T R O U B L E D C O M P A N Y R E P O R T E R Thursday, March 20, 2008, Vol. 12, No. 68 Headlines ABITIBIBOWATER INC: Weak Liquidity Prompts Moody's to Junk Rating AERCO LIMITED: Fitch Cuts Ratings on Two Note Classes to CC/DR4 AGY HOLDING: Solicits Consents to Amend Pact for 11% Lien Notes AINSWORTH LUMBER: S&P Retains Junk Rating on Failed Exchange Offer AMBAC FINANCIAL: Denies Having Material Exposure to Bear Stearns AMBAC FINANCIAL: Unit Meets With Bondholders on Fund's Escrow Pact AMERICAN AIRLINES: Fitch Holds Ratings on $42M Notes at 'B' ARMSTRONG LOAN: S&P Assigns 'BB' Rating on $18M Class F Notes BCE INC: Bell Noteholders File Appeal Against Plan of Arrangement BEAR STEARNS: Insurers Not Liable to Pay Coverage, NY Court Rules BEAR STEARNS: SEC May Start Another Probe on Bear Stearns Conduct BELLWRIGHT INDUSTRIES: Case Summary & 18 Largest Unsec. Creditors BLUE WATER: Committee's Appeal on Interim DIP Order Denied BLUE WATER: Schedules Filing Deadline Extended to March 28 BLUE WATER: Gets Court Okay to Hire Foley & Lardner as Counsel BLUE WATER: Gets Permission to Hire Administar as Claims Agent BRIGANTINE HIGH: Moody's Cuts Ratings on Declining Credit Quality C-BASS: Fitch Affirms 'BB' Rating on Class B-4 Certificates CBTC S2001-8 TRUST: S&P Assigns 'B-' Rating on A-1 and A-2 Classes CLEAR CHANNEL: Extends Closing of Notes Tender Offer to March 24 COLLEGE PARTNERSHIP: Case Summary & 20 Largest Unsecured Creditors CONTINENTAL AIRLINES: First Choice for Merger, UAL Says CORINTHIAN CUSTOM: Gets Permission to Hire MGLAW as Counsel CUMULUS MEDIA: Inks 2nd Amendment to Credit Agreement with BofA NA CWMBS: Fitch Downgrades Class B-3 to 'B' From 'BB' DELPHI CORP: Court Allows Probe Plan Lenders on Improper Trading DOMAIN INC: Court Schedules March 25 Auction of Store Leases DUNE ENERGY: Declining Liquidity Prompts S&P's Negative Outlook FIDELITY PARTNERSHIP: Board Allows Dissolution Effective March 31 FREMONT GENERAL: Debt Restructuring Cues Delay of $6 Mil. Payment FREMONT GENERAL: Payment Delay on Sr. Notes Cues S&P's 'D' Ratings FREMONT GENERAL: Fitch Mulls Default Due to Interest Payment Delay GAINEY CORP: Liquidity Concerns Cue S&P to Junk Rating From 'B-' GENERAL GROWTH: Weakened Financial Profile Cues S&P's 'BB+' Rating GMAC LLC: Financial Unit's Board Names Alvaro de Molina as CEO GMAC COMMERCIAL: Moody's Confirms Low-B Ratings on Six Classes GREATER AMERICAN: Voluntary Chapter 11 Case Summary GREENWICH CAPITAL: Fitch Holds Low-B Ratings on Six Cert. Classes GS MORTGAGE: Moody's Cuts Rating on Class H-HP Certs. to 'Ba1' H&R BLOCK: To Sell Mortgage Business to WL Ross Affiliate HAMLIN PROPERTIES: Court Okays Hiring of Olson Nicoud as Counsel INTERSTATE BAKERIES: Can Reject CBAs with Two Local BCTGM Unions INTERSTATE BAKERIES: Incurs $5.3 Debt Fees to Silver Point Finance JOHN CARR: Voluntary Chapter 11 Case Summary KKR ATLANTIC: Amendment Extension Won't Affect S&P Ratings KKR PACIFIC: S&P Ratings Unmoved by Amendment Extension Execution LB FURNITURE: Case Summary & 20 Largest Unsecured Creditors LIBERTY HARBOUR: Poor Credit Quality Prompts Moody's Rating Cuts LILA INC: Case Summary & 20 Largest Unsecured Creditors LIONEL LLC: Files Third Amended Plan of Reorganization MAGNA ENTERTAINMENT: Ernst & Young Raises Substantial Doubt MEDICOR LTD: Court Extends Exclusive Plan-Filing Period to May 26 MORGAN STANLEY: S&P Assigns 'BB' Rating on $3.5M Class A-14 Notes MORGAN STANLEY: Fitch Affirms 'B-' Rating on $2.4MM Class N Certs. NORTHWEST AIRLINES: Continental is First Choice for UAL Merger OPTION ONE: To Be Sold by H&R Block to WL Ross Affiliate PASA FUNDING: Moody's Junks Rating on $120 Mil. Notes PASCACK VALLEY: Court Okays $45 Million Asset Sale to HUMC/Touro PERFORMANCE TRANS: Obtains Default Waiver from DIP Lenders PERFORMANCE TRANS: Avoidance Actions Filed Against 38 Entities PIKE NURSERY: Wants to Access PNC and PDIP's Cash Collateral PLASTECH ENGINEERED: Atek Wants Stay Lifted to Prosecute Appeal PLASTECH ENGINEERED: Court OKs Lazard Freres as Financial Advisor PLASTECH ENGINEERED: Panel Can Hire Mesirow as Financial Advisors PLASTECH ENGINEERED: Parties React to JCI Plea for Pact Decision PLASTECH ENGINEERED: Wants United Stars' Lift Stay Plea Denied PRAISE TABERNACLE: Case Summary & Six Largest Unsecured Creditors PRC LLC: Gets Court Nod on Jenner & Block as Special Counsel PRC LLC: Panel Seeks to Retain Blank Rome as Bankruptcy Counsel PRC LLC: Panel Seeks to Employ J.H. Cohn as Financial Advisor PRC LLC: Wants Court to Approve Severance Program PROPEX INC: Board Names Woody McGee as New President and CEO PSI TECHNOLOGIES: Amends 2006 Report; Going Concern Doubt Raised QUEBECOR WORLD: Won't Timely File Financial Report for 2007 QWEST COMMS: Appeals Court Orders New Trial for Former CEO Nacchio REYNOLDS AMERICAN: Moody's Reviews 'Ba1' Rating for Likely Upgrade RITCHIE IRELAND: Withdraws Lawsuit Against Coventry First SALANDER-O'REILLY: Resolves Gallery Lease Dispute with Landlord SECURITIZED ASSET: Fitch Junks Ratings on Four Certificate Classes SIRIUS SATELLITE: Net Loss Drops to $565MM in Year Ended Dec. 31 SHAW CREATIONS: Voluntary Chapter 11 Case Summary SOFA EXPRESS: Can Use Wells Fargo's Cash Collateral on Final Basis SOUTHERN BUILDING: Bites the Dust After Lender Halts Credit Line SOUTHERN BUILDING: Case Summary & 17 Largest Unsecured Creditors SPECTRUM BRANDS: To Create Jobs at Rayovac Plant in Wisconsin SPRINT NEXTEL: Bane and Koch Won't Stand for Board Re-election SPYRUS INC: Court Approves Epiq Bankruptcy as Claims Agent TOP QUALITY GLASS: Case Summary & Six Largest Unsecured Creditors THORNBURG MORTGAGE: Inks Override Pact with Five Counterparties TOT-BOT INC: Case Summary & 19 Largest Unsecured Creditors TRIBUNE CO: S&P Cuts Ratings on Class A and B Debentures to 'CCC' TRICOM SA: Bancredit Says Prepack Plan Violates Bankruptcy Code TRICOM SA: Seeks Dismissal of Bancredit's $120MM Lawsuit TRICOM SA: Gets Go-Signal to Pay Employee Wages & Benefits TRUMILLA HINNANT: Case Summary & 12 Largest Unsecured Creditors UAL CORPORATION: Continental Airlines is First Choice for Merger UAL CORPORATION: Denies Criminal Allegations of Former Employee UAL CORPORATION: SPCP Group Wants $1,445,675 Claim Allowed UNISYS CORP: Posts $79 Mil. Net Loss in Year Ended December 31 US CELLULAR: S&P Upgrades Ratings on A-1 and A-2 Certs. From 'BB+' UNIVERSAL AMERICAN: Writes Down $26.7 Mil. of Sub-Prime Holdings UNIVERSAL AMERICAN: $26.7 Mil. Writedown Won't Affect 'BB+' Rating VERASUN ENERGY: Moody's Chips Rating on $210 Mil. Notes to 'Ba3' VISTEON CORP: Elects Alex J. Mandl to Board of Directors VONAGE HOLDINGS: BDO Seidman Raises Substantial Doubt WCI COMMUNITIES: Posts $459.8M Net Loss in 2007 4th Quarter WELLMAN INC: Wants to Implement 2008 Annual Incentive Plans WR GRACE: Smaller DIP Loan Approved; Some Lenders Back Out * S&P Downgrades 123 Tranches' Ratings From 23 Cash Flows and CDOs * S&P Downgrades Ratings on 29 Classes From 11 RMBS Transactions * S&P Says Weakness Lies Ahead For Consumer Discretionary Sector * S&P Says Export Growth Will Help Industrials Facing Slow Economy * S&P Says Market Volatility to Further Reduce Credit Availability * American College of Bankruptcy Inducts Stephen Gray as Fellow * Andrews Kurth Formalizes Subprime and Distressed Assets Practice * Bridge Associates Forms Multi-Disciplinary Advisory Board * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* ABITIBIBOWATER INC: Weak Liquidity Prompts Moody's to Junk Rating ----------------------------------------------------------------- Moody's Investors Service downgraded the corporate family ratings of AbitibiBowater Inc.'s subsidiaries Abitibi-Consolidated Inc. and Bowater Incorporated to Caa1 from B2. The rating action results from AbitibiBowater's deteriorating liquidity profile, the anticipated challenges associated with the company's recently announced $1.4 billion refinancing plan and weakened credit protection measures. At the same time, Moody's downgraded the probability-of-default rating of Abitibi to Caa3 from B2 and the probability-of-default rating of Bowater to Caa1 from B2. Moody's assigned a B1 rating to the new $415 million secured notes due 2011 at Abitibi and downgraded the senior unsecured ratings for bonds and debentures issued by Abitibi and Bowater to Caa2 from B3. In addition, Abitibi's and Bowater's speculative grade liquidity ratings were downgraded to SGL-4 and SGL-3 respectively from SGL-2. The rating outlooks for Abitibi and Bowater are negative. The ratings of Abitibi reflect the company's weakened liquidity profile and the anticipated challenges of completing the company's recently announced exchange offer whereby the company has offered to exchange the 6.95% notes of Abitibi due April 1, 2008, the 5.25% Notes of Abitibi-Consolidated Company of Canada due June 20, 2008, and the 7.875% notes of Abitibi due Aug. 1, 2009 (the affected notes) in a private placement for a combination of cash and new 15% notes due 2010 to be issued by Abitibi-Consolidated Company of Canada. Moody's considers the exchange offer to be occurring under distressed circumstances and upon the completion of the exchange, would downgrade Abitibi's probability-of-default rating on the affected notes to LD from Caa3 reflecting a limited default. The ratings of Abitibi and Bowater also reflect their weak operating performance, negative free cash flow and high debt levels from past debt-financed acquisitions. The ratings incorporate declining demand for newsprint, deteriorating markets for their sawmill