Properties Incorporated, and The Forbes Company, * UBS Realty Investors, LLC, * Westfield, LLC, * CBL & Associates Management, * Kravco Simon Company, * Leidig/Draper Properties, * BP 111 Huntington LLC, * Inland Southwest Management, LLC, * Greenway Center, LLC, * Greater Lakeside Corp., * Stopen, LLC, * General Growth Properties, Inc., Developers Diversified Realty Corp., Turnberry Associates, and Weingarten Realty Investors, * The States of California, Connecticut, Kentucky, Missouri, New York, Ohio, Oregon, Michigan and Tennessee, and * Commonwealth of Massachusetts Most of the Objectors complained that the Debtor failed to give adequate notices of the rejection of the leases, thus leaving them with no advance opportunity to find new tenants. The Objectors were also concerned that the Debtor's use of signs and banners for advertisement may be improper and would damage the value of their premises and offend customers of the other lessees in the area. The Objectors also contended that the Debtor's proposed auction procedures failed to fix an end date, thus allowing the Debtor to conduct its closing store sales without any time limit at all at the expense of the entities and their tenants. Kelly Beaudin Stapleton, the United States Trustee for Region 3, disputed that the Debtor's notice does not contain certain required information, and the Debtor's request is procedurally improper. She added that with regard to rejection damage claims, if a rejection claimant fails to file a timely proof of claim, the claimant's rights should be limited consistent with the Bankruptcy Rules. The U.S. Trustee is also concerned that the Debtor sought to pay certain bonuses without prior Court review. The states of California, Connecticut, Kentucky, Missouri, New York, Ohio, Oregon, Michigan and Tennessee, and the Commonwealth of Massachusetts argued that their state laws related to store closings and going out of business sales are preempted by the Bankruptcy Code or that the Debtor may use Section 105(a) of the Bankruptcy Code to remove any inconvenient obligations. The states also asserted the Debtor's request is procedurally improper pursuant to Rule 7001(7) of the Federal Rules of Bankruptcy Procedure. Judge Gross deemed the Auction and Store Closing Sales Notice as good and sufficient notice of the Debtor's request. All objections that have not been resolved, withdrawn, or otherwise declared as moot, were overruled. 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. 7, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) SIGMA FINANCE: Pressures Spur S&P's Negative CreditWatch Listing ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Sigma Finance Corp., a limited purpose finance company, on CreditWatch with negative implications. S&P's outlook on the LPFC sector remains negative. As S&P noted in its Dec. 18, 2007, release, "S&P Says Limited Purpose Finance Companies Face Negative Outlook," Sigma faces a similar set of challenges in the marketplace as structured investment vehicles. The CreditWatch negative placement reflects S&P's view of the continuing and intensifying pressure that is still present in the credit and fixed-income markets. Specifically, S&P observed that: -- Asset prices continue to fall and the mark-to-market coverage continues to shrink. While Sigma is still operating at a cushion, it has approximately a 175-basis-point spread cushion that translates to about a 7.4% market value price coverage relative to par of its liabilities. The 175-basis- point cushion is based on Sigma's reported prices. -- Large liability maturities loom. Sigma has approximately $15 billion in senior debt and repurchase agreement maturities that will come due between now and June 2008. Sigma may find it difficult to refinance these maturities if the market liquidity condition continues or worsens. S&P notes that the recent JPMorgan Chase acquisition of Bear Stearns is a result of the liquidity conditions in the market. -- Since July 2007, Sigma has had to turn largely to the repurchase (repo) markets to refinance its debt maturities, and it now finances more than $11 billion of its asset portfolio through those markets. These repo agreements, which have maturities between three months and one year, enable Sigma to defer selling in the current markets. Each repo requires overcollateralization ranging from 2%-10%. These overcollateralization levels could exhaust a large portion of Sigma's capital since they are posted away from Sigma and in favor of the repo counterparties. If liquidity conditions worsen, these additional margin posting requirements could cause Sigma to default in the event of a missed collateral posting. As of the most recent reports, Sigma has executed seven repo agreements. Of the collateral types subject to these repo agreements, approximately 30% represents asset-backed security or collateralized debt obligation collateral and approximately 70% represents financial institution debt. -- Sigma has sold or exchanged more than $14 billion in assets since July 2007. S&P believes Sigma's ability to sell these assets will be pressured further as banks wrestle with what they should do with the significant sum of their own assets that they are currently financing. Thus far, Sigma has not been allowed to directly finance at governmental windows and, therefore, may ultimately need to sell assets at prices that are lower than those observed in the market. In addition to the assets being financed through the repo markets, Sigma has approximately $24 billion in assets that are being financed by debt. The most recent reports that Standard & Poor's has received from managers show that there is approximately $160 billion of remaining senior debt outstanding among SIVs and LPFCs, compared with $350 billion-$400 billon outstanding as of March 2007 (these numbers vary depending on how the synthetic obligations and repurchase obligations are counted). In a sense, therefore, it can be said that the exposure has decreased. However, the markets do not appear to reflect this improvement because the broader markets reacting to various financial institutions' overall need to find ways to sell or refinance those assets without absorbing excess losses that could be associated with liquidity discounts. Standard & Poor's analytic approach to Sigma looks primarily at two scenarios: the first focuses on relevant metrics associated with the "what if" scenario in the event that Sigma is not able to refinance its asset portfolio, and the second focuses on the "what if" scenario that assumes Sigma is able to continue financing its asset portfolio. Assuming Sigma has the ability to refinance, it will continue to pass all cash flow-related tests. Sigma has effectively operated in no-growth mode since July 2007 and any further erosion of its asset values could result in Sigma entering a "natural amortization" operating mode, which means Sigma's portfolio will wind-down as the assets mature or prepay. A refinancing or a natural amortization would not result in a forced sale of Sigma's assets. On the other hand, Sigma's failure to secure financing for its assets would force it to liquidate its assets irrespective of any test or operation mode. S&P's review of Sigma, which is based on recent manager reports and meetings, revealed these informations: -- Portfolio asset ratings: The portfolio remains highly diversified with a weighted average rating of 'AA+'. Sigma's portfolio rating distribution shows most of the 'AAA' ratings are in ABS or CDO assets. The 'AA' weighting comes from bank paper and the remaining corporate assets (including small exposures of below-investmentgrade assets) range from 'A' to 'B'. -- Portfolio asset maturities: The portfolio has a weighted average life of approximately 3.58 years. -- Portfolio asset sector concentrations: Sigma's portfolio is most heavily concentrated in financial institutions debt (57% total), with approximately 37% invested in subordinated bank debt. Sigma has minimum exposure to any assets in the U.S. residential mortgage-backed security or CDO of ABS sectors. -- Sigma's liability profile: Sigma has maturities of approximately $15 billion that will come due over the next four months. Sigma has total remaining liabilities outstanding of approximately $24 billion in senior debt (the majority of which is in medium-term notes) and approximately $11 billion in repo financing. Sigma's repo financing comes from seven counterparties, which could change depending on the market conditions. -- Management: In S&P's view, Sigma's manager, Gordian Knot Ltd., has done a good job of managing the company through the difficult market conditions. Since July 2007, Sigma has repaid approximately $30 billion of its senior liabilities. Sigma has worked with capital and senior investors to buy some of the assets that it was financing. Sigma is not a subsidiary of an existing financial institution, which may have provided the vehicle with greater financial flexibility and enabled the company to secure funding from multiple financial institutions. SIVs, on the other hand, are sponsored by banks that ultimately were supported only by their sponsor banks. In 2003, Sigma amended its documentation to restrict the enforcement triggers and remove the mandatory sale triggers, allowing it to refinance even in the natural amortization operating mode. Sigma has repeatedly stated that multiple financing sources were a critical element of management's finance strategy. However, Sigma has not been immune from the reality that liquidity is hard to find in this market, and that no one sponsor would provide full liquidity. Sigma has also stated its belief that, due to its lower return-on- equity targets compared to SIVs, it would be better positioned to weather adverse financial markets due to the fact that it holds less-volatile assets and maintains lower leverage than SIVs. -- Leverage: Sigma's current approximate leverage is 11 to 1, based on the total liabilities outstanding over the net asset value. This compares favorably to SIVs that were managed by hedge funds and is in the same range as those SIVs that were managed by Citibank pre-capital infusion. An excerpt from a Wall Street Journal article mentioned that Gordian Knot said it aims to hold onto its top-tier ratings. A downgrade could make it harder or more expensive for Sigma Finance to raise funds and put more pressure on it to sell assets at a difficult time. The article also noted that Sigma Finance has been able to weather the credit crunch so far, because it doesn't have triggers in its structure that force it to unwind its portfolio when market prices on assets or it credit ratings fall below a certain level. S&P says that despite Sigma having successfully managed, thus far, through what is undoubtedly the most challenging debt market since Sigma's inception, potential weaknesses still remain. S&P believes that with market liquidity continuing to be constrained, Sigma will face increasing challenges tapping the repo markets. Therefore, Sigma may need to look to senior debt investors to refinance its debt either by rolling existing debt or replacing existing debt with repo funding. While this could be described as "opportunistic," it could also be considered an exchange of short- term obligations for longer-term debt. S&P estimates of Sigma's effective NAV places it below 80, at approximately between 74 and 76. That number could change slightly depending on how it is calculated. As with SIVs, S&P generally views an NAV below 80 as a signal for a weakening financial position. Despite the manager's efforts and success at managing through these credit and liquidity conditions, Sigma needs to continue to finance assets whose credit quality is backed by a weakening U.S. and global economy amid the disarray in the financing markets. Because of these stresses on Sigma's capital and its financing position, S&P is placing the rating on CreditWatch with negative implications. S&P expects to resolve the CreditWatch placement within one week. In determining whether to affirm S&P's 'AAA' rating, S&P will look to these factors: -- An increase in the capital that is supporting the senior debt in a significant amount consistent with S&P's 'AAA' rating criteria. -- A further and significant reduction in Sigma's leverage. -- A refinancing of significant portions of Sigma's asset portfolio to term funding and, therefore, the substantial reduction of Sigma's potential need to eventually sell