/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080402.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, April 2, 2008, Vol. 12, No. 78 Headlines ABACUS 2006-8: Moody's Downgrades Ratings on Six Classes of Notes ADVANCED COMMERCIAL: Case Summary & 16 Largest Unsecured Creditors AEGIS MORTGAGE: Court Approves Settlement Agreement with Azoogle AEGIS MORTGAGE: Court OKs Request to Release Liens on Repaid Loans AFFINIA GROUP: Moody's Maintains Corporate Family Rating at 'B2' ALDONA URBANTAS-STEWART: Case Summary & 12 Largest Creditors AMBAC FINANCIAL: Admits Hard Year in 2007, Ex-CEO Gets Less Salary AMERICAN HOME: Countrywide Files Motion for Late Filing of Claims ASCALADE COMMS: Won't File 2007 Annual Report Until CCAA Expires AVENSYS CORP: Unit Completes Purchase of Willer's Assets and Debts BEST BRANDS: Third Amendment and Waiver Won't Affect S&P's Ratings BUILDING MATERIALS: Investor Talked With Rivals to Explore Deals BXG RECEIVABLES: Moody's Puts 'Ba2' Rating on $3.1 Mil. G Notes C-BASS CBO: Moody's Downgrades Ratings on Five Classes of Notes CAREYTOWN SEAFOOD: Case Summary & 18 Largest Unsecured Creditors CCM MERGER: Moody's Chips Corporate Family Rating to 'B2' From B1 CELANESE CORP: Moody's Upgrades Unit's Corporate Rating to 'Ba2' CHAMP CAR: Court Approves $6.25MM Asset Sale to Indy Racing CHRYSLER LLC: U.S. Sales in March 2008 Down 19% at 166,386 Units CIFG GUARANTY: Fitch Slashes Insurer Fin'l Strength Rating to 'A-' COMMODORE CDO: Weak Credit Quality Cues Moody's Eight Rating Cuts CONSTELLATION COPPER: Defaults in CN$69 Million Debentures COOKSON SPC: Moody's Reviews 'Ba2' Rating on 2007-10HGB 2046 Notes COREL CORP: Gets Proposal from Majority Shareholder Corel Holdings COREL CORP: S&P Puts 'B' Rating on Neg. Watch on Acquisition Bid CORTS TRUST: S&P Posts BB Rating on $27MM Certs. on Positive Watch COUDERT BROS: Examiners Say Ex-Partners Should Contribute $11.8MM CROWN MEDIA: Three New Members Elected to Board of Directors CSK AUTO: O'Reilly Automotive to Acquire Business for $1.0 Billion CENVEO INC: Completes Acquisition Contract with Rex Corporation CYGNUS ETRANSACTIONS: Case Summary & 19 Largest Unsec. Creditors DIABLO GRANDE: Discloses Receipt of Purchase Offers for Property DIABLO GRANDE: Court to Approve $1.5 Mil. Credit Facility Today DIAMOND GLASS: Files Voluntary Petition for Reorganization in Del. DIAMOND GLASS: Case Summary & 30 Largest Unsecured Creditors DIAMOND GLASS: President Still Optimistic Despite Ch. 11 Filing DIRECTED ELECTRONICS: Moody's Holds Ratings on Facility Amendment DIRECTED ELECTRONICS: Enters Into Amendment to Credit Agreement DUKE FUNDING XIII: Poor Credit Quality Spurs Moody's Rating Cuts DUKE FUNDING XII: Moody's Downgrades Ratings on Eight Note Classes DUKE FUNDING X: Eroding Credit Quality Prompts Moody's Rating Cuts DURA AUTOMOTIVE: Further Amends First Revised Chapter 11 Plan DURA AUTOMOTIVE: Court Extends Exclusivity Deadline to April 30 DUTCH HILL: Five Classes of Notes Obtain Moody's Junk Ratings EAST LANE: S&P Puts 'BB' Debt Rating on $75 Million Class A Notes ELUSTONDO RAMOS: Case Summary & 17 Largest Unsecured Creditors ENRON CORP: $1.3 Billion Earmarked for Distribution to Creditors EULER ABS: 10 Notes Get Moody's Rating Cuts on Poor Credit Quality EVERGREEN INT'L: Liquidity Concerns Prompts S&P's Negative Watch FAIRPOINT COMM: Completes Merger Agreement with Verizon's Spinco FINANCIAL GUARANTY: S&P Slashes Ratings on 59 Insured ABS Classes FINANCIAL GUARANTY: S&P's 'BB' Rating Cues Rating Cuts on 310 RMBS FINISAR CORP: Restructures Terms on Convertible Note Due March 26 FOOT LOCKER: Poor Sales Results Cues Moody's Rating Cuts to 'Ba3' FORD MOTOR: Total March 2008 U.S. Sales Down 14% at 227, 143 Units FORTUNOFF: Launches New E-Commerce Web Site FORTUNOFF: El-Kam Renews Demand for Postpetition Rent Payment FORTUNOFF: Two Creditors Want Goods Returned or Paid GENERAL MOTORS: March 2008 U.S. Sales Down 13% at 282,732 Units GLOBAL EXECUTION: Fitch Confirms 'BB' Rating on Two Note Classes GREENTREE ESTATES: Case Summary & Largest Unsecured Creditor HERCULES INC: Debt Reduction Cues Moody's Rating Upgrade to 'Ba1' HOT WEB: Gets Rid of $1.6 Million Legacy Debt from Snap 'N Sold INTERSTATE BAKERIES: Wants Court to Determine Tax Liabilities INNOVATIVE DESIGNS: A. Fonzi Resigns as Chief Financial Officer INPHONIC INC: Judge Gross Extends Exclusive Plan Filing Period ISTANA HIGH: Eight Classes of Notes Get Moody's Rating Downgrades JEFFERSON COUNTY: S&P Junks Rating on Series 2003 B-2-B7 Warrants J&R STOUT: Voluntary Chapter 11 Case Summary JP MORGAN CMS: Credit Degradation of Assets Cues S&P Ratings Cut JUDY HOUSTON: Case Summary & Five Largest Unsecured Creditors JULIE WASILESKI: Case Summary & 16 Largest Unsecured Creditors KB HOME: Posts $268 Million Net Loss in Quarter Ended February 29 KHAMSIN CREDIT: Moody's Junks Rating on $12.5 Mil. Notes From 'B3' KROMET AMERICA: Case Summary & 20 Largest Unsecured Creditors LARRY HUFFMAN: Case Summary & 11 Largest Unsecured Creditors LEHMAN XS: Moody's Cuts 279 Tranches' Ratings From 27 Alt-A Deals LEINER HEALTH: Obtains Court OK to Employ Strom as Special Counsel LEXINGTON PRECISION: Case Summary & 30 Largest Unsecured Creditors LIFECARE HOLDINGS: Posts $60.8 Million Net Loss in 2007 LILLIAN VERNON: Committee Wants to Hire Traxi as Financial Advisor LILLIAN VERNON: Panel Wants to Hire Cooley Godward as Counsel LILLIAN VERNON: Panel Wants to Hire Ballard Spahr as Co-counsel LILLIAN VERNON: Wants to Hire McGuireWoods as Special Counsel LOCAL INSIGHT: Moody's Puts 'Ba3' Rating on Proposed $365MM Credit LUMINENT MORTGAGE: Unit Registers Planned REIT Conversion to PTP MAGNOLIA FINANCE 2006-11: Moody's Junks Rating on $40 Mil. Notes MAGNOLIA FINANCE 2007-1: Moody's Junks Rating on Notes From 'B2' MANCHESTER INC: Lender to Foreclose Assets or File Chapter 11 Plan MATHIS PARTNERS: Files Voluntary Chapter 11 Petition in Georgia MEGA BRANDS: Gets Lender Approval on Changes to Debt Facilities MERCY REGIONAL: Undergoes Restructuring Due to Meager Earnings MERISANT COMPANY: Moody's Rates Proposed $210 Mil. Loan at 'B3' MICHAEL DAVIS: Involuntary Chapter 11 Case Summary NATIONAL RV: Exclusive Plan Filing Period Extended Until June 27 NEFF CORP: Posts $119.9 Million Net Loss in Year Ended Dec. 31 NEO PLASTICS: Assets Acquired by RTS Plastics for $880,000 NORTHSHORE SERVICE: Case Summary & Six Largest Unsecured Creditors NOVELL INC: Augments Operations with PlateSpin Buyout Completion NUVEEN INVESTMENT: Funds to Refinance Auction-Rate Securities PETROQUEST ENERGY: S&P Upgrades Corporate Credit Rating to 'B' PINNACLE ENTERTAINMENT: Moody's Holds 'B2' Corporate Family Rating PONTIAC HOSPITAL: S&P's Rating on $35.8 Mil. Bonds Tumbles to 'D' QUEBECOR WORLD: Jefferies & Co. as Committee Bankers Approved QUEBECOR WORLD: Kurtzman Carson Hiring as Committee Agent Approved QUEBECOR WORLD: Mesirow Hiring as Panel Financial Advisor Approved RANDALL MARTIN: Case Summary & 20 Largest Unsecured Creditors READER'S DIGEST: Increase in Debt Spurs Moody's Negative Outlook REMINGTON ARMS: Posts $1.5 Million Net Loss in Year Ended Dec. 31 REMINGTON ARMS: Edward Rensi Appointed to Board of Directors ROLLAND ENERGY: CEO McLellan Provides Second Restructuring Update SAIL TRUSTS: Write-downs Spurs S&P's 'D' Rating on Five Classes SECURITY CAPITAL: S&P's Rating on Preference Shares Tumbles to 'D' SINCLAIR-DWYER & CO: Case Summary & 11 Largest Unsecured Creditors SIRVA INC: Triple Files Appeal on DIP Financing & Payment Orders SP NEWSPRINT: Completes $350 Million Buyout Deal with White Birch SR TELECOM: Selling Assets to Groupe Lagasse for $6 Million STEELCASE INC: Plans Job Cuts and Plant Closures in North America STONE ENERGY: S&P Changes Outlook to Stable; Confirms 'B+' Rating SUPERIOR OFFSHORE: Defaults on JPMorgan Chase Credit Facility SUPERIOR OFFSHORE: Review of Financial Records Delays 10-K Filing TAYLOR TELFAIR: Case Summary & 20 Largest Unsecured Creditors TOUSA INC: Wants Automatic Stay Lifted to Advance Defense Costs TOUSA INC: Committee Wants to Hire Garden City as Info Agent TOUSA INC: Committee Seeks to Retain Jefferies as Advisor TOWERS OF CHANNELSIDE: Taps Cascade Capital as Financial Advisors TOWERS OF CHANNELSIDE: Taps Dennis Noto & Associates as Appraiser US AIRWAYS: Court of Appeals Upholds Ruling on R. Bosiger's Suit US AIRWAYS: To Settle MD Aviation Claim by Paying $11,500,000 US AIRWAYS: R. Thomas Demands Retirement Benefits Continued VALMONT INDUSTRIES: Revenue Growth Cues Moody's Rating Lift to Ba1 VAXGEN INC: CEO Says MedCap's Analysis is Incorrect and Shallow VAXGEN INC: Ends Raven Merger Over Likely Stockholder Objection VERASUN ENERGY: Completes Merger Agreement with US BioEnergy VESTA INSURANCE: Gaines Trustee Settlement with SG/SPV Approved VIASYSTEMS INC: Earns $17.3 Million in Year Ended Dec. 31 VILLAGE HOTEL: Case Summary & 27 Largest Unsecured Creditors VOUGHT AIRCRAFT: Boeing Agrees to Buy Share of Global Aeronautica VOUGHT AIRCRAFT: S&P Says 50% Stake Sale Won't Affect Its Rating VPG INVESTMENTS: Files Schedules of Assets and Liabilities WADSWORTH CDO: Moody's Junks Rating on $38 Mil. Notes From 'Baa1' WOODSIDE AMR 107: Case Summary & 40 Largest Unsecured Creditors X-RITE INC: Weak Performance Cues Moody to Cut Ratings to 'B2' ZIFF DAVIS: Court Grants Final Approval to Cash Collateral Use ZIFF DAVIS: Disclosure Statement Hearing Set April 29 ZIFF DAVIS: Winston & Strawn Clarifies Pre-Bankruptcy Transactions * S&P Downgrades Ratings on 65 Classes From 19 RMBS Transactions * Stressed Markets Mean