operations, rising input costs (especially in eastern Canada), the strong Canadian dollar, and a weakened liquidity profile. Positive factors that support the ratings include AbitibiBowater's large scale as the largest newsprint producer in the world, which provides flexibility to reduce costs, the potential to realize a large portion of the $375 million of identified synergies, and cost-competitive operations. It is noted that even as newsprint consumption continues to decline in 2008 owing to rising substitution by electronic media and the slowing US economy, the newsprint capacity reductions by AbitibiBowater and its competitors should provide support to the price increases implemented in the first quarter of 2008. Some improvement in cash flow generation should be observed as the effects of price increases work their way through the company's results. The speculative grade liquidity ratings for Abitibi and Bowater result from minimal availability under each company's respective credit facilities, and expectations that cash flow will be slightly negative to neutral over the next four quarter SGL time horizon. The weaker SGL rating for Abitibi reflects the scheduled debt maturity of $346 million in the next quarter and the limited cash and credit availability of approximately $100 million. The SGL ratings also incorporate the expectation that financial covenant compliance may become a problem should the company prove unsuccessful in extending an expiring waiver or financial performance fails to improve materially in the next few quarters. Moody's believes that AbitibiBowater has some alternative liquidity potential with the ability to sell certain non-core assets including the company's hydro assets, timberlands and operating assets in the UK and South Korea. In addition, the company expects to receive approximately $160 million in cash proceeds in the second quarter of this year from the recent sale of the Snowflake, Arizona newsprint mill to Catalyst Paper Corporation. The negative outlook reflects the potential for further downward ratings adjustment should the refinancing plan fail to be completed in the amounts and in the timeframe required to address Abitibi's debt maturities. The negative rating outlook also reflects expectations that AbitibiBowater's liquidity profile will be at risk should declining newsprint demand, the strong Canadian dollar and rising input costs offset the expected improved financial results from the newsprint price increases implemented since November 2007. Downgrades: Issuer: Abitibi-Consolidated Company of Canada -- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2, LGD4-62% from B3, LGD4-57% -- Senior Unsecured Shelf, Downgraded to (P)Caa2 from (P)B3 Issuer: Abitibi-Consolidated Finance L.P. -- Multiple Seniority Shelf, Downgraded to (P)Caa2 from (P)B3 -- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2, LGD4-62% from B3, LGD4-57% Issuer: Abitibi-Consolidated Inc. -- Probability of Default Rating, Downgraded to Caa3 from B2 -- Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-2 -- Corporate Family Rating, Downgraded to Caa1 from B2 -- Multiple Seniority Shelf, Downgraded to (P)Caa2 from (P)B3 -- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2, LGD 4-62% from B3, LGD4-57% Issuer: Bowater Canada Finance Corp. -- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2, LGD4-61% from B3, LGD4-60% Issuer: Bowater Incorporated -- Probability of Default Rating, Downgraded to Caa1 from B2 -- Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 -- Corporate Family Rating, Downgraded to Caa1 from B2 -- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2, LGD4-61% from B3, LGD4-60% Issuer: Maine Finance Authority -- Senior Unsecured Revenue Bonds, Downgraded to Caa2, LGD4-61% from B3, LGD4-60% Issuer: McMinn (County of) TN, I.D.B. -- Senior Unsecured Revenue Bonds, Downgraded to Caa2, LGD4-61% from B3,LGD4-60% Issuer: York (County of) SC -- Senior Unsecured Revenue Bonds, Downgraded to Caa2, LGD4-61% from B3,LGD4-60% Assignments: Issuer: Abitibi-Consolidated Company of Canada -- Senior Secured Regular Bond/Debenture, Assigned B1, LGD1-08% Outlook Actions: Issuer: Abitibi-Consolidated Company of Canada -- Outlook, Changed To Negative From Developing Issuer: Abitibi-Consolidated Finance L.P. -- Outlook, Changed To Negative From Developing Issuer: Abitibi-Consolidated Inc. -- Outlook, Changed To Negative From Developing Issuer: Bowater Canada Finance Corp. -- Outlook, Changed To Negative From Developing Issuer: Bowater Incorporated -- Outlook, Changed To Negative From Developing Headquartered in Montréal, Québec, with a regional office in Greenville, South Carolina, AbitibiBowater is North America's leader in newsprint and commercial printing papers. The company also produces lumber and market pulp. The company was formed from the merger of Abitibi and Bowater in October 2007. AbitibiBowater owns or operates 27 paper and pulp facilities (excluding the Snowflake, Arizona newsprint mill) and 35 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. American LaFrance, LLC, on March 11, 2008, filed an Amended Plan of Reorganization and Disclosure Statement. AERCO LIMITED: Fitch Cuts Ratings on Two Note Classes to CC/DR4 --------------------------------------------------------------- Fitch Ratings has taken these rating actions on AerCo Limited: -- Class A-3 notes affirmed at 'BBB-'; -- Class A-4 notes affirmed at 'BBB'; -- Class B-1 notes downgraded to 'CC/DR4' from 'CCC/DR4'; -- Class B-2 notes downgraded to 'CC/DR4' from 'CCC/DR4'; -- Class C-1 notes remain at 'C/DR6'; -- Class C-2 notes remain at 'C/DR6'; -- Class D-2 notes remain at 'C/DR6'. Classes A-3, A-4, B-1, and B-2 are removed from Rating Watch Negative. The affirmation and removal of Rating Watch Negative on the class A notes results from Fitch's analysis which determined that expected monthly cash flow along with available liquidity support are sufficient to support the class A notes' at their current rating levels. The downgrade to the class B notes reflects decreasing recovery prospects resulting from continued class B interest shortfalls which have accumulated to $3.7 million as of March reporting. Fitch's analysis incorporated the expected net cash flow to be available to the trust over the remaining life of the transaction. Fitch's expected cash flow takes several factors into account, including aircraft age, portfolio value, potential lease rates on the aircraft and perceived liquidity of the aircraft in the portfolio. AerCo is a special purpose limited liability Jersey company formed to conduct limited activities, including the buying, owning, leasing and selling of commercial jet aircraft. In July 1998 AerCo issued $800 million of notes to acquire a portfolio of 35 aircraft. In July 2000, AerCo issued $960 million of notes to refinance its class A-1 and D-1 notes and to acquire an additional 30 aircraft. AGY HOLDING: Solicits Consents to Amend Pact for 11% Lien Notes --------------------------------------------------------------- AGY Holding Corp. is soliciting consents to certain proposed amendments to the indenture governing its 11% senior second lien notes due 2014, and the intercreditor agreement and consignment agreement related to the indenture. The consent solicitation commenced March 18, 2008 and will expire at 5:00 p.m., New York City time, on March 28, 2008, unless extended or earlier terminated. Holders of Notes as of 5:00 p.m., New York City time, on March 17, 2008, the record date, will be eligible to consent. The consent solicitation requires that consents be received and not revoked from holders of a majority of the aggregate principal amount of Notes outstanding. Upon the terms and subject to the conditions set forth in the Consent Solicitation Statement dated March 18, 2008, AGY is seeking consents to amend the indenture to allow the company to increase the maximum permissible value of consigned platinum under the consignment agreement due to the recent increases in platinum market prices. In addition, the company is seeking a further amendment to the consignment agreement to increase the consignment reserve in exchange for a reduction in, or elimination of, the required standby letter of credit collateral, in order to improve liquidity. The consent solicitation is subject to certain conditions as set forth in the Consent Solicitation Statement, including receipt of the Requisite Consents, execution of a supplemental indenture and amendments to each of the intercreditor agreement and the consignment agreement, and the absence of any legal restriction relating to the transactions contemplated by the Consent Solicitation Statement. Holders of the Notes are referred to the Consent Solicitation Statement and the accompanying consent letter, which are being mailed to the holders, for the detailed terms and conditions of the consent solicitation. Only those holders of Notes who have delivered, and not revoked, consents prior to the Expiration Date will be entitled to receive the consent fee. The company has retained Global Bondholder Services Corporation to serve as Information Agent and Tabulation Agent for the consent solicitation. Requests for documents should be directed to Global Bondholder Services Corporation at (866) 873-6300 or (212) 430- 3774. The company has also retained UBS Securities LLC as Solicitation Agent for the consent solicitation. Questions concerning the terms of the consent solicitation should be directed to UBS Securities LLC, Liability