assets. -- Additional details on the aspects of the repo funding and the liquidity and capital stresses generated by this funding. Based on S&P's current view, in the absence of one or more of these factors, Sigma's long-term rating may be affected by as much as two to three notches to 'AA/A-1+' depending on any additional information that S&P receives. Ratings Placed on CreditWatch Negative Sigma Finance Corp. Class Rating ----- ------ To From -- ---- Issuer credit rating AAA/Watch Neg/A-1+ AAA/Negative/A-1+ CP A-1+/Watch Neg A-1+ MTNs AAA/Watch Neg AAA SILVERWING ENERGY: Seeks Financing to Remedy Covenant Breach ------------------------------------------------------------ Silverwing Energy Inc. was in breach of a covenant, as at Dec. 31, 2007, that required the company to maintain a positive working capital ratio of 1:1 for the revolving demand loan facility. Silverwing is in the process of securing appropriate financing to rectify this breach. The company released financial and operating results for the three and twelve month periods ended Dec. 31, 2007. Reported net loss was $0.6 million in the fourth quarter ended Dec. 31, 2007. For full year 2007, reported net loss was $25.718 million compared to net loss of $12,216 million in 2006. Capital expenditures totaled $8 million in the fourth quarter and $23.6 million in fiscal 2007. This included: (i) $0.8 million on land and seismic; (ii) $17.2 million drilling 22 gross, 16.4 net wells; (iii) $ 4.7 million on facility infrastructure; and (iv) $0.9 million on other. As at March 12, 2008, Silverwing has outstanding bank debt of $10.3 million and a working capital deficit of approximately $14.7 million. The working capital amount does not include $1.2 million held in escrow, classified at year end as a long term restricted cash asset that will be released when completion work is undertaken on Silverwing's Tomahawk project. In August of 2007, Silverwing completed a private placement financing raising $30 million. These proceeds, together with funds from operations and existing credit facilities, were used to fund the company's 2007 capital program. Silverwing had 188 million common shares outstanding at year end. About Silverwing Energy Based in Calgary, Canada, Silverwing Energy Inc. (TSX:SVW,SVW.WT) is a crude oil and natural gas exploration and production company. By implementing its strategic plan in key focus areas located throughout the Western Canadian Sedimentary Basin, Silverwing is well positioned to achieve its growth plans for the benefit of its shareholders. SPYRUS INC: Wants DLA Piper US as Bankruptcy Counsel ---------------------------------------------------- SPYRUS, Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware for authority to employ DLA Piper US, LLP as their bankruptcy counsel. DLA Piper is expected to: a. advise the debtors concerning their fiduciary obligations to the estates, the creditors and the Court; b. assist regarding the administration of the cases, including prosecution of motions and adversary proceedings, defense of actions commenced against the debtors, commencement and prosecution of objections to claims, representation in the claims reconciliation process and counseling regarding the preparation of schedules, statements and operating reports; c. assist in the formulation, negotiation and confirmation of a plan of reorganization and related disclosure statement; and d. render other legal services as may be requested by management and as may be required in furtherance of these cases. The Debtors will pay the firm at its standard hourly rate: Professional Rate ------------ ---- Thomas Califano US$800 Christopher Thomson US$535 Kristin Rosella US$410 To the best of the Debtors' knowledge, the firm does not hold any adverse interest in the Debtors' estates. They believe also that the employment of the firm is necessary and in the best interest of their estates. The firm can be reached at: Thomas R. Califano, Esq. DLA Piper US, LLP 1251 Avenue of the Americas New York, NY 10020 http://www.dlapiper.com/ Based in San Jose, California, SPYRUS, Inc. and its subsidiaries manufacture products and services for the information security market since 1992. It focuses on customers in government and commercial enterprises, particularly those needing data protection and privacy in vertical markets regulated by legislation such as the Gramm-Leach-Bliley Act, Health Insurance Portability and Accountability Act and Sarbanes-Oxley Act. The company filed for Chapter 11 on March 10, 2008 (Bankr. D. Del. Case No. 08-10462). Neil B. Glassman, Esq., at Bayard P.A. represents the Debtor in its restructuring efforts. When the Debtor filed for protection from their creditors, it listed estimated assets and and estimated debts both of $1 million to $10 million. STRADA 315: Files Schedules of Assets and Liabilities ----------------------------------------------------- Strada 315, LLC delivered to the United States Bankruptcy Court for the Southern District of Florida its schedules of assets and liabilities disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $32,000,000 B. Personal Property 5,097,326 C. Property Claimed as Exempt D. Creditors Holding $20,976,789 Secured Claims E. Creditors Holding 0 Unsecured Priority Claims F. Creditors Holding 8,420,251 Unsecured Nonpriority Claims ------------ ------------- TOTAL $37,097,326 [$29,397,040] Headquartered in Delray Beach, Flordia, Strada 315 LLC is affiliated with Delray Beach's Southpoint Realty Development. It owns and manages luxury condominiums. The Debtor filed for chapter 11 protection on Feb. 11, 2008 (Bankr. S.D. Fla. Case No. 08-11574). Scott A Underwood, Esq., represents the Debtor in its restructuring efforts. The U.S. Trustee for Region 21 appointed creditors to serve on a Official Committee of Unsecured Creditors in these cases. The Debtor listed assets and debts between $10 million and $50 million. Its three major unsecured creditors are Associated Steel & Aluminium, Coleman Floor Co., and Y.&T. Plumbing Corp., with claims of less than $1 million each. TC COMPUTER: Case Summary & 21 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: T.C. Computer Service, Inc. 14505 Torrey Chase Boulevard, Suite 106 Houston, TX 77014 Bankruptcy Case No.: 08-31677 Type of Business: The Debtor offers computer services. See http://www.tccsi.com/ Chapter 11 Petition Date: March 14, 2008 Court: Southern District of Texas (Houston) Judge: Marvin Isgur Debtor's Counsel: Preston T. Towber, Esq. The Towber Law Firm 6750 West Loop South Suite 920 Bellaire, TX 77401 Tel: (832) 485-3555 Fax: (832) 485-3550 preston@towberlaw.com Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 million to $10 million Debtor's list of its 21 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ IRS Tax Debt $1,899,974 P.O. box 21126 Philadelphia, PA 19114 Tech Data Corporation Trade Debt $44,453 P.O. Box 730238 Dallas, TX 75373-0238 Paul Bettencourt Harris Tax Debt $36,235 County Tax Assessor- Col. P.O. Box 4089 Houston, TX 77210-4089 Dexon Computer, Inc. Trade Debt $7,649 eNETsolutions, LLC Note $5,903 Chamberlain, HWW & Martin Tax Counsel Fees $2,933 Sandra Check, CPA PLLC Accountant Fees $3,600 Home Depot Credit Services Trade Debt $3,446 Jobing.com Trade Debt $3,287 State Comptroller Tax Debt $3,139 Spring ISD Tax Office Tax Debt $2,866 Global Knowledge Trade Debt $2,595 Office Depot Trade Debt $1,692 Monster, Inc. Trade Debt $1,433 N.W. Harris County Mud #21 Tax Debt $876 Cbeyond Communications Trade Debt $765 Jim F. Herring CPA Accountant Fees $750 Sprint 1958 Trade Debt $521 WebEx Communications Inc. Trade Debt $420 Southeastern Employee Benefit $295 Services CIT Technology Financial Trade Debt $126 Services Inc. TENNECO INC: S&P Puts Ratings on Negative Watch on Work Stoppage ---------------------------------------------------------------- Standard & Poor's Ratings Services placed the ratings on General Motors Corp., American Axle & Manufacturing Holdings Inc., Lear Corp., and Tenneco Inc. on CreditWatch with negative implications. The CreditWatch placement reflects S&P's decision to review the ratings in light of the extended American Axle (BB/Watch Neg/--) strike. The work stoppage that began Feb. 25 at American Axle's U.S. United Auto Workers plants has forced closure of many GM (B/Watch Neg/--) plants, as well as plants of certain GM suppliers. The strike began after the expiration of the four-year master labor agreement with American Axle. Although S&P still expect American Axle and the UAW to reach an agreement that will reflect more competitive labor costs, the timing is unknown. The two sides resumed negotiations last week. "We believe the strike has gone on long enough to possibly begin to affect the financial resources of GM and those suppliers most exposed to the automaker," said Standard & Poor's credit analyst Robert Schulz. To resolve the CreditWatch listings, Standard & Poor's will assess the strike's impact on the companies' credit profiles, particularly liquidity, once production resumes. S&P could lower the ratings any time prior to a resolution of the Axle strike if the liquidity of the companies becomes compromised, although downgrades are not likely for another several weeks. THORNBURG MORTGAGE: May Issue Securities to Raise Funds ------------------------------------------------------- Thornburg Mortgage Inc., delivered to the Securities and Exchange Commission a prospectus, which forms part of a registration statement that the company filed with the SEC using a "shelf" registration process. Under the process, Thornburg may offer and sell any combination of debt securities, common stock, preferred stock, warrants to purchase common stock or preferred stock, and rights issuable to its shareholders to purchase shares of company common stock or preferred stock or to purchase warrants exercisable for shares of stock in one or more offerings. Thornburg said net proceeds from the sale of the securities will be used for general corporate purposes. Majority of the net proceeds may also be used to finance the acquisition or origination of additional adjustable-rate mortgage assets; repay maturing obligations; redeem outstanding indebtedness; finance acquisition of other assets, capital expenditures and working capital; and for liquidity needs. Thornburg may also invest the net proceeds from the sale of any securities or may use them to reduce short term indebtedness. Thornburg may offer debt securities, including 8.00% Senior Notes Due 2013 pursuant to the indenture and the first supplemental indenture that the company has entered into with Deutsche Bank Trust Company Americas, as trustee. It may also offer debt securities pursuant to an indenture to be entered into with another trustee. The company may also offer equity securities. As of March 17, 2008, the company's authorized capital stock consists of: -- 449,385,500 shares of common stock; -- 22,000 shares of Series B Cumulative Preferred Stock, par value $0.01 per share; -- 7,230,000 shares of Series C Preferred Stock; -- 5,000,000 shares of Series D Preferred Stock; -- 6,162,500 shares of Series E Preferred Stock; and -- 32,200,000 shares of Series F Preferred Stock. The company's capital stock is subject to restrictions on ownership and transfer. McKee Nelson LLP serves as the company's tax counsel. Heller Ehrman LLP provides the company advice on legal matters. A full-text copy of the prospectus is available at no charge at http://researcharchives.com/t/s?2949 As reported in the Troubled Company Reporter on March 14, 2008, Thornburg has received notices of events of default from various counterparties to master repurchase agreements after failing to meet margin calls: Proceeds Lent to Counterparty Margin Call Thornburg Under Deal ------------ ----------- -------------------- Morgan Stanley & $9,000,000 $49,000,000 Co. Incorporated Natixis Securities $6,000,000 $163,000,000 North America Inc., as agent for Natixis Financial Products Inc. Goldman, Sachs & Co. $54,000,000 $550,000,000 JPMorgan Chase Bank, N.A. $28,000,000 $320,000,000 ING Financial Markets LLC also sent a notice of default after Thornburg failed to repurchase roughly $70,000,000 in AAA-rated securities. The aggregate amount of the proceeds ING lent to the company under their BMA Master Repurchase Agreement, dated January 12, 2007, was roughly $707,000,000. Thornburg has been in continuing discussions with all of its lenders, and, to the best of its knowledge, the lenders that issued notices