/raid1/www/Hosts/bankrupt/TCR_Public/080401.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, April 1, 2008, Vol. 12, No. 77
Headlines
AAMES MORTGAGE: Fitch Cuts Rating to BB from BBB- on $4.1MM Certs.
ABERDEEN LOAN: S&P Attaches 'BB' Rating on $17.25 Mil. Class Notes
ABITIBIBOWATER INC: Exchange Offer for Senior Notes Ends April 4
ABITIBIBOWATER INC: Noteholder Withdrawal Rights in Offer Expires
ABITIBIBOWATER INC: Inks Agreement for Private Placement of $350MM
ACUSPHERE INC: Deloitte & Touche Expresses Going Concern Doubt
AGY HOLDING: 11% Lien Notes Amendment Gets Noteholders' Consent
ALESCO FINANCIAL: December 31 Balance Sheet Upside-Down by $2.4BB
AMERICAN BIO FUEL: Voluntary Chapter 11 Case Summary
AMERICAN HOME: Court Extends Plan Filing Due Date to June 2
AMPEX CORPORATION: Seeks Relief Under Chapter 11
AMPEX CORPORATION: Case Summary & 51 Largest Unsecured Creditors
ASCALADE COMMS: Court OKs Sale of Richmond Property for $8.4 Mil.
ASCALADE COMMS: British Columbia Court OKs $8MM Sale of Property
ASCENDIA BRANDS: Joseph A. Falsetti Resigns as Executive Chairman
BALLY TOTAL: Commences Cash Distribution to Former Stockholders
BANK OF AMERICA: Stable Performance Cues Fitch to Hold Ratings
BELDEN & BLAKE: Posts $35.3 Million Net Loss in Year Ended Dec. 31
BERNOULLI HIGH: Moody's Junks Ratings on Seven Classes of Notes
BRASIL TELECOM: Moody's Reviews 'Ba1' Note Rating for Likely Lift
CALPINE CORP: Canadian Monitor Reports Updates on CCAA Proceedings
CALPINE CORP: Initial Market Capitalization Valued at $8.6 Billion
CALPINE CORP: Charles Clark Steps Down as Vice President
CARDIMA INC: To Restate Financial Statements Due to Errors
CATHOLIC CHURCH: Century Amends Objection to Disclosure Statement
CATHOLIC CHURCH: Fairbanks May Employ CSG as Special Counsel
CATHOLIC CHURCH: Fairbanks Amends Motion to Hire Keegan Linscott
CATHOLIC CHURCH: Fairbanks May Employ Quarles & Brady as Counsel
CATHOLIC CHURCH: Spokane's Plan Trustee Wants Bond Amount Cut
CBRL GROUP: Weak Credit Metrics Prompts S&P's Rating Cuts to 'BB-'
CENTENNIAL COMMS: Feb. 29 Blanace Sheet Upside Down by $1.062 Bil.
CENTEX HOME: Fitch Chips Ratings on $582.9 Million Certificates
CHAMPION AIR: To Shut Down Operations by End of May
CHAMPION ENTERPRISES: To Shut Down Plants in Silverton & LaGrange
CHARTER COMM: Unit Completes $546MM Sale of 10.875% 2nd Lien Notes
CHARYS HOLDING: Wants Milbank Tweed as Bankruptcy Counsel
CITADEL BROADCASTING: Has $848MM Net Loss in 4th Qtr. Ended 2007
CLEAR CHANNEL: Banks Want NY State Court to Dismiss Lawsuit
CLEARWATER FUNDING: Low Credit Quality Cues Moody's Rating Reviews
COMSTOCK HOMEBUILDING: Incurs $87.5 Mil. Net Loss for Fiscal 2007
COUNTRYWIDE FINANCIAL: Feds to Study Benefits of BofA Acquisition
CREDIT SUISSE: Fitch Affirms Low-B Ratings on Five Cert. Classes
CROSSWINDS AT LONE: U.S. Trustee Appoints Three-Member Committee
CROSSWINDS AT LONE: Files Schedules of Assets and Liabilities
CSFB HOME: Fitch Junks Ratings on 10 Certificate Classes
CVR ENERGY: Posts $57 Million Net Loss in Year Ended December 31
CWABS: Fitch Downgrades Ratings on $158.2 Million Certificates
DELPHI CORP: Can Continue Implementing Employee Compensation Plan
DELPHI CORP: Wants to Extend Indemnification Agreement with GM
DISTRIBUTED ENERGY: PwC Raises Going Concern Doubt Due to Losses
DLJ MORTGAGE: Fitch Retains 'C' Ratings on Two Certificate Classes
EIF CALYPSO: S&P Puts 'BB+' Rating on $650MM and $150MM Facilities
ELLEGY PHARMA: Mayer Hoffman Expresses Going Concern Doubt
EMPIRE RESORTS: Board of Directors Adopts Stockholder Rights Plan
FEDERAL-MOGUL: G. Michael Lynch Retires; Jeff Kaminski is New CFO
FEDERAL-MOGUL: Professionals Seek Postpetition Fees and Expenses
FEDDERS CORP: Michael Giordano Steps Down as President and CEO
FINANCIAL GUARANTY: Moody's Cuts Insurer Strength Rating to 'Baa3'
FINANCIAL GUARANTY: Howard C. Pfeffer Tenders Retirement Notice
FINANCIAL GUARANTY: S&P Slashes Financial Strength Rating to 'BB'
FORD MOTOR: Partners with Ontario Government to Save 300 Jobs
FORTUNOFF: Panel Taps Morrison & Foerster to Replace Otterbourg
FORTUNOFF: Court OKs Panel's Limited Engagement of Otterbourg
FORTUNOFF: Mahoney Cohen Serves as Committee's Financial Advisor
FRONTIER DRILLING: Concerns on Funding Spurs S&P's Negative Watch
GENERAL MOTORS: Ex-Unit Delphi Wants Indemnification Pact Extended
GREENWICH 2007-GG9: Fitch Affirms 'B-' Rating on $8.22MM Certs.
HOOP HOLDINGS: Has Interim Court Nod to Use Wells Fargo Collateral
HOOP HOLDINGS: Gets Initial Nod to Use Wells Fargo's $35 Mil. Loan
HSBC FINANCE: KVAM Urges HSBC to Shed Off Burdensome U.S. Unit
IDEARC INC: S&P Assigns 'BB' Corp. Rating on CreditWatch Negative
INTEREP NATIONAL: Files for Bankruptcy; To Restructure $99MM-Debt
INTERTAPE POLYMER: Posts $8.3 Mil. Net Loss for Fiscal Year 2007
INTERTAPE POLYMER: Secures $200MM Senior Secured Credit Facility
INTERTAPE POLYMER: Enters Into $200 Million Senior Credit Facility
IVANHOE ENERGY: Management Expresses Going Concern Doubt
KKR FINANCIAL: Avoids Default by Turning Over AAA-Rated Securities
LAZY DAYS: Weak Performance Prompts Moody's Rating Cuts to 'B3'
MANIS LUMBER: Taps Thomas Richardson to Give Collection Services
MANIS LUMBER: Committee Wants Miller Canfield as Lead Counsel
MANIS LUMBER: Committee Taps James C. Frenzel PC as Co-Counsel
MAUDE HENDERSON: Voluntary Chapter 11 Case Summary
MAXUM PETROLEUM: Moody's Holds 'B2' Rating; Gives Negative Outlook
MICHAEL BREEN: Case Summary & Largest Unsecured Creditor
MIGENIX INC: Posts CN$3.4 Million Net Loss in Qtr. Ended Jan. 31
MILLENIUM IMAGING: Voluntary Chapter 11 Case Summary
MOVIDA COMMS: Case Summary & 20 Largest Unsecured Creditors
NEW CENTURY: Examiner Suggests Actions Against Officers & KMPG LLP
NEXSTAR FINANCE: Moody's Chips Probability of Default Rating to B3
NOMURA ASSET: Fitch Cuts Rating to BB from BB+ on Cl. B-6 Certs.
NOVELIS INC: S&P Changes Outlook to Stable; Confirms 'BB-' Rating
POWERMATE HOLDING: Court OKs Retention of Kurtzon as Claims Agent
POWERMATE HOLDING: Section 341(a) Meeting Scheduled for April 25
QUEBECOR WORLD: Court OKs Prepetition Payments to 376 Managers
QUEBECOR WORLD: Silvex Seeks Recovery from Insurance Claims
QUEBECOR WORLD: Wants to Employ Three Real Estate Consultants
QUEBECOR WORLD: Shutting Down Magazine Facility in Magog, Quebec
RECKSON OPERATING: S&P Holds 'BB+' Senior Unsecured Debt Ratings
RED HAT: Revenue Growth Cues S&P's Rating Upgrade to 'BB-' From B+
REMOTE DYNAMICS: Posts Approximately $8 Mil. Stockholder's Deficit
SCOTTISH RE: Postpones 2007 Earnings Release and Form 10-K Filing
SCOTTISH RE: S&P Says Notice of Late Filing Won't Move Its Ratings
SECURITY CAPITAL: XLCA's 'BB' Rating Cues Fitch's Actions on Bonds
SEQUOIA MORTGAGE: Fitch Puts 'BB' Rating Under Negative Watch
SG MORTGAGE: Fitch Lowers Ratings on Ten Certificate Classes
SIMMONS BEDDING: Moody's Gives Negative Outlook; Holds All Ratings
SIMMONS CO: Earns $6 Million in Fourth Quarter Ended December 29
SIRIUS SATELLITE: State Counsels Balk at DOJ Approval of XM Merger
SOTHEBY: S&P Assigns 'BB+' Corp. Rating on CreditWatch Positive
SPANSION INC: Completes Acquisition of Saifun Semiconductors
SPYRUS INC: Judge Sontchi Approves $2 Million DIP Financing
TENFOLD CORP: Enters Merger Agreement with Versata Enterprises
THORNBURG MORTGAGE: Completes $1.35 Bil. Offering of Secured Notes
TLC FUNDING: Moody's Withdraws All Ratings on Amedisys Acquisition
TLC VISION: Raises Going Concern Doubt on OccuLogix Unit
TOUSA INC: Files Motion to Extend Removal Period to July 27
TRI VANTAGE: Voluntary Chapter 11 Case Summary
UNITED HERITAGE: Nasdaq Says Stocks Listing Rely on $2.5MM Equity
US DRY CLEANING: Signs $1.9 Million Merger Deal with Zoots Corp.
US AIRWAYS: Employees to Get $49 Million in Profit Sharing
US AIRWAYS: To Open Separate Talks with America West Pilots
US AIRWAYS: Reaches Tentative Unified Mechanics Pact with IAM
UTAH 7000: Involuntary Chapter 11 Case Summary
VERENIUM CORP: Ernst & Young Expresses Going Concern Doubt
VERMILLION INC: Market Value Non-Compliance Cues Stocks Delisting
VISIPHOR CORP: Designates Michael Goffin to Board of Directors
WHITE CEDAR: Case Summary & Largest Unsecured Creditor
WISCONSIN AUTHORITY: Case Summary & 2 Largest Unsecured Creditors
WORNICK CO: Ad Hoc Committee Balks Disclosure Statement
XM SATELLITE: State Counsels Balk at DOJ Approval on Sirius Merger
* S&P Downgrades Ratings on 81 Classes From 21 RMBS Transactions
* Fitch Says US CMBS Delinquencies Rose to 0.30% on February
* FTI Widens UK Presence with Forensic Accounting Buyout
* Bankruptcy Firm Watson & Maynez Starts El Paso, Texas Operation
* Large Companies with Insolvent Balance Sheets
*********
AAMES MORTGAGE: Fitch Cuts Rating to BB from BBB- on $4.1MM Certs.
------------------------------------------------------------------
Fitch Ratings has taken rating actions on Aames Mortgage
Investment Trust mortgage pass-through certificates. Affirmations
total $99 million and downgrades total $4.1 million.
Additionally, $4.1 million was placed on Rating Watch Negative.
Break Loss percentages and Loss Coverage Ratios for each class are
included with the rating actions as:
Aames Mortgage Investment Trust 2005-3
-- $28.6 million class I-A-1 affirmed at 'AAA',
(BL: 83.08, LCR: 13.97);
-- $35.7 million class I-A-2 affirmed at 'AAA',
(BL: 51.59, LCR: 8.67);
-- $11.0 million class I-A-3 affirmed at 'AAA',
(BL: 42.73, LCR: 7.18);
-- $7.6 million class M-1 affirmed at 'AA+',
(BL: 35.66, LCR: 5.99);
-- $6.4 million class M-2 affirmed at 'AA',
(BL: 29.41, LCR: 4.94);
-- $1.5 million class M-3 affirmed at 'AA-',
(BL: 27.86, LCR: 4.68);
-- $1.6 million class M-4 affirmed at 'A+',
(BL: 26.18, LCR: 4.4);
-- $1.4 million class M-5 affirmed at 'A',
(BL: 24.67, LCR: 4.15);
-- $2.0 million class M-6 affirmed at 'A-',
(BL: 22.38, LCR: 3.76);
-- $1.3 million class B-1 affirmed at 'BBB+',
(BL: 20.81, LCR: 3.5);
-- $2.0 million class B-2 affirmed at 'BBB',
(BL: 18.24, LCR: 3.07);
-- $4.1 million class B-3 downgraded to 'BB' from 'BBB-', placed
on Rating Watch Negative (BL: 7.89, LCR: 1.33).
Deal Summary
-- Originators: Aames Investment Corporation (77.78%)
-- 60+ day Delinquency: 6.24%
-- Realized Losses to date (% of Original Balance): 0.93%
-- Expected Remaining Losses (% of Current balance): 5.95%
-- Cumulative Expected Losses (% of Original Balance): 4.37%
The rating actions are based on changes that Fitch has made to its
subprime loss forecasting assumptions. The updated assumptions
better capture the deteriorating performance of pools from 2007,
2006 and late 2005 with regard to continued poor loan performance
and home price weakness.
ABERDEEN LOAN: S&P Attaches 'BB' Rating on $17.25 Mil. Class Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its ratings to
Aberdeen Loan Funding Ltd. and Aberdeen Loan Funding Corp.'s
$467.25 million notes.
Aberdeen Loan Funding Ltd. and Aberdeen Loan Funding Corp. is a
collateralized loan obligation with a seven-year reinvestment
period that is managed by Highland Capital Management L.P. The
closing portfolio's weighted average purchase price is 87.4% of
par. The liabilities' weighted average sale price is 88.28%.
The ratings reflect:
-- Adequate credit support provided by overcollateralization,
subordination, and excess spread;
-- The characteristics of the underlying collateral pool, which
consists primarily of non-investment-grade rated senior
secured loans, second-lien loans, bonds, and structured
finance obligations, up to 20% of which may be referenced
synthetically or represent participation interests;
-- Scenario default rates of 54.13% for class A and B, 48.23%
for class C, 43.1% for class D, and 36.56% for class E; and
break-even loss rates of 67.78% for class A, 59.23% for class
B, 56.69% for class C, 49.98% for class D, and 38.9% for
class E;
-- A weighted average rating of 'B';
-- A weighted average maturity for the portfolio of 5.6 years;
-- An S&P default measure of 5.47%;
-- An S&P variability measure of 3.24%; and
-- An S&P correlation measure of 2.00.
Interest on the class C, D, and E notes may be deferred up until
the legal final maturity date in November 2018 without causing a
default under these obligations. The ratings on these notes,
therefore, address the ultimate payment of interest and principal.
Ratings Assigned
Aberdeen Loan Funding Ltd.
Aberdeen Loan Funding Corp.
Class Rating Amount (million)
----- ------ ----------------
A AAA $376.00
B AAA $29.50
C A $25.25
D BBB $19.25
E BB $17.25
Class I preferred shares NR $12.00
Class II preferred shares NR $36.00
NR -- Not rated.
ABITIBIBOWATER INC: Exchange Offer for Senior Notes Ends April 4
----------------------------------------------------------------
AbitibiBowater Inc. said that Abitibi-Consolidated Company of
Canada, its indirect subsidiary, has extended the withdrawal
deadline for its exchange offers for 6.95% senior notes due 2008,
5.25% senior notes due 2008 and 7.875% senior notes due 2009.
The exchange offers will expire at 12:00 midnight, New York City
time, on Friday, April 4, 2008.
The withdrawal deadline for the exchange offers was extended until
March 27, 2008, and the withdrawal deadline expired on March 26,
2008. Neither the consent payment deadline nor the expiration
date for the exchange offers has been modified.
Investors Agree to Senior Notes Restructuring
The Canadian Press reports that AbitibiBowater's investors
consented to the restructuring of the company's senior notes
aggregating $496 million. The report says that as of March 27,
2008, investors surrendered between 89.3% and 93.2% of the notes.
The senior notes restructuring is under AbitibiBowater's plan to
secure $1.4 billion additional capital, Canadian Press relates.
The exchange offers were being made only to qualified
institutional buyers and institutional accredited investors inside
the United States and to certain non-U.S. investors located
outside the United States.
As reported in the TCR on March 28, 2008, AbitibiBowater Inc.
disclosed in its 2007 annual report that Abitibi-Consolidated
Inc.'s independent auditor PricewaterhouseCoopers LLP in
Montreal, Quebec, Canada, expressed substantial doubt about
Abitibi's ability to continue as a going concern.
Abitibi-Consolidated is currently experiencing a liquidity
shortfall and faces significant near-term liquidity challenges.
For the year ended Dec. 31, 2007, Abitibi reported a net loss of
CDN$714 million, negative cash flows from operating activities of
CDN$468 million and reported an accumulated deficit of CDN$1.591
billion as at Dec. 31, 2007.
At Dec. 31, 2007, Abitibi-Consolidated's balance sheet showed
CDN$6.572 billion in total assets, CDN$5.026 billion in total
liabilities, and CDN$1.546 billion in total stockholders' equity.
Abitibi's balance sheet at Dec. 31, 2007, showed strained
liquidity with CDN$1.009 billion in total current assets available
to pay CDN$1.416 billion in total current liabilities.
Abitibi has a total of $346 million of long-term debt that matures
in 2008:
-- $196 million principal amount of its 6.95% Notes due
April 1, 2008, and
-- $150 million principal amount of 5.25% Notes due June 20,
2008, issued by Abitibi-Consolidated Company of Canada, a
wholly owned subsidiary of Abitibi.
Abitibi also has revolving credit facilities with commitments
totalling $710 million maturing in the fourth quarter of 2008.
None of these debts have yet been refinanced. These circumstances
lend substantial doubt as to the ability of Abitibi to meet its
obligations as they come due and, accordingly, substantial doubt
as to the appropriateness of the use of accounting principles
applicable to a going concern.
To address these near-term liquidity challenges, Abitibi, and its
parent company, AbitibiBowater Inc., have developed a refinancing
plan to address upcoming debt maturities and general liquidity
needs designed to enable Abitibi to repay the $346 million due in
April and June 2008 and to repay all its maturities due in 2009,
while continuing to fund Abitibi's operations, debt service and
capital expenditures, so it can continue as a going concern.
This refinancing plan is expected to consist of:
-- a $200 million to $300 million of new senior unsecured
exchange notes due 2010;
-- up to $450 million of a new 364-day senior secured term
loan secured by substantially all of Abitibi's assets
other than fixed assets;
-- approximately $400 million of new senior secured notes or
a term loan due 2011 secured by fixed assets; and
-- $200 million to $300 million of new convertible notes of
AbitibiBowater.
About AbitibiBowater
Headquartered in Montreal, Canada, AbitibiBowater Inc. (NYSE:ABH)
-- http://www.abitibibowater.com/-- was formed as a result of the
combination of Abitibi-Consolidated Inc. and Bowater Incorporated.
Pursuant to the transaction, Abitibi-Consolidated Inc. and Bowater
Incorporated became subsidiaries of AbitibiBowater. The company
produces a range of forest products marketed in more than 80
countries around the world. The company's customers include many
publishers, commercial printers, retailers, consumer products
companies and building supply outlets. AbitibiBowater is also a
recycler of newspapers and magazines. The company owns or
operates 32 pulp and paper mills and 35 wood products facilities
in North America and offshore. The company manages its business
in five segments: coated papers, specialty paperBs, newsprint,
market pulp and lumber.
ABITIBIBOWATER INC: Noteholder Withdrawal Rights in Offer Expires
-----------------------------------------------------------------
AbitibiBowater Inc. disclosed that the withdrawal rights of
noteholders in the exchange offers by Abitibi-Consolidated Company
of Canada, a subsidiary of AbitibiBowater, expired at 5:00 p.m.
New York City time, on March 27, 2008.
These exchange offers are for the 6.95% Senior Notes due 2008,
5.25% Senior Notes due 2008 and 7.875% Senior Notes due 2009. As
of the withdraw deadline, approximately 89.3% of the outstanding
6.95% Senior Notes, 91.8% of the outstanding 5.25% Senior Notes
and 93.2% of the outstanding 7.875% Senior Notes had been validly
tendered in the exchange offers.
Based on these preliminary results, ACCC has elected to waive the
minimum tender condition with respect to the exchange offers. The
exchange offers expire at 12:00 midnight, New York City time, on
April 4, 2008.
The exchange offers were made only to qualified institutional
buyers and institutional accredited investors inside the United
States and to certain non-U.S. investors located outside the
United States.
About AbitibiBowater
Headquartered in Montreal, Canada, AbitibiBowater Inc. (NYSE:ABH)
-- http://www.abitibibowater.com/-- was formed as a result of the
combination of Abitibi-Consolidated Inc. and Bowater Incorporated.
Pursuant to the transaction, Abitibi-Consolidated Inc. and Bowater
Incorporated became subsidiaries of AbitibiBowater. The company
produces a wide range of newsprint, commercial printing papers,
market pulp and wood products and markets these products to more
than 90 countries.
Following the required divestiture agreed to with the U.S.
Department of Justice, AbitibiBowater will own or operate 27 pulp
and paper facilities and 35 wood products facilities located in
the United States, Canada, the United Kingdom and South Korea. The
company also has newsprint sales offices in Brazil and Singapore.
The company's shares also trade at the Toronto Stock Exchange
under the stock symbol ABH.
* * *
As reported in the Troubled Company Reporter on March 27, 2008,
Moody's Investors Service assigned a B1 rating to the proposed new
$450 million secured term loan at Abitibi-Consolidate Inc's
subsidiary Abitibi-Consolidated Company of Canada. At the same
time, Moody's affirmed Abitibi's corporate family rating of Caa1,
the probability-of-default rating of Caa3, the senior unsecured
ratings of Caa2 and the B1 rating assigned to the new $415 million
secured notes due 2011. In addition, Abitibi's speculative grade
liquidity rating was affirmed at SGL-4 and the rating outlook
remains negative.
ABITIBIBOWATER INC: Inks Agreement for Private Placement of $350MM
------------------------------------------------------------------
AbitibiBowater Inc. disclosed on March 24, 2008, that it has
entered into a definitive agreement with Fairfax Financial
Holdings Limited for an investment by Fairfax and its
designated subsidiaries in AbitibiBowater of $350 million in the
form of unregistered convertible debentures.
This transaction, which is part of the company's previously
announced $1.4 billion refinancing plan, is expected to address
upcoming debt maturities and general liquidity needs of its
Abitibi-Consolidated Inc. subsidiary. There is no financing
condition to the obligations of Fairfax to fund the transaction.
The $350 million of convertible debentures is convertible into
AbitibiBowater common shares at $10.00 per share, carries an 8%
cash coupon, has an ability for the company to pay interest in the
form of additional "pay-in-kind" debentures at a rate of 10%, and
has a subsidiary guarantee. The debentures have a maturity of 5
years and are non-callable.
The transaction is subject to certain conditions, including the
receipt of various lender consents and the closing of the other
components of the company's $1.4 billion refinancing plan. Under
the Fairfax Purchase Agreement, Fairfax will have the right to
appoint two directors to the Board of Directors of the company.
In connection with the approval of the Fairfax transaction by the
Board of Directors of AbitibiBowater, and pursuant to an exception
provided by the New York Stock Exchange stockholder approval
policy, the Audit Committee of AbitibiBowater determined that a
delay in the transaction in order to secure stockholder approval
of the issuance of the convertible debentures, given the
pending maturities of Abitibi-Consolidated's April 1 and June 20,
2008 senior notes, as well as the current state of the credit and
capital markets, could seriously jeopardize the financial
viability of AbitibiBowater.
Accordingly, AbitibiBowater's Board of Directors and Audit
Committee expressly approved the company's decision not to seek
stockholder approval of the issuance of the convertible debentures
to Fairfax. The New York Stock Exchange has accepted
AbitibiBowater's reliance on the exception and the company, in
reliance upon this exception, is mailing a letter to all
stockholders notifying them of its intention to issue the
convertible debentures without their prior approval.
About Fairfax
Fairfax Financial Holdings Limited (TSX and NYSE: FFH) is a
financial services holding company which, through its
subsidiaries, is engaged in property and casualty
insurance and reinsurance and investment management.
About AbitibiBowater
Headquartered in Montreal, Canada, AbitibiBowater Inc. (NYSE:ABH)
-- http://www.abitibibowater.com/-- was formed as a result of the
combination of Abitibi-Consolidated Inc. and Bowater Incorporated.
Pursuant to the transaction, Abitibi-Consolidated Inc. and Bowater
Incorporated became subsidiaries of AbitibiBowater. The company
produces a wide range of newsprint, commercial printing papers,
market pulp and wood products and markets these products to more
than 90 countries.
Following the required divestiture agreed to with the U.S.
Department of Justice, AbitibiBowater will own or operate 27 pulp
and paper facilities and 35 wood products facilities located in
the United States, Canada, the United Kingdom and South Korea. The
company also has newsprint sales offices in Brazil and Singapore.
The company's shares also trade at the Toronto Stock Exchange
under the stock symbol ABH.
* * *
As reported in the Troubled Company Reporter on March 12, 2008,
Standard & Poor's Ratings Services assigned its 'B-' long-term
corporate credit rating to AbitibiBowater Inc. The outlook is
negative.
As reported in the Troubled Company Reporter on March 28, 2008,
AbitibiBowater Inc. disclosed in its 2007 annual report that its
wholly owned subsidiary, Abitibi-Consolidated Inc. "is currently
experiencing a liquidity shortfall and liquidity problems and
there is substantial doubt about Abitibi's ability to continue as
a going concern."
ACUSPHERE INC: Deloitte & Touche Expresses Going Concern Doubt
--------------------------------------------------------------
Deloitte & Touche LLP in Boston raised substantial doubt about the
ability of Acusphere, Inc. to continue as a going concern after it
audited the company's financial statements for the year ended Dec.
31, 2007. The auditor pointed to the company's recurring losses
from operations, negative cash flows from operations, and the
projected funding needed to sustain its operations
The company posted a net loss of $53,730,000 on total sales of
$2,667,000 for the year ended Dec. 31, 2007, as compared with a
net loss of $61,089,000 on total sales of $1,781,000 in the prior
year.
At Dec. 31, 2007, the company's balance sheet showed $52,020,000
in total assets, $28,280,000 in total liabilities and $23,740,000
in stockholders' equity.
Going Concern
Management stated that as of Dec. 31, 2007, the company had cash
and equivalents of $26,100,000. During the 12 months ended
Dec. 31, 2007, operating activities used $41,700,000 of cash.
Before the end of the second quarter of 2008, the company will
require significant additional funds in order to fund operations.
As a result of its limited capital resources, the company may
elect to delay the funding of certain development activities,
which could harm its financial condition and operating results.
The depletion of its resources may make future funding more
difficult or expensive to attain. The company may raise
additional funds through public or private sales of equity or from
borrowings or from strategic partners.
Future capital requirements will depend on many factors including
the scope and progress made in research and development activities
and the size and timing of creating expanded manufacturing
capabilities.
There are no assurances, however, that the company will be able to
obtain additional financing on favorable terms, or at all, or
successfully market its products. If the company is unable to
execute its operations according to its plans or to obtain
additional financing, it may be forced to cease operations.
"We are focused on product development and we have not generated
any revenue from commercial sales of our products to date. We
have incurred losses each year of our operations. In 2007, we had
a net loss available to holders of common stock of $56 million.
At Dec. 31, 2007, we had an accumulated deficit of $334.9 million.
We expect our research and development, general and administrative
and sales and marketing expenses will increase over the next
several years," the company said.
A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2999
About Acusphere
Based in Watertown, Mass., Acusphere, Inc. (NasdaqGM:ACUS) --
http://www.acusphere.com/-- a specialty pharmaceutical company,
develops new drugs and formulations of existing drugs using its
proprietary porous microparticle technology in the United States.
Its porous microparticle technology enables to control the size
and porosity of particles, including nanoparticles and
microparticles. The company develops products in the areas of
cardiology, oncology, and asthma. Its lead product candidate
Imagify, a cardiovascular drug, is in Phase 3 clinical development
for the detection of coronary artery disease. The company's
products also include AI-850, a Phase 1 clinical trial completed
product candidate that utilizes hydrophobic drug delivery system
to improve the dissolution rate of a cancer drug; AI-128, a Phase
1 clinical study completed formulation of asthma drug. Acusphere
was founded in 1993.
AGY HOLDING: 11% Lien Notes Amendment Gets Noteholders' Consent
---------------------------------------------------------------
AGY Holding Corp. received consents from noteholders representing
in excess of a majority in principal amount of its outstanding
11% Senior Second Lien Notes due 2014.
As reported in the Troubled Company Reporter on March 20, 2008,
AGY Holding was 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.
After receipt of the consents, the company and certain of its
subsidiaries executed a supplemental indenture and amendments to
the intercreditor agreement and consignment agreement providing
for the amendments. The amendments are operative with respect to
all noteholders, including those noteholders who did not consent
to the amendments.
Requests for documents should be directed to Global Bondholder
Services Corporation at (866) 873-6300 or (212) 430-3774. UBS
Securities LLC is serving 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.
ALESCO FINANCIAL: December 31 Balance Sheet Upside-Down by $2.4BB
-----------------------------------------------------------------
Alesco Financial Inc.'s balance sheet at Dec. 31, 2007, showed
total assets of $8.935 billion and total liabilities of
$11.334 billion, resulting total stockholders' deficit of
$2.399 billion.
The company reported financial results for the three and twelve-
months ended Dec. 31, 2007.
AFN reported a generally accepted accounting principle or GAAP net
loss for the three-months ended Dec. 31, 2007, of $729.3 million
compared to net income of $3.6 million for the three-months ended
Dec. 31, 2006.
AFN reported a GAAP net loss for the twelve-months ended Dec. 31,
2007 of $1.3 billion as compared to net income of $22.0 million,
for the period from Jan. 31, 2006, through Dec. 31, 2006.
The significant losses during the three-months and twelve-months
ended Dec. 31, 2007, are due to non-cash charges of approximately
$775 million and $1.4 billion, arising from write downs in the
fair value of mortgage backed sities, other CDO investments and
TruPS investments.
Liquidity and Capital Markets Transactions
As of Dec. 31, 2007, AFN's consolidated financial statements
include $80.2 million of available, unrestricted cash and cash
equivalents. This amount includes $18.8 million of cash dividends
that were paid to AFN shareholders on Jan. 10, 2008.
Management has evaluated AFN's current and forecasted liquidity
and continues to monitor evolving market conditions. Future
investment alternatives and operating activities will continue to
be evaluated against anticipated current and longer term liquidity
demands.
As of Dec. 31, 2007, AFN's consolidated financial statements
include $95.5 million of restricted cash and warehouse deposits.
The $95.5 million is restricted for these purposes:
-- $5.0 million first-loss deposit on an Emporia leveraged loan
warehouse facility;
-- $47.6 million at consolidated CDO entities to be used to
acquire additional assets; and
-- $42.9 million of undistributed cash flow from operations at
consolidated CDO entities.
Share Repurchase
On Aug. 3, 2007, AFN's board of directors approved a share
repurchase plan that authorizes AFN to purchase up to $50 million
of AFN common shares. Under the plan, AFN may make purchases from
time to time through open market or privately negotiated
transactions.
The timing and exact number of shares purchased will be determined
at AFN's discretion and will depend on market conditions. This
plan may be modified or discontinued at any time. During the
three-months ended Dec. 31, 2007, AFN did not repurchase shares of
its common stock.
Dividend Summary
AFN disclosed a cash dividend for the quarter ended March 31,
2008, of $0.25 per common share. The dividend will be payable on
April 10, 2008, to shareholders of record as of the close of
business on March 20, 2008. The ex-dividend date was March 18,
2008.
About Alesco Financial Inc.
Headquartered in Philadelphia, Pennsylvania, Alesco Financial Inc.
(NYSE:AFN) -- http://www.alescofinancial.com/-- is a specialty
finance company, which operates as a real estate investment trust.
AFN makes investments in real estate-related and other securities.
AFN's portfolio consists of investments in trust preferred
securities, mortgage backed securities and corporate loan
obligations. AFN is externally managed by Cohen & Company, an
investment banking and asset management firm focusing on lending
to the real estate and financial services industries.
AMERICAN BIO FUEL: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: American Bio Fuel, Inc.
5016 Strummer Drive
Fort Worth, TX 76180
Bankruptcy Case No.: 08-41392
Type of Business: The Debtor sells petroleum products in
wholesale.
Chapter 11 Petition Date: March 31, 2008
Court: Northern District of Texas (Ft. Worth)
Judge: Russell F. Nelms
Debtor's Counsel: Clifford Franklin McMaster, Esq.
(cfmcmaster@sbcglobal.net)
309 West 7th Street, No. 1400
Fort Worth, TX 76102
Tel: (817) 335-8080
Fax: (817) 429-3371
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The Debtor did not file a list of its largest unsecured creditors.
AMERICAN HOME: Court Extends Plan Filing Due Date to June 2
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extends the
exclusive periods for American Home Mortgage Investors Corp. and
its debtor-affiliates to file a plan of reorganization through
June 2, 2008, and solicit and obtain acceptances for that plan
through July 31, 2008.
James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor,
LLP, in Wilmington, Delaware, said that lots of things must
be done in the bankruptcy cases before any party will be in a
position to file a Plan and accompanying disclosure statement.
He adds that the Debtors, in consultation with the Official
Committee of Unsecured Creditors, have determined to seek the 90-
day extension.
Mr. Patton related that the Debtors have begun, but not yet
completed, negotiations with the Creditors Committee regarding
the terms of a consensual Plan or Plans based on adequate
information. He, however, pointed out that they have accomplished
several things since December 2007:
(a) The Debtors have spent time working with AH Mortgage
Acquisition Co., Inc., to facilitate the effective
transition of the Servicing Business;
(b) The Debtors have focused on maximizing the value of, and
minimizing the administrative burdens related to, the
their other major assets, like, among other things,
marketing and selling loans and analyzing an efficient and
the appropriate disposition of the 1,500,000 mortgage loan
files they held through a third party vendor;
(c) The Debtors have focused their time and resources towards
maximizing the value of the bankruptcy estates through the
disposition of their major assets, including:
-- creation of non-debtor business entities for the
transition of the Servicing Business to AHM
Acquisition;
-- consummation of a sale with Indymac Bank F.S.B.;
-- approval of procedures to return mortgage loan files
to owners or master servicers of the mortgage loans;
-- compromise of certain loans to obtain a greater value
for the estates; and
-- approval of procedures to maximize the sale value for
certain non-performing loans; and
(d) The Debtors have expended substantial time and resources
addressing the numerous pending adversary proceedings and
related discovery matters.
Mr. Patton said that, despite the Debtors' accomplishments, the
the current Exclusive Periods did not provide them with an
adequate opportunity to develop and negotiate a Plan. The
contested nature of nearly every facet of the cases has prevented
the Debtors and their professionals from devoting significant
attention to the preparation and negotiation of a Plan, he said.
In addition, the Debtors have had to work with or litigate with
numerous large financial entities and other parties-in-interest
to obtain approval of the sale of the mortgage loan servicing
business. Moreover, the Debtors received various notices of
purported defaults from parties to master servicing agreements.
Mr. Patton told the Court that there are a variety of other
tasks that lie ahead of the Debtors. The Debtors still have
numerous other assets that may be marketed and sold, including
their (i) federally chartered thrift and bank, which will need to
be sold in a manner consistent with strict regulatory guidelines;
(ii) certain whole loans; and (iii) certain other real estate
holdings, like their Melville, New York, corporate headquarters.
The resolution of asset sales and the review and analysis of
claims will be determinative of the value available to the
Debtors' creditors, and must be considered in the formulation of
any Chapter 11 plan, Mr. Patton said.
About American Home
Based in Melville, New York, American Home Mortgage Investment
Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage
real estate investment trust engaged in the business of investing
in mortgage-backed securities and mortgage loans resulting from
the securitization of residential mortgage loans originated and
serviced by its subsidiaries.
American Home Mortgage and seven affiliates filed for chapter 11
protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047
through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite,
Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt &
Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC
acts as the Debtors' claims and noticing agent. The Official
Committee of Unsecured Creditors selected Hahn & Hessen LLP as
its counsel. As of March 31, 2007, American Home Mortgage's
balance sheet showed total assets of $20,553,935,000, total
liabilities of $19,330,191,000.
(American Home Bankruptcy News, Issue No. 31; Bankruptcy
Creditors' Service, Inc., Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
AMPEX CORPORATION: Seeks Relief Under Chapter 11
------------------------------------------------
Ampex Corporation and its U.S. subsidiaries filed voluntary
petitions for relief under Chapter 11 of the U.S. Bankruptcy Code,
according to a regulatory filing with the U.S. Securities and
Exchange Commission.
Prior to filing, the company negotiated with and obtained the
support of the majority of its secured creditors and its largest
unsecured creditor for the terms of a pre-negotiated plan of
reorganization, as evidenced by the plan support agreement filed
contemporaneously with the company's voluntary petitions for
relief under Chapter 11.
Concurrently with the commencement of these cases, the company
filed a motion for approval of the disclosure statement with
respect to the Plan and related solicitation procedures. The
company believes that it will emerge from Chapter 11 no later than
fall 2008. During the Chapter 11 proceedings, the company will
continue to operate its business without interruption as a debtor-
in-possession. All of the company's employees will be retained,
offices and manufacturing facilities will remain open and all
customer support and warranty programs will continue as planned.
Upon emergence from Chapter 11, Hillside Capital Incorporated ,
the company's largest secured and unsecured creditor, will provide
new financing to the Company that will be used for working capital
purposes, to repay certain long term obligations, including
certain senior secured notes, and to fund future pension
obligations. Ampex began to report in July 2007 that it might be
forced to take this action in order to facilitate an orderly
financial restructuring.
As was disclosed in its filings with the Securities and Exchange
Commission over the previous months, Ampex has been negotiating a
consensual refinancing of certain notes that were issued to
Hillside over the past several years with respect to pension
contributions made by Hillside for the benefit of the Companys
defined benefit plans. The Plan is the result of months of arm's-
length negotiations between the company, Hillside and holders of a
majority of the face amount of the Companys senior secured notes.
The overall purpose of the Plan is to provide for the
restructuring of the company's liabilities in a manner designed to
maximize recovery to all stakeholders and to enhance the company's
financial viability by de-levering the company's capital
structure, providing additional liquidity and arranging a long-
term financing solution to future pension contributions that does
not over-leverage the Company in future years.
Under the Plan, it is contemplated that trade creditors will
remain unaffected and will continue to receive cash payments as
their claims become due in the ordinary course. Because the
company's debt exceeds the amount of its assets, its existing
common stock currently has no value, and therefore will be
cancelled on the effective date of the Plan.
Under the terms of the proposed Plan, new equity in the
reorganized company will be issued to certain creditors. Although
holders of existing common stock will not receive new equity
under the Plan, those holders that do not object to the Plan may
be eligible to receive some consideration. The Plan also
contemplates that the new equity in the reorganized Company
will not be registered or traded on any public exchange.
"Ampex Data Systems Corporation will continue to sell and service
data acquisition and instrumentation recorders and we will
continue to license our intellectual property to manufacturers of
consumer digital video products," D. Gordon Strickland, Ampex's
President and Chief Executive Officer, noted that the court filing
is not expected to have any significant impact on Ampexs day-to-
day operations. "While the restructuring will be an important
step towards a more successful future, our primary focus will
continue to be our customers and their satisfaction with our
products and services."
"In recent years, Ampex has been constrained by its highly
leveraged capital structure and by the continuing burden of its
significant legacy pension liabilities," Mr. Strickland explained.
"Quite simply, we have too much debt. We intend to use the
Chapter 11 process to reduce these obligations significantly and
to develop and implement a new capital structure that will allow
us to invest in our business."
"Fortunately, the fundamentals of our business remain strong and
provide an excellent foundation for the future," Mr. Strickland
concluded. "We expect that Ampex will emerge from its Chapter 11
reorganization a stronger, more financially viable company, well-
positioned for profitable growth."
Other Matters
The company could not file its Annual Report on Form 10-K for the
year ended Dec. 31, 2007, within the prescribed period because
additional time is required to complete the financial statements,
footnotes and disclosures in order to incorporate information
contained in the Plan and the related Disclosure Statement in
connection with its filing for relief under chapter 11 of the
Bankruptcy Code.
The Company currently expects to be able to file its 2007 Form
10-K within fifteen calendar days following the prescribed due
date, but there can be no assurance that it will be able to do
so.
Likely Insufficient Financial Resources
As reported in the Troubled Company Reporter on Jan. 21, 2008,
based on its projected operations, the company relates that it
will not have sufficient financial resources or be able to
generate cash flow to service all of its obligations, including
scheduled indebtedness, within the next 12 months and beyond. In
order for the company to remain a going concern it will be
required to substantially modify the repayment terms of its Senior
Notes well as the Hillside Notes.
Alternatively, the company may be required to issue new equity to
holders of all or most of its outstanding debt securities, well as
for debt that will be issued in connection with future pension
plan contributions. Any such issuance of equity for debt would
result in current stockholders' ownership interest being
significantly diluted and potentially cause a substantial decline
in the price of the company's Common Stock. The company cannot
give assurance that it will be successful in restructuring its
indebtedness.
A full-text copy of Ampex's Disclosure Statement is available for
free at:
http://ResearchArchives.com/t/s?29d4
A full-text copy of Ampex's Plan of Reorganization is available
for free at:
http://ResearchArchives.com/t/s?29d5
A full-text copy of the Plan Support Agreement with the Senior
Secured Holder is available for free at:
http://ResearchArchives.com/t/s?29d6
About Ampex
Headquartered in Redwood City, California, Ampex Corporation
(Nasdaq: AMPX) -- http://www.ampex.com/-- manufactures high
performance data storage products principally used in defense
applications.
Ampex Corporation's consolidated balance sheet at Sept. 30, 2007,
showed $23.3 million in total assets and $123.8 million in total
liabilities, resulting in a $100.5 million total shareholders'
deficit.
AMPEX CORPORATION: Case Summary & 51 Largest Unsecured Creditors
----------------------------------------------------------------
Lead Debtor: Ampex Corp.
1228 Douglas Avenue
Redwood City, CA 94063
Bankruptcy Case No.: 08-11094
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
AFC Holdings Corp. 08-11095
Ampex Holdings Corp. 08-11096
Ampex International Sales Corp. 08-11097
Ampex Finance Corp. 08-11098
Ampex Data Systems Corp. 08-11099
Ampex Data International Corp. 08-11100
Type of Business: The Debtors are licensors of visual information
technology. They have two business segments:
Recorders segment and Licensing segment. Their
Recorders segment primarily includes the sale
and service of data acquisition and
instrumentation recorders (which record data and
images rather than computer information), and to
a lesser extent mass data storage products.
Their Licensing segment involves the licensing
of intellectual property to manufacturers of
consumer digital video products through their
corporate licensing division. See
http://www.ampex.com
Chapter 11 Petition Date: March 30, 2008
Court: Southern District of New York (Manhattan)
Judge: Arthur J. Gonzalez
Debtors' Counsel: Matthew Allen Feldman, Esq.
(maosbny@willkie.com)
Rachel C. Strickland, Esq.
(maosbny@willkie.com)
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019-6099
Tel: (212) 728-8000
Fax: (212) 728-8111
http://www.willkie.com
Debtors' Consolidated Financial Condition:
Total Assets: $26,467,000
Total Debts: $133,602,000
Debtors' Consolidated List of 51 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Hillside Capital Inc. Loan $41,699,022
Attn: Raymond Weldon
Managing Director
405 Park Avenue
New York, NY 10022
Tel: (212) 935-6092
Seaboard Group II Contingent $1,348,327
P.O. Drawer 19764 Liability
Raleigh, NC 27619
Tel: (650) 324-3474
Attn: Mr. Amos C. Dawson
Williams Mullen Maupin
Highwoods Tower One
3200 Beechleaf Court
Taylor, PA
Arthur H. Hausman Trade Debt $1,194,952
Tel: (650) 324-3474
55 Flood Circle
Atherton, CA 94025
Charles A. Steinberg Trade Debt $746,055
Tel: (650) 366-3069
235 Crest Road
Woodside, CA 94062
David. J. Chapman Trade Debt $484,549
Tel: (650) 879-0851
P.O. Box 490
Pescadero, CA 94060
Donald V. Kleffman Trade Debt $398,839
826 Cathedral Drive
Sunnyvale, CA 94087
Tel: (408) 245-2018
Lois P. Faught Trade Debt $377,999
102 Oakleaf Terrace
Joplin, MO 64801
Tel: (417) 782-5359
Mayme Lee Mitchell Trade Debt $354,196
Tel: (480) 275-6980
75 San Fernando Way
San Francisco, CA 94127
Mark L. Sanders Trade Debt $346,400
Tel: (650) 851-0495
16075 Skyline Boulevard
Woodside, CA 94062
Robert McAdams, Jr. Trade Debt $310,167
75644 Via Cortona
Indian Wells, CA 92210
Tel: (760) 610-1305
Ronald C. Ballintine Trade Debt $285,428
7396 Timerrose Way
Roseville, CA 95747
Tel: (916) 782-7405
Anne Andersen Trade Debt $265,077
26810 Ortega Drive
Los Altos, CA 94022
Tel: (650) 948-8181
Donald F. Flanigan Trade Debt $177,780
Willis A. Wedel Trade Debt $173,588
Max P. Bennett Trade Debt $171,220
David R. Bunker Trade Debt $164,000
John L. Porter Trade Debt $156,421
Joel D. Talcott Trade Debt $155,800
Ephraim F. Litterman Trade Debt $146,337
Philips Services Site PRP Liability $135,000
Group
George A. Merrick Trade Debt $108,900
Donald F. Bogue Trade Debt $102,300
Charles R. Rhind Trade Debt $92,407
John E. Trewin Trade Debt $90,400
Jerome Raffel Trade Debt $74,547
Thomas E. Davis Trade Debt $58,549
North Weber and Baugh Trade Debt $49,888
Robert L. Wilson Trade Debt $47,700
David A. Bocchinni Trade Debt $43,100
NH Holding Inc. Trade Debt $32,509
Heath Wakelee Trade Debt $29,881
Vicki S. Gruber, P.C. Trade Debt $28,400
Arrow Electronics Trade Debt $25,179
Richard Sirinsky Trade Debt $22,948
Mervyn J. Kingsbury Trade Debt $19,213
Super Talent Technology Corp. Trade Debt $18,000
Martin A. Booye Trade Debt $16,899
Kontron Trade Debt $15,768
Warren O'Sullivan Trade Debt $15,239
Faye Dell Squyres Trade Debt $13,824
Alexander Pizarev Trade Debt $13,715
Ralph Mossino Trade Debt $12,013
GE Fanuc Intelligent Trade Debt $11,263
Dacks Cable & Harness Inc. Trade Debt $10,388
PMA Group, Inc. Trade Debt $10,000
Eleanore Larson Trade Debt $9,198
Martha Dempster Trade Debt $9,152
Ella Mae Ward Trade Debt $7,266
Robert N. Wheeler Trade Debt $6,834
Edson W. Montgomery Trade Debt $6,112
Harriet Slater Trade Debt $5,984
ASCALADE COMMS: Court OKs Sale of Richmond Property for $8.4 Mil.
-----------------------------------------------------------------
Ascalade Communications Inc. said that in connection with its
protection from creditors under the Companies' Creditors
Arrangement Act (CCAA), the British Columbia Supreme Court granted
an order authorizing and approving the sale of Ascalade's property
located in Richmond, British Columbia for $8.4 million.
The property is currently held by one of Ascalade's wholly owned
subsidiaries. The Richmond property is an approximately
40,000 square foot building that houses Ascalade's corporate
headquarters and its research and product development. The sale
of the property was to close yesterday, March 31, 2008. No update
on the sale is available as of press time.
Any recovery for creditors and other stakeholders, including
shareholders, is uncertain and is highly dependent upon a number
of factors, including the recovery from the sale of the Company's
factory and equipment in the People's Republic of China, potential
claims from customers and suppliers and the outcome of the Scheme
of Arrangement in Hong Kong.
Deloitte & Touche Inc., in its capacity as monitor of Ascalade,
will continue to work with Ascalade on the restructuring or
winding up of the company.
As reported in the Troubled Company Reporter on March 4, 2008,
Ascalade intended to seek protection from creditors under the
Companies' Creditors Arrangement Act with the British Columbia
Supreme Court. Ascalade's board of directors has determined that
seeking creditor protection is in the interests of the company,
its creditors, shareholders, employees, customers and other
stakeholders.
The company related that these actions are necessary because of
the company's inability to fund operations to meet customer
demand. This is as a result of significant operational challenges
due to difficulty hiring and retaining workers, continued labor
and material cost increases, sustained competitive price pressures
and foreign exchange variations impacting the business.
The intent of the CCAA filing was to enable Ascalade to continue
its day to day operations for as long as possible or until its
CCAA status changes.
About Ascalade Communications Inc.
Based in Richmond, British Columbia, Ascalade Communications Inc.
(TSE:ACG) -- http://www.ascalade.com/ -- is an innovative product
company that designs, develops and manufactures digital wireless
and communication products. The company deliver products by
offering its partners and customers complete vertical integration,
from product design and development to final production. The
company's products include digital cordless phones, Voice over
Internet Protocol phones, digital wireless baby monitors and
digital wireless conference phones. Ascalade products have been
distributed in over 35 countries and under 80 regional brands.
Ascalade also has facilities in Qingyuan, China, Hong Kong and a
sales office in Hertfordshire, United Kingdom.
ASCALADE COMMS: British Columbia Court OKs $8MM Sale of Property
----------------------------------------------------------------
Ascalade Communications Inc. disclosed that in connection with the
protection from its creditors under the Companies' Creditors
Arrangement Act, the British Columbia Supreme Court granted an
order authorizing and approving the sale of Ascalade's property
located in Richmond, British Columbia, for $8.4 million.
The property is currently held by one of Ascalade's subsidiaries.
The Richmond property is an approximately 40,000 square foot
building that houses Ascalade's corporate headquarters and
its research and product development. The sale of the property is
expected to close on March 31, 2008.
Any recovery for creditors and other stakeholders, including
shareholders, is uncertain and is highly dependent upon a number
of factors, including the recovery from the sale of the company's
factory and equipment in the People's Republic of China, potential
claims from customers and suppliers and the outcome of the Scheme
of Arrangement in Hong Kong.