Management Group at (888) 719-4210 or (203) 719-4210. About AGY Holding Headquartered in Aiken, South Carolina, AGY Holding Corporation -- http://www.agy.com/-- manufactures materials used in automotive, construction, defense, electronics, aerospace, marine, andrecreation markets. AGY has a European office in Lyon, France, and manufacturing 0facilities in Aiken, South carolina and Huntingdon, Pennsylvania. * * * Moody's Investor Service placed AGY Holding Corporation's senior secured debt rating at 'B2' in October 2006. The rating still holds to date with a stable outlook. AINSWORTH LUMBER: S&P Retains Junk Rating on Failed Exchange Offer ------------------------------------------------------------------ Standard & Poor's Ratings Services kept the 'CC' long-term corporate credit and senior unsecured debt ratings on Ainsworth Lumber Co. Ltd. on CreditWatch with negative implications following the company's failed exchange offer of all existing senior unsecured notes for discounted senior notes due 2014. The ratings were placed on CreditWatch Feb. 6, 2008. At the same time, S&P lowered the rating on the senior secured bank loan to 'CCC' (two notches above the corporate credit rating) from 'B-', and revised the CreditWatch implications to negative from developing, where they were placed Feb. 15. The recovery rating is unchanged at '2', indicating an expectation of substantial (70%-90%) recovery in the event of a payment default. The ratings reflect Ainsworth's extremely tight liquidity, which stood at CDN$69 million at Dec. 31, 2007. Given depressed oriented strandboard prices so far in 2008, S&P expects the company is not generating any cash from operations and quickly depleting what little liquidity it has. "If the company's profitability remains weak because of continued low OSB prices, its large cash interest payment in the second quarter will increase the likelihood that Ainsworth will default on payment or file for bankruptcy in 2008," said Standard & Poor's credit analyst Jatinder Mall. The CreditWatch placement will be resolved once S&P has a clear understanding of the company's plan to improve liquidity. AMBAC FINANCIAL: Denies Having Material Exposure to Bear Stearns ---------------------------------------------------------------- Ambac Financial Group Inc. said it has no material exposure to Bear Stearns in its financial guaranty and financial services businesses. In these areas, Ambac is exposed to Bear Stearns through special purpose vehicles and, in its capacity as, a servicer, a CDS counterparty, a remarketing agent or an interest rate swap/cap provider. With respect to its exposures, Ambac relates that all of its exposures to Bear Stearns are sufficiently structured to protect Ambac from any material loss. For example, Bear Stearns has substantially collateralized its exposure to Ambac under its interest rate and cross-currency swap agreements. Ultimately, Ambac expects that JP Morgan Chase will assume the liabilities of Bear Stearns under these contracts. "We believe that we have limited exposure to Bear Stearns and we will continue to monitor it closely," Michael Callen, chairman and CEO of Ambac Financial Group, commented. "We understand that, in times of market stress, it is particularly important to communicate this information with investors and our other constituents." Based in New York City, Ambac Financial Group, Inc. is a holding company that provides financial guarantees and financial services to clients in both the public and private sectors around the world through its principal operating subsidiary, Ambac Assurance Corporation. As an alternative to financial guarantee insurance credit protection is provided by Ambac Credit Products, a subsidiary of Ambac Assurance, in credit derivative format. 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. AMBAC FINANCIAL: Unit Meets With Bondholders on Fund's Escrow Pact ------------------------------------------------------------------ Ambac Assurance UK Limited met with holders of bonds issued by Metronet Rail BCV and Metronet Rail SSL to provide further information on the escrow arrangements for funds received in respect of those bonds and the application of those funds. The funds paid on Feb. 12, 2008, by London Underground Ltd. in respect of the put option price on bonds issued by BCV and SSL are being held in escrow and are available to meet debt service and other amounts due in accordance with the Bond Trust Deed, escrow agreements and other relevant documentation. AUK insures GBP193 million of the SSL indexed-linked bonds and GBP350 million of the BCV fixed rate bonds. The debt was issued under Public Private Partnership contracts to finance the operation, maintenance and the initial phase of asset upgrades for part of the London Underground. Under the applicable PPP contracts, insured bondholders and other senior creditors including commercial banks and the EIB benefit from an "Underpinned Amount" providing support from LUL. With respect to the AUK-insured BCV and SSL bonds, the sum of GBP617 million has been segregated through deposit into two separate escrow accounts opened in the joint names of AUK and Deutsche Trustee Company Limited (Deutsche) at Citibank N.A., London Branch. Deutsche is the Bond Trustee under the Bond Trust Deed governing the BCV and SSL bonds. The funds held in escrow are available to meet debt service guaranteed by AUK and other amounts due in accordance with the Bond Trust Deed, the escrow agreement and other relevant documentation. While in escrow, the funds will be invested in UK government securities, entities which invest solely in UK government securities, any short term instruments or deposits with a rating of A-1 or better by S&P and P-1 or better by Moody's, or other investments as agreed by AUK and the Bond Trustee. As is typical for insured transactions that experience an event of default, AUK has the right to direct that the funds held in escrow be used either to continue to meet debt service as scheduled or to fund the acceleration and immediate payment of all principal and interest due in accordance with the documentation. AUK's unconditional and irrevocable guaranty remains in full force and effect. About Ambac Financial Based in New York City, Ambac Financial Group, Inc. is a holding company that provides financial guarantees and financial services to clients in both the public and private sectors around the world through its principal operating subsidiary, Ambac Assurance Corporation. As an alternative to financial guarantee insurance credit protection is provided by Ambac Credit Products, a subsidiary of Ambac Assurance, in credit derivative format. For the nine months ended Sept. 30, 2007, Ambac reported net income of $26 million. As of Sept. 30, 2007, Ambac had shareholders' equity of approximately $5.65 billion. * * * On Jan. 18, Fitch Ratings downgraded Ambac to double-A after the insurer put off plans to raise equity capital. As reported Troubled Company Reporter on Jan. 17, 2008, Moody's Investors Service placed the Aaa insurance financial strength ratings of Ambac Assurance Corporation and Ambac Assurance UK Limited on review for possible downgrade. In the same rating action, Moody's also placed the ratings of the holding company, Ambac Financial Group, Inc. (senior debt at Aa2), and related financing trusts on review for possible downgrade. Moody's stated that this rating action follows Ambac's announcement of record losses, a capital raising plan, and the retirement of its CEO. AMERICAN AIRLINES: Fitch Holds Ratings on $42M Notes at 'B' ----------------------------------------------------------- Fitch Ratings has affirmed the ratings of American Airlines, Inc. Class A & B secured notes due 2009, as: -- $180,457,000 7.25% class A at 'BBB-'; -- $42,031,000 9.00% class B at 'B'. Fitch's affirmation on the class A notes primarily reflects the value of the spare parts securing the notes, which has remained consistent since close; the availability of Section 1110 of the U.S. Bankruptcy Code; AA's credit quality; and the liquidity facilities for the class A notes only, which provide four successive semi-annual interest payments at the existing fixed interest rate. Fitch's rating on the class B notes primarily reflects AA's credit quality and the steady value of the spare parts. The notes are structured similar to enhanced equipment trust certificates. EETC's are hybrid corporate-structured debt obligations in which payment on the notes is effectively supported by the underlying corporate entity, while structured elements of the transaction provide protection to investors in the event of issuer default. As such, Fitch's ratings on EETC transactions begin with the underlying Issuer Default Rating of the issuing entity and are adjusted upward depending on the structural enhancements in place. The notes are backed by a pool of spare parts for aircraft and engine spare parts currently owned by AA. The majority of the spare parts are comprised of rotables and limited life spare parts, and expendable spare parts, all for use on the following types of in-service aircraft utilized by AA: Boeing model 737- 800s, 757-200s, 767-200s, 767-300s, or 777-200s, and McDonnell Douglas MD-80 aircraft, or on any engine or spare part utilized on any such aircraft. The spare parts notes have a security interest in all of the aircraft spare parts financed. ARMSTRONG LOAN: S&P Assigns 'BB' Rating on $18M Class F Notes ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Armstrong Loan Funding Ltd. and Armstrong Loan Funding Corp.'s $569.64 million floating-rate notes due 2016. The preliminary ratings are based on information as of March 18, 2008. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The transaction's 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 Armstrong Loan Funding Ltd./Armstrong Loan Funding Corp. Class Rating Amount (million) ----- ------ ---------------- A AAA $333.30 B AAA $133.32 C AA $30.30 D A $36.36 E BBB $18.18 F BB $18.18 Class I preference shares NR $16.85 Class II preference shares NR $21.69 NR — Not rated. BCE INC: Bell Noteholders File Appeal Against Plan of Arrangement ---------------------------------------------------------------- Certain holders of Bell Canada debentures appealed all judgments of the Quebec Superior Court in relation to the plan of arrangement of BCE Inc. with a consortium led by the Ontario Teachers' Pension Plan. As reported in the Troubled Company Reporter on March 11, 2008, The committee comprising certain institutional holders of 1997 Bell Canada debentures objected to the plan. The Committee related that the proposed plan forced Bell Canada, the BCE subsidiary in which Committee members hold bonds, to guarantee $32 billion in loans that the purchaser will incur to purchase the shares of BCE. Committee members believe that Bell will receive nothing in return for guaranteeing that debt. The proposed plan has already led to a decrease in the market value of the bonds and has led some credit agencies to downgrade the bonds' status from investment grade to junk bond status. BCE Inc.'s Statement on the Appeal BCE Inc. was notified of this action, Martine Turcotte, chief legal officer of BCE and Bell Canada, in response, said: "Our position from the start, which was supported on every point of contention by the Quebec Superior Court, is that the claims of these debentureholders are without merit." "We will vigorously defend that position in the Court of Appeal and believe that the Superior Court's decisions will be upheld," Ms. Turcotte added. "As the Superior Court has concluded, BCE and Bell Canada have respected all of the rights and reasonable expectations of the debentureholders." The remaining conditions to the closing of the privatization transaction include the required approvals of the Canadian Radio- television and Telecommunications Commission and Industry Canada. BCE expects the transaction to close in the first part of the second quarter of 2008, subject to the timing of the appeals. About Bell Canada Headquartered in Montreal, Bell Canada -- http://www.bell.ca/-- is a communications company, providing consumers with solutions to all their communications needs, including telephone services, wireless communications, high-speed Internet, digital television and voice over IP. Bell also offers integrated information and communications technology services to businesses and governments, and is the Virtual Chief Information Officer to small and medium businesses. Bell is proud to be a Premier National Partner and the exclusive Communications Partner to the Vancouver 2010 Olympic and Paralympic Winter Games. Bell is wholly owned by BCE Inc. (TSX/NYSE: BCE). Bell Canada continues to carry Standard & Poor's Ratings Services' 'BB-' long-term corporate credit rating, which was placed in September 2007. About BCE Inc. Headquartered in Montreal, Quebec, BCE Inc. (TSX/NYSE: BCE) -- http://www.bce.ca/-- is a communications company, providing comprehensive and innovative suite of communication services to residential and business customers in Canada. Under the Bell brand, the company's services include local, long distance and wireless phone services, high-speed and wireless Internet access, IP-broadband services, information and communications technology services (or value-added services) and direct-to-home satellite and VDSL television services. Other BCE holdings include Telesat Canada and an interest in CTVglobemedia. * * * As reported in the Troubled Company Reporter on Dec. 14, 2007, Standard & Poor's Ratings Services kept its ratings on BCE Inc. and its related entities on CreditWatch with negative implications, pending the completion of the company's leveraged buyout by a consortium of private equity investors led by Teachers Private Capital as announced on June 30, 2007. As a result of the proposed LBO, S&P expect reported debt to increase to about CDN$37 billion from about CDN$10 billion at Sept. 30, 2007. As reported in the Troubled Company Reporter on Sept. 26, 2007, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on BCE Inc. and wholly owned subsidiary Bell Canada to 'BB-' from 'A-'. BEAR STEARNS: Insurers Not Liable to Pay Coverage, NY Court Rules ----------------------------------------------------------------- The New York Court of Appeals decreed that the insurers of Bear Stearn Companies Inc. are not accountable to pay $45 million of an $80 million settlement between Bear Stearns Companies Inc. and various regulators in 2002, The Associated Press reports. The New York appellate court snubbed the investment bank's explanation that it had informed its insurers three days after executing the settlement, AP says. According to a filing with the U.S. Securities and Exchange Commission, on Dec. 20, 2002, Bear, Stearns & Co. Inc., a subsidiary of The Bear Stearns Companies Inc., reached an agreement with the SEC; the National Association of Securities Dealers; the New York Stock Exchange; the Offices of the Attorneys General of New York, New Jersey, Delaware, Vermont, and Hawaii; and the North American Securities Administrators Association to resolve their investigations of Bear Stearns relating to research analyst independence. Pursuant to the agreement in principle, Bear Stearns agreed, among other things, to: (i) pay $50 million in retrospective relief; (ii) adopt internal structural and operational reforms that will further augment the steps it has already taken to ensure research analyst independence and promote investor confidence; (iii) contribute $25 million spread over five years to provide independent, third-party research to clients; (iv) contribute $5 million for investor education programs; and (v) in connection with the agreement in principle, adopt restrictions on the allocation of shares in initial public offerings to corporate executives and directors of public companies. The NY Appeals Court determined that the insurers were not given notice ahead of time, which was required by certain provisions of its insurance contracts, when the company signed a consent agreement with the regulators, AP relates. Bear Stearns insisted that the actual settlement took place a few months later when it was approved by the U.S. District Court in the Southern District of New York in October 2003. According to AP, the Hon. Victoria Graffeo, one of the six judges who unanimously rejected Bear Stearns' argument, held that the settlement was a done deal after both parties signed the consent agreement. AP relates, citing court papers, that when Bear Stearns depleted its $10 million self-insurance, it had $10 million of coverage with Vigilant Insurance and excess liability policies with Federal Insurance and Gulf Insurance for $40 million. All insurers had mandatory policies requiring the company not to resolve any claim more than $5 million without insurers' consent. 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: SEC May Start Another Probe on Bear Stearns Conduct ----------------------------------------------------------------- In a March 18, 2008 FAQ release posted on its Web site, the U.S. Securities and Exchange Commission disclosed that, among others, it has considering potential investigation into Bear Stearns Companies, Inc.'s conduct prior to the investment bank's acquisition agreement with J.P. Morgan Chase & Co. As reported in the Troubled Company Reporter on March 17, 2008, Bear Stearns agreed to be bought by JP Morgan for roughly $240 million. The boards of directors of both companies have unanimously approved the transaction, which 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. During discussions of the possible transaction, SEC officials were in close contact with officials of the Board of Governors of the Federal Reserve System and the Department of the Treasury as well as representatives of JPMorgan and Bear Stearns. To assist in advancing a possible transaction, the SEC staff was able to provide several letters clarifying the staff's position on certain matters connected with the merger. 1) The Division of Trading and Markets The Division of Trading and Markets wrote a letter addressing the timing of JPMorgan's filing of a Form BD with the SEC. Form BD is required to be filed "promptly" after a registered broker-dealer is acquired by another firm. The staff's letter states that it would be acceptable if JPMorgan filed a completed Form BD a reasonable period after the merger closes. 2) The Division of Investment Management The Investment Management Division wrote two letters concerning issues under the Investment Company Act and Investment Advisers Act arising out of the change in control of investment advisers affiliated with Bear Stearns. One letter addresses approvals by the mutual funds advised by the Bear Stearns advisers of new advisory contracts between the funds and the advisers. The other letter provides temporary, conditional relief from restrictions on principal transactions between the Bear Stearns advisers and clients of investment advisers affiliated with JP Morgan and transactions between the JP Morgan advisers and clients of the Bear Stearns advisers. 