Poor 2008 Thrift Performance, S&P Says * S&P Says Most Nonbulge-Bracket Brokers Survive Turbulent Markets * U.S. Senate Advances Bill to Stem Housing Foreclosures * IWIRC to Honor Achievement of Bankruptcy Professionals * CRG Partners Forms Strategic Alliance with Smith & Williamson * FTI Acquires Real Estate Consulting Firm Schonbraun McCann * BDO Consulting Forms Strategic and Financial Consulting Services * Upcoming Meetings, Conferences and Seminars ********* ABACUS 2006-8: Moody's Downgrades Ratings on Six Classes of Notes ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by ABACUS 2006-8, Ltd.: Class Description: $50,000,000 Class A-1 Floating Rate Notes, Due 2045 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Aa3, on review for possible downgrade Class Description: $35,000,000 Class A-2 Floating Rate Notes, Due 2045 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $27,500,000 Class A-3 Floating Rate Notes, Due 2046 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: $20,000,000 Class B Floating Rate Notes, Due 2046 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $32,500,000 Class C Floating Rate Notes, Due 2046 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class Description: $4,000,000 Class D Floating Rate Notes, Due 2045 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. ADVANCED COMMERCIAL: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Advanced Commercial Contracting Inc. 22473 Prat's Dairy Road Abita Springs, LA 70420 Bankruptcy Case No.: 08-10609 Chapter 11 Petition Date: March 25, 2008 Court: Eastern District of Louisiana (New Orleans) Judge: Jerry A. Brown Debtor's Counsel: Phillip K. Wallace, Esq. 2027 Jefferson Street Mandeville, LA 70448 Tel: (985) 624-2824 Fax: (985) 624-2823 PhilKWall@aol.com Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million Debtor's list of its 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Edward J. Hartson business capital $2,284,877 dba Hartson Holdings LLC 78261 Booth Road Folsom, LA 70437 Statewide Bank real estate; $1,987,154 2008 Ronald Reagan Highway value of Covington, LA 7043 security: $16,920,000; value of senior lien: $18,525,715 Internal Revenue Service FICA taxes $104,479 P.O. Box 87 Memphis, TN 38101 Chase Visa credit card $60,700 purchases for business LA Department of Revenue state withholding $50,687 tax Internal Revenue Service federal $49,123 withholding taxes Wells Fargo Master Card credit card $37,472 purchases Hogan Hardwoods loan to pay off $34,547 accounts payable invoices AICCO insurance $31,192 coverage Standard Insurance employee withheld $23,454 retirement fund AIG insurance $17,980 coverage Stonetrust Commercial insurance $15,855 coverage Humana Plan of Louisiana employee $14,386 insurance coverage Aldon G. Wahl, Jr., CPA accounting $14,195 services Standard Insurance employer matched $14,119 retirement fund Baldwin, Haspel, Burke & attorney fees $14,073 Mayer AEGIS MORTGAGE: Court Approves Settlement Agreement with Azoogle ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved a settlement agreement among Aegis Lending Corp., AzoogleAds US, Inc., and Azoogle.com, Inc. The parties entered into a stipulation to avoid any costly litigation to resolve their dispute. The stipulation provides, among other things, that: (i) AzoogleAds and Azoogle.com will pay $30,000,000 to Aegis Lending; (ii) Aegis Lending will dismiss, with prejudice, an arbitration demand it filed before the American Arbitration Association; and (iii) the parties will release each other from all claims. The dispute ensued among the parties after AzoogleAds and Azoogle.com allegedly breached their agreement dated August 1, 2005, when they sold to Aegis Lending a mortgage lead allegedly obtained through the use of unsolicited spam email. Aegis Lending was also implicated in a lawsuit filed by Asis Internet Services as a result of the sale. When Aegis Lending asked for initial indemnification payment, AzoogleAds and Azoogle.com only paid $17,705 in damages and attorneys' fees, instead of $25,000 as agreed upon by the parties. Consequently, Aegis Lending initiated a demand for arbitration pursuant to the Aug. 1, 2005 agreement before the American Arbitration Association. Headquartered in Houston, Texas, Aegis Mortgage Corporation -- http://www.aegismtg.com/-- offers a variety of mortgage loan products to brokers through its subsidiaries. The company together with 10 affiliates filed for chapter 11 protection on Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119) Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl, & Jones, L.L.P., serve as counsel to the Debtors. The Official Committee of Unsecured Creditors is represented by Landis Rath & Cobb LLP. In schedules filed with the Court, Aegis disclosed total assets of $138,265,342 and total debts of $4,125,470. The Debtors' exclusive period to file a plan of reorganization expires on April 9, 2008. (Aegis Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AEGIS MORTGAGE: Court OKs Request to Release Liens on Repaid Loans ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware approved the request of Aegis Mortgage Corp. and its debtor-affiliates to: (i) release their liens and interests on certain properties, which secure the loans that had been fully repaid by the borrowers; and (ii) process all prepetition sales and transfers of loans and loan-related assets to third parties. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, explained that the Debtors have filed the request to avoid spending unnecessary legal fees for responding to lawsuits that loan borrowers may file to compel the release of the Debtors' liens on the properties, or the completion of loan transfer requests. Pre-bankruptcy, the Debtors executed in the ordinary course of business all documentation required to fully consummate sales and transfers of prepetition loans and loan related assets, rights and interests. In some instances, the Debtors did not complete all necessary documentation, or, alternatively, the person or entity receiving the documentation may have misplaced or lost the documentation. As a result, the Debtors from time to time received, and continue to receive, requests to complete, replace or re-execute various types of documentation relating to sales and transfer of loans. Upon determination that they had no remaining right or interest in any loan or other related assets, the Debtors would grant the request and complete, replace or re- execute appropriate documentation as necessary to effectuate the particular transaction reflected in their books and records. In addition to Loan Transfer Requests, the Debtors still may have recorded liens on certain properties for loans that were fully repaid by borrowers prepetition, but which liens were never released. Headquartered in Houston, Texas, Aegis Mortgage Corporation -- http://www.aegismtg.com/-- offers a variety of mortgage loan products to brokers through its subsidiaries. The company together with 10 affiliates filed for chapter 11 protection on Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119) Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl, & Jones, L.L.P., serve as counsel to the Debtors. The Official Committee of Unsecured Creditors is represented by Landis Rath & Cobb LLP. In schedules filed with the Court, Aegis disclosed total assets of $138,265,342 and total debts of $4,125,470. The Debtors' exclusive period to file a plan of reorganization expires on April 9, 2008. (Aegis Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AFFINIA GROUP: Moody's Maintains Corporate Family Rating at 'B2' ---------------------------------------------------------------- Moody's Investors Service lowered Affinia Group Inc.'s Speculative Grade Liquidity Rating to SGL-3, from SGL-2. In a related action Affinia's Corporate Family Rating and Probability of Default were affirmed at B2, ratings on the company's first lien bank obligations and the ratings on the subordinated notes were affirmed at Ba3, and B3, respectively. The outlook is stable. The revised Speculative Grade Liquidity Rating reflects Moody's concern that stepdowns in the leverage covenants contained in the company's bank credit facilities, combined with potential softness in automotive aftermarket demand, high debt levels, and the timing of the company's ongoing restructuring activities, could narrow the margin of cushion relative to this leverage test. The leverage covenant steps down for the first fiscal quarter of 2008 and again for the fourth quarter. At year-end 2007, the company maintained $59 million of cash and cash equivalents which should be more than sufficient to cover seasonal working capital needs. The company's $125 revolving credit facility matures in November 2010 and had availability of approximately $97 million after taking account of $28 million of letters of credit. The company's receivable securitization facility matures in November 2009. The next debt maturity is the company's term loan in November 2011. Alternate forms of liquidity are limited as the bank credit facilities are secured by substantially all of the company's assets. Notwithstanding tighter covenant headroom and the potential for general economic headwinds in the United States to depress aftermarket demand, Moody's expects Affinia to be cash flow positive in 2008. The company has initiated a number of restructuring actions which have positively impacted results in 2007 and are expected to have a positive impact in 2008. The B2 Corporate Family Rating continues to consider