Deloitte & Touche Inc., in its capacity as monitor of Ascalade,
will continue to work with Ascalade on the restructuring or
winding up of the company.
As reported in the Troubled company Reporter on March 4, 2008,
Ascalade Communications intended to seek protection from
creditors under the Companies' Creditors Arrangement Act with the
British Columbia Supreme Court. Ascalade's board of directors has
determined that seeking creditor protection is in the interests of
the company, its creditors, shareholders, employees, customers and
other stakeholders.
The company related that these actions were necessary because of
the company's inability to fund operations to meet customer
demand. This was a result of significant operational challenges
due to difficulty hiring and retaining workers, continued labor
and material cost increases, sustained competitive price pressures
and foreign exchange variations impacting the business.
About Ascalade Communications Inc.
Based in Richmond, British Columbia, Ascalade Communications Inc.
(TSE:ACG) -- http://www.ascalade.com/ -- is an innovative product
company that designs, develops and manufactures digital wireless
and communication products. The company deliver products by
offering its partners and customers complete vertical integration,
from product design and development to final production. The
company's products include digital cordless phones, Voice over
Internet Protocol phones, digital wireless baby monitors and
digital wireless conference phones. Ascalade products have been
distributed in over 35 countries and under 80 regional brands.
Ascalade also has facilities in Qingyuan, China, Hong Kong and a
sales office in Hertfordshire, United Kingdom.
ASCENDIA BRANDS: Joseph A. Falsetti Resigns as Executive Chairman
-----------------------------------------------------------------
Joseph A. Falsetti has resigned as executive chairman of Ascendia
Brands Inc. and as a member of its board of directors, effective
March 21, 2008.
Ascendia and Mr. Falsetti have entered into a Separation Agreement
under which Mr. Falsettti agreed to the termination of his
employment agreement entered into on Feb. 12, 2007, and forfeited
rights to certain incentive stock options, in return for mutually
agreed-upon severance payments.
Headquartered in Hamilton, New Jersey, Ascendia Brands Inc.
-- http://www.ascendiabrands.com/-- is a leader in the value and
premium value segments of the health and beauty care products
sector. In November 2005, Ascendia expanded its range of product
offerings through the acquisition of a series of brands, including
Baby Magic(R), Binaca(R), Mr. Bubble(R) and Ogilvie(R), and in
February 2007 it acquired the Calgon(TM)* and the healing
garden(R) brands. The company operates two manufacturing
facilities, in Binghamton, New York, and Toronto, Canada.
Senior Lenders Waive Default
As reported in the Troubled Company Reporter on Jan. 3, 2008,
Ascendia Brands Inc. reached agreement with its senior lenders
to restructure $160 million first and second lien debt facilities.
Under the agreement, Ascendia's senior lenders will waive certain
existing covenant defaults and adjust financial covenant levels
through the end of Ascendia's fiscal year ending Feb. 28, 2009.
The TCR reported on Dec. 17, 2007 that Ascendia Brands notified
its senior lenders that it is in default of certain covenants
contained in its first and second lien credit facilities and is
unable to make certain representations and warranties deemed to be
made when drawings are made under its revolving credit facility.
BALLY TOTAL: Commences Cash Distribution to Former Stockholders
---------------------------------------------------------------
Bally Total Fitness Holding Corporation commenced the process to
make an initial cash distribution to former stockholders, in
accordance with the terms of Bally's confirmed chapter 11 plan.
The initial cash distribution is $.31 per share of Old Common
Stock.
Approximately $3.5 million has been reserved by Bally's disbursing
agent, pending disallowance of certain outstanding claims that
were filed in Bally's chapter 11 case. These reserved funds may
fund a second distribution to holders of Old Common Stock, but
such a distribution is subject to satisfactory resolution of the
outstanding claims.
About Bally Total Fitness
Based in Chicago, Illinois, Bally Total Fitness Holding Corp.
(Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates
fitness centers in the U.S., with over 375 facilities located in
26 states, Mexico, Canada, Korea, China and the Caribbean under
the Bally Total Fitness(R), Bally Sports Clubs(R) and Sports Clubs
of Canada (R) brands. Bally Total and its affiliates filed for
chapter 11 protection on July 31, 2007 (Bankr. S.D.N.Y. Case No.
07-12396) after obtaining requisite number of votes in favor of
their pre-packaged chapter 11 plan. Joseph Furst, III, Esq. at
Latham & Watkins, L.L.P. represents the Debtors in their
restructuring efforts. As of June 30, 2007, the Debtors had
$408,546,205 in total assets and $1,825,941,54627 in total
liabilities.
The Debtors filed their Joint Prepackaged Plan & Disclosure
Statement on July 31, 2007. On Aug. 13, 2007, they filed an
Amended Joint Prepackaged Plan and on Aug. 17 filed a Modified
Amended Prepackaged Plan.
BANK OF AMERICA: Stable Performance Cues Fitch to Hold Ratings
--------------------------------------------------------------
Fitch Ratings has affirmed Bank of America Commercial Mortgage
Securities 2004-1 as:
-- $283.9 million class A-1A at 'AAA';
-- $98.4 million class A-2 at 'AAA';
-- $100.1 million class A-3 at 'AAA';
-- $521.9 million class A-4 at 'AAA';
-- Interest-only class X-C at 'AAA';
-- Interest-only class X-P at 'AAA';
-- $31.5 million class B at 'AAA'.
-- $13.3 million class C at 'AAA';
-- $29.9 million class D at 'AA+';
-- $13.3 million class E at 'AA';
-- $18.2 million class F at 'A+';
-- $11.6 million class G at 'A-';
-- $19.9 million class H at 'BBB';
-- $6.6 million class J at 'BBB-';
-- $6.6 million class K at 'BB+';
-- $8.3 million class L at 'BB';
-- $8.3 million class M at 'BB-';
-- $3.3 million class N at 'B+';
-- $3.3 million class O at 'B'.
Class A-1 has been paid in full and Fitch does not rate the
$21.6 million class P.
Affirmations are due to the stable performance and minimal paydown
of the transaction since the last Fitch rating action. As of the
March 2008 distribution date, the pool has paid down 9.7% to
$1.20 billion from $1.33 billion at issuance.
In total nine loans (9.4%) have defeased, including two (5.4%) of
the top 10 (42.8%) loans. Currently 36% of the nondefeased loans
are interest only or have interest-only periods. Scheduled
nondefeased maturities in 2008 and 2009 are 4.5% and 0.7%,
respectively. The majority of the balance of the nondefeased
loans mature in 2013 (45.5%) and 2014 (26.3%). The pool's
weighted average coupon mortgage rate is 5.6%.
Nine (4%) loans have been identified as Fitch loans of concern due
to declining occupancy or debt service coverage ratios. Currently
there are no delinquent or specially serviced loans.
Fitch maintains investment grade credit assessments on two loans
in the trust: the Leo Burnett Building (10%) and the Hines
Sumitomo Life Office Portfolio (8.7%) loans.
The Leo Burnett Building is a 1.1 million square foot class A
office building located in Chicago, Illinois. Occupancy as of
March 2008 was 100% compared to 98.2% at issuance.
The Hines Sumitomo Life Office Portfolio is secured by three
central business district office buildings containing a total of
1.2 million square feet. Two of the office buildings are located
in New York, New York, and one is located in Washington, DC. The
whole loan consists of two senior pari passu notes and one junior
note. Only the A2 pari passu note is held in the trust. As of
September 2007, the overall occupancy has remained flat compared
to 97.7% at issuance.
Nine loans (9.3%) mature in 2008 and 2009, of which three loans
(4.1%) are defeased.
BELDEN & BLAKE: Posts $35.3 Million Net Loss in Year Ended Dec. 31
------------------------------------------------------------------
Belden & Blake Corp. reported a net loss $35.3 million on net
operating revenues of $125.7 million for the year ended Dec. 31,
2007, compared with net income of $52.2 million on net operating
revenues of $159.1 million for the year ended Dec. 31, 2006.
The decrease in net operating revenues was due to lower gas sales
revenues of $32.8 million and lower gas gathering and marketing
revenues of $1.0 million.
Derivative fair value gain/loss was a loss of $78.1 million in
2007 compared to a gain of $37.4 million in 2006. The derivative
fair value gain/loss reflects the changes in fair value of certain
derivative instruments that are not designated or do not qualify
as cash flow hedges, the ineffective portion of crude oil swaps
through Aug. 15, 2005, and the ineffective portion of natural gas
swaps as a result of purchase accounting.
At Dec. 31, 2007, the company had aggregate long term debt of
$286.4 million, compared with $279.9 million at Dec. 31, 2006.
Balance Sheet
At Dec. 31, 2007, the company's consolidated balance sheet showed
$774.2 million in total assets, $672.0 million in total
liabilities, and $102.2 million in total stockholders' equity.
The company's consolidated balance sheet at Dec. 31, 2007, also
showed strained liquidity with $52.9 million in total current
assets available to pay $67.1 million in total current
liabilities.
Full-text copies of the company's consolidated financial
statements for the year ended Dec. 31, 2007, are available for
free at http://researcharchives.com/t/s?29c5
About Belden & Blake
Belden & Blake Corporation -- http://www.beldenblake.com/-- is an
independent energy company engaged in the exploitation,
development, production, operation and acquisition of oil and
natural gas properties. The company's operations are focused in
the Appalachian Basin in Ohio, Pennsylvania and New York and in
the Antrim Shale formation in the Michigan Basin.
* * *
Belden & Blake Corp. 8.75% Senior Secured Guaranteed Global Notes
die 2012 carry Moody's Caa1 rating. It also carries Moody's Caa1
corporate family rating.
BERNOULLI HIGH: Moody's Junks Ratings on Seven Classes of Notes
---------------------------------------------------------------
Moody's Investors Service downgraded ratings of eight classes of
notes issued by Bernoulli High Grade CDO II, Ltd., and left on
review for possible further downgrade the rating of one of these
classes. The notes affected by this rating action are:
Class Description: $555,000,000 Class A-1B Second Priority Senior
Secured Floating Rate Notes Due October 2054
-- Prior Rating: Baa3, on review for possible downgrade
-- Current Rating: B1, on review for possible downgrade
Class Description: $56,000,000 Class B Third Priority Senior
Secured Floating Rate Notes Due October 2054
-- Prior Rating: Ba2, on review for possible downgrade
-- Current Rating: Ca
Class Description: $103,000,000 Class C Fourth Priority Senior
Secured Floating Rate Notes Due October 2054
-- Prior Rating: Ba3, on review for possible downgrade
-- Current Rating: Ca
Class Description: $4,000,000 Class D Fifth Priority Mezzanine
Deferrable Secured Floating Rate Notes Due October 2054
-- Prior Rating: B1, on review for possible downgrade
-- Current Rating: C
Class Description: $3,000,000 Class E Sixth Priority Mezzanine
Deferrable Secured Floating Rate Notes Due October 2054
-- Prior Rating: B2, on review for possible downgrade
-- Current Rating: C
Class Description: $10,500,000 Class F Seventh Priority Mezzanine
Deferrable Secured Floating Rate Notes Due October 2054
-- Prior Rating: Caa1, on review for possible downgrade
-- Current Rating: C
Class Description: $4,500,000 Class G Eighth Priority Mezzanine
Deferrable Secured Floating Rate Notes Due October 2054
-- Prior Rating: Caa1, on review for possible downgrade
-- Current Rating: C
Class Description: $14,000,000 Income Notes Due October 2054
-- Prior Rating: Ca
-- Current Rating: C
The rating downgrade actions reflect deterioration in the credit
quality of the underlying portfolio, as well as the occurrence on
March 4, 2008, as reported by the Trustee, of an event of default
that occurs when the Sequential Pay Ratio is less than 95 per
cent, as described in Section 5.1(i) of the Indenture dated Aug.
28, 2007.
Recent ratings downgrades on the underlying portfolio caused
ratings-based haircuts to affect the calculation of
overcollateralization. Thus, the Event of Default described in
Section 5.1(i) of the Indenture occurred.
As provided in Article V of the Indenture during the occurrence
and continuance of an Event of Default, holders of certain Notes
may be entitled to direct the Trustee to take particular actions
with respect to the Collateral Debt Securities and the Notes.
The rating downgrades taken reflect the increased expected loss
associated with each tranche. Losses are attributed to diminished
credit quality on the underlying portfolio. The severity of
losses of certain tranches may be different, however, depending on
the timing and choice of remedy to be pursued following an event
of default. Because of this uncertainty, the ratings assigned to
the Class A-1B Notes remain on review for possible further action.
Bernoulli High Grade CDO II, Ltd. is a collateralized debt
obligation backed primarily by a portfolio of RMBS securities and
CDO securities.
BRASIL TELECOM: Moody's Reviews 'Ba1' Note Rating for Likely Lift
-----------------------------------------------------------------
Moody's placed on review for possible upgrade the Ba1 rating
assigned to Brasil Telecom S.A.'s $200 million 9.375% structured
Notes due 2014. The review is a result of the placement on review
for possible upgrade of the Ba1 global scale senior unsecured
rating of Brasil Telecom S.A.
The rating assigned to the structured notes is linked to the
fundamental credit quality of Brasil Telecom S.A., as reflected by
its global local currency rating. As a result of this linkage,
any further change in that rating may also result in a change in
the rating of the structured notes.
Brasil Telecom S.A., headquartered in Brasília, is an integrated
telecommunications company operating in nine states in the
southern, mid-western and northern regions of Brazil. In 2007
Brasil Telecom reported consolidated net revenues of
BRL11,059 million or $5,671 million.
The complete rating action is:
-- $200 million 9.375% structured Notes, Ba1 rating placed on
review for possible upgrade.
CALPINE CORP: Canadian Monitor Reports Updates on CCAA Proceedings
------------------------------------------------------------------
Ernst & Young, Inc., the monitor of the reorganization proceedings
of Calpine Corporation's affiliates under the Canadian Companies'
Creditors Arrangement Act, reports that Calpine Canada Energy
Finance I ULC, on February 6, 2008,
has completed its distribution and has fully repaid or reserved
for all its third party creditors and all holders of the ULC1
Notes. ULC1 is currently seeking permission from the Honorable
Madam Justice Romaine of the Court of Queen's Bench of Alberta to
allow for the cancellation of the ULC1 Notes and the discharge
and release of the ULC1 Indenture Trustee.
The Monitor further reports the total recoveries of the CCAA
Applicants, related distributions and payments and the reserves
for unresolved claims, totaled approximately $11,000,000,000,
including $5,100,000,000 in recoveries from claims against the US
Debtors. The CCAA Applicants distributed $3,500,000,000 to third
party creditors, allowing each CCAA Applicant to fully repay all
resolved third party claims.
The Monitor also relates that:
(a) $4,700,000,000 in claims were resolved between CCAA
Applicants;
(b) $1,300,000,000 in distributions have been made in respect
of claims owing to the US Debtors;
(c) approximately $83,700,000 as a full reserve for
unresolved claims, which remain outstanding; and
(d) approximately $943,000,000 in capital has been returned
to the US Debtors.
The Monitor further relates that the CCAA Applicants accumulated
"other recoveries" totaling $980,000,000, with the significant
recoveries comprising:
-- CCNG's collection of a $57,800,000 receivable that was
factored with a third party;
-- CCRC's repatriation of $251,400,000 in funds from its
foreign subsidiaries, referred to as the Saltend Proceeds;
-- CCPL's sale of its B Units of the Fund for net proceeds of
approximately $97,700,000;
-- CCRC's sale of its ULC1 Notes for net proceeds of
$403,700,000; and
-- CESCA's recoveries of $75,900,000 comprising the proceeds
from the sale of natural gas under a call-on-production
agreement as well as the collection of miscellaneous
pre-filing accounts receivable.
The CCAA Applicants recovered $5,100,000,000, from the U.S.
Debtors, comprising of:
-- $1,200,000,000, in claims owing by QCH were repaid on
or about February 1, 2008, in conjunction with the
implementation of the U.S. Plan of Reorganization;
-- $3,700,000,000 contribution from QCH to CCEL as part of the
unwinding of the Hybrid Note Structure;
-- $231,700,000 in net proceeds were received by the CCAA
Applicants in December 2007 relating to the sale of certain
claims against the US Debtors.
The CCAA Applicants distributed $4,800,000,000, in intercompany
claims owing amongst them.
The Monitor says that upon the distribution to creditors of ULC2
and CESCA, the amount required to be contributed by CCRC relating
to the ULC2 Shortfall Claim and the CESCA Shortfall Claim totaled
$251,600,000, representing a payment of $19,900,000 to ULC2, and
$231,700,000 to CESCA.
The CCAA Applicants distributed $9,650,000,000, comprising of
$3,500,000,000, with respect to resolved third party claims,
$4,800,000,000, with respect to claims of other CCAA Applicants,
and $1,300,000,000, in distributions in respect of claims of the
U.S. Debtors.
The Monitor says $82,300,000, in claims remain unresolved, of
which $66,600,000, relates to the deferral of the ULC1 guarantee
fee owing to Calpine Corporation. The Monitor says each of the
CCAA Applicant has withheld sufficient cash as a reserve against
the unresolved claim amounts.
The CCAA Applicants paid $81,700,000, for the purchase of natural
gas as required under the COP Agreements and payment of employee
costs and general and administrative costs. About $76,000,000
was distributed by CCRC to the U.S. Debtors as part of the
implementation of the Global Settlement Agreement. Professional
fees and KERP payments total $40,300,000, including an accrual
for professional fees to allow for the completion of these CCAA
proceedings.
In conjunction with the implementation of the U.S. Plan, CCEL
returned to QCH $943,400,000, in capital, comprising of shares
Calpine Corporation common stock that CCEL received from QCH as
part of the unwinding of the Hybrid Note Structure. CCEL has
accrued an additional costs for future general and administrative
costs to complete these CCAA proceedings.
Approximately $86,100,000, is estimated to be available for the
U.S. Debtors, representing the remaining funds after each CCAA
Applicant has fully reserved for all estimated remaining costs
and unresolved claims, the Monitor says. Of the $86,100,000
remaining, $48,500,000 is comprised of cash and $37,600,000 of
Calpine Shares.
A full-text copy of the Monitor's Report is available at no cost
at http://bankrupt.com/misc/Calpine_E&Y29thMonitorsReport.pdf
Based in San Jose, California, Calpine Corporation (OTC Pink
Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers
and communities with electricity from clean, efficient, natural
gas-fired and geothermal power plants. Calpine owns, leases and
operates integrated systems of plants in 21 U.S. states and in
three Canadian provinces. Its customized products and services
include wholesale and retail electricity, gas turbine components
and services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services.
The company and its affiliates filed for chapter 11 protection on
Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard
M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq.,
and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the
Debtors in their restructuring efforts. Michael S. Stamer, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, represents the Official
Committee of Unsecured Creditors. As of Aug. 31, 2007, the
Debtors disclosed total assets of $18,467,000,000, total
liabilities not subject to compromise of $11,207,000,000, total
liabilities subject to compromise of $15,354,000,000 and
stockholders' deficit of $8,102,000,000.
On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC,
and Silverado Geothermal Resources, Inc., filed voluntary chapter
11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198).
On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another
affiliate, also filed a voluntary chapter 11 petition (Bankr.
S.D.N.Y. Case No. 07-12967).
On June 20, 2007, the Debtors filed their Chapter 11 Plan and
Disclosure Statement. On Aug. 27, 2007, the Debtors filed their
Amended Plan and Disclosure Statement. Calpine filed a Second
Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a
Third Amended Plan. On Sept. 25, 2007, the Court approved the
adequacy of the Debtors' Disclosure Statement and entered a
written order on September 26. On Dec. 19, 2007, the Court
confirmed the Debtors' Plan. The Amended Plan was deemed
effective as of January 31, 2008.
CALPINE CORP: Initial Market Capitalization Valued at $8.6 Billion
------------------------------------------------------------------
Calpine Corporation announced that its "Emergence Date Market
Capitalization," calculated pursuant to its amended and restated
certificate of incorporation, was approximately $8,600,000,000.
If, prior to February 1, 2013, Calpine's Market Capitalization
declines 35 percent from the Emergence Date Market Capitalization
and 25 percentage points of ownership change has occurred (for the
purposes of Section 382 of the Internal Revenue Code), Calpine's
Board shall meet to determine whether to impose trading
restrictions in accordance with Article VII of the
amended and restated certificate of incorporation.
The trading restrictions are designed to provide Calpine with the
ability to preserve its net operating losses for tax purposes.
If Calpine's Board of Directors determines to impose such trading
restrictions, Calpine is required pursuant to the amended and
restated certificate of incorporation to promptly announce the
imposition and terms of such trading restrictions.
Based in San Jose, California, Calpine Corporation (OTC Pink
Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers
and communities with electricity from clean, efficient, natural
gas-fired and geothermal power plants. Calpine owns, leases and
operates integrated systems of plants in 21 U.S. states and in
three Canadian provinces. Its customized products and services
include wholesale and retail electricity, gas turbine components
and services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services.
The company and its affiliates filed for chapter 11 protection on
Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard
M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq.,
and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the
Debtors in their restructuring efforts. Michael S. Stamer, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, represents the Official
Committee of Unsecured Creditors. As of Aug. 31, 2007, the
Debtors disclosed total assets of $18,467,000,000, total
liabilities not subject to compromise of $11,207,000,000, total
liabilities subject to compromise of $15,354,000,000 and
stockholders' deficit of $8,102,000,000.
On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC,
and Silverado Geothermal Resources, Inc., filed voluntary chapter
11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198).
On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another
affiliate, also filed a voluntary chapter 11 petition (Bankr.
S.D.N.Y. Case No. 07-12967).
On June 20, 2007, the Debtors filed their Chapter 11 Plan and
Disclosure Statement. On Aug. 27, 2007, the Debtors filed their
Amended Plan and Disclosure Statement. Calpine filed a Second
Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a
Third Amended Plan. On Sept. 25, 2007, the Court approved the
adequacy of the Debtors' Disclosure Statement and entered a
written order on September 26. On Dec. 19, 2007, the Court
confirmed the Debtors' Plan. The Amended Plan was deemed
effective as of January 31, 2008.
CALPINE CORP: Charles Clark Steps Down as Vice President
--------------------------------------------------------
Charles B. Clark Jr., Calpine Corporation's Senior Vice President
and Chief Accounting Officer, will be leaving the company
effective May 30, 2008, the company said in a press release.
Calpine said it has initiated a search for Mr. Clark's
replacement. Mr. Clark will be available to assist in the
transition for a period of time after May 30, 2008.
"I join all of Calpine's employees in feeling pride in having
participated in Calpine's reorganization and emergence from the
two-year Chapter 11 process," Mr. Clark said. "We have also
completed the centralization of the accounting function in
Houston under a top-notch accounting leadership team. I am very
optimistic about Calpine's future prospects, and after nine years
as the Company's Chief Accounting Officer, I will be leaving with
fond memories of my time at Calpine. I extend my best wishes to
the reorganized Calpine and its fantastic employees.
"I want to thank Chuck for his many years of service to Calpine
and for being an important member of our team. We will miss him
and wish him the very best with his new endeavors," said Lisa
Donahue, Executive Vice President and Chief Financial Officer for
Calpine.
Bringing more than 20 years of domestic and international
financial experience to Calpine, Mr. Clark joined the company in
1999. Prior to joining Calpine, Mr. Clark was the CFO of Hobbs
Group, LLC. He holds a master's degree in business
administration from Harvard Graduate School of Business
Administration and a bachelor of science degree in mathematics
from Duke University.
In a regulatory filing with the Securities and Exchange
Commission, Calpine disclosed that Mr. Clark will be entitled to
severance benefits under the Calpine Corporation Change in
Control and Severance Benefits Plan, which was adopted effective
January 31, 2008. He will also continue to be eligible to
participate in the company's Emergence Incentive Plan.
Based in San Jose, California, Calpine Corporation (OTC Pink
Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers
and communities with electricity from clean, efficient, natural
gas-fired and geothermal power plants. Calpine owns, leases and
operates integrated systems of plants in 21 U.S. states and in
three Canadian provinces. Its customized products and services
include wholesale and retail electricity, gas turbine components
and services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services.
The company and its affiliates filed for chapter 11 protection on
Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard
M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq.,
and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the
Debtors in their restructuring efforts. Michael S. Stamer, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, represents the Official
Committee of Unsecured Creditors. As of Aug. 31, 2007, the
Debtors disclosed total assets of $18,467,000,000, total
liabilities not subject to compromise of $11,207,000,000, total
liabilities subject to compromise of $15,354,000,000 and
stockholders' deficit of $8,102,000,000.
On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC,
and Silverado Geothermal Resources, Inc., filed voluntary chapter
11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198).
On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another
affiliate, also filed a voluntary chapter 11 petition (Bankr.
S.D.N.Y. Case No. 07-12967).
On June 20, 2007, the Debtors filed their Chapter 11 Plan and
Disclosure Statement. On Aug. 27, 2007, the Debtors filed their
Amended Plan and Disclosure Statement. Calpine filed a Second
Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a
Third Amended Plan. On Sept. 25, 2007, the Court approved the
adequacy of the Debtors' Disclosure Statement and entered a
written order on September 26. On Dec. 19, 2007, the Court
confirmed the Debtors' Plan. The Amended Plan was deemed
effective as of January 31, 2008.
CARDIMA INC: To Restate Financial Statements Due to Errors
----------------------------------------------------------
Cardima Inc. said in a regulatory filing with the Securities and
Exchange Commission dated March 26, 2008, that the company's Board
of Directors have determined that its previously issued financial
statements for the three-month period ended June 30, 2007, on Form
10-QSB as filed with the Commission on Aug. 30, 2007, should no
longer be relied upon as a result of incorrect accounting for
certain non-cash debt extinguishment.
The company said that this had the effect of understating the
company's net loss attributable to common stockholders by
approximately $21.7 million.
As originally filed, the company reported net income of $4,367,000
for the three months ended June 30, 2007, and a net loss of
$2,657,000 for the six months ended June 30, 2007. As restated
for the three and six months ended June 30, 2007, net loss were
$17.4 million and $27.2 million, respectively.
The company's Board also has determined that its previously issued
financial statements for the three-month periods ended March 31,
2006, June 30, 2006, Sept. 30, 2006, March 31, 2007, Sept. 30,
2007, and the year ended Dec. 31, 2006, should no longer be relied
upon as a result of the company's determination that it had
incorrectly accounted for the non-cash extinguishment of debt and
commitment of unauthorized shares.
All incorrect accounting related to the restructuring of certain
of the company's debt obligations. On June 7, 2007, Apix
International Limited, a lender to the company, converted all of
its debt and warrants into 88,000,000 shares of common stock of
the company. As a result, $46,000,000 was credited to shareholder
equity on the company's balance sheet. That amount included
$35,000,000 for the conversion of the shares and $11,000,000 for
the reversal of the authorized share liability at June 30, 2007.
The company said the misstatement had the effect of understating
the company's net loss for the relevant reporting periods:
Period As Reported Restatement As Restated
------ ----------- ----------- -----------
Year Ended 12.31.06 $ 9,533,000 $1,394,000 $10,927,000
Thru Sept. 30, 2007 $12,631,000 $17,451,000 $30,082,000
About Cardima Inc.
Headquartered in Fremont, California, Cardima Inc. (OTC BB:
CRDM.OB) -- http://www.cardima.com/-- has developed the
PATHFINDER(R) and REVELATION(R) Series of diagnostic catheters,
the INTELLITEMP(R) Energy Management Device, and the Surgical
Ablation System. The REVELATION(R) Series of ablation catheters
with the INTELLITEMP(R) EP Energy Management Device was developed
and marketed for the treatment of atrial fibrillation after
receiving CE mark approval in Europe; it is not currently
available in the U.S.
* * *
Marc Lumer & Company, in San Francisco, expressed substantial
doubt about Cardima Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the year ended Dec. 31, 2006. The auditing firm pointed to the
company's recurring losses from operations.
CATHOLIC CHURCH: Century Amends Objection to Disclosure Statement
-----------------------------------------------------------------
Century Indemnity Company, as successor to CCI Insurance Company
and Insurance Company of North America, informs the U.S.
Bankruptcy Court for the Southern District of Iowa that since the
filing of its objection to the Diocese of Davenport's Disclosure
Statement, Century Indemnity has become aware of the decision in
Safeco Ins. Co. of America v. Farmland Indus., Inc. (In re
Farmland Indus., Inc.), 296 B.R. 793 (8th Cir. BAP 2003).
Richard K. Updegraff, Esq., at Brown, Winick, Graves, Gross,
Baskerville & Schoenebaum PLC, in Des Moines, Iowa, relates that
in Farmland, the 8th Circuit of the Bankruptcy Appellate Panel
rejected reliance on In re Federal Mogul Global, Inc., 300 F.3d
368 (3rd Cir. 2002).
In its initial objection filed with the Court, Century Indemnity
relied on the Federal Mogul decision in its objection to the
Disclosure Statement.
Mr. Updegraff explains that Federal Mogul involved a situation
where there was no indemnity agreement and no guarantor or
suretyship relation, unlike Century Indemnity's position in the
bankruptcy case as an insurer to a non-debtor. In Farmland,
however, there was an express suretyship relationship between a
debtor and its surety bond issuer.
"While the BAP decision in Farmland is not controlling precedent,
it is a significant jurisdictional ruling," Mr. Updegraff says.
He points out that had Century Indemnity been aware of Farmland,
the BAP decision would have been cited and dealt with it in the
Objection.
About Diocese of Davenport
The Diocese of Davenport in Iowa filed for chapter 11 protection
(Bankr. S.D. Ia. Case No. 06-02229) on Oct. 10, 2006. Richard A.
Davidson, Esq., at Lane & Waterman LLP, represents the Davenport
Diocese in its restructuring efforts. Hamid R. Rafatjoo, Esq.,
and Gillian M. Brown, Esq., at Pachulski Stang Zhiel Young Jones &
Weintraub LLP represent the Official Committee of Unsecured
Creditors. In its schedules of assets and liabilities, the
Davenport Diocese reported $4,492,809 in assets and $1,650,439 in
liabilities. The hearing on the adequacy of Davenport's
disclosure statement explaining its reorganization plan commenced
on March 5, 2008. (Catholic Church Bankruptcy News, Issue No.
119; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000).
CATHOLIC CHURCH: Fairbanks May Employ CSG as Special Counsel
------------------------------------------------------------
Donald J. Kettler, sole Director of the Catholic Bishop of
Northern Alaska, and bishop of the Diocese of Fairbanks, obtained
authority from the U.S. Bankruptcy Court for the District of
Alaska to employ Cook, Schuhmann & Groseclose, Inc., nunc pro
tunc to the bankruptcy filing, as special litigation counsel to
represent the Diocese's interests with respect to certain
prepetition litigation matters.
As reported in the Troubled Company Reporter on March 11, 2008,
Prior to the bankruptcy filing, CSG represented the Diocese in
pending civil actions in various courts in the state of Alaska.
Hence, Bishop Kettler says, CSG is intimately familiar with the
issues in the Litigation Cases.
About Diocese of Fairbanks
The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic
Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka
The Diocese of Fairbanks, aka CBNA filed for chapter 11 bankruptcy
on March 1, 2008 (Bankr. D. Alaska Case No. 08-00110). Susan G.
Boswell, Esq., at Quarles & Brady LLP represents the Debtor in its
restructuring efforts. Michael R. Mills, Esq., of Dorsey &
Whitney LLP serves as the Debtor's local counsel and Cook,
Schuhmann & Groseclose Inc. as its special counsel. Judge Donald
MacDonald, IV, of the United States Bankruptcy Court for the
District of Alaska presides over Fairbanks' Chapter 11 case. The
Debtor's schedules show total assets of $13,316,864 and total
liabilities of $1,838,719. The church's exclusive plan filing
period expires on June 29, 2008. (Catholic Church Bankruptcy
News, Issue No. 119; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
CATHOLIC CHURCH: Fairbanks Amends Motion to Hire Keegan Linscott
----------------------------------------------------------------
Donald J. Kettler, sole director of the Catholic Bishop of
Northern Alaska, and bishop of the Diocese of Fairbanks, filed
with the U.S. Bankruptcy Court for the District of Alaska an
amended application to employ Keegan, Linscott and Kenon, P.C.,
as Fairbanks' accountants and financial consultants, nunc pro
tunc to the bankruptcy filing.
Bishop Kettler relates that Keegan Linscott's retainer, which
would have been applied to prepetition fees and costs, did not
reach the firm prior to the bankruptcy filing due to certain bank
errors during the transfer of the funds. He further relates that
the $50,000 funds was received by Keegan Linscott's bank on
February 29, 2008, but was returned to the Diocese's account,
without consulting the firm, allegedly because the routing number
was incorrect.
The Diocese says that the Court should consider the Retainer as a
prepetition retainer because the transfer of funds was done
prepetition, and intended as a prepetition retainer. Bishop
Kettler notes that in the original employment application, the
Diocese and Keegan Linscott operated under the assumption that
the Retainer had actually been received prepetition.
By its amended application, the Diocese asks Judge MacDonald to:
-- approve Keegan Linscott's employment as of the bankruptcy
filing;
-- recognize the Retainer as a prepetition retainer;
-- allow Keegan Linscott to apply the Retainer to amounts
accrued prepetition; and
-- allow Keegan Linscott to retain the remaining Retainer to
be used for postpetition fees.
* * *
The Court approved the Diocese's amended application. Judge
MacDonald further held that Keegan Linscott may (i) apply the
Retainer to any amounts accrued prepetition, and (ii) retain the
Retainer to be applied against postpetition fees.
About Diocese of Fairbanks
The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic
Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka
The Diocese of Fairbanks, aka CBNA filed for chapter 11 bankruptcy
on March 1, 2008 (Bankr. D. Alaska Case No. 08-00110). Susan G.
Boswell, Esq., at Quarles & Brady LLP represents the Debtor in its
restructuring efforts. Michael R. Mills, Esq., of Dorsey &
Whitney LLP serves as the Debtor's local counsel and Cook,
Schuhmann & Groseclose Inc. as its special counsel. Judge Donald
MacDonald, IV, of the United States Bankruptcy Court for the
District of Alaska presides over Fairbanks' Chapter 11 case. The
Debtor's schedules show total assets of $13,316,864 and total
liabilities of $1,838,719. The church's exclusive plan filing
period expires on June 29, 2008. (Catholic Church Bankruptcy
News, Issue No. 119; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
CATHOLIC CHURCH: Fairbanks May Employ Quarles & Brady as Counsel
----------------------------------------------------------------
Donald J. Kettler, sole director of the Catholic Bishop of
Northern Alaska and bishop of the Diocese of Fairbanks, obtained
permission from the United States Bankruptcy Court for the
District of Alaska to employ Quarles & Brady LLP as the Diocese's
general reorganization and restructuring counsel.
As reported in the Troubled Company Reporter on March 6, 2008,
Bishop Kettler said Quarles & Brady has extensive experience in
representing distressed Catholic dioceses throughout the country,
and in negotiating settlements of sexual abuse tort claims, and
out-of-court and bankruptcy court supervised restructurings.
Susan G. Boswell, Esq., and her team at Quarles & Brady also
represented the Diocese of Tucson and The Roman Catholic Bishop
of San Diego in their reorganization cases.
About Diocese of Fairbanks
The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic
Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka
The Diocese of Fairbanks, aka CBNA filed for chapter 11 bankruptcy
on March 1, 2008 (Bankr. D. Alaska Case No. 08-00110). Susan G.
Boswell, Esq., at Quarles & Brady LLP represents the Debtor in its
restructuring efforts. Michael R. Mills, Esq., of Dorsey &
Whitney LLP serves as the Debtor's local counsel and Cook,
Schuhmann & Groseclose Inc. as its special counsel. Judge Donald
MacDonald, IV, of the United States Bankruptcy Court for the
District of Alaska presides over Fairbanks' Chapter 11 case. The
Debtor's schedules show total assets of $13,316,864 and total
liabilities of $1,838,719. The church's exclusive plan filing
period expires on June 29, 2008. (Catholic Church Bankruptcy
News, Issue No. 119; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
CATHOLIC CHURCH: Spokane's Plan Trustee Wants Bond Amount Cut
-------------------------------------------------------------
Gloria Z. Nagler, Esq., Trustee for the Diocese of Spokane's
Chapter 11 plan, asks the U.S. Bankruptcy Court for the Eastern
District of Washington to reduce the amount of bond, under which
she serves, pursuant to Article 6(a) of the Catholic Diocese of
Spokane Plan Trust Agreement for Qualified Settlement Fund.
The bond is currently set at $30,000,000 by Article 6(a) of the
Plan Trust Agreement, Ms. Nagler says.
Ms. Nagler informs the Court that in 2007, she paid to claimants,
bankruptcy case professionals, and other administrative costs all
but about $6,000,000 of the funds in the Plan Trust accounts.
Therefore, she notes, there is no reason now to pay for a bond of
$30,000,000.
The Diocese will likely pay the outstanding balance of
$1,000,000, less some discount for early payment, sometime in the
spring of 2008, Ms. Nagler relates. Therefore, she tells Judge
Williams, the most that she will be holding "from this time
forward" is something less than $7,000,000.
Mr. Nagler notes that she hopes to make another distribution to
the Diocese's matrix claimants in the next few months, which will
bring the total amount held in the Plan Trust even less.
Article 6(h) of the Plan Trust Agreement requires that any
modifications to the provisions of the Plan Trust Agreement be
made upon request to the Court. Ms. Nagler assures the Court
that notice has been sent to appropriate parties-in-interest
regarding her request.
Accordingly, Ms. Nagler asks the Court to allow the reduction of
the requisite bond to $7,000,000. She also asks the Court to
allow future bond reduction to the amount actually held in the
Plan Trust accounts, and without further Court order.
About The Diocese of Spokane
The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed $11,162,938 in total assets and
$81,364,055 in total debts.
The Diocese of Spokane, the Tort Claimants Committee, the Future
Claims Representative, and the Executive Committee of the
Association of Parishes delivered an Amended Plan of
Reorganization, and a Disclosure Statement describing that Plan to
the Court on Feb. 1, 2007. The Honorable Patricia C. Williams
approved the disclosure statement on March 8, 2007. On April 24,
2007, the Court confirmed Spokane's 2nd Amended Joint Plan. That
plan became effective on May 31, 2007. (Catholic Church
Bankruptcy News, Issue No. 119; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
CBRL GROUP: Weak Credit Metrics Prompts S&P's Rating Cuts to 'BB-'
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered the ratings on Lebanon,
Tennessee-based CBRL Group Inc. to 'BB-' from 'BB.' The outlook
is stable.
"The downgrade reflects credit metrics that are weak for the 'BB'
rating category," said Standard & Poor's credit analyst Jackie E.
Oberoi, "including leverage of 4.2x for the 12 months ended
Feb. 1, 2008, and interest coverage of 2.9x."
Furthermore, S&P does not expect significant improvement during
the near term, as general economic factors are expected to hurt
CBRL and others in the restaurant industry. "Moreover," added Ms.
Oberoi, "customers who are burdened by higher gas prices and
problems in the housing market are trading down from casual- and
family-dining concepts to quick-service restaurants, many of which
have extensive value offerings.
CENTENNIAL COMMS: Feb. 29 Blanace Sheet Upside Down by $1.062 Bil.
------------------------------------------------------------------
Centennial Communications Corp. reported a balance sheet data for
Feb. 29, 2008 with total assets of $1.340 billion, total
liabilities of $2.402 billion resulting to a total stockholders'
deficiency of $1.062 billion.
For the three months ended Feb. 29, 2008, the company generated
revenues of $251.1 million from $229.1 million for the same
quarter in 2007.
For the 2008 third quarter, the company's net income is at
$5.4 million compared to the $1.3 million net loss of the same
quarter in 2007.
The company reported income from continuing operations of
$6.6 million for the fiscal third quarter of 2008 as compared to
income from continuing operations of $0.3 million in the fiscal
third quarter of 2007.
"In the U.S., we continue to invest heavily in training our front-
line Associates to engender a competitive spirit that keeps
everyone focused on the bottom line," Michael J. Small,
Centennial's chief executive officer, said. "We've improved upon
our long successful local market strategy by delighting customers
at every touch-point with innovative new features, improving an
already superior network and targeting our advertising within our
footprint to showcase our strengths against the most relevant
competitors."
"In Puerto Rico, we're capitalizing on our leading position to
consistently grow customers, improve customer retention and
sustain a robust ARPU," Mr. Small continued. "Our Puerto Rico
wireless business grew cash flow 13 percent during the fiscal
third quarter, our best effort in more than two years."
"We're also leveraging our assets to attack new revenue streams in
the residential market, and are seeing meaningful growth from our
cable partnerships," Mr. Small added.
The company ended the quarter with 1,086,300 total wireless
subscribers, which compares to 1,034,200 for the year-ago quarter
and 1,068,300 for the previous quarter ended Nov. 30, 2007. The
company reported 474,500 total access lines and equivalents at the
end of the fiscal third quarter, which compares to 397,800 for the
year-ago quarter.
About Centennial Communications
Based in Wall, New Jersey, Centennial Communications Corp.
(NASDAQ: CYCL) - http://www.centennialwireless.com/--
provides regional wireless and integrated communications
services in the United States and the Puerto Rico with
approximately 1.1 million wireless subscribers and 387,500
access lines and equivalents. The US business owns and operates
wireless networks in the Midwest and Southeast covering parts of
six states. Centennial's Puerto Rico business owns and operates
wireless networks in Puerto Rico and the U.S. Virgin Islands and
provides facilities-based integrated voice, data and Internet
solutions. Welsh, Carson, Anderson & Stowe and an affiliate of
the Blackstone Group are controlling shareholders of Centennial.
* * *
Centennial Communications Corp. continues to carry Moody's
Investor Services' 'Caa1' senior unsecured debt rating, which was
placed in September 2006.
CENTEX HOME: Fitch Chips Ratings on $582.9 Million Certificates
---------------------------------------------------------------
Fitch Ratings has taken rating actions on Centex Home Equity Loan
Trust mortgage pass-through certificates. Affirmations total
$540.7 million and downgrades total $582.9 million. Break Loss
percentages and Loss Coverage Ratios for each class is included
with the rating actions as:
Centex Home Equity Loan Trust 2005-A TOTAL
-- $7.7 million class AF-5 affirmed at 'AAA',
(BL: 97.22, LCR: 4.48);
-- $24.9 million class AF-6 affirmed at 'AAA',
(BL: 93.12, LCR: 4.29);
-- $41.2 million class M-1 affirmed at 'AA+',
(BL: 75.66, LCR: 3.48);
-- $37 million class M-2 downgraded to 'A' from 'AA'
(BL: 42.42, LCR: 1.95);
-- $20.4 million class M-3 downgraded to 'BBB' from 'AA-'
(BL: 35.75, LCR: 1.65);
-- $18 million class M-4 downgraded to 'BB' from 'A+'
(BL: 31.42, LCR: 1.45);
-- $17.6 million class M-5 downgraded to 'BB' from 'A'
(BL: 27.62, LCR: 1.27);
-- $16.6 million class M-6 downgraded to 'B' from 'A-'
(BL: 24.08, LCR: 1.11);
-- $14.3 million class M-7 downgraded to 'B' from 'BBB+'
(BL: 21.15, LCR: 0.97);
-- $13 million class B downgraded to 'CC' from 'BBB'
(BL: 18.89, LCR: 0.87).
Deal Summary
-- Originators: Centex Home Equity Company, LLC (100%)
-- 60+ day Delinquency: 18.63%
-- Realized Losses to date (% of Original Balance): 1.10%
-- Expected Remaining Losses (% of Current balance): 21.72%
-- Cumulative Expected Losses (% of Original Balance): 6.64%
Centex Home Equity Loan Trust, Series 2005-B TOTAL
-- $27.5 million class AF-4 affirmed at 'AAA',
(BL: 89.42, LCR: 3.55);
-- $20.4 million class AF-5 affirmed at 'AAA',
(BL: 84.62, LCR: 3.36);
-- $16 million class AF-6 affirmed at 'AAA',
(BL: 84.87, LCR: 3.37);
-- $35 million class M-1 affirmed at 'AA+',
(BL: 70.97, LCR: 2.82);
-- $33 million class M-2 downgraded to 'BBB' from 'AA'
(BL: 43.02, LCR: 1.71);
-- $20.5 million class M-3 downgraded to 'BB' from 'AA-'
(BL: 36.35, LCR: 1.44);
-- $18.5 million class M-4 downgraded to 'BB' from 'A+'
(BL: 31.94, LCR: 1.27);
-- $16 million class M-5 downgraded to 'B' from 'A'
(BL: 28.49, LCR: 1.13);
-- $18 million class M-6 downgraded to 'B' from 'A-'
(BL: 24.77, LCR: 0.98);
-- $15 million class M-7 downgraded to 'CCC' from 'BBB+'
(BL: 21.87, LCR: 0.87);
-- $17.5 million class B downgraded to 'CCC' from 'BBB'
(BL: 18.94, LCR: 0.75).
Deal Summary
-- Originators: Centex Home Equity Company, LLC (100%)
-- 60+ day Delinquency: 22.80%
-- Realized Losses to date (% of Original Balance): 1.06%
-- Expected Remaining Losses (% of Current balance): 25.18%
-- Cumulative Expected Losses (% of Original Balance): 7.91%
Centex Home Equity Loan Trust 2005-C Total
-- $2.1 million class AF-3 affirmed at 'AAA'
(BL: 99.63, LCR: 4.19);
-- $28.4 million class AF-4 affirmed at 'AAA'
(BL: 91.41, LCR: 3.85);
-- $37.4 million class AF-5 affirmed at 'AAA'
(BL: 80.01, LCR: 3.37);
-- $19.8 million class AF-6 affirmed at 'AAA'
(BL: 81.31, LCR: 3.42);
-- $10.5 million class AV-3 affirmed at 'AAA'
(BL: 80.00, LCR: 3.37);
-- $45.5 million class M-1 affirmed at 'AA+'
(BL: 67.12, LCR: 2.82);
-- $33.5 million class M-2 affirmed at 'AA'
(BL: 51.06, LCR: 2.15);
-- $21 million class M-3 affirmed at 'AA-'
(BL: 42.70, LCR: 1.8);
-- $19.5 million class M-4 downgraded to 'BBB' from 'A+'
(BL: 36.04, LCR: 1.52);
-- $16.5 million class M-5 downgraded to 'BB' from 'A'
(BL: 32.00, LCR: 1.35);
-- $17.5 million class M-6 downgraded to 'B' from 'A-'
(BL: 27.94, LCR: 1.18);
-- $14.5 million class M-7 downgraded to 'B' from 'BBB+'
(BL: 24.83, LCR: 1.04);
-- $16.5 million class B-1 downgraded to 'CCC' from 'BBB'
(BL: 21.55, LCR: 0.91);
-- $18 million class B-2 downgraded to 'CCC' from 'BBB-'
(BL: 18.45, LCR: 0.78).
Deal Summary
-- Originators: Centex Home Equity Company, LLC (100%)
-- 60+ day Delinquency: 20.71%
-- Realized Losses to date (% of Original Balance): 0.76%
-- Expected Remaining Losses (% of Current balance): 23.77%
-- Cumulative Expected Losses (% of Original Balance): 8.68%
Centex Home Equity Loan Trust 2005-D TOTAL
-- $0.4 million class AF-2 affirmed at 'AAA'
(BL: 99.82, LCR: 3.97);
-- $26.4 million class AF-3 affirmed at 'AAA'
(BL: 94.27, LCR: 3.74);
-- $24.3 million class AF-4 affirmed at 'AAA'
(BL: 82.94, LCR: 3.29);
-- $54 million class AF-5 affirmed at 'AAA'
(BL: 67.80, LCR: 2.69);
-- $28 million class AF-6 affirmed at 'AAA'
(BL: 68.71, LCR: 2.73);
-- $36.8 million class AV-2 affirmed at 'AAA'
(BL: 67.79, LCR: 2.69);
-- $47 million class M-1 downgraded to 'AA' from 'AA+'
(BL: 55.19, LCR: 2.19);
-- $32.5 million class M-2 downgraded to 'A' from 'AA'
(BL: 48.43, LCR: 1.92);
-- $22.5 million class M-3 downgraded to 'A' from 'AA-'
(BL: 43.43, LCR: 1.73);
-- $17 million class M-4 downgraded to 'BBB' from 'A+'
(BL: 38.54, LCR: 1.53);
-- $17 million class M-5 downgraded to 'BB' from 'A'
(BL: 33.45, LCR: 1.33);
-- $15.5 million class M-6 downgraded to 'B' from 'A-'
(BL: 27.47, LCR: 1.09);
-- $16 million class M-7 downgraded to 'B' from 'BBB+'
(BL: 23.79, LCR: 0.95);
-- $14.5 million class B-1 downgraded to 'CCC' from 'BBB'
(BL: 20.60, LCR: 0.82);
-- $11 million class B-2 downgraded to 'CC' from 'BBB-'
(BL: 18.57, LCR: 0.74);
-- $12 million class B-3 downgraded to 'CC' from 'BB+'
(BL: 16.70, LCR: 0.66).
Deal Summary
-- Originators: Centex Home Equity Company, LLC (100%)
-- 60+ day Delinquency: 18.87%
-- Realized Losses to date (% of Original Balance): 0.87%
-- Expected Remaining Losses (% of Current balance): 25.17%
-- Cumulative Expected Losses (% of Original Balance): 11.07%
The rating actions are based on changes that Fitch has made to its
subprime loss forecasting assumptions. The updated assumptions
better capture the deteriorating performance of pools from 2007,
2006 and late 2005 with regard to continued poor loan performance
and home price weakness.
CHAMPION AIR: To Shut Down Operations by End of May
---------------------------------------------------
Champion Air will cease flight operations May 31, 2008 after being
hit by increase in fuel prices and overall economic slowdown.
"This is a sad day for the entire Champion family," said Champion
President and CEO Lee Steele. "The men and women of this airline
have poured themselves into providing safe, reliable and pleasing
service to millions of customers over our 11 years in business.
Unfortunately, our business model is no longer viable in a world
of $110 oil, a struggling economy and rapidly changing demand for
our services. Those factors also have impeded our efforts to
attract new capital and new investors. Accordingly, the
management team and our board of directors have decided that the
best course of action is to cease flying and to wind up our
operations in a responsible, deliberate manner."
Mr. Steele noted that the run-up in fuel prices strongly impacted
Champion's fleet of three-engine Boeing 727s and that both the
overall economic slowdown and the tight credit markets had a
strong, negative impact on the airline's business prospects and
its efforts to attract investors. Compounding the challenges
facing the airline was a growing trend in the marketplace away
from charter carriers for certain types of flying.
"Champion really has experienced a 'perfect storm' that has
simultaneously affected our cost structure, our ability to
generate revenue and our ability to restructure ourselves," Mr.
Steele said. "Any one of those factors would be difficult;
collectively they are insurmountable . . . even with the
tremendous employees we have and the best efforts of everyone
involved.
"The people of this airline can take a very justifiable pride in
what they have created," Mr. Steele continued. "This situation is
in no way a reflection of their talents, their commitment or their
passion for our customers."
Champion will fulfill all outstanding service commitments and will
remain fully in compliance with all regulatory, operational and
labor contract requirements. The company has adequate funds to
continue operations and to settle all outstanding financial
obligations.