3) The Division of Enforcement The Division of Enforcement wrote a letter concerning investigations and potential future inquiries into conduct and statements by Bear Stearns before the public announcement of the transaction with JPMorgan. The staff declined to provide assurances about possible future enforcement actions. The letter states that reaching conclusions about those inquiries would be premature. In the letter, the Division confirmed that, consistent with prior statements and guidance by the SEC, the staff would favorably take into account the circumstances of the JPMorgan acquisition of Bear Stearns when considering whether to recommend enforcement action against JPMorgan arising out of statements made by Bear Stearns in the 60 days before the public announcement of the merger. The Division of Enforcement investigates possible violations of the securities laws as appropriate, says the SEC. Among the things the Division looks for are potential indications of insider trading or manipulation of markets through the dissemination of false or misleading information to investors by companies or other market participants. The SEC brings enforcement actions when it concludes the securities laws have been violated. 4) The Division of Corporation Finance The division wrote a letter addressing sales by client accounts managed by JPMorgan and Bear Stearns of the other firm's securities, in view of the control relationship created by the merger agreement. The letter states that these sales may occur temporarily without registration under the Securities Act or compliance with Securities Act Rule 144 in certain limited circumstances. 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'. BELLWRIGHT INDUSTRIES: Case Summary & 18 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Bellwright Industries, Inc. 10186 Bellwright Road Summerville, SC 29483 Bankruptcy Case No.: 08-01597 Type of Business: The Debtor manufactures motor vehicle parts and accessories, metal cutting and polishing lathes, industrial molds, railway air and vacuum brakes. It owns and manages a commercial physical research laboratory. See http://www.bellwright.com Chapter 11 Petition Date: March 18, 2008 Court: District of South Carolina (Charleston) Judge: John E. Waites Debtor's Counsel: Ivan N. Nossokoff, Esq. (inoss@bellsouth.net) 1470 Tobias Gadson Boulevard, Suite 107 Charleston, SC 29407 Tel: (843) 571-5442 Total Assets: $2,508,837 Total Debts: $8,846,821 Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Okuma America Corp. $3,177,051 11900 Westhall Drive Charlotte NC 28273 lease balance $231,224 Business Developmt Corp of security interest $1,053,727 South Carolina value of security: 111 Executive Center Drive $880,068 Columbia SC 29221 Waupaca Foundry, Inc. $527,166 310 South Tower Road Waupaca WI 54981 Alternative Staffing $297,036 1455-I Remount Road Charleston SC 29406 The CIT Equipment Financing lease balance $197,451 Machine Tool System $185,125 Carolina Machine & Tool, Inc. $150,348 Berkeley County Treasurer $139,986 Specialty Tool, Inc. $101,610 BCD-COG (Council and $96,781 Governments) GE Capital $90,000 Diversified Financial $85,386 Services Amembal Capital Corp. lease balance $79,207 Atlantic Financial Partners $69,767 CNC Associates, Inc #9021 $66,744 Express Personnel Services $66,108 CNC Associates, Inc. #9021 $59,199 Innovative Chemical Solutions $54,574 BLUE WATER: Committee's Appeal on Interim DIP Order Denied ---------------------------------------------------------- For reasons stated in the open court, Judge Avern Cohn of the U.S. District Court for the Eastern District of Michigan, Southern Division, denied an appeal by the Official Committee of Unsecured Creditors in Blue Water Automotive Systems, Inc., and its debtor- affiliates' cases from an interim order issued by the U.S. Bankruptcy Court for the Eastern District of Michigan authorizing the Debtors to obtain postpetition loans not to exceed $27,500,000 from Citizens Bank. Judge Cohn also approved a stipulation between the Debtors and the Committee regarding the withdrawal and dismissal of the Committee' request for leave to file the Appeal. The withdrawal and dismissal of the Committee's request for leave is wholly without prejudice to the Committee's rights to file further appeals related to the DIP Financing. As reported in the Troubled Company Reporter on March 7, 2008, the Committee asked the District Court to determine whether: (a) the Interim DIP Order be vacated and the matter remanded to the Bankruptcy Court; (b) the Bankruptcy Court erred in granting the DIP Financing Motion and in entering the Interim DIP Order where the Order: -- allows the Debtors to incur up to $15,000,000, in additional debt secured by liens and superpriority claims on all the Debtors' assets; -- renders the Debtors immediately and irreversibly administratively insolvent; -- compels the sale of all the Debtors' operating assets on an expedited basis and allows the Debtors' customers veto rights on any potential purchaser; -- waives the Debtors' rights to reject their unprofitable contracts with their customers, even though those are the same contracts that rendered the Debtors insolvent in the first place; -- waives and releases all claims against the prepetition lenders where the prepetition lenders' highly inequitable and possibly illegal actions in sweeping funds advanced by Ford forced the Debtors into bankruptcy, and where the Committee has had no opportunity to review those claims; -- permits the Debtors' customers to take over and operate the Debtors' business at any time if the customers feel that the continued production of their parts is in any way threatened; and -- prevent the Debtors, the Committee, or any other party-in-interest from confirming any plan of reorganization, and giving the customers veto rights over any proposed plan of liquidation; (c) the Bankruptcy Court erred in finding that the Debtors would be irreparably harmed if not permitted to spend $15,000,000, before the Interim DIP Order could become a final order; and (d) the Bankruptcy Court erred in finding that the DIP Lenders extended credit to the Debtors in good faith. The Creditors Committee has argued that the Debtors, in their DIP Motion, failed to (i) demonstrate that their management has fulfilled their fiduciary duty to unsecured creditors; and (ii) support their case for borrowing money, which will never be repaid to the prejudice of unsecured creditors, just to provide a controlled sale or liquidation for the benefit of certain of the Debtors' customers who continue to enjoy prices that result in Debtors' substantial operating losses. The Committee also sought a stay of the Interim DIP Order. The Debtors argued that the Committee's request for stay is premature. Because it is not a final order, the Debtors said that the Interim DIP Order may not be appealed. The Debtors also noted that the Committee cannot demonstrate any irreparable harm if its request for stay is denied because the Committee's issues concern its monetary recovery as unsecured creditors. The Debtors argued that it is well settled that money damages do not constitute irreparable harm. Furthermore, the Debtors said that there is no proof of the economic harm to the Committee; its alleged harm at this early stage of the chapter 11 proceeding is hypothetical. The Debtors argued that, on the other hand, they will suffer immediate irreparable harm if the Interim DIP Order is stayed by the Court, because the Debtors would then have no funds to operate. If the postpetition financing is stayed, the result would be, among others, the immediate shutdown of their operations, the immediate loss of employment of more than approximately 1,000 employees, as well as the immediate cessation of parts production for the customers of the Debtors. This would result in a ripple effect as automotive plants shut down lines because they have no parts for production, the Debtors asserted. Solvay Objects to the Interim DIP Order In a separate filing, Solvay Engineered Polymers, Inc., asks the Bankruptcy Court not to base the Final DIP Order on the Interim DIP since it fails to budget for the payment of Section 503(b)(9)claims and grants superpriority status to the DIP Lenders. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operation in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BLUE WATER: Schedules Filing Deadline Extended to March 28 ---------------------------------------------------------- The Hon. Marci B. McIvor of the United States Bankruptcy Court for the Eastern District of Michigan extended until March 28, 2008, the deadline for Blue Water Automotive Systems, Inc., and its debtor-affiliates to file schedules of assets and liabilities, and statements of financial affairs. As reported in the Troubled Company Reporter on Feb. 25, 2008, the Debtors' counsel, Judy A. O'Neill, Esq., at Foley & Lardner, LLP, in Detroit, Michigan, explained that the Debtors cannot complete their Schedules and Statements within the 15-day period alloted under Rule 1007(c) of the Federal Rules of Bankruptcy Procedure due to the complexity of their businesses and the critical restructuring issues that have consumed the attention of their key personnel and professionals. Ms. O'Neill added that the Debtors have not had a sufficient opportunity to gather the necessary information to prepare and file their Schedules and Statements given the size and complexity of their business operations and the fact that certain prepetition invoices have not yet been received and entered into their books and records. Ms. O'Neill said that the Debtors have already commenced the extensive process of gathering the necessary information to prepare and finalize what will be voluminous Schedules and Statements, but believe that the 15-day automatic extension to file the Schedules and Statements will not be sufficient to permit completion of the Schedules and Statements. The Debtors believe that the additional 30 days is enough for them to complete and file the Schedules and Statements. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operation in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BLUE WATER: Gets Court Okay to Hire Foley & Lardner as Counsel -------------------------------------------------------------- The Hon. Marci B. McIvor of the United States Bankruptcy Court for the Eastern District of Michigan authorized Blue Water Automotive Systems, Inc., and its debtor-affiliates to employ Foley & Lardner, LLP, as their bankruptcy counsel. As reported in the Troubled Company Reporter on Feb. 20, 2008, as the Debtors' bankruptcy counsel, Foley & Lardner will: (a) analyze the Debtors' current financial and legal situation; (b) prepare and file, on behalf of the Debtors, all necessary and appropriate petitions, applications, motions, pleadings, draft orders, notices and other documents, including their amendments, and reviewing all financial and other reports to be filed in their Chapter 11 cases; (c) advise the Debtors concerning their powers and duties as debtors-in-possession in the continued operation of their businesses and management of their property; (d) advise the Debtors concerning, and assist in the negotiation and documentation of, financing agreements, debt restructurings, cash collateral arrangements and related transactions; (e) advise the Debtors with regard to their relationships with secured and unsecured creditors and equity security holders, past, present and future, negotiating with those creditors and security holders, and their representatives and legal counsel, as necessary, and taking legal actions as may be necessary or advisable in the best interests of the Debtors; (f) review the nature and validity of liens asserted against the property of the Debtors and advise the Debtors concerning the enforceability of those liens; (g) negotiate and assist in the drafting and preparation of leases, security instruments, and other contracts as may be in the best interests of the Debtors; (h) represent the Debtors at the meeting of creditors, confirmation hearing, and other hearings as may occur; (i) advise the Debtors concerning the actions that it might take to collect and to recover property for the benefit of the Debtors' estates; (j) assist and counsel the Debtors in connection with the formulation, negotiation, preparation, acceptance, confirmation, and implementation of a plan of reorganization in their Chapter 11 proceedings; (k) prepare, on behalf of the Debtors, a disclosure statement, and assist the Debtors in soliciting acceptances of a reorganization plan; (l) advise the Debtors concerning, and preparing responses to, applications, motions, pleadings, notices, and other papers that may be filed and served in their Chapter 11 cases; (m) represent the Debtors in adversary proceedings and other contested matters; and (n) perform all other legal services for or on behalf of the Debtors that may be necessary in the administration of their Chapter 11 cases and the reorganization of their businesses, including advising and assisting with respect to debt restructurings, stock or asset dispositions, claims analysis and disputes, and legal issues involving general corporate, bankruptcy, labor, employee benefits, tax, finance, real estate, and litigation matters, and utilizing paraprofessionals, law clerks, associates, and partners of the firm of Foley & Lardner LLP as may be economical under the circumstances. The Debtors will pay Foley & Lardner according to the firm's customary hourly rates and will reimburse the firm for any necessary out-of-pocket expenses. The Debtors expect six Foley & Lardner professionals to take primary responsibility in providing legal services to them: Professional Position Hourly Rate ------------ -------- ----------- Judy O'Neill, Esq. Partner $635 Frank DiCastri, Esq. Partner $495 John Simon, Esq. Senior Counsel $495 Derek Wright, Esq. Senior Counsel $475 Joanne Lee, Esq. Associate $395 Veronica Crabtree Paralegal $180 Frank W. DiCastri, Esq., a partner at Foley & Lardner, disclosed that Foley & Lardner currently represents Visteon Corp., Automotive Component Holdings, Behr, AON, Metzeler, Cooper- Standard, LaSalle Bank, and KPS Special Situations Fund I, L.P., in matters wholly unrelated to the Debtors or their Chapter 11 cases. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operation in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BLUE WATER: Gets Permission to Hire Administar as Claims Agent -------------------------------------------------------------- Blue Water Automotive Systems, Inc., and its debtor-affiliates can employ Administar Services Group LLC, as claims, noticing, and balloting agent in their chapter 11 cases, the Hon. Marci B. McIvor of the United States Bankruptcy Court for the Eastern District of Michigan ruled. As reported in the Troubled Company Reporter on Feb. 20, 2008, the Debtors sought to employ a claims and notice agent given the thousands of entities or persons to which notice must be given for various purposes. The Debtors explained that the noticing, receiving, docketing, and maintaining proofs of claim would impose heavy administrative and other burdens on the Court and the Office of the Clerk of the U.S. Bankruptcy Court for the Eastern District of Michigan. Administar Services is a firm that specializes in providing data processing services to Chapter 11 debtors in connection with administration and reconciliation of claims, as well as administration of plan balloting. The Debtors believe that Administar is well qualified to provide them services because of the firm's experience in providing claims, noticing, and balloting services in many other chapter 11 cases in various jurisdictions. The Debtors will compensate and reimburse Administar Services for services rendered and expenses incurred in connection with their Chapter 11 cases pursuant to the terms and conditions of a Services Agreement between the parties dated February 11, 2008. Administar Services' hourly rates for its professionals are: Professional Hourly Rate ------------ ----------- Vice President/Senior Vice President $150 to $185 Bankruptcy Consultant $90 to $150 /Senior Bankruptcy Consultant Bankruptcy Analyst/Senior Analyst $55 to $85 Administrative/Operations $25 to $45 /Call Center Attendant Jeffrey L. Pirrung, senior vice president of Administar Services, assures the Court that neither the firm, nor any of its employees, is connected with the Debtors, their creditors, other parties-in-interest or the United States Trustee or any person employed by the Office of the U.S. Trustee. He maintains taht Administar Services is a disinterested person, as the term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operation in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BRIGANTINE HIGH: Moody's Cuts Ratings on Declining Credit Quality ----------------------------------------------------------------- Moody's Investors Service downgraded these notes issued by Brigantine High Grade Funding, Ltd.: Class Description: $1,180,000,000 Class A-1A Floating Rate Notes Due 2007 -- Prior Rating: P1, on review for possible downgrade -- Current Rating: P2 Class Description: $100,000,000 Class A-1D Floating Rate Notes Due 2008 -- Prior Rating: P1, on review for possible downgrade -- Current Rating: P2 Class Description: $69,500,000 Class A-2 Floating Rate Notes Due 2051 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Ca Class Description: $17,000,000 Class B Floating Rate Notes Due 2051 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ca Class Description: $14,000,000 Class C Deferrable Floating Rate Notes Due 2051 -- Prior Rating: Ca -- Current Rating: C Class Description: $11,000,000 Class D Deferrable Floating Rate Notes Due 2051 -- Prior Rating: Ca -- Current Rating: C Moody's also downgraded and left on review for possible downgrade these notes: Class Description: Up to $1,180,000,000 Class A-1AL Floating Rate Notes Due 2007 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $500,000,000 Class A-1B Floating Rate Notes Due 2051 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $100,000,000 Class A-1C Floating Rate Notes Due 2051 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: Up to $100,000,000 Class A-1DL Floating Rate Notes Due 2008 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of asset backed securities. C-BASS: Fitch Affirms 'BB' Rating on Class B-4 Certificates ----------------------------------------------------------- Fitch Ratings has affirmed nine classes from these Credit Based Asset Servicing and Securitization LLC issue: Series 2004-CB6 -- class AF-3 affirmed at 'AAA' and taken off Rating Watch Negative; -- class AF-4 affirmed at 'AAA'; -- class M-1 affirmed at 'AA'; -- class M-2 affirmed at 'A'; -- class M-3 affirmed at 'A-'; -- class B-1 affirmed at 'BBB+'; -- class B-2 affirmed at 'BBB'; -- class B-3 affirmed at 'BBB-'; -- class B-4 affirmed at 'BB'. The affirmations reflect adequate relationships of credit enhancement to future loss expectations and affect approximately $86.64 billion of outstanding certificates. The AF-3 bond is wrapped by XL Capital Assurance Inc. and is the only wrapped bond in the issue. All the transactions are being serviced by Litton Loan Servicing LP and is rated 'RPS1' by Fitch. 