the qualitative strengths of Affinia's business in Moody's Auto Supplier Methodology such as scale of operations, geographic and customer diversification and focus on the replacement parts market. The company benefits from leading market shares in filters, brakes and chassis components and offers a full line of products in those categories, which helps to competitively position its products across distribution channels. The rating also reflects the company's leverage and interest coverage. As of Dec. 31, 2007 Affinia's debt EBITDA (including Moody's standard adjustments) was 5.2x and EBIT Interest was 1.4x. Negative free cash flow in 2007 was largely driven restructuring costs and higher inventory levels used to lower customer fulfillment risks associated with the transition of sourcing to low cost countries. The stable outlook continues to consider the demand characteristics and market share for Affinia's replacement parts and improving operating margins. Demand for Affinia's products are correlated with normal maintenance and wear requirements. This contrasts with repair and warranty requirements which are more influenced by product failure rates which have been affected by general trends in improved quality of original equipment parts. The outlook anticipates that the company's restructuring efforts will lead to stronger operating margins and free cash flow over the intermediate period, and the company's current cash balances. Any further deterioration in the company's liquidity profile will adversely impact the outlook and ratings. Ratings lowered: -- Speculative Grade Liquidity Rating, to SGL-3 from SGL-2 Ratings affirmed: -- B2, Corporate Family Rating -- B2, Probability of Default -- Ba3 (LGD2, 24%), first lien bank debt -- B3 (LGD5, 74%) on the Subordinated Notes -- Senior Unsecured Issuer Rating, B3 The last rating action was on Jan. 23, 2007 when Affinia's ratings were raised. Affinia Group Inc., headquartered in Ann Arbor, Michigan, is a designer, manufacturer and distributor of aftermarket components for passenger cars, sport utility vehicles, light, medium and heavy trucks and off-highway vehicles. The company's product range addresses filtration, brake and chassis markets in North and South America, Europe and Asia. In 2007, the company reported revenues of approximately $2.1 billion. ALDONA URBANTAS-STEWART: Case Summary & 12 Largest Creditors ------------------------------------------------------------ Debtor: Aldona Maria Urbantas-Stewart dba Beau Bleu Equestrian 578 Dooley Road Dallas, GA 30132 Bankruptcy Case No.: 08-40957 Type of Business: The Debtor owns and manages a horse stable and arena. Chapter 11 Petition Date: March 31, 2008 Court: Northern District of Georgia (Rome) Debtor's Counsel: Rex Cornelison, Esq. The Cornelison Group, LLC Building D, Suite 1 500 Sun Valley Drive Roswell, GA 30076-5636 Tel: (770) 587-0082 Total Assets: $3,035,460 Total Debts: $1,722,758 Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Washington Mutual Card Service credit card $3,246 P.O. Box 660509 Dallas, TX 75266-0509 Cherokee Feed & Seed, Inc. feed $2,764 2370 Hightower Road Ball Ground, GA 30107 Greystone Power Corp. electric service $1,000 P.O. Box 6071 Douglasville, GA 30154-6071 J&J Hay Farms, Inc. hay $500 Rainwater Hearting & Air Cond. service $379 Mike Morgan carpet installation $378 T-Mobile telephone service $284 Verizon Wireless telephone service $266 Equine Veterinary Service veterinary services $252 Cherokee County Water & Sewer water service $113 AT&T telephone service $60 DirectTV satellite service unknown AMBAC FINANCIAL: Admits Hard Year in 2007, Ex-CEO Gets Less Salary ------------------------------------------------------------------ The fiscal year 2007 was a difficult year for Ambac Financial Group Inc. overall, according to a filing with the Securities and Exchange Commission. The company did not meet its financial objectives and were negatively impacted by the credit crisis and the continued deterioration of the subprime and mortgage related markets. The fiscal year 2007 was significantly impacted by a $6.004 billion mark-to-market loss, primarily driven by certain collateralized debt obligations of asset-backed securities backed by subprime residential mortgage-backed securities. Also impacting 2007 was the establishment of loss reserves primarily driven by unfavorable credit activity within the home equity line of credit and closed-end second lien residential mortgage-backed securities portfolio. In view of these circumstances, and consistent with the compensation principles, the company took certain steps relating to compensation. The company reorganized its management team and risk function. Robert J. Genader, who served as Ambac's Chief Executive Officer during 2007, and William T. McKinnon, who served as its Chief Risk Officer, have retired. The company did not pay bonus compensation or make long-term incentive awards to Mr. Genader in respect of 2007 and made only the payments and awards to Mr. McKinnon that was required by his employment agreement. Mr. Genader announced his retirement from Ambac on Jan. 13, 2008. Mr. Genader stated that his decision to retire was prompted, in part, by his disagreement with aspects of the Board's capital raising plan. For 2007, Mr. Genader received a base salary of $5.6 million. He did not receive any bonus or long-term incentive compensation. Mr. Genader did not receive any severance or other retirement package. Upon retirement, all of Mr. Genader's unvested equity awards vested in accordance with the terms and conditions of the underlying award agreements as applicable to all employees. Although the company's performance in 2007 did not reach the threshold required to trigger a payout under its Executive Incentive Plan, it determined to pay bonus compensation to those named executive officers who are continuing with us in 2008. Ambac believes it is essential to retain those executives whom it considers to be critical to our efforts to re-establish the franchise and improve stockholder value over the long-term. Ambac did not increase the rate of base salary for any of our named executive officers for 2008. However, the company has continued its practice of offering executive officers health, welfare and similar benefit programs on the same basis that the company makes these programs available to its employees generally. Based in New York City, Ambac Financial Group, Inc. is a holding company that provides financial guarantees and financial services to clients in both the public and private sectors around the world through its principal operating subsidiary, Ambac Assurance Corporation. As an alternative to financial guarantee insurance credit protection is provided by Ambac Credit Products, a subsidiary of Ambac Assurance, in credit derivative format. For the nine months ended Sept. 30, 2007, Ambac reported net income of $26 million. As of Sept. 30, 2007, Ambac had shareholders' equity of approximately $5.65 billion. * * * As reported in the Troubled Company Reporter on March 7, 2008, Moody's Investors Service said in a news statement that Ambac Financial Group Inc., if successful with its equity offering of $1.5 billion, will likely retain its "Aaa" rating. Moody's said that it will evaluate Ambac's ability to raise capital at reasonable terms as an indication of the company's financial flexibility and overall level of support from investors. In Moody's view, Ambac's new equity and equity linked capital through a public offering represents an important component of its overall plan to strengthen the credit profile of its financial guaranty insurance subsidiary, Ambac Assurance Corporation. On Jan. 18, Fitch Ratings downgraded Ambac to double-A after the insurer put off plans to raise equity capital. Moody's, the TCR said Jan. 17, 2008, placed the Aaa insurance financial strength ratings of Ambac Assurance Corporation and Ambac Assurance UK Limited on review for possible downgrade. In the same rating action, Moody's also placed the ratings of the holding company, Ambac Financial Group, Inc. (senior debt at Aa2), and related financing trusts on review for possible downgrade. Moody's stated that this rating action follows Ambac's announcement of record losses, a capital raising plan, and the retirement of its CEO. AMERICAN HOME: Countrywide Files Motion for Late Filing of Claims ----------------------------------------------------------------- Countrywide Home Loans, Inc., Countrywide Bank, F.S.B., ReconTrust Bank, N.A., and Landsafe ask the U.S. Bankruptcy Court for the District of Delaware to allow the late filing of their proofs of claim one business day beyond the January 11, 2008 Bar Date in the bankruptcy case of American Home Mortgage Investment Corp. and its debtor-affiliates. In December 2007, Countrywide requested the assistance of Katherine M. Windler, Esq., at Bryan Cave, LLP, in Santa Monica, California, in the preparation and filing of their Claims. Ms. Windler worked directly alongside her legal secretary, Pamela Davis, and mailed to EPIC Bankruptcy Solutions, LLC, the Debtors' claims agent, via Federal Express next-day delivery, 10 Claims placed in four separate delivery packages. A complete set of the Claims was retained as a precautionary step in the event Ms. Windler could not confirm delivery of the Claims in New York on Friday, January 11, 2008. According to Ms. Windler's declaration, on January 11, the Federal Express tracking system verified that the packages had arrived in New York. However, on