The airline's current 550 employees will continue to receive their
pay and benefits through May 31. Notification of the impending
shutdown as mandated by the Worker Adjustment and Retraining
Notification Act and any similar state and local regulations is
underway.
CHAMPION ENTERPRISES: To Shut Down Plants in Silverton & LaGrange
-----------------------------------------------------------------
Champion Enterprises Inc. will close its manufacturing facility in
Silverton, Oregon, and idle the last of four plants at its complex
in LaGrange, Indiana, transferring the LaGrange production to the
company's nearby facilities in Topeka, Indiana.
As a result of the closures, the company expects to incur pretax
cash restructuring charges of approximately $2.1 million in the
first quarter ending March 29, 2008.
In addition, the company is in the process of assessing the
related pretax non-cash fixed asset impairment charges that it
expects to record during the quarter which could $7.5 million.
"Our ongoing efforts to deliver strong segment operating margins
in the face of challenging U.S. housing markets require that we
continuously monitor the regional capacity utilization rates and
profitability of our manufacturing footprint," William Griffiths,
chairman, president and chief executive officer of Champion
Enterprises Inc., stated. "As a result of lagging sales, we made
the difficult decision to further consolidate our U.S. operations,
bringing the total number of plants idled or closed since
mid-2006 to 10."
About Champion Enterprises Inc.
Based in Auburn Hills, Michigan, Champion Enterprises Inc. (NYSE:
CHB) -- http://www.championhomes.com/-- operates 31 manufacturing
facilities in North America and the United Kingdom working with
independent retailers, builders and developers. The Champion
family of builders produces manufactured and modular homes, as
well as modular buildings for government and commercial
applications.
* * *
As reported in the Troubled Company Reporter on Dec. 12, 2007;
Standard & Poor's Ratings Services raised its ratings on Champion
Enterprises Inc.'s senior notes due 2009 and on Champion Home
Builders Co.'s senior secured credit facility to 'B+' from 'B'.
At the same time, S&P upgraded the recovery ratings on the senior
notes and the credit facility to '3' from '5'. Concurrently, S&P
affirmed the 'B+' corporate credit ratings. The outlook for both
entities is stable.
CHARTER COMM: Unit Completes $546MM Sale of 10.875% 2nd Lien Notes
------------------------------------------------------------------
Charter Communications Inc.'s subsidiary, Charter Communications
Operating LLC, closed on the sale of $546 million principal amount
of 10.875% 2nd lien notes due 2014 in a private transaction. At
the closing, the amount of the Notes was upsized from the amount
previously disclosed.
As reported in the Troubled Company Reporter on March 14, 2008,
Charter Communications' subsidiary, Charter Communications
Operating LLC agreed to issue $520 million principal amount of
10.875% 2nd lien notes due 2014, which are to be guaranteed by CCO
Holdings LLC and certain subsidiaries of Charter Operating, in a
private transaction. The purchase price of the notes will be
approximately 96.1% of the principal amount.
The proceeds from the sale of the Notes were used to repay, but
not permanently reduce, the outstanding debt balances under the
existing revolving credit facility of Charter Operating.
About Charter Communications
Headquartered in St. Louis, Missouri, Charter Communications Inc.
(NASDAQ: CHTR) -- http://www.charter.com/-- is a broadband
communications company and a publicly traded cable operator in the
United States. Charter provides a full range of advanced
broadband services, including advanced Charter Digital Cable(R)
video entertainment programming, Charter High-Speed(R) Internet
access, and Charter Telephone(R). Charter Business(TM) similarly
provides scalable, tailored, and cost-effective broadband
communications solutions to business organizations, such as
business-to-business Internet access, data networking, video and
music entertainment services, and business telephone. Charter's
advertising sales and production services are sold under the
Charter Media(R) brand.
* * *
As reported in the Troubled Company Reporter on March 14, 2008,
Moody's Investors Service affirmed these ratings for Charter
Communications Inc.: (i) corporate family rating: Caa1; (ii)
probability-of-default rating: Caa2; and (iii) senior unsecured
notes: Ca (LGD5 -- 87%).
CHARYS HOLDING: Wants Milbank Tweed as Bankruptcy Counsel
---------------------------------------------------------
Chary's Holding Company Inc. and its debtor affiliate ask the U.S.
Bankruptcy Court for the District of Delaware to retain Milbank,
Tweed, Hadley & McCloy LLP as its Bankruptcy Counsel.
The firm will assist the Debtor and its debtor-affiliate in legal
services that will enable the company to perform its duties
faithfully and to carry out a comprehensive chapter 11 plan.
Milbank will be compensated at its standard hourly rates, which
are based on the professionals' level of experience. These hourly
rates are subject to periodic firm-wide adjustments in the
ordinary course of the firm's business.
Partners $700 - $950
Counsel $650 - $850
Associates and Senior Attorneys $275 - $635
Legal Assistants $155 - $325
Matthew S. Barr, a partner in Milbank's Financial Restructuring
Group, assures the court that Milbank does not have any connection
with or represent any adverse interest to the Debtors, their
creditors or any other party in interest, pursuant to Bankruptcy
Rule 2014(a).
Headquartered in Atlanta, Georgia, Charys Holding Co., Inc., --
http://www.charys.com/-- provide remediation & reconstruction and
wireless communications & data infrastructure. The company and
its Crochet & Borel Services, Inc. subsidiary filed for Chapter 11
protection on Feb. 14, 2008 (Bankr. Del. Case No.08-10289). Chun
I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble Heath, Esq.,
at Richards, Layton & Finger, P.A., represent the Debtors in their
restructuring efforts. No Official Committee of Unsecured
Creditors has been appointed in these cases to date. When the
Debtors filed for protection against their creditors, it listed
total assets of $245,000,000 and total debts of $255,000,000.
CITADEL BROADCASTING: Has $848MM Net Loss in 4th Qtr. Ended 2007
----------------------------------------------------------------
Citadel Broadcasting Corporation posted net loss pf $848.0 million
for the quarter ended Dec. 31, 2007, as compared to a net loss of
$1.1 million for the same period in 2006. Included in net loss
for the quarter ended Dec. 31, 2007 was approximately $857.0
million of non-cash asset impairment and disposal charges.
The company's net revenues for the fourth quarter of 2007 were
$245.5 million as compared to $114.0 million for the fourth
quarter of 2006. T he increase in revenues was a result of the
acquisition of ABC Radio on June 12, 2007.
On a pro forma basis, net revenues in the fourth quarter of 2006
were $258.5 million as compared to $245.3 million for the quarter
ended Dec. 31, 2007. Pro forma revenues for 2007 and 2006 have
been adjusted for the results of ABC Radio as if it had been
acquired at the beginning of 2006 and any significant station
dispositions. This decrease in pro forma revenues of $13.2
million is primarily a result of a $13.1 million decline in
revenue from our Radio Markets, partially offset by an increase in
revenue at the Radio Network of $0.6 million.
The decline in net revenues at the Radio Markets was primarily
attributable to lower revenues in our San Francisco, CA;
Washington, DC; Chicago, IL; Atlanta, GA; New York, NY;
Birmingham, AL; Dallas, TX and Los Angeles, CA radio stations.
Operating loss for the fourth quarter of 2007 was $1,043 million
as compared to operating income of $10.8 million in the
corresponding 2006 period, a decrease of $1,054 million. The
decrease in operating income for the three months ended Dec. 31,
2007 as compared to the three months ended Dec. 31, 2006 is
primarily the result of an increase in asset impairment charges of
approximately $1,076 million. The asset impairment charge is
related to a continued deterioration in the radio marketplace and
to a decline in the Company's stock price during the three months
ended Dec. 31, 2007.
Operating income was also impacted by an increase in depreciation
and amortization of $9.3 million and an increase of $2.2 million
in corporate general and administrative costs, offset by the
operations of the ABC Radio stations and Network acquired on June
12, 2007. The increases in depreciation and amortization and
corporate general and administrative expenses are primarily
attributable to the ABC Radio acquisition.
Segment operating income was $86.4 million for the fourth quarter
of 2007, compared to $49.0 million for the fourth quarter of 2006,
an increase of $37.4 million. This increase reflects the
operations of ABC Radio, which was acquired on June 12, 2007. On
a pro forma basis, segment operating income adjusted for the
results of ABC Radio, as if it had been acquired at the beginning
of 2006, and any significant station dispositions was $103.2
million in the fourth quarter of 2006 compared to $86.1 million
for the quarter ended Dec. 31, 2007. This decrease of $17.1
million is a result of a $16.2 million decline in segment
operating income from our Radio Markets and a $0.9 million decline
at the Radio Network.
The decline in segment operating income at the Radio Markets was
primarily attributable to our New York, NY; San Francisco, CA;
Chicago, IL; Atlanta, GA; Los Angeles, CA; Washington, D.C.;
Birmingham, AL and Dallas, TX radio stations.
Net interest expense increased to $37.4 million for the quarter
ended December 31, 2007 from $8.0 million for the quarter ended
Dec. 31, 2006, an increase of $29.4 million. The increase in net
interest expense was primarily the result of the interest incurred
on the increased borrowings under the Company's new senior credit
and term loan facility as a result of the merger with ABC Radio.
Income tax benefit for the quarter ended Dec. 31, 2007 was $234.9
million, compared to income tax expense of $2.9 million for the
quarter ended Dec. 31, 2006. The income tax benefit for the
quarter ended Dec. 31, 2007 is primarily related to the $1,103.1
million asset impairment and disposal charges, which resulted in
an income tax benefit of approximately $246.1 million, partially
offset by the tax expense on pre-tax income excluding impairment
loss.
Free cash flow was $34.9 million for the three months ended
December 31, 2007, compared to $29.4 million for the three months
ended Dec. 31, 2006, an increase of $5.5 million. The increase in
free cash flow is a result of the acquired ABC Radio business,
offset in part by an increase in interest costs and corporate
general and administrative expenses. For the three months ended
Dec. 31, 2007, the basic weighted average common shares
outstanding was approximately 261.7 million as compared to
111.2 million for the three months ended December 31, 2006.
Farid Suleman, Chairman and Chief Executive Officer of Citadel
Broadcasting Corporation, commented: "The fourth quarter and the
year ended Dec. 31, 2007 was difficult for the broadcasting
industry and the Company. The performance of the larger market
radio stations acquired in the ABC Merger was particularly
disappointing. Whereas the Company continues to believe that the
long-term prospects from these stations will be positive, the
Company in the interim is completing a major restructuring of
these stations to both improve short-term profitability as well as
position them for future growth. The Company is however pleased
with the potential growth and profitability of the ABC Network.
The Company's plan for the coming year is to focus on immediately
improving the profitability of the ABC Radio stations as well as
use the Company's considerable free cash flow to pay down debt."
About Citadel Broadcasting
Headquartered in Las Vegas, Nevada, Citadel Broadcasting Corp.
(NYSE: CDL) -- http://www.citadelbroadcasting.com/-- is a radio
broadcaster focused primarily on acquiring, developing and
operating radio stations throughout the United States. Citadel
is comprised of 169 FM and 61 AM radio stations, in addition to
the ABC Radio Network business.
* * *
As reported in the Troubled Company Reporter on Feb. 19, 2008,
Standard & Poor's Rating Services said that the announcement by
Citadel Broadcasting Corp. (B+/Stable/--) of its settlement of
litigation with certain subordinated note holders has no immediate
effect on ratings.
CLEAR CHANNEL: Banks Want NY State Court to Dismiss Lawsuit
-----------------------------------------------------------
Citigroup Inc. Morgan Stanley, Credit Suisse Group, Royal Bank of
Scotland Group Plc, Deutsche Bank AG and Wachovia Corp. have asked
a New York state court to dismiss complaints filed against them by
private equity firms Thomas H. Lee Partners LP and Bain Capital
Partners relating to a $19 billion financing agreement to acquire
Clear Channel Communications Inc., Reuters reports.
As reported in the Troubled Company Reporter on March 31, 2008,
a full trial on a temporary restraining order issued by a Texas
court to force financiers of the proposed acquisition of Clear
Channel to honor a financing deal is set April 8, 2008.
The TCR reported on March 27, 2008, Bain and Thomas H. Lee, which
have agreed to buy Clear Channel Communications Inc., sued the
group that promised to finance the $19 billion acquisition, to
compel them to honor the agreement. The private equity firms
filed complaints in New York state court in Manhattan and in Bexar
County, Texas. The firms alleged the backers breached a contract
entered in May to fund the deal. Clear Channel joined the suit in
Texas.
The New York case wants a judge to order the banks to provide the
promised loans. In Texas, Clear Channel asked for an order banning
the banks from interfering with the merger agreement and sought
more than $26 billion in damages.
The main New York case on the Clear Channel buyout is BT Triple
Crown Merger Co. v. Citigroup, 08-600899, New York State Supreme
Court, County of New York (Manhattan). The Texas case is Clear
Channel Communications Inc. and CC Media Holdings Inc. v.
Citigroup, 2008-CI-04864, Texas District Court, Bexar County,
Texas.
As previously reported in the TCR, the privatization of Clear
Channel appeared in danger of collapsing after the backers
reportedly failed to reach agreement on the final financing of the
transaction. Clear Channel had anticipated closing the merger
agreement by March 31, 2008. The company's shareholders approved
the adoption of the merger agreement, as amended, in which Clear
Channel would be acquired by CC Media Holdings Inc., a corporation
formed by private-equity funds co-sponsored by Lee Partners and
Bain Capital. The deal includes $19.4 billion of equity and
$7.7 billion of debt.
Talks between the private equity firms and their banks reportedly
became mired over details of the credit agreement.
The main dispute centers on the syndicate's demand that the
private-equity firms replace a long-term financing package of at
least six years in the original agreement with a short-term,
three-year bridge-financing agreement; and a condition that the
buyers not use a revolving credit facility or Clear Channel's cash
flow to pay down about $3.8 billion in short-term debt securities.
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 of Dec. 31, 2007, it owned 717 core radio
stations, 288 non-core radio stations which are being marketed for
sale and a leading national radio network operating in the United
States.
* * *
As reported in the Troubled Company Reporter on March 28, 2008,
Standard & Poor's Ratings Services said its ratings on Clear
Channel Communications Inc., including the 'B+' corporate credit
rating, remain on CreditWatch with negative implications.
Fitch Ratings stated that in line with previous guidance, Clear
Channel Communications' 'BB-' Issuer Default Rating and Senior
Unsecured Ratings would remain in place if the going-private
transaction is not completed.
Moody's stated that assuming the transaction is completed as
currently contemplated, Clear Channel will likely be assigned a
Corporate Family Rating of B2 and the rating on the existing
senior notes is likely to be notched down to Caa1 based on their
expected subordination to the new senior secured debt facilities
and the new senior notes.
CLEARWATER FUNDING: Low Credit Quality Cues Moody's Rating Reviews
------------------------------------------------------------------
Moody's Investors Service placed its rating of these notes issued
by Clearwater Funding CDO 2001-A, Ltd. on review for possible
downgrade:
Class Description: $11,250,000 Class A-3 Notes Due 2013
-- Prior Rating: A3
-- Prior Rating: A3, on review for possible downgrade
In addition Moody's also downgraded and left on review for
possible downgrade these notes:
Class Description: $5,000,000 Class B-1 Notes Due 2013
-- Prior Rating: Baa2
-- Prior Rating: Ba2, on review for possible downgrade
Class Description: $8,250,000 Class B-2 Notes Due 2013
-- Prior Rating: Baa2
-- Prior Rating: Ba2, on review for possible downgrade
Moody's explained that this rating action reflects deterioration
in the credit quality of the transaction's underlying collateral
pool, which consists primarily of corporate bonds.
COMSTOCK HOMEBUILDING: Incurs $87.5 Mil. Net Loss for Fiscal 2007
-----------------------------------------------------------------
Comstock Homebuilding Companies Inc., for the twelve months ended
Dec. 31, 2007, reported a net loss of $87.5 million on total
revenue of $266.2 million as compared to a net loss of
$39.8 million on revenue of $245.9 million for the twelve months
ended Dec. 31, 2006.
In connection with these results the company stated that it had
elected to record non-cash impairment and write-off charges of
$78.3 million after tax based on a 39% tax rate, for the twelve
months ended Dec. 31, 2007 as compared to charges of $57.4 million
after tax based on a 39% tax rate, for the twelve months ended
Dec. 31, 2006.
Exclusive of impairment and write-off charges the company posted
an operating loss of $13.8 million for the twelve months ended
Dec. 31, 2007 as compared to an operating loss of $8.3 million for
the twelve months ended Dec. 31, 2006.
In addition, at Dec. 31, 2007 the company had recorded a
$29.2 million valuation allowance against its deferred tax asset,
an increase of $28.7 million as compared to Dec. 31, 2006. This
increase in the company's deferred tax asset valuation allowance
represented, on a pro-forma basis.
The company noted that during the twelve months ended Dec. 31,
2007 it reduced its debt by $124.2 million to $171.2 million as
compared to $295.4 million at Dec. 31, 2006. The company's net
debt-to-cap ratio at Dec. 31, 2007 was 75.5% as compared to 65.4%
at Dec. 31, 2006. The company indicated that it had received all
necessary waivers or forbearances from its lenders with respect to
its Dec. 31, 2007 loan covenants.
As previously reported, on March 14, 2008 the company closed on a
new $40.0 million revolving loan facility with KeyBank National
Association. The proceeds from the new loan were used to
refinance the company's Eclipse at Potomac Yard and Towns at
Station View projects, provide financing for the restructure of
the company's $30.0 million senior unsecured notes; pay fees and
expenses associated with the new loan and provide working capital
to the company.
In connection with the closing of the new loan with KeyBank, and
as previously disclosed, the company executed on its option to
restructure its $30.0 million senior unsecured notes. Under the
terms of the restructuring, the company made a $6.0 million
payment to the noteholder, entered into an amended and restated
indenture for $9.0 million and issued the noteholder a warrant to
purchase 1.5 million shares of the company's Class A common stock
at a price of $0.70 per share. In exchange, the noteholder
reduced the outstanding amount due under the notes by an
additional $15.0 million.
Company Gets $13MM Tax Refund
The company also announced that in February 2008, based on its
taxable losses for 2007, it had filed for a $13.9 million refund
of federal and state taxes paid in connection with the company's
2005 fiscal year. The refunds were received in March 2008.
"Last year was a difficult year for our company and the home
building industry by any measure," Christopher Clemente, chairman
and chief executive officer, said. "However, we are confident
that the actions we took during 2007 improve our outlook for
future periods."
"We reduced debt by nearly one third while obtaining meaningful
concessions from most of our lenders, we significantly reduced
operating expenses and production costs, we enhanced liquidity by
maximizing our tax refund, we reduced the burden of debt service
by temporarily repositioning several projects as rental properties
and selling certain other assets, and accelerated recognition of
future period expenses where practical," Mr. Clemente added. "We
also negotiated a $15 million discount to our $30 million senior
unsecured notes, revalued the assets we continue to hold through
the recognition of impairments based on a 17% discount model and
aggressively sold inventory of speculative units."
"While market conditions remain challenging we believe we have
positioned Comstock for improving results in future periods," Mr.
Clemente concluded.
As of Dec. 31, 2007, the company's consolidated balance sheet
reflected a total shareholders' equity of $46.5 million.
About Comstock Homebuilding
Based in Reston, Virginia, Comstock Homebuilding Companies Inc.
(Nasdaq: CHCI) -- http://www.comstockhomebuilding.com/-- is a
diversified real estate development firm with a focus on
moderately priced for-sale residential products. Established in
1985, Comstock builds and markets single-family homes, townhouses,
mid-rise condominiums, high-rise condominiums, mixed-use urban
communities and active adult communities. The companycurrently
markets its products under the Comstock Homes brand in the
Washington, D.C., Raleigh, North Carolina, and Atlanta, Georgia
metropolitan areas. Comstock develops mixed-use, urban
communities and active-adult communities under the Comstock
Communities brand.
* * *
On Oct. 25, 2007, the company entered into loan modification
agreements which extended maturities and provided for a
forbearance agreement with respect to all financial covenants.
The forbearance runs until March 31, 2008. As of Sept. 30, 2007,
the company had $11.1 million outstanding to M&T Bank, and is not
in compliance with the tangible net worth covenant.
COUNTRYWIDE FINANCIAL: Feds to Study Benefits of BofA Acquisition
-----------------------------------------------------------------
The U.S. Federal Reserve will hold hearings on the proposed
$4 billion acquisition of Countrywide Financial Corp. by Bank of
America Corp., various reports say.
According to the Chicago Tribune, the Federal Reserve's aim of
holding the hearings is to determine whether or not the purchase
will "benefit the public". The Fed will schedule the hearings on
April 22 at the Federal Reserve Bank of Chicago, in Illinois, as
well as in Los Angeles, California, the Tribune reports.
The Tribune notes that the consumer public sees these hearings as
an opportunity to goad Bank of America to be more involved in
helping distressed homeowners.
Early this year, Countrywide signed a definitive agreement to sell
its business to Bank of America in an all-stock transaction worth
approximately $4 billion. Under the terms of the agreement,
shareholders of Countrywide would receive 0.1822 of a share of
Bank of America stock in exchange for each share of Countrywide.
The purchase is expected to close in the third quarter and to be
neutral to Bank of America earnings per share in 2008 and
accretive in 2009, excluding merger and restructuring costs.
As reported in the Troubled Company Reporter on March 12, 2008,
the U.S. Federal Bureau of Investigation is also fielding evidence
from its investigation of Countrywide Financial Corp., which
potentially exposes the company's slipshod and dubious lending
practices.
According to WSJ, the FBI discovered that many loan documents bear
incorrect and faulty information on the mortgage clients the
mortgage lender was servicing. The FBI is also mulling over the
company's practice of originating and selling home loans to people
who have questionable credit histories.
About Countrywide Financial
Based in Calabasas, California, Countrywide Financial Corporation
(NYSE: CFC) -- http://www.countrywide.com/-- is a diversified
financial services provider and a member of the S&P 500, Forbes
2000 and Fortune 500. Through its family of companies,
Countrywide originates, purchases, securitizes, sells, and
services residential and commercial loans; provides loan closing
services such as credit reports, appraisals and flood
determinations; offers banking services which include depository
and home loan products; conducts fixed income securities
underwriting and trading activities; provides property, life and
casualty insurance; and manages a captive mortgage reinsurance
company.
* * *
As reported in the Troubled Company Reporter on Jan. 15, 2008,
Moody's placed the ratings of Countrywide Financial Corporation
and its subsidiaries under review for upgrade. CFC and
Countrywide Home Loans senior debt is rated Baa3 and short-term
debt is rated Prime-3. Countrywide Bank FSB's bank financial
strength rating is C-, deposits are rated Baa1 and short-term debt
Prime-2. All long and short-term ratings are placed under review
for possible upgrade.
CREDIT SUISSE: Fitch Affirms Low-B Ratings on Five Cert. Classes
----------------------------------------------------------------
Fitch Ratings has upgraded three classes of Credit Suisse First
Boston commercial mortgage securities 2003-C5 as:
-- $15.8 million class C to 'AAA' from 'AA+';
-- $31.5 million class D to 'AA-' from 'A+';
-- $17.3 million class E to 'A+' from 'A'.
In addition, Fitch has affirmed these classes:
-- $135.4 million class A-2 at 'AAA';
-- $115.6 million class A-3 at 'AAA';
-- $370.3 million class A-4 at 'AAA';
-- $298.7 million class A-1-A at 'AAA';
-- Interest only (IO) class A-X at 'AAA';
-- IO class A-SP at 'AAA';
-- $39.4 million class B at 'AAA';
-- $17.3 million class F at 'A-';
-- $14.2 million class G at 'BBB+';
-- $14.2 million class H at 'BBB';
-- $9.5 million class J at 'BBB-';
-- $6.3 million class K at 'BB+';
-- $6.3 million class L at 'BB';
-- $7.9 million class M at 'B+';
-- $1.6 million class N at from 'B';
-- $4.7 million class O at 'B-'.
Fitch does not rate the $15.5 million class P. Class A-1 has paid
in full.
The upgrades reflect the increased credit enhancement levels due
to principal paydown of 5.9% and defeasance of seven loans (6%)
since Fitch's last rating action. As of the March 2008
distribution date, the pool's aggregate principal balance has
decreased 11.1% to $1.12 billion from $1.26 billion at issuance.
Eighteen loans have defeased, including the 4th largest loan in
the transaction (4.2%).
Fitch has identified fourteen loans as Fitch loans of concern
(9.2%) due to declining performance. The largest Fitch loan of
concern (1.3%), which is in special servicing, is secured by a 438
unit multifamily property located in Houston, Texas. The loan was
transferred to the special servicer due to monetary default. The
special servicer had started foreclosure proceeding and the
borrower, controlled by MBS Cos., subsequently filed for
bankruptcy. The borrower has submitted reorganization plan which
is under review for approval.
The second largest Fitch loan of concern (1.4%) is secured by a
173 unit multifamily property in Baltimore, Maryland. The
servicer reported Debt Service Coverage Ratio as of June 30, 2007
was 0.51 times with occupancy at 99%, compared to DSCR of 1.29x
with occupancy at 92% at issuance.
Fitch has reviewed the remaining four shadow rated loans: Mall at
Fairfield Commons, Mayfair Mall & Office Complex, Stanford
Shopping Mall and Paramount Plaza. All loans maintain investment-
grade shadow ratings due to their stable performance since
issuance.
The Mall at Fairfield Commons loan (7.2%) is secured by 856,879
square foot of a 1,046,726 sf regional mall in Beavercreek, Ohio.
As of Year end 2007, the occupancy remained stable at 99.4% since
issuance. The loan is scheduled to mature in November 2014.
The Mayfair Mall & Office Complex loan (6.3%) is secured by
1,277,483 sf of a 1,488,197 sf commercial complex which is
comprised of a regional mall and four office buildings in
Wauwatosa, Wisconsin. Occupancy as of September 30, 2007 remains
strong at 92%. The loan is scheduled to mature in July 2008.
The Stanford Shopping Mall loan (6.3%) is secured by 1,387,351 sf
regional mall in Palo Alto, California. Occupancy as of October
30, 2007 increased to 99% from 96% at issuance. The loan is
schedule to mature in September 2008.
The Paramount Plaza loan (3.6%) is secured by two 20-story office
buildings totaling 911,900 sf located in Los Angeles, California.
Occupancy as of September 30, 2007 increased to 90% from 84% at
issuance. The loan is schedule to mature in September 2013.
Ten loans (17.7%) are scheduled to mature in 2008, including nine
non-defeased loans (17.6%). The interest rate on the non defeased
loans ranges from 3.108% to 7.1% with weighted average coupon at
3.65%. Sales for the two maturing retail properties have
increased since issuance.
CROSSWINDS AT LONE: U.S. Trustee Appoints Three-Member Committee
----------------------------------------------------------------
The United States Trustee for Region 6 appointed three creditors
to serve on an Official Committee of Unsecured Creditors in
Cornerstone Ministries Investments Inc.'s bankruptcy case.
The Committee members are:
1. Mr. John Vellutato Interim Chairman
Huitt-Zollars Inc.
3131 Mckinney Avenue, # 600
Dallas, TX 75219
Tel: (214) 871 3311
2. Mr. Earl Broussard
TBG Partners
901 S. Mopac, Building 2, Suite 350
Austin, TX 78746
Tel: (512) 327-1011
3. Mr. Saad Hineidi
Fugro Consultants LP
2880 Virgo Lane,
Dallas, TX 75229
Tel: (972) 484-8301
Official creditors' committees have the right to employ legal
and accounting professionals and financial advisors, at the
Debtors' expense. They may investigate the Debtors' business and
financial affairs. Importantly, official committees serve as
fiduciaries to the general population of creditors they represent.
Those committees will also attempt to negotiate the terms of a
consensual Chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtor is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.
Headquartered in Novi, Michigan, Crosswinds at Lone Star Ranch
1000, Ltd., owns and develops real estate. The company filed
for Chapter 11 protection on February 4, 2008. Frank J. Wright,
Esq., at Wright, Ginsberg & Brusilow P.C., represents the Debtor
in its restructuring efforts. No Official Committee of Unsecured
Creditors has been appointed in this case to date. When the
Debtor file for protection against it creditors, it list total
asset of $115,000,000 and total debts of $79,100,000.
CROSSWINDS AT LONE: Files Schedules of Assets and Liabilities
-------------------------------------------------------------
Crosswinds at Lone Star Ranch 1000, Ltd. delivered to the United
States Bankruptcy Court for the Eastern District of Texas its
schedules of assets and liabilities disclosing:
Name of Schedule Assets Liabilities
---------------- ------------ -----------
A. Real Property $115,000,000
B. Personal Property 910,022
C. Property Claimed
as Exempt
D. Creditors Holding $61,089,338
Secured Claims
E. Creditors Holding 5,954
Unsecured Priority
Claims
F. Creditors Holding 19,073,943
Unsecured Nonpriority
Claims
------------ -----------
TOTAL $115,910,022 $80,169,235
Headquartered in Novi, Michigan, Crosswinds at Lone Star Ranch
1000, Ltd., owns and develops real estate. The company filed
for Chapter 11 protection on February 4, 2008. Frank J. Wright,
Esq., at Wright, Ginsberg & Brusilow P.C., represents the Debtor
in its restructuring efforts. No Official Committee of Unsecured
Creditors has been appointed in this case to date. When the
Debtor file for protection against it creditors, it list total
asset of $115,000,000 and total debts of $79,100,000.
CSFB HOME: Fitch Junks Ratings on 10 Certificate Classes
--------------------------------------------------------
Fitch Ratings has taken rating actions on CSFB Home Equity pass-
through certificates. Unless stated otherwise, any bonds that
were previously placed on Rating Watch Negative are removed.
Affirmations total $383.1 million and downgrades total
$277.9 million. Additionally, $72.2 million was placed on Rating
Watch Negative. Break Loss percentages and Loss Coverage Ratios
for each class is included with the rating actions as:
CSFB HEAT 2005-5
-- $46.5 million class 1-A-1 affirmed at 'AAA'
(BL: 78.50, LCR: 2.91);
-- $11.6 million class 1-A-2 affirmed at 'AAA'
(BL: 71.19, LCR: 2.64);
-- $70.3 million class 2-A-2 affirmed at 'AAA'
(BL: 75.72, LCR: 2.81);
-- $20.6 million class 2-A-3 affirmed at 'AAA'
(BL: 68.42, LCR: 2.53);
-- $36.5 million class M-1 affirmed at 'AA+'
(BL: 57.78, LCR: 2.14);
-- $33 million class M-2 rated 'AA', placed on Rating Watch
Negative (BL: 47.44, LCR: 1.76);
-- $19.5 million class M-3 downgraded to 'BBB' from 'AA-'
(BL: 42.11, LCR: 1.56);
-- $17.5 million class M-4 downgraded to 'BB' from 'A+'
(BL: 36.98, LCR: 1.37);
-- $17 million class M-5 downgraded to 'B' from 'A-'
(BL: 31.98, LCR: 1.18);
-- $16 million class M-6 downgraded to 'B' from 'BBB'
(BL: 27.20, LCR: 1.01);
-- $13 million class M-7 downgraded to 'CCC' from 'BB+'
(BL: 23.19, LCR: 0.86);
-- $10 million class B-1 affirmed at 'CCC',
(BL: 20.15, LCR: 0.75);
-- $8.5 million class B-2 downgraded to 'CC' from 'CCC'
(BL: 17.53, LCR: 0.65);
-- $10 million class B-3 downgraded to 'CC' from 'CCC'
(BL: 14.85, LCR: 0.55).
Deal Summary
-- Originators: Decision One (34.0%), CIT (14.1%), Mortgage IT
(10.6%)
-- 60+ day Delinquency: 38.52%
-- Realized Losses to date (% of Original Balance): 2.72%
-- Expected Remaining Losses (% of Current balance): 26.99%
-- Cumulative Expected Losses (% of Original Balance): 11.98%
CSFB HEAT 2005-9
-- $60.2 million class 1-A-1 affirmed at 'AAA'
(BL: 61.27, LCR: 2.05);
-- $48.4 million class 2-A-2 affirmed at 'AAA'
(BL: 90.03, LCR: 3.02);
-- $79 million class 2-A-3 affirmed at 'AAA'
(BL: 65.19, LCR: 2.19);
-- $39.2 million class 2-A-4 rated 'AAA', placed on Rating Watch
Negative (BL: 55.60, LCR: 1.86);
-- $50.00 class P affirmed at 'AAA';
-- $34.2 million class M-1 downgraded to 'A' from 'AA+'
(BL: 47.15, LCR: 1.58);
-- $30.1 million class M-2 downgraded to 'BB' from 'AA+'
(BL: 39.96, LCR: 1.34);
-- $21.1 million class M-3 downgraded to 'B' from 'AA'
(BL: 34.88, LCR: 1.17);
-- $14.9 million class M-4 downgraded to 'B' from 'AA-'
(BL: 31.28, LCR: 1.05);
-- $14.9 million class M-5 downgraded to 'CCC' from 'A'
(BL: 27.68, LCR: 0.93);
-- $13 million class M-6 downgraded to 'CCC' from 'BBB+'
(BL: 24.47, LCR: 0.82);
-- $13.5 million class M-7 downgraded to 'CC' from 'BBB'
(BL: 21.04, LCR: 0.71);
-- $9.5 million class M-8 downgraded to 'CC' from 'BBB-'
(BL: 18.62, LCR: 0.62);
-- $9 million class B-1 downgraded to 'CC' from 'BB'
(BL: 16.26, LCR: 0.55);
-- $7.2 million class B-2 downgraded to 'C' from 'BB-'
(BL: 14.34, LCR: 0.48);
-- $9 million class B-3 downgraded to 'C' from 'CCC'
(BL: 12.14, LCR: 0.41).
Deal Summary
-- Originators: Fremont (27.07%), Encore Credit (21.95%), Own It
(11.42%)
-- 60+ day Delinquency: 37.83%
-- Realized Losses to date (% of Original Balance): 1.69%
-- Expected Remaining Losses (% of Current balance): 29.82%
-- Cumulative Expected Losses (% of Original Balance): 15.56%
The rating actions are based on changes that Fitch has made to its
subprime loss forecasting assumptions. The updated assumptions
better capture the deteriorating performance of pools from 2007,
2006 and late 2005 with regard to continued poor loan performance
and home price weakness.
CVR ENERGY: Posts $57 Million Net Loss in Year Ended December 31
----------------------------------------------------------------
CVR Energy Inc. released financial results for fourth quarter and
year ended Dec. 31, 2007.
The company reported fourth quarter 2007 net loss of $15.9 million
and net loss of $56.8 million for the full year ended Dec. 31,
2007. Net income in 2006 was $20.8 million in the fourth quarter
and $191.6 million for the full year.
CVR Energy 2007 fourth quarter results reflect the impact of non-
cash share-based compensation of pretax $32.2 million, a one-time
pretax expense of $10.0 million arising from the termination of
management agreements in conjunction with the company's initial
public offering, and $7.2 million in net flood-related expenses.
Full year comparisons in 2007 were affected by a planned major
turnaround and expansion at the refinery, well as significant
downtime and costs associated with the flood.
"CVR Energy's operating income provides the best measure of our
business this year because of the assortment of one-time and non-
cash items affecting our net income," Jack Lipinski, chief
executive officer, said. "Our operating successes continue to
provide a solid foundation on which to grow our business."
"CVR Energy experienced a remarkable 2007," Mr. Lipinski said.
"We successfully executed a major turnaround and capital expansion
program at our Coffeyville, Kansas, refinery early in the year;
rapidly recovered from a flood during the summer that affected
both our petroleum and nitrogen fertilizer businesses; and then
executed a successful initial public offering of CVR Energy on the
New York Stock Exchange in the fall."
"This truly was a transitional year," he added. "We emerge from
2007 an even stronger company focused on finding ways to create
value for our shareholders."
At Dec. 31, 2007, the company's balance sheet showed total assets
of $1.856 billion, total liabilities of $1.412 billion and total
members' equity of $443.515 million.
About CVR Energy
Headquartered in Sugar Land, Texas, CVR Energy Inc. --
http://www.cvrenergy.com/-- is an independent refiner and
marketer of high value transportation fuels and, through a limited
partnership, a producer of ammonia and urea ammonia nitrate
fertilizers. CVR Energy's petroleum business includes a 113,500
barrel per day, complex, full-coking sour crude refinery in
Coffeyville, Kansas. In addition, CVR Energy's supporting
businesses include a crude oil gathering system serving central
Kansas, northern Oklahoma and southwest Nebraska; storage and
terminal facilities for asphalt and refined fuels in Phillipsburg,
Kansas; and a rack marketing division supplying product to
customers through tanker trucks and at throughput terminals.
* * *
As reported in the Troubled Company Reporter on Dec. 7, 2007,
Moody's Investors Service upgraded CVR Energy Inc.'s corporate
family rating from Caa1 to B2, senior first secured debt ratings
from Caa1 (LGD 3; 31%) to B2 (LGD 3; 31%), probability of default
rating from Caa2 to B3, and assigned a stable outlook.
CWABS: Fitch Downgrades Ratings on $158.2 Million Certificates
--------------------------------------------------------------
Fitch Ratings has taken rating actions on Countrywide mortgage
pass-through certificates. Unless stated otherwise, any bonds
that were previously placed on Rating Watch Negative are removed
from Rating Watch Negative. Affirmations total $460.9 million and
downgrades total $158.2 million. Additionally, $63.0 million was
placed on Rating Watch Negative. Break Loss percentages and Loss
Coverage Ratios for each class are included with the rating
actions as:
CWABS 2005-BC3
-- $24.6 million class 1-A-1 affirmed at 'AAA',
(BL: 90.51, LCR: 4.88);
-- $6.1 million class 1-A-2 affirmed at 'AAA',
(BL: 88.29, LCR: 4.76);
-- $7.3 million class 2-A-3 affirmed at 'AAA',
(BL: 92.53, LCR: 4.99);
-- $43.2 million class M-1 affirmed at 'AA+',
(BL: 65.29, LCR: 3.52);
-- $29.6 million class M-2 downgraded to 'B' from 'AA'
(BL: 20.10, LCR: 1.08);
-- $8.4 million class M-3 downgraded to 'B' from 'AA-'
(BL: 17.50, LCR: 0.94);
-- $12.8 million class M-4 downgraded to 'CCC' from 'A+'
(BL: 15.35, LCR: 0.83);
-- $10.0 million class M-5 downgraded to 'CC' from 'A'
(BL: 13.68, LCR: 0.74);
-- $8.8 million class M-6 downgraded to 'CC' from 'A-'
(BL: 12.19, LCR: 0.66);
-- $9.2 million class M-7 downgraded to 'CC' from 'BBB+'
(BL: 10.95, LCR: 0.59);
-- $8.8 million class M-8 downgraded to 'CC' from 'BBB'
(BL: 10.10, LCR: 0.54);
-- $7.6 million class B downgraded to 'CC' from 'BBB-'
(BL: 9.65, LCR: 0.52).
Deal Summary
-- Originators: Various
-- 60+ day Delinquency: 29.67%
-- Realized Losses to date (% of Original Balance): 1.00%
-- Expected Remaining Losses (% of Current balance): 18.56%
-- Cumulative Expected Losses (% of Original Balance): 5.34%
CWABS 2005-9
-- $174.6 million class 1-A-1 affirmed at 'AAA',
(BL: 48.88, LCR: 2.2);
-- $22.9 million class 2-A-3 affirmed at 'AAA',
(BL: 47.55, LCR: 2.14);
-- $88.7 million class 2-A-4 affirmed at 'AAA',
(BL: 45.56, LCR: 2.06);
-- $9.9 million class 2-A-4M affirmed at 'AAA',
(BL: 47.55, LCR: 2.14);
-- $83.6 million class 2-A-5 affirmed at 'AAA',
(BL: 47.86, LCR: 2.16);
-- $63.0 million class M-1 downgraded to 'A' from 'AA+', placed
on Rating Watch Negative (BL: 37.84, LCR: 1.71).
Deal Summary
-- Originators: Countrywide
-- 60+ day Delinquency: 26.95%
-- Realized Losses to date (% of Original Balance): 1.30%
-- Expected Remaining Losses (% of Current balance): 22.17%
-- Cumulative Expected Losses (% of Original Balance): 11.41%
The rating actions are based on changes that Fitch has made to its
subprime loss forecasting assumptions. The updated assumptions
better capture the deteriorating performance of pools from 2007,
2006 and 2005 with regard to continued poor loan performance and
home price weakness.
DELPHI CORP: Can Continue Implementing Employee Compensation Plan
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorizes Delphi Corp. and its debtor-affiliates to continue
implementing its Annual Incentive Plan from Jan. 1, 2008, through
June 30, 2008.
Pursuant to the AIP, Delphi executives will receive between
$21,200,000 and $39,100,000 in bonuses depending on Delphi's
financial performance.
If the Debtors do not emerge from Chapter 11 on or before
Aug. 15, 2008, the Official Committee of Unsecured Creditors may
review and raise objections to EBITDAR performance adjustments
related to the Debtors' agreements with their labor unions and
General Motors Corp., the timing of the Debtors' emergence from
Chapter 11, and other adjustments. If the Debtors are unable to
resolve the Creditors Committee's objections, the Creditors
Committee may adjust by up to $150,000,000 the Debtors' EBITDAR
performance for purposes of the AIP.
Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS:
DPHIQ) -- http://www.delphi.com/-- is the single supplier
of
vehicle electronics, transportation components, integrated systems
and modules, and other electronic technology. The company's
technology and products are present in more than 75 million
vehicles on the road worldwide. Delphi has regional headquarters
in Japan, Brazil and France.
The company filed for chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors. As of
March 31, 2007, the Debtors' balance sheet showed $11,446,000,000
in total assets and $23,851,000,000 in total debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the solicitation
of votes on the First Amended Plan on Dec. 20, 2007. The Court
confirmed the Debtors' First Amended Plan on Jan. 25, 2008.
(Delphi Bankruptcy News, Issue No. 120; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
* * *
As reported in the Troubled Company Reporter on March 28, 2008,
Moody's Investors Service raised the rating on Delphi Corp.'s
revised second lien term loan to (P)B2 from (P)B3 and affirmed the
company's Corporate Family Rating and Probability of Default
Ratings of (P)B2, Speculative Grade Liquidity rating of SGL-2,
first lien term loan rating of (P)Ba2, and stable outlook. The
revision to the rating on the second lien facility follows a
change in the composition of the term loans from the structure
Moody's rated on March 14, 2008.
As reported in the Troubled Company Reporter on March 17, 2008,
Standard & Poor's Ratings Services still expects to assign a 'B'
corporate credit rating to Delphi Corp. if the company emerges
from bankruptcy in early April.
S&P has revised its expected issue-level ratings because changes
to the structure of the proposed financings have affected relative
recovery prospects among the various term loans. S&P's expected
ratings are:
a) The $1.7 billion "first out" first-lien term loan B-1 is
expected to be rated 'BB-' (two notches higher than the
expected corporate credit rating on Delphi), with a '1'
recovery rating, indicating the expectation of very high
(90%-100%) recovery in the event of payment default.
b) The $2 billion "second out" first-lien term loan B-2 is
expected to be rated 'B' (equal to the corporate credit
rating), with a '4' recovery rating, indicating the expectation
of average (30%-50%) recovery in the event of payment default.
c) The $825 million second-lien term loan is expected to be rated
'B-' (one notch lower than the corporate credit rating), with a
'5' recovery rating, indicating the expectation of modest (10%-
30%) recovery in the event of payment default.
DELPHI CORP: Wants to Extend Indemnification Agreement with GM
--------------------------------------------------------------
Delphi Corp. and its debtor-affiliates seek authority from the
U.S. Bankruptcy Court for the Southern District of New York to
extend the indemnification agreement between Delphi Corp. and
General Motors Corp. with respect to the UAW Benefit Guarantee,
dated as of Dec. 22, 1999, for an additional time period of up to
15 days, until April 15, 2008, if GM extends its obligations under
the UAW Benefit Guarantee by the same period of time.
As reported in the Troubled Company Reporter on June 26, 2007, the
United Automobile, Aerospace and Agricultural Implement Workers of
America, Delphi, and GM entered into a memorandum of
understanding. Among other things, the UAW-Delphi-GM Memorandum
of Understanding was designed to enable Delphi's continued
transformation to more competitive wage and benefit levels and to
address divestiture, work rules, and staffing level issues in the
Debtors' workforce.
Pursuant to the UAW-Delphi-GM Memorandum of Understanding, the
UAW, Delphi, and GM also agreed to the "Term SheetDelphi Pension
Freeze and Cessation of OPEB, and GM Consensual Triggering of
Benefit Guarantee," which facilitates the freezing of Delphi's
pension plan and the assumption of billions of dollars of OPEB
liabilities by GM, thereby dramatically reducing Delphi's ongoing
benefit costs. The UAW-Delphi-GM Memorandum of Understanding was
ratified by the UAW membership on June 28, 2007, and approved by
the Court on July 19, 2007.
The UAW-Delphi-GM Memorandum of Understanding extended the time
period for certain of GM's obligations under the Sept. 30, 1999
Benefit Guarantee Agreement between GM and the UAW to March 31,
2008, if Delphi commenced solicitation of acceptances of a plan
of reorganization prior to Dec. 31, 2007. Delphi and GM also
agreed that the eighth anniversary date reference in the
Indemnification Agreement would be extended until March 31, 2008,
if Delphi commenced solicitation of acceptances of a plan of
reorganization prior to Dec. 31. The Debtors' Chapter 11 Plan,
however, was not confirmed and substantially consummated by
Dec. 31. Nonetheless, the UAW-Delphi-GM Memorandum of
Understanding additionally provided that the March 31, 2008 UAW
Benefit Guarantee extension date would be extended to "such later
date as Delphi and GM will agree to extend the Indemnification
Agreement expiration."
Under the provisions of the Memorandum of Understanding approved
by the Court on July 19, 2007, the Debtors believe that they
already have authority to extend the Indemnification Agreement
for additional time periods. Out of an abundance of caution,
however, and as a result of GM's unique role in the Chapter 11
cases, the Debtors seek the Court's authority to extend the
Indemnification Agreement.
John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in Chicago, Illinois, asserts that an extension will
allow Delphi's indemnification obligations under the Indemnity
Agreement to continue uninterrupted until it has emerged from
Chapter 11. If the Plan is not consummated, the extension will
also provide additional time for the Debtors to consider whether
additional extensions are appropriate or viable.
The extension, in the exercise of the Debtors' business judgment,
is in the best interests of the Debtors' estates, creditors, and
other parties-in-interest, including Delphi's employees,
Mr. Butler asserts.
Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS:
DPHIQ) -- http://www.delphi.com/-- is the single supplier
of
vehicle electronics, transportation components, integrated systems
and modules, and other electronic technology. The company's
technology and products are present in more than 75 million
vehicles on the road worldwide. Delphi has regional headquarters
in Japan, Brazil and France.
The company filed for chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors. As of
March 31, 2007, the Debtors' balance sheet showed $11,446,000,000
in total assets and $23,851,000,000 in total debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the solicitation
of votes on the First Amended Plan on Dec. 20, 2007. The Court
confirmed the Debtors' First Amended Plan on Jan. 25, 2008.
(Delphi Bankruptcy News, Issue No. 120; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
* * *
As reported in the Troubled Company Reporter on March 28, 2008,
Moody's Investors Service raised the rating on Delphi Corp.'s
revised second lien term loan to (P)B2 from (P)B3 and affirmed the
company's Corporate Family Rating and Probability of Default
Ratings of (P)B2, Speculative Grade Liquidity rating of SGL-2,
first lien term loan rating of (P)Ba2, and stable outlook. The
revision to the rating on the second lien facility follows a
change in the composition of the term loans from the structure
Moody's rated on March 14, 2008.
As reported in the Troubled Company Reporter on March 17, 2008,
Standard & Poor's Ratings Services still expects to assign a 'B'
corporate credit rating to Delphi Corp. if the company emerges
from bankruptcy in early April.
S&P has revised its expected issue-level ratings because changes
to the structure of the proposed financings have affected relative
recovery prospects among the various term loans. S&P's expected
ratings are:
a) The $1.7 billion "first out" first-lien term loan B-1 is
expected to be rated 'BB-' (two notches higher than the
expected corporate credit rating on Delphi), with a '1'
recovery rating, indicating the expectation of very high
(90%-100%) recovery in the event of payment default.
b) The $2 billion "second out" first-lien term loan B-2 is
expected to be rated 'B' (equal to the corporate credit
rating), with a '4' recovery rating, indicating the expectation
of average (30%-50%) recovery in the event of payment default.
c) The $825 million second-lien term loan is expected to be rated
'B-' (one notch lower than the corporate credit rating), with a
'5' recovery rating, indicating the expectation of modest (10%-
30%) recovery in the event of payment default.
DISTRIBUTED ENERGY: PwC Raises Going Concern Doubt Due to Losses
----------------------------------------------------------------
Pricewaterhousecoopers LLP expressed substantial doubt about the
ability of Distributed Energy Systems Corp. to continue as a going
concern after it audited the company's financial statements for
the year ended Dec. 31, 2007. The auditing firm reported that
the company has incurred significant recurring operating losses
and cash outflows from operations.
Management of Distributed Energy related that since Dec. 31, 2006,
the company's financial condition has deteriorated significantly.
It had anticipated that its previously announced revenue
initiatives would improve sales and margins, but sales and gross
margins in the quarter and the 12 months ended Dec. 31, 2007, were
below expectations, in particular in its Northern subsidiary.
The company's previously announced joint venture with Morgan
Stanley Wind LLC did not generate new business in 2007 and
therefore it exited this joint venture in February 2008 and
received a one-time payment of $500,000 from Morgan Stanley Wind
LLC for its 15% ownership share of the joint venture.
Accordingly, the company had been required to raise additional
funds and significantly cut its costs in order for its business to
survive.
The company stated that it incurred significant operating losses
and negative cash flows from operating activities in each of the
last three years and during the quarter and the 12 months ended
Dec. 31, 2007. Such circumstances raise substantial doubt about
its ability to continue as a going concern.
Perseus Partners Loans
To address the need to raise additional working capital,
Distributed Energy entered into three loan transactions with
Perseus Partners VII, L.P., or Perseus.
On June 1, 2007, the company closed on the first of these
transactions, in which it borrowed $12.5 million from Perseus and
issued to Perseus a warrant to purchase shares of its common
stock. This loan bore interest at the rate of 12.5% per annum and
was secured by all of the company's assets and those of its
material subsidiaries.
On Aug. 24, 2007, the company closed on the second of the two
transactions, in which it borrowed $15 million from Perseus, used
a portion of these proceeds to repay the principal and accrued
interest on the initial loan and issued another warrant to Perseus
to purchase additional shares of its common stock.
The net amount received in the second loan, after deducting the
amount necessary to repay the principal and accrued interest due
on the initial note, was $2.1 million.
On March 13, 2008, the company borrowed an additional $1.5 million
from Perseus. This additional convertible debt bears interest at
12.5% per annum and is due in full Nov. 30, 2008.