of event of default have not yet exercised their rights to liquidate pledged collateral. The company has said it is working to meet all of its outstanding margin calls within a timeframe acceptable to its lenders, through a combination of selling portfolio securities, issuing collateralized mortgage debt and raising additional debt or equity capital. The Wall Street Journal reported that Thornburg creditors have seized "billions of dollars" of collateral from the embattled home lender, and dumped those assets onto the bond market. Through the close of business on March 6, 2008, Thornburg had received $1,777,000,000 in margin calls since December 31, 2007, and had satisfied $1,167,000,000 of those margin calls primarily by using its available liquidity, principal and interest payments, and proceeds from the sale of assets. As of the close of business on March 6, 2008, Thornburg had outstanding margin calls of $610,000,000 which significantly exceeded its available liquidity at that date. The recent events have raised substantial doubt about the company's ability to continue as a going concern without significant restructuring and the addition of new capital. On March 4, 2008, the company was advised by its independent accountant, KPMG LLP, that no further reliance should be placed on the auditors' report dated February 27, 2008, on the company's consolidated financial statements as of December 31, 2007, and 2006 and for each of the years in the two year period ended December 31, 2007. About Thornburg Mortgage Headquartered in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- is a single- family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable-rate mortgages. It originates, acquires, and retains investments in adjustable and variable rate mortgage assets. Its ARM assets comprise of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. * * * As reported in the Troubled Company Reporter on March 10, 2008, Moody's Investors Service downgraded to Ca from Caa2 the senior unsecured debt, and to C from Ca the preferred stock ratings of Thornburg Mortgage, Inc. Thornburg's Ca unsecured debt rating remains under review for possible downgrade. The downgrades were in response to Thornburg's announcement that cross-defaults have been triggered under all of the REIT's repurchase agreements and secured loan agreements. Reverse repurchase agreements represent a key source of funding for the company. The TCR said on March 10 that Standard & Poor's Ratings Services lowered its issue ratings on Thornburg Mortgage Inc.'s senior unsecured debt to 'CC' from 'CCC+' and preferred stock to 'C' from 'CCC-'. Both issue ratings will remain on CreditWatch negative, where they were placed on March 3, 2008. The counterparty credit rating remains on selective default. Given Thornburg's limited financial resources, S&P believes the risk of default has increased further. The TCR also said on March 10 that, given Thornburg Mortgage, Inc.'s weakening credit profile stemming from defaults under the company's reverse repurchase agreements, Fitch has downgraded the Debtors' four ratings -- Issuer Default Rating to 'RD' from 'CCC'; -- Senior unsecured notes to 'C/RR6' from 'CCC-/RR5'; -- Unsecured subordinate notes to 'C/RR6' from 'CC/RR6'; and -- Preferred stock to 'C/RR6' from 'CC/RR6'. TILLIM LLC: Has Until May 30 to File Plan and Disclosure Statement ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Michigan established May 30, 2008, as the last day for Tillim LLC to file a chapter 11 plan and disclosure statement. Parties who may want to add any information in the disclosure statement may communicate with the Debtor until April 30, 2008. By July 7, 2008, all ballots in relation to the plan, are expected to be returned to the debtor's attorney in this address: Jerome D. Frank Suite 205, 30833 Northwestern Hwy. Farmington Hills, MI 48334-5643 The hearing on objections, filed prior to the July 7 deadline, to the final approval of the disclosure statement and confirmation of the plan will be held on July 14, 2008 at 10:00 a.m., in Room 1825, 211 W. Fort Street, Detroit, Michigan. Headquartered in Detroit, Michigan, Tillim LLC filed for Chapter 11 protection on Jan. 31, 2008 (Bankr. E.D. Mich. Case No.: 08- 42316). Jerome D. Frank, Esq. represents the Debtor in its restructuring efforts. When it filed for protection from its creditors, it listed total assets of $10 million and total debts of $11.5 million. TILLIM LLC: Can Decide Until May 12 to Assume or Reject Lease ------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan established May 12, 2008, as the last day for Tillim LLC to decide whether to assume or reject non-residential real property leases. The Court ordered the Debtor's counsel to consult with the courtroom deputy to assure that any request seeking further extension of the deadline is set for hearing before May 30, 2008. Headquartered in Detroit, Michigan, Tillim LLC filed for Chapter 11 protection on Jan. 31, 2008 (Bankr. E.D. Mich. Case No.: 08- 42316). Jerome D. Frank, Esq. represents the Debtor in its restructuring efforts. When it filed for protection from its creditors, it listed total assets of $10 million and total debts of $11.5 million. TRIBUNE CO: 10% Expected Decline in Revenue Cues S&P's 'B-' Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Tribune Co. to 'B-' from 'B' and removed all ratings from CreditWatch, where S&P originally placed them, with negative implications, on Feb. 8, 2008. The outlook is negative. At the same time, S&P revised ratings on Tribune's $10.1 billion in senior secured credit facilities. S&P revised the recovery rating to '2' from '1', and lowered the bank loan rating to 'B' from 'BB-', reflecting the expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default. "The revised recovery rating reflects our reassessment of recovery prospects for secured lenders and greater-than-expected deterioration in the company's operating results and cash flow," explained Standard & Poor's credit analyst Emile Courtney. The downgrade to 'B-' reflects S&P's expectation that the rate of decline in advertising revenue at Tribune's newspaper publications could be in the 10% area in 2008. Newspaper publication revenue was near 60% of total revenue in the 12 months ended Sept. 30, 2007, broadcasting revenue was just over 25%, and circulation revenue was about 15%. S&P expects that the recent weakening in operating trends in the newspaper sector and in Tribune's operating results could lead to EBITDA declines at Tribune in the mid-teens percentage area in 2008. This heightens the risk that Tribune may violate its leverage covenant (which steps down to 8.75x after the December 2008 quarter from 9.00x) in the first half of 2009. The numerator for this covenant is guaranteed debt. This is the case even though S&P continues to believe Tribune will benefit from modestly improved performance in its broadcasting unit in 2008 and that cash operating expenses will decline due to lower labor costs. UNICO INC: Issues Convertible Debentures Totaling $300,000 ---------------------------------------------------------- Unico Inc. disclosed in a regulatory filing on Friday that Moore Investment Holdings LLC has purchased three new convertible debentures from the company in the amounts of $250,000, $40,000 and $10,000. Unico received a total of $300,000 from the three transactions. The company said that all three of the convertible debentures bear interest at the rate of 8.0% per annum, are convertible to shares of Unico's common stock at 50.0% of the bid price of Unico's common stock on the date of conversion, and are due and payable 6 months from their issue date. Moore Investment Holdings, LLC is a Nevada limited liability company controlled by Josph A. Lopez, and his wife, Patricia A. Lopez. Joseph A. Lopez is the father of Mark A. Lopez, chief executive officer of Unico. About Unico Inc. Based in San Diego, Calif., Unico Inc. (OTC BB: UCOI.OB) -- http://www.unicomining.com/-- is a publicly traded natural resource company in the precious metals mining sector that is focused on the exploration, development and production of gold, silver, lead, zinc, and copper concentrates at its three mine properties: the Deer Trail Mine, the Bromide Basin Mine and the Silver Bell Mine. Going Concern Doubt As reported in the Troubled Company Reporter on June 15, 2007, HJ Associates & Consultants LLP, in Salt Lake City, expressed substantial doubt about Unico Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Feb. 28, 2007, and 2006. The auditing firm pointed to the company's recurring losses from operations and stockholders' deficit. VANGENT INC: Posts $1.99 Mil. Net Loss For The 2007 Fourth Quarter ------------------------------------------------------------------ Vangent Inc. reported a net loss of $1.99 million for the three months ended Dec. 31, 2007 compared to $6.29 million net income for the same period in 2006. The company generated revenues of $147.56 million for the 2007 fourth quarter from $124.45 million revenues for the 2006 fourth quarter. "We made tremendous progress over the course of the year in building a foundation for growth by transforming our management team and streamlining our operations," Mac Curtis, president and chief executive officer of Vangent, said. "The business performed well in the fourth quarter, achieving sequential revenue and Adjusted EBITDA growth, building a strong cash position and maintaining a solid backlog," Mr. Curtis continued. "Importantly, these successes came as many of our largest contracts hit peak levels." "With this groundwork in place, we look forward to further success in 2008 and beyond," Mr. Curtis concluded. As of Dec. 31, 2007, the company's balance sheet reflected total assets of $694.068 million, total liabilities of $513.779 million and a total stockholders' equity of $180.289 million. About Vangent Inc. Headquartered in Arlington, Virginaia, Vangent Inc. (formerly Pearson Government Solutions) -- http://www.vangent.com -- designs, builds, and operates technology systems for government agencies, higher education institutions, and commercial human resources departments. Services include enterprise architecture design, education and training, business process outsourcing, and systems integration. The company focuses on civilian government agencies; international governments; and commercial entities in the retail, pharmaceutical, and banking sectors; public health care; and homeland security markets. Veritas Capital bought Vangent for $600 million in 2007. * * * Vangent Inc. continues to carry Moody's Investors Service's 'B2' long term corporate family rating, 'Ba3' bank loan debt rating, 'Caa1' senior subordinate debt rating and 'B2' probability of default rating with a stable outlook, which was assigned on January, 2007. VICTORY MEMORIAL: Judge Craig Pushes Back Auction Date to March 31 ------------------------------------------------------------------ The Honorable Carla E. Craig of the U.S. Bankruptcy Court for the Eastern District of New York deferred the March 20 auction to March 31, 2008, and moved the March 17 bid deadline to March 26, 2008, according to court papers filed last week. As reported in the Troubled Company Reporter on March 14, 2008, the Court approved the Debtors' bidding procedure for the sale of certain assets, clear of all liens and interests, subject to higher and better offer. New York not-for-profit corporation St. Jerome Health Services Corporation dba Holy Family Home, as the stalking horse bidder, agreed to purchase the assets for $40 million in cash, under a purchase agreement. The agreement requires St. Jerome deposit $1,500,000 in cash, which will held in escrow. The Debtors said that the purchased assets, includes, among others: a) real property in Tax Block 6094 Lot 1 in Brooklyn, New York, also known as main campus; b) Victory Memorial Hospital's 150-bed Skilled Nursing Facility (SNF), including all licenses and certificates; c) Victory Memorial Hospital Long Term Home Health Care (LTHHCP)program, including also licenses and certificates; d) all equipments and assets for the SNF and LTHHCP. All excluded assets will be retained by the Debtors, including, among others, the existing $25 million HEAL award and any causes of action of the Debtors. Pursuant to the terms and conditions of the agreement, the Debtors have agreed to provide a $400,000 break-up fee. Sale Protocol Qualified bidders must deliver a written copies of that bid at: a) DLA Piper US LLP Attn: Timothy W. Walsh, Esq. 1251 Avenue of the Americas New York, NY 10020 b) Alston & Bird LLP Attn: Martin G. Bunin, Esq. 90 Park Avenue New York, NY 10016 c) CIT Capital USA Inc. Attn: Natalie Wilensky 11 West 42nd Street, 7th floor New York, NY 10036 Each bid must be accompanied by a "good faith deposit" of $1,500,000 in bank or certified check. The initial overbid must be equal or exceed the purchase price plus $500,000. The auction will took place at the offices of DLA Piper US LLP, and will be conducted by CIT Capital. During the public auction, bidding will commence with the baseline bid and continue in minimum increments of at least $100,000. Based in Brooklyn, New York, Victory Memorial Hospital is a non-profit, full service acute care voluntary hospital with approximately 241 beds and a skilled nursing unit with 150 beds. Victory Hospital provides a full range of medical services with a focus on community care and a program of community outreach to the Brooklyn community. Victory Ambulance Services, Inc. a for-profit subsidiary, provides Victory Hospital with ambulance services. Victory Pharmacy, Inc., a for-profit subsidiary, does not have any employees or assets. The company and its two-subsidiaries filed for chapter 11 protection on Nov. 15, 2006 (Bankr. S.D.N.Y. Case Nos. 06-44387 through 06-44389). Timothy W. Walsh, Esq., and Jeremy R. Johnson, Esq., at DLA Piper US LLP, represent the Debtors. Craig E. Freeman, Esq., and Martin G Bunin, Esq., at Alston & Bird LLP, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed assets and debts between $1 million and $100 million. VONAGE HOLDINGS: Inks Settlement Agreement with Nortel Networks ---------------------------------------------------------------- Vonage Holdings Corp. said in a regulatory filing that on March 10, 2008, the company, Nortel Networks Inc., and Nortel Networks Limited entered into a settlement agreement effective Jan. 1, 2008, to implement the terms of a Memorandum of Understanding entered into by the parties on Dec. 28, 2007. Pursuant to the terms of the agreement, the company and Nortel agree to file within five days of the agreement between the parties joint stipulations for dismissal, without costs, dismissing without prejudice all claims and counterclaims in: -- Vonage Holdings Corp. v. SBC Internet Services Inc., et al., pending in the United States District Court for the Northern District of Texas, Fort Worth Division; and -- Vonage Holdings Corp. v. Nortel Networks Inc., et al., pending in the United States District Court for the District of Delaware. Further, the company agrees to dismiss without prejudice Central Telephone Company of Texas from all claims related to three of the company's patents in the Texas Action. Pursuant to the agreement, the company grants to Nortel and its affiliates a worldwide, non-exclusive, paid-up, transferable -- subject to certain limitations -- license under three of the company's patents relating to Voice over Internet Protocol technology. Nortel has the right to grant limited sublicenses to its customers to use the licensed products and services when manufactured or sold by Nortel, and to transfer the license rights in conjunction with a change of control of Nortel. Pursuant to the agreement, Nortel grants to the company and its affiliates a worldwide, non-exclusive, paid-up, transferable license under three of Nortel patents relating to VoIP technology. The company has the right to grant limited sublicenses to its customers to use the licensed products and services, and to transfer the license rights in conjunction with a change of control of the company. Either party may terminate the licenses described above if the other party: (a) brings a patent infringement suit against that party with respect to patents not licensed thereunder; or (b) brings a patent infringement suit against a third party which third party asserts a good faith claim of indemnification against either the Company or Nortel or any of their affiliates. The company covenants not to sue Nortel customers for patent infringement of the three licensed Vonage Patents by reason of Nortel customers using licensed products or services and will not seek any damages or costs either during the term of the license or prior to Jan. 1, 2008, from Nortel customers for such use; provided, however, such covenant will become ineffective should Nortel bring a patent infringement suit against the company or any of its customers, prior to the company bringing any such suit against Nortel. Nortel covenants not to sue suppliers of products or services to the company, during the term of any Nortel Patent, for infringement of any Nortel Patent to the extent the company indemnifies them for patent infringement for providing products or services to the company. The company also releases Central Telephone Company of Texas and its customers from all claims, demands and rights of action with respect to any act of infringement or alleged infringement of any of the Vonage Patents by Central Telephone Company of Texas or its customers prior to Jan. 1, 2008. About Nortel Networks Corporation Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries including Indonesia, Australia, China, Hong Kong, India, Philippines, Singapore, Taiwan and Thailand. * * * Nortel Networks Corp. still carries Moody's Investors Service's B3 senior unsecured debt rating assigned on July 6, 2005. Outlook is Stable. About Vonage Holdings Headquartered in Holmdel, New Jersey, Vonage Holdings Corp. (NYSE:VG) -- http://www.vonage.com/-- provides broadband telephone services with nearly 2.6 million subscriber lines. The company's Residential Premium Unlimited and Small Business Unlimited calling plans offer consumers unlimited local and long distance calling, and features like call waiting, call forwarding and voicemail for a flat monthly rate. Vonage's service is sold on the web and through national retailers including Best Buy, Circuit City, Wal-Mart Stores Inc. and Target and is available to customers in the U.S., Canada and the United Kingdom. * * * At Dec. 31, 2007, the company had $462.3 million in total assets and $537.4 million in total liabilities, resulting in a $75.1 million total stockholders' deficit. WASHINGTON MUTUAL: 38 Classes Get Moody's Rating Confirmations -------------------------------------------------------------- Moody's Investors Service affirmed the ratings on 38 classes of credit card receivable-backed securities issued through the Washington Mutual Master Note Trust, the Washington Mutual Master Trust and related owner trusts. The affirmation is based on the strength of the seller or servicer and the credit quality of the collateral performance of the securitized WaMu credit card portfolio, which has up to now been within Moody's expectations. Although WaMu has experienced several downgrades over the past several months, its credit quality remains at a level that is sufficient to perform on the deals it services. And although the credit card master trust has performed within the bounds of Moody's expectations to date, Moody's has now revised its view on certain trust performance metrics. Should either of these factors continue to deteriorate, downgrades, particularly on trust subordinate classes, would be likely. Washington Mutual Bank is the seller/servicer for the related credit card trusts. The viability of revolving securitization programs is highly correlated to the credit strength of the seller/servicer. This evaluation of the seller/servicer's credit strength is an important consideration in Moody's credit opinion of the program's outstanding asset-backed securities. It is Moody's opinion that higher, investment grade rated seller or servicers are more likely to maintain the ongoing servicing and origination requirements of such a program. Since November 2007, the senior unsecured rating of the seller or servicer has been downgraded four notches, to Baa2 from A1. This weakening has been incorporated in Moody's decision to affirm the ratings on the currently outstanding credit card-backed securities. Although the collateral performance of the securitized WaMu credit card portfolio remains within the bounds of Moody's expectations, it is expected to deteriorate beyond those bounds for some key statistics. Charge-off rates are on the rise for the industry, but the increase in the WaMu trust charge-off rate has outpaced the industry in recent months as measured by Moody's Credit Card Indices. As a result, Moody's has revised its expected range of net charge-offs for the WaMu trust to 10% - 12% from 9% - 11%. Also, due primarily to an expected and ongoing change in portfolio mix that favors credit cards with lower interest rates, Moody's has revised its expected range of yield to 21.5% - 24.5% from 24.0% - 27.0%. Although Moody's has affirmed the current ratings, the cumulative effect of the recent multi-notch downgrades of the seller or servicer and the revised expectations of the collateral performance is that the current ratings are more susceptible to further deterioration. Downward rating pressure on WaMu's credit card securities, especially on the subordinate classes of notes, could ensue as a result of either a determination by Moody's that Washington Mutual Bank's credit strength has weakened further or if credit card collateral performance deteriorates beyond Moody's revised band of expectations. The ratings on these securities were affirmed: Issuer: Washington Mutual Master Note Trust -- $643,600,000 Floating Rate Class 2005-A1 Asset Backed Notes, rated Aaa; -- $775,000,000 Floating Rate Class 2005-A2 Asset Backed Notes, rated Aaa; -- $87,800,000 Floating Rate Class 2005-B1 Asset Backed Notes, rated A2; -- $150,000,000 Fixed Rate Class 2005-B2 Asset Backed Notes, rated A2; -- $93,100,000 Floating Rate Class 2005-C1 Asset Backed Notes, rated Baa2; -- $150,000,000 Floating Rate Class 2005-C2 Asset Backed Notes, rated Baa2; -- $85,100,000 Floating Rate Class 2005-D1 Asset Backed Notes, rated Ba2; -- $90,400,000 Floating Rate Class 2005-M1 Asset Backed Notes, rated Aa2; -- $125,000,000 Floating Rate Class 2005-M2 Asset Backed Notes, rated Aa2; -- $900,000,000 Floating Rate Class 2006-A1 Asset Backed Notes, rated Aaa; -- $750,000,000 Floating Rate Class 2006-A2 Asset Backed Notes, rated Aaa; -- $1,250,000,000 Floating Rate Class 2006-A3 Asset Backed Notes, rated Aaa; -- $500,000,000 Floating Rate Class 2006-A4 Asset Backed Notes, rated Aaa; -- $200,000,000 Fixed Rate Class 2006-B1 Asset Backed Notes, rated A2; -- $200,000,000 Floating Rate Class 2006-C1 Asset Backed Notes, rated Baa2; -- $150,000,000 Floating Rate Class 2006-C2 Asset Backed Notes, rated Baa2; -- $200,000,000 Floating Rate Class 2006-C3 Asset Backed Notes, rated Baa2; -- $300,000,000 Floating Rate Class 2006-M1 Asset Backed Notes, rated Aa2; -- $1,100,000,000 Floating Rate Class 2007-A1 Asset Backed Notes, rated Aaa; -- $875,000,000 Floating Rate Class 2007-A2 Asset Backed Notes, rated Aaa; -- $425,000,000 Fixed Rate Class 2007-A4 Asset Backed Notes, rated Aaa; -- $200,000,000 Floating Rate Class 2007-A5 Asset Backed Notes, rated Aaa; -- $150,000,000 Fixed Rate Class 2007-B1 Asset Backed Notes, rated A2; -- $125,000,000 Floating Rate Class 2007-C1 Asset Backed Notes, rated Baa2; -- Class 2005-D2 Variable Funding Asset Backed Notes, rated Ba3; -- Class 2007-C2 Variable Funding Asset Backed Notes, rated Baa2. Issuer: Washington Mutual Master Trust -- $650,000,000 Class A Floating Rate Certificates, Series 2001- D, rated Aaa; -- $400,000,000 Class A Floating Rate Certificates, Series 2001- G, rated Aaa; -- Class E Certificates, Variable Funding Series 2004-C, rated Ba3; -- Class E Certificates, Variable Funding Series 2004-G, rated Ba3; -- Class A Certificates, Variable Funding Series 2007-A, rated Aaa; -- Class B Certificates, Variable Funding Series 2007-A, rated Aa2; -- Class C Certificates, Variable Funding Series 2007-A, rated A2; -- Class D Certificates, Variable Funding Series 2007-A, rated Baa2; -- Class A Certificates, Variable Funding Series 2007-B, rated Aaa; -- Class B Certificates, Variable Funding Series 2007-B, rated Aa2; -- Class C Certificates, Variable Funding Series 2007-B, rated A2; -- Class D Certificates, Variable Funding Series 2007-B, rated Baa2. This affirmation follows Moody's March 14, 2008 downgrade of the senior unsecured rating of Washington Mutual, Inc. to Baa3 from Baa2. Washington Mutual Bank's long term deposit rating was downgraded