January 15, Ms. Windler received the returned Federal Express envelopes with the conformed copies of the Claims and learned, for the first time, that the Claims were not actually received by the Claims Agent until Monday, January 14, one business day after the Bar Date. Thereafter, Ms. Windler learned, through new tracking reports, that the packages had actually sat in Tennessee the entire weekend from January 11 through 13, directly contradicting the print out obtained on January 11, which wrongfully represented that the packages were physically in New York, according to William E. Chipman, Jr., Esq., at Edwards Angell Palmer & Dodge LLP, in Wilmington, Delaware. Countrywide immediately called counsel to the Debtors to alert them of the issue in an attempt to reach a consensual resolution. Mr. Chipman relates that since January 17, 2008, counsel for Countrywide and counsel for the Debtors have been engaged in good-faith negotiations on a stipulation deeming the Claims as timely filed. However, as of March 11, the parties have been unable to reach an agreement. Allowing the Claims to be filed one day late would not force the return of amounts already paid out under any plan or affect a distribution to creditors because the Debtors have yet to propose a plan, Mr. Chipman says. The reason for the delay was due to Federal Express and its errors in (i) not adhering to its own forms and instructions for next-day delivery and (ii) incorrectly reporting in its tracking system that the packages had arrived in New York when in fact they had not, Mr. Chipman tells the Court. The length of delay in filing the Claims on the next business day and any potential impact upon the Debtors' cases is de minimis, he asserts. Countrywide Capital in Lake Havasu city, Arizona, is listed at one of the Debtor's 39 largest unsecured creditors. It holds unspecified unliquidated loan repurchase. 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. The Court has extended the exclusive periods for the Debtors to file a plan of reorganization through June 2, 2008, and solicit and obtain acceptances for that plan through July 31, 2008. (American Home Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ASCALADE COMMS: Won't File 2007 Annual Report Until CCAA Expires ---------------------------------------------------------------- Ascalade Communications Inc. said that as a result of its application under the Companies' Creditors Arrangement Act and as previously disclosed on March 3, 2008, it does not expect to file its audited annual financial statements for the year ended Dec. 31, 2007, and the management's discussion and analysis, as well as, its annual information form for the year ended Dec. 31, 2007. Ascalade does not anticipate completing the filings prior to the lifting or expiry of the CCAA protection order. Ascalade has been under CCAA protection since March 3, 2008. The expected delay in completing the Filings is as a result of Ascalade focusing its resources on restructuring winding up of the Ascalade group of companies and the uncertainty regarding Ascalade's future operations. While under CCAA protection, Ascalade will comply with the alternative information guidelines set out in Ontario Securities Commission Policy 57-603 -- Defaults by Reporting Issuers in Complying with Financial Statement Filing Requirements for issuers who are delayed in filing and forwarding to shareholders financial statements within the times prescribed by applicable securities laws. The guidelines, among other things, require Ascalade to issue bi- weekly status reports by way of a news release so long as Ascalade remains under CCAA protection and the Filings have not been completed. Ascalade acknowledges that an issuer cease trade order may be imposed by the Ontario Securities Commission, if the default is not remedied by May 31, 2008 and the Filings have not been completed. On March 13, 2008 Ascalade's subsidiary in Hong Kong, Ascalade Communications Limited, filed a Scheme of Arrangement under Section 166 of the Companies Ordinance (Chapter 32) of Hong Kong. A first hearing of the Scheme was scheduled in Hong Kong on April 1, 2008. A Meeting of Creditors is scheduled to consider the Scheme of Arrangement on May 2, 2008 in Hong Kong. Concurrently with the issuance of this press release, Ascalade has filed with the Ontario Securities Commission a report in the form of a material change report, which includes additional information related to Ascalade's CCAA protection and its delay in filing the Filings. 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. AVENSYS CORP: Unit Completes Purchase of Willer's Assets and Debts ------------------------------------------------------------------ Avensys Inc., a subsidiary of Avensys Corporation, closed its acquisition of the assets and liabilities of Willer Engineering Limited. As reported in the Troubled Company Reporter on March 13, 2008, Avensys Inc. entered into an asset purchase agreement with Willer Engineering Limited. Upon the close of the acquisition, the assets of Willer Engineering will be merged with Avensys Inc.'s environmental instrumentation division, Avensys Environmental Solutions. The company related that the merger will result in a business generating $15 million a year in revenues, in a market where players are significantly smaller. It will also result in significant cost synergies and the ability to expand product lines and services beyond current capabilities. About Willer Engineering Limited Headquartered in Toronto, Willer Engineering Limited -- http://www.willereng.com/-- is a privately-owned company that provides professional instrumentation solutions, products and service to the industrial, process and scientific markets in Eastern Canada. The company was established more than 45 years ago. About Avensys Corp. Avensys Corp. fka. Manaris Corp. -- http://www.manariscorp.com/-- operates through its wholly owned subsidiaries, Avensys Inc. and C-Chip Technologies Corp. Avensys Inc. develops optical components and sensors and provides environmental monitoring solutions. AVI sells its optical products and services primarily in North America, Asia and Europe to the telecommunications, aerospace, and oil and gas industries. Environmental monitoring services and solutions are primarily targeted at public sector organizations across Canada. Prior to the termination of the Technology License Agreement with its former supplier, C-Chip earned royalties with respect to the devices sold by the licensee to the credit management marketplace. Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 4, 2007, Montreal, Canada-based Raymond Chabot Grant Thornton LLP expressed substantial doubt about Manaris Corp. nka. Avensys Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended June 30, 2007. The auditor pointed to the company's significant losses since inception and reliance on non-operational sources of financing to fund operations. BEST BRANDS: Third Amendment and Waiver Won't Affect S&P's Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services said that its ratings and outlook on Minnetonka, Minnesota-based Best Brands Corp. (CCC/Negative/--) remain unchanged following the company's disclosure that it received a third amendment and waiver to its credit facility which relaxed covenant levels and increased pricing, among other provisions. Best Brands also completed a sale and leaseback transaction and applied proceeds to debt reduction. Still, S&P remains concerned about very limited covenant cushion over the next few quarters, and ongoing liquidity as peak revolver borrowing typically occurs in September-October. The company currently has about $2 million in cash and about $12 million available on its $30 million revolving credit facility. The ratings could be lowered if liquidity tightens and the company seeks another amendment. BUILDING MATERIALS: Investor Talked With Rivals to Explore Deals ---------------------------------------------------------------- Building Materials Holding Corporation shareholder and fund manager Chapman Capital L.L.C. disclosed that following the company's first quarter 2007 Conference Call, Chapman Capital made contact with senior executives of various publicly traded and privately held competitors of the company to: a) broaden Chapman Capital's understanding of BMHC's business, assets, liabilities outside of management, and competitive positioning, and b) inform those peer companys of Chapman Capital's interest in maximizing the long term value of BMHC's common stock via a change-of-control transaction. In a regulatory filing with the Securities and Exchange Commission, Chapman Capital said the communications with the Peers continued throughout May 2007, and may be expected to persist until a change-of-control transaction has reached a definitive state. Chapman Capital also disclosed holding 1,433,760 shares -- or 4.9% -- of the outstanding shares of BMHC common stock. Chapman Capital said 469,102 of the shares are held in Chap-Cap Partners II Master Fund, Ltd., and 964,658 of the shares are held in Chap- Cap Activist Partners Master Fund, Ltd. Chapman Capital acquired BMHC securities in the ordinary course business. Chap-Cap Partners II paid $6,438,266 for its shares. Chap-Cap Activist Partners paid $13,206,282. The funds were derived from the firm's working capital. >From May to November 2007, Chapman Capital sent various correspondences with BMHC management demanding for changes, including significantly reduce the company's corporate and divisional