While the company recently obtained funding from Perseus, it does
not expect that its current capital resources will be sufficient
to operate its business beyond the next 30 to 45 days, and it
expects that it will need to raise additional capital within the
next 30 days to continue to operate.
Financials
Distributed Energy posted a net loss of $49,874,272 on net
revenues of $29,388,281 for the year ended Dec. 31, 2007, as
compared with a net loss of $53,355,195 on net revenues of
$45,092,792 in the prior year.
At Dec. 31, 2007, the company's balance sheet showed $41,750,604
in total assets, $18,827,203 in total liabilities and $22,923,401
in stockholders' equity.
A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2996
About Distributed Energy
Based in Wallingford, Connecticut, Distributed Energy Systems
Corp. (NasdaqCM: DESC) -- http://www.distributed-energy.com/--
provides products and services for distributed, or on-site, power
generation and storage.
DLJ MORTGAGE: Fitch Retains 'C' Ratings on Two Certificate Classes
------------------------------------------------------------------
Fitch Ratings has taken rating actions on these DLJ Mortgage
Acceptance Corporation mortgage pass-through certificates:
Series 1992-A
-- Class A affirmed at 'AAA'.
Series 1992-1
-- Class A affirmed at 'AAA'.
Series 1994-3
-- Class A affirmed at 'AAA';
-- Class M affirmed at 'AAA'';
-- Class B1 affirmed at 'AA';
-- Class B2 affirmed at 'BB';
-- Class B3 downgraded to 'C/DR3' from 'CCC/DR2';
-- Class B4 remains at 'C/DR6'.
Series 2000-1
-- Class A affirmed at 'AAA';
-- Class D-B-1 affirmed at 'AAA'';
-- Class D-B-2 affirmed at 'A';
-- Class D-B-3 affirmed at 'B';
-- Class D-B-4 remains at 'C/DR2'.
The affirmations, affecting approximately $30.1 million of
outstanding certificates, reflect a stable relationship between
credit enhancement and future loss expectations. The downgrades,
affecting approximately $65,859 in outstanding certificates,
reflect deterioration in the relationship between CE and loss
expectation.
The collateral of the above transactions consists of fixed and
hybrid adjustable-rate, 15- to 30-year fully amortizing mortgage
loans secured by first liens on one- to four-family residential
properties. As of February 2008, the transactions are seasoned
192 months (1992-A and 1992-1), 167 months (1994-3), and 96 months
(2000-1). The pool factors for these transactions are
approximately 2% (1992-A), 1% (1992-1 and 1994-3), and 4%
(2000-1).
EIF CALYPSO: S&P Puts 'BB+' Rating on $650MM and $150MM Facilities
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its final rating of
'BB+' to EIF Calypso LLC's $650 million senior secured term loan
and $150 million senior secured revolving credit facility.
Calypso used proceeds from the issue to acquire an 80%
membership interest in Calypso Energy Holdings LLC, a portfolio of
14 power generation assets in 12 states concentrated in the mid-
Atlantic region of the U.S.
The term loan, combined with $807.5 million of equity, financed
the acquisition of 2,331 MW of capacity (80% of the 3,608 MW
portfolio) consisting of waste coal, scrubbed coal, and natural-
gas fired power plants. The letter of credit will support hedges
and contracts at the project level, fund-permitted capital
expenditures, and provide a six-month debt service reserve.
All senior facilities are secured by a first-priority security
interest in all of Calypso's equity interests in CE Holdings and
any future, wholly owned subsidiary. At the same time, Standard &
Poor's assigned a recovery rating of '2' to the facilities,
indicating expectations of very high recovery (70%-90%) in the
event of a payment default. The outlook is stable.
Standard & Poor's rates Calypso's $800 million senior secured
'BB+' with a recovery rating of '2', indicating the expectation of
substantial recovery (70%-90%) in the event of default.
The stable outlook is based on the solid operational performance
of the plants, combined with the investment-grade credit quality
of the power-purchase agreement counterparties.
"At current debt levels, the plants are expected to distribute
sufficient cash to EIF Calypso to amortize the tranches and build
up reserves as needed," said Standard & Poor's credit analyst
Justin Martin. Increased leverage at any of the projects,
material changes to the PPA, or sustained and pronounced fuel
price mismatches (resulting in trapped cash) could negatively
affect the rating. "Given the contracted nature of the revenues,
the fixed payment schedule, and the ceiling on asset sale
proceeds, an upgrade is unlikely," he continued.
ELLEGY PHARMA: Mayer Hoffman Expresses Going Concern Doubt
----------------------------------------------------------
Mayer Hoffman McCann P.C. in Plymouth Meeting, Pa., raised
substantial doubt about the ability of Cellegy Pharmaceuticals,
Inc., to continue as a going concern after it audited the
company's financial statements for the year ended Dec. 31, 2007.
The auditor reported that the company has incurred recurring
losses from operations and has limited working capital to pursue
its business alternatives.
The company posted a net loss of $1,927,061 on $0.00 revenue for
the year ended Dec. 31, 2007, as compared with a net income of
$9,671,805 on total sales of $2,660,058 in the prior year.
At Dec. 31, 2007, the company's balance sheet showed $2,094,092 in
total assets, $904,344 in total liabilities and $1,189,748 in
stockholders' equity.
A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?299d
About Cellegy Pharmaceuticals
Headquartered in Quakertown, Pennsylvania, Cellegy
Pharmaceuticals, Inc. (OTC BB: CLGY.OB) -- http://www.cellegy.com/
-- is a specialty biopharmaceutical company. Following the
company's decision to eliminate its direct research activities and
the sale of its assets to ProStrakan in late 2006, the company's
operations currently relate primarily to the ownership of its
intellectual property rights relating to the Biosyn product
candidates and the evaluation of its remaining options and
alternatives with respect to its future course of business.
EMPIRE RESORTS: Board of Directors Adopts Stockholder Rights Plan
-----------------------------------------------------------------
Empire Resorts Inc.'s board of directors adopted a Stockholder
Rights Plan. Under the plan, Rights will be distributed as a
dividend at the rate of one Right for each share of Empire common
stock, par value $.01 per share, held by stockholders of record as
of the close of business on April 3, 2008.
The Rights Plan is designed to deter coercive takeover tactics,
including the accumulation of shares in the open market or through
private transactions and to prevent an acquirer from gaining
control of Empire without offering a fair and adequate price and
terms to all of Empire's stockholders. The Rights will expire on
March 24, 2010.
Each Right initially will entitle stockholders to buy one unit of
a share of a series of preferred stock for $20. The Rights
generally will be exercisable only if a person or group acquires
beneficial ownership of 20 percent or more of Empire common stock
or commences a tender or exchange offer upon consummation of which
such person or group would beneficially own 20 percent or more of
Empire's common stock.
Headquartered in Monticello, New York, Empire Resorts Inc.
(NASDAQ: NYNY) -- http://www.empireresorts.com/-- operates the
Monticello Gaming & Raceway and is involved in the development of
other legal gaming venues. Empire's facility now features over
1,500 video gaming machines and amenities including a 350-seat
buffet and live entertainment. Empire is also working to develop
a "Class III" Native American casino and resort on a site adjacent
to the Raceway and other gaming and non-gaming resort projects in
the Catskills and beyond.
* * *
Empire Resorts Inc.'s consolidated balance sheet at Sept. 30,
2007, showed $69.4 million in total assets and $82.8 million in
total liabilities, resulting in a $13.4 million total
stockholders' deficit.
FEDERAL-MOGUL: G. Michael Lynch Retires; Jeff Kaminski is New CFO
-----------------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission, Federal-Mogul Corporation Senior Vice President
Robert L. Katz reports that effective March 31, 2008, G. Michael
Lynch will retire as executive vice president and chief financial
officer of Federal-Mogul.
In connection with Mr. Lynch's retirement, (i) the Amended and
Restated Employment Agreement dated as of June 18, 2002 between
the Company and Mr. Lynch and (ii) the Severance Agreement dated
as of June 18, 2002 between the Company and Mr. Lynch will
terminate on March 31, 2008.
Jeff Kaminski, age 46, will become the Company's senior vice
president and chief financial officer effective April 1, 2008.
Mr. Kaminski has served as the Company's Senior Vice President,
Global Purchasing and a member of the Strategy Board of the
Company since April 2005. From November 2003 to April 2005, he
served as vice president of Global Supply-Chain Management. From
July 2001 to November 2003, Mr. Kaminski was vice president of
Finance and Powertrain Operations and served in numerous finance
and operations positions including finance director for Sealing
Systems, general manager of the Companys Aftermarket subsidiary
based in Australia and International Controller for the Companys
Aftermarket group.
Mr. Kaminski has been employed by the Company since 1989 with the
exception of a brief period from January 2001 to July 2001 during
which he served as vice president of Finance for GDX Automotive,
according to Mr. Katz. Mr. Kaminski is a certified public
accountant and began his career in 1983 with the accounting firm
of Deloitte, Haskins & Seals before he joined RP Scherer
Corporation in August 1987 and the Company in 1989.
Federal-Mogul reports that there are no family relationships
between Mr. Kaminski and any other director or executive officer
of the Company, or with any person selected to become an officer
or a director of the Company. Other than as a result of Mr.
Kaminski's employment with the Company, the Company adds that it
has had no transactions since the beginning of its last fiscal
year, and has no transactions proposed, in which Mr. Kaminski, or
any member of his immediate family, has a direct or indirect
material interest.
Federal-Mogul Corporation -- http://www.federal-mogul.com/--
(OTCBB: FDMLQ) is a global supplier, serving the world's foremost
original equipment manufacturers of automotive, light commercial,
heavy-duty, agricultural, marine, rail, off-road and industrial
vehicles, as well as the worldwide aftermarket. Founded in
Detroit in 1899, the company is headquartered in Southfield,
Michigan, and employs 45,000 people in 35 countries. Aside from
the U.S., Federal-Mogul also has operations in other locations
which includes, among others, Mexico, Malaysia, Australia, China,
India, Japan, Korea, and Thailand.
The Company filed for chapter 11 protection on Oct. 1, 2001
(Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F.
Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown &
Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl &
Jones, P.C., represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $10.15 billion in assets and $8.86 billion in liabilities.
Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at
Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein
Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer,
Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the
Official Committee of Unsecured Creditors.
On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan.
They submitted a Disclosure Statement explaining that plan on
April 21, 2003. They submitted several amendments and on June 6,
2004, the Bankruptcy Court approved the Third Amended Disclosure
Statement for their Third Amended Plan. On July 28, 2004, the
District Court approved the Disclosure Statement. The estimation
hearing began on June 14, 2005. The Debtors submitted a Fourth
Amended Plan and Disclosure Statement on Nov. 21, 2006, and the
Bankruptcy Court approved that Disclosure Statement on Feb. 6,
2007. The Fourth Amended Plan was confirmed by the Bankruptcy
Court on Nov. 8, 2007, and affirmed by the District Court on
Nov. 14. Federal-Mogul emerged from Chapter 11 on December 27,
2007.
* * *
As reported in the Troubled Company Reporter on Jan. 10, 2008,
Moody's Investors Service confirmed the ratings of the reorganized
Federal-Mogul Corporation -- Corporate Family Rating, Ba3;
Probability of Default Rating, Ba3; and senior secured bank credit
facilities, Ba2. The outlook is stable. The financing for the
company's emergence from Chapter 11 bankruptcy protection has been
funded in line with the structure originally rated by Moody's in a
press release dated Nov. 28, 2007.
As reported in the Troubled Company Reporter on Jan. 7, 2008,
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to Southfield, Michigan-based Federal-Mogul Corp.
following the company's emergence from Chapter 11 on Dec. 27,
2007. The outlook is stable.
FEDERAL-MOGUL: Professionals Seek Postpetition Fees and Expenses
----------------------------------------------------------------
Three more professionals have sought allowance of their
professional fees and expenses incurred during the bankruptcy
cases of Delphi Corp. and its debtor-affiliates:
Final
Professional Fee Period Fees Expenses
------------ ---------- ---- --------
05/15/07 -
Kostelanetz & Fink, LLP 12/27/07 $23,145 $180
10/26/04 -
Navigant Consulting, Inc. 12/27/07 714,570 22,555
10/01/01 -
Spriggs & Hollingsworth 12/27/07 1,309,892 63,363
The Debtors hired Kostelanetz & Fink and Spriggs & Hollingsworth
as their special insurance counsel. Spriggs & Hollingsworth gave
the Debtors legal advice on matters related to Abex and to Ferodo
America.
The Official Committee of Asbestos Property Damage Claimants
retained Navigant Consulting as its asbestos claims consultants.
On behalf of the Asbestos Property Damage Committee, Navigant
conducted numerous investigations and analyses on the asbestos
personal injury claims asserted against the Debtors.
Federal-Mogul Corporation -- http://www.federal-mogul.com/--
(OTCBB: FDMLQ) is a global supplier, serving the world's foremost
original equipment manufacturers of automotive, light commercial,
heavy-duty, agricultural, marine, rail, off-road and industrial
vehicles, as well as the worldwide aftermarket. Founded in
Detroit in 1899, the company is headquartered in Southfield,
Michigan, and employs 45,000 people in 35 countries. Aside from
the U.S., Federal-Mogul also has operations in other locations
which includes, among others, Mexico, Malaysia, Australia, China,
India, Japan, Korea, and Thailand.
The Company filed for chapter 11 protection on Oct. 1, 2001
(Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F.
Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown &
Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl &
Jones, P.C., represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $10.15 billion in assets and $8.86 billion in liabilities.
Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at
Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein
Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer,
Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the
Official Committee of Unsecured Creditors.
On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan.
They submitted a Disclosure Statement explaining that plan on
April 21, 2003. They submitted several amendments and on June 6,
2004, the Bankruptcy Court approved the Third Amended Disclosure
Statement for their Third Amended Plan. On July 28, 2004, the
District Court approved the Disclosure Statement. The estimation
hearing began on June 14, 2005. The Debtors submitted a Fourth
Amended Plan and Disclosure Statement on Nov. 21, 2006, and the
Bankruptcy Court approved that Disclosure Statement on Feb. 6,
2007. The Fourth Amended Plan was confirmed by the Bankruptcy
Court on Nov. 8, 2007, and affirmed by the District Court on
Nov. 14. Federal-Mogul emerged from Chapter 11 on December 27,
2007.
* * *
As reported in the Troubled Company Reporter on Jan. 10, 2008,
Moody's Investors Service confirmed the ratings of the reorganized
Federal-Mogul Corporation -- Corporate Family Rating, Ba3;
Probability of Default Rating, Ba3; and senior secured bank credit
facilities, Ba2. The outlook is stable. The financing for the
company's emergence from Chapter 11 bankruptcy protection has been
funded in line with the structure originally rated by Moody's in a
press release dated Nov. 28, 2007.
As reported in the Troubled Company Reporter on Jan. 7, 2008,
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to Southfield, Michigan-based Federal-Mogul Corp.
following the company's emergence from Chapter 11 on Dec. 27,
2007. The outlook is stable.
FEDDERS CORP: Michael Giordano Steps Down as President and CEO
--------------------------------------------------------------
Effective March 21, 2008, Michael Giordano is no longer president
and chief executive officer of Fedders Corporation, the company
disclosed in a regulatory filing with the Securities and Exchange
Commission dated March 28, 2008. Mr. Giordano will continue as a
director of the company.
About Fedders Corporation
Based in Liberty Corner, New Jersey, Fedders Corporation --
http://www.fedders.com/ -- manufactures and markets air
treatment products, including air conditioners, air cleaners,
dehumidifiers, and humidifiers. The company has production
facilities in the United States in Illinois, North Carolina, New
Mexico, and Texas and international production facilities in the
Philippines, China and India.
The company filed for Chapter 11 protection on Aug. 22, 2007,
(Bankr. D. Del. Case No. 07-11182). Its debtor-affiliates
filed for separate Chapter 11 cases. Norman L. Pernick, Esq.,
Irving E. Walker, Esq., and Adam H. Isenberg, Esq., of Saul,
Ewing, Remick & Saul LLP, represent the Debtors in their
restructuring efforts. The Debtors have selected Logan & Company
Inc. as claims and noticing agent. The Official Committee of
Unsecured Creditors is represented by Brown Rudnick Berlack
Israels LLP. When the Debtors filed for protection from its
creditors, it listed total assets of $186,300,000 and total debts
of $322,000,000.
* * *
As reported in the Troubled Company Reporter on March 4, 2008,
the Debtors asked the Court to further extend their exclusive
period to file a Chapter 11 plan until April 14, 2008.
FINANCIAL GUARANTY: Moody's Cuts Insurer Strength Rating to 'Baa3'
------------------------------------------------------------------
Moody's Investors Service downgraded to Baa3, from A3, the
insurance financial strength ratings of the operating subsidiaries
of FGIC Corporation, including Financial Guaranty Insurance
Company and FGIC UK Limited. Moody's has also downgraded the
senior debt rating of the holding company, FGIC Corporation to B3
from Ba1, and the contingent capital securities ratings of Grand
Central Capital Trusts I -- IV to B2 from Baa3.
These rating actions reflect the company's inability to date to
raise new capital, the increased likelihood of FGIC breaching
minimum regulatory capital requirements, and the effects of its
current inability to upstream dividends without prior regulatory
approval. The ratings remain under review for possible downgrade.
On March 28, 2008, FGIC filed its statutory statements indicating
that, as a result of a loss of $1.5 billion, its statutory capital
stood at approximately $260 million as compared to the minimum
statutory capital requirement of $65 million. The three notch
downgrade of FGIC's IFS ratings to Baa3 reflects Moody's view that
the cushion above the required regulatory minimum may not be
sufficient to absorb additional losses associated with FGIC's
mortgage related exposures and the recent deterioration of
Jefferson County bonds, to which FGIC has sizable exposure.
Should FGIC breach the $65 million minimum statutory capital
requirement the New York State Insurance regulator could take
action to assume control of the operating company.
FGIC also announced that, as of Dec. 31, 2007, it had breached
regulatory aggregate and single risk limits, which could cause the
New York State Insurance Department to order that the company
cease writing new business. FGIC has disclosed, however, that it
has already voluntarily stopped writing new business in an attempt
to improve its capital position through portfolio amortization.
According to Moody's, the downgrade of FGIC's contingent capital
securities, Grand Central Trusts I-IV, to B2 reflects the
increased possibility that the payment of preferred dividends
might not be permitted by the regulator should FGIC decide to
exercise its option to put non-cumulative preferred stock to the
trusts. Moody's added that the downgrade of FGIC Corporation's
senior unsecured debt to B3 reflects the operating company's
inability, without regulatory approval, to upstream dividends to
the holding company to service debt, coupled with the structural
subordination of holding company senior bonds to operating company
preferred stock.
Moody's noted that FGIC Corporation, having drawn the full amount
of its bank credit facility, has approximately $250 million in
holding company liquidity to pay interest on its bank facility and
$325 million in senior bonds. However, the operating company's
limits on writing new business and its inability to upstream
dividends without regulatory approval heightens the refinancing
risk associated with the bank credit facility, which matures in
2010.
Moody's also noted that FGIC has guaranteed the termination
payments for certain public finance swap arrangements. Swap
termination payments could be triggered if FGIC and the issuer
were downgraded below certain rating thresholds and the issuer
defaults on the termination payment. At this time, FGIC is not
exposed to imminent termination payments. However, Moody's will
continue to monitor the situation to determine the extent of
possible future termination payments and the implications to
FGIC's liquidity profile and capital adequacy.
FGIC announced that it has taken legal action against parties
related to one ABS CDO transaction which accounts for over
$900 million or 75% of the credit impairments taken in the fourth
quarter of 2007. While the ultimate outcome of this dispute
remains uncertain, a resolution favorable to FGIC could have
positive implications for the company's capital adequacy position.
The ratings remain under review for downgrade to reflect the
heightened risk of FGIC breaching minimum regulatory capital
requirements, and the uncertain consequences for policyholders and
creditors of possible regulatory intervention. Moody's stated
that the ratings review will focus on additional details relating
to FGIC's restructuring and recapitalization plan, any further
movement in loss reserves at the end of 1Q2008, the implications
of potential swap termination payments to liquidity and capital,
the company's ongoing compliance with statutory requirements, and
the implications of any actions on the part of the regulator.
List of Rating Actions
These ratings have been downgraded, and remain on review for
possible downgrade:
-- Financial Guaranty Insurance Company: insurance financial
strength to Baa3, from A3;
-- FGIC UK Limited: insurance financial strength to Baa3, from
A3;
-- Grand Central Capital Trusts I-VI: contingent capital
securities to B2, from Baa3; and
-- FGIC Corporation: senior unsecured debt to B3, from Ba1.
Impact on Ratings of Insured Obligations
Moody's ratings on securities that are guaranteed or "wrapped" by
a financial guarantor are maintained at a level equal to the
higher of a) the rating of the guarantor or b) the published
underlying rating. Using this modified "credit substitution"
approach, and following this rating action, the Moody's-rated
securities that are guaranteed or "wrapped" by FGIC are also
downgraded to Baa3, and remain on review for further downgrade,
except those with higher published underlying ratings.
Overview of FGIC Corporation
FGIC Corporation is a holding company whose primary operating
subsidiaries are Financial Guaranty Insurance Corporation and FGIC
UK Limited, provide credit enhancement and protection products to
the public finance and structured finance markets throughout the
United States and internationally. FGIC Corporation is privately
owned by an investor group consisting of The PMI Group, GE and
private equity firms Blackstone, Cypress and CIVC. At dEC. 31,
2007, FGIC Corporation reported GAAP losses of $1.8 billion and
had shareholders' equity of approximately $584 million.
FINANCIAL GUARANTY: Howard C. Pfeffer Tenders Retirement Notice
---------------------------------------------------------------
FGIC Corporation, the parent company of Financial Guaranty
Insurance Company, disclosed that Howard C. Pfeffer has notified
the company and its board of directors of his desire to retire,
effective April 1.
Mr. Pfeffer joined FGIC in December 2003 as president and chief
underwriting officer. He later assumed responsibility for credit
risk management, investment management and enterprise risk
management.
Prior to FGIC, Mr. Pfeffer was vice chairman at Ambac Financial
Group where he spent most of his career. Before this he was in
Citicorp Investment Bank's municipal finance division. Mr.
Pfeffer was instrumental in the development of FGIC's businesses
during his tenure and also served as a member of FGIC
Corporation's board of directors. The company extends its best
wishes to him in his future endeavors.
About Financial Guaranty
Financial Guaranty Insurance Co. -- http://www.fgic.com/-- has
enjoyed a reputation for financial strength, underwriting
discipline and superior client service. As a leading financial
guaranty insurance company, FGIC provides credit enhancement on
infrastructure finance and structured finance securities
worldwide, enabling bond issuers to obtain capital cost
effectively and enhancing their access to the capital markets.
FINANCIAL GUARANTY: S&P Slashes Financial Strength Rating to 'BB'
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its financial strength
rating on Financial Guaranty Insurance Co. six notches, to 'BB'
from 'A', and its rating on holding company FGIC Corp. six
notches, to 'B' from 'BBB'. Standard & Poor's also removed the
ratings from CreditWatch with negative implications, where they
had been placed on March 21, 2008; the outlook is negative.
At the same time, Standard & Poor's suspended its ratings on
public finance and corporate transactions insured by FGIC that do
not have an underlying public rating.
In S&P's opinion, FGIC has been slow to identify the unfavorable
insured portfolio trends that have emerged and has failed to
implement a strategic plan to re-establish itself as a viable
operating entity capable of writing new business. The company has
suspended underwriting new business in order to generate internal
capital.
S&P's increased concerns over regulatory and managerial issues
have led to a downgrade to the speculative grade level. Unlike
many of its peers, FGIC has been unsuccessful so far in raising
new external capital. The violation of certain New York State
Insurance Department risk limits, as noted in financial statements
released on March 26, 2008, may further hamper these efforts. The
departure of FGIC's president, may further reduce management's
overall effectiveness.
While the company has reportedly advised the Insurance Department
of its desire to split into a mostly municipal operation, with a
second company insuring mostly structured finance transactions,
progress has been slow, in S&P's view. Most importantly, and
regardless of whatever structure the company ultimately decides
upon, S&P believes that new capital is a critical component.
The recent announcement by the PMI Group, FGIC's principal owner,
that it would not be contributing additional capital was a
setback. As time passes, the possibility of a run-off situation
for FGIC becomes greater in S&P's opinion, and the likelihood of
FGIC continuing as an operating entity capable of writing new
business is waning.
Holding company FGIC Corp.'s ability to service its debt may be
constrained by FGIC's statutory earned surplus deficit, resulting
in FGIC being unable to upstream dividends to FGIC Corp. without
insurance department approval.
Standard & Poor's believes that the credit characteristics of the
underlying insured municipal, corporate, and structured
transactions may be stronger than the FGIC-enhanced rating
following the downgrade. For those issuers or issues for which
S&P currently has an underlying rating, or SPUR, Standard & Poor's
will rate to the higher of the SPUR or the insurer. Standard &
Poor's has suspended its ratings on those issuers or issues that
do not currently carry a SPUR. The option to enter a rating
process in order to obtain a SPUR remains available to issuers.
A SPUR is S&P's opinion of the stand-alone creditworthiness of an
issuer or transaction--that is, the capacity to pay debt service
on a debt issue in accordance with its terms, without considering
an otherwise applicable bond insurance policy. The SPUR, once
assigned, remains in place regardless of what happens to the
credit enhancer's rating, and is subject to surveillance by
Standard & Poor's.
FORD MOTOR: Partners with Ontario Government to Save 300 Jobs
-------------------------------------------------------------
Autoworkers in Windsor will be back on the job at Ford Motor
Company's Essex Engine Plant, thanks to a partnership between the
Ontario government and Ford. The Canada Auto Workers union is
celebrating the announcement by the Ontario government and Ford
Canada of an investment needed to re-open the Ford Essex engine
plant.
Ontario is providing $17 million to support Ford's $170 million-
investment in a new engine program in Windsor, paving the way for
about 300 workers to return to their jobs. Ford had initially
proposed a $300 million investment in the plant, but later scaled
back plans after the federal government failed to come forward
with its $30 million portion.
The plant, which closed in November 2007, will re-open and employ
300 people who will build a new engine. The date for the re-
opening has not yet been set. The second phase of the project
could employ another 300 workers.
Strengthening key industry partnerships, like the one with Ford,
is part of Ontario's five-point plan to build a stronger economy.
The government's budget, released last week, also outlined
investments in skills training and infrastructure, plans to lower
business costs and support for innovation.
"Thanks to Ford, workers can return to the jobs they take pride
in. This is great news for Windsor families," Premier Dalton
McGuinty said.
"The partnership marks a big win for Ford, for Ontario and, most
importantly, for the hardworking people of Windsor," Economic
Development and Trade Minister Sandra Pupatello said.
CAW President Buzz Hargrove was on site for the announcement and
said he is still optimistic that the federal Tory government will
finally realize the importance of the project and put in their
share.
"There is a chance to grow this program, if the federal government
would do their part," Mr. Hargrove said. "The fact that they have
so far refused to support the auto industry is incredibly
frustrating and short-sighted."
Mike Vince, president of CAW Local 200, which represents Ford
workers in Windsor said that the investment is an exciting
opportunity for the members and the wider community which has been
hard hit by massive job loss.
"It's something we have put a lot of time into and I'm happy to
see that it has finally happened. After some very negative
circumstances over the past few years, this announcement is a very
welcome light at the end of the tunnel."
Windsor has the second highest unemployment rate of any city in
Canada at 8.7%.
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles in
200 markets across six continents. With about 260,000 employees
and about 100 plants worldwide, the company's core and affiliated
automotive brands include Ford, Jaguar, Land Rover, Lincoln,
Mercury, Volvo, Aston Martin, and Mazda. The company provides
financial services through Ford Motor Credit Company.
The company has operations in Japan in the Asia Pacific region.
In Europe, the company maintains a presence in Sweden, and the
United Kingdom. The company also distributes its brands in
various Latin American regions, including Argentina and Brazil.
* * *
As reported in the Troubled Company Reporter on March 28, 2008,
Standard & Poor's Ratings Services said that the ratings and
outlook on Ford Motor Co. and Ford Motor Credit Co. (both rated
B/Stable/B-3) were not affected by Ford's announcement of an
agreement to sell its Jaguar and Land Rover units to Tata Motors
Ltd. (BB+/Watch Neg/--) for $2.3 billion (before $600 million of
pension contributions by Ford for Jaguar-Land Rover).
As reported in the Troubled Company Reporter on Feb. 15, 2008,
Fitch Ratings affirmed the Issuer Default Ratings of Ford Motor
Company and Ford Motor Credit Company at 'B', and maintained the
Rating Outlook at Negative.
As reported in the Troubled Company Reporter on Nov. 19, 2007,
Moody's Investors Service affirmed the long-term ratings of Ford
Motor Company (B3 Corporate Family Rating, Ba3 senior secured,
Caa1 senior unsecured, and B3 probability of default), but changed
the rating outlook to Stable from Negative and raised the
company's Speculative Grade Liquidity rating to SGL-1 from SGL-3.
Moody's also affirmed Ford Motor Credit Company's B1 senior
unsecured rating, and changed the outlook to Stable from Negative.
These rating actions follow Ford's announcement of the details of
the newly ratified four-year labor agreement with the United Auto
Workers.
FORTUNOFF: Panel Taps Morrison & Foerster to Replace Otterbourg
---------------------------------------------------------------
The Official Committee of Unsecured Creditors seeks the U.S.
Bankruptcy Court for the Southern District of New York's authority
to retain Morrison & Foerster LLP as its counsel, nunc pro tunc to
March 6, 2008.
In behalf of Agio International Co., the Committee's chairperson,
Thomas R. Gold, Esq., informs Judge James M. Peck that Morrison &
Foerster would be substituted in the place of Otterbourg Steinder
Houston & Rosen PC as counsel for the Committee starting on
March 6.
Beginning Feb. 7 to March 4, 2008, the attorney at Otterbourg
principally responsible for the representation of the Committee
was Bret H. Miller. However, Mr. Miller resigned from his
position as a partner at Otterbourg, and on March 4 joined
Morrison & Foerster as a partner.
Mr. Gold says that although the Committee continued to receive
high quality level representation following Mr. Miller's
departure from Otterbourg, the Committee decided that its
representation should follow Mr. Miller to his new firm, given
his depth and knowledge of all issues relating to the Debtors'
bankruptcy cases.
According to Mr. Gold, the Committee believes Morrison & Foerster
is qualified to represent it in a cost-effective, efficient and
timely manner. The Committee anticipates that, as its counsel,
Morrison & Foerster will:
* assist and advise the Committee in its consultation with the
Debtors relative to the administration of the Chapter 11
cases;
* attend meetings and negotiate with the representatives of
the Debtors;
* assist and advise the Committee in its examination and
analysis of the conduct of the Debtors' affairs;
* assist the Committee in the review, analysis and negotiation
of any plan of reorganization and the accompanying
disclosure statement;
* assist the Committee in the review, analysis, and
negotiation of any financing agreements;
* generally prepare on behalf of the Committee all necessary
motions, applications, answers, orders, reports and papers
in support of positions taken by the Committee;
* appear, as appropriate, before the courts and the Unites
States Trustee; and
* perform all other necessary legal services.
Morrison & Foerster is also expected to take all necessary action
to protect and preserve the interests of the Committee,
including:
(1) possible prosecution of actions on its behalf;
(2) if appropriate, negotiations concerning all
litigation in which the Debtors are involved; and
(3) if appropriate, review and analysis of claims filed
against the Debtors' estates;
Mr. Gold tells the Court that Morrison & Foerster intends to work
closely with the Debtors' representatives, to ensure that there
is no unnecessary duplication of services performed or charged to
the Debtors' estates.
Morrison & Foerster proposes to charge the Committee on an hourly
basis in accordance with its ordinary and customary rates.
Mr. Gold informs the Court that with respect to attorneys at
Morrison & Foerster who were previously at Otterbourg, Morrison &
Foerster has reached an agreement with the Committee, pursuant to
which the hourly rates will remain the same as at Otterbourg.
Hence, Morrison & Foerster's applicable hourly rates for Chapter
11 matters are:
(a) $575 to $900 for partners, based upon a variety of
factors, including seniority and distinction and expertise
in one's field;
(b) $395 per hour to $615 per hour for professionals "of
counsel";
(c) $280 to $615 for associates, based upon year of graduation
from law school; and
(d) $165 to $270 for paraprofessionals.
Mr. Gold says that seven professionals at Morrison & Foerster are
expected to have primary responsibility for providing services to
the Committee:
Name Status Rate
---- ------ ----
Brett H. Miller Bankruptcy Partner $695
Lorenzo Marinuzzi Bankruptcy Partner $595
Melissa A. Hagler Bankruptcy Of Counsel $575
Justin G. Imperato Bankruptcy Associate $440
John A. Pintarelli Bankruptcy Associate $440
Todd A. Goren Bankruptcy Associate $425
Laura Guido Paraprofessional $210
The Committee has also agreed, subject to Court approval, to
reimburse Morrison & Foerster for all actual out-of-pocket
expenses incurred Committee's behalf.
Mr. Miller assures the Court that his firm does not represent any
interest adverse to the Debtors or their estate, and is a
"disinterested" person within the meaning of Section 101(14) of
the Bankruptcy Code.
* * *
Judge Peck authorized the Committee to retain Morrison & Foerster
as its counsel, on an interim basis.
The Court held that Otterbourg will be entitled to reasonable
compensation for services rendered to the Committee, for the
period February 7 to March 26, 2008, plus reimbursement of actual
and necessary expenses incurred.
Otterbourg will be relieved of all responsibilities and
obligations to the Committee as of March 6, 2008, Judge Peck
maintained.
The Court will convene a final hearing on April 22, 2008, at
10:00 a.m., to determine whether Committee's application to
employ Morrison & Foerster should be granted on a permanent
basis.
Judge Peck waived the requirement under Rule 9013-1(b) of the
Local Bankruptcy Rules for the Southern District of New York, for
the filing of a memorandum of law.
About Fortunoff
New York-based Fortunoff Fine Jewelry and Silverware LLC --
http://www.fortunoff.com/-- is a family owned business since
1922 founded by by Max and Clara Fortunoff. Fortunoff offers
customers fine jewelry and watches, antique jewelry and silver,
everything for the table, fine gifts, home furnishings including
bedroom and bath, fireplace furnishings, housewares, and seasonal
shops including outdoor furniture shop in summer and enchanting
Christmas Store in the winter. It opened some 20 satellite
stores in the New Jersey, Long Island, Connecticut and
Pennsylvania markets featuring outdoor furniture and grills
during the Spring/Summer season and indoor furniture (and in some
locations Christmas trees and decor) in the Fall/Winter season.
Fortunoff and two affiliates, M. Fortunoff of Westbury LLC and
Source Financing Corp., filed for chapter 11 petition on Feb. 4,
2008 (Bankr. S.D.N.Y. Case Nos. 08-10353 through 08-10355) in
order to effectuate a sale to NRDC Equity Partners LLC, --
http://www.nrdcequity.com/-- a private equity firm that owns
of Lord & Taylor from Federated Department Stores.
Due to the U.S. Trustee's objection, Fortunoff is backing out of
its request to employ Skadden Arps Meagher & Flom LLC, as
bankruptcy counsel. Fortunoff is hiring Togut Segal & Segal LLP,
as their general bankruptcy counsel, but Skadden Arps will
continue to serve the Debtors as special counsel in connection
with the sale the Debtors' assets. Logan & Company, Inc., serves
as the Debtors' claims, noticing, and balloting agent. FTI
Consulting Inc. are the Debtors' proposed crisis manager.
An Official Committee of Unsecured Creditors has been appointed in
this case.
In their schedules, Fortunoff Fine Jewelry listed $5,052,315 total
assets and $136,626,948 total liabilities; Source Financing Corp.
listed $154,680,100 total assets and $176,961,631 total
liabilities; and M. Fortunoff of Westbury LLC listed $6,300,955
total assets and $119,985,788 total liabilities. The Debtors'
exclusive period to file a plan of reorganization ends on June 3,
2008. (Fortunoff Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
FORTUNOFF: Court OKs Panel's Limited Engagement of Otterbourg
-------------------------------------------------------------
Judge James M. Peck of the U.S. Bankruptcy Court for the Southern
District of New York approved the Official Committee of Unsecured
Creditors' application to retain Otterbourg Steindler Houston &
Rosen PC, as their attorneys, effective as of Feb. 7, 2008.
The Court held that Otterbourg will be entitled to reasonable
compensation for services undertaken as proposed Committee
Counsel for the period Feb. 7, 2008 to March 26, 2008, plus
reimbursement of actual and necessary expenses incurred.
With a reservation of all rights and remedies, Otterbourg was to
have been relieved of all responsibilities and obligations to the
Committee as of March 6, 2008, the Court said.
The Committee is seeking permision to retain Morrison & Foerster
LLP as counsel, nunc pro tunc to March 6, 2008, to replace
Otterbourg. A separate story on the Committee's application is
reported in today's Troubled Company Reporter.
About Fortunoff
New York-based Fortunoff Fine Jewelry and Silverware LLC --
http://www.fortunoff.com/-- is a family owned business since
1922 founded by by Max and Clara Fortunoff. Fortunoff offers
customers fine jewelry and watches, antique jewelry and silver,
everything for the table, fine gifts, home furnishings including
bedroom and bath, fireplace furnishings, housewares, and seasonal
shops including outdoor furniture shop in summer and enchanting
Christmas Store in the winter. It opened some 20 satellite
stores in the New Jersey, Long Island, Connecticut and
Pennsylvania markets featuring outdoor furniture and grills
during the Spring/Summer season and indoor furniture (and in some
locations Christmas trees and decor) in the Fall/Winter season.
Fortunoff and two affiliates, M. Fortunoff of Westbury LLC and
Source Financing Corp., filed for chapter 11 petition on Feb. 4,
2008 (Bankr. S.D.N.Y. Case Nos. 08-10353 through 08-10355) in
order to effectuate a sale to NRDC Equity Partners LLC, --
http://www.nrdcequity.com/-- a private equity firm that owns
of Lord & Taylor from Federated Department Stores.
Due to the U.S. Trustee's objection, Fortunoff is backing out of
its request to employ Skadden Arps Meagher & Flom LLC, as
bankruptcy counsel. Fortunoff is hiring Togut Segal & Segal LLP,
as their general bankruptcy counsel, but Skadden Arps will
continue to serve the Debtors as special counsel in connection
with the sale the Debtors' assets. Logan & Company, Inc., serves
as the Debtors' claims, noticing, and balloting agent. FTI
Consulting Inc. are the Debtors' proposed crisis manager.
An Official Committee of Unsecured Creditors has been appointed in
this case.
In their schedules, Fortunoff Fine Jewelry listed $5,052,315 total
assets and $136,626,948 total liabilities; Source Financing Corp.
listed $154,680,100 total assets and $176,961,631 total
liabilities; and M. Fortunoff of Westbury LLC listed $6,300,955
total assets and $119,985,788 total liabilities. The Debtors'
exclusive period to file a plan of reorganization ends on June 3,
2008. (Fortunoff Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
FORTUNOFF: Mahoney Cohen Serves as Committee's Financial Advisor
----------------------------------------------------------------
The Official Committee of Unsecured Creditors sought and obtained
authority from the U.S. Bankruptcy Court for the Southern District
of New York to retain Mahoney Cohen & Company, CPA, P.C., as its
financial advisor, effective as of Feb. 8, 2008.
On behalf of Agio International Co., Ltd, chairperson of the
Committee, Thomas Gold, Esq., says the Committee selected Mahoney
because of the firm's extensive experience in, and knowledge of
business reorganizations under Chapter 11 of the Bankruptcy Code.
As the Committee's financial advisor, Mahoney Cohen will:
* assist the Committee in its evaluation of the Debtors'
postpetition cash flow and other projections and budgets
prepared by the Debtors or their financial advisors;
* analyze transactions involving the Debtors' financing
institutions;
* provide financial analysis related to debtor-in-possession
financing, including advising the Committee concerning
similar matters;
* monitor the Debtors' activities regarding cash expenditures
and general postpetition business operations;
* assist the Committee in its review of monthly operating
reports submitted by the Debtors or their financial
advisors;
* assist with any investigation into prepetition acts,
conduct, property, liabilities and financial condition of
the Debtors, their management or creditors, including the
operation of the Debtors' business, as instructed by the
Committee;
* analyze transactions with vendors, insiders, related or
affiliated companies, subsequent and prior to the Petition,
Date, as instructed by the Committee;
* assist the Committee or its counsel in any litigation
against the financing institutions of the Debtors, certain
insiders and other potential adversaries -- including their
testimony, if necessary;
* assist the Committee in its review of the financial aspects
of any proposed asset purchase agreement or evaluation any
plan of reorganization or liquidation; and, if applicable,
assist the Committee in negotiating, evaluating and
qualifying any competing offers;
* attend meetings with representatives of the Committee and
their counsel, and prepare presentations to the Committee
that provides analyses and updates on diligence performed;
and
* perform any other services that may be requested by the
Committee.
Mahoney Cohen will work closely with the Debtors' representatives
and the other professionals retained by the Committee, to ensure
that there is no unnecessary duplication of services performed or
charged to the Debtors' estates.
Mahoney Cohen will charge for its services on an hourly basis in
accordance with its ordinary and customary hourly rates. The
firm will be reimbursed for actual and necessary out-of-pocket
expenses incurred. Mahoney Cohen's current hourly rates are:
Professional Hourly Rate
------------ -----------
Shareholders and Directors $425 to $595
Managers and Senior Managers $325 to $425
Senior Accountants and Staff $100 to $325
Charles M. Berk, a certified public accountant and a shareholder
of Mahoney Cohen, assures the Court his firm does not represent
any interest adverse to the Debtors or their estate, and is a
"disinterested" person within the meaning of Section 101(14) of
the Bankruptcy Code.
About Fortunoff
New York-based Fortunoff Fine Jewelry and Silverware LLC --
http://www.fortunoff.com/-- is a family owned business since
1922 founded by by Max and Clara Fortunoff. Fortunoff offers
customers fine jewelry and watches, antique jewelry and silver,
everything for the table, fine gifts, home furnishings including
bedroom and bath, fireplace furnishings, housewares, and seasonal
shops including outdoor furniture shop in summer and enchanting
Christmas Store in the winter. It opened some 20 satellite
stores in the New Jersey, Long Island, Connecticut and
Pennsylvania markets featuring outdoor furniture and grills
during the Spring/Summer season and indoor furniture (and in some
locations Christmas trees and decor) in the Fall/Winter season.
Fortunoff and two affiliates, M. Fortunoff of Westbury LLC and
Source Financing Corp., filed for chapter 11 petition on Feb. 4,
2008 (Bankr. S.D.N.Y. Case Nos. 08-10353 through 08-10355) in
order to effectuate a sale to NRDC Equity Partners LLC, --
http://www.nrdcequity.com/-- a private equity firm that owns
of Lord & Taylor from Federated Department Stores.
Due to the U.S. Trustee's objection, Fortunoff is backing out of
its request to employ Skadden Arps Meagher & Flom LLC, as
bankruptcy counsel. Fortunoff is hiring Togut Segal & Segal LLP,
as their general bankruptcy counsel, but Skadden Arps will
continue to serve the Debtors as special counsel in connection
with the sale the Debtors' assets. Logan & Company, Inc., serves
as the Debtors' claims, noticing, and balloting agent. FTI
Consulting Inc. are the Debtors' proposed crisis manager.
An Official Committee of Unsecured Creditors has been appointed in
this case.
In their schedules, Fortunoff Fine Jewelry listed $5,052,315 total
assets and $136,626,948 total liabilities; Source Financing Corp.
listed $154,680,100 total assets and $176,961,631 total
liabilities; and M. Fortunoff of Westbury LLC listed $6,300,955
total assets and $119,985,788 total liabilities. The Debtors'
exclusive period to file a plan of reorganization ends on June 3,
2008. (Fortunoff Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
FRONTIER DRILLING: Concerns on Funding Spurs S&P's Negative Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Service placed the ratings, including
the 'B-' corporate credit rating, on marine contract drilling
company Frontier Drilling ASA on CreditWatch with negative
implications.
"The CreditWatch listing reflects concern about the company's
ability to fund its planned 2008 capital spending program," said
Standard & Poor's credit analyst Jeffrey B. Morrison.
Given project cost overruns beyond initial estimates and
weaker-than-expected cash flow from operations, S&P believes that
Frontier Drilling will need to raise additional capital over the
near term, a risk heightened by a currently turbulent credit
market.
Costs of upgrading and maintaining the company's drillships and
delays in recontracting in early 2008 will likely cause cash flow
from operations to fall short of projections. If the company is
unable to secure additional financing by June 2008 and
successfully recontract its Southeast Asian unit at a favorable
dayrate, S&P would likely downgrade Frontier Drilling to 'CCC+'
and assign a developing outlook.
S&P is aware that Frontier Drilling's private-equity sponsors have
made equity infusions in the past to meet the company's capital
needs in funding both internal and growth initiatives. Although
S&P has not yet received Frontier Drilling's audited financial
statements for fiscal 2007, S&P notes that the company in March
drew down the full amount on its $60 million senior secured
revolving credit facility.
GENERAL MOTORS: Ex-Unit Delphi Wants Indemnification Pact Extended
------------------------------------------------------------------
Delphi Corp. and its debtor-affiliates seek authority from the
U.S. Bankruptcy Court for the Southern District of New York to
extend the indemnification agreement between Delphi Corp. and
General Motors Corp. with respect to the UAW Benefit Guarantee,
dated as of Dec. 22, 1999, for an additional time period of up to
15 days, until April 15, 2008, if GM extends its obligations under
the UAW Benefit Guarantee by the same period of time.
As reported in the Troubled Company Reporter on June 26, 2007, the
United Automobile, Aerospace and Agricultural Implement Workers of
America, Delphi, and GM entered into a memorandum of
understanding. Among other things, the UAW-Delphi-GM Memorandum
of Understanding was designed to enable Delphi's continued
transformation to more competitive wage and benefit levels and to
address divestiture, work rules, and staffing level issues in the
Debtors' workforce.
Pursuant to the UAW-Delphi-GM Memorandum of Understanding, the
UAW, Delphi, and GM also agreed to the "Term SheetDelphi Pension
Freeze and Cessation of OPEB, and GM Consensual Triggering of
Benefit Guarantee," which facilitates the freezing of Delphi's
pension plan and the assumption of billions of dollars of OPEB
liabilities by GM, thereby dramatically reducing Delphi's ongoing
benefit costs. The UAW-Delphi-GM Memorandum of Understanding was
ratified by the UAW membership on June 28, 2007, and approved by
the Court on July 19, 2007.
The UAW-Delphi-GM Memorandum of Understanding extended the time
period for certain of GM's obligations under the Sept. 30, 1999
Benefit Guarantee Agreement between GM and the UAW to March 31,
2008, if Delphi commenced solicitation of acceptances of a plan
of reorganization prior to Dec. 31, 2007. Delphi and GM also
agreed that the eighth anniversary date reference in the
Indemnification Agreement would be extended until March 31, 2008,
if Delphi commenced solicitation of acceptances of a plan of
reorganization prior to Dec. 31. The Debtors' Chapter 11 Plan,
however, was not confirmed and substantially consummated by
Dec. 31. Nonetheless, the UAW-Delphi-GM Memorandum of
Understanding additionally provided that the March 31, 2008 UAW
Benefit Guarantee extension date would be extended to "such later
date as Delphi and GM will agree to extend the Indemnification
Agreement expiration."
Under the provisions of the Memorandum of Understanding approved
by the Court on July 19, 2007, the Debtors believe that they
already have authority to extend the Indemnification Agreement
for additional time periods. Out of an abundance of caution,
however, and as a result of GM's unique role in the Chapter 11
cases, the Debtors seek the Court's authority to extend the
Indemnification Agreement.
John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in Chicago, Illinois, asserts that an extension will
allow Delphi's indemnification obligations under the Indemnity
Agreement to continue uninterrupted until it has emerged from
Chapter 11. If the Plan is not consummated, the extension will
also provide additional time for the Debtors to consider whether
additional extensions are appropriate or viable.
The extension, in the exercise of the Debtors' business judgment,
is in the best interests of the Debtors' estates, creditors, and
other parties-in-interest, including Delphi's employees,
Mr. Butler asserts.
Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS:
DPHIQ) -- http://www.delphi.com/-- is the single supplier
of
vehicle electronics, transportation components, integrated systems
and modules, and other electronic technology. The company's
technology and products are present in more than 75 million
vehicles on the road worldwide. Delphi has regional headquarters
in Japan, Brazil and France.
The company filed for chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors. As of
March 31, 2007, the Debtors' balance sheet showed $11,446,000,000
in total assets and $23,851,000,000 in total debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the solicitation
of votes on the First Amended Plan on Dec. 20, 2007. The Court
confirmed the Debtors' First Amended Plan on Jan. 25, 2008.
(Delphi Bankruptcy News, Issue No. 120; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
About GM
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries. In 2007, nearly 9.37 million GM cars and
trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.
* * *
As reported in the Troubled Company Reporter on March 26, 2008,
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/B-3) 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 expects American
Axle and the UAW to reach an agreement that will reflect more
competitive labor costs, the timing is unknown.
To resolve the CreditWatch listings, S&P'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.
As reported in the Troubled Company Reporter on Feb. 28, 2008,
Fitch Ratings has affirmed the Issuer Default Rating of General
Motors at 'B', with a Rating Outlook Negative.
As reported in the Troubled Company Reporter on Nov. 9, 2007,
Moody's Investors Service affirmed its rating for General Motors
Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1
senior unsecured and SGL-1 Speculative Grade Liquidity rating) but
changed the outlook to Stable from Positive. In an environment of
weakening prospects for US auto sales GM has announced that it
will take a non-cash charge of $39 billion for the third quarter
of 2007 related to establishing a valuation allowance against its
deferred tax assets in the US, Canada and Germany.
As reported in the Troubled Company Reporter on Oct. 23, 2007,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and other ratings on General Motors Corp. and
removed them from CreditWatch with positive implications, where
they were placed Sept. 26, 2007, following agreement on the new
labor contract. The outlook is stable.
GREENWICH 2007-GG9: Fitch Affirms 'B-' Rating on $8.22MM Certs.
---------------------------------------------------------------
Fitch has affirmed Greenwich 2007-GG9, commercial mortgage pass-
through certificates as:
-- $74,361,088 A-1 'AAA';
-- $1,180,078,000 Class A-2 'AAA';
-- $85,985,000 Class A-3 'AAA';
-- $88,000,000 Class A-AB 'AAA';
-- $2,671,598,000 Class A-4 'AAA';
-- $493,485,000 Class A-1A 'AAA';
-- $557,593,000 Class A-M 'AAA';
-- $100,000,000 Class A-MFL 'AAA';
-- $575,393,000 Class A-J 'AAA';
-- Interest Only Class X 'AAA'
-- $32,880,000 Class B 'AA+';
-- $98,638,000 Class C 'AA';
-- $41,100,000 Class D 'AA-';
-- $41,099,000 Class E 'A+';
-- $57,540,000 Class F 'A';
-- $57,539,000 Class G 'A-';
-- $82,199,000 Class H 'BBB+';
-- $65,759,000 Class J 'BBB';
-- $65,760,000 Class K 'BBB-';
-- $32,879,000 Class L 'BB+';
-- $16,440,000 Class M 'BB';
-- $24,660,000 Class N 'BB-';
-- $16,440,000 Class O 'B+';
-- $16,439,000 Class P 'B';
-- $8,220,000 Class Q 'B-'.