'RPS1' is the highest servicer rating available by Fitch. CBTC S2001-8 TRUST: S&P Assigns 'B-' Rating on A-1 and A-2 Classes ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'B-' ratings on classes A-1 and A-2 from Corporate Backed Trust Certificates Series 2001-8 Trust on CreditWatch with negative implications. The rating actions follow the March 17, 2008, placement of the corporate credit rating and other ratings on General Motors Corp. (GM; B/Watch Neg/B-3) on CreditWatch negative. Corporate Backed Trust Certificates Series 2001-8 Trust is a pass- through transaction, and the ratings on the certificates issued by the trust are based solely on the rating assigned to the underlying securities, GM's 8.10% debentures due June 15, 2024. The placement of the corporate credit rating and other ratings on GM on CreditWatch negative has no immediate rating impact on the GM-related asset-backed securities supported by collateral pools of consumer auto loans, auto leases, or auto wholesale loans. CLEAR CHANNEL: Extends Closing of Notes Tender Offer to March 24 ---------------------------------------------------------------- Clear Channel Communications Inc. extended dates for the tender offer for its outstanding 7.65% Senior Notes due 2010 (CUSIP No. 184502AK8) and Clear Channel's subsidiary AMFM Operating Inc.'s tender offer for its outstanding 8% Senior Notes due 2008 (CUSIP No. 158916AL0). Clear Channel extended the date on which: -- the pricing for the Notes will be established from 2:00 p.m. New York City time on March 18, 2008, to 2:00 p.m. New York City time on March 20, 2008; -- the tender offers are scheduled to expire from 8:00 a.m. New York City time on March 20, 2008, to 8:00 a.m. New York City time on March 24, 2008; and -- the consent payment deadline for the Notes from 8:00 a.m. New York City time on March 20, 2008, to 8:00 a.m. New York City time on March 24, 2008. Each of the Price Determination Date, the Offer Expiration Date and the Consent Payment Deadline is subject to extension by Clear Channel, with respect to the CCU Notes, and AMFM, with respect to the AMFM Notes, in their sole discretion. Clear Channel disclosed on Jan. 2, 2008, that it had received, pursuant to its tender offer and consent solicitation for the CCU Notes, the requisite consents to adopt the proposed amendments to the CCU Notes and the indenture governing the CCU Notes applicable to the CCU Notes, and that AMFM had received, pursuant to its tender offer and consent solicitation for the AMFM Notes, the requisite consents to adopt the proposed amendments to the AMFM Notes and the indenture governing the AMFM Notes. As of March 18, approximately 87% of the AMFM Notes have been validly tendered and not withdrawn and approximately 98% of the CCU Notes have been validly tendered and not withdrawn. The Clear Channel tender offer and consent solicitation was made pursuant to the terms and conditions set forth in the Clear Channel Offer to Purchase and Consent Solicitation Statement for the CCU Notes dated Dec. 17, 2007, and the related Letter of Transmittal and Consent. The AMFM tender offer and consent solicitation wa made pursuant to the terms and conditions set forth in the AMFM Offer to Purchase and Consent Solicitation Statement for the AMFM Notes dated Dec. 17, 2007, and the related Letter of Transmittal and Consent. Clear Channel has retained Citi to act as the lead dealer manager for the tender offers and lead solicitation agent for the consent solicitations and Deutsche Bank Securities Inc. and Morgan Stanley & Co. Incorporated to act as co-dealer managers for the tender offers and co-solicitation agents for the consent solicitations. Global Bondholder Services Corporation is the Information Agent for the tender offers and the consent solicitations. Questions regarding the transaction should be directed to Citi at (800) 558-3745 (toll-free) or (212) 723-6106 (collect). Requests for documentation should be directed to Global Bondholder Services Corporation at (212) 430-3774 (for banks and brokers only) or (866) 924-2200 (for all others toll-free). The tender offers and consent solicitations for the Notes were made in connection with the merger with BT Triple Crown Merger Co. Inc. The completion of the Merger and the related debt financings are not subject to, or conditioned upon, the completion of the tender offers or the related consent solicitations or the adoption of the proposed amendments with respect to the Notes. The closing of the Merger is expected to occur during the first quarter 2008. The closing of the Merger is subject to customary closing conditions. About Clear Channel Based in San Antonio, Texas, Clear Channel Communications Inc. (NYSE:CCU) -- http://www.clearchannel.com/-- is a media and entertainment company specializing in "gone from home" entertainment and information services for local communities and premiere opportunities for advertisers. The company's businesses include radio, television and outdoor displays. Outside U.S., the company operates in 11 countries -- Norway, Denmark, the United Kingdom, Singapore, China, the Czech Republic, Switzerland, the Netherlands, Australia, Mexico and New Zealand. * * * As reported in the Troubled Company Reporter on Jan. 30, 2008, Standard & Poor's Ratings Services said its ratings on Clear Channel Communications, including the 'B+' corporate credit rating, remain on CreditWatch with negative implications. S&P originally placed them on CreditWatch on Oct. 26, 2006, following the company's announcement that it was exploring strategic alternatives to enhance shareholder value. COLLEGE PARTNERSHIP: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: CPIN07, Inc. fdba College Partnership Merger Co. fdba College Partnership, Inc. fdba College Bound Student Alliance Inc. 6835 South University Boulevard, Suite 402 Centennial, CO 80122 Bankruptcy Case No.: 08-13265 Chapter 11 Petition Date: March 17, 2008 Court: District of Colorado (Denver) Judge: Elizabeth E. Brown Debtor's Counsel: Weinman & Associates, PC Jeffrey Weinman, Esq. William A. Richey, Esq. 730 17th Street Suite 240 Denver, CO 80202 Tel: (303) 572-1010 jweinman@epitrustee.com Estimated Assets: Less than $50,000 Estimated Debts: $1 million to $10 million Debtor's list of its 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Scott Traylor $1,439,628 5690 Buckleigh Pointe Suwanee, GA 30024 Kingley Capital Inc. $1,338,395 3773 Cherry Creek North Drive, Suite 575 Denver, CO 80209 Bridges & pipes, LLC $560,311 c/o David Laird, Esq. Cage Williams, P.C. 1433 17th Street Denver, CO 80202 David Lott $539,790 Daody Management, Inc. 197 Falling Leaf Ct Reeds Spring, MO 65737 Camoti Master LDC $486,982 c/o Duncan Capital 830 3rd Avenue 14th Floor New York, NY 10022 North American $273,908 P.O. Box 39 Duncanville, PA 16635 Non Profit Promotions $270,810 828 Dulaney Valley Road, Suite 10 Towson, MD 21204 American Student List $243,663 Burg Simpson Eldredge & Jardine, PC $176,405 A.J. Robbins, P.C. $165,000 Global Capital, LLC - Wm. Yotty $150,000 Triumph College Admissions $148,678 Shirley Thornton $135,000 KPMG $117,300 Internal Revenue Service $99,860 Dave Hall $85,000 America's Schools $80,315 John J. Grace $80,053 Citicorp Vendor Finance $74,000 Bloom Murr & Accomazzo, P.C. $66,243 CONTINENTAL AIRLINES: First Choice for Merger, UAL Says ------------------------------------------------------- United Air Lines Inc. would pursue a consolidation with Continental Airlines Inc. if given the go-ahead, to create the airline industry's biggest carrier, United Press International reports. Stephen Canale, a union representative on United Airlines' board of directors, said that Continental is "without question" the first choice for a United merger, UPI said. A possible merger between Delta Airlines and Northwest Airlines Corp., currently under consideration, would incite a United- Continental tie-up, according to UPI. However, as widely reported, talks between Delta and Northwest stalled last week as the two carriers' pilots disagree on how seniority issues would be addressed. If Northwest merged with another airline it would relinquish its "golden share," which amounts to veto power over any merger Continental wants to pursue, UPI notes. A deal with Continental is "a great fit business-wise and internationally. There's no two ways about that," UPI quotes Glenn Tilton, United's chief executive officer, as saying. Teamsters Union Speaks Out The Teamsters union said it will oppose a merger between United Airlines and Continental Airlines unless the deal benefits workers at both airlines. The Teamsters union represents 3,800 active airline mechanics at Continental Airlines. There are 9,300 mechanics at United now voting on whether to switch their representation to the Teamsters from the Airline Mechanics Fraternal Association. "Most airline mergers are bad for passengers, bad for workers and good for top management," said Teamsters General President Jim Hoffa. "United has a track record of giving outrageous salaries to top executives while workers suffer. A merger would probably bring more of the same." Union Coalition and AMFA