overhead, and engaging financial advisors to explore the complete or divisional sale of the company. In October 2007, the fund manager demanded the resignation of Robert E. Mellor, chairman of BMHC's board of directors and its chief executive officer. The fund manager attempted -- but failed -- to obtain a seat for Robert L. Chapman, Jr., managing member at Chapman Capital, on BMHC's board. In November, Mr. Chapman sent correspondence to BMHC's Board to inform them of his appointment as director of Entertainment Distribution Company, Inc. Mr. Chapman emphasized how BMHC's "entrenched and chronologically advanced" Board has "ostracized and excluded the advisor to its largest ownership block [versus] EDCI's embracement of that same advisor via Board inclusion." Chapman Capital said it may in the future consider a variety of different alternatives to achieving its goal of maximizing shareholder value, including negotiated transactions, tender offers, proxy contests, consent solicitations, or other actions. "However, it should not be assumed that such members will take any of the foregoing actions. The members of the Reporting Persons reserve the right to participate, alone or with others, in plans, proposals or transactions of a similar or different nature with respect to [BMHC]" Mr. Chapman said. To contact Chapman Capital: Robert L. Chapman, Jr. Chapman Capital L.L.C. 1007 N. Sepulveda Blvd. #129 Manhattan Beach, CA 90267 Telephone (310) 373-0404 About Building Materials Holding Corporation Based in San Francisco, California, Building Materials Holding Corporation (NYSE:BLG) -- http://www.bmhc.com-- provides residential construction services and building products to professional homebuilders and contractors in western and southern regions of the United States. It operates through two business segments: SelectBuild and BMC West. SelectBuild provides framing and other construction services to high-volume homebuilders in key markets. BMC West markets and sells building materials, manufactures building components and provides construction services to professional builders and contractors through a network of 41 distribution facilities and 60 manufacturing facilities. It provides construction services and building products in 16 single-family residential construction markets. In November 2006, SelectBuild acquired the remaining 49% interest in BBP companies. In March 2007, BMHC's subsidiary, SelectBuild Construction Inc., acquired the remaining 27% of Riggs Plumbing LLC. * * * As reported by the Troubled Company Reporter on March 18, 2008, Fitch Ratings downgraded and removed from Rating Watch Negative Building Materials Holding Corporation's Issuer Default Rating to 'B' from 'B+'; and Senior secured debt to 'B+/RR3' from 'BB-/RR3'. The Rating Outlook is Negative. The TCR said on March 17 that Standard & Poor's Ratings Services lowered its corporate credit rating on BMHC to 'B-' from 'B'. S&P also lowered the senior secured bank loan rating to 'B-' from 'B+' and revised the recovery rating to '4' from '2' -- indicating that lenders can expect an average (30%-50%) recovery in the event of a payment default. S&P also assigned a 'B-' senior secured rating to the company's amended and restated revolving credit facility, with a recovery rating of '4'. Moody's Investors Service, the TCR said March 10, lowered the ratings of BMHC, including its corporate family rating, to B2 from B1, its probability-of-default rating to B3 from B2, and its first-lien bank credit facility rating to B2 (LGD3, 39%) from B1 (LGD3, 38%), concluding Moody's review which commenced Feb. 13. The ratings outlook is negative. BXG RECEIVABLES: Moody's Puts 'Ba2' Rating on $3.1 Mil. G Notes --------------------------------------------------------------- Moody's Investors Service assigned a Aaa rating to the senior class of notes issued by BXG Receivables Note Trust 2008-A in Bluegreen Corporation's securitization of timeshare receivables. Moody's also rated Classes B, C, D, E, F and G Aa3, A3, Baa1, Baa2, Baa3 and Ba2, respectively. The ratings were based on the levels of credit enhancement provided by each of the subordinate classes, the overcollateralization, the reserve fund, the quality of the timeshare receivables, and the structure of the transaction. The complete rating action is: Issuer: BXG Receivables Note Trust 2008-A -- $17.8 mil; Class A, 5.885% Timeshare Loan-Backed Notes, Series 2008-A, Aaa -- $9.6 mil; Class B, 6.880% Timeshare Loan-Backed Notes, Series 2008-A, Aa3 -- $14.1 mil; Class C, 7.870% Timeshare Loan-Backed Notes, Series 2008-A, A3 -- $4.3 mil: Class D, 9.100% Timeshare Loan-Backed Notes, Series 2008-A, Baa1 -- $5.7 mil; Class E, 10.085%, Timeshare Loan Backed Notes, Series 2008-A, Baa2 -- $5.3 mil; Class F, 10.810%, Timeshare Loan Backed Notes, Series 2008-A, Baa3 -- $3.1 mil; Class G, 11.630%, Timeshare Loan Backed Notes, Series 2008-A, Ba2 Bluegreen specializes in drive-to timeshare developments in regional locations. There are 44 in-network resorts in the Bluegreen Club. Bluegreen, which has a senior secured rating of B3 from Moody's with a stable outlook, markets to people with minimum household incomes of $40,000 a year. It estimates that its customer's average annual household income is approximately $70,000, which is less than the industry average. The average outstanding loan balance in the transaction as of the statistical cut-off date of Feb. 15, 2008 was approximately $13,945. The weighted average coupon was approximately 15%.The weighted average original term to maturity was 120 months and the weighted average age was 3.3 months. Most of the loans have an original term of 10 years with a minimum required down payment of 10%. Higher down payments lead to a reduction in the interest rate charged on the loan. Approximately 73.4% of the collateral balance arises under loans for resorts located in Florida and South Carolina. By state of residence, the highest obligor concentration is in North Carolina with 9.7%. The concentration of foreign borrowers at the statistical cut-off date is approximately 1.3%. The required reserve fund balance as a percentage of the aggregate closing date collateral balance will be at closing 2.5% growing to 7.5%. After month 18, the required reserve fund balance will decrease by 1.25% per month to a floor of 1.5%. Bluegreen Corporation., headquartered in Boca Raton, Florida, has been in the timeshare business since 1994 and is among the top ten sellers of timeshares in the United States. Bluegreen is the servicer in this transaction. C-BASS CBO: Moody's Downgrades Ratings on Five Classes of Notes --------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by C-BASS CBO XVIII Ltd.: Class Description: $346,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $150,000,000 Class A-2 First Priority Senior Secured Fixed Rate Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $46,500,000 Class B Second Priority Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Class Description: $12,700,000 Class C Third Priority Secured Floating Rate Deferrable Interest Notes Due 2047 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Class Description: $17,800,000 Class D Fourth Priority Secured Floating Rate Deferrable Interest Notes Due 2047 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio CAREYTOWN SEAFOOD: Case Summary & 18 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Careytown Seafood, Inc. dba Carytown Seafood dba Careytown Seafood 3107 West Cary Street Richmond, VA 23221 Bankruptcy Case No.: 08-31451 Type of Business: The Debtor sells seafood in wholesale and retail. Chapter 11 Petition Date: March 31, 2008 Court: Eastern District of Virginia (Richmond) Debtor's Counsel: Lynn L. Tavenner, Esq. (ltavenner@tb-lawfirm.com) Tavenner & Beran, PLC 20 North Eighth Street, Second Floor Richmond, VA 23219 Tel: (804) 783-8300 Fax: 804-783-0178 http://www.tb-lawfirm.com/ Total Assets: 913,902 Total Debts: 2,110,852 Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sam Rust Seafood, Inc. Seafood $240,556 P.O. Box 9760-620 Regional Drive Hampton, VA 23670 Hitachi Captial America Refrigeration Truck $77,066 21925 Network Place FM260; value of Baltimore, MD 21297-0513 security: $40,000 Refrigeration Truck $46,807 FK 180; value of security: $30,000 Refrigeration Truck $42,374 FE180; value of security: $30,000 Crocker & Winsor Seafoods, Seafood $105,946 Inc. 100 Widett Circle Boston, MA 02118 Sea Farms, Inc. Seafood $84,009 Ocean to Ocean Seafood Seafood $73,421 OFC Capital Corp. Lobster Tank; value $70,956 of security: $15,000 Twin Tails $56,920 Legacy Sea Products LLC Seafood $41,181 Agro America LLC Seafood $36,190 Pier Fish Co., Inc. Seafood $26,518 Tidewater Foods Inc. Seafood $23,650 Beaver Street Fisheries, Inc. Seafood $20,457 AdvanceMe Inc. Cash advances $20,000 from credit card companies based on sales Moreys Seafood International Seafood $19,487 Stavis Seafood Seafood $15,075 Slade Gorton & Co. Seafood $14,055 Crabs Express Crabs $10,654 Ryder Transportation Services Trucking $10,548 CCM MERGER: Moody's Chips Corporate Family Rating to 'B2' From B1 ----------------------------------------------------------------- Moody's Investors Service lowered the ratings of CCM Merger, Inc. due to the much slower-than-anticipated leverage reductions and fiercely competitive Detroit gaming market. As a result, Moody's believes it's unlikely that the company will be able to reduce debt EBITDA to at or below 5.0 times by the end of 2009 -- a primary underlying assumption supporting