The $82,199,863 Class S is not rated by Fitch.
Affirmations are due to the stable performance of the pool. There
has been minimal pay down of the transaction since issuance. As
of the March 2008 distribution date, the transaction has paid down
0.2% to $6.57 billion from $6.58 billion at issuance.
Four loans (10.2%) maintain their investment grade shadow ratings.
The largest shadow rated loan, 590 Madison Avenue (5.3%), is a 1
million square foot office building located in midtown New York
City. The servicer reported occupancy as of December 2007 was
100%. The loan is interest-only with a coupon of 5.46% that
matures in 2017.
The Merchandise Mart (2.7%) consists of a single wholesale trade
mart with nearly 3.5 million SF in Chicago, Illinois. Servicer
reported occupancy has improved to 99% as of February 2008 from
95% at issuance. The loan is interest-only with a coupon of 5.57%
that matures in 2016. Boulevard Mall (1.6%) is located in
Amherst, New York and consists of 762,407 sf. In-line occupancy
has increased to 97% as of September 2007, compared to 95% at
issuance. The loan is interest-only with a coupon rate of 6.04%
and matures in 2017. Victoria Ward (0.6%) is located in Honolulu,
Hawaii and is comprised of a 159,126 sf retail/office property.
Servicer reported combined occupancy has declined to 78% as of
September 2007, down from 90.9% at issuance due to vacancies in
the retail portion of the collateral. The loan is interest-only
with a coupon of 5.52% and a maturity in 2011.
There are no scheduled maturities until 2011. Interest-only loans
represent 76.4% of the pool, including the top 10 loans (40.2%) in
the transaction.
HOOP HOLDINGS: Has Interim Court Nod to Use Wells Fargo Collateral
------------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
authorized Hoop Retail Stores LLC to use, on an interim basis, the
cash collateral of Wells Fargo Retail Finance LLC, as prepetition
agent, until May 31, 2008.
Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A.
in Wilmington, Delaware, says that the cash collateral will be
used solely to repay the prepetition debt and all liabilities.
As of March 26, 2008, the Debtor owed at least $9.3 million under
their prepetition loan agreement with Wells Fargo and $15.6
million in letters of credit plus interests. The sums were used
to fund working capital requirements. The prepetition debt were
secured by interests and liens on the Debtor's assets.
The prepetition lenders have consented to the Debtor's use of the
cash collateral.
As adequate protection for the interest of the prepetition lender,
Wells Fargo will be entitled to prepetition replacements liens,
prepetition superpriority claim, adequate protection payments, and
a $250,000 prepetition indemnity account.
The Debtor provided a budget projecting cash flow for 13 weeks. A
full-text copy of that budget is available for free at:
http://ResearchArchives.com/t/s?29c2
The Hon. Mary F. Walrath will hold a hearing April 16, 2008, at
11:00 a.m. to consider final approval of the Debtor's request.
Objections, if any, are due April 9, 2008, at 4:00 p.m. Objections
must be delivered to the Debtors, Wells Fargo, The Children's
Place Retail Stores, Inc., and The Walt Disney Company, as well as
the United States Trustee for Region 3 and counsel to any
statutory committee appointed in the cases.
Wells Fargo is represented in the chapter 11 cases by Donald E.
Rothman, Esq., at Riemer & Braunstein, LLP, in Boston
Massachusetts; and Steven K. Kortanek, Esq., at Womble Carlyle
Sandridge & Rice PLLC in Wilmington, Delaware.
The Children's Place Retail Stores, Inc., is represented by Lori
R. Fife, Esq., at Weil Gotshal & Manges LLP, in New York. The
Walt Disney Company is represented by Lisa Hill Fenning, Esq., at
Dewey & LeBoeuf LLP in Los Angeles, California.
About Hoop Holdings
Headquartered in Secausus, New Jersey, Hoop Holdings LLC owns and
operates gift, novelty, and souvenir shops. The company and two
of its affiliates (Hoop Retail Stores, LLC and Hoop Canada
Holdings, Inc.) filed for Chapter 11 protection on March 27, 2008
(Bankr. D. Del. Lead Case No.08-10544). Daniel J. DeFranceschi,
Esq., at Richards, Layton & Finger, represents the Debtors in
their restructuring efforts. The U.S. Trustee for Region 3 has
not appointed creditors to serve on an official committee of
unsecured creditors or examiner under these cases. When the
Debtors' filed for protection against their creditors, they listed
assets and debts between $100 million to $500 million.
HOOP HOLDINGS: Gets Initial Nod to Use Wells Fargo's $35 Mil. Loan
------------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
authorized Hoop Retail Stores LLC to obtain, on an interim basis,
up to $35,000,000 of debtor-in-possession financing from Wells
Fargo Retail Finance LLC, as collateral agent and administrative
agent.
The Court allows Hoop Retail to access at least $30,000,000 from
the facility on the interim. The DIP facility will mature Sept.
25, 2008. The facility, however, will expire and become due on
April 30, 2008, if the Court has not entered a final order by that
date. The facility will bear interest at a rate per annum equal
to the base rate plus base rate loans of 1.5%.
The Debtor said it has an immediate need for postpetition
financing to fund business operations, and to administer and
preserve the value of assets. Specifically the Debtors will
apply the fund to finance, among other things:
-- working capital and general corporate purposes;
-- payment of costs of administration of the case;
-- all prepetition issued under the prepetition loan
agreement will bee deemed issued under the DIP loan
agreement; and
-- payment in full of the priority facility, upon entry of the
final DIP order.
The Debtor will pay a host of fees to the lender including a
$337,500 closing fee and a non-refundable servicing fee of $5,000
per month. It will also pay an unused line fee of 0.375% per
annum.
To secure its DIP Obligations, the Debtor will grant Wells Fargo a
superpriority administrative claim over all administrative expense
claims and unsecured claims against the Debtors and their estate.
The DIP liens are subject to a carve-out for fees payable to
bankruptcy professionals, the U.S. Trustee and the Clerk of Court.
The Hon. Mary F. Walrath will hold a hearing April 16, 2008, at
11:00 a.m. to consider final approval of the Debtor's request.
Objections, if any, are due April 9, 2008, at 4:00 p.m. Objections
must be delivered to the Debtors, Wells Fargo, The Children's
Place Retail Stores, Inc., and The Walt Disney Company, as well
as the United States Trustee for Region 3 and counsel to any
statutory committee appointed in the cases.
Wells Fargo is represented in the chapter 11 cases by Donald E.
Rothman, Esq., at Riemer & Braunstein, LLP, in Boston
Massachusetts; and Steven K. Kortanek, Esq., at Womble Carlyle
Sandridge & Rice PLLC in Wilmington, Delaware.
The Children's Place Retail Stores, Inc., is represented by Lori
R. Fife, Esq., at Weil Gotshal & Manges LLP, in New York. The
Walt Disney Company is represented by Lisa Hill Fenning, Esq., at
Dewey & LeBoeuf LLP in Los Angeles, California.
About Hoop Holdings
Headquartered in Secausus, New Jersey, Hoop Holdings LLC owns and
operates gift, novelty, and souvenir shops. The company and two
of its affiliates (Hoop Retail Stores, LLC and Hoop Canada
Holdings, Inc.) filed for Chapter 11 protection on March 27, 2008
(Bankr. D. Del. Lead Case No.08-10544). Daniel J. DeFranceschi,
Esq., at Richards, Layton & Finger, represents the Debtors in
their restructuring efforts. The U.S. Trustee for Region 3 has
not appointed creditors to serve on an official committee of
unsecured creditors or examiner under these cases. When the
Debtors' filed for protection against their creditors, they listed
assets and debts between $100 million to $500 million.
HSBC FINANCE: KVAM Urges HSBC to Shed Off Burdensome U.S. Unit
--------------------------------------------------------------
HSBC Holdings plc was told by a shareholder to divest its U.S.
unit, saying that the bank's shares would increase if it actually
sold or "ring-fenced" the U.S. business.
Knight Vinke Asset Management said that HSBC Finance is loaded up
with too much debt, and doing away with it means a "200-300 pence"
increase in HSBC Holding's shares.
In a letter to HSBC Holdings dated March 14, KVAM CEO Eric Knight
related to HSBC that the HSBC Finance matter was KVAM's greatest
concern, and lamented that:
-- HFC has an unsustainable business model; and
-- HFC is structurally unable to support $150 billion of its
debt.
Mr. Knight contended that the HSBC Group continues to be at risk
so long as HSBC is injecting substantial capital into HFC to keep
it afloat. KVAM, he said, is worried about the increasing risk of
debt raised in the wholesale markets to lend to sub-prime
creditors, of which HFC relies almost entirely on.
According to Mr. Knight, KVAM's suggestion to ring-fence HFC was
met by a hasty comment that said it would be "irresponsible" and
"unthinkable" for HSBC to walk away from HFC.
Mr. Knight relates that HSBC has provided a massive amount of
financial support to HFC:
a) a $3 billion of additional equity which has been injected
since the acquisition of Household International in 2003;
b) over $40 billion as at Dec. 31, 2007, provided through a
mixture of loans from HSBC to HFC;
c) receivables-based financing from HSBC Bank USA; and
d) other asset purchases.
Taking into account the acquisition price of $14.8 billion, HSBC
has disbursed almost $60 billion on HFC since 2003 and this amount
is likely to increase very quickly given the additional $1.6
billion equity injection already required in 2008, the amount of
HFC expected losses and $80 billion in HFC debt which need to be
refinanced in the next three years.
With absolutely no access to customer deposits and only limited
access to the debt markets, HFC is increasingly dependent on asset
sales and support from its parent for funding, averred Mr. Knight.
With delinquencies rising, KVAM believes that net interest and
loan repayments received may not cover the operating cash flow
needs of the business.
KVAM also observed that net new lending has virtually come to a
standstill and is projected to go into negative territory next
year. Even more worrying however, said Mr. Knight, is the fact
that debt repayments due over the next three years amount to over
$80 billion.
Mr. Knight argued that HFC will require significant additional
capital from its parent just to survive and that, even after the
U.S. property market finally recovers, the business will probably
not be worth anything to HSBC's shareholders.
"As of today, selling the business may no longer be possible on
acceptable terms but it may still be possible to spin it off or
otherwise ring-fence it," Mr. Knight said in the letter. "If all
else fails, then the best course of action may well be for HFC to
file for protection from its creditors under Chapter 11 of the
U.S. Bankruptcy Code," he concluded.
About KVAM
Knight Vinke Asset Management -- http://www.kvamllc.com/-- is a
privately owned investment management firm specializing in
institutional shareholder activism with offices in New York and
Monaco. The firm invests in underperforming large cap public
companies and instigates change by highlighting inefficiences with
respect to structure and poor corporate governance. The company
seeks to build a consensus amongst shareholders, board members,
management, financial analysts and others, as to the appropriate
remedies. It then aims to convince the board of directors or
controlling shareholder to adopt these remedies, thereby creating
value for all shareholders.
About HSBC Holdings
Based in London, HSBC -- http://www.hsbc.com/-- is one of the
largest banking and financial services organisations in the world.
HSBC's international network comprises over 10,000 offices in 83
countries and territories in Europe, the Asia-Pacific region, the
Americas, the Middle East and Africa.
With listings on the London, Hong Kong, New York, Paris and
Bermuda stock exchanges, shares in HSBC Holdings plc are held by
around 200,000 shareholders in some 100 countries and territories.
The shares are traded on the New York Stock Exchange in the form
of American Depositary Receipts.
Through an international network linked by advanced technology,
including a rapidly growing e-commerce capability, HSBC provides a
comprehensive range of financial services: personal financial
services; commercial banking; corporate, investment banking and
markets; private banking; and other activities.
About HSBC Finance
HSBC Financial Corporation Limited and its subsidiaries, HSBC
Retail Services Limited, HSBC Finance Mortgages Inc., HSBC Finance
Corporation Canada -- http://www.hsbcfinance.ca/-- service
millions of customers in Canada with financial products and is
proud to now be a member of the HSBC Group . HSBC Finance has the
experience and resources to tailor loans that help customers reach
their financial goals and realize their dreams.
IDEARC INC: S&P Assigns 'BB' Corp. Rating on CreditWatch Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Idearc
Inc., including the 'BB' corporate credit rating, on CreditWatch
with negative implications.
"The CreditWatch listing follows the company's guidance yesterday
that it expects mid-single-digit percentage declines in multi-
product amortized revenue," noted Standard & Poor's credit analyst
Emile Courtney. "In addition, Idearc restated its expectation for
operating margin contraction in 2008. As a result, we expect
EBITDA to decline in the 10% area for the year, which is at a
higher rate than our previous expectation. This comes at a time
when the company is facing secular challenges to its print product
offerings and has limited flexibility in its leverage profile,
with total debt (adjusted for operating leases and expected
pension and postretirement obligations) to EBITDA of about 6x as
of December 2007."
Idearc also announced it would eliminate its common dividend,
which totaled $200 million in 2007. Although the dividend
elimination will enable Idearc to significantly increase the
amount of discretionary cash flow available for debt repayment,
the action reflects greater uncertainty for the company's
operations because of a slowing economy in 2008.
In addition to deteriorating operating expectations for 2008,
revenue and EBITDA declines accelerated at Idearc throughout 2007.
Revenue and EBITDA declined 1.8% and 6.9%, respectively, in the
December 2007 quarter, and 0.8% and 2.7%, respectively, in 2007.
S&P's review will incorporate its previous and current expectation
that free cash flow in 2008 will increase meaningfully from the
$323 million generated in 2007 due to a decrease in uses for
working capital purposes, notwithstanding lower EBITDA generation.
Free cash flow in 2007 was impaired by a use of cash to fund
working capital of $308 million, the majority of which was a
result of extended days sales outstanding as Idearc began the
direct billing of customers-this usage of cash is mostly expected
to reverse in 2008. After factoring in the dividend elimination,
the company appears to be in a position to reduce debt balances by
an amount significantly more than the modest $50 million it repaid
in 2007 (in the absence of acquisitions).
Notwithstanding higher free cash flow and greater debt repayment
potential in 2008, S&P does not expect leverage to improve given
the lower EBITDA estimate. Idearc's long-term business and
operating outlook will be key to the resolution of S&P's
CreditWatch listing.
INTEREP NATIONAL: Files for Bankruptcy; To Restructure $99MM-Debt
-----------------------------------------------------------------
Interep National Radio Sales Inc., along with 14 of its
affiliates, filed for Chapter 11 bankruptcy protection in the
United States Bankruptcy Court for the Southern District of New
York, Dawn McCarty of Bloomberg News reports.
To restructure Interep National's debt, $99,000,000 in senior
subordinated bonds due July 2008 will be paid through issuance of
secured debt and new stock, Mrs. McCarty says.
Mrs. McCarty further says, citing a company official with
knowledge of these cases, Interep National sought relief in order
to carry out a prepackaged reorganization plan. Creditors have
expressed their support for the plan, company official said.
The plan, however, has yet to be filed before the Court, Bloomberg
notes.
On March 31, 2008, the company has entered into a consensual
balance sheet restructuring to be implemented through a Chapter 11
plan of reorganization.
Under the agreement, which is supported by Interep's largest
bondholders, funds managed by Oaktree Capital Management, L.P. and
Silver Point Capital, L.P., will allow the company to eliminate
all of its existing cash-pay indebtedness. Oaktree and Silver
Point have also agreed to provide Interep with a new $25 million
credit facility.
"The strategic decision Interep has chosen to take today
establishes a solid financial footing for the company going
forward," said David Kennedy, the company's Vice Chairman and
Chief Executive Officer. "With the agreement of the key
bondholders, the company now has a plan that will reduce debt,
provide the financial resources to grow, and put any uncertainty
about Intereps future behind us."
Interep noted that its clients and customers will not be affected
by the Chapter 11 process, and that the company intends to honor
all obligations in the ordinary course.
Interep anticipates that the reorganization will receive formal
court approval within 90 days.
"This agreement was made possible because of the commitment
of these long-term financial partners, the outstanding staff
and management of Interep, and the tremendous radio and television
station clients, agencies and advertisers the company serves," Mr.
Kennedy added. "I am grateful to all of them for their patience
and trust as the company has worked diligently over the past
several months to address its balance sheet issues for the long-
term. [Mon]day's announcement marks an exciting new chapter for
Interep, one that I'm confident will demonstrate how a well-
capitalized and truly independent rep firm will be able to achieve
the best possible results for everyone it serves."
About Interep National Radio
Headquartered in New York, New York, Interep National Radio Sales,
Inc. -- http://www.interep.com/-- are independent sales and
marketing companies that specialize in radio, the Internet,
television and complementary media. With 16 offices across the
U.S., they serve radio and television station clients and
advertisers in all 50 states and beyond. The company and 14 of
its affiliates filed for Chapter 11 protection on March 30, 2008
(Bankr. S.D.N.Y. Lead Case No.08-11079).
Erica M. Ryland, Esq., at Jones Day, represents the Debtors in
their restructuring efforts. No Official Committee has been
appointed in the cases to date. When the Debtor filed for
protection from their creditors, it listed between $50 million and
$100 million in asset and between $100 million and $500 million in
debts.
INTERTAPE POLYMER: Posts $8.3 Mil. Net Loss for Fiscal Year 2007
----------------------------------------------------------------
Intertape Polymer Group Inc. reported a net loss of $0.7 million
for the three months ended Dec. 31, 2007, down from $15.1 million
of net loss for the same period in 2006. For the fiscal year
ended Dec. 31, 2007, the company incurred a net loss of $8.3
million from $166.6 million in 2006.
The net loss for 2007 includes $8.1 million of manufacturing
facility closures, restructuring, strategic alternatives and other
charges, compared to similar charges in 2006 of $76.1 million.
For the 2007 fourth quarter, the company generated sales of
$191.4 million compared to the $187.3 million sales in 2006. For
fiscal 2007, the company's sales reached $767.2 million from
$812.2 million in 2006.
"Intertape completed an eventful year with an encouraging
performance, notwithstanding the challenges created by the
strategic alternatives process which affected the first half of
2007 and most of 2006," Melbourne F. Yull, executive director of
International Polymer, said. "With these disruptions behind us
and a new Board in place, we progressed steadily, despite the
downturn in the US residential construction market.
"All of the company's key second half fiscal 2007 earnings metrics
improved compared to the second half of fiscal 2006," Mr. Yull
stated.
"We have maintained our strong focus on cost reductions and
reduced SG&A expenses by $13.7 million in 2007 compared to 2006
levels," Victor V. DiTommaso, chief financial officer of the
company, said. "The new financing announced earlier today will
contribute to an expected interest expense reduction of
approximately $8.4 million in 2008 compared to 2007."
Pre-tax earnings for the year ended Dec. 31, 2007 were
$3.9 million compared to a pre-tax loss of $197.4 million in 2006.
Exclusive of manufacturing facility closures, restructuring,
strategic alternatives and other charges and the 2006 goodwill
impairment charge, pre-tax earnings for fiscal 2007 were
$12.0 million compared to a pre-tax loss of $1.4 million in 2006
and for the fourth quarter of 2007 pre-tax earnings were
$2.6 million, compared to a pre-tax loss of $3.7 million for the
fourth quarter of 2006.
Gross profit was $114.4 million in 2007, a decrease of 2.7% from
2006. Gross margin represented 14.9% of sales in 2007 and 14.5%
in 2006. However, second half 2007 gross profits and gross
margins improved compared to second half 2006 levels, primarily
the result of cost reductions implemented by the company in late
2006 and early 2007. While sales volumes declined 5.5% in 2007,
manufacturing expenses for 2007 were reduced by 8.9%.
Gross profits for the fourth quarter of 2007 were $27.8 million at
a gross margin of 14.5% compared to $22.8 million at a gross
margin of 12.2% for the fourth quarter of 2006. Results for the
fourth quarter of 2007 also reflect the company's improved ability
to recover raw material cost increases during the period.
About Intertape Polymer Group
Based in Montreal, Quebec and Sarasota/Bradenton, Florida,
Intertape Polymer Group Inc. (NYSE,ITP; TSX: ITP.TO) --
http://www.intertapepolymer.com/-- develops and manufactures
specialized polyolefin plastic and paper-based packaging products
and complementary packaging systems for industrial and retail use.
The company employs approximately 2,100 employees with operations
in 17 locations, including 13 manufacturing facilities in North
America and one in Europe.
* * *
As reported int the Troubled company Reporter on Dec. 26, 2007,
Standard & Poor's Ratings Services raised its ratings on Intertape
Polymer Group Inc. including its corporate credit rating to 'B'
from 'B-'. The outlook is stable.
INTERTAPE POLYMER: Secures $200MM Senior Secured Credit Facility
----------------------------------------------------------------
Intertape Polymer Group Inc. entered into a new $200 million
Senior Secured Credit Facility consisting of a U.S. revolving
credit facility in the amount of $185 million and a Canadian
revolving credit facility in the amount of $15 million.
IPG also obtained a letter of credit facility with a sublimit in
the amount of $15 million. The Credit Facility is secured by a
first lien on the non-real estate assets of IPG and substantially
all of its subsidiaries. Upon funding on March 28, 2008, proceeds
will be used to repay the $117 million currently outstanding under
the Company's existing credit facility.
The $200 million Credit Facility has been provided by a bank
syndicate. The Credit Facility has a five year term and shall
bear interest at either Libor plus 1.75%, or the prime rate set by
Bank of America plus 0.25%, as elected by IPG, through Sept. 30,
2008. Thereafter, the applicable margin shall adjust quarterly
based on the then outstanding availability under the Credit
Facility.
In connection with the repayment of the existing credit facility,
the Ccompany terminated its two outstanding interest rate swap
agreements at a cost of approximately $3 million. In addition,
the company expects to record a non-cash charge of approximately
$3.4 million in the first quarter of 2008 representing the
accelerated amortization of the debt issue expenses relating to
the termination of the existing credit facility.
The combination of the new financing and the $80 million reduction
of debt during 2007 coupled with the decline in current Libor
interest rates should result in a reduction of interest expense of
approximately $ 8.4 million in 2008 compared to 2007.
The new facility has eliminated the financial ratio covenants set
forth in the prior credit agreement with the exception of a fixed
charge coverage ratio that becomes effective only when unused
availability is less than $25 million. At closing, the company is
well onside in this regard.
"We are pleased with the terms of our new Credit Facility and
believe the successful refinancing of our Credit Facility is
indicative of the progress made in improving the financial
stability of the company," IPG's Victor DiTommaso, CPA, chief
financial officer, stated. "The company's ability to refinance
this part of the debt in these difficult times reflects our strong
cash flows and the confidence our lenders have in the company."
IPG has approximately $39 million of liquidity upon closing of its
new Credit Facility. While IPG anticipates that its free cash
flows will enable it to reduce its borrowings under the Credit
Facility during 2008, the company retains the ability to obtain
additional financing secured by all or a portion of its owned real
estate in an amount of up to $35 million.
"The company anticipates that the refinancing of its Credit
Facility, its ongoing efforts to reduce costs, the introduction of
five new products and the realignment of sales personnel focusing
on propriety and high margin niche markets, should significantly
contribute to the financial results of the company in the second
half of 2008," Melbourne F. Yull, executive director of IPG, said.
About Intertape Polymer Group
Based in Montreal, Quebec and Sarasota/Bradenton, Florida,
Intertape Polymer Group Inc. (NYSE,ITP; TSX: ITP.TO) --
http://www.intertapepolymer.com/-- develops and manufactures
specialized polyolefin plastic and paper-based packaging products
and complementary packaging systems for industrial and retail use.
The company employs approximately 2,100 employees with operations
in 17 locations, including 13 manufacturing facilities in North
America and one in Europe.
* * *
As reported in the Troubled Company Reporter on Dec. 26, 2007,
Standard & Poor's Ratings Services raised its rating on
Intertape's senior subordinated notes to 'CCC+' from 'CCC'.
INTERTAPE POLYMER: Enters Into $200 Million Senior Credit Facility
------------------------------------------------------------------
Intertape Polymer Group Inc. entered into a new $200 million
senior secured credit facility consisting of a U.S. revolving
credit facility in the amount of $185 million and a Canadian
revolving credit facility in the amount of $15.0 million.
International Polymer also obtained a letter of credit facility
with a sublimit in the amount of $15.0 million.
The credit facility is secured by a first lien on the non-real
estate assets of Intertape Polymer and substantially all of its
subsidiaries. Upon funding on March 28, 2008, proceeds will be
used to repay the $117.0 million currently outstanding under the
company's existing credit facility.
The $200 million credit facility has been provided by a bank
syndicate. The credit facility has a five year term and shall
bear interest at either libor plus 1.75%, or the prime rate set by
Bank of America plus 0.25%, as elected by International Polymer,
through Sept. 30, 2008. Thereafter, the applicable margin shall
adjust quarterly based on the then outstanding availability under
the credit facility.
In connection with the repayment of the existing credit facility,
the company terminated its two outstanding interest rate swap
agreements at a cost of approximately $3.0 million . In addition,
the company expects to record a non-cash charge of approximately
$3.4 million in the first quarter of 2008 representing the
accelerated amortization of the debt issue expenses relating to
the termination of the existing credit facility.
The combination of the new financing and the $80.0 million
reduction of debt during 2007 coupled with the decline in current
Libor interest rates should result in a reduction of interest
expense of approximately $ 8.4 million in 2008 compared to 2007.
The new facility has eliminated the financial ratio covenants set
forth in the prior credit agreement with the exception of a fixed
charge coverage ratio that becomes effective only when unused
availability is less than $25.0 million. At closing, the company
is well onside in this regard.
"We are pleased with the terms of our new credit facility and
believe the successful refinancing of our credit facility is
indicative of the progress made in improving the financial
stability of the company," Victor DiTommaso, Intertape Polymer's
chief financial officer, stated. "The company's ability to
refinance this part of the debt in these difficult times reflects
our strong cash flows and the confidence our lenders have in the
company."
International Polymer currently has approximately $39.0 million of
liquidity upon closing of its new credit facility. While
International Polymer anticipates that its free cash flows will
enable it to reduce its borrowings under the credit facility
during 2008, the company retains the ability to obtain additional
financing secured by all or a portion of its owned real estate in
an amount of up to $35.0 million.
"The company anticipates that the refinancing of its credit
facility, its ongoing efforts to reduce costs, the introduction of
five new products and the realignment of sales personnel focusing
on propriety and high margin niche markets, should significantly
contribute to the financial results of the company in the second
half of 2008," Melbourne F. Yull, executive director of
International Polymer, said .
About Intertape Polymer Group
Based in Montreal, Quebec and Sarasota/Bradenton, Florida,
Intertape Polymer Group Inc. (NYSE,ITP; TSX: ITP.TO) --
http://www.intertapepolymer.com/-- develops and manufactures
specialized polyolefin plastic and paper-based packaging products
and complementary packaging systems for industrial and retail use.
The company employs approximately 2,100 employees with operations
in 17 locations, including 13 manufacturing facilities in North
America and one in Europe.
* * *
As reported in the Troubled company Reporter on Dec. 26, 2007,
Standard & Poor's Ratings Services raised its ratings on Intertape
Polymer Group Inc. including its corporate credit rating to 'B'
from 'B-'. The outlook is stable.
IVANHOE ENERGY: Management Expresses Going Concern Doubt
--------------------------------------------------------
The management of Ivanhoe Energy, Inc., stated in its annual
report for the year ended Dec. 31, 2007, filed with the Securities
and Exchange Commission, that the company incurred a net loss of
about $39,200,000 for the year ended Dec. 31, 2007, and as at Dec.
31, 2007, had an accumulated deficit of $159,990,000 and negative
working capital of about $3,500,000.
The company stated it currently anticipates incurring substantial
expenditures to further its capital investment programs and the
company's cash flow from operating activities will not be
sufficient to both satisfy its current obligations and meet the
requirements of these capital investment programs. Recovery of
capitalized costs related to potential projects is dependent upon
finalizing definitive agreements for, and successful completion
of, the various projects.
Management's plans include alliances or other arrangements with
entities with the resources to support the company's projects as
well as project financing, debt and mezzanine financing or the
sale of equity securities in order to generate sufficient
resources to assure continuation of the company's operations and
achieve its capital investment objectives.
The company disclosed plans to utilize revenue from existing
operations to fund the transition of the company to a heavy oil
exploration, production and upgrading company, and non-heavy, oil-
related investments in its portfolio will be leveraged or
monetized to capture value and provide maximum return for the
company.
The outcome of these matters cannot be predicted with certainty at
this time and therefore the company said it may not be able to
continue as a going concern.
Financials
The company posted a net loss of $39,207,000 on revenues of
$33,517,000 for the year ended Dec. 31, 2007, as compared with a
net loss of $25,492,000 on revenues of $48,100,000 in the prior
year.
At Dec. 31, 2007, the company's balance sheet showed $236,916,000
in total assets, $39,629,000 in total liabilities, and
$197,287,000 in stockholders' equity.
Bank Notes
In October 2006 the company obtained a bank loan for a $15 million
Senior Secured Revolving/Term Credit Facility with an initial
borrowing base of $8 million. The facility is for two years, the
first 18 months in the form of a revolver and at the end of 18
months, the then outstanding amount will convert into a six-month
amortizing loan.
Depending on the drawn amount, interest, at the company's option,
will be either at 1.75% to 2.25%, above the bank's base rate or
2.75% to 3.25% over the London Inter-Bank Offered Rate.
The loan terms include the requirement for the company to enter
into two-year commodity derivative contracts covering up to 14,700
Bbls per month of the company's production from its South Midway
Property in California and Spraberry Property in West Texas.
As part of reestablishing the borrowing base amount, the company
was required to enter into an additional commodity derivative
contract.
The facility is secured by a mortgage on both of these properties.
The company had made an initial $1.5 million draw of this facility
in October 2006 and a subsequent draw of $3 million in September
2007.
In September 2007, the company obtained a bank loan for a
$30 million Revolving/Term Credit Facility with an initial
borrowing base of $10 million. The facility is a revolving
facility with a three-year term with interest payable only during
the term. Interest will be three-month LIBOR plus 3.75%.
The loan terms include the requirement for the company to enter
into three-year commodity derivative contracts covering up to
18,000 Bbls per month of the company's production from its Dagang
field in China. The facility is secured by a pledge of
collections from the company's monthly oil sales in China and by a
pledge of shares of the company's Chinese subsidiaries. The
company had made an initial $7 million draw of this facility in
September 2007 and a subsequent draw of $3 million in December
2007.
Promissory Notes
In February 2006, the company re-acquired the 40% working interest
in the Dagang oil project not already owned by the company. Part
of the consideration was the issuance by the company of a non-
interest bearing, unsecured promissory note in the principal
amount of around $7.4 million ($6.5 million after being discounted
to net present value). The note is payable in 36 equal monthly
installments commencing March 31, 2006.
During 2005 the company borrowed a total of $8 million under two
separate convertible loan agreements with the same lender. In
November 2005, the company entered into an agreement with the
lender of these two convertible loans to repay $4 million of the
loans by issuing 2,453,988 common shares of the company at $1.63
per share and to refinance the residual $4 million outstanding
with a new $4 million promissory note due Nov. 23, 2007, and
bearing interest, payable monthly, at a rate of 8% per annum.
The previously granted conversion rights attached to the two
previously outstanding convertible loans were cancelled and the
company issued to the lender 2,000,000 purchase warrants, each of
which entitled the holder to purchase one common share at a price
of $2.00 per share until November 2007. This note was repaid in
April 2006.
Revolving Line of Credit
The company has a revolving credit facility for up to
$1.25 million from a related party, repayable with interest at
U.S. prime plus 3%. The company did not draw down any funds from
this credit facility for the years ended Dec. 31, 2007, 2006 and
2005.
A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2997
About Ivanhoe Energy
Ivanhoe Energy, Inc. (NasdaqCM: IVAN) -- http://www.ivanhoe-
energy.com/ -- is an independent international heavy oil
development and production company focused on pursuing long-term
growth in its reserves and production. Core operations are in the
United States and China, with business development opportunities
worldwide.
KKR FINANCIAL: Avoids Default by Turning Over AAA-Rated Securities
------------------------------------------------------------------
KKR Financial Holdings LLC entered into an agreement with the
holders of the secured liquidity notes, also known as commercial
paper, issued by the two asset-backed conduits sponsored by KKR
Financial Corp. The agreement provides for the Noteholders to
receive the collateral in the Facilities in exchange for
terminating the outstanding secured liquidity notes without
default in payment.
The company also signed a definitive agreement to sell a
controlling interest in the REIT Subsidiary to Rock Capital 2 LLC,
which sale is anticipated to be consummated in the second quarter
of 2008.
Upon closing, this transaction will complete the company's
conversion from a REIT to a limited liability company, a change
that was approved by the company's shareholders in May 2007.
Terms of the transaction were not disclosed.
"This agreement and the sale of our REIT subsidiary mark a
constructive resolution to an issue created by the unprecedented
dislocations in the credit markets," Saturnino Fanlo, chief
executive officer of KKR Financial said. "Reflecting these
conditions, our board of directors has approved an incremental
charge of approximately $5.5 million, which we believe is an
appropriate amount to resolve both the refinancing issues
relating to the secured liquidity notes issued by the REIT's two
asset-backed conduits and complete the exit of our mortgage-
related business."
"KKR Financial remains focused on building enterprise value by
making opportunistic investments in corporate debt and continues
to execute on our core strategy of underwriting and purchasing the
attractively priced assets which are in abundance in the current
environment," Mr. Fanlo continued. "Our balance sheet consists of
over $8.5 billion in investments, more than 95% of which are in
corporate debt investments issued by some of the largest companies
in the world. The steps we have disclosed enhance our ability to
take advantage of new opportunities for investment, capital-
raising, and other initiatives consistent with our core strategy."
"The Noteholder Committee has been in discussions with KKR
Financial over the past several weeks and appreciates KKR
Financial's work to find a constructive resolution in this very
challenging market," Ross Martin, a spokesperson for the
Noteholders, said.
With respect to the agreement with the Noteholders:
-- All of the AAA-rated residential mortgage-backed
securities
funding the secured liquidity notes have been returned to
the Noteholders in satisfaction of the notes.
-- Approximately $3.5 billion of secured liquidity notes and
related RMBS will be removed from the company's balance
sheet.
-- The company and its affiliates have been released from any
future obligations or liabilities to the Noteholders.
When KKR Financial was formed, it was set up as a real estate
investment trust and initially invested approximately 35% of its
equity capital in RMBS to satisfy REIT requirements. KKR
Financial converted to a limited liability company structure in
May 2007, and at that time discontinued investing in mortgage-
related investments. In August of 2007, the company wrote off its
entire investment exposure to mortgage-related investments
financed by the secured liquidity notes, recording a charge for
discontinued operations, and related contingencies, of
approximately $243.7 million.
On Oct. 18, 2007, KKR Financial disclosed that the REIT Subsidiary
had consummated a restructuring of its non-recourse asset-backed
secured liquidity note facilities, extending the maturity date of
the notes. KKR Financial had undertaken the restructuring because
the widespread disruptions in the credit markets made the
collateral for the notes, AAA-rated RMBS, difficult to refinance.
The company has since been in discussions with the Noteholders
with a focus on determining a constructive path forward that would
benefit all parties, and has concluded those discussions with this
statement.
Exclusive of the $3.5 billion of secured liquidity notes and
related RMBS which will be removed from the company's balance
sheet, as of Dec. 31, 2007, the company's exposure to the
residential mortgage market consists of approximately
$337.6 million of RMBS, of which $300.1 million is rated
investment grade or higher and $37.5 million is rated below
investment grade.
These securities do not include any assets that are collateralized
or backed by subprime or non-prime residential mortgage loans. In
addition, the company does not have any off-balance sheet exposure
to residential mortgage assets as the company does not hold any
investments in off-balance sheet structures such as structured
investment vehicles or collateralized debt obligations.
About KKR Financial Holdings
KKR Financial Holdings LLC, formerly KKR Financial Corp., (NYSE:
KFN) -- http://www.kkrkfn.com/-- is a specialty finance company
that invests in multiple asset classes. Its investment objective
is to allocate capital primarily to residential mortgage loans and
mortgage-backed securities; corporate loans and debt securities;
commercial real estate loans and debt securities; asset-backed
securities, and marketable and non-marketable equity securities.
It also makes certain investments from time to time, including
debt, equity and derivative investments.
As of Dec. 31, 2006, its investment portfolio consisted of
residential mortgage loans and securities, corporate loans and
securities, commercial real estate loans and securities,
marketable equity securities, and investments in non-marketable
equity securities. In May 2007, KKR Financial Corp. announced
that KKR Financial Holdings LLC completed the restructuring
transaction, whereby KKR Financial Corp. became a wholly owned
subsidiary of KKR Financial Holdings LLC.
KKR Financial Holdings LLC is externally managed by KKR Financial
Advisors LLC. KKR Financial Holdings LLC and KKR Financial
Advisors LLC are affiliates of Kohlberg Kravis Roberts & Co. LP.
* * *
As reported in the Troubled Company Reporter on Feb. 21, 2008,
KKR Financial Holdings LLC's second postponement of its repayment
of "billions of dollars" worth of mortgage-backed securities " is
a further embarrassment for" Kohlberg Kravis Roberts & Co. LP.
Founders Henry Kravis and George Roberts drew out from their
personal pockets to help bail out KKR Financial Holdings from a
$270 million debt obligation.
LAZY DAYS: Weak Performance Prompts Moody's Rating Cuts to 'B3'
---------------------------------------------------------------
Moody's Investors Service downgraded Lazy Days' R.V. Center,
Inc.'s ratings and maintained the negative outlook to reflect
weaker than expected operating performance and credit metrics, and
limited cushion under its financial covenants. Moody's also
downgraded Lazy Days' speculative grade liquidity rating to SGL-4
from SGL-3.
"Lazy Days' credit metrics and financial flexibility have
deteriorated due to softer RV unit sales and precipitous margin
declines over the last two years," said Mike Zuccaro, Analyst at
Moody's. "Our expectation is for limited improvement in metrics
over the near-to-intermediate term as a result of continued-soft
economic conditions and slowing discretionary spending."
Lazy Days' operating margin, measured as EBIT gross profit,
declined to nearly 17% for the LTM period ending Sept. 30, 2007,
down from over 22% in 2005, while consolidated debt EBITDA has
increased to over 8.5x (1.5x of which stems from treating Lazy
Days' holding company preferred stock as 50% debt). Interest
coverage (EBITDA Interest) declined to 1.1x. Moody's does not
expect these metrics to significantly improve over the near term.
Mr. Zuccaro further added that, "the downgrades also reflect
tenuous covenant compliance, which strains liquidity at a time
when discretionary consumer spending is weakening and credit
markets are difficult. Our belief is that the company may need to
seek covenant relief if performance deteriorates any further."
These ratings were downgraded:
-- Corporate family rating to B3 from B2;
-- Probability of default rating to B3 from B2;
-- Senior Unsecured Notes at to Caa1 (LGD 5, 76%) from B3
(LGD 4, 68%);
The Speculative Grade Liquidity to SGL-4 from SGL-3
Headquartered near Tampa, Florida, Lazy Days is the largest single
site recreational vehicle retailer in the world. Its products
include new and pre-owned Class A and Class C motor homes,
conventional trailers and fifth-wheel trailers. Revenues
approached $780 million for the LTM September 2007.
MANIS LUMBER: Taps Thomas Richardson to Give Collection Services
----------------------------------------------------------------
Manis Lumber Company and its debtor-affiliates seek permission
from the U.S. Bankruptcy Court for the Northern District of
Georgia to employ Thomas D. Richardson and Brinson Askew Berry
Seigler Richardson & Davis LLP to provide collection services.
The Debtors relate that they have an immediate need to employ the
firm. Under Georgia law, the right of a materialmen to file a
lien expires three months after goods are last provided on a job.
Additionally, litigation must be commenced to collect debt within
12 months of the date the debt became due.
Thomas D. Richardson, a member of Thomas D. Richardson and Brinson
Askew Berry Seigler Richarson & Davis LLP will act as the lead
counsel for these services:
a) research property records for liens;
b) file liens;
c) make demands for payments;
d) prepare notes and security deeds;
e) file suits to perfect liens well as to collect on accounts,
notes and bad checks; and
f) draft workout arrangements.
Prior to the bankruptcy filing, the Debtors employed the firm to
provide collection services.
Mr. Richardson tells the Court that his professional bill is
$250 per hour. Additionally, these professionals may also provide
services in these hourly rates:
Robert L. Berry, Esq. $250
Franklin Beachman, Esq. $210
Samuel L. Lucas, Esq. $185
Shannon Grajzar $85
Luan Hicks $85
Mr. Richardson relates that the firm will also reimburse all out-
of-pocket expenses incurred in services related to these cases.
Mr. Richardson assures the Court that his firm is"disinterested"
as that term is defined in Section 101(14) of the Bankruptcy Code.
Mr. Richardson can be reached at:
Thomas D. Richardson and Brinson Askew Berry Seigler
Richarson & Davis LLP
615 W. First Street
P.O. Box 5007
Rome, GA 30162-5007
Headquartered in Rome, Georgia, Manis Lumber Co. dba Wheeler's
manufactures and distributes building materials to professional
home builders in from about 20 locations in Georgia, Alabama, and
North Carolina. Materials distributed include engineered,
framing, and pressure-treated lumber, hardware, roofing, and stair
parts. They also make trusses and wall panels, and provide door
and window assembly, well as installed sales.
The Debtor and its Debtor-affiliates filed for separate Chapter 11
petitions on Feb. 11, 2008, (Bankr. N.D. Ga. Case No.: 08-40398
thru 08-40417.) Manis Lumber Co's financial condition when it
filed for protection from its creditors showed estimated assets of
$1 million to $10 million and estimated debts of $10 million to
$50 million.
MANIS LUMBER: Committee Wants Miller Canfield as Lead Counsel
-------------------------------------------------------------
The Official Committee for Unsecured Creditors in Manis Lumber Co.
and its Debtor affiliates' Chapter 11 cases seeks permission from
the U.S. Bankruptcy Court for the Northern District of Georgia to
employ Miller Canfield Paddock & Stone as lead counsel.
Miller Canfield will:
a) serve as lead counsel for the Committee;
b) provide the Committee with legal advice with respect to its
duties and powers in all matters relating to the provisions
of the Bankruptcy Code;
c) represent and appear on behalf of the Committee in matters
occuring within the state of Georgia as requested;
d) represent and appear on behalf of the committee in matters
related to the proceeding; and
e) perform other services as may be required and in the best
interests of the unsecured creditors generally and the
Committee.
Dale W. Baird, chairman of the Unsecured Creditors Committee
relates that the lead counsel and local counsel will coordinate
Court appearances to ensure that multiple lawyer appearances at
hearings are limited to those circumstances warranting the same as
evidentiary hearings, contested matter hearings and hearings with
large dockets that include separate matters being handled by
different counsel.
Mr. Baird tells the Court that Miller Canfield professionals'
hourly rates are:
Professionals Hourly Rate
------------- -----------
Michael H. Traison, Esq. $360
Donald J. Hutchinson, Esq. $295
Associates $175 - $200
Paralegals $165
Mr. Baird assures the Court that the firm is "disinterested" as
that term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Miller Canfiels Paddock & Stone PLC
Suite 2600, 225 W. Washington
Chicago, IL 60606
Headquartered in Rome, Georgia, Manis Lumber Co. dba Wheeler's
manufactures and distributes building materials to professional
home builders in from about 20 locations in Georgia, Alabama, and
North Carolina. Materials distributed include engineered,
framing, and pressure-treated lumber, hardware, roofing, and stair
parts. They also make trusses and wall panels, and provide door
and window assembly, well as installed sales.
The Debtor and its Debtor-affiliates filed for separate Chapter 11
petitions on Feb. 11, 2008, (Bankr. N.D. Ga. Case No.: 08-40398
thru 08-40417.) G. Frank Nason, IV, Esq., a member at Lamberth
Cifelli Stokes Ellis & Nason P.A. represents the Debtors in their
restructuring efforts. Manis Lumber Co's financial condition when
it filed for protection from its creditors showed estimated assets
of $1 million to $10 million and estimated debts of $10 million to
$50 million.
MANIS LUMBER: Committee Taps James C. Frenzel PC as Co-Counsel
--------------------------------------------------------------
The Official Committee for Unsecured Creditors in Manis Lumber Co.
and its Debtor affiliates' Chapter 11 cases seeks permission from
the U.S. Bankruptcy Court for the Northern District of Georgia to
employ James C. Frenzel PC as co-counsel for Miller Canfield
Paddock & Stone PLC.
James Frenzel will:
a) serve as local counsel at the direction of lead counsel for
the committee;
b) provide the Committee with legal advice with respect to its
duties and powers in this proceeding in all matters relating
to or affected by Georgia law;
c) represent and appear on behalf of the Committee in matters
occuring within the state of Georgia as requested;
d) represent the committee on routine motions before the Court;
and
e) perform other services as may be required and in the best
interests of the unsecured creditors generally and the
Committee.
Dale W. Baird, chairman of the Unsecured Creditors Committee,
relates that the local counsel and lead counsel will coordinate
Court appearances to ensure that multiple lawyer appearances at
hearings are limited to those circumstances warranting the same as
evidentiary hearings, contested matter hearings and hearings with
large dockets that include separate matters being handled by
different counsel.
Mr. Baird tells the Court that James Frenzel's professionals'
hourly rates are:
James C. Frenzel, Esq. $350
Associates $175
Law Clerks and Paralegals $100
Mr. Baird assures the Court that the firm is "disinterested" as
that term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
James C. Frenzel PC
Suite 155, East Tower
Atlanta Financial Center
3343 Peachtree Road, NE
Atlanta, GA 30326
Headquartered in Rome, Georgia, Manis Lumber Co. dba Wheeler's
manufactures and distributes building materials to professional
home builders in from about 20 locations in Georgia, Alabama, and
North Carolina. Materials distributed include engineered,
framing, and pressure-treated lumber, hardware, roofing, and stair
parts. They also make trusses and wall panels, and provide door
and window assembly, well as installed sales.
The Debtor and its Debtor-affiliates filed for separate Chapter 11
petitions on Feb. 11, 2008, (Bankr. N.D. Ga. Case No.: 08-40398
thru 08-40417.) G. Frank Nason, IV, Esq., a member at Lamberth
Cifelli Stokes Ellis & Nason P.A. represents the Debtors in their
restructuring efforts. Manis Lumber Co's financial condition when
it filed for protection from its creditors showed estimated assets
of $1 million to $10 million and estimated debts of $10 million to
$50 million.
MAUDE HENDERSON: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Maude Henderson Trust
732 Springs Avenue
Pawleys Island, SC 29585
Tel: (843) 693-3400
Bankruptcy Case No.: 08-01814
Chapter 11 Petition Date: March 28, 2008
Court: District of South Carolina (Charleston)
Judge: John E. Waites
Debtor's Counsel: Kathleen D. Cauthen, Esq.
(kcauthen@cauthenlawfirm.com)
Cauthen Law Firm, LLC
P.O. Box 611
Blythewood, SC 29016
Tel: (803) 754-5124
http://www.cauthenlawfirm.com/
Estimated Assets: $1 million to $100 million
Estimated Debts: $1 million to $100 million
The Debtor did not file a list of its largest unsecured creditors.
MAXUM PETROLEUM: Moody's Holds 'B2' Rating; Gives Negative Outlook
------------------------------------------------------------------
Moody's Investors Service affirmed Maxum Petroleum, Inc.'s B2
corporate family rating, but revised its ratings outlook to
negative from stable and lowered the rating on the $155 million
senior secured term loan to B3 from B2, per the Loss Given Default
Methodology.
The outlook revision reflects Maxum's declining profitability due
to challenging conditions in certain end-markets, temporary margin
erosion, and the previously announced loss of a key distribution
contract (TA Operating LLC terminated its diesel fuel distribution
contract with Maxum in May 2007). The outlook revision also
reflects weaker than expected free cash flow after a surge in
working capital which caused free cash flow to be negative over
the last several quarters.
Specifically, escalating diesel prices have increased working
capital requirements, thus pressuring cash flow and resulting in
higher revolving credit facility borrowings. Additionally, the
company is facing challenging operating conditions in certain end-
markets (particularly automotive, construction and trucking)
coupled with a volatile procurement environment.
Moody's believes these factors will apply ongoing pressure to
Maxum's operating margins and volume growth over the near term.
Moody's notes that management expects relatively flat diesel
volume growth over the next several quarters. Given these
challenges, Moody's is concerned over the company's ability to
remain compliant with the financial covenants governing its credit
facility.
The B2 corporate family rating reflects Maxum's high leverage, the
low margins inherent in Maxum's core diesel marketing and
distribution business, and longer term acquisition risk. The
rating is supported by the company's economies of scale in
procurement, low customer concentration, diversified end markets
and long-tenured relationships with key suppliers. Given Maxum's
current covenant hurdles combined with the financial sponsors
stated strategy of growing the business through acquisitions,
Moody's expects that the pending IPO will be necessary in order
for Maxum to further execute its acquisition strategy.
The downgrade of the term loan to B3 (LGD4, 67%) from B2 (LGD4,
55%) reflects the increased proportion of revolving credit
facility debt in the capital structure.
Ratings Affirmed:
-- Corporate Family Rating at B2;
-- Probability of Default Rating at B2.
Ratings Downgraded:
-- $155 million Senior Secured $155 million Term Loan B due
2013, to B3 (LGD4, 67%) from B2 (LGD4, 55%).
Maxum Petroleum, Inc., based in Old Greenwich, Connecticut, is a
leading national marketer and distributor of diesel gasoline,
lubricants, and related petroleum-based products.
MICHAEL BREEN: Case Summary & Largest Unsecured Creditor
--------------------------------------------------------
Debtor: Michael Breen
604 West 21st Avenue
Covington, LA 70433
Bankruptcy Case No.: 08-10661
Type of Business: The Debtor is a chiropractor.
Chapter 11 Petition Date: March 28, 2008
Court: Eastern District of Louisiana (New Orleans)
Judge: Jerry A. Brown
Debtor's Counsel: Robert L. Marrero, Esq.
(marrero1035@bellsouth.net)
3520 General DeGaulle Drive, Suite 1035
New Orleans, LA 70114
Tel: (504) 366-8025
Fax: (504) 366-8026
Total Assets: $1,017,710
Total Debts: $8,585,235
Debtor's XX Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Allen McMillin $8,585,235
Attn: Charles M. Hughes, Esq.
322 Columbia Street
Bogalusa, LA 70427
MIGENIX INC: Posts CN$3.4 Million Net Loss in Qtr. Ended Jan. 31
----------------------------------------------------------------
MIGENIX Inc. reported a net loss of CN$3.4 million for the third
quarter ended Jan. 31, 2008, compared with a net loss of
CN$6.7 million in the same period ended Jan. 31, 2007.