to Baa2 from Baa1. Washington Mutual Bank's bank financial strength rating at C- and short term rating at Prime-2 were affirmed. Moody's placed a negative outlook on all Washington Mutual entities. Moody's action reflects the rapid deterioration of the residential housing sector in the first quarter of 2008 and the resulting increase in expected provisioning needs on WaMu's residential mortgage loan portfolio. Moody's believes that remaining lifetime losses on this portfolio will be higher than previously expected. Washington Mutual, Inc. is headquartered in Seattle, Washington, and its reported assets at Dec. 31, 2007 were $328 billion. WICKES FURNITURE: Committee Wants Sun Wickes Loans Investigated --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Wickes Furniture Company, Inc. asked the U.S. Bankruptcy Court for the District of Delaware for authority to issue subpoenas to Sun Wickes LLC and its related entities. The subpoenas are intended for testimony and the production of documents for an investigation under Rule 2004 of the Federal Rules of Bankruptcy. The Committee wants to investigate the purported debt of Sun Entities either directly with the Debtors or indirectly through Ableco LLC, as collateral agent. The investigation will primarily include an inquiry into the financings provided by the Sun Entities to the Debtors subsequent to its acquisition of Wickes Holdings in 2004. Sun Entities Stake Ownership Wickes Holdings has four equity owners: Sun Wickes, an affiliate of Sun Capital Partners LP; Ableco, a prepetition lender; Randolph Street Partners V; and H.I.G. Sun Partners Inc, another Sun Capital affiliate. Sun Wickes owns 100%of the class A units, which are the only voting securities of Wickes Holdings. Ableco, Randolph and HIG Sun each own non-voting convertible class B units of Wickes Holdings: Ableco -- 71%; Randolph -- 17.4%; and HIG Sun -- 11.6%. If the class b units were fully converted to class A units, Sun Wickes would own 96.12%, Ableco 2.52%, Randolph 0.94%, and HIG Sun 0.41% of Wickes Holdings on a fully diluted basis. Prepetition Financing On Aug. 9, 2002, the Debtors entered into a prepetition financing agreement with Wickes Furniture as borrower, Wickes Holdings as guarantor, and Ableco as collateral and administrative agent and lender. Ableco subsequently assigned to Wells Fargo Retail Finance LLc its interest under the initial financing agreement as a revolving loan lender and term loan A lender. Ableco also assigned to Wells Fargo its role as administrative agent under the initial financing agreement. The Debtors then entered in to an amended and restated financing agreement, dated as of Oct. 30, 2002 with Ableco as collateral agent and Wells Fargo as administrative agent and lender. These amounts remain outstanding as of the bankruptcy filing, Feb. 3, 2008: Revolving Loan (Wells Fargo) $22,940,373 Term Loan B (Ableco) 14,361,766 Term Loan C (Ableco) 5,526,813 Term Loan D (Wells Fargo) 11,000,000 Term Loan E (Ableco) 10,067,335 Term Loan F (Ableco) 276,852 Term Loan G (Ableco) 14,805,637 ----------- Total: $78,978,776 As of the bankruptcy filing, the total outstanding amount with respect to the Ableco term loans was $45,038,403. Sun Wickes is a participant in a substantial portion of the Ableco term loans. The Committee informed the Court that the Ableco term loans are held almost entirely by the equity owners of Wickes Holdings. The Committee related that the Sun Entities and Ableco entered into various agreements with respect to the Ableco term loans, under which the Sun Entities will buy an interest in the Ableco term loan in varying percentage amounts. According to the Committee, SCSF Wickes LLC, an affiliate of Sun Wickes and one of the Sun Entities, is either a participant or a funding source of more than $39,000,000, or 87%, of the Ableco term loans. The Committee said that from Nov. 1, 2004, through Feb. 4, 2008, SCSF Wickes entered into four participation agreements with Ableco, including participation or purchase of 87% of the outstanding debt under the Ableco term loans. In addition, the Committee recounted that on or about Dec. 5, 2007, Wickes Furniture delivered to Wickes Holdings a $15,000,000 senior subordinated secured promissory note. According to the Debtors, as of Feb. 3, 2008, the amount due under the Holdings note was about $15,103,333. The Sun Entities, the Committee said, are now asserting secured claims in the excess of $50 million, arising from their participation interests or funding of the Ableco term loans and the Holdings Note. Committee's Request for Further Information On Feb. 14, 2008, the Debtors voluntarily provided the Committee copies of prepetition loan documents upon the Committee's request. The Committee sent an e-mail message to Ableco, Sun Entities and their counsels requesting for documents to further the investigation. The information request set March 21, 2008, as the response and production deadline for Ableco and Sun Entities. 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. The Official Committee of Unsecured Creditors is represented by Cooley Godward Kronish LLP and Whiteford Taylor Preston LLC. 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. WILLIAM BOYD: Hearing on Plant Sale to Cass Hill is Today --------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of New York set a hearing on March 19, 2008, at 10:30 a.m. to consider approval of the sale of William Boyd Printing Company, Inc.'s plant for $1.3 million, Michael DeMasi writes for The Albany Business Review. Based on the report, the Debtor received the offer from Cass Hill Advisors Ltd., a Cass Hill Development Cos. affiliate, to buy the plant located at Sheridan Avenue in Albany, New York. Business Review relates that the plant was auctioned on Feb. 29, 2008. In December 2006, Cass Hill owns a number of properties, including an office structure right across Boyd's plant, Business Review says. Cass Hill Development president Marc H. Paquin didn't comment on the deal. About William Boyd Printing Company Albany, New York-based William Boyd Printing Company, Inc. -- http://www.boydprinting.com/-- operates a printing press that specializes in the production of loose-leaf publications, perfectbound or saddle-stitched books and journals of every kind. It filed for chapter 11 protection on Sept. 26, 2005 (Bankr. N.D.N.Y. Case No. 05-16900). The Law Office of Robert J. Rock represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed assets and debts between $1 million and $10 million. XERIUM TECHNOLOGIES: May File For Bankruptcy Protection ------------------------------------------------------- Xerium Technologies Inc. said that it may file for bankruptcy if it failed to meet the terms of a financial covenant with lenders under a credit agreement, according to the company regulatory filing with the Securities and Exchange Commission. In light of Xerium's risk of financial covenant default under its credit and guaranty agreement, Stephen Light, Xerium's new chief executive officer, and other members of senior management have been devoting the substantial portion of their time seeking solutions to these financial covenant issues. Xerium says that its board of directors has determined not to declare a dividend on its common stock in the first quarter of 2008, but instead, determined to retain cash that would have otherwise been used for a dividend for the repayment of debt or other purposes. Xerium adds that it does not currently expect to pay dividends on its common stock for the foreseeable future. According to Peter J. Brennan of Bloomberg News, Xerium took a slide from $3.28 to $1.15 in New York Stock Exchange composite trading Tuesday. Xerium shares also dropped 78%, He adds. Furthermore, Xerium filed a notice of late filing with the SEC in regard to its annual report on Form 10-K for the period ended Dec. 31, 2008. About Xerium Technologies Based on Youngsville, North Carolina, Xerium Technologies Inc. (NYSE: XRM) -- http://www.xerium.com/--manufactures and supplies consumable products used primarily in the production of paper: clothing and roll covers. The company has approximately 3,800 employees and 35 manufacturing facilities in 15 countries around the world. ZIFF DAVIS: Gets Court Approval to Hire BMC as Claims Agent ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved a request by Ziff Davis Media, Inc. and its debtor- affiliates to employ the BMC Group, Inc., as their notice, claims and balloting agent in their Chapter 11 cases. The Debtors anticipate that the thousands of creditors, equity security holders and other parties-in-interest in the Chapter 11 case may impose heavy burdens on the Court and the Office of the Clerk of the Court. Thus, the Debtors seek to employ BMC to lessen the burdens of the Bankruptcy Clerk's Office. As reported by the Troubled Company Reporter on March 14, Mark D. Moyer, chief restructuring officer of Ziff Davis Media Inc., related that the Debtors selected BMC because the firm has substantial experience as a claims and noticing agent and has already developed efficient and cost-effective methods in its area of expertise. As the Debtors' notice and claims agent, BMC will: (a) prepare and serve required notices in the Chapter 11 cases including (i) a notice of the commencement of these chapter 11 cases and the initial meeting of creditors, (ii) notices of objections to claims, (iii) notices of any hearings on a disclosure statement and confirmation of a Plan or Plans of Reorganization; and (iv) other miscellaneous notices as the Debtors or the Court may deem necessary or appropriate for an orderly administration of the Chapter 11 cases; (b) prepare for filing with the Clerk's Office a certificate or affidavit of service within three business days after the service of a particular notice; (c) maintain a Web site at www.bmcgroup.com/ziffdavis where, among other things, electronic copies of all pleadings filed in the Chapter 11 cases will be posted within three business days of filing and may be viewed free of charge; (d) maintain copies of all claims and proofs of interest filed in the Chapter 11 cases; (e) maintain official claims registers in the Chapter 11 cases by docketing all claims and proofs of interest in a claims database; (f) implement necessary security measures to ensure the completeness and integrity of the claims registers; (g) transmit to the Clerk's Office a copy of the claims registers on a weekly basis unless requested more or less frequently by the Clerk's Office; (h) maintain an up-to-date mailing list for all entities that have filed claims or proofs of interest and make the list available upon request to the Clerk's Office or any party in interest; (i) provide access to the public for examination of copies of the claims or proofs of interest filed in the Chapter 11 cases without charge during regular business hours and on a public Web site; (j) record all transfers of claims and, if directed to do so by the Court, provide notice of the transfers; (k) comply with applicable federal, state, municipal, and local statutes, ordinances, rules, regulations, orders, and other requirements; (l) provide temporary employees to process claims as necessary; (m) promptly comply with further conditions and requirements as the Clerk's Office or the Court may at any time prescribe; and (n) provide other claims processing, noticing, balloting, and related administrative services as may be requested from time to time by the Debtors. As balloting agent, BMC will: * print ballots including creditor and shareholder specific ballots; * prepare voting reports by plan class, creditor, or shareholder and amount for review and approval by the client and its counsel; * coordinate the mailing of ballots, disclosure statement, and Plan of Reorganization to all voting and non-voting parties and provide affidavit of service; * establish a toll-free "800" number to receive questions regarding voting on the Plan; and * receive ballots at BMC's headquarters, inspect ballots for conformity to voting procedures, date stamping and numbering ballots consecutively, and tabulate and certify the results. Moreover, BMC will assist the Debtors with, among other things, (a) maintaining and updating the master mailing lists of creditors, (b) to the extent necessary, gathering data in conjunction with the preparation of the Debtors' schedules of assets and liabilities and statements of financial affairs, (c) the tracking and administration of claims, and (d) performing other administrative tasks pertaining to the administration of the Chapter 11 cases as may be requested by the Debtors or the Clerk's Office. The Debtors will pay BMC for its services, expenses and supplies at the rates or prices in effect on the day the services or supplies are provided to the Debtors, in accordance with BMC's fee schedule. Moreover, before the Petition Date, the Debtors paid BMC a $15,000 retainer. In addition, the fees and expenses of BMC incurred for the services rendered are to be treated as an administrative expense of the Debtors' estates, Mr. Moyer notes. Each notice and claims agent invoice will be be paid by the Debtors within 10 business days of the date the invoice has been received by the Debtors, unless BMC is advised, within the 10-day period, that the Debtors object to the invoice. If the Debtors object to the invoice, a hearing will be scheduled before the Court to consider the disputed invoice, and the Debtors will remit to BMC only the undisputed portion of the invoice and, if applicable, pay the remainder to BMC upon the resolution of the dispute, as mandated by the Court. Tinamarie Feil, chief financial officer of BMC, assures the Court that her firm is a "disinterested person," as the term is defined in Section 101(14) of the Bankruptcy Code. 