the initial assignment of the B1 corporate family rating in July 2005. Based on Moody's current EBITDA expectations for CCM Merger, it's expected that debt EBITDA for fiscal 2008 and fiscal 2009 will more likely be near 6.0 times, a level more consistent with a B2 corporate family rating. Ratings downgraded are: -- Corporate family rating to B2 from B1 -- Probability of default ratings to B2 from B1 -- Senior secured bank loan rating to B1 (LGD 3, 34%) from Ba3 (LGD 3, 35%) -- 8% senior notes due 2013 to Caa1 (LGD 5, 88%) from B3 (LGD 5, 88%). A stable ratings outlook was assigned. CCM Merger's debt EBITDA for the fiscal year-ended Dec. 31, 2007 was about 7.6 times. While this metric includes a significant amount of construction related debt tied to the company's $300 million permanent casino development, it also reflects EBITDA results that are below 2005 projected expectations. The EBITDA shortfall occurred as a result of: (1) greater than expected promotional activity and slower than expected growth in the Detroit market during the past 12-18 months; (2) a previous extension of the permanent casino opening deadline; and; (3) the recent opening of MGM MIRAGE's (Ba2/stable) MGM Grand Detroit casino, which in addition to growing the overall Detroit gaming market, has taken market share away from CCM Merger's MotorCity Casino. The stable rating outlook considers the favorable demographics and density of the Detroit gaming market along with the positive near- term contributors to CCM Merger's EBITDA. These include the 5% reduction in the company's wagering tax that recently took effect with the completion of the hotel and permanent casino complex and scheduled completion in June 2008 of significant additional amenities. The stable outlook also acknowledges that although CCM Merger's overall liquidity is adequate, its prospective ability to comply with debt covenants contained in its bank credit facility is uncertain. Ratings could be lowered in the near-term if the company does not meet its debt covenants, is not able to cure, negotiate or amend the affected covenant, loses access to its revolver availability, or its liquidity otherwise becomes constrained. Separate from any covenant violation, ratings could be lowered if heightened competition, construction delays and unfavorable economic trends keep debt EBITDA above 6.0 times by Dec. 31, 2009. CCM Merger, Inc. is a holding company whose primary operating subsidiary is Detroit Entertainment, LLC doing business as MotorCity Casino. All revenues and operating cash flows are derived from this subsidiary. As of Dec. 31, 2007, MotorCity Casino, located in Detroit, Michigan, had 100,000 square feet of gaming space, 2,324 slot machines, 68 table games, and approximately 3,000 parking spaces. The company does not publicly disclose financial data. CELANESE CORP: Moody's Upgrades Unit's Corporate Rating to 'Ba2' ---------------------------------------------------------------- Moody's Investor Service raised the corporate family rating of Crystal US Holdings 3 LLC, a subsidiary of Celanese Corporation, to Ba2 from Ba3. In addition, Moody's upgraded the secured revolvers and term loans to Ba2 and the unsecured notes and revenue bonds to B1. The ratings outlook is positive. The speculative grade liquidity rating of the company was affirmed at SGL-1. These actions conclude Moody's review initiated on Feb. 8, 2008. Upgrades: Issuer: Crystal US Holdings 3 LLC -- Probability of Default Rating, Upgraded to Ba2 from Ba3 -- Corporate Family Rating, Upgraded to Ba2 from Ba3 Issuer: Celanese U.S. Holdings LLC -- Senior Secured Bank Credit Facility, Upgraded to Ba2 from Ba3 Issuer: CNA Holdings, Inc. -- Senior Unsecured Regular Bond/Debenture, Upgraded to B1 from B2 Issuer: Corpus Christi (Port) TX, Auth of Nueces Cnty -- Senior Unsecured Revenue Bonds, Upgraded to B1 from B2 Issuer: Giles County I.D.A., VA -- Senior Unsecured Revenue Bonds, Upgraded to B1 from B2 Issuer: Matagorda (Cnty of) TX, Port of Bay City Auth -- Senior Unsecured Revenue Bonds, Upgraded to B1 from B2 Issuer: Red River Authority of Texas -- Senior Unsecured Revenue Bonds, Upgraded to B1 from B2 Issuer: York (County of) SC -- Senior Unsecured Revenue Bonds, Upgraded to B1 from B2 The one notch upgrade reflects the company's strong operating performance in 2007, growth in Asia, strong pricing and demand in its Acetyl Intermediates businesses (approximately 52% of 2007 revenues), better product mix and cost improvements in Industrial Specialties, improving credit metrics and a large cash balance. Celanese continues to capitalize on the very strong operating environment in acetyls, acetate and Ticona being driven by increased demand and relatively high capacity utilization rates. This performance was achieved despite a substantial increase in various feedstock or energy costs. However, their Free Cash Flow to Debt metric declined due to the substantial, over $300 million, increase in working capital. The Ba2 ratings take into account Celanese's strong competitive position in key businesses and significant competitive barriers, including process know-how and requirements for world scale production capabilities. The ratings are tempered by its significant exposure to volatile petrochemical feedstocks, on- going acquisition activity and the potential for additional share repurchases that may increase debt. "While Celanese continues to improve its credit profile, we do not anticipate that debt reduction will be a priority", stated John Rogers, Senior Vice President at Moody's. The positive outlook reflects Moody's expectation that the acetyls business will remain strong for 2008 and into early 2009, providing a solid base of earnings and cash flow. The company's new low cost plant in Nanjing, China should provide a boost in 2008 with a full year of operations. The company has restructured a meaningful portion of its business portfolio over the last several years and Moody's has some concern over how these businesses will perform in a more difficult operating environment; and hence, the stability of its credit metrics over the cycle. Currently Net Debt to EBITDA and Retained Cash Flow to Net Debt are in the lower end of the "Baa" category at 2.8x and 24%, respectively. Improvement in the company's credit profile could be slowed if it pursues acquisitions of more than $500 million. To the extent that over the next 12-15 months the company continues to generate EBITDA of over $1.3 billion, free cash flow rises back above $350 million, and maintains margins despite potential declines in acetyl methanol pricing, Moody's would consider raising the company's rating. On the other hand, if the company's financial performance is below Moody's current expectations or if the balance sheet debt increased above $3.75 billion (including preferred stock) for more than 3-4 quarters without a commensurate increase in earnings and cash flow, Moody's could change the outlook to stable. The notching of the senior secured credit facilities at the same level as the CFR reflects the predominance of secured bank debt in the new capital structure, less subordinated debt cushion beneath it, and insufficient collateral coverage. The sale of certain US assets in the recent Oxo products and derivatives business divestiture further reduces the collateral coverage. The unsecured debt instruments remain behind a large amount of secured debt, and thus are rated two notches below the CFR. Moody's views Celanese's liquidity as very good and recognizes the company's significant liquidity due to its balance sheet cash of $825 million, undrawn $650 million secured revolver, and $99 million remaining availability under its credit-linked revolving facility (as of Dec. 31, 2007). In addition, Moody's expects the company to generate free cash flow in the range of $350-450 million (excluding extraordinary items) in 2008. Celanese is currently in compliance with all of the financial covenants related to its debt agreements. Celanese Corporation, headquartered in Dallas, Texas is a leading global producer of acetyls, emulsions (including vinyl acetate monomer - VAM), acetate tow and engineered thermoplastics. Celanese reported sales of roughly $6.4 billion for the fiscal year ending Dec. 31, 2007. Crystal US Holdings 3 LLC is a subsidiary of Celanese. Celanese US Holdings LLC (previously BCP Crystal US Holdings Corp.), along with Celanese Americas Corporation, are subsidiaries of CUS3 and borrowers under the credit facilities. CNA Holdings Inc. is a subsidiary CAC and the holding company for Celanese's North American operating companies. CHAMP CAR: Court Approves $6.25MM Asset Sale to Indy Racing ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Indiana authorized the sale of Champ Car World Series LLC's assets to competitor Indy Racing League LLC, Bill Rochelle of Bloomberg News reports. Mr. Rochelle relates that the purchase agreement was entered into before the March 5 bankruptcy filing. The pact was amended to raise the purchase price to $6.25 million, resolving the opposing creditors' complaints. Indianapolis-based Champ Car World Series LLC, fdba Open Wheel Racing Series LLC and Corkscrew Acquisition LLC, -- http://www.champcarworldseries.com/-- organizes and operates a racing circuit that features about 20 drivers competing in single- seat, open-wheeled race cars. The circuit includes more than a dozen race tracks and road courses in the US, Canada, Mexico, and Australia. It regulates the sport and promotes the races; it generates revenue