For the three months ended Jan. 31, 2008, the decrease in the loss
is principally attributable to a CN$2.8 million decrease in the
write-down in intangible assets and a CN$600,000 decrease in
research and development expenses.
During the three months ended Jan. 31, 2008, the company had no
revenues, compared to research and development collaboration
revenue of CN$19,000 for the three months ended Jan. 31, 2007.
This research and development collaboration revenue is pursuant to
the sale of omiganan drug substance to Cutanea Life Sciences.
At Jan. 31, 2008, the company's consolidated balance sheet showed
CN$11.3 million in total assets, CN$7.8 million in total
liabilities, and CN$3.5 million in total shareholders' equity.
Liquidity and Capital Resources
As of Jan. 31, 2008, the company had cash, cash equivalents and
short-term investments of CN$7.9 million and the company's net
working capital was CN$7.1 million, compared to net working
capital of CN$14.6 million at April 30, 2007. The
CN$7.5 million decrease in net working capital from April 30,
2007, is primarily attributable to the cash loss of
CN$7.0 million for the nine months ended Jan. 31, 2008.
Going Concern Doubt
MIGENIX Inc. has incurred significant losses since inception and
as at Jan. 31, 2008, had an accumulated deficit of
CN$134.2 million. Management has been able, thus far, to finance
its cash requirements primarily from equity financings and
payments from licensing agreements. Management believes these
conditions raise substantial doubt about the company's ability to
continue as a going concern.
About MIGENIX Inc.
Headquartered in Vancouver, B.C., Canada, with US operations in
San Diego, MIGENIX Inc. (Toronto Stock Exchange: MGI) --
http://www.migenix.com/-- is a drug development company committed
to advancing therapy, improving health, and enriching life by
developing and commercializing drugs primarily in the area of
infectious diseases. The company's clinical programs include drug
candidates for the treatment of chronic hepatitis C infections,
the prevention of catheter-related infections and the treatment of
dermatological diseases.
MILLENIUM IMAGING: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Millenium Imaging, Inc.
10910 SR 70 East
Bradenton, FL 34202
Bankruptcy Case No.: 08-04149
Type of Business: The Debtor provides a full range of diagnostic
imaging services, including MRI, CAT Scans, X-
Ray, and Ultrasound imaging. See
http://www.millenniumimagingfl.com/
Chapter 11 Petition Date: March 28, 2008
Court: Middle District of Florida (Tampa)
Judge: Michael G. Williamson
Debtor's Counsel: Grissim H. Walker, Esq.
(grissim@consumer-lawyers.com)
Consumer Law Center, PA
537 10th Street West
Bradenton, FL 34205
Tel: (941) 761-0363
Fax: (941) 748-4282
http://www.consumer-lawyers.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.
MOVIDA COMMS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Movida Communications, Inc.
aka Movida
1627 Main Street, 11th Floor
Kansas City, MO 64108
Bankruptcy Case No.: 08-10600
Type of Business: The Debtor is a wireless service provider that
offers pay-as-you-go wireless voice and data
communications services using a national
providers digital network. See
http://www.movidacelular.com
Chapter 11 Petition Date: March 31, 2008
Court: District of Delaware (Delaware)
Debtor's Counsel: Michael R. Nestor, Esq.
(bankfilings@ycst.com)
Young Conaway Stargatt & Taylor
The Brandywine Building
1000 West Street, 17th Floor
P.O. Box 391
Wilmington, DE 19899
Tel: (302) 571-6600
Fax: (302) 571-1253
http://www.ycst.com/
Estimated Assets: $10 million to $50 million
Estimated Debts: $50 million to $100 million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Sprint Nextel trade debt $15,941,398
Attn: Randy Bryson
6180 Sprint Parkway
KSOPHH0412-4A203
Strategic Partners
Tel: (913) 315-6480
Fax: (913) 523-8312
Sprint Spectrum, L.P.
Attn: V.P., Law, Marketing
and Sales
6450 Sprint Parkway
Overland Park, KS 66251
Tel: (913) 794-9469
Fax: (913) 794-0720
Attn: Len Kennedy, General
6200 Sprint Parkway
Overland Park, KS 66251
Counsel
Tel: (800) 829-0965
Fax: (913) 315-0736
Brightstar US, Inc. trade debt $4,789,254
Attn: R. Marcelo Claure,
President
2010 Northwest 84th Avenue
Miami, FL 33122
Fax: (305) 477-9072
Attn: Clayton E. Parker, Esq.
Kilpatrick & Lockhart Preston
Gates Ellis, LLP
201 South Biscayne Boulevard,
Suite 2000
Miami, FL 33131
Fax: (305) 358-7095
Telcordia Technologies trade debt $679,615
Attn: Oscar von Bredow
(ovonbred@telcordia.com)
11130 Popes Head Road
Fairfax, VA 22030
Tel: (703) 691-1933
Fax: (703) 691-1481
Attn: Mark Finkelstein
(mfinkels@telcordia.com)
One Telcordia Drive, 4B664
Piscataway, NJ 08854
Tel: (732) 699-6135
Fax: (732) 336-4167
Federal Universal Service Fund taxes $568,016
(USAC)
1259 Paysphere Circle
Chicago, IL 60674
Tel: (202) 776-0200
Fax: (202) 776-0080
Commonwealth of Pennsylvania taxes $174,179
Guerra DeBerry Coody trade debt $78,005
Tax Partners, LLC trade debt $60,039
Time Warner Telecom trade debt $59,772
State of New York taxes $59,721
Latino Cellular, LLC trade debt $53,734
Graphic Consultants trade debt $45,809
Kelly Services, Inc. trade debt $44,278
TopCommm, Inc. trade debt $41,120
Deloitte & Touche LLP trade debt $35,670
Microforum LTD trade debt $33,575
Resource Graphics, Inc. trade debt $30,661
Global Crossing trade debt $30,200
IT Decision Management trade debt $30,025
CCH Inc. trade debt $28,117
Aspen Marketing Services trade debt $26,240
NEW CENTURY: Examiner Suggests Actions Against Officers & KMPG LLP
------------------------------------------------------------------
The 581-page final report of Michael J. Missal -- the appointed
examiner for New Century Financial Corp. and its debtor-affiliates
-- on his investigation on the accounting and financial statement
irregularities, errors or misstatements of the Debtors have been
unsealed.
The Final Report was made available to the public on March 26,
2008, following the Official Committee's withdrawal of its motion
to maintain the Final Report under seal. The Final Report was
filed February 29, 2008, but only the Committee, the U.S. Trustee
and the Debtors were provided copies of the document.
In his findings, Mr. Missal noted that the subprime mortgage
market collapsed with great speed and unprecedented severity,
resulting to financial difficulties among subprime lenders.
Taking the recent subprime crisis into consideration, Mr. Missal
concludes that New Century engaged in a number of significant
improper and imprudent practices related to its loan
originations, operations, accounting and financial reporting
processes. The Examiner also says that KPMG LLP contributed to
certain accounting and financial reporting deficiencies by
enabling them to persist and precipitating New Century's
departures from applicable accounting standards.
Actions Against KPMG and
the Debtors' Former Officers
The Examiner believes that several causes of action may be
available to the estates, including an action against KPMG for
professional negligence and negligent misrepresentation based on
KPMG's breach of its professional standard of care in carrying
out its audit and reviews of New Century's financial statements
and its related systems of internal controls.
As required by the order issued by the U.S. Bankruptcy Court for
the District of Delaware setting forth his appointment as
Examiner, Mr. Missal was tasked to identify any potential claims
that the bankruptcy estates may have arising out of any improper
conduct.
Mr. Missal also says that the estates may assert action against
some former New Century officers to recover certain of the
bonuses paid to them in 2005 and 2006, which were tied to the
company's incorrect financial statements. He avers the two
causes of action could seek "millions of dollars" in recoveries.
The Examiner relates that officers and directors owed New Century
fiduciary duties of loyalty, due care, good faith and candid
disclosure. He has assessed the conduct of certain former and
current officers and directors to determine whether their actions
or inactions may give rise to additional potential causes of
action on behalf of the estates.
Breach of fiduciary duty claims against officers and directors
have strong defenses to overcome, the Examiner states.
The Examiner did not include, in the Final Report, a detailed
discussion of those potential claims. The Examiner, however,
outlined in the Final Report some potential areas of concern
about the conduct and level of care exhibited by the Officers and
Directors.
Loan Originations Issues
New Century's revenues, assets and operations were directly
affected by its subprime lending policies and practices. Hence,
the Examiner holds it is pertinent to New Century's accounting
and financial reporting processes to examine certain issues
related to the company's loan originations, which include:
(i) New Century's "brazen obsession" with increasing loan
originations, without due regard to the risks associated
with that business strategy;
(ii) The increasingly risky nature of New Century's loan
originations, which New Century layered on the risks of
loan products upon the risks of loose underwriting
standards in its loan originations to high risk borrowers;
(iii) New Century's frequent exceptions to its underwriting
guidelines for borrowers, who might not otherwise qualify
for a particular loan;
(iv) Senior management's turning a blind eye to the increasing
risks of New Century's loan originations, and did not take
appropriate steps to manage those risks; and
(v) Senior management's continued feeding on the wave of
investor demands without anticipating the inevitable
requirement to repurchase an increasing number of bad
loans, resulting from the steady increase in early payment
defaults on loans originated by New Century.
Accounting and KPMG Issues
The Examiner also identifies these critical issues that include
New Century's improper accounting practices and KPMG's conduct,
among other things:
-- several claims that KPMG recommended improper changes to
the repurchase reserve calculation that were made in the
second and third quarters of 2006;
-- failure to value properly residual interests that the
Company held in off-balance sheet securitizations, which
represented hundreds of millions of dollars on its balance
sheet;
-- problematic accounting issues in 2005 and 2006 related to
New Century's allowance for loan losses, mortgage servicing
rights, deferral and amortization of loan origination fees
and costs, hedge accounting, and the $77,700,000 of
goodwill that New Century recorded in connection with its
acquisition of the loan origination platform of the prime
mortgage retail division of RBC Mortgage Company;
-- accounting practices and methodologies that were
inconsistent with the Generally Accepted Accounting
Principles or otherwise subject to criticism by KPMG;
-- troubling and puzzling conduct of KPMG, on which KPMG
signed off on a New Century repurchase reserve based on the
estimate that the Company would need to repurchase
$70,000,000 of the loans sold in the fourth quarter of
2005, while KPMG's workpapers showed that the Company needs
to purchase was $140,000,000 of loans;
-- New Century made false and misleading statements in its
public filings, press releases and other communications;
-- an unhealthy friction between the Board of Directors and
Senior Management at a time when the business challenges
would have greatly benefited from a strong collaborative
relationship; and
-- New Century's Internal Audit Department was deficient in a
number of ways, including not giving adequate attention to
kickouts and repurchase claims, and not thoroughly
assessing corporate or operational risks.
As a consequence to its accounting failures, New Century
understated its repurchase reserve by as much as 1,000% in the
third quarter of 2006, reported a profit of $63,500,000 in the
third quarter of 2006, when it should have reported a loss and
should have announced earnings below expectations, the Examiner
points out. He states that KPMG contributed to these failings in
critical ways because KPMG failed to question or test certain
important assumptions in a rigorous manner, among other
inadequacies.
"The KPMG engagement team acquiesced in New Century's departures
from prescribed accounting methodologies and often resisted or
ignored valid recommendations from specialists within KPMG,"
Mr. Missal tells the Court.
The Examiner further notes that while New Century had an active
Audit Committee, it failed to focus on certain issues of crucial
importance to the Company, like loan quality issues, ensuring a
sustained analysis by Management of entity-wide risk, key
operational risks and proper supervision of New Century's
Internal Audit Department. Had the Audit Committee addressed the
issues more effectively and with more urgency, some of the
accounting and operational failures may have been avoided, he
continues.
A copy of the Examiner's Final Report is available for free at:
http://bankrupt.com/misc/NewCentury_FinalExaminerReport.pdf
KPMG Says Work Performed With Standards
The Washington Post reports that KPMG spokesman Dan Ginsburg,
said "it's not unusual for the work of an auditor to be reviewed
by a bankruptcy examiner. We're confident that any objective
review will confirm that our work was performed in accordance
with professional standards."
Mr. Ginsburg added, according to the Orange County Register, "We
strongly disagree with the report's conclusions concerning KPMG.
We believe that an objective review of the facts and
circumstances will affirm our position."
About New Century
Founded in 1995, Irvine, Calif.-based New Century Financial
Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real
estate investment trust, providing mortgage products to borrowers
nationwide through its operating subsidiaries, New Century
Mortgage Corporation and Home123 Corporation. The company offers
a broad range of mortgage products designed to meet the needs of
all borrowers.
The company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2007 (Bankr. D. Del. Lead Case No.
07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and
Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at
Richards, Layton & Finger, P.A., represent the Debtors. The
Official Committee of Unsecured Creditors selected Hahn & Hessen
as its bankruptcy counsel and Blank Rome LLP as its co-counsel.
When the Debtors filed for bankruptcy, they listed total assets
of $36,276,815 and total debts of $102,503,950. The Debtors'
exclusive period to file a plan expired on Jan. 28, 2008. (New
Century Bankruptcy News, Issue No. 36; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
NEXSTAR FINANCE: Moody's Chips Probability of Default Rating to B3
------------------------------------------------------------------
Moody's Investors Service downgraded Nexstar Finance Holdings,
Inc.'s probability-of-default rating to B3 from B2. In addition,
Moody's affirmed Nexstar's Corporate Family Rating of B2 and
downgraded the ratings for Nexstar's 11.375% Senior Discount Notes
due 2013 and 7.0% Senior Subordinated Notes. Moody's also
upgraded the ratings for Nexstar Broadcasting, Inc.'s and Mission
Broadcasting, Inc.'s senior secured credit facilities. The
outlook is developing. Moody's also assigned an SGL-4 Speculative
Grade Liquidity rating for Nexstar.
The PDR downgrade reflects the heightened probability of default
given the extremely limited cushion for the next few quarters
under Nexstar Broadcasting Inc.'s senior secured credit facility
covenants and correspondingly weak liquidity profile. The PDR
would otherwise be lowered further were it not for S&P's belief
that the company will likely be able to get a waiver and an
amendment in the event that it does breach its financial
maintenance covenants and is thereby subject to a technical
default. The developing outlook incorporates the uncertainty
surrounding the covenant compliance situation.
The rating upgrades for the senior secured credit facilities
reflect their senior-most position in the capital structure and
Moody's shift to an above-average recovery expectation for the
consolidated enterprise (and correspondingly lower LGD rates for
the secured debt) in an event of default scenario based on the
company's reasonably sound business profile and moderate perceived
loan-to-value, and notwithstanding near-term liquidity concerns.
The senior discount notes and the senior subordinated notes are
being downgraded to reflect the fact that they fully bear the
incremental expected credit loss associated with the heightened
probability of default (and notwithstanding some modest
improvement in projected recovery rates based on the revised
above-average family recovery rate) due entirely to their junior
ranking in the consolidated capital structure.
The SGL-4 speculative grade liquidity rating is significantly
influenced by the company's precarious ability to remain in
compliance with its financial maintenance covenants, and a modest
perceived ability to quickly monetize non-core assets if needed.
These weaknesses are balanced by the company's modestly positive
free cash flow (prior to satisfaction of the expected paydown
related to the high yield discount obligation, using cash drawn
under the revolver) as forecast, which is supplemented by excess
cash balances and revolver availability (subject to ongoing
covenant compliance).
Moody's has taken these ratings actions:
Nexstar Finance Holdings, Inc.
-- Corporate family rating: Affirmed B2
-- Probability-of-default rating: Downgraded to B3 from B2
-- 11.375% senior discounts notes due 2013: Downgraded to Caa2
from Caa1 (to LGD 5, 85% from LGD 6, 93%)
-- Speculative Grade Liquidity Assessment: Assigned SGL-4
Nexstar Broadcasting, Inc. (including Mission Broadcasting, Inc.)
-- $98 million revolving credit facilities due 2012: Upgraded to
Ba2 from Ba3 (to LGD 2, 15% from LGD 2, 26%)
-- $355 million senior secured term loans due 2012: Upgraded to
Ba2 from Ba3 (to LGD 2, 15% from LGD 2, 26%)
-- 7% senior subordinated notes due 2014: Downgraded to Caa1
from B3 (to LGD 4, 61% from LGD 5, 76%)
The rating outlook is developing.
Nexstar's ratings reflect its high debt-to-EBITDA leverage ratio
of 7.9x (for the fiscal year ended Dec. 31, 2007) and limited
cushion under the company's secured credit facility covenants.
The ratings also incorporate the inherent cyclicality of the
advertising business and the increasing business risk associated
with declining trends in broadcast television audiences and
increasing cross-media competition for advertising dollars.
Nexstar's ratings are supported by the company's diversified
geographic footprint, continued local market focus, and limited
competition in most markets. The company also benefits from
diverse network affiliations and its local service agreements with
Mission Broadcasting that expand programming coverage.
Nexstar Broadcasting Group, Inc., based in Irving, Texas, owns and
operates or provides services to 50 television stations in 29
markets. The company recorded revenue of approximately
$267 million during year ended Dec. 31, 2007.
NOMURA ASSET: Fitch Cuts Rating to BB from BB+ on Cl. B-6 Certs.
----------------------------------------------------------------
Fitch Ratings has taken rating actions on these Nomura Asset
Acceptance Corp. mortgage pass-through securities:
Series 2003-A2
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AAA';
-- Class M-2 affirmed at 'AAA';
-- Class B-1 affirmed at 'AAA';
-- Class B-2 affirmed at 'AA';
-- Class B-3 affirmed at 'AA-';
-- Class B-4 affirmed at 'A';
-- Class B-5 affirmed at 'BBB';
-- Class B-6 downgraded to 'BB' from 'BB+'.
Series 2003-A3
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA+';
-- Class M-2 affirmed at 'A+';
-- Class B-1 affirmed at 'BBB+'.
The affirmations, affecting approximately $87 million of
outstanding certificates, reflect a stable relationship between
credit enhancement and future loss expectations. The negative
rating actions, affecting approximately $1.5 million of
outstanding certificates, reflect deterioration in the
relationship between future loss expectations and credit support
levels.
NOVELIS INC: S&P Changes Outlook to Stable; Confirms 'BB-' Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Atlanta-
based Novelis Inc. to stable from negative. At the same time, S&P
affirmed its ratings, including the 'BB-' long-term corporate
credit rating, on Novelis. Standard & Poor's also withdrew its
'B-2' short-term counterparty credit rating on the company, due to
lack of market need.
"The outlook revision to stable factors in an expected improvement
in Novelis' financial performance, the parent-subsidiary link
between Hindalco and Novelis, and expected support from the parent
to the subsidiary entity," said Standard & Poor's credit analyst
Donald Marleau. "As the credit quality of Novelis and Hindalco
are linked to some extent, any change in the credit quality of
Hindalco would have a similar effect on the Novelis ratings in the
short-to-medium term," Mr. Marleau added.
The ratings on Novelis reflect the company's aggressive financial
risk profile, characterized by a heavy debt burden, poor cash
generation, and unstable margins. Alleviating these weaknesses
are the company's leading position in the global aluminum rolled
products market, and extensive geographic and product diversity.
The ratings also reflect the support of its parent, Hindalco
Industries Ltd., for which Novelis is a long-term, strategically
important investment. Standard & Poor's believes that this
strategic importance provides good incentive for Hindalco to
support its $3.5 billion investment.
Notwithstanding poor results in the last two years, Novelis' weak
financial performance should improve through 2008 despite the
economic slowdown in North America and Europe, as the company
improves its ability to manage the operating margin and liquidity
risks associated with can-sheet price ceilings and strong aluminum
prices. Hindalco acquired Novelis in May 2007, only two years
after Novelis was spun out of integrated aluminum producer Alcan
Inc. (BBB+/Watch Pos/A-2).
The outlook is stable. The outlook factors in an expected
improvement in Novelis' financial performance, the parent-
subsidiary link between Hindalco and Novelis, and expected support
from the parent to the subsidiary entity. Nevertheless, Novelis'
standalone credit quality will continue to face pressure from debt
that is persistently high for the rating, as well as slowing core
markets.
Downward pressure on the Novelis ratings is likely if
the combination of hedging strategies and changes to its sales
contracts does not effectively reduce its exposure to commodity
metals prices in the next 12-18 months, such that cash flow
stability and the debt reduction pace do not improve. With some
debt reduction in the next several years, the company's capital
structure could better correspond to its satisfactory business
risk, thereby putting upward pressure on the ratings.
POWERMATE HOLDING: Court OKs Retention of Kurtzon as Claims Agent
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorizes
Powermate Holding Corporation and its debtor-affiliates to retain
Kurtzman Carson Consulting LLC as its notice, claims and balloting
agent.
Kurtzman Carson Consulting LLC will:
a. assist the Debtors with all required notices in this Chapter
11 case including:
1. notice of commencement of these chapter 11 cases and the
initial meeting of creditors under section 341(a) of the
Bankruptcy Code;
2. notice of claims bar dates;
3. notice of objections to claims;
4. notices of hearings on the Debtors' disclosure
statement
and confirmation of the Debtors' chapter 11 plan, and;
5. such other miscellaneous notices as the Debtors or
the
Court may deem necessary or appropriate for the orderly
administration of these chapter 11 cases.
b. within five days of the service of a particular notice, file
with the Clerk's Office a certificate or affidavit of
service that includes:
1. a copy of the notice served;
2. a list of persons upon whom the notice was served along
with their addresses, and;
3. the date and manner of service.
c. receive, examine and maintain copies of all proofs of claim
and proofs of interest filed.
d. maintain official claims registers in each of the Debtors'
cases by docketing all proofs of claim and proofs of interest
in the applicable claims database that includes these
information for each claim or interest asserted:
1. the name and address of the claimant or interest holder
and any agent, if the proof of claim or interest was filed
by an agent;
2. the date the proof of claim or proof of interest was
received by the agent or the Court;
3. the claim number assigned to the proof of claim or
interest;
4. the asserted amount and classification of the claim, and;
5. the applicable Debtor against which the claim or interest
is asserted.
e. implement necessary security measures to ensure the
completeness and integrity of the claims registers.
f. transmit to the clerk's office a copy of the claims registers
on a weekly basis, unless requested by the clerk's office on
a more or less frequent basis.
g. maintain an up-to-date mailing list for all entities that
have filed proofs of claim or interest and make the list
available upon request to the clerk's office or any party in
interest.
h. provide access to the public for examination of copies of
the proofs of claim or proofs of interest filed in the case
without charge during regular business hours.
i. record all transfers of claims pursuant to Bankruptcy Rule
3001(e) and provide notice of the transfers.
j. comply with applicable federal, state, municipal and local
statutes, ordinances, rules, regulations, orders and other
requirements;
l. provide such other claims processing, noticing and related
administrative services as may be requested from time to time
by the Debtors.
m. oversee the distribution of the applicable solicitation
material to each holder of a claim against or interest in the
Debtor.
n. respond to mechanical and technical distribution and
solicitation inquiries.
o. receive, review and tabulate the ballots cast adn make
determinations with respect to each ballot as to its
timeliness, compliance with the Bankruptcy Code, Bankruptcy
Rules and Procedures ordered by the Court, subject to its
review and determination.
p. certify the results of the balloting to the Court.
q. perform related plan-solicitation services as may be
requested by the Debtors.
The Debtors and the firm have agreed that Kurtzman will invoice
the Debtor's monthly for services rendered to the Debtors during
the preceding month. Under the agreement, the Debtors have paid
the firm a retainer of $50,000, which may be applied immediately
in the satisfaction of the Debtor's obligations.
Kurtzman Carson Consulting LLC believes it neither holds nor
represents any interest adverse to the Debtors' or its estates and
is a disinterested person as defined in section 101(14) of the
Bankruptcy Code.
About Powermate Holding
Headquartered in Aurora, Illinois, Powermate Holding Corp. --
http://www.powermate.com/-- anufacturers of portable and home
standby generators, air compressors, and pressure washers. The
company and two of its affiliates filed for Chapter 11 protection
on March 17, 2008 (Bankr. D. Del. Lead Case No.08-10498).
Kenneth J. Enos, Esq.. and Michael R. Nestor, Esq., at Young,
Conaway, Stargatt & Taylor, represent the Debtors. No Official
Committee of Unsecured Creditors has been appointed in these
cases. When the Debtors filed for protection against their
creditors, they listed assets and debt between $50 million to
$100 million.
POWERMATE HOLDING: Section 341(a) Meeting Scheduled for April 25
----------------------------------------------------------------
The U.S. Trustee for Region 3 will convene a meeting of Powermate
Holding Corporation's creditors on April 25, 2008 at 9:30 a.m., at
J. Caleb Boggs Federal Building, 2nd floor, room 2112.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Aurora, Illinois, Powermate Holding Corp. --
http://www.powermate.com/-- anufacturers of portable and home
standby generators, air compressors, and pressure washers. The
company and two of its affiliates filed for Chapter 11 protection
on March 17, 2008 (Bankr. D. Del. Lead Case No.08-10498).
Kenneth J. Enos, Esq.. and Michael R. Nestor, Esq., at Young,
Conaway, Stargatt & Taylor, represent the Debtors. No Official
Committee of Unsecured Creditors has been appointed in these
cases. When the Debtors filed for protection against their
creditors, they listed assets and debt between $50 million to
$100 million.
QUEBECOR WORLD: Court OKs Prepetition Payments to 376 Managers
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Quebecor World Inc. and its debtor-affiliates to pay
the accrued prepetition payments due under their Management
Incentive Compensation Plan and Plant Based Incentive Plan.
The Debtors sought the Court's permission to pay 376 managers
prepetition payments due under certain incentive plans for the
second half of 2007, which will become due and owing on March 31,
2008:
Prepetition
Plan No. of Employees Amount Due
---- ----------------- ----------
MICP 135 $2,627,776
PBIP 241 $1,949,760
The Court, however, has not yet given the Debtors permission to
continue their Management Incentive Compensation Plan and the
Plant Based Incentive Plan postpetition and in the ordinary
course of business. The Court will consider the request in the
next omnibus hearing.
As reported in the Troubled Company Reporter on March 24, 2008,
according to Michael Canning, Esq. at Arnold & Porter LLP, in New
York, the Debtors maintain two annual incentive plans for its
management employees: the Management Incentive Compensation Plan
and the Plant Based Incentive Plan. Mr. Canning notes that these
Incentive Plans are integral components of how the Debtors reward
and encourage their important managerial employees.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well as
print solutions to retailers, branded goods companies, catalogers
and to publishers of magazines, books and other printed media. It
has 127 printing and related facilities located in North America,
Europe, Latin America and Asia. In the United States, it has 82
facilities in 30 states, and is engaged in the printing of books,
magazines, directories, retail inserts, catalogs and direct mail.
In Canada it has 17 facilities in five provinces, through which it
offers a mix of printed products and related value-added services
to the Canadian market and internationally.
The company is an independent commercial printer in Europe with
19 facilities, operating in Austria, Belgium, Finland, France,
Spain, Sweden, Switzerland and the United Kingdom. In March 2007,
it sold its facility in Lille, France. Quebecor World (USA) Inc.
is its wholly owned subsidiary.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the
CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary,
along with other U.S. affiliates, filed for chapter 11 bankruptcy
on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-10152). Anthony
D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors
in their restructuring efforts. The Official Committee of
Unsecured Creditors is represented by Akin Gump Strauss Hauer &
Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of $5,554,900,000, total
liabilities of $3,964,800,000, preferred shares of $175,900,000,
and total shareholders' equity of $1,414,200,000.
The company has until May 20, 2008, to file a plan of
reorganization in the Chapter 11 case. The Debtors' CCAA stay has
been extended to May 12, 2008. (Quebecor World Bankruptcy News,
Issue No. 10; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Feb. 13, 2008,
Moody's Investors Service assigned a Ba2 rating to the
$400 million super priority senior secured revolving term loan
facility of Quebecor World Inc. as a Debtor-in-Possession. The
related $600 million super priority senior secured term loan was
rated Ba3 (together, the DIP facilities). The RTL's better asset
value coverage relative to the TL accounts for the ratings'
differential.
QUEBECOR WORLD: Silvex Seeks Recovery from Insurance Claims
-----------------------------------------------------------
Silvex Designs, Inc., asks the U.S. Bankruptcy Court for the
Southern District of New York to lift the automatic stay
to allow it to prosecute its lawsuit against Quebecor World Inc.
and its affiliates, in order to recover from the Debtors'
insurance carrier claims for damages, through trial or settlement.
According to Beata Shapiro, Esq., at Wilson, Elser, Moskowitz,
Edelman & Dicker LLP, in Stamford, Connecticut, on Aug. 29, 2006,
Silvex retained Quebecor World Logistics, Inc., doing business as
QW Express, to transport a consignment of 4,009 pounds of sterling
silver jewelry from Silvex's office in New York to a trade show in
Arizona. Silvex claims that 1,000 pounds of the goods, amounting
to $332,872, were missing upon their consignment in Arizona.
The Debtors maintained an insurance policy with Navigators Ins.
Co. through Navigators Management (UK) Ltd, which was effective
at the time the goods were lost, and which policy affords
coverage for Silvex's damages, Ms. Shapiro says.
Silvex instituted an action in the U.S. District Court for the
Southern District of New York on May 11, 2007, against QW Express
and other parties involved in the shipment.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well as
print solutions to retailers, branded goods companies, catalogers
and to publishers of magazines, books and other printed media. It
has 127 printing and related facilities located in North America,
Europe, Latin America and Asia. In the United States, it has 82
facilities in 30 states, and is engaged in the printing of books,
magazines, directories, retail inserts, catalogs and direct mail.
In Canada it has 17 facilities in five provinces, through which it
offers a mix of printed products and related value-added services
to the Canadian market and internationally.
The company is an independent commercial printer in Europe with
19 facilities, operating in Austria, Belgium, Finland, France,
Spain, Sweden, Switzerland and the United Kingdom. In March 2007,
it sold its facility in Lille, France. Quebecor World (USA) Inc.
is its wholly owned subsidiary.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the
CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary,
along with other U.S. affiliates, filed for chapter 11 bankruptcy
on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-10152). Anthony
D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors
in their restructuring efforts. The Official Committee of
Unsecured Creditors is represented by Akin Gump Strauss Hauer &
Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of $5,554,900,000, total
liabilities of $3,964,800,000, preferred shares of $175,900,000,
and total shareholders' equity of $1,414,200,000.
The company has until May 20, 2008, to file a plan of
reorganization in the Chapter 11 case. The Debtors' CCAA stay has
been extended to May 12, 2008. (Quebecor World Bankruptcy News,
Issue No. 10; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Feb. 13, 2008,
Moody's Investors Service assigned a Ba2 rating to the
$400 million super priority senior secured revolving term loan
facility of Quebecor World Inc. as a Debtor-in-Possession. The
related $600 million super priority senior secured term loan was
rated Ba3 (together, the DIP facilities). The RTL's better asset
value coverage relative to the TL accounts for the ratings'
differential.
QUEBECOR WORLD: Wants to Employ Three Real Estate Consultants
-------------------------------------------------------------
Quebecor World Inc. and its affiliates seek the U.S. Bankruptcy
Court for the Southern District of New York's authority to employ
(a) Prime Locations, LLC, (b) George Comfort & Sons, Inc. and (c)
The CORE Network for various real estate consulting services, nunc
pro tunc to March 1, 2008.
CORE is a non-profit national network of approximately 40 real
estate firms and approximately 1,000 individual brokers and
consultants. CORE is experienced in representing clients in
numerous aspects of chapter 11 business operations and is well
qualified to represent the Debtors in the Chapter 11 cases.
CORE's national reach enables it to provide services to clients
with real estate interests across the United States.
Prime is affiliated with CORE's network of real estate firms and
is a nationally recognized real estate consulting firm with
extensive and specific experience in valuing portfolios,
negotiating leases, effecting sales of assets in Chapter 11 and
Chapter 7 cases, reduction of landlord claims and expert
testimony.
Comfort is a national real estate firm, with extensive knowledge
of the Debtors' real estate portfolio and vast experience in
maximizing value and minimizing liabilities related to leased and
owned properties.
Under Work Authorization #1, the RE Consultants will prepare a
Real Market Valuation report setting forth the market rent or
market value for 96 sites identified by the Debtors. The
Valuation Services will include, as appropriate:
(a) review of all applicable leases, lease summaries, charts,
deeds, title documents and related documents provided by
the Debtors;
(b) communications with real estate professionals and retail
operators knowledgeable with respect to the locations of
the Debtors' sites;
(c) determination of the market value and market rent for each
site; and
(d) determination of the marketability, financing and
disposition potential of the sites based on an analysis of
the market and documents provided by the Debtors.
With respect to Work Authorization #2, the services to be
provided by the RE Consultants relate to lease negotiations and
modifications, and, to the extent advisable, arranging for sales
of certain of the Debtors' leasehold and fee interests. The
Restructuring Services will include:
(i) re-negotiating certain of the Debtors' leases;
(ii) selling certain leasehold interests and fee interests; and
(iii) locating and negotiating leases for replacement locations
for existing leases.
The Debtors have determined that the joint retention of CORE,
Prime and Comfort will enable them to undertake a restructuring
of their real estate interests quickly and efficiently, and that
access to more than one professional firm will increase the speed
with which the Debtors can undertake an analysis of their real
estate interests and begin to make decisions regarding
restructuring or disposing of certain assets.
According to Michael Canning, Esq., at Arnold & Porter LLP, in
New York, the need for multiple real estate advisors arises in
large part from the fact that the Debtors have a large number of
geographically dispersed real estate holdings, and the Debtors
believe that there is little risk of duplication of effort by
CORE, Prime and Comfort. Nevertheless, the Debtors are mindful
of concerns with respect to duplication of efforts when multiple
professionals are retained. In this regard, the Debtors, CORE,
Prime and Comfort have agreed to communicate regularly and work
closely to ensure that no such duplication occurs and, in all
events, the Debtors will only be responsible for one fee in
connection with each transaction.
The Debtors and the RE Consultants have negotiated separate
compensation arrangements for each of the Valuation Services and
the Restructuring Services.
For the Valuation Services, the RE Consultants will charge the
Debtors $250 for each of the 96 locations to be the subject of
the Real Market Valuation report, for a total fee of $24,000.
This fee will be a comprehensive fee for the Valuation Services,
with the exception of any travel expenses incurred by the RE
Consultants on account of visits to the Debtors at their offices
or elsewhere at the Debtors' request.
As compensation for the Restructuring Services, the RE
Consultants will receive fees based on value realized from
successful transactions:
(a) 5% of the first $200,000 in savings realized from
each lease renegotiation and 4% of any savings in excess
of $200,000 realized from the lease renegotiation;
(b) 5% of the first $200,000 in cash proceeds realized from
the sale of a leasehold interest and 4% of any cash
proceeds in excess of $200,000 realized from the sale of
the leasehold interest;
(c) 5% of the first $200,000 of gross cash proceeds realized
from the sale of a fee interest and 4% of any gross cash
proceeds in excess of $200,000 realized from the sale of
the fee interest; and
(d) a flat fee of $2,500 if the RE Consultants are successful
in arranging, at the express request, and to the
satisfaction of, the Debtors, a transaction where the
additional value is unquantifiable, such as an option to
purchase, extend or terminate a lease.
The RE Consultants will not be entitled to any fee in the event
that the Debtors reject a leasehold interest or do not realize
savings or cash proceeds. The Debtors believe that the fee
structure will be beneficial to their estates because the ability
of the RE Consultants to earn a fee of 4% on all savings realized
above $200,000 creates a strong incentive for the RE Consultants'
professionals to maximize the Debtors' savings in each
restructuring or asset disposition.
With respect to both the Valuation Services and the Restructuring
Services, the fees are aggregate fees payable to the RE
Consultants collectively. In no event will multiple fees be
payable to more than one of the RE Consultants on account of a
single valuation or restructuring transaction.
The parties do not presently contemplate that the RE Consultants'
professionals will be compensated on an hourly basis, other than
in the event it becomes necessary for one of the RE Consultants'
professionals to provide expert testimony in connection with the
RE Consultants' services to the Debtors. To the extent that
hourly compensation is applicable, the RE Consultants will be
entitled to receive compensation from the Debtors' bankruptcy
estates at these rates:
Level Rate Per Hour
----- -------------
Managing Directors $400 to $450
Directors $300 to $350
Associates $100 to $250
According to Mr. Canning, CORE and Dana Pike, senior vice
president of Comfort, have both performed services for the
Debtors in the past. Mr. Pike holds a longstanding relationship
with the Debtors and is familiar with their business operations
and real estate interests, Mr. Canning adds.
Mr. Canning assures the Court that none of the RE Consultants
hold any claim against the Debtors on account of any unpaid fees
or unreimbursed expenses. Prime, Comfort and CORE are each a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code as modified by Section 1107(b), Mr.
Canning asserts. The RE Consultants do not hold or represent any
interest adverse to the estate that would impair their ability to
objectively perform professional services for the Debtors in
accordance with Section 327, Mr. Canning says.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well as
print solutions to retailers, branded goods companies, catalogers
and to publishers of magazines, books and other printed media. It
has 127 printing and related facilities located in North America,
Europe, Latin America and Asia. In the United States, it has 82
facilities in 30 states, and is engaged in the printing of books,
magazines, directories, retail inserts, catalogs and direct mail.
In Canada it has 17 facilities in five provinces, through which it
offers a mix of printed products and related value-added services
to the Canadian market and internationally.
The company is an independent commercial printer in Europe with
19 facilities, operating in Austria, Belgium, Finland, France,
Spain, Sweden, Switzerland and the United Kingdom. In March 2007,
it sold its facility in Lille, France. Quebecor World (USA) Inc.
is its wholly owned subsidiary.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the
CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary,
along with other U.S. affiliates, filed for chapter 11 bankruptcy
on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-10152). Anthony
D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors
in their restructuring efforts. The Official Committee of
Unsecured Creditors is represented by Akin Gump Strauss Hauer &
Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of $5,554,900,000, total
liabilities of $3,964,800,000, preferred shares of $175,900,000,
and total shareholders' equity of $1,414,200,000.
The company has until May 20, 2008, to file a plan of
reorganization in the Chapter 11 case. The Debtors' CCAA stay has
been extended to May 12, 2008. (Quebecor World Bankruptcy News,
Issue No. 10; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Feb. 13, 2008,
Moody's Investors Service assigned a Ba2 rating to the
$400 million super priority senior secured revolving term loan
facility of Quebecor World Inc. as a Debtor-in-Possession. The
related $600 million super priority senior secured term loan was
rated Ba3 (together, the DIP facilities). The RTL's better asset
value coverage relative to the TL accounts for the ratings'
differential.
QUEBECOR WORLD: Shutting Down Magazine Facility in Magog, Quebec
----------------------------------------------------------------
Quebecor World Inc. is closing its Magog, Quebec facility. The
Magog facility produced magazines and retail inserts for the U.S.
and Canadian markets. The closure is part of the company's global
retooling and restructuring program begun three years ago. The
program which is being completed in 2008 is designed to reduce
costs and improve productivity across the company's global
platform by consolidating volume in larger and more efficient
facilities. This program has included investing in and deploying
state-of-the-art presses and accompanying technology in fewer but
larger facilities to better service customers and to improve
performance.
The closure will result in the loss of approximately 300 full time
positions. Currently 200 full time employees are on temporary
layoff which will be made permanent. All employees including those
on lay off will receive a minimum of 16 weeks of indemnity as
provided for by the Quebec Labour Standards. Quebecor World will
help its employees find new jobs by providing them with
outplacement services and the company will work with the union and
the appropriate government agencies to assist in
retraining initiatives.
The company will begin closing down the facility immediately.
Currently the facility is only operating at 20% of its capacity
due to the reduced demand at this time of the year. The Magog
facility began operations in 1971. Quebecor World employs
approximately 2,000 employees at six facilities in Quebec,
printing magazines, catalogs, retail inserts and directories.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well as
print solutions to retailers, branded goods companies, catalogers
and to publishers of magazines, books and other printed media. It
has 127 printing and related facilities located in North America,
Europe, Latin America and Asia. In the United States, it has 82
facilities in 30 states, and is engaged in the printing of books,
magazines, directories, retail inserts, catalogs and direct mail.
In Canada it has 17 facilities in five provinces, through which it
offers a mix of printed products and related value-added services
to the Canadian market and internationally.
The company is an independent commercial printer in Europe with
19 facilities, operating in Austria, Belgium, Finland, France,
Spain, Sweden, Switzerland and the United Kingdom. In March 2007,
it sold its facility in Lille, France. Quebecor World (USA) Inc.
is its wholly owned subsidiary.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the
CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary,
along with other U.S. affiliates, filed for chapter 11 bankruptcy
on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-10152). Anthony
D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors
in their restructuring efforts. The Official Committee of
Unsecured Creditors is represented by Akin Gump Strauss Hauer &
Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of $5,554,900,000, total
liabilities of $3,964,800,000, preferred shares of $175,900,000,
and total shareholders' equity of $1,414,200,000.
The company has until May 20, 2008, to file a plan of
reorganization in the Chapter 11 case. The Debtors' CCAA stay has
been extended to May 12, 2008. (Quebecor World Bankruptcy News,;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Feb. 13, 2008,
Moody's Investors Service assigned a Ba2 rating to the
$400 million super priority senior secured revolving term loan
facility of Quebecor World Inc. as a Debtor-in-Possession. The
related $600 million super priority senior secured term loan was
rated Ba3 (together, the DIP facilities). The RTL's better asset
value coverage relative to the TL accounts for the ratings'
differential.
RECKSON OPERATING: S&P Holds 'BB+' Senior Unsecured Debt Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Reckson
Operating Partnership L.P. to stable from positive. In addition,
S&P affirmed its 'BBB-' corporate credit and 'BB+' senior
unsecured debt ratings on the company. The rating actions affect
$1.06 billion of rated senior unsecured notes.
"The outlook revision reflects decelerating market fundamentals in
the company's core Manhattan office market, which reduces the
potential for an upgrade given our expectation that Reckson's key
credit metrics are unlikely to improve in the near term," said
credit analyst Elizabeth Campbell. "The rating on the company
continues to reflect the implied credit quality of its unrated
parent, SL Green Realty Corp., and the ratings on Reckson's
publicly rated unsecured bonds, including the exchangeable
debentures, remain one notch below the issuer credit rating,
reflecting their subordination to secured creditors at SL Green."
SL Green's portfolio-recycling activities of the past few years
have improved asset quality and resulted in a more defensible
portfolio. A moderately leveraged balance sheet and manageable
lease expirations should support stable cash flows despite S&P's
expectation that Midtown Manhattan office market fundamentals will
weaken, limiting upward rating momentum at this time. Should the
Manhattan office market experience more dramatic or prolonged
weakness such that the company's gain-adjusted debt coverage
metrics decline significantly, S&P could revise its outlook and
lower its ratings.
RED HAT: Revenue Growth Cues S&P's Rating Upgrade to 'BB-' From B+
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Raleigh, North Carolina-based Red Hat Inc. to 'BB-' from
'B+'. The upgrade reflects Red Hat's consistent growth in
revenues and operating earnings and improving financial profile.
The outlook is stable.
"The ratings on Red Hat reflect the company's relatively narrow
business profile, modest scale relative to other rated software
companies, rapid technology evolution, and high leverage--based on
total debt," said Standard & Poor's credit analyst Molly Toll-
Reed. "These concerns are offset partially by barriers to entry
provided by the large number of independent software and hardware
vendors, who certify their products to work with Red Hat, and
liquidity and cash flow that are strong for the rating level."
Red Hat provides open-source operating and middleware software and
related services predominantly to large enterprise customers.
REMOTE DYNAMICS: Posts Approximately $8 Mil. Stockholder's Deficit
------------------------------------------------------------------
Remote Dynamics reported total stockholders' deficiency of $8.259
million resulting from total assets of $6.131 million and total
liabilities of $14.390 million.
"The company made a significant amount of progress this year as we
continued to implement the transition plan that we started in late
2006," Gary Hallgren, chief executive officer of Remote Dynamics,
said. "Although, because of this transition and our reverse
merger accounting, it is difficult to make year-over-year
comparisons, we believe our results demonstrate the strength of
our business and the quality of our operations.
"In 2007, we completed a significant cost and operational-based
restructuring with the objective of making our business self-
supporting and eventually profitable," Mr. Hallgren continued.
"The restructuring included rightsizing our workforce, clearing
away non-critical expenses, reducing debt from our legacy
business, and developing a sales and marketing strategy to
accelerate unit sales and subscriber growth."
"We are now focused on expanding our footprint in the industry and
gaining significant traction in this marketplace," Mr. Hallgren
added.
"The REDIview product line will provide the foundation for our
revenue growth in the coming year and we expect to enhance the
product line by adding new functionality in the areas of
dispatching, security, and maintenance," Mr. Hallgren concluded.
"We also will remain focused on increasing units in service and
revenue, while improving financial results."
Status of Secured Convertible Notes and Liquidity
Subsequent to the end of the year, Remote Dynamics disclosed that
approximately $2,669,891 in principal amount of its outstanding
secured convertible notes have reached their maturity date and are
due and payable. In addition, the company is not in compliance
with certain of its other obligations relating to its secured
convertible notes. The failure to comply with the obligations
relating to these securities exposes the company to demands for
immediate repayment as well as default interest and liquidated
damages claims by the security holders.
"Our liquidity situation remains challenging," Mr. Hallgren
stated. "We plan to continue to explore alternatives to
restructure or otherwise satisfy our obligations to our note
holders."
"However, we do not currently have the cash on hand to repay
amounts due under the notes if the holders elect to exercise their
remedies," Mr. Hallgren expressed.
About Remote Dynamics
Based in Plano, Texas, Remote Dynamics Inc. (OTC BB: REDI.OB) --
http://www.remotedynamics.com/-- markets, sells and supports a
state-of-the-art asset tracking and fleet management solution that
contributes to higher customer revenues, enhanced operator
efficiency and improved cost control. Combining the technologies
of the global positioning system (GPS) and wireless technologies,
the company's solution improves customers' operating efficiencies
through real-time status information, exception-based reporting,
and historical analysis.
* * *
As reported in the Troubled Company Reporter on Jan., 22, 2007,
KBA Group LLP, in Dallas, Texas, expressed substantial doubt about
Remote Dynamics Inc.'s ability to continue as a going concern
after auditing the company's financial statements for the year
ended Aug. 31, 2006. The auditing firm pointed to the company's
significant working capital deficit, recurring losses, and
negative flows from operating activities.
SCOTTISH RE: Postpones 2007 Earnings Release and Form 10-K Filing
-----------------------------------------------------------------
Scottish Re Group Limited postponed the release of results for the
fourth quarter and the filing of its form 10-K for the year ended
Dec. 31, 2007. The company previously expected to report results
for the fourth quarter of 2007 on March 27, 2008.
On March 12, 2008, the company filed a form 12b-25 with the
Securities and Exchange Commission stating that it was postponing
the filing of its annual report on form 10-K for the year ended
Dec. 31, 2007 beyond the due date and that it intended to file its
form 10-K on or about April 1, 2008 so that the company could:
(i) complete its process of evaluating mark-to-market
valuations and other-than-temporary impairments in the
carrying value of its available-for-sale securities;
(ii) address the accounting and disclosure requirements arising
from the company's recently announced change in strategy;
and
(iii) allow sufficient time for the company's independent
registered public accounting firm, Ernst & Young LLP, to
complete its audit of the company's consolidated financial
statements for the year ended Dec. 31, 2007.
The company has filed with the Securities and Exchange Commission
an amendment to its form 12b-25.
In light of continuing deterioration in the credit markets and the
resulting further declines in the market value of the company's
investment portfolio subsequent to the fiscal year end, the
company has determined, in consultation with Ernst & Young LLP,
that additional work is required to evaluate and conclude on the
amount of other-than-temporary impairment charges to be recognized
in the consolidated financial statements in accordance with US
GAAP.
The company's determination of other-than-temporary impairments
for securities classified as available-for-sale involves a variety
of assumptions and estimates and includes assessments of risks and
uncertainties associated with general economic conditions as well
as specific conditions affecting specific issuers. The company's
other-than-temporary impairment methodology includes an analysis
of gross unrealized losses for securities where the estimated fair
value has declined significantly below cost or amortized cost.
Factors being considered by the company include the length of time
fair value has been below cost, credit worthiness of the issuer,
position of the security in the issuer's capital structure, the
presence and estimated value of collateral or other credit
enhancement, length of time to maturity, interest rates and the
company's intent and ability to hold the security until the market
value recovers.
The company is conducting a detailed review in conjunction with
Ernst & Young LLP of its current and past accounting practices for
other-than-temporary impairments of lower credit quality
structured securities pursuant to the requirements of EITF 99-20.
Although the company is currently unable to specify the amount of
other-than-temporary impairments to be included in realized
investment losses for the fourth quarter of 2007, the company
believes that the amounts will significantly exceed those
previously reported for prior periods.
The time and effort required to complete the foregoing evaluation
is proving to be greater than the company had previously
anticipated. The company is also examining whether this analysis
would require a restatement of previously reported financial
results. As a result, additional time is required for the company
to complete its work in the foregoing areas and for Ernst & Young
LLP to complete its audit procedures of the company's consolidated
financial statements. Consequently, the company will be unable to
file its Form 10-K for the year ended Dec. 31, 2007 with the
Securities and Exchange Commission by April 1, 2008. The company
is diligently working on completing the Form 10-K but is unable to
specify at this time when it will be in a position to make the
filing.
The company anticipates that its full year 2007 results as
compared with the corresponding period for 2006 will show that
revenues have decreased primarily as a result of realized
investment losses representing other-than-temporary impairments on
investments. Total benefits and expenses for 2007 are expected to
be comparable with that of the prior year. However, in light of
changes in the company's assessment of other-than-temporary
impairment charges since March 12, 2008, the company currently
anticipates that its net loss after tax for the year ended
Dec. 31, 2007 will be higher than its net loss reported for the
year ended Dec. 31, 2006, although the exact amount of such change
cannot be determined at this time.
About Scottish Re
Scottish Re Group Ltd. -- http://www.scottishre.com/-- is a
global life reinsurance specialist. Scottish Re has operating
businesses in Bermuda, Grand Cayman, Guernsey, Ireland, the
United Kingdom, United States, and Singapore. Its flagship
operating subsidiaries include Scottish Annuity & Life Insurance
company (Cayman) Ltd. and Scottish Re (US), Inc. Scottish Re
Capital Markets, Inc., a member of Scottish Re Group Ltd., is a
registered broker dealer that specializes in securitization of
life insurance assets and liabilities.
SCOTTISH RE: S&P Says Notice of Late Filing Won't Move Its Ratings
------------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on
Scottish Re Group Ltd. (B/Watch Neg/--) and related entities were
not affected by the company's March 27, 2008, notification of late
filing of its 2007 10-K. This is because S&P already took into
account the securities valuation and the other factors Scottish Re
gave for the delay when S&P placed the ratings on CreditWatch
negative.