Criticize UAL Management As a member of the Union Coalition at United Airlines, AMFA fully supports this position of the coalition: United Airlines will not merge with another carrier unless we -- the Union Coalition at United Airlines and AMFA -- say it will merge. It is that simple, the AMFA said in a statement. "Unionized employees have earned our place at the consolidation table. We not only endured the painful initial shock resulting from the attacks of September 11 but also suffered the layoffs and cutbacks that followed. The management of United Airlines took the mechanics and all other employees through the humiliation of a bankruptcy and extracted billions of dollars in wages, retirements, and work rules that destroyed careers, families, and lives," said the statement. In repayment for this suffering, the management team of United helped themselves to millions of dollars in stock options, bonuses, pay raises, and dividends with little consideration of its employees or customers. United Airlines owes its existence today to the sacrifices made by employees during UAL's record time in bankruptcy. UAL will not merge with another carrier unless it fully and completely restores it employees to their previous position as industry leaders in wages, benefits and work rules. "What UAL has to look forward to is a complete and total denial of cooperation should it decide to barrel ahead with any merger plans that do not take its employees back to the period when we rightfully earned top pay and benefits for being a top airline", the Local Presidents of AMFA at United Airlines disclosed in a joint statement. "It is now our turn to have a say in the future and direction of our airline. United must come to terms with its employees if it expects cooperation in any consolidation or merger action. The mechanic and related employees at United Airlines have had enough of the thievery at the expense of its employees and of management's lack of permanent interest in the company they pretend to serve. United must also keep in mind that before any merger could ever be considered by AMFA-represented employees, the company must come to terms with its $600 million and growing liability due to its ongoing outsourcing violation involving our contract." AMFA represents over 9,400 active and furloughed mechanics and related employees at UAL, and belongs to the 30,000-member UAL Labor Collation. United Increases Fares After oil prices surged to $111 per barrel, United increased its round-trip fares by as much as $50 round-trip, effective March 13, 2008, reports Adam Schreck of The Associated Press. United spokeswoman Robin Urbanski explained that the increased fares are based on the length of a given trip, says AP. Trips of under 500 miles will cost travelers $4 to $10 more round-trip, while trips of more than 1,500 miles are now $12 to $50. Carriers have tried to push more of their fuel costs onto consumers, AP notes. However, stiff competition from low-cost airlines like Southwest Airlines Co. and JetBlue Airways Corp. means other carriers have rolled back their increased rates, after competing airlines failed to follow suit. "Fuel is our highest expense. The cost of it clearly continues to rise," AP quotes Ms. Urbanski, as saying. "We must be able to pass along these costs just like other businesses do." About Northwest Airlines Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents, including Italy, Spain, Japan, China, Venezuela and Argentina. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On Jan. 12, 2007 the Debtors filed with the Court their Chapter 11 Plan. On Feb. 15, 2007, they Debtors filed an Amended Plan & Disclosure Statement. The Court approved the adequacy of the Debtors' Disclosure Statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' Plan. The Plan took effect May 31, 2007. (Northwest Bankruptcy News, Issue No. 88; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News, Issue No. 154 Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). About Continental Airlines Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/ -- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,900 daily departures throughout the Americas, Europe and Asia, serving 144 domestic and 139 international destinations. More than 500 additional points are served via SkyTeam alliance airlines. With more than 45,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with Continental Express, carries approximately 69 million passengers per year. * * * As reported in the Troubled Company Reporter on Dec. 27, 2007, Fitch Ratings affirmed Continental Airlines 'B-' issuer default rating with a stable outlook. CORINTHIAN CUSTOM: Gets Permission to Hire MGLAW as Counsel ----------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Tennessee authorized Corinthian Custom Homes, Inc. to hire MGLAW, PLLC as counsel in its bankruptcy case. MGLAW will: a. render legal advice with respect to the rights, powers and duties of the Debtor in the management of its property; b. investigate and, if necessary, institute legal action on behalf of the Debtor to collect and recover assets of the estate of the Debtor; c. prepare all necessary pleadings, orders and reports with respect to this proceeding and to render all other legal services as may be necessary or proper; d. assist and counsel the Debtor in the preparation, presentation and confirmation of its disclosure statement and plan of reorganization; e. represent the Debtor in any forum as may be necessary to protect the interests of the Debtor; and f. perform all other legal services that may be necessary and appropriate in the general administration of this estate. The Debtor assured the Court that MGLAW is a "disinterested person" under Bankruptcy Code Section 101(14) and 327. The Debtor said that, to the best of its knowledge and the Firm's knowledge, the Firm has no disqualifying connection with the Debtor or the estate, the Debtor's creditors, or any other parties-in-interest. The only connections the Firm has with any such parties are: -- In 1993, Robert J. Gonzales, a member of the Firm, was employed as a Summer Law Intern in the Office of the U.S. Trustee in Nashville, Tennessee; -- The Firm has from time to time represented American Security Bank & Trust with respect to discrete matters unrelated to the Debtor. The Firm will not represent American Security Bank & Trust in connection with this case; -- The Firm has from time to time represented Key Bank. Key Bank is a creditor of Debtor's President and 100% shareholder Nicholas Psillas, and of a partnership owned in part by Mr. Psillas. Upon information and belief, Key Bank is not a creditor of Debtor. The Firm will not represent Key Bank in connection with this case or in connection with any matter related to Debtor's insiders or related entities; -- Allison Batts, who is an associate of the Firm, previously represented Colonial Bancgroup and Colonial Bank with respect to matters unrelated to the Debtor or its insiders. Ms. Batts was not affiliated with the Firm at the time of the representation and Ms. Batts and the Firm will not represent Colonial Bancgroup or Colonial Bank in connection with this case; -- The Firm currently represents Hermitage Lighting Gallery, an affiliate of Hermitage Electric Supply, a creditor of Debtor. The Firm will not represent Hermitage Lighting Gallery in connection with this case; -- The Firm currently represents News Channel 5 (WTVF) in connection with matters unrelated to Debtor. The Firm will not represent News Channel 5 (WTVF) in connection with this case; -- The Firm represented YP Siding in 2004 but does not currently represent YP Siding. The Firm will not represent YP Siding in connection with this case; -- The Firm maintains depository accounts with Debtor's creditor First Tennessee Bank; -- The Firm has represented Regions Bank from time to time on discrete matters unrelated to Debtor. The Firm will not represent Regions Bank in connection with this case; The Firm has been solely engaged to represent the Debtor. However, in connection with representing the Debtor, the Firm also has provided assistance with respect to ancillary matters involving the Debtor's principal and related entities and specifically has provided guidance from time to time to Mr. Psillas, Debbie Psillas, Premier Equipment Company, LLC and Premier Development Partnership. Mr. Psillas has an ownership interest in Premier Equipment and Premier Development. Premier Equipment and Premier Development have not filed for bankruptcy protection. The Firm will not represent Nicholas or Debbie Psillas in connection with the chapter 11 case. The Firm will be paid for its legal services on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date services are rendered. The Firm's current standard hourly rates are: Members $265 - $375 per hour Associates $165 - $245 per hour Paralegals $125 per hour The Firm's standard hourly rates are subject to adjustment as of January 1 of each year. In the year prior to the commencement of the chapter 11 case, the Firm received payments from or on behalf of the Debtor totaling $352,674. Of the amount, $121,759 was earned prior to the bankruptcy filing, $1,039 was used for the Chapter 11 filing fee, and the $229,876 balance after payment of substantially all prepetition expenses and charges is being held in escrow as a retainer for services to be rendered in the bankruptcy. On September 21, 2007, the Debtor delivered to the Firm an initial retainer of $10,000. On October 24, 2007, M