from sponsorships and broadcasting rights. It filed for chapter 11 protection on March 5, 2008 (Bankr. S.D. Ind. Case No. 08-02172). Gary Lynn Hostetler, Esq., and Jeffrey A. Hokanson, Esq., at Hostetler & Kowalik PC represent the Debtor in its restructuring efforts. The Debtor had assets of between $10 million to $50 million and debts between $1 million to $10 million when it filed for bankruptcy. Its largest unsecured creditor, Cosworth Inc., is owed $1,825,000. CHRYSLER LLC: U.S. Sales in March 2008 Down 19% at 166,386 Units ---------------------------------------------------------------- Reflecting the overall market in which 21 of 23 companies had a decrease in sales, Chrysler LLC on Tuesday posted U.S. sales of 166,386 units for March, down 19% from the same period a year earlier. "The market is tough right now for certain vehicles, especially pickup trucks, and we have reduced our daily rental fleet sales, which make our sales numbers lower," Steven Landry, Executive Vice President North American Sales, said. "However, cutting daily rental sales keeps the residual values on our vehicles higher, and that's added value that our customers appreciate." "The overall economic situation is causing many consumers, at all manufacturers, to either delay purchases, or shift to a different vehicle segment, but to one where we have new products," Mr. Landry said. "That segment shift is especially true with pickups. But we're pleased with the consumer response to our many new vehicles, especially our new minivans, compact vehicles and mid- size sedans." The compact vehicle trio of Dodge Caliber, Jeep Compass and Jeep Patriot posted it highest sales ever. Combined the three vehicles reached 21,909 buyers in March, up 51% from March 2007. The new long wheel base Dodge Grand Caravan and Chrysler Town & Country minivans combined for a 18% sales gain. And the new mid-size cars, the Chrysler Sebring Sedan/Convertible and the Dodge Avenger, combined for a 15% increase in sales. "For April, when the spring selling season gets into full swing, Chrysler will have in the market a typical Chrysler strong spring incentive program," Mr. Landry said. The company will offer great financing and owner loyalty incentives of up to $2,000 cash back for buyers of pickups and minivans. In addition, the company will launch advertising for the all-new 2009 Dodge Journey. "We are relieving credit pressures on customers by offering great deals on financing, including helping so-called Tier B consumers get the credit they deserve," Mr. Landry said. "And from a dealer perspective, we are keeping inventories down, despite the slowing market, which greatly relieves pressure on their businesses." Based in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * To date, Chrysler LLC holds Moddy's Investors Service's 'B3' long- term corporate family rating and probability of default rating assigned in July 2007. The company also has Moody's 'B1' bank loan debt rating, which was placed in November 2007. Standard & Poor's Ratings Services assigned a 'B' long-term foreign and local issuer credit ratings to Chrysler LLC in November 2007. The ratings still apply. CIFG GUARANTY: Fitch Slashes Insurer Fin'l Strength Rating to 'A-' ------------------------------------------------------------------ Fitch Ratings downgraded these Insurer Financial Strength ratings of CIFG Guaranty and its affiliates to 'A-' from 'AA-': CIFG Guaranty CIFG Assurance North America, Inc. CIFG Europe -- IFS to 'A-' from 'AA-'. Fitch has also removed CIFG from Rating Watch Negative, where it was originally placed on Feb. 5, 2008. The Rating Outlook is Negative. The downgrade of CIFG and its affiliates is based on Fitch's updated assessment of CIFG's capital position, a review by Fitch of CIFG's updated business plan, consideration of various qualitative ratings factors, and an update on Fitch's current views of U.S. subprime related risks. Fitch believes that CIFG's proforma claims paying resources, which include the $1.5 billion capital infusion in late-2007 from its shareholders Caisse Nationale des Caisses d'Epargne et Prevoyance and Banque Federale des Banques Populaires, are consistent with Fitch's updated standard for an 'A' category level of capital. However, claims paying resources fall below Fitch's 'AA' capital target by $1.2 to $1.7 billion. Fitch will continue to monitor developments in the residential mortgage-backed securities markets for its impact on direct exposure to that asset class as well as implications on structured finance collateralized debt obligations insured by CIFG. While CIFG's future business plans will include an emphasis on municipal finance and several improvements to its risk management framework, including the exit from several higher-risk capital intensive structured finance business lines, Fitch believes that CIFG may be extremely challenged in achieving these goals. CIFG's business platform has historically emphasized structured finance business, with a concentration in insuring CDOs. CIFG has not been able to establish a strong municipal franchise to date. Further, Fitch is unclear whether CIFG can maintain its franchise and business model with an 'A' category IFS rating, a level at which it currently sits with all three major rating agencies. Given its current rating and the potential losses the company is likely to experience; it may become even more difficult for the company to attain trading values on par with stronger financial guaranty competitors. Given these uncertainties, CIFG has decided to temporarily cease underwriting new business until the company can stabilize its financial and ratings position. Fitch believes that it will be very difficult to stabilize the ratings of CIFG until the company can more effectively limit the downside risk from its SF CDOs through reinsurance or other risk mitigation initiatives. Fitch does not anticipate removing the Negative Rating Outlook over the near- to intermediate-term until the ultimate risk of loss on the SF CDO portfolio can be more definitively quantified. Also influencing the Negative Rating Outlook for CIFG is Fitch's view that CIFG's shareholders may be less willing to provide further capital support to CIFG in the future than in the past. In addition, while shareholders have given no indication they would plan to remove capital from CIFG, Fitch recognizes that if CIFG is ultimately unable to successfully resume underwriting new business, that may create economic incentives for shareholders to consider doing so, which could further pressure ratings. Unquestioned capital support from large, strong shareholders has been a key qualitative aspect of CIFG's 'AAA' IFS rating historically, and played a tangible role in Fitch's maintenance of CIFG's 'AAA' rating following deterioration in CIFG's insured portfolio due to subprime exposures. CIFG's shareholders have indicated commitment to the business and will help to facilitate negotiations with counterparties. Finally, this action factors in Fitch's updated analysis of CIFG's $9.2 billion exposure to SF CDOs, and the implications this analysis has on Fitch's view of CIFG's overall capital adequacy position. Fitch currently believes that expected losses on CIFG's insured SF CDO will ultimately fall within a range of $1.7 to $2.4 billion. These totals reflect Fitch's current estimates of the range of future losses that CIFG would be expected to incur over the life of these transactions, stated on a present value basis. The range of outcomes reflects the unknown magnitude of U.S. residential mortgage losses on SF CDOs insured by CIFG. From a present value perspective, Fitch discounts the expected future loss rates by 5% over a two-year period for CDO-squareds, five years for mezzanine SF CDOs and seven years for high-grade SF CDOs. Fitch's analysis of expected losses includes an assumption that underlying cumulative loss rates on U.S. residential mortgages supporting outstanding subprime residential mortgage-backed securities pools will average 21% in the 2006 vintage year and 26% for the 2007 vintage year. These assumed cumulative loss rates are consistent with those currently used by Fitch for its ratings of outstanding RMBS transactions. Fitch notes that when it discusses 'expected losses' this is an analytical concept based on Fitch assumptions, and no inferences should be made with respect the applicability of these projections to CIFG's loss provisioning. Given Fitch's current projected loss estimates for 2006-2007 vintage subprime RMBS, it is expected that a high percentage of the underlying tranches that were originally rated below 'AAA' will potentially default and suffer significant losses. This development is expected to result in losses elevating high into the capital structure for many SF CDOs. Only those RMBS and SF CDO transactions from the 2006-2007 vintages that maintained very healthy levels of initial subordination are expected to avoid experiencing losses in the future. Fitch believes for modeling purposes that its expected loss estimates for SF CDOs fall approximately to an 'A' level ratings stress. Accordingly, in order to address the necessary level of capital to support a financial guarantor at the highest rating levels, expected losses are further stressed to arrive at 'AA' and 'AAA' capital requirements. This is done to capture the risk that losses could grow higher than expected due to a more severe downturn in the economy, sharper than expected declines in home prices, higher than expected loan