On Jan. 31, 2008, Standard & Poor's lowered its ratings on
Scottish Re and placed them on CreditWatch negative because of the
company's continuing exposure to increasing investment losses and
meaningful risk of losing some reserve credits secured through
Ballantyne Re plc. As previously stated, Standard & Poor's will
resolve the CreditWatch status of the ratings when it completes
its independent process of assessing expected losses given the
ongoing market deterioration for these securities and assesses the
risk of the company incurring loss of reserve credits.
SECURITY CAPITAL: XLCA's 'BB' Rating Cues Fitch's Actions on Bonds
------------------------------------------------------------------
The March 26 downgrade on IFS rating to 'BB' from 'A' of Security
Capital Assurance's subsidiary, XL Capital Assurance Inc., by
Fitch Ratings will result in these rating actions on XLCA's
insured municipal bonds:
-- For the 2,973 CUSIPs where Fitch maintains underlying ratings
that are 'A' or higher, no rating actions are being taken, as
the ratings already reflect the issuers' underlying credit
quality;
-- For the 464 CUSIPs where Fitch maintains underlying ratings
lower than 'A' and higher than or equal to 'BB', Fitch has
revised the ratings to their underlying ratings;
-- For the bonds where Fitch does not maintain underlying
ratings, Fitch is at this time keeping the ratings at 'A' and
on Rating Watch Negative. The floor for the ratings once the
Rating Watches are resolved is currently 'BB', corresponding
to XLCA's IFS rating.
Fitch is aware that most of the XLCA-insured municipal bonds
without Fitch underlying ratings either possess credit
characteristics such that they would be rated higher than 'BB', or
may be publicly rated higher than 'BB' on an underlying basis by
another rating agency. If Fitch determines that these issuers do
not wish to have Fitch publish underlying ratings on their bonds,
then Fitch may withdraw their XLCA-insured ratings in the coming
weeks.
SEQUOIA MORTGAGE: Fitch Puts 'BB' Rating Under Negative Watch
-------------------------------------------------------------
Fitch Ratings has taken these rating actions on one Sequoia
Mortgage Trust mortgage pass-through certificates:
Sequoia Mortgage Trust 11
-- $64.9 million class A affirmed at 'AAA';
-- $2.2 million class B-1 affirmed at 'AAA';
-- $1.3 million class B-2 affirmed at 'AA';
-- $0.9 million class B-3 rated 'A', placed on Rating Watch
Negative;
-- $0.4 million class B-4 rated 'BBB', placed on Rating Watch
Negative;
-- $0.2 million class B-5 rated 'BB', placed on Rating Watch
Negative.
The affirmations reflect a satisfactory relationship between
credit enhancement and future loss expectations. Classes placed
on Negative Watch reflect possible deterioration of this
relationship in the future.
As of the March distribution date, the transaction is seasoned 65
months and has a pool factor of approximately 10%. The underlying
collateral consists of prime adjustable-rate mortgage loans
indexed to one-month LIBOR and six-month LIBOR. The mortgage term
is typically 25 or 30 years with a five or 10-year interest-only
period. The Sequoia Mortgage Trust 11 loans have been acquired
from various originators by a subsidiary of Redwood Trust Inc, a
mortgage real estate investment trust that invests in residential
real estate loans and securities. Wells Fargo Bank Minnesota,
National Association (rated 'RMS1' by Fitch) is the master
servicer.
SG MORTGAGE: Fitch Lowers Ratings on Ten Certificate Classes
------------------------------------------------------------
Fitch Ratings has taken rating actions on SG Mortgage Securities
Trust mortgage pass-through certificates. Affirmations total
$117 million and downgrades total $81.9 million. Break Loss
percentages and Loss Coverage Ratios for each class are included
with the rating actions as:
SG Mortgage Securities Trust 2005-OPT1
-- $72.3 million class A-2 affirmed at 'AAA',
(BL: 66.01, LCR: 2.68);
-- $27.6 million class A-3 affirmed at 'AAA',
(BL: 59.78, LCR: 2.43);
-- $17.1 million class M1 affirmed at 'AA+',
(BL: 50.58, LCR: 2.06);
-- $16.4 million class M2 downgraded to 'A' from 'AA'
(BL: 42.90, LCR: 1.74);
-- $9.6 million class M3 downgraded to 'BBB' from 'AA-'
(BL: 38.12, LCR: 1.55);
-- $8.8 million class M4 downgraded to 'BB' from 'AA-'
(BL: 33.69, LCR: 1.37);
-- $7.8 million class M5 downgraded to 'B' from 'A+'
(BL: 29.76, LCR: 1.21);
-- $7.6 million class M6 downgraded to 'B' from 'A'
(BL: 25.90, LCR: 1.05);
-- $6.8 million class M7 downgraded to 'CCC' from 'A-'
(BL: 22.31, LCR: 0.91);
-- $6.0 million class M8 downgraded to 'CCC' from 'BBB+'
(BL: 19.11, LCR: 0.78);
-- $4.0 million class M9 downgraded to 'CC' from 'BBB'
(BL: 16.88, LCR: 0.69);
-- $2.5 million class M10 downgraded to 'CC' from 'BBB'
(BL: 15.45, LCR: 0.63);
-- $5.0 million class M11 downgraded to 'CC' from 'BBB-'
(BL: 12.73, LCR: 0.52);
-- $4.5 million class M12 downgraded to 'C' from 'BB+'
(BL: 10.12, LCR: 0.41);
-- $2.8 million class M13 downgraded to 'C' from 'BB'
(BL: 8.74, LCR: 0.36);
Deal Summary
-- Originators: Option One Mortgage Corporation (100%)
-- 60+ day Delinquency: 30.82%
-- Realized Losses to date (% of Original Balance): 1.13%
-- Expected Remaining Losses (% of Current balance): 24.59%
-- Cumulative Expected Losses (% of Original Balance): 10.97%
The rating actions are based on changes that Fitch has made to its
subprime loss forecasting assumptions. The updated assumptions
better capture the deteriorating performance of pools from 2007,
2006 and late 2005 with regard to continued poor loan performance
and home price weakness.
SIMMONS BEDDING: Moody's Gives Negative Outlook; Holds All Ratings
------------------------------------------------------------------
Moody's Investors Service revised Simmons' rating outlook to
negative following concerns that the company will face a period of
limited cushion in its financial covenants due to the combination
of soft discretionary consumer spending, increased raw material
costs, abnormally high costs incurred last year with the relaunch
of its Beautyrest(R) product line and a contractual revision of
its bank covenants in the first quarter.
"Soft consumer spending, high raw material costs and abnormally
high costs incurred in the second quarter of 2007 from its
relaunch of its' Beautyrest(R) product line have restricted the
company's profitability, and, when combined with the contractual
revision of bank covenant levels in 2008, may leave the company
with limited cushion under its financial covenants" said Kevin
Cassidy, Vice President and Senior Credit Officer at Moody's
Investors Service.
Moody's recognizes that the company has increased its market share
over the last couple of years with its new Beautyrest(R) and
Beautyrest Black lines and ComforPedic acquisition and that it
continues to generate good operating cash flow.
The negative outlook reflects Moody's belief that the company will
face a period of tightness around its covenant compliance. This
results from Moody's expectation that reduced consumer spending
will pressure its profitability similar to its peers at a time
that covenants "step up" requirements for lower leverage and
higher interest coverage levels. Although Moody's believes that
the company would likely be able to amend its credit facility
should the need arise given the strength of its underlying
business and cash flows, its credit risk profile has nevertheless
risen over the near term.
Ratings affirmed and assessments revised:
-- Corporate family rating at B2;
-- Probability of default rating at B2;
-- $75 million senior secured revolver due 2011 at Ba2 (LGD-2,
18% from LGD-2, 20%);
-- $492 million senior secured term due 2011 at Ba2 (LGD-2, 18%
from LGD-2, 20%);
-- $200 million senior subordinated notes due 2014 at B2 (LGD-4,
53% from LGD-4, 57%);
-- $269 million senior discount notes due 2014 at B3 (LGD-5, 74%
from LGD-5, 75%);
-- $300 million Super Holdco Toggle loan at Caa1 (LGD-6, 91%)
Simmons Bedding Company, a wholly-owned subsidiary of Simmons
Company, is headquartered in Atlanta, Georgia. Net sales for the
year ended December 2007 approximated $1.1 billion.
SIMMONS CO: Earns $6 Million in Fourth Quarter Ended December 29
----------------------------------------------------------------
Simmons Company released operating results for the fourth quarter
and full year ended Dec. 29, 2007.
For the fourth quarter of 2007, net income was $6.2 million
compared to a net loss of $2.8 million for the same period in
2006.
For 2007, net income was $23.9 million for 2007 compared to
$16.6 million for the prior year, exclusive of the gain on the
sale of SCUSA net of related taxes.
"During the year we gained considerable market share and the
fourth quarter was the eighth consecutive quarter that our sales
growth exceeded the growth rate for the industry," Charlie Eitel,
Simmons chairman and chief executive officer, said. "Looking
forward, our mid-year 2007 acquisition of ComforPedic should
position us well for further growth in the specialty bedding
area."
"We are starting 2008 in a very challenging retail and
manufacturing environment but we believe our sales momentum,
strong product offerings and keen focus on cost management put us
in position to be successful -- despite a soft economy and higher
raw material costs," Mr. Eitel continued.
As of Dec. 29, 2007, Simmons' working capital as a percentage of
net sales for 2007 was 1.0% compared to 0.7% at the beginning of
the year. During the fourth quarter, Simmons' total debt, less
cash on hand, decreased by $35.9 million. For the fourth quarter
of 2007, Simmons Bedding's leverage ratio decreased to 4.2 from
4.5, as a result of the company's improved financial performance
and debt reduction.
At Dec. 29, 2007, the company's balance sheet showed total assets
of $1.477 billion, total liabilities of $1.289 billion and total
stockholder's equity of $0.188 billion.
About Simmons Company
Headquartered in Atlanta, Georgia, Simmons Company --
http://www.simmons.com/-- is a mattress manufacturer and marketer
of a range of products through its indirect subsidiary Simmons
Bedding Company. Products includes Beautyrest(R), Beautyrest
Black(TM), ComforPedic by Simmons(TM), Natural Care(TM),
BackCare(R), Beautyrest Beginnings(TM) and Deep Sleep(R). Simmons
Bedding Company operates 21 conventional bedding manufacturing
facilities and two juvenile bedding manufacturing facilities
across the United States, Canada and Puerto Rico. Simmons also
serves as a key supplier of bedding to hotel groups and resort
properties.
* * *
As reported in the Troubled Company Reporter on Feb. 6, 2007,
Standard & Poor's Ratings Services assigned its 'CCC+' debt rating
to Simmons Super Holding Company proposed $275 million senior
unsecured PIK toggle term loan due 2012. At the same time,
Standard & Poor's lowered its long term corporate credit rating on
Simmons Company to 'B' from 'B+'. The outlook is stable.
SIRIUS SATELLITE: State Counsels Balk at DOJ Approval of XM Merger
------------------------------------------------------------------
U.S. state counsels dispute the Department of Justice's decision
allowing the merger transaction of SIRIUS Satellite Radio Inc. and
XM Satellite Radio Holdings Inc. to proceed, Reuters reports. The
consortium from 11 states want the Federal Communications
Commission to lay down sanctions to preserve competition and
protect consumers, supposing the agency approves the merger deal.
Reuters say that the merger deal has been labeled as anti-
competitive by the traditional radio industry and by some U.S.
lawmakers.
As reported in the Troubled Company Reporter on March 25, 2008,
the Department of Justice informed SIRIUS and XM that it has ended
its investigation into the pending merger of SIRIUS and XM without
taking action to block the transaction. This decision means the
DOJ has concluded that the merger is not anti-competitive and it
will allow the transaction to proceed. SIRIUS and XM each
obtained stockholder approval for the deal in November 2007. The
pending merger is still subject to approval of the Federal
Communications Commission.
According to Reuters, the state attorneys are afraid that the
result of the merger would control satellite radio access across
the nation. They also encourage the FCC to require both companies
to make interoperable radio receivers available to customers,
offer different packages of channels on an a la carte basis, and
divest some radio spectrum that would allow another competitor
into the business, Reuters recounts.
In addition, Sirius Chief Executive Mel Karmazin pledges offerings
on a la carte pricing and adult channels barring refunds, Reuters
writes.
As previously reported in the TCR, XM and SIRIUS have entered into
a definitive agreement, under which the companies will be combined
in a tax-free, all-stock merger of equals with a combined
enterprise value of approximately $13 billion, which includes net
debt of approximately $1.6 billion.
Under the terms of the agreement, XM shareholders will receive a
fixed exchange ratio of 4.6 shares of SIRIUS common stock for each
share of XM they own. XM and SIRIUS shareholders will each own
approximately 50% of the combined company.
About XM
Based in Washington, D.C., XM Satellite Radio Holdings Inc. --
http://www.xmradio.com/-- parent of XM Satellite Radio Inc.
(Nasdaq: XMSR), is a satellite radio company, with more than
8.5 million subscribers. XM delivers entertainment and data
services for the automobile market through partnerships with
General Motors, Honda, Hyundai, Nissan, Porsche, Ferrari, Subaru,
Suzuki and Toyota.
About SIRIUS Satellite
Based in New York, SIRIUS Satellite Radio Inc. (NASDAQ: SIRI) --
http://www.sirius.com/ -- provides sports radio programming,
broadcasting play-by-play action of more than 350 pro and college
teams. SIRIUS features news, talk and play-by-play action from
the NFL, NASCAR, NBA, NHL, Barclays English Premier League soccer,
UEFA Champions League, the Wimbledon Championships and more than
125 colleges, plus live coverage of several of the year's top
thoroughbred horse races. SIRIUS also features programming from
ESPN Radio and ESPNews.
* * *
As reported in the Troubled Company Reporter on March 6, 2008,
Standard & Poor's Ratings Services revised the CreditWatch
implications of the ratings on Sirius Satellite Radio Inc.
(CCC+/Watch Developing/--) to developing from positive. S&P
originally placed the ratings on CreditWatch, with positive
implications, on Feb. 20, 2007, based on the company's definitive
agreement to an all-stock "merger of equals" with XM
Satellite Radio Holdings Inc. (CCC+/Watch Developing/--).
SOTHEBY: S&P Assigns 'BB+' Corp. Rating on CreditWatch Positive
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
the 'BB+' corporate credit rating, on New York City-based
Sotheby's on CreditWatch with positive implications.
"This action reflects the company's recent good performance due to
a strong worldwide auction market and the successful
implementation of its strategic initiatives," said Standard &
Poor's credit analyst David Kuntz. Sotheby's credit protection
profile has been enhanced as a result of the company's improved
operations. "We anticipate operations are likely to improve over
the near term, thus strengthening credit metrics," added Mr.
Kuntz.
SPANSION INC: Completes Acquisition of Saifun Semiconductors
------------------------------------------------------------
Spansion Inc. completed the acquisition of Saifun Semiconductors
Ltd. in accordance with the definitive merger agreement and its
amendment that both companies signed on Oct. 8, 2007 and Dec. 12,
2007.
As reported in the Troubled Company Reporter on Dec. 27, 2007,
Spansion Inc. and Saifun Semiconductors Ltd. boards of directors
have executed an amendment to their merger agreement providing
for an approximately $31.4 million increase in the cash
distribution, which would result in a cash distribution of
approximately $6.05 per share in cash based on Saifun
Semiconductor's current capitalization.
The company relates that the addition of the Saifun offering will
expand Spansion's product portfolio, and enable Spansion's
immediate entry into the technology licensing business,
significantly expanding Spansion's market opportunity. Saifun
will operate as a subsidiary of Spansion. Immediately after the
closing, former Saifun shareholders held approximately 14.4% of
Spansion's outstanding Class A common stock. Dr. Boaz Eitan was
also appointed to Spansion's board of directors effective as of
the closing.
"We look forward to leveraging the depth of technology expertise
and the quality of people from the Saifun organization," said
Bertrand Cambou, president and CEO, Spansion Inc. "With Saifun as
a wholly-owned subsidiary, we expect to enter new markets with a
powerful technology licensing strategy and a broadened and
diversified product portfolio."
Under the terms of the definitive merger agreement and its
amendment, each Saifun shareholder received 0.7238 shares of
Spansion Class A Common Stock and approximately $6.20 per share in
cash for each Saifun ordinary share, subject to certain tax
withholding requirements. The exchange ratio and the cash
distribution were adjusted in accordance with the terms of the
definitive merger agreement and its amendment. The cash
distribution will be funded solely from Saifun's existing cash on
hand concurrently or before the closing of the transaction.
"This is a new beginning for the Saifun employees to apply their
incredible talent and expertise to new market opportunities," said
Boaz Eitan, CEO of Saifun Semiconductor. "We remain committed to
supporting our existing licensees with the same dedication we have
always provided them. We are confident that the combination of
the Saifun and Spansion teams will accelerate all initiatives and
benefit our customers, potential new customers and our employees."
Since 2002, Spansion has been a licensee of Saifun's NROM
intellectual property, which has formed the cornerstone of
Spansion's proprietary MirrorBit technology. MirrorBit technology
now represents nearly 1/4 of the entire NOR Flash memory segment,
and generates revenues at a run rate approaching $2 billion per
year.
As part of this relationship, Saifun has also provided design
services to Spansion, including the successful development of
Spansion's MirrorBit Quad and SPI product families. By combining
the two companies, Spansion can further accelerate the development
of its next generation product roadmap by directly leveraging over
150 MirrorBit technology and design experts. Spansion has more
than 3,000 patents and patent applications in the area of non-
volatile memory, combining Spansion IP and NROM IP.
Citigroup Global Markets Inc. served as financial advisor to
Spansion and Lehman Brothers served as financial advisor to
Saifun. O'Melveny & Myers represented Spansion with Yigal Arnon &
Co., as special Israeli counsel and Morrison & Foerster
represented Saifun with Eitan-Mehulal Law Group as Israeli
counsel.
Saifun shareholders will also be able to obtain this information
by contacting Spansion Investor Relations: Marsha Shalvi at +972 9
8928450 or Russ Barck at (408) 616-8025.
About Saifun Semiconductor
Saifun is a provider of intellectual property solutions for the
non-volatile memory market. The company's innovative Saifun
NROM(R) technology allows semiconductor manufacturers to deliver
high performance, reliable products at a lower cost per megabit,
with greater storage capacity, using a single process for all NVM
applications. Saifun licenses its IP to semiconductor
manufacturers who use this technology to develop and manufacture a
variety of stand-alone and embedded NVM products. These include
Flash memory for the telecommunications, consumer electronic,
networking and automotive markets. Among the companies licensing
Saifun NROM technology are Macronix International, NEC
Electronics, Semiconductor Manufacturing International
Corporation, Sony Corporation, Spansion, and Tower Semiconductor.
About Spansion Inc.
Headquartered in Sunnyvale, California, Spansion Inc. (NASDAQ:
SPSN) -- http://www.spansion.com/-- designs, develops,
manufactures, markets and sells flash memory solutions for
wireless, automotive, networking and consumer electronics
applications.
* * *
As reported in the Troubled Company Reporter on Feb. 28, 2008,
Fitch Ratings affirmed Spansion Inc.'s issuer default rating at
'B-' while downgrading these issue-level ratings due to lower
recovery prospects: (i) $175 million senior secured revolving
credit facility due 2010 to 'B/RR3' from 'B+/RR2'; (ii)
$625 million senior secured floating rating notes due 2013 to
'B/RR3' from 'B+/RR2'; (iii) $225 million of 11.25% senior
unsecured notes due 2016 to 'CCC/RR6' from 'CCC+/RR5'; and
(iv) $207 million of 2.25% convertible senior subordinated
debentures due 2016 to 'CCC-/RR6' from 'CCC/RR6'. The rating
outlook remains negative. Approximately $1.2 billion of debt is
affected.
SPYRUS INC: Judge Sontchi Approves $2 Million DIP Financing
-----------------------------------------------------------
The Hon. Christopher S. Sontchi of the United States Bankruptcy
Court for the District of Delaware authorized SPYRUS Inc. and its
debtor-affiliates to obtain, on a final basis, up to $2 million of
debtor-in-possession financing from John D. Miller as DIP agent,
and and certain holders of the company's Series B Preferred
securities.
As reported in the Troubled Company Reporter on March 27, 2008,
the DIP loan is secured by liens on property of the Debtors'
estates.
As reported in the Troubled Company Reporter on March 18, 2008,
Mr. Miller, a former board member of the Debtors in 1999, advanced
secured bridge loans to the Debtors that provide for a $615,000 in
the aggregate, evidenced by secured notes bearing a fixed interest
rate of 11% per annum. The notes are secured by substantially all
of the Debtors' assets.
The Debtors told the Court that they have an immediate need to
access Mr. Miller's DIP facility to permit, among other things:
-- orderly continuation of the operation of their businesses;
-- management and preservation of the Debtors' assets and
properties;
-- maintenance of business relationships with vendors,
suppliers and customers;
-- payment of payroll obligations;
-- satisfaction of other working capital and operational needs;
and
-- maintenance of the going concern value of the Debtors'
state.
Neil B. Glassman, Esq., at The Bayard, P.A., at Wilmington,
Delaware, said that the Debtors lack liquidity to preserve and
maintain the going concern value of their assets.
If the Debtors defaulted of their obligations, the remaining
balance of the loan will bear interest at 14%, Mr. Glassman said.
The Debtors agreed to pay a $30,000 commitment fee, $30,000 exit
fee and 10% backstop fee to the DIP Agent.
As security to the Debtors' DIP obligations, the lenders will
receive perfected postpetition security interest and liens, senior
and superior in priority to all other secured and unsecured
creditors of the Debtors' estate.
Headquartered in San Jose, California, SPYRUS Inc. --
http://www.spyrus.com-- develops, manufactures and markets
hardware and software encryption and security products. Terisa
Systems Inc. and Blue Money Software are wholly owned subsidiary
of SPYRUS. SPYRUS has additional offices in New Jersey and
Australia. SYRUS was valued at approximately $12 million as of
March 13, 2008.
The company and two of its affiliates filed for Chapter 11
protection on March 13, 2008 (Bankr. D. Del. Lead Case.08-10462).
Neil B. Glassman, Esq., at Bayard, P.A., represents the Debtors in
their restructuring efforts. No Official Committee of Unsecured
Creditors has been appointed in these cases. When the Debtors
filed for protection against their creditors, it listed assets and
debts between $1 million to $100 million.
TENFOLD CORP: Enters Merger Agreement with Versata Enterprises
--------------------------------------------------------------
TenFold Corporation signed a Merger Agreement to be acquired by
Versata Enterprises Inc., a privately held provider of enterprise
business solutions.
Under the terms of the agreement, TenFold stockholders will
receive $0.04 in cash for each share of TenFold common stock, and
convertible preferred stock on an as-converted basis.
In connection with the Merger Agreement, TenFold has executed a
$300,000 promissory note in favor of Versata. The promissory note
bears interest at 10% per annum and is due on the earlier to occur
of Sept. 21, 2008, or the termination of the Merger Agreement.
Repayment of the promissory note is secured by TenFold's equipment
and accounts receivable pursuant to a security agreement executed
concurrently with the promissory note.
The proposed transaction has been approved by TenFold's board of
directors. In addition, the holders of a majority of TenFold's
preferred stock have waived, on behalf of the entire class, the
liquidation preference otherwise payable in respect of the
preferred stock.
The transaction is expected to be completed in the second quarter
of 2008, subject to various conditions, including approval by
TenFold's stockholders and other customary closing conditions. A
special meeting of TenFold's stockholders will be scheduled soon
as practicable after the preparation and filing of proxy materials
with the Securities and Exchange Commission.
"By merging with Versata, we believe that TenFold will benefit
from the leverage offered by a larger parent company similarly
focused on delivering business value to customers through robust,
agile applications," Robert Felton, TenFold's chairman, president,
and CEO. "We expect this merger to enable TenFold to provide our
customers with a broader set of product and services offerings, as
well as continue to focus on the significant business benefits of
the TenFold technology."
"TenFold's history of providing its customers and partners with
significant savings in development and maintenance complements
Versata's strategy of lowering customers' total cost of ownership
with solutions to accelerate development, reduce ongoing
maintenance, and drive business impact," Randy Jacop's, CEO of
Versata Enterprises, said. "Our customer success program compels
us to align investments and priorities with our customers, a
unique focus in the software industry intended to drive benefit to
TenFold's customers. We are excited by TenFold's long-term
customer relationships and look forward to welcoming them to our
customer success program."
Stockholders will be able to obtain free copies of the Proxy
Statement from TenFold by contacting:
TenFold Corporation
Investor Relations
Suite 200, 698 West 10000 South
South Jordan, UT 84095
Tel (801) 495-1010
About Versata Enterprises Inc.
Versata Enterprises -- http://www.versata.com/-- solves the most
complex business problems for the largest organizations covering
45 countries. Versata Enterprises comprises a number of leading
enterprise solution providers, including Versata Inc., Artemis
International Solutions Corporation, Gensym Corporation, and
Nextance Inc. Versata distinguishes itself in the software
industry by focusing on customer priorities as driven by value
delivered. Versata's Customer Success Program ensures customer
involvement in product decisions and business priorities and
provides a twice-yearly opportunity for customers to score
Versata's performance against commitments.
About TenFold Corporation
TenFold Corporation (OTC BB: TENF) -- http://www.tenfold.com/--
licenses its patented technology for applications and services
development, EnterpriseTenFold SOA, to organizations that face the
daunting task of replacing obsolete applications or building
complex SOA-compliant applications systems.
Going Concern Doubt
Tanner LC in Salt Lake City, Utah, expressed substantial doubt
about Tenfold Corp.'s ability to continue as a going concern after
auditing the company's financial statements for the years ended
Dec. 31, 2006, and 2005. The auditing firm cited that the company
used significant balances of its cash in operating activities
and at present levels of cash consumption will not have sufficient
resources to meet operating needs. This going concern phrase was
still included in the financial results ended Sept. 30, 2007.
THORNBURG MORTGAGE: Completes $1.35 Bil. Offering of Secured Notes
------------------------------------------------------------------
Thornburg Mortgage, Inc. has completed its previously announced
offering to raise $1.35 billion from the sale of senior
subordinated secured notes, warrants to purchase common stock and
a participation in certain mortgage-related assets.
The company has received $1.15 billion of the proceeds from the
offering. The remaining $200 million of the offering proceeds is
being held in escrow and will be delivered to the company upon the
successful completion of a tender offer for its preferred stock.
The company's senior subordinated secured notes, which are
scheduled to mature on March 31, 2015, have an annual interest
rate of 18%, which will be adjusted to 12% upon shareholder
approval of an increase in the number of authorized shares of
capital stock that the company may issue to 4 billion shares and
the successful completion of a tender offer for its preferred
stock.
Each purchaser of these notes also received initial detachable
warrants to purchase shares of common stock, which are exercisable
at a price of $0.01 per share. These warrants, in the aggregate,
will be equal to approximately 39.6% of the currently outstanding
fully diluted shares of the company after giving effect to all
anti-dilution adjustments under all existing instruments and
agreements. The company sold $1.15 billion aggregate principal
amount of the notes and the detachable warrants for an aggregate
purchase price of $1.05 billion.
In addition, the company and MatlinPatterson Global Opportunities
Partners III L.P. and MatlinPatterson Global Opportunities
Partners (Cayman) III L.P. -- which committed to purchase the new
notes -- have entered into a 7-year Principal Participation
Agreement whereby the investors have paid the company $100
million.
In return, the investors will receive monthly payments in the
amount of the principal payments received on the company's
portfolio of mortgage securities and other assets constituting
collateral under the company's Override Agreement with five of its
remaining reverse repurchase agreement counterparties, after
deducting amounts due under the financing agreements that relate
to such assets. The investors will be entitled to receive the
payments from the March 16, 2009 expiration date of the Override
agreement through March 31, 2015, the maturity date of the
Principal Participation Agreement.
At the maturity date of the Principal Participation Agreement, the
investors will receive the mark-to-market valuation of the
collateral after deducting the then outstanding balances of the
financing agreements that relate to such collateral. The
Principal Participation Agreement may be terminated before the 7th
year anniversary, at the company's option, upon the occurrence of
a shareholder vote to increase the number of authorized shares,
the purchase by the company of at least 90% of the outstanding
preferred stock in the tender offer and the issuance of the
additional warrants.
Upon approval of the company's shareholders of an increase in the
number of authorized shares of capital stock, the purchase by the
company of at least 90% of the outstanding preferred stock in the
tender offer and termination of the Principal Participation
Agreement, those investors who are participants in the Principal
Participation Agreement and those who have subscribed to the
escrow fund -- if the funds are used -- will then receive
additional warrants such that the additional warrants, together
with the initial detachable warrants will be exercisable for
shares of common stock that constitute 87.8% of the fully diluted
equity of the company after giving effect to the issuance of
warrants to purchase 5% of the company's common stock on a fully
diluted basis in the tender offer and all anti-dilution
adjustments under all existing instruments and agreements.
If warrants are not issued in the tender offer, the initial and
additional warrants would constitute 90% rather than 87.8% of the
fully diluted shares outstanding.
Upon the occurrence of these events, the investors will receive up
to an additional $200 million aggregate principal amount of senior
subordinated secured notes and related detachable warrants to the
extent that the escrowed funds are used to fund the tender offer
and the annual interest payable on the notes will decrease to 12%.
The proceeds of the private placement will be used to satisfy the
outstanding margin calls owed to the reverse repurchase agreement
counterparties, a key contingency of the Override Agreement, as
amended, that the company originally announced on March 19, 2008.
The company entered into the agreement with its five remaining
reverse repurchase agreement counterparties and their affiliates
pursuant to which the counterparties will provide approximately
$5.8 billion of reverse repurchase agreement financing.
The company will conduct a tender offer for all of its outstanding
preferred stock at a price of $5 per $25 of liquidation value,
plus, upon shareholder approval of additional authorized shares,
warrants to purchase an aggregate of 5% of the company's common
stock outstanding on a fully diluted basis or, if shareholder
approval is not obtained, alternative consideration. To the
extent that the escrowed funds are not used to purchase the
preferred shares that are tendered, unused escrow funds will be
returned to the investors.
Dividend Payments to Preferred Stock Halted
Additionally, the company has suspended dividend payments on all
outstanding series of preferred stock.
The company is required to seek shareholder approval to amend the
company's charter to increase the number of shares of capital
stock the company is authorized to issue. The company will hold
its annual shareholder meeting as promptly as practicable, but no
later than June 15, 2008, at which time its shareholders will vote
on, among other things, amendments to the company's Articles of
Incorporation to increase the number of authorized shares of
capital stock to at least 4 billion shares.
Upon completion of all of the transactions, common shareholders
will hold approximately 5.5% of common stock on a fully diluted
basis. The company has agreed that, upon clearance of regulatory
matters, if any, certain investors will have the right to
designate up to five members of the company's ten-member board.
Five of the company's current directors, yet to be determined,
will resign to make positions available for the directors to be
designated by such investors.
The issuance of the warrants in connection with the private
placement, in connection with the tender offer to be conducted and
pursuant to the Override Agreement would normally require approval
of the company's shareholders in accordance with the shareholder
approval policy of the New York Stock Exchange. However, after a
careful review of the facts, the members of the Audit Committee of
Thornburg Mortgage's Board of Directors determined that any delay
caused by securing shareholder approval prior to the issuance of
these securities would seriously jeopardize the financial
viability of the company.
Pursuant to an exception in the New York Stock Exchange's
shareholder approval policy, the company's audit committee members
approved the company's omission to seek the shareholder approval
that would otherwise have been required under that policy. The
company has requested approval from the New York Stock Exchange
for the use of the exception and in reliance upon this exception,
has agreed to mail a letter to all shareholders notifying them of
its intention to issue the securities without prior shareholder
approval.
Neither the sale or the issuance of the senior subordinated
secured notes, the warrants, the participations or the shares of
common stock underlying the warrants in this transaction have been
registered under the Securities Act of 1933, as amended, or
applicable state securities laws and will not be offered, sold or
transferred in the United States absent registration or an
exemption from registration. The company has agreed to file a
resale registration statement on Form S-3 and has agreed to take
steps to cause such registration statement to be declared
effective within 180 days after the closing of the transaction for
purposes of registering the resale by the investors of the shares
of common stock underlying the warrants. The company has also
agreed to file a registration statement to allow the senior
subordinated secured notes to be exchanged for registered notes
and guarantees having substantially the same terms as the notes or
register the senior subordinated secured notes for resale.
About Thornburg Mortgage
Based 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'.
TLC FUNDING: Moody's Withdraws All Ratings on Amedisys Acquisition
------------------------------------------------------------------
Moody's Investors Service withdrew all ratings of TLC Funding
Corporation. TLC Funding Corporation is a vehicle that was used
to finance the assets of TLC Health Care Services, Inc. The
rating action follows the close of the acquisition of TLC by
Amedisys Inc., which was previously announced on Feb. 19, 2008.
Based on change of control provisions within TLC's credit
agreement, Moody's understands that TLC's term loans have been
repaid and that its revolving credit agreement has been
terminated.
Ratings withdrawn:
-- Corporate Family Rating, B2
-- Probability of Default Rating, B2
-- $120 million Senior Secured Term Loan due 2012, B1
(LGD3, 35%)
-- $50 million Senior Secured Second Lien Term Loan due 2013,
Caa1 (LGD5, 88%)
-- $20 million Senior Secured Revolver due 2011, B1 (LGD3, 35%)
TLC Health Care Services, Inc. is a leading provider of home
health care services. TLC provides a wide range of skilled
nursing and home health aide services to assist patients with
activities of daily living.
TLC VISION: Raises Going Concern Doubt on OccuLogix Unit
--------------------------------------------------------
The management of TLC Vision Corporation stated in its annual
report for the year ended Dec. 31, 2007, filed with the Securities
and Exchange Commission, that as of Dec. 31, 2007, and 2006, the
company's equity investment in OccuLogix, Inc., totaled $0 and
$14.4 million, respectively.
OccuLogix
As of Dec. 31, 2007, the company owned approximately 33%, or
18.8 million shares, of OccuLogix, Inc.'s issued and outstanding
common stock with a fair market value of $1.5 million based on the
year-end closing price of OccuLogix's common stock.
Because the company accounted for its original investment in
OccuLogix at historical cost, the company must eliminate certain
items when it recognizes equity earnings (losses) from OccuLogix.
For the year ended Dec. 31, 2007, the company recognized
$13.4 million of equity losses from OccuLogix.
During the quarter ended Dec. 31, 2007, OccuLogix suspended
indefinitely its RHEO System clinical development program in dry
age-related macular degeneration, and sold its SOLX subsidiary.
In addition, it announced its intent to significantly reduce
headcount and to explore a full range of strategic alternatives to
maximize shareholder value. These actions resulted in OccuLogix
recording significant charges, including an impairment of assets.
TLC Vision recorded its share of the impairment charges as an
increase in losses from equity investments and recorded its
portion of the other charges to the extent of its ownership.
"As a significant shareholder of OccuLogix, our stock price may be
affected by changes in the price of OccuLogix's common stock. As
of Dec. 31, 2007, the market price of OccuLogix's stock was $0.08.
We are unable to predict how fluctuations in OccuLogix's stock
price will affect our own stock price," TLC stated.
TLC added that since the second quarter of 2006, it had accounted
for its investment in OccuLogix under the equity method. Under
APB 18, "The Equity Method of Accounting for Investments in Common
Stock," an investor's share of losses of an investee may equal or
exceed the carrying amount of an investment accounted for by the
equity method. The investor ordinarily should discontinue
applying the equity method when the investment is reduced to zero
and should not provide for additional losses unless the investor
has guaranteed obligations of the investee or is otherwise
committed to provide further financial support for the investee.
If the investee subsequently reports net income, the investor
should resume applying the equity method only after its share of
that net income equals the share of net losses not recognized
during the period the equity method was suspended.
As the company's investment in OccuLogix reached $0 as of Dec. 31,
2007, resulting from continual losses incurred by OccuLogix, the
company has suspended use of equity method accounting for
OccuLogix on a go forward basis.
Because of the numerous risks and uncertainties associated with
developing and commercializing new medical therapies, including
obtaining FDA approval, OccuLogix is unable to predict the extent
of any future losses or when it will become profitable, if ever.
The company's operating results and stock price may be negatively
impacted by the operating results of OccuLogix.
Further, OccuLogix's history of losses and financial condition
raise substantial doubt about OccuLogix's ability to continue as a
going concern.
$85 Million Notes
During June 2007, the company issued notes in an aggregate
principal amount of $85 million that mature in June 2013. The
notes bear floating-rate interest payable.
The company cannot be assured that its maintenance of this
indebtedness will not adversely affect its operating results or
financial condition.
In addition, changes by any rating agency to its credit rating can
negatively impact the value and liquidity of both its debt and
equity securities.
The company had entered into certain interest rate swaps to, in
effect, convert the interest rates of the floating-rate interest
notes into fixed rates.
The instruments governing the notes contain certain covenants that
may adversely affect its ability to incur certain liens or engage
in certain types of transactions.
If the company is not successful in achieving operational and
financial goals in future periods it could be at risk of non-
compliance regarding its covenants, which could result in a
material adverse impact to the company's financial condition.
Financials
TLC Vision posted a net loss of $43,514,000 on total sales of
$298,414,000 for the year ended Dec. 31, 2007, as compared with a
net loss of $11,519,000 on total sales of $277,853,000 in the
prior year.
At Dec. 31, 2007, the company's balance sheet showed $237,810,000
in total assets, $175,688,000 in total liabilities, and
$62,122,000 in stockholders' equity.
The company's consolidated balance sheet at Dec. 31, 2007, showed
strained liquidity with $45,883,000 in total current assets
available to pay $57,024,000 in total current liabilities.
At Dec. 31, 2007, the company had an accumulated deficit of
$275,404,000.
A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?299b
About TLC Vision
Headquartered in Mississauga, Ontario, TLC Vision Corporation
(TSE:TLC) -- http://www.tlcv.com/-- is an eye care services
company providing eye doctors facilities, technologies and
staffing support they need to deliver patient care. The majority
of the company's revenues come from laser refractive surgery,
which involves using an excimer laser to treat common refractive
vision disorders, such as myopia, hyperopia and astigmatism. The
company's business models include arrangements ranging from owning
and operating refractive centers to providing access to lasers
through branded TLC fixed site and mobile service relationships.
In addition to refractive surgery, the company is diversified into
other eye care businesses. Through its MSS, Inc., subsidiary, the
company furnishes hospitals and other facilities with mobile or
fixed site access to cataract surgery equipment, supplies and
technicians.
TOUSA INC: Files Motion to Extend Removal Period to July 27
-----------------------------------------------------------
TOUSA Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court
for the Southern District of Florida to extend the time within
which they may remove civil actions and proceedings to which they
are a party, through and including July 27, 2008.
The debtors are parties to numerous civil actions in the various
states in which they do business, Paul Steven Singerman, Esq., at
Berger Singerman, P.A., in Miami, Florida, informs the Court.
These lawsuits are generally managed by the Debtors' separate
divisions and are being handled on behalf of the Debtors by a wide
variety of local and national law firms.
Section 1452 of the Judicial and Judiciary Procedures Code
provides for the removal of actions related to bankruptcy cases.
It provides, in pertinent part, that a party may remove any claim
or cause of action in a civil action by a governmental unit to
enforce that governmental unit's police or regulatory power, to
the district court for the district where that civil action is
pending.
Rule 9027 of the Federal Rules of Bankruptcy Procedure sets forth
the time periods for the filing of notice to remove claims or
causes of action. Specifically, Bankruptcy Rule 9027 provides
that:
(i) if the claim or cause of action in a civil action is
pending when a case under the Bankruptcy Code is
commenced, a notice of removal may be filed only within
the longest of (A) 90 days after the order for relief in
the case under the Bankruptcy Code, (B) 30 days after
entry of an order terminating a stay, if the claim or
cause of action in a civil action has been stayed under
Section 362 of the Bankruptcy Code, or (C) 30 days after a
trustee qualifies in a chapter 11 reorganization case but
not later than 180 days after the order for relief; and
(ii) if a claim or cause of action is asserted in another court
after the commencement of a case under the Bankruptcy
Code, a notice of removal may be filed with the clerk only
within the shorter of (A) 30 days after receipt, through
service or otherwise, of a copy of the initial pleading
setting forth the claim or cause of action sought to be
removed, or (B) 30 days after a receipt of the summons if
the initial pleading has been filed with the court but not
served with the summons.
The time within which the Debtors may file a notice of removal of
pending civil actions under Bankruptcy Rule 9027(a) will expire
on April 28, 2008.
By this motion, the Debtors ask the Court to extend the time
within which they may remove civil actions and proceedings to
which they are a party, through and including July 27, 2008.
According to Mr. Singerman, the Debtors are continuing to review
their files and records to determine whether they should remove
certain claims or civil causes of action pending in state or
federal court to which they might be a party.
Because evaluation of the Civil Actions requires attention from
the Debtors' key personnel in each division and the Debtors' law
department, all of whom are actively involved in other key
aspects of the Debtors' reorganization efforts, the Debtors
require additional time to consider filing notices of removal in
the actions, Mr. Singerman tells the Court.
Unless the proposed extension is granted, the Debtors believe
they will not have sufficient time to give adequate consideration
to whether removal of any Civil Actions is necessary.
The rights of any party to the Civil Actions will not be
prejudiced by an extension, Mr. Singerman asserts. If the
Debtors ultimately seek to remove any action pursuant to
Bankruptcy Rule 9027, any party to the litigation can seek to
have the action remanded pursuant to Section 1452(b) of the
Bankruptcy Code, he elaborates.
The Debtors reserve their right to seek further extensions.
About TOUSA Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A.
Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P.,
TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder
in the United States, operating in various metropolitan markets in
10 states located in four major geographic regions: Florida, the
Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and
markets high-quality detached single-family residences, town
homes, and condominiums to a diverse group of homebuyers, such as
"first-time" homebuyers, "move-up" homebuyers, homebuyers who are
relocating to a new city or state, buyers of second or vacation
homes, active-adult homebuyers, and homebuyers with grown children
who want a smaller home. It also provides financial services to
its homebuyers and to others through its subsidiaries, Preferred
Home Mortgage Company and Universal Land Title Inc.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.:
08-10928). The Debtors have selected M. Natasha Labovitz, Esq.,
Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta,
Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at
Berger Singerman to represent them in their restructuring efforts.
Lazard Freres & Co. LLC is the Debtors' investment banker and
financial advisor. Ernst & Young LLP is selected as the Debtors'
independent auditor and tax services provider. Kurtzman Carson
Consultants LLC acts as the Debtors' Notice, Claims & Balloting
Agent. TOUSA Inc.'s financial condition as of Sept. 30, 2007,
showed total assets of $2,276,567,000 and total debts of
$1,767,589,000. Its consolidated detailed balance sheet as of
Feb. 29, 2008 showed total assets of $1,961,669,000 and total
liabilities of $2,278,106,000.
The Debtors' exclusive period to file a plan expires on May 28,
2008. (TOUSA Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
TRI VANTAGE: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Tri Vantage Companies, LLC
531 Highway 182
Morgan City, LA 70380
Bankruptcy Case No.: 08-50436
Type of Business: The Debtor is a steel fabricators & erectors.
See http://www.www.trivantagecompanies.com/
Chapter 11 Petition Date: March 28, 2008
Court: Western District of Louisiana (Lafayette/Opelousas)
Debtor's Counsel: Patrick S. Garrity, Esq.
(pgarrity@steffeslaw.com)
Steffes, Vingiello & McKenzie
3029 South Sherwood Forest Boulevard, Suite 100
Baton Rouge, LA 70816
Tel: (225) 368-1006
Fax: (225) 368-0696
http://www.steffeslaw.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.
UNITED HERITAGE: Nasdaq Says Stocks Listing Rely on $2.5MM Equity
-----------------------------------------------------------------
United Heritage Corporation received a letter from the Nasdaq
Hearings Panel indicating that the Panel has determined to
continue the listing of the company's common stock, subject to the
condition that the company demonstrates compliance with the
$2.5 million minimum shareholders' equity requirement on the Form
10-K it will file for the fiscal year ended March 31, 2008.
If the company fails to demonstrate shareholders' equity of
$2.5 million or greater, the Panel will promptly conduct a hearing
with respect to the failure and may immediately delist the
company's common stock from The Nasdaq Stock Market.
If the company fails to comply with any requirement for continued
listing other than shareholders' equity, it will be provided with
written notice of the deficiency and an opportunity to present a
definitive plan to regain compliance. The Panel will thereafter
render a determination with respect to the continued listing.
Headquartered in Midland, Texas, United Heritage Corporation
(NasdaqCM: UHCP) -- http://www.unitedheritagecorp.com/ -- is an
independent producer of natural gas and crude oil based in
Midland, Texas. The company produces from properties it leases in
Texas. Lothian Oil Inc., formerly the company's largest
shareholder, provided the company with the funds to operate from
November 2005 until it declared bankruptcy on June 13, 2007.
Going Concern Doubt
Weaver and Tidwell L.L.P., in Fort Worth, Texas, expressed
substantial doubt about United Heritage Corp.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the years ended March 31,
2007, and 2006. The auditing form reported that the company sold
all of its proved reserves in 2006 and currently does not have
significant revenue producing assets. In addition, the auditing
firm said that the company has limited capital resources and it's
majority shareholder who was financing the company's development
filed for bankruptcy subsequent to March 31, 2007.
US DRY CLEANING: Signs $1.9 Million Merger Deal with Zoots Corp.
----------------------------------------------------------------
U.S. Dry Cleaning Corporation acquired the assets of Zoots
Corporation.
Zoots is the second acquisition U.S. Dry Cleaning has made this
quarter. This puts U.S. Dry Cleaning on track to achieve its goal
of a $100 million revenue run rate by the end of 2008. In
February, the company acquired the leading dry cleaning business
in Central California. Together the two acquisitions will
increase the company's annualized revenue run rate by 120%.
"We are determined to carry out our game plan of buying market
share leading companies that have strong cash flow," Robbie Lee,
founder and chief executive officer of U.S. Dry Cleaning said.
"With this acquisition of Zoots and our previously announced
acquisition in February of Team Enterprises Inc., and their
related entities in Central California, we are on track to achieve
our goal of a $100 million run rate by the end of 2008."
"The acquisition brings revenue, volume and talent to U.S. Dry
Cleaning," Mr. Lee continued. "Let me assure our shareholders,
this is our first of several planned acquisitions in the eastern
half of the U.S."
According to the terms of the acquisition, the company paid a
total of approximately $1.9 million, which included approximately
$940,000 in cash and the balance in a short-term note.
"We are very enthusiastic about joining the U.S. Dry Cleaning
family and excited to be part of the effort to create the nation's
premier dry cleaning chain," William Wall, formerly of Zoots and
now general manager of U.S. Dry Cleaning Portsmouth Inc. stated.
About Zoots Corp.
Headquartered in Newton, Massacusetts, Zoots Corporation --
http://www.zoots.com -- serves customers weekly through about 75
dry-cleaning outlets and 115 home delivery routes in Connecticut,
Massachusetts, New Hampshire, New Jersey, Rhode Island, and
Virginia. Its name developed by a branding firm, Zoots boasts
that it doesn't dry clean with perchloroethylene, a carcinogen
typically used in the process. Adding to its dry-cleaning
holdings, Zoots acquired rival Sarni Cleaners in mid-2006.
Founded in 1998 by former chief executive officer, Todd Krasnow
and Tom Stemberg, both former Staples executives, Zoots is owned
by venture-capital firms.
About U.S. Dry Cleaning
Headquartered in Palm Springs, California, U.S. Dry Cleaning
Corporation (OTC BB: UDRY) -- http://www.usdrycleaning.com/--
operates in the laundry and dry cleaning business and is
geographically concentrated in Hawaii and Southern California.
* * *
As reported in the Troubled Company Reporter on Feb. 25, 2008,
Squar, Milner, Peterson, Miranda & Williamson LLP, in Newport
Beach, California, expressed substantial doubt about U.S. Dry
Cleaning Corporation's ability to continue as a going concern
after auditing the company's consolidated financial statements for
the year ended Sept. 30, 2007. The auditing firm pointed to the
company's recurring losses from operations and accumulated deficit
of approximately $19,356,000 at Sept. 30, 2007.
US AIRWAYS: Employees to Get $49 Million in Profit Sharing
----------------------------------------------------------
Profit sharing checks totaling $49 million will be distributed to
US Airways Group Inc. employees in hundreds of communities today
as the airline celebrates its second consecutive year of
profitability since merging with America West in 2005.
"Last year was our second consecutive profitable year as one
carrier and I'm delighted that today our employees will share in
this success through our profit sharing program," said Chairman
and CEO Doug Parker. "Our employees have done an outstanding job
of taking care of our customers as evidenced by our recent
industry leading on-time performance."
US Airways' profit sharing program sets aside 10% of the airline's
annual pre-tax profits excluding special items. The airline
posted a 2007 net profit (excluding special items) of $427 million
as announced earlier this year.
Last year's milestones include:
-- Moving to a single FAA operating certificate;
-- Migrating to single reservations, maintenance and flight
operating computer systems;
-- Breaking ground for a state-of-the-art single operations
control center in Pittsburgh;
-- Launching three new international destinations, Athens,
Zurich, and Brussels;
-- Receiving an award for the airline's first-ever route to
Asia from Philadelphia to Beijing;
-- Placing an order for 17 new A330s, 22 new A350s, and 60
A320 family aircraft; and
-- Recently hired 350 new pilots, recalled 200 flight
attendants and hired more than 1,000 new employees over
the summer of 2007.
In addition to the profit sharing program US Airways employees
receive cash bonuses for achieving operational incentives. US
Airways paid $5.2 million to employees in incentives for 2007, and
recently announced it will pay out $1.8 million in incentive
checks to employees for achieving the top spot in on-time
performance among major carriers in January.
About US Airways
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P.
Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq.,
at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas
M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in
their restructuring efforts. In the Company's second bankruptcy
filing, it lists $8,805,972,000 in total assets and $8,702,437,000
in total debts.
The Debtors' Chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005. The Debtors completed their
merger with America West on the same date. (US Airways Bankruptcy
News, Issue No. 157; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter on March 26, 2008,
Standard & Poor's Ratings Services revised its outlook on US
Airways Group Inc. to stable from positive. S&P has affirmed all
ratings, including the 'B-' long-term corporate credit rating.
US AIRWAYS: To Open Separate Talks with America West Pilots
-----------------------------------------------------------
US Airways Group Inc.'s management received notification from the
America West pilots requesting to commence separate contract
negotiations under Section 6 of the Railway Labor Act.
Also the America West pilots have begun separate negotiations with
US Airways management on future Airbus A330-200 widebody flying.
In a statement, Captain John McIlvenna, chairman of the union
leadership group representing the America West pilots, said:
"America West pilots have lost all patience with this
merger. For nearly three years, we have been working with
our brothers and sisters at the former US Airways to
complete a joint contract. We had hoped that this process
would prove fruitful for all pilots of the new US Airways;
however, we have come to the point where we are leaving
millions of dollars on the table each month for management
to pocket. As a result, the pilots I represent are angry,
frustrated and asking what was in this merger for us. It
appears as if the answer is nothing."