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) * February Downgrades Driven By Covenant Concerns, Moody's Says --------------------------------------------------------------- Speculative-Grade Liquidity ratings downgrades of three companies in February reflects the importance of loan covenants to liquidity, says Moody's Investors Service. "Covenant structure and a company's earnings trajectory are key," says Moody's Vice-President John Puchalla, "and concerns about potential covenant violations were the main reasons for these downgrades." Underscoring the critical significance of covenants and liquidity to credit quality, Moody's also placed the Corporate Family Ratings of these three companies on review for downgrade, says Puchalla. In all, Moody's downgraded 10 companies' SGL ratings in February, including the three downgrades to SGL-4, the weakest composite score. "Rising concerns about covenant compliance and increased reliance on a revolving credit facility each factored into five of the 10 SGL downgrades in February," says Puchalla. "In three of the 10 downgrades, we cited weaker cash and cash-flow coverage of obligations over the next 12 months as the contributing factors." Note that more than one factor can contribute to a downgrade. So far, the pace of SGL downgrades in the first quarter of 2008 is behind that of the fourth quarter of 2007, says Moody's. However, there were significantly more downgrades (10) than upgrades (2) in February than in January (5 upgrades versus 5 downgrades). The importance of covenants is evident in the historical drivers of SGL downgrades, says Moody's. A diminishing covenant cushion was the most frequently cited reason, factoring into 215, or 79.6%, of the SGL downgrades since the Moody's Speculative-Grade Liquidity ratings were introduced in October 2002. The number of issuers with SGL-4 ratings climbed to 39 in February from 37 in January, accounting for 8.2% of the SGL-rated issuers at the end of February. The percent of issuers with SGL-4 ratings was slightly below the recent peak of 8.3% in December. In all, there were 473 active SGL ratings, with total rated debt of about $1.12 trillion, as of Feb. 29. The majority of the SGL ratings are for US-based issuers, although there are a handful of Canadian companies in the population. * S&P Reports Data on Leveraged Companies With High Default Risk ---------------------------------------------------------------- More than three-quarters of all U.S. weakest links have highly leveraged financial risk profiles, and over half of these companies have been involved in private equity driven transactions in recent years. S&P says that the number of weakest links has increased significantly since mid-2007, in line with the sharply rising volatility in the credit markets. "A close look at the 93 U.S. weakest links shows that more than 50% were involved in transactions involving private equity," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "This is not surprising, as a deluge of liquidity in the bond and loan markets in recent years has spurred a wave of leveraged activity, including private-equity sponsors seeking to put cheap money to work on behalf of their clients." * S&P Downgrades 47 Classes' Ratings From Five CDO Deals to 'D' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 47 classes of notes from five collateralized debt obligation transactions to 'D'. The rating actions follow notice from the trustees for the CDO transactions that state that they are in the final stages of liquidating the collateral for the CDO transactions. The five CDO transactions are: -- BFC Silverton CDO Ltd., a hybrid mezzanine structured finance CDO of ABS transaction originated in October 2006; -- Diogenes CDO III Ltd., a hybrid mezzanine SF CDO of ABS transaction originated in August 2007; -- IMAC CDO 2007-2 Ltd., a hybrid CDO of SF CDOs transaction originated in April 2007; -- TABS 2007-7 Ltd., a hybrid mezzanine SF CDO of ABS transaction originated in March 2007; and, -- Vertical ABS CDO 2007-1 Ltd., a hybrid mezzanine SF CDO of ABS transaction originated in April 2007. The trustees have indicated that they anticipate that the proceeds from the sale of the collateral, along with the proceeds in the collateral principal collection account, super-senior reserve account, credit default swap reserve account and other sources, will likely not be adequate to cover the required termination payments to the CDS counterparty, and that it is likely that proceeds will not be available for distribution to the notes junior to super-senior swap in the capital structure of the CDO transactions. Ratings Lowered and Removed From CreditWatch Negative Rating ------ Transaction Class To From ----------- ----- -- ---- BFC Silverton CDO Ltd A LiqFac D BB/Watch Neg BFC Silverton CDO Ltd B-1 D CCC-/Watch Neg BFC Silverton CDO Ltd B-2 D CCC-/Watch Neg BFC Silverton CDO Ltd C D CCC-/Watch Neg Diogenes CDO III Ltd. A-1a D BB/Watch Neg Diogenes CDO III Ltd. A-1a D BB/Watch Neg Diogenes CDO III Ltd. A-1b D CCC-/Watch Neg Diogenes CDO III Ltd. A-1c D CCC-/Watch Neg Diogenes CDO III Ltd. A-2 D CCC-/Watch Neg Diogenes CDO III Ltd. B-1 D CCC-/Watch Neg IMAC CDO 2007-2 Ltd A-1 D BB/Watch Neg IMAC CDO 2007-2 Ltd A-2 D CCC-/Watch Neg IMAC CDO 2007-2 Ltd A-3 D CCC-/Watch Neg IMAC CDO 2007-2 Ltd B D CCC-/Watch Neg IMAC CDO 2007-2 Ltd C D CCC-/Watch Neg TABS 2007-7 Ltd. A1S D BB/Watch Neg TABS 2007-7 Ltd. A1J D CCC-/Watch Neg TABS 2007-7 Ltd. A2 D CCC-/Watch Neg TABS 2007-7 Ltd. X D CCC-/Watch Neg Vertical ABS CDO 2007-1 Ltd A1S D BB/Watch Neg Vertical ABS CDO 2007-1 Ltd A1J D CCC-/Watch Neg Vertical ABS CDO 2007-1 Ltd A2 D CCC-/Watch Neg Vertical ABS CDO 2007-1 Ltd X D BB/Watch Neg Ratings Lowered Rating ------ Transaction Class To From ----------- ----- -- ---- BFC Silverton CDO Ltd D D CC BFC Silverton CDO Ltd E D CC BFC Silverton CDO Ltd F D CC Diogenes CDO III Ltd. B-2 D CC Diogenes CDO III Ltd. C-1 D CC Diogenes CDO III Ltd. C-2 D CC Diogenes CDO III Ltd. D-1 D CC Diogenes CDO III Ltd. D-2 D CC Diogenes CDO III Ltd. E D CC IMAC CDO 2007-2 Ltd D D CC IMAC CDO 2007-2 Ltd E D CC IMAC CDO 2007-2 Ltd F D CC IMAC CDO 2007-2 Ltd G D CC TABS 2007-7 Ltd. A3 D CC TABS 2007-7 Ltd. B1 D CC TABS 2007-7 Ltd. B2 D CC TABS 2007-7 Ltd. B3 D CC TABS 2007-7 Ltd. C D CC TABS 2007-7 Ltd. ISub Nts D CC Vertical ABS CDO 2007-1 Ltd A3 D CC Vertical ABS CDO 2007-1 Ltd B1 D CC Vertical ABS CDO 2007-1 Ltd B2 D CC Vertical ABS CDO 2007-1 Ltd C D CC Vertical ABS CDO 2007-1 Ltd I D CC * S&P Designates Ratings on 228 Classes of RMBS on Negative Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on 228 classes of residential mortgage-backed securities backed by U.S. first-lien prime jumbo mortgage loan collateral issued from the first quarter of 2005 through the first quarter of 2007 on CreditWatch with negative implications. The classes are from 115 RMBS transactions. In aggregate, the affected classes represent an original par amount of approximately $933.0 million, which is 0.22% of the $417.6 billion original par amount of U.S. first-lien prime jumbo mortgage collateral rated by Standard & Poor's from the first quarter of 2005 through the first quarter of 2007. The certificates with ratings placed on CreditWatch negative have a current balance of $894.6 million. The affected prime jumbo transactions are collateralized by hybrid adjustable-rate mortgage (ARM) loans (which may or may not have a period of interest-only payments) and fixed-rate mortgage loans. The rating actions affected the various collateral types: 2005 Vintage percentage affected rated percentage No. ratings ratings (million) (billion) rated ----------- ---------- --------- --------- ----------- 86 2.18% $219.2 $229.5 0.10% 2006 Vintage percentage affected rated percentage No. ratings ratings (million) (billion) rated ----------- ---------- --------- --------- ----------- 103 4.07% $286.3 $138.0 0.21% 2007 Vintage percentage affected rated percentage No. ratings ratings (million) (billion) rated ----------- ---------- --------- --------- ----------- 39 4.51% $427.5 $50.0 0.85% Impact On CDOs, ABCP, And SIVs Standard & Poor's has reviewed its rated collateralized debt obligation transactions with exposure to the affected U.S. prime jumbo RMBS classes, and has determined that the RMBS rating actions being taken will not affect the ratings assigned to the CDO transactions. Standard & Poor's has completed a global review of its rated asset-backed commercial paper conduits with exposure to these U.S. prime jumbo RMBS classes and confirms that the ratings on these ABCP conduits are not adversely affected by these rating actions. Standard & Poor's has also reviewed all of its rated structured investment vehicle and SIV-lite structures with regard to exposure to these U.S. prime jumbo RMBS classes. This review showed that the ratings on these SIVs are not adversely affected by these rating actions. The classes affected by the CreditWatch actions were distributed throughout the rating spectrum. By number of ratings, the CreditWatch actions predominantly affected the 'BB' and lower rating categories (77.63%). The ratings associated with the CreditWatch placements, as a percentage of the total $933.0 million in affected securities, are: Rating No. of Orig. cert. percentage of total category classes bal. (million) actions by bal. -------- ------- -------------- ------------------- AAA 4 $299.2 32.07% AA 3 $18.4 1.97% AA- 1 $3.3 0.36% A+ 1 $3.1 0.33% A 11 $47.7 5.11% A- 1 $1.9 0.21% BBB+ 2 $5.2 0.56% BBB 21 $70.2 7.52% BBB- 7 $8.8 0.94% BB 43 $138.0 14.79% BB- 5 $12.0 1.29% B 127 $321.0 34.41% B- 2 $4.1 0.44% Total 228 $933.0 100.00% These CreditWatch actions reflect a persistent rise in the level of delinquencies among the prime jumbo mortgage loans supporting these transactions. As of the February 2008 distribution period, severe delinquencies (90-plus days, foreclosures, and real estate owned {REO} collateral) for the affected transactions from the 2005 vintage represented 2.76% of the current aggregate pool balance, which is 64% higher than the 1.68% reported for all of the prime jumbo transactions issued in 2005. The affected transactions from the 2006 vintage had severe delinquencies of 2.65%, which is 57% higher than the 1.69% experienced by the entire vintage. The affected transactions from the first-quarter of 2007 had severe delinquencies of 1.51%, which is 36% higher than the 1.11% experienced by the entire first quarter of 2007 vintage. In addition, S&P is reviewing the affected U.S. prime jumbo transactions with respect to the revised assumptions S&P now uses for the surveillance of U.S. RMBS, as noted in S&P's Jan. 15, 2008, announcement. The fundamental change to S&P's surveillance assumptions for U.S. RMBS that is applicable to prime jumbo collateral is the extension of S&P's stresses of the expected loss amount over the lifetime of the transactions (compared with the 36-month period S&P had been using) to evaluate the adequacy of credit enhancement. Because S&P expects the duration of the housing downturn to be longer than previously anticipated, S&P believes that using a longer term and corresponding revisions to loss