defaults, or other adverse developments beyond expectations. CIFG Guaranty, CIFG Assurance North America, Inc. and CIFG Europe are subsidiaries of CIFG Holding. CIFG Holding is directly owned by Banque Federale des Banques Populaires and Caisse Nationale des Caisses d'Epargne et Prevoyance, two large French banking groups. COMMODORE CDO: Weak Credit Quality Cues Moody's Eight Rating Cuts ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Commodore CDO V, Ltd.: Class Description: $75,000,000 Class A-1A First Priority Senior Secured Floating Rate Delayed Draw Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa1, on review for possible downgrade Class Description: $225,000,000 Class A-1B Second Priority Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa1, on review for possible downgrade Class Description: $50,000,000 Class A-2 Third Priority Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: $25,000,000 Class A-3 Fourth Priority Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $70,000,000 Class B Fifth Priority Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $13,250,000 Class C Sixth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2047 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: Ca Class Description: $24,000,000 Class D Seventh Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2047 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: Ca Class Description: $8,500,000 Class E Eighth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2047 -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. CONSTELLATION COPPER: Defaults in CN$69 Million Debentures ---------------------------------------------------------- Constellation Copper Corporation said that approximately CN$1.9 million of interest due on March 31, 2008, on its CN$69 million convertible unsecured senior debentures has not been paid, resulting in a default under the terms of the convertible debentures. If the interest is not paid within 30 days, by April 30, 2008, the default will become an event of default as defined in the indenture, after which the terms of the convertible debentures provide the debenture holders with certain rights and remedies during the continuance of a default, including the right to accelerate all of the debt due under the convertible debentures. The company continues to pursue various near term financing alternatives, including bank financing, equity investment, mergers, and sale of certain assets or sale of the entire company. The company may consider filing for legal protection from its creditors in both Canada and the United States if cash liquidity problems can not be resolved. Going Concern As reported in the Troubled Company Reporter on Jan. 15, 2008, the company related that there is significant doubt about the its ability to continue as a going concern. The cash balance of $10.87 million at September 30, has been reduced further to approximately $3.20 million at Dec. 31, 2007, and in order to provide liquidity, the company is pursuing various near term financing alternatives, including bank financing, equity investment, mergers, and sale of certain assets or sale of the entire company. In late November 2007, as a result of a comprehensive management evaluation of Lisbon Valley operations, the company disclosed its decision to cease mining and crushing activities and convert the Lisbon Valley mine to a leach only operation in early 2008. The evaluation included analyses of various mining plans, waste stripping requirements, contract mining arrangements, available mining equipment, projected copper prices and extensive operating cost and cash flow projections. In connection with the evaluation and conversion to a leach only operation, the company recorded an asset impairment of $92,918,000. At Sept. 30, 2007, the company's balance sheet showed total assets of $72.68 million and total liabilities of $90.40 million, resulting to a total shareholders' deficit of $17.72 million. About Constellation Copper Headquartered in Lakewood, Colorado, Constellation Copper Corporation (CCU: TSX) -- http://www.constellationcopper.com/-- evaluates and develops mineral properties in the United States and Mexico. The company holds its properties primarily through three of its wholly owned subsidiaries, Lisbon Valley Mining Co. LLC, Minera Terrazas S.A. de C.V. and San Javier del Cobre S.A. de C.V. LVMC operates the Lisbon Valley copper mine, which comprises three main deposits: Sentinel, Centennial and GTO, plus the Cashin satellite deposit, with reserves and resources totalling +50 million tons and grading an average 0.48% copper. Minera Terrazas holds the company's interest in the Terrazas zinc-copper project located in north- central Mexico. The property has a total resource of 90 million tonnes grading 1.37% zinc and 0.32% copper in two adjacent deposits. San Javier del Cobre S.A. de C.V. holds the company's interest in the San Javier copper property located in northwestern Mexico. COOKSON SPC: Moody's Reviews 'Ba2' Rating on 2007-10HGB 2046 Notes ------------------------------------------------------------------ Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Cookson SPC 2007- 10HGB: Class Description: $5,000,000 Series 2007-10HGB Notes Due 2046 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. COREL CORP: Gets Proposal from Majority Shareholder Corel Holdings ------------------------------------------------------------------ Corel Corporation received an unsolicited proposal from Corel Holdings L.P., which is controlled by an affiliate of Vector Capital Corporation, the holder of 69% of Corel's outstanding common shares. CHLP is proposing to make an offer to acquire all of Corel's outstanding common shares not currently held by CHLP at a price of $11.00 cash per share. CHLP has indicated that any such offer would be conditional upon, among other things, satisfactory confirmatory due diligence and Corel's existing credit facility remaining in place after the consummation of any transaction. The board of directors of Corel has formed a special committee of independent members of the board consisting of Ian Giffen, Steven Cohen and Daniel Ciporin to assist it in evaluating and responding to the CHLP proposal and other related strategic considerations. Corel will not be providing further comment at this time but will provide updates as further information becomes available. There can be no assurance that any transaction will be completed or, if completed, of its terms, price or timing. About Corel Corporation Ottawa, Ontario-based Corel Corp. (NASDAQ: CREL) (TSX: CRE) -- http://www.corel.com/-- is a packaged software company with an estimated installed base of over 40 million users. The Company provides productivity, graphics and digital imaging software. Its products are sold in over 75 countries through a scalable distribution platform comprised of original equipment manufacturers, Corel's international websites, and a global network of resellers and retailers. The Company's product portfolio features CorelDRAW(R) Graphics Suite, Corel(R) WordPerfect(R) Office, WinZip(R), Corel(R) Paint Shop(R) Pro, and Corel Painter(TM). COREL CORP: S&P Puts 'B' Rating on Neg. Watch on Acquisition Bid ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B' long-term corporate credit and senior secured debt ratings on Ottawa-based packaged software provider Corel Corp. on CreditWatch with negative implications. The recovery rating on the senior secured debt is unchanged at '3'. The CreditWatch placement follows the unsolicited bid by Cayman Islands-based Corel Holdings L.P. to acquire all of Corel's common shares outstanding that it doesn't hold already for a price of $11 per share. CHLP is controlled by an affiliate of San Francisco- based private equity investment company Vector Capital Corp. CHLP has indicated that its offer is conditional upon, among other things, confirmed satisfactory due diligence and Corel's existing credit facility remaining in place following the close of any transaction. In response to the bid, Corel's board of directors has formed a special committee to evaluate CHLP's proposal and other related strategic considerations. "The CreditWatch listing primarily reflects our lack of sufficient information about CHLP including its existing assets, operations, and capital structure, as well as its plans to finance the estimated US$84 million acquisition," said Standard & Poor's credit analyst Madhav Hari. Standard & Poor's notes that pursuant to CHLP's purchase of Corel, CHLP's financial policy and capital structure become germane to the ratings of 100%-owned subsidiary Corel. S&P will resolve the CreditWatch listing once S&P has had an opportunity to fully evaluate the transaction, including details of CHLP's operations and the new owners' strategy. CORTS TRUST: S&P Posts BB Rating on $27MM Certs. on Positive Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'BB' rating on the $27.0 million fixed-rate corporate-backed trust securities certificates issued by CorTS Trust for Xerox Capital Trust I on CreditWatch with positive implications. The CreditWatch placement reflects the March 27, 2008, placement of the rating on the underlying securities, the 8% series B capital securities due Feb. 1, 2027, issued by Xerox Capital Trust I (a subsidiary of Xerox Corp.) on CreditWatch positive. The CorTS certificate issue is a pass-through transaction, the ratings on which are based solely on the rating assigned to the underlying collateral, Xerox Capital Trust I's $27.0 million 8% series