"Since the America West-US Airways merger was consummated,
more than 400 US Airways East (former US Air) pilots have
been able to upgrade to captain positions, yet less than 40
US Airways West (former America West) pilots have been
offered the same opportunity. It's long past time for
management to make this merger right for the hard working
pilots out West, whose contributions and sacrifices enabled
the creation of the new US Airways."
The America West pilots' current contract became amendable
December 2006, with provisions that allowed for the parties to
open negotiations in June 2006. The US Airways pilots' contract
is not amendable until December 2009. Prior to the merger, the
two pilot groups negotiated a Transition Agreement with
management that (among other things) recognized the rights of
America West pilots to enter into Section 6 negotiations
separately with management at any time. Until now, those
negotiations were in recess, as both pilot groups had been
dedicating themselves to completing a joint contract with
management.
The America West pilots are represented by the Air Line Pilots
Association, Int'l. (ALPA). Founded in 1931, ALPA is the world's
largest pilot union, representing 61,000 pilots at 43 airlines in
the United States and Canada. Visit the ALPA Web site at
http://www.alpa.org/
US Airways Rejects Request
US Airways rejected the request from America West pilots,
Bloomberg News reports. The pilots union asked US Airways to
start the talks before April 14.
"We believe it to be in the best interest of US Airways and all
of our employees to focus on joint negotiations for a single
labor agreement as we are now one company. We are ready to meet
with both of our pilot groups to jointly negotiate one single
contract," US Airways says, according to Bloomberg.
The America West pilots say the US Airways pilots are being
promoted to captain at a much higher rate than they are. They do
not want to wait when the US Airways pilot agreement can be
renegotiated in 2009.
Pilots Start Vote
The pilots started electronic voting on March 13; the election
will end, and the results will be announced, on April 17, The
Timesonline.com reports.
Appeals are expected regardless of the outcome of the election,
union officials from both sides say. Nevertheless, it's unclear
when pilots might get back to the bargaining table with US
Airways management, The Timesonline.com discloses.
About US Airways
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P.
Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq.,
at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas
M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in
their restructuring efforts. In the Company's second bankruptcy
filing, it lists $8,805,972,000 in total assets and $8,702,437,000
in total debts.
The Debtors' Chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005. The Debtors completed their
merger with America West on the same date. (US Airways Bankruptcy
News, Issue No. 157; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter on March 26, 2008,
Standard & Poor's Ratings Services revised its outlook on US
Airways Group Inc. to stable from positive. S&P has affirmed all
ratings, including the 'B-' long-term corporate credit rating.
US AIRWAYS: Reaches Tentative Unified Mechanics Pact with IAM
-------------------------------------------------------------
US Airways Group Inc. and the International Association of
Machinists District 142 today reached a tentative agreement on a
unified contract that moves all US Airways' maintenance-and-
related employees to one labor contract.
The contract, if ratified, would move pre-merger America West
maintenance-and-related employees to the higher pay scales of the
pre-merger US Airways labor contract and modifies the existing
East labor agreement in ways that are mutually beneficial to IAM
mechanic-and-related employees and the company.
"This is an important milestone in the US Airways merger and we're
delighted to reach an agreement that recognizes the contributions
of our maintenance team," said Doug Parker, chairman and CEO of US
Airways.
The IAM mechanics' agreement, covering approximately 3,300
maintenance-and-related employees (800 West and 2,500 East), is
the latest unified contract achieved at the new US Airways since
its merger with America West in 2005.
Agreements had previously been reached covering about 7,500
airport and reservations agents represented by the Communications
Workers of America and International Brotherhood of Teamsters,
and with the Transport Workers Union covering several hundred
flight dispatchers, engineers and ground school instructors.
"Maintenance-and-related employees have been working under the
terms of a transition agreement which essentially kept the groups
separate under their respective existing labor contracts," said Al
Hemenway, vice president of Labor Relations. "These unified
agreements help fulfill an important goal of our merger, that is,
to have each group of our represented employees working as one
team with identical pay, benefits and work rules."
Details of the agreement will be released by the IAM. The
agreement is subject to a ratification vote of the IAM membership
and would become amendable on Dec. 31, 2011.
IAM's Statement
IAM District 142 said on March 12, 2008, that it reached a
tentative agreement with US Airways covering 3,300 Mechanic &
Related employees.
"This agreement provides stability and security for our members at
a time when the airline industry is in turmoil," said IAM General
Vice President Robert Roach, Jr. "I thank our negotiating
committee for a job well done under very difficult circumstances."
The tentative agreement would bring US Airways and former America
West Mechanic & Related employees under the same contract and wage
scale for the first time since the merger of the two airlines in
September 2005. The agreement, if ratified, will be effective
through December 31, 2011. Negotiations for IAM-represented
Maintenance Training Specialists and Fleet Service personnel are
continuing.
"Our members have waited too long to share in the benefits the US
Airways-America West merger promised," said IAM District 142
President Tom Higginbotham. "This agreement provides annual wage
increases, job security and new pension benefits for all our
Mechanic & Related members."
Highlights of the agreement include base wage and license premium
increases, improved overtime rates, new shift premiums and
participation in the IAM National Pension Plan, a secure multi-
employer pension plan.
The tentative agreement must be ratified by the membership. The
District 142 negotiating committee is recommending ratification of
the agreement, and a voting schedule is being prepared. Complete
terms of the agreement will be available on the District 142 Web
site http://www.iamdl142.org
About US Airways
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P.
Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq.,
at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas
M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in
their restructuring efforts. In the Company's second bankruptcy
filing, it lists $8,805,972,000 in total assets and $8,702,437,000
in total debts.
The Debtors' Chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005. The Debtors completed their
merger with America West on the same date. (US Airways Bankruptcy
News, Issue No. 157; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter on March 26, 2008,
Standard & Poor's Ratings Services revised its outlook on US
Airways Group Inc. to stable from positive. S&P has affirmed all
ratings, including the 'B-' long-term corporate credit rating.
UTAH 7000: Involuntary Chapter 11 Case Summary
----------------------------------------------
Alleged Debtor: Utah 7000, LLC, Alleged Debtor
fka Pivotal Promontory, LLC
8758 North Promontory Ranch Road
Park City, UT 84098
Case Number: 08-21869
Alleged debtor-affiliates filed with separate Chapter 11
petitions:
Entity Case No.
------ --------
Utah 7000 Development, LLC 08-21870
Utah 7000 Capital, LLC 08-21872
Type of Business: The Debtor manufactures apparel accessories and
other apparel.
Involuntary Petition Date: March 28, 2008
Court: District of Utah (Salt Lake City)
Judge: Judith A. Boulden
Petitioner's Counsel: Kenneth L. Cannon, II, Esq.
(kcannon@djplaw.com)
Durham Jones & Pinegar
111 East Broadway, Suite 900
P.O. Box 4050
Salt Lake City, UT 84110-4050
Tel: (801) 415-3000
Fax: (801) 415-3500
http://www.djplaw.com/
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Stanfield Bristol CLO, funded debt $13,475
Attn: Chris Koscinski
The Bank of New York
601 Travis Street, 17th Floor
Houston, TX 77002
Stanfield Carrera CLO, Ltd. funded debt $13,475
Attn: US Bank, NA
Corporate Trust Department
One Federal Street, 3rd Floor
Boston, MA 02110
Stanfield Veyron Clo, Ltd. funded debt $13,475
Attn: Daniel Drake
The Bank of New York
601 Travis Street, 17th Floor
Houston, TX 77002
Stanfield Daytona Clo, Ltd, funded debt $13,475
Attn: Charles Janz
The Bank of New York
601 Travis Street, 17th Floor
Houston, TX 77002
XL Re Europe Limited, funded debt $13,475
Attn: Christine Nicodemus
Mellon Securities Trust Co.
120 Broadway, 13th Floor
New York, NY 10271
Stanfield Modena CLO, Ltd, funded debt $13,475
Attn: Chris Koscinski
The Bank of New York
601 Travis Street, 17th Floor
Houston, TX 77002
Sorin Master Fund, Ltd. funded debt $13,475
Attn: Ogier Fiduciary Srvices
(Cayman), Ltd.
Queensgate House
South Church Street
Grand Cayman,Cayman Islands
George Town Grand Cayman
British West Indies
VERENIUM CORP: Ernst & Young Expresses Going Concern Doubt
----------------------------------------------------------
Ernst & Young LLP raised substantial doubt about the ability of
Verenium Corporation to continue as a going concern after it
audited the company's financial statements for the year ended
Dec. 31, 2007. The auditor pointed to the company's operating
losses and accumulated deficit.
The company has incurred net losses of $89.7 million and
$39.3 million for the years ended Dec. 31, 2005, and 2006,
respectively, and has an accumulated deficit of $437.1 million as
of Dec. 31, 2007.
The company posted a net loss of $107,585,000 on total sales of
$46,273,000 for the year ended Dec. 31, 2007.
At Dec. 31, 2007, the company's balance sheet showed $264,779,000
in total assets, $169,564,000 in total liabilities and $95,215,000
in stockholders' equity.
Based on the company's operating plan, its existing working
capital is not sufficient to meet the cash requirements to fund
its planned operating expenses, capital expenditures, and working
capital requirements through Dec. 31, 2008, without additional
sources of cash and the deferral, reduction or elimination of
significant planned expenditures.
Through June 20, 2007, the date of the closing of the company's
merger with Celunol Corp., its losses were attributable to its
specialty enzymes business. The company expects to continue to
incur additional losses for the foreseeable future in its
specialty enzymes business as it continues to develop specialty
enzyme products, and as a result of its continued investment in
sales and marketing infrastructure to support anticipated growth
in product sales. Beginning with the closing of its merger with
Celunol Corp. on June 20, 2007, the company began to incur
additional losses as it pursued vertical integration strategy
within biofuels.
"We have used a significant portion of the proceeds received from
sales of our 5.5% notes in April 2007 to make enhancements to our
pilot facility and continue construction and development of our
demonstration-scale facility in Jennings, Louisiana, to
commercialize our specialty enzymes products, to continue our
research and development efforts in both specialty enzymes and
biofuels, and for expenses related to our merger with Celunol, all
of which have adversely affected, and will continue to adversely
affect, our operating results until revenues from our specialty
enzymes business and our biofuels business reach levels at which
we can fully support our operating and capital expenditures," the
company related.
The company also stated that it did not generate cash flows from
operating activities during 2007 sufficient to offset its
operating and capital expenditures. Based on the information
currently available regarding its proposed plans and assumptions
relating to operations, it anticipates that the net proceeds from
its sale of the 8.0% notes in February 2008, together with its
budgeted cash flow from operations, may not be sufficient to meet
cash requirements for working capital and capital expenditures
beyond December 2008 without additional sources of cash. As a
result, it may be necessary to reduce or defer certain planned
expenditures, to secure additional sources of revenue and/or to
secure additional financing to support its planned operations.
A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?299c
About Verenium Corp.
Based in Cambridge, Mass., Verenium Corporation (NASDAQGM: VRNM)
-- http://www.verenium.com/-- together with its subsidiaries,
develops and produces specialty enzyme products, and focuses on
the production and commercialization of biofuels, primarily
ethanol from cellulosic biomass. The Specialty Enzymes segment
develops customized enzymes for use in alternative fuels,
specialty industrial processes, and animal nutrition and health
markets. It operates in North America, South America, Europe,
Asia, and the Middle East. The company was founded in 1992 under
the name Industrial Genome Sciences, Inc., and changed its name to
Diversa Corporation in 1997. Further, it changed its name to
Verenium Corporation in 2007.
VERMILLION INC: Market Value Non-Compliance Cues Stocks Delisting
-----------------------------------------------------------------
Vermillion Inc. received a letter from the Listing Qualifications
Staff of NASDAQ notifying that, based upon the company's non-
compliance with the $35 million market value of listed securities
requirement for continued listing on The NASDAQ Capital Market, as
set forth in NASDAQ Marketplace Rule 4310(c)(3)(B), the company's
securities are subject to delisting from NASDAQ unless the company
requests a hearing before a NASDAQ Listing Qualifications Panel.
The company plans to timely request a hearing before a NASDAQ
Panel, which will stay any action with respect to the Staff
Determination until such NASDAQ Panel renders a decision
subsequent to the hearing. The company anticipates that the
hearing will be scheduled to occur within the next 45 days. There
can be no assurance that such NASDAQ Panel will grant the
company's request for continued listing.
The Staff Determination follows correspondence from NASDAQ dated
Feb. 22, 2008, which was disclosed by the company on Feb. 27,
2008, that, should the company fail to regain compliance with the
market value of listed securities requirement by March 24, 2008,
NASDAQ would provide written notification of such and the
opportunity to request a hearing before the NASDAQ Panel.
The company also received communication from The NASDAQ Stock
Market that, as a result of the company's common stock closing at
$1 per share or more for a minimum of 10 consecutive business
days, it has achieved compliance with the minimum bid price
requirement for continued listing set forth in NASDAQ Marketplace
Rule 4310(c)(4) ("Rule 4310(c)(4)").
The communication follows a notice of noncompliance from NASDAQ
dated Sept. 6, 2007, which indicated that the company failed to
comply with the minimum bid price requirement for continued
listing set forth in Rule 4310(c)(4).
The notice of noncompliance gave the company notice that the bid
price of its common stock had closed under $1 per share for the
previous 30 business days, and stated that if the company could
not demonstrate compliance with Rule 4310(c)(4) by March 4, 2008,
the NASDAQ staff would determine whether or not the company meets
The NASDAQ Capital Market initial listing criteria set forth in
NASDAQ Marketplace Rule 4310(c), except for the bid price
requirement.
The bid price requirement was met in part as a result of the 1-
for-10 reverse stock split of the company's outstanding common
stock effected by the filing of the company's Third Amended and
Restated Certificate of Incorporation on Feb. 29, 2008, which was
disclosed by the company on March 3, 2008. The reverse stock
split was effective with respect to stockholders of record upon
the close of business on March 3, 2008.
The common stock has been traded on the NASDAQ Capital Market
under the symbol "VRMLD" beginning on March 4, 2008, to designate
that it is trading on a post-reverse-split basis, and will resume
trading under the symbol "VRML" on April 2, 2008.
The company also disclosed that that in its 2007 financial
statements to be included in the company's Annual Report on Form
10-K, which the company expects to file on March 31, 2008, the
audit opinion of PriceWaterhouseCoopers LLP will contain a "going
concern" qualification. NASDAQ's marketplace rules require
NASDAQ-listed companies to publicly announce the receipt of an
audit opinion containing a "going concern" qualification.
About Vermillion Inc.
Based in Fremont, California, Vermillion Inc. (NASDAQ:VRMLD) --
http://www.vermillion.com/-- fka Ciphergen Biosystems Inc. is
involved in the discovery, development and commercialization of
specialty diagnostic tests that provide physicians with
information, with which to manage their patients' care and that
improve patient outcomes. Incorporated on Dec. 9, 1993, the
company, along with its prestigious scientific collaborators, has
ongoing diagnostic programs in oncology, hematology, cardiology
and women's health with an initial focus in ovarian cancer.
At Sept. 30, 2007, the company's balance sheet showed total assets
$26.86 million, total liabilities of $34.95, resulting to a total
shareholders' deficit of $8.09 million.
VISIPHOR CORP: Designates Michael Goffin to Board of Directors
--------------------------------------------------------------
Visiphor Corporation appointed Michael Goffin to the company's
board of directors. The appointment is in direct relation to the
$1.75 Million private placement with Quorum Investment Pool
Limited Partnership.
"We are very pleased with the addition of [Mr.] Goffin to the
company's board," Oliver "Buck" Revell, Visiphor chairman and
former associate deputy director of the FBI, stated. "We
welcome [Mr. Goffin's] knowledge and expertise to the team and are
confident that his added leadership will help drive the company's
upcoming achievement."
Mr. Goffin joined Quorum Group of Companies, Quorum Funding
Corporation, in 1997 where he has since gained over ten years of
investment, accounting and corporate financial experience. Prior
to 1997, he held various progressive financial positions in the
service industry and manufacturing sector.
Mr. Goffin sits on Quorum's Technology Advisory Committee, and is
a board member of several publicly listed companies. His focus is
on the management of portfolio investments, financial structuring,
strategic modelling and due diligence. He also contributes to the
Quorum mergers and acquisitions and divestiture team, including
the sale of Newstar E-commerce to BCE Emergis.
Mr. Goffin graduated from the University of Toronto with a
Bachelor of Arts degree in Economics and Environmental Management
in 1994 and holds a Certified General Accountant designation.
About Visiphor Corp.
Headquartered in Vancouver, Visiphor Corp. (OTC BB: VISRF.OB)
(CDNX: VIS.V) -- http://www.visiphor.com/-- sells software
products and services that deliver practical, rapidly deployable
solutions that integrate business processes and databases. The
company's solutions focus on disparate process and data management
problems that exist in numerous verticals spanning government,
energy, law enforcement, security, health care and financial
services.
Going Concern Doubt
Grant Thornton LLP raised substantial doubt about Visiphor Corp.'s
ability to continue as a going concern after auditing the
company's financial statements for the period ending
Dec. 31, 2006. The audotors pointed to the company's incurred a
loss from operations of CN$6,678,371 and deficiency in operating
cash flow of CN$2,602,248. In addition, the company incurred
significant operating losses and net utilization of cash in
operations in all prior periods.
WHITE CEDAR: Case Summary & Largest Unsecured Creditor
------------------------------------------------------
Debtor: White Cedar, LLC
6381B Auburn Boulevard
Citrus Heights, CA 95621
Bankruptcy Case No.: 08-23783
Chapter 11 Petition Date: March 27, 2008
Court: Eastern District of California (Sacramento)
Judge: Christopher M. Klein
Debtor's Counsel: John David Maxey, Esq.
13 SierraGate Plaza, Suite B
Roseville, CA 95678
Tel: (916) 786-7272
Estimated Assets: $1 million to $10 million
Estimated Debts: $1 million to $10 million
Debtor's Largest Unsecured Creditor:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Michael Spencer services $2,599
Civil Diligence, Inc.
1504 Eureka Road, Suite 230
Roseville, CA 95661
Tel: (916) 773-3500
WISCONSIN AUTHORITY: Case Summary & 2 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Wisconsin Authority, LLC
P.O. Box 26402
Milwaukee, WI 53226
Bankruptcy Case No.: 08-22837
Chapter 11 Petition Date: March 28, 2008
Court: Eastern District of Wisconsin (Milwaukee)
Judge: Pamela Pepper
Debtor's Counsel: Jonathan V. Goodman, Esq.
135 West Wells Street, Suite 340
Milwaukee, WI 53203
Tel: (414) 276-6760
(jgoodman@ameritech.net)
Estimated Assets: $500,000 to $1 million
Estimated Debts: $1 million to $10 million
Debtor's Two Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Rollie R. Hanson, Esq. attorney's fees $2,500
Law Office of Rollie R. Hanson
10150 West National Avenue,
Suite 370
Milwaukee, WI 53227
WE Energies utility bills $1,000
231 West Michigan Street
Milwaukee, WI 53290
WORNICK CO: Ad Hoc Committee Balks Disclosure Statement
-------------------------------------------------------
The Ad Hoc Committee of Certain Senior Secured Noteholders objects
to The Wornick Company and its debtor-affiliates' disclosure
statement dated Feb. 14, 2008, explaining their Chapter 11 plan
of reorganization.
The Ad Hoc Committee say that the plan provides different
treatment for the Ad Hoc Committee and other excluded creditors.
Gus Kallergis, Esq., at Jones Day in Cleveland, Ohio, relates that
the plan violated the requirement of Section 1123(a)(4) of the
Bankruptcy Code that claims in the same class receive the same
treatment
The Ad Hoc Committee, which holds approximately $11.3 million of
senior secured notes, tells the Court that the Debtors' disclosure
statement fails provide sufficient information on:
-- any marketing of the assets or investment opportunity prior
to deciding to deal exclusively with the favored creditors;
-- the negotiations leading up to the purchase agreement;
-- the arrangement or agreement between the DDJ Capital
Management, LLC, and the other favored creditors regarding
the ownership structure of the purchaser and control of the
reorganized debtors, including any efforts by the DDJ
Capital to obtain a return or credit on account of their
junior unsecured notes; and
-- the valuation of the Debtors and the justification for the
various releases offered to third-parties, including the
officers and directors, indenture trustee and the favored
creditors.
Accordingly, the Ad Hoc Committee asks the Hon. J. Vincent Aug,
Jr., of the United States Bankruptcy Court for the Southern
District of Ohio to hold that the Debtors' disclosure statement
doesn't contain adequate information as required by Section 1125
of the Bankruptcy Code.
As reported in the Troubled Company Reporter on Feb. 15, 2008,
the Debtors have reached an agreement with their senior secured
working capital lender and holders of approximately 85% of
its senior secured notes on the terms of a restructuring to reduce
the Company's long term debt.
The parties intend to implement the restructuring through a plan
of reorganization under the U.S. Bankruptcy Code and, accordingly,
the Company has filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court for
the Southern District of Ohio in Cincinnati.
In conjunction with the Chapter 11 filing, the Company filed
a plan of reorganization setting forth the terms of the
restructuring. This restructuring contemplates that all trade
creditors and suppliers will be paid in full, and that a new
entity formed by the members of the Bondholder Group will purchase
the equity of the reorganized Company, subject to higher and
better offers.
The Company also filed a motion seeking approval of certain bid
procedures that will govern the solicitation of competing offers
as well as customary buyer protections. The pre-negotiated plan
of reorganization is subject to approval by creditors and the
Bankruptcy Court, and contemplates that the Company will emerge
from Chapter 11 by July of this year.
DDJ Capital $35 Million DIP financing
The Company has received a commitment for up to $35 million in
debtor-in-possession financing from certain funds and accounts
managed by DDJ Capital.
Upon Court approval, the DIP financing, combined with the
Company's operating cash, will provide sufficient liquidity to
refinance the existing senior secured working capital facility,
meet ongoing obligations and ensure that normal operations
continue without interruption.
DDJ has also agreed to provide exit financing to reorganized
Wornick in the event the plan of reorganization is approved and
the equity of the reorganized Company is sold to the Bondholder
Group.
A full-text copy of the Disclosure Statement is available for free
at http://ResearchArchives.com/t/s?29c4
A full-text copy of the Chapter 11 plan of reorganization is
available for free at http://ResearchArchives.com/t/s?29c3
About Wornick Company
Headquartered in Cincinnati, The Wornick Company --
http://www.wornick.com/-- is a leading supplier of individual and
group military field rations to the Department of Defense. In
addition the company continues to extend its core capabilities to
commercial markets where its customers include, but are not
limited to, Kraft Foods, Inc., Gerber Products Company, as well as
retail and grocery outlets including Walgreens Co., 7-Eleven, The
Kroger Co., Publix Super Markets and Meijer.
Wornick specializes in the production, packaging, and distribution
of shelf-life, shelf-stable, and frozen foods in flexible pouches
and semi-rigid products. The firm's two main lines of business
are military rations (approximately 70% of revenues) and co-
manufacturing for leading food brands (30%). The company produces
both individual (including MRE) and group rations (including
Unitized Group Rations-A or UGR-A) for the U.S. military. MREs
comprise about 65% of military revenues.
The company and and five of its affiliates filed for Chapter 11
protection on Feb. 14, 2008 (Bankr. S.D.O., Case No. 08-10654).
Donald W. Mallory, Esq., Kim Martin Lewis , Esq., and Patrick
Burns, Esq. at Dinsmore & Shohl LLP represent the Debtors in
their restructuring efforts. The Debtor selected Kurtzman Carson
Consultants LLC as claims, noticing and balloting agent. An
official committee of unsecured creditors has not been appointed
in these cases. The company listed between $100 million and $500
million assets and between $100 million and $500 million in debts
in its bankruptcy filing.
XM SATELLITE: State Counsels Balk at DOJ Approval on Sirius Merger
------------------------------------------------------------------
U.S. state counsels dispute the Department of Justice's decision
allowing the merger transaction of SIRIUS Satellite Radio Inc. and
XM Satellite Radio Holdings Inc. to proceed, Reuters reports. The
consortium from 11 states want the Federal Communications
Commission to lay down sanctions to preserve competition and
protect consumers, supposing the agency approves the merger deal.
Reuters say that the merger deal has been labeled as anti-
competitive by the traditional radio industry and by some U.S.
lawmakers.
As reported in the Troubled Company Reporter on March 25, 2008,
the Department of Justice informed SIRIUS and XM that it has ended
its investigation into the pending merger of SIRIUS and XM without
taking action to block the transaction. This decision means the
DOJ has concluded that the merger is not anti-competitive and it
will allow the transaction to proceed. SIRIUS and XM each
obtained stockholder approval for the deal in November 2007. The
pending merger is still subject to approval of the Federal
Communications Commission.
According to Reuters, the state attorneys are afraid that the
result of the merger would control satellite radio access across
the nation. They also encourage the FCC to require both companies
to make interoperable radio receivers available to customers,
offer different packages of channels on an a la carte basis, and
divest some radio spectrum that would allow another competitor
into the business, Reuters recounts.
In addition, Sirius Chief Executive Mel Karmazin pledges offerings
on a la carte pricing and adult channels barring refunds, Reuters
writes.
As previously reported in the TCR, XM and SIRIUS have entered into
a definitive agreement, under which the companies will be combined
in a tax-free, all-stock merger of equals with a combined
enterprise value of approximately $13 billion, which includes net
debt of approximately $1.6 billion.
Under the terms of the agreement, XM shareholders will receive a
fixed exchange ratio of 4.6 shares of SIRIUS common stock for each
share of XM they own. XM and SIRIUS shareholders will each own
approximately 50% of the combined company.
About SIRIUS Satellite
Based in New York, SIRIUS Satellite Radio Inc. (NASDAQ: SIRI) --
http://www.sirius.com/ -- provides sports radio programming,
broadcasting play-by-play action of more than 350 pro and college
teams. SIRIUS features news, talk and play-by-play action from
the NFL, NASCAR, NBA, NHL, Barclays English Premier League soccer,
UEFA Champions League, the Wimbledon Championships and more than
125 colleges, plus live coverage of several of the year's top
thoroughbred horse races. SIRIUS also features programming from
ESPN Radio and ESPNews.
About XM
Based in Washington, D.C., XM Satellite Radio Holdings Inc. --
http://www.xmradio.com/-- parent of XM Satellite Radio Inc.
(Nasdaq: XMSR), is a satellite radio company, with more than
8.5 million subscribers. XM delivers entertainment and data
services for the automobile market through partnerships with
General Motors, Honda, Hyundai, Nissan, Porsche, Ferrari, Subaru,
Suzuki and Toyota.
* * *
As reported in the Troubled Company Reporter on March 28, 2008,
Standard & Poor's Ratings Services said its ratings on Washington,
District of Columbia-based XM Satellite Radio Holdings Inc. and XM
Satellite Radio Inc. (CCC+/Watch Developing/--) remain on
CreditWatch with developing implications, where S&P originally
placed them on March 4, 2008, due to S&P's concerns over
standalone refinancing risks XM might face if its merger with
Sirius Satellite Radio Inc. (CCC+/Watch Developing/--) wasn't
approved.
* S&P Downgrades Ratings on 81 Classes From 21 RMBS Transactions
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 81
classes of asset-backed certificates from 21 U.S. residential
mortgage-backed securities transactions from four issuers. S&P
placed its rating on one of the downgraded classes on CreditWatch
with negative implications. Concurrently, S&P affirmed its
ratings on the remaining 103 classes from these and nine other
transactions.
The rating actions involve transactions from New Century Home
Equity Loan Trust, NovaStar Mortgage Funding Trust, Securitized
Asset Backed Receivables LLC Trust, and Soundview Home Loan Trust.
The downgrades reflect a reduction in credit enhancement as a
result of monthly realized losses, as well as high amounts of
severe delinquencies (90-plus days, foreclosures, and REOs). As
of the February 2008 remittance date, cumulative realized losses
for the downgraded transactions, as a percentage of the original
pool balances, ranged from 0.98% (Soundview Home Loan Trust 2005-
3) to 2.72% (New Century Home Equity Loan Trust 2005-D). Severe
delinquencies, as a percentage of the current pool balances,
ranged from 11.8% (NovaStar Mortgage Funding Trust 2004-1) to
35.78% (Soundview Home Loan Trust 2005-3). Overcollateralization
is below its target for all of the downgraded transactions except
Soundview Home Loan Trust 2005-OPT3. The overcollateralization
for Soundview Home Loan Trust 2005-2 has been completely eroded.
The pool factors for these transactions range from 10.69%
(NovaStar Mortgage Funding Trust 2004-1) to 56.71% (New Century
Home Equity Loan Trust 2005-C).
S&P lowered the rating on class M-7 from New Century Home Equity
Loan Trust 2004-3 and placed it on CreditWatch negative due to the
combination of high severe delinquencies and the amount of credit
support the class may lose as a result of the transaction's step-
down feature. S&P will closely monitor this transaction and take
further negative rating actions if the amount of credit support
relative to severe delinquencies continues to deteriorate.
The affirmations reflect sufficient credit enhancement available
to support the ratings at their current levels.
Subordination, overcollateralization, and excess spread provide
credit support for these transactions. A portion of the
collateral in each NovaStar Mortgage Funding Trust transaction is
insured up to a certain loan-to-value ratio by primary mortgage
insurance issued by Mortgage Guaranty Insurance Corp., PMI
Mortgage Insurance Corp., or Radian Guaranty. The collateral for
these transactions consists of subprime mortgage loans.
Ratings Lowered
New Century Home Equity Loan Trust
Rating
------
Transaction Class CUSIP To From
----------- ----- ----- -- ----
2004-3 M-8 64352VJC6 BB BBB
2004-3 M-9 64352VJD4 B BBB-
2004-4 M-7 64352VJQ5 BBB BBB+
2004-4 M-8 64352VJR3 BB BBB
2004-4 M-9 64352VJS1 B BBB-
2005-1 M-9 64352VKJ9 BB BBB-
2005-2 M-9 64352VLB5 BB BBB-
2005-4 M-10 64352VND9 BB- BBB-
2005-4 M-9 64352VNC1 BB BBB-
2005-B M-5 64352VNP2 BB A+
2005-B M-6 64352VNQ0 BB- A
2005-B M-7 64352VNR8 B BBB+
2005-B M-8 64352VNS6 B- BB
2005-B M-9 64352VNT4 CCC B
2005-C M-5 64352VPD7 BB A+
2005-C M-6 64352VPE5 BB- A
2005-C M-7 64352VPF2 B BB
2005-C M-8 64352VPG0 B- BB
2005-C M-10 64352VPJ4 CCC B
2005-C M-9 64352VPH8 CCC B
2005-D M-5 64352VPU9 BBB- A+
2005-D M-6 64352VPV7 BB A
2005-D M-7 64352VPW5 BB- A-
2005-D M-8 64352VPX3 B BBB+
2005-D M-9 64352VPY1 B- BB
2005-D M-10 64352VPZ8 CCC B
NovaStar Mortgage Funding Trust
Rating
------
Transaction Class CUSIP To From
----------- ----- ----- -- ----
2004-1 M-6 66987XEF8 A- A
2004-1 B-1 66987XEG6 BB A-
2004-1 B-2 66987XEH4 B BBB
2004-1 B-3 66987XEJ0 CCC BBB-
2004-3 B-2 66987XFW0 BBB BBB+
2004-3 B-3 66987XFX8 B BBB
2004-3 B-4 66987XFY6 B- BBB
2004-4. B-3 66987WCB1 B BBB
2004-4 B-4 66987WCC9 B- BBB-
Securitized Asset Backed Receivables LLC Trust
Rating
------
Transaction Class CUSIP To From
----------- ----- ----- -- ----
2004-DO1 B-1 81375WAW6 BBB BBB+
2004-DO1 B-2 81375WAX4 BB BBB
2004-DO1 B-3 81375WAY2 B BBB-
Soundview Home Loan Trust
Rating
------
Transaction Class CUSIP To From
----------- ----- ----- -- ----
2005-2. B-4 83611MFC7 CCC B+
2005-3 M-7 83611MFT0 BBB A-
2005-3 M-8 83611MFU7 BB- BBB+
2005-3 M-9 83611MFV5 B BBB
2005-3 B-1 83611MFW3 CCC BB
2005-4. M-6 83611MKK3 BBB+ A
2005-4 M-7 83611MKL1 BBB- A-
2005-4 M-8 83611MKM9 BB- BBB+
2005-4 M-9 83611MKN7 B+ BBB
2005-4 M-10 83611MKP2 B BBB-
2005-4 M-11 83611MKQ0 CCC BB
2005-CTX1 M-7 83611PCA7 A- A
2005-CTX1 M-8 83611PCB5 BB BBB+
2005-CTX1 M-9 83611PCC3 B+ BBB
2005-CTX1 M-10 83611PCD1 B BBB-
2005-CTX1 B-1 83611PCE9 CCC BB
2005-CTX1 B-2 83611PCF6 CCC B
2005-DO1 M-11 83611MEH7 BB BBB-
2005-DO1 B-1 83611MEJ3 B B+
2005-OPT1 M-6 83611MDM7 BBB- A
2005-OPT1 M-7 83611MDN5 BB- BBB+
2005-OPT1 M-8 83611MDP0 B BB
2005-OPT1 M-9 83611MDQ8 CCC B
2005-OPT2 M-2 83611MGJ1 BBB A+
2005-OPT2 M-3 83611MGK8 BB+ BBB
2005-OPT2 M-6 83611MGN2 B- B
2005-OPT2 M-7 83611MGP7 CCC B
2005-OPT3 M-4 83611MGX0 A- A+
2005-OPT3 M-5 83611MGY8 BBB- A
2005-OPT3 M-6 83611MGZ5 BB A-
2005-OPT3 M-7 83611MHA9 B+ BBB
2005-OPT3 M-8 83611MHB7 B BB
2005-OPT3 M-10 83611MHG6 CCC B
2005-OPT3 M-9 83611MHC5 CCC B
2005-OPT4 M-4 83611MJP4 BBB A+
2005-OPT4 M-5 83611MJQ2 BB+ A
2005-OPT4 M-6 83611MJR0 BB- A-
2005-OPT4 M-7 83611MJS8 B+ BBB+
2005-OPT4 M-8 83611MJT6 B BBB
2005-OPT4 M-9 83611MJU3 CCC BB
2005-OPT4 M-10 83611MJV1 CCC B
2005-OPT4 M-11 83611MJW9 CCC B
Rating Lowered and Placed on CreditWatch Negative
New Century Home Equity Loan Trust
Rating
------
Transaction Class CUSIP To From
----------- ----- ----- -- ----
2004-3 M-7 64352VJB8 BBB/Watch Neg BBB+
Ratings Affirmed
New Century Home Equity Loan Trust
Transaction Class CUSIP Rating
----------- ----- ----- ------
2003-4 M-1 64352VDK4 AA
2003-4 M-2 64352VDL2 A
2003-4 M-3 64352VDM0 A-
2003-4 M-4 64352VDN8 BBB+
2003-4 M-5 64352VDP3 BBB
2003-4 M-6 64352VDQ1 BBB-
2003-A A 64352VDR9 AAA
2003-A M-2 64352VDT5 AA+
2003-A M-3 64352VDU2 A+
2003-A M-4 64352VDV0 A+
2003-A M-5 64352VDW8 BBB-
2003-B M-1 64352VES6 AA
2003-B M-2 64352VET4 A
2003-B M-3 64352VEU1 A-
2003-B M-4 64352VEV9 BBB+
2003-B M-5 64352VEW7 BBB
2003-B M-6 64352VEX5 BBB-
2004-3 M-1 64352VHV6 AAA
2004-3 M-2 64352VHW4 AA+
2004-3 M-3 64352VHX2 AA
2004-3 M-4 64352VHY0 AA-
2004-3 M-5 64352VHZ7 A
2004-3 M-6 64352VJA0 A-
2004-4 M-1 64352VJJ1 AA+
2004-4 M-2 64352VJK8 AA
2004-4 M-3 64352VJL6 AA-
2004-4 M-4 64352VJM4 A+
2004-4 M-5 64352VJN2 A
2004-4 M-6 64352VJP7 A-
1997-NC5 A-5 64352VAE1 AAA
1997-NC5 A-6 64352VAF8 AAA
1997-NC5 A-7IO 64352VAG6 AAA
1997-NC5 M-1 64352VAH4 AA
1997-NC5 M-2 64352VAJ0 A
1997-NC5 B 64352VAK7 BBB-
NovaStar Mortgage Funding Trust
Transaction Class CUSIP Rating
----------- ----- ----- ------
2003-1 A-1 66987XCD5 AAA
2003-1 A-2 66987XCE3 AAA
2003-1 AIO 66987XCJ2 AAA
2003-1 P 66987XCK9 AAA
2003-1 M-1 66987XCF0 AA
2003-1 M-2 66987XCG8 A
2003-1 M-3 66987XCH6 BBB
2003-2 A-1 66987WAP2 AAA
2003-2 A-2 66987WAQ0 AAA
2003-2 P 66987XCL7 AAA
2003-2 M-1 66987WAR8 AA
2003-2 M-2 66987WAS6 A
2003-2 M-3 66987WAT4 A-
2003-2 B-1 66987WAU1 BBB+
2003-3 A-1 66987XCQ6 AAA
2003-3 A-2C 66987XCT0 AAA
2003-3 A-3 66987XCU7 AAA
2003-3 P 66987XDA0 AAA
2003-3 M-1 66987XCV5 AA
2003-3 M-2 66987XCW3 A
2003-3 M-3 66987XCX1 A-
2003-3 B-1 66987XCY9 BBB+
2003-3 B-2 66987XCZ6 BBB
2003-4. A-1 66987XDE2 AAA
2003-4 A-2B 66987XDG7 AAA
2003-4 A-2C 66987XDH5 AAA
2003-4 A-3 66987XDJ1 AAA
2003-4 P 66987XDQ5 AAA
2003-4 M-1 66987XDK8 AA
2003-4 M-2 66987XDL6 A
2003-4 M-3 66987XDM4 A-
2003-4 B-1 66987XDN2 BBB+
2003-4 B-2 66987XDP7 BBB
2003-4 B-3 66987XDU6 BBB-
2004-3 M-1 66987XFP5 AA+
2004-3 M-2 66987XFQ3 AA+
2004-3 M-3 66987XFR1 AA
2004-3 M-4 66987XFS9 AA-
2004-3 M-5 66987XFT7 A+
2004-3 M-6 66987XFU4 A
2004-3 B-1 66987XFV2 A-
2004-4 A-1A 66987WBN6 AAA
2004-4 A-1B 66987WBP1 AAA
2004-4 A-2C 66987WBS5 AAA
2004-4 M-1 66987WBT3 AA+
2004-4 M-2 66987WBU0 AA+
2004-4 M-3 66987WBV8 AA
2004-4 M-4 66987WBW6 AA
2004-4 M-5 66987WBX4 AA-
2004-4 M-6 66987WBY2 A+
2004-4 B-1 66987WBZ9 A
2004-4 B-2 66987WCA3 A-
Securitized Asset Backed Receivables LLC Trust
Transaction Class CUSIP Rating
----------- ----- ----- ------
2004-DO1 A-1 81375WAZ9 AAA
2004-DO1 A-2 81375WAS5 AAA
2004-DO1 M-1 81375WAT3 AA+
2004-DO1 M-2 81375WAU0 A
2004-DO1 M-3 81375WAV8 A-
Soundview Home Equity Loan Trust
Transaction Class CUSIP Rating
----------- ----- ----- ------
2001-1 A 83611PAJ0 AAA
2001-1 A-IO 83611PAK7 AAA
2001-1 M-1 83611PAL5 BB
Soundview Home Loan Trust
Transaction Class CUSIP Rating
----------- ----- ----- ------
2005-3 B-2 83611MFX1 CCC
2005-3 B-3 83611MFY9 CCC
2005-DO1 B-2 83611MEK0 CCC
2005-OPT1 M-10 83611MDR6 CCC
2005-OPT2 M-8 83611MGQ5 CCC
2005-OPT2 M-9 83611MGR3 CCC
* Fitch Says US CMBS Delinquencies Rose to 0.30% on February
------------------------------------------------------------
February U.S. CMBS delinquencies rose to 0.30%, only slightly
higher than the historic low of 0.27% despite another increase in
delinquent multifamily loans, according to the latest loan
delinquency index from Fitch Ratings. The average loan
delinquency index for the prior twelve months is also equal to 30
basis points.
'$130 million in newly delinquent multifamily loans were the major
contributor to the slight rise in the delinquency index,' said
Managing Director Susan Merrick. 'Multifamily delinquencies
continue to be overrepresented in the index, now comprising 60% of
all delinquent loans, though they only represent 14.6% of the
Fitch-rated universe.'
Delinquent multifamily loans reached $1 billion at the end of last
month, up by 14.5% compared to $894 million at the end of January
2008. Isolating the delinquent multifamily loans and comparing
them to all multifamily loans in the Fitch-rated universe, the
sector's delinquency index is 1.4%.
Loans secured by office buildings represent 30.4% of all
properties within the Fitch-rated universe, but as of the end of
February 2008, office delinquencies represented 11% of the overall
delinquency index. Office delinquencies decreased by 1.1% in
February, resulting in a delinquency index of 0.12%.
Retail loans represent 28% of the Fitch rated universe, and 15.2%
of the overall delinquency index. Retail delinquencies increased
by 5.8% in February, due to the addition of seven newly-delinquent
loans comprising $22.1 million. The retail sector's delinquency
index was 0.18%.
Hotel loans properties represent 10.5% of the total Fitch rated
universe, but 5.1% of total delinquencies. Hotel delinquencies
increased by 14.6% in February due to the addition of three newly
delinquent hotels totaling $11.3 million. The hotel sector's
delinquency index was 0.17%.
The seasoned delinquency index, which omits transactions with less
than one year of seasoning, rose by the two basis points in
February 2008, ending the month at 0.37%. Three transactions
totaling $7.7 billion became newly seasoned, but none of them had
any delinquent loans.
Fitch's index measures loans that are at least 60 days delinquent
in the $562 billion Fitch rated portfolio, totaling approximately
42,000 loans.
* FTI Widens UK Presence with Forensic Accounting Buyout
--------------------------------------------------------
FTI Consulting Inc. acquired Forensic Accounting LLP, a
consultancy firm which is expected to enhance its U.K. presence
and breadth of service offerings. Terms of the transaction were
not disclosed. The transaction is expected to close early next
week.
Forensic Accounting is the UK's independent forensic accounting
practice, providing accountancy based expert witness and
investigation services in disputes, regulatory inquiries and due
diligence reviews. Its clients are a mix of public and private
sector organizations, including several UK regulators and magic
circle law firms.
FA will be integrated into the company's Forensic and Litigation
Consulting Segment, and will serve as the U.K.-based hub for FLC's
Investigations and Forensic Accounting practice in the Europe,
Middle East and Africa region.
Andrew Mainz, Raj Bairoliya, Julia Wallace-Walker and Dominic
Wreford, co-founders of FA, and Ian Trumper, a partner at the
firm, have joined FTI as senior managing directors. Additionally,
31 FA employees will be joining FTI.
"One of our key strategic objectives has been to replicate the
broad service platform that we have established in the major
business and financial centers in the U.S.," Jack Dunn, president
and CEO of FTI, commented. "The acquisition of Forensic
Accounting is a strategic step that provides the foundation on
which to build our forensic accounting offering in London to meet
the escalating demand in the market."
"Equally important, the acquisition of FA, along with the
purchases of Brewer Consulting and Sante and the launch of our
restructuring practice within the past year, has made London FTI's
largest office in the world, with over 400 professionals advising
clients in the U.K. and Europe," Mr. Dunn continued. 'We are now
able to offer an integrated range of forensic accounting,
investigations, corporate finance/restructuring and communications
consulting services in one of the world's most important centers
of global commerce and finance."
"We know FA well from the joint assignments we have worked on with
its excellent consultants," Mr. Dunn added. "It perfectly
complements FLC's current presence in the United States, South
America and Asia and, with its extensive regulatory work, gives us
immediate credibility and relationships with the U.K. regulatory
authorities that further enhance our reputation for independence
and diligence in this critical market. As FLC's hub in Europe, FA
will better enable us to service Global 1000 clients and the law
firms and financial services institutions that support them both
at home and abroad."
"We are delighted to become part of the FTI team," Andrew Mainz,
chairman of Forensic Accounting LLP, said. "FA will be able to
maintain the independent nature of our work and our focus on high
standards of successful client service. This approach has made us
the UK's leading independent forensic accounting practice, from a
standing start in 2000."
"Going forward, we shall be able to use FTI's resources to improve
the level of service we offer our international clients," added
Mr. Mainz. "With FTI's additional capabilities and relationships,
we look forward to substantially increasing the scope of our
business."
About Forensic Accounting LLP
Headquartered in London, Forensic Accounting LLP --
http://www.forensicaccounting.co.uk/-- has the resources needed
to complete large assignments and offer a genuine alternative to
the Big 4 accounting firms. The company's partners, directors and
staff have experience, accumulated over many years, in the
specialised areas of damages assessment, financial modeling,
valuation, fraud investigation, reconstruction of accounts and
asset tracing. Forensic Accounting is committed to making a
genuine contribution towards the successful resolution of
disputes.
About FTI Consulting
FTI Consulting (NYSE: FCN) -- http://www.fticonsulting.com/-- is
a business advisory firm dedicated to helping organizations
protect and enhance enterprise value in an increasingly complex
legal, regulatory and economic environment. With more than 2,400
professionals located in most major business centers in the world,
the company works closely with clients every day to anticipate,
illuminate, and overcome complex business challenges in areas such
as investigations, litigation, mergers and acquisitions,
regulatory issues, reputation management and restructuring.
* Bankruptcy Firm Watson & Maynez Starts El Paso, Texas Operation
-----------------------------------------------------------------
Attorneys Matt Watson and Omar Maynez have teamed up to establish
a law firm with a unique package of services. By focusing on two
main fields of law -- El Paso probate and El Paso bankruptcy law,
they serve their Texas community with two highly developed skill
sets. If you've ever wondered what an El Paso bankruptcy lawyer
and an El Paso probate attorney have in common, it is this: a
genuine desire to serve the community where they practice.
Omar Maynez, Esq., is joining Matt Watson, bringing his background
in bankruptcy law, family law, immigration law, criminal defense
and civil litigation to the table. When combined with Mr.
Watson's focus on estate planning and probate, as well as family
law and consumer bankruptcy, a comprehensive firm was created-
ready and able to deal with each client's financial needs, with an
special interest in assisting the aging population.
Greedy, profit-driven lawyers abound, it is important to remember
that there are still good attorneys out there who are willing to
fight for the rights of individuals. Watson & Maynez, P.C. is
doing just that -- representing individuals who face bankruptcy
alone, never the creditors seeking to collect. While most desire
for probate- the process of handling the estate of the deceased-
to go smoothly, Mr. Maynez's civil litigation experience ensures
that should worse come to worst, this firm is ready to provide a
strong advocate for the client.
Watson & Maynez, P.C. provides its community with professional El
Paso bankruptcy chapter 7 & chapter 13 and El Paso probate needs.
A federally designated debt relief agency, they work with people
facing bankruptcy, foreclosure and repossession. In their estate
planning and El Paso trusts and wills work, they are willing to
fight hard for their clients who face even the most sensitive
matters. These highly skilled attorneys have formed an alliance
that can handle your financial needs in a far more comprehensive
manner than either could have achieved alone.
For more information, contact Watson and Maynez at 915-532-7526.
For El Paso Bankruptcy visit -- http://www.bankruptcy4elpaso.com/
-- and for El Paso Probate visit --
http://www.elpasowillsprobate.com/
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Shareholders Total Working
Equity Assets Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------------ ------ -------
Absolute Software ABT (3) 77 28
AFC Enterprises AFCE (36) 151 (7)
Alaska Comm Sys ALSK (28) 557 24
Bare Escentuals BARE (132) 214 76
Blount International BLT (78) 472 140
CableVision System CVC (5,131) 9,807 (630)
Carrols Restaurant TAST (13) 463 (29)
Centennial Comm CYCL (1,063) 1,343 14
Cheniere Energy CQP (203) 1,962 109
Choice Hotels CHH (149) 338 (31)
Cincinnati Bell CBB (671) 1,966 17
Claymont Stell PLTE (40) 158 80
Compass Minerals CMP (48) 722 145
Corel Corp. CRE (20) 249 (19)
Crown Media HL CRWN (619) 703 48
CV Therapeutics CVTX (157) 281 204
Cyberonics CYBX (18) 132 (28)
Deltek Inc PROJ (144) 148 (12)
Denny's Corporation DENN (201) 413 (65)
Domino's Pizza DPZ (1,434) 497 82
Dun & Bradstreet DNB (467) 1,419 (262)
Einstein Noah Re BAGL (41) 146 0
Entropic Communications ENTR (33) 177 29
Extendicare Real EXE-U (24) 1,277 161
Gencorp Inc. GY (52) 995 77
General Motors GM (40,071) 149,500 (1,798)
Healthsouth Corp. HLS (1,025) 2,529 (351)
IDEARC Inc IAR (8,531) 1,658 391
IMAX Corp IMX (77) 213 0
IMAX Corp IMAX (77) 213 0
Incyte Corp. INCY (141) 283 238
Indevus Pharma IDEV (74) 183 39
Intermune Inc ITMN (13) 292 237
Koppers Holdings KOP (24) 676 186
Life Sciences Re LSR 0 236 7
Linear Tech Corp LLTC (564) 1,410 912
Lodgenet Entertn LNET (18) 709 18
Mediacom Comm MCCC (188) 3,631 (276)
National Cinemed NCMI (579) 439 40
Navistar Intl NAVZ (1,699) 10,786 164
Netsuite Inc N (49) 56 (46)
Nexstar Broadcasting NXST (87) 708 (19)
NPS Pharm Inc NPSP (210) 361 (119)
PRG-Schultz Intl PRGX (29) 115 21
Primedia Inc PRM (129) 282 6
Protection One PONN (13) 675 (287)
Radnet Inc. RDNT (53) 434 41
Regal Entertainment RGC (93) 2,594 (41)
Riviera Holdings RIV (42) 219 18
RSC Holdings Inc RRR (73) 3,554 (283)
Rural Cellular RCCC (595) 1,328 98
Sally Beauty Hol SBH (761) 1,405 354
Sealy Corp. ZZ (113) 1,025 22
Sipex Corp SIPX (18) 44 2
Sirius Satellite SIRI (641) 1,587 (262)
Sonic Corp SONC (102) 765 (27)
Spectrum Brands SPC (104) 3,211 779
St. John Knits Inc. SJKI (52) 213 80
Station Casinos STN (291) 3,932 (50)
Stelco Inc STE (64) 2,657 693
Town Sports Int. CLUB (6) 483 (71)
UST Inc. UST (292) 1,461 446
Voyager Learning VLCY (53) 917 (637)
Warner Music Gro WMG (36) 4,572 (687)
Weight Watchers WTW (945) 1,037 (134)
WR Grace & Co. GRA (383) 3,871 (1,057)
XM Satellite XMSR (724) 1,709 (244)
*********
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 ***