curves may be appropriate. S&P also continue to monitor the transactions issued during the second, third, and fourth quarters of 2007 and will take action if S&P deems it appropriate. It is possible that the continued decline in performance, combined with the extension of S&P's stresses of the expected loss amount over the lifetime of the transactions and the potential for revisions to its expected losses, may have an adverse impact on its ratings. * S&P Downgrades Ratings on 91 Classes From 23 RMBS Transactions ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 91 classes from 23 residential mortgage-backed securities transactions backed by U.S. subprime mortgage loan collateral issued in 2006. At the same time, S&P removed all of the lowered ratings from CreditWatch with negative implications. In addition, S&P affirmed its ratings on 58 classes from 20 RMBS transactions backed by U.S. subprime loans and removed them from CreditWatch negative. All of the ratings had been placed on CreditWatch negative on Jan. 30, 2008. The downgrades reflect S&P's opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings, given S&P's current projected losses. S&P calculated its projected deal-specific losses utilizing 2006 subprime default curves, which S&P published on Oct. 19, 2007. Due to current market conditions, S&P is assuming that it will take approximately 15 months to liquidate loans in foreclosure and approximately eight months to liquidate loans categorized as real estate owned. In addition, S&P is assuming a loss severity of approximately 45% for U.S. subprime RMBS transactions issued in 2006. The lowered ratings reflect S&P's assessment of credit support under two constant prepayment rate scenarios. The first scenario utilizes the lower of the lifetime or 12-month CPR, while the second utilizes a six-month CPR, which is very slow by historical standards. S&P assumed a constant default rate for each pool. Because the analysis focused on each individual class with varying maturities, prepayment scenarios may cause an individual class or the transaction itself to prepay in full before it incurs the entire loss projection. Slower prepayment assumptions lengthen the average life of the mortgage pool, which increases the likelihood that total projected losses will be realized. The longer a class remains outstanding, however, the more excess spread it generates. Standard & Poor's has updated its projected excess spread to account for the recent cuts in U.S. interest rates. In an upwardly sloping mortgage rate environment, Standard & Poor's announced that it would be discounting a portion of excess spread to account for potential interest rate modifications. An interest rate modification may extend the initial fixed-rate period of a mortgage loan to five years from two and three years. The reduction in interest rates has effectively extended the initial interest rates beyond the interest rate reset period. As a result of the reduction in excess spread, many loan modifications may no longer be needed. Standard & Poor's has updated its assumptions on excess spread to reflect the current environment. In assessing the creditworthiness of each class, S&P reviewed the individual delinquency and loss trends of each transaction, changes, if any, in risk characteristics, servicing, and the ability to withstand additional credit deterioration. For pools that are continuing to show increasing delinquencies, S&P increased its cash flow stresses to account for potential increases in monthly losses. In order to maintain a rating higher than 'B', a class had to absorb losses in excess of the base case assumption S&P assumed in its analysis. For example, a class may have to withstand 115% of S&P's base case loss assumption in order to maintain a 'BB' rating, while a class had to withstand 125% of S&P's base case loss assumption to maintain a 'BBB' rating. Each class that has an affirmed 'AAA' rating can withstand approximately 150% of S&P's base case loss assumptions under its analysis, subject to individual caps assumed on specific transactions. S&P determined the caps by limiting the amount of remaining defaults to 90% of the current pool balances. Credit support for these transactions is provided through a combination of subordination, excess spread, and overcollateralization. The underlying collateral for these transactions consists of fixed- and adjustable-rate U.S. subprime mortgage loans that are secured by first and second liens on one- to four-family residential properties. To date, including the classes listed below and actions on both publicly and confidentially rated classes, S&P has resolved the CreditWatch placements of 137 classes from 23 U.S. RMBS subprime transactions from the 2006 and 2007 vintages. Currently, S&P's ratings on 2,455 classes from 492 U.S. RMBS subprime transactions from the 2006 and 2007 vintages are on CreditWatch negative. Standard & Poor's will continue to monitor the RMBS transactions it rates and take rating actions, including CreditWatch placements, when appropriate. Ratings Lowered and Removed From CreditWatch Negative ABFC Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-OPT2 M-1 BB AA+/Watch Neg 2006-OPT2 M-2 B AA/Watch Neg 2006-OPT2 M-3 CCC AA-/Watch Neg ACE Securities Corp Home Equity Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-ASAP4 M-2 BBB AA+/Watch Neg 2006-ASAP4 M-3 BB AA+/Watch Neg 2006-ASAP4 M-4 B AA/Watch Neg 2006-ASAP4 M-5 B AA/Watch Neg 2006-ASAP4 M-6 CCC AA-/Watch Neg 2006-NC1 M-4 BBB AA/Watch Neg 2006-NC1 M-5 B AA-/Watch Neg 2006-NC3 A-1A A AAA/Watch Neg 2006-NC3 A-1B A AAA/Watch Neg 2006-NC3 A-2D A AAA/Watch Neg 2006-NC3 M-1 B AA+/Watch Neg 2006-NC3 M-2 B AA/Watch Neg 2006-NC3 M-3 CCC AA-/Watch Neg Argent Securities Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-W1 M-3 BBB AA/Watch Neg 2006-W1 M-4 B AA/Watch Neg Asset Backed Securities Corp. Home Equity Loan Trust Rating ------ Series Class To From ------ ----- -- ---- OOMC 2006-HE5 M-2 BBB AA/Watch Neg OOMC 2006-HE5 M-3 B AA-/Watch Neg FFMLT Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-FF4 M-3 BBB AA/Watch Neg 2006-FF4 M-4 BB AA/Watch Neg 2006-FF4 M-5 B AA-/Watch Neg 2006-FF13 A-1 BBB AAA/Watch Neg 2006-FF13 A-2D BBB AAA/Watch Neg 2006-FF13 M-1 BB AA+/Watch Neg 2006-FF13 M-2 B+ AA+/Watch Neg 2006-FF13 M-3 B AA/Watch Neg 2006-FF13 M-4 CCC AA/Watch Neg 2006-FF13 M-5 CCC AA-/Watch Neg Fremont Home Loan Trust 2006-A Rating ------ Series Class To From ------ ----- -- ---- 2006-A M-2 B AA/Watch Neg GSAMP Trust 2006-HE5 Rating ------ Series Class To From ------ ----- -- ---- 2006-HE5 M-2 A AA/Watch Neg 2006-HE5 M-3 BB AA/Watch Neg 2006-HE5 M-4 B AA/Watch Neg Home Equity Asset Trust 2006-5 Rating ------ Series Class To From ------ ----- -- ---- 2006-5 M-1 AA- AA+/Watch Neg 2006-5 M-2 BB AA+/Watch Neg 2006-5 M-3 B AA/Watch Neg 2006-5 M-4 CCC AA/Watch Neg 2006-5 M-5 CCC AA-/Watch Neg IXIS Real Estate Capital Trust 2006-HE2 Rating ------ Series Class To From ------ ----- -- ---- 2006-HE2 M-1 BB AA+/Watch Neg 2006-HE2 M-2 CCC AA/Watch Neg 2006-HE2 M-3 CCC AA/Watch Neg 2006-HE2 M-4 CCC AA-/Watch Neg Long Beach Mortgage Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-1 M-2 BBB AA+/Watch Neg 2006-1 M-3 B+ AA/Watch Neg 2006-1 M-4 B AA/Watch Neg 2006-1 M-5 CCC AA-/Watch Neg 2006-6 I-A AA AAA/Watch Neg. 2006-6 II-A4 AA AAA/Watch Neg. 2006-6 M-1 BB AA+/Watch Neg. 2006-6 M-2 B AA+/Watch Neg. 2006-6 M-3 CCC AA/Watch Neg 2006-6 M-4 CCC AA/Watch Neg 2006-6 M-5 CCC AA-/Watch Neg 2006-WL3 M-2 AA- AA/Watch Neg 2006-WL3 M-3 BB AA-/Watch Neg Merrill Lynch Mortgage Investors Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-FM1 M-1 AA- AA+/Watch Neg 2006-FM1 M-2 BB AA/Watch Neg 2006-FM1 M-3 B AA-/Watch Neg 2006-HE6 A-1 AA AAA/Watch Neg 2006-HE6 A-2C AA AAA/Watch Neg 2006-HE6 M-1 BBB AA+/Watch Neg 2006-HE6 M-2 B AA/Watch Neg 2006-HE6 M-3 CCC AA-/Watch Neg Morgan Stanley ABS Capital I Inc. Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-WMC2 A-1 BB AAA/Watch Neg 2006-WMC2 A-2C AA AAA/Watch Neg 2006-WMC2 A-2D BB AAA/Watch Neg 2006-WMC2 M-1 B AA+/Watch Neg 2006-WMC2 M-2 CCC AA/Watch Neg 2006-WMC2 M-3 CCC AA/Watch Neg RAMP Trust 2006-NC2 Rating ------ Series Class To From ------ ----- -- ---- 2006-NC2 M-2 BBB AA/Watch Neg 2006-NC2 M-3 BB AA/Watch Neg 2006-NC2 M-4 B AA-/Watch Neg RASC Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-KS9 A-I-4 AA AAA/Watch Neg 2006-KS9 A-II AA AAA/Watch Neg 2006-KS9 M-1S BB AA+/Watch Neg 2006-KS9 M-2S B AA/Watch Neg 2006-KS9 M-3S CCC AA/Watch Neg 2006-KS9 M-4 CCC AA-/Watch Neg Securitized Asset Backed Receivables LLC Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-OP1 M-4 A AA-/Watch Neg 2006-WM4 A-1 BB AAA/Watch Neg 2006-WM4 A-2C A AAA/Watch Neg 2006-WM4 A-2D BB AAA/Watch Neg Structured Asset Securities Corp. Mortgage Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-BC1 A-1 AA AAA/Watch Neg 2006-BC1 A-2 AA AAA/Watch Neg 2006-BC1 A-6 AA AAA/Watch Neg 2006-BC1 M-1 BBB AA+/Watch Neg 2006-BC1 M-2 B AA+/Watch Neg 2006-BC1 M-3 CCC AA+/Watch Neg 2006-BC1 M-4 CCC AA/Watch Neg 2006-BC1 M-5 CCC A/Watch Neg Ratings Affirmed and Removed From CreditWatch Negative ABFC Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-OPT2 A-1 AAA AAA/Watch Neg 2006-OPT2 A-2 AAA AAA/Watch Neg 2006-OPT2 A-3A AAA AAA/Watch Neg 2006-OPT2 A-3B AAA AAA/Watch Neg 2006-OPT2 A-3C AAA AAA/Watch Neg 2006-OPT2 A-3D AAA AAA/Watch Neg ACE Securities Corp. Home Equity Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-NC1 M-2 AA AA/Watch Neg 2006-NC1 M-3 AA AA/Watch Neg 2006-NC3 A-2A AAA AAA/Watch Neg 2006-NC3 A-2B AAA AAA/Watch Neg 2006-NC3 A-2C AAA AAA/Watch Neg Argent Securities Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-W1 M-2 AA+ AA+/Watch Neg Bear Stearns Asset Backed Securities I Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-HE3 M-3 AA- AA-/Watch Neg Citigroup Mortgage Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-WFHE3 M-2 AA AA/Watch Neg 2006-WFHE3 M-3 AA- AA-/Watch Neg FFMLT Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-FF13 A-2A AAA AAA/Watch Neg 2006-FF13 A-2B AAA AAA/Watch Neg 2006-FF13 A-2C AAA AAA/Watch Neg Fremont Home Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-A 1-A-1 AAA AAA/Watch Neg 2006-A 1-A-2 AAA AAA/Watch Neg 2006-A 2-A-2 AAA AAA/Watch Neg 2006-A 2-A-3 AAA AAA/Watch Neg 2006-A 2-A-4 AAA AAA/Watch Neg 2006-A M-1 AA AA/Watch Neg GSAMP Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-HE5 M-1 AA+ AA+/Watch Neg IXIS Real Estate Capital Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-HE2 A-1 AAA AAA/Watch Neg 2006-HE2 A-2 AAA AAA/Watch Neg 2006-HE2 A-3 AAA AAA/Watch Neg 2006-HE2 A-4 AAA AAA/Watch Neg Long Beach Mortgage Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-1 I-A AAA AAA/Watch Neg 2006-1 II-A2 AAA AAA/Watch Neg 2006-1 II-A3 AAA AAA/Watch Neg 2006-1 II-A4 AAA AAA/Watch Neg 2006-1 M-1 AA+ AA+/Watch Neg 2006-6 II-A1 AAA AAA/Watch Neg 2006-6 II-A2 AAA AAA/Watch Neg 2006-6 II-A3 AAA AAA/Watch Neg Merrill Lynch Mortgage Investors Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-FM1 A-2A AAA AAA/Watch Neg 2006-FM1 A-2B AAA AAA/Watch Neg 2006-FM1 A-2C AAA AAA/Watch Neg 2006-FM1 A-2D AAA AAA/Watch Neg 2006-FM1 A-1 AAA AAA/Watch Neg 2006-HE6 A-2A AAA AAA/Watch Neg 2006-HE6 A-2B AAA AAA/Watch Neg Morgan Stanley ABS Capital I Inc. Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-WMC2 A-2FPT AAA AAA/Watch Neg 2006-WMC2 A-2A AAA AAA/Watch Neg 2006-WMC2 A-2B AAA AAA/Watch Neg RAMP TRUST Rating ------ Series Class To From ------ ----- -- ---- 2006-NC2 M-1 AA+ AA+/Watch Neg RASC TRUST Rating ------ Series Class To From ------ ----- -- ---- 2006-KS9 A-I-1 AAA AAA/Watch Neg 2006-KS9 A-I-2 AAA AAA/Watch Neg 2006-KS9 A-I-3 AAA AAA/Watch Neg Securitized Asset Backed Receivables LLC Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-OP1 M-2 AA+ AA+/Watch Neg 2006-OP1 M-3 AA AA/Watch Neg 2006-WM4 A-2A AAA AAA/Watch Neg 2006-WM4 A-2B AAA AAA/Watch Neg Structured Asset Securities Corp. Mortgage Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-BC1 A-3 AAA AAA/Watch Neg 2006-BC1 A-4 AAA AAA/Watch Neg 2006-BC1 A-5 AAA AAA/Watch Neg * Fitch Says Credit Market Downturn Is Difficult for Underwriters ----------------------------------------------------------------- The current credit market downturn has made it considerably more difficult for underwriters to clear deals through the leveraged loan market, according to Fitch Ratings. Beginning in the second half of 2007, underwriters began offering a variety of credit enhancements to make leveraged loans more attractive to a diminishing investor base. These include: upward flex, call protection, original issue discounts, more restrictive covenant packages, and Most Favored Nation clauses. More recently, underwriters also have begun offering London Inter- Bank Offered Rate floors on many facilities as well as faster amortization schedules. In a new report, Fitch examines some of these features and their relative effectiveness. 'The number of committed deals coming to market in the near future could exacerbate an already tenuous situation,' said Eric Tutterow, Managing Director, Fitch Ratings U.S. Leveraged Finance. 'Tight credit markets are forcing underwriters to focus more on reducing inventories rather than underwriting new loans.' Amid a diminished base of leveraged loan investors, particularly CLOs, arrangers have had limited success with less conventional investors such as distressed funds and newly-created loan opportunity funds. Fitch Ratings estimates the total amount of 'hung' loans remains in the range of $150-200 billion while the forward leveraged loan pipeline totals another $120 billion. For borrowers, structural changes in the leveraged loan market have resulted in an increase in the cost of capital and reduced financial flexibility. Fitch Ratings believes this could result in rising default rates over the course of 2008. Default volume in January of 2008 was $3.7 billion, more than the amount of issuance defaulted in all of 2007. * Fitch Says Weak Housing Environment Will Continue to Take a Toll ------------------------------------------------------------------ The weak U.S. housing environment , a weaker economy and tighter credit standards have and will continue to take a toll on home improvement spending, according to Fitch Ratings in a new report. Home improvement spending is influenced to a major degree by new and, especially, existing home turnover, albeit on a lagged basis. Thus, with fewer homes being sold, home prices declining, expensive building materials, lower homeowner equity and higher interest rates on home equity loans, consumers scaled back spending on housing renovations in 2007. 'Increasing uncertainty about income prospects and job security, as reflected in the weakening of consumer confidence indicators, is also likely to take a toll on consumer spending,' said Managing Director and lead homebuilding analyst Robert Curran. 'Employment growth has been a key support to the consumer outlook in the face of pressures from the housing market and debt servicing, and the volatility and deterioration comes just as these other pressures are intensifying.' Various national house price measures are now showing sizeable annual declines in nominal terms, which will reduce net wealth and further reduce possibilities of home equity extraction. 'Although interest rates have declined so far in 2008, tighter lending standards are also expected to contribute to reduced home equity extraction this year,' said Director Robert Rulla. * CorporateDefaults.com Reports Default Chances for Bear Stearns ---------------------------------------------------------------- CorporateDefaults.com by Savvysoft released implied default probabilities for Bear Stearns for the past several weeks. A chart shows the default probabilities rising steadily from 4.88% on March 5 to 8.26% on March 13, an increase of more than 65%. The default probabilities calculated at CorporateDefaults.com are based on a bond's spread to the Treasury curve. A corporate bond trades at a higher yield, and therefore a lower price, than a Treasury, to compensate for a possible default. The larger the price discount, the greater the market believes is the chance of default. These implied default probabilities are an independent, objective and accurate measure of what the market as a whole thinks is the chance of a company defaulting. The Bear Stearns default probability history: Date Default Probability ---- ------------------- March 5 4.88% March 6 5.69% March 7 6.05% March 10 6.65% March 11 7.74% March 12 7.60% March 13 8.26% "Rumors have a way of turning out to be true, and that was certainly the case here," Rich Tanenbaum, president of Savvysoft, said. "But even if you weren't clued into the rumor mill, CorporateDefaults told us that the market was expecting problems at Bear Stearns." CorporateDefaults tracks the implied default probabilities of thousands of issuers, and is updated daily. About Savvysoft Headquartered in New York City, Savvysoft is a provider of high- caliber OTC derivatives analytics, portfolio and risk management systems, and market-implied corporate default rates. Savvysoft's analytical products handle OTC derivatives in many markets including: equities, interest rates, FX, commodities, convertibles, MBS, electricity, energy, and credit. Savvysoft products are used by over 3000 institutions in 15 countries worldwide. The institutions include top-tier banks, dealers, brokers, money managers, energy suppliers, corporate treasurers, auditors and consultants. Savvysoft was founded by Rich Tanenbaum, the head of Derivatives Research at Bankers Trust (now Deutsche Bank). * CRG's Gray Named Fellow of American College of Bankruptcy ----------------------------------------------------------- Stephen Gray, a managing partner of CRG Partners, was inducted as a fellow of the American College of Bankruptcy March 15, 2008, in Washington, D.C. He was one of 29 honorees selected from a pool of international candidates for the Nineteenth Class of College Fellows. The ceremony was held at the National Building Museum and was presided over by David G. Heiman, president of the College. "Stephen Gray's induction as a fellow of the American College of Bankruptcy confirms what we, his colleagues, already know: Stephen demonstrates the highest level of professionalism, ethics, integrity, professional expertise and leadership," said Michael Epstein, a managing partner. "His contribution and dedication to the enhancement of the bankruptcy and insolvency practice serves as a model for the entire firm. All of us at CRG Partners congratulate him on this honor." Fellows are recognized for their professional excellence in and exceptional contributions to the fields of bankruptcy and insolvency law. They are selected by a board of regents from the recommendations of the Circuit Admissions Council in each federal judicial circuit and specially appointed Committees for Judicial and International Fellows. The American College of Bankruptcy -- http://www.amercol.org/-- is an honorary professional and educational association of bankruptcy and insolvency professionals. The College plays an important role in sustaining professional excellence in this rapidly expanding field of expertise. College Fellows include commercial and consumer bankruptcy attorneys, insolvency accountants, turnaround and workout specialists, law professors, judges, government officials and others involved in the bankruptcy and insolvency community. About CRG Partners Headquartered in New York, CRG Partners -- http://www.crgpartners.com-- is a provider of operational and financial restructuring services, specializing in creating value for the stakeholders of underperforming companies. CRG Partners has offices in Atlanta; Bethesda; Boston; Charlotte; Chicago; Dallas; Los Angeles; New York; and Vienna, Austria. * Beard Audio Presents "Understanding CDS Contract Risks" Seminar ----------------------------------------------------------------- Beard Audio Conferences presents a new audio seminar on "Understanding CDS Contract Risks." The live 90-minute telephone conference with interactive Q&A session is hosted by the Beard Group Law and Business Publishers and Troubled Company Reporter. Enroll today in this international audio conference and let noted restructuring attorney Andrea Pincus help you better understand the make-up of your CDS portfolio. She'll provide a plain-English explanation of the structure of CDS transactions, then analyze the state of today's market, empowering you to better manage CDS contract risks, tap into potential rewards, and spot warning signs along the way. Register now at http://researcharchives.com/t/s?2954 Learn more by visiting http://researcharchives.com/t/s?2955 Today's $45 trillion CDS market is roughly twice the size of the entire U.S. stock market. Yet despite its staggering size, the unregulated over-the-counter CDS market and its vast underpinnings remain a mystery to even the most sophisticated of investors. What's more, the spider's web of connections between Credit Default Swaps and global subprime failures, ratings downgrades, monoline exposure, and billion-dollar losses by commercial banks and insurers means your potential CDS risks are greater than ever. The conference agenda includes: * What's behind the curtain? What you need to know about the structure of today's CDS contracts and their evolution - from hedging vehicle to highly customized alternative investment vehicle, * Mechanics of a typical CDS transaction, including required documentation and critical contract terms * Special challenges and concerns for CDS written on asset-backed securities and backed by financial guaranty policies * What is counterparty risk? How is it affected in the face of subprime meltdowns, concentration of major players, the ongoing liquidity crisis, and shaken investor confidence? * Changing dynamic for troubled companies due to the high volume of CDS trading in the secondary market and related pressure on CDS buyers to push troubled companies intoChapter 11 * New initiatives from ISDA, including modifications to standard forms * Prospects for regulation and changing accounting principles * Emerging areas of dispute and litigation - like ambiguous documentation, valuation methodologies, and conflicts over collateral obligations. Learn how to identify them before they sabotage your portfolio * Hedging your hedge - potential upsides for distressed investors. Early-Bird Registration Discount Register by Thursday, April 17, and save $50 off the regular tuition. Tuition is $245 prior to April 17; $295 afterwards. Remember, the tuition includes written materials and an unlimited number of attendees at your dial-in site. Who Should Attend: All those participating in today's Credit Default Swap market - both buyers and sellers of CDS protection - and their legal and financial advisors. This easy-to-attend audio briefing is designed to help you better understand the latest market dynamics affecting ways to value your holdings - or unload them. About Your Presenter: Andrea Pincus joined the law firm of Reed Smith LLP as a lateral partner in February 2008, and is a member of the firm's Commercial Restructuring & Bankruptcy Group and the firm's Financial Industries Group. In her practice, Andrea represents hedge funds, banks and other institutional investors, bondholders and trustees, as well as ad hoc and official committees, secured creditors, governmental entities, private individuals and debtors-in-possession in all aspects of Chapter 11 cases as well as out-of-court workouts involving private and publicly-held companies. In the related areas of capital markets and structured finance, Andrea represents hedge funds, banks and other financial institutions in connection with distressed investing strategies, structured debt, and derivative transactions based on ISDA documentation, with a particular focus on credit default swaps and valuation disputes. Andrea is a member of 100 Women in Hedge Funds, a global association of women in the hedge fund industry, and serves on its Philanthropy Committee and Governance Committee. In addition, she is a member of the American Bankruptcy Institute as well as the Turnaround Management Association. HOW TO REGISTER: 1. Call 240-629-3300 and charge your tuition investment of $245 ($295 after April 17, 2008) to a major credit card, or 2. Visit www.beardaudioconferences.com for fast and convenient online registration. 3. Mail your check payable to Beard Audio Conferences to: Beard Group, P.O. Box 4250, Frederick, MD 21705-4250 (checks must be received 48 hours prior to conference). Can't make the scheduled date and time? Order the Audio CD recording of this conference. Or get the CONFERENCE PLUS option that allows you to attend the audio conference AND get the Audio CD recording at a discounted price. For either option, visit http://www.beardaudioconferences.com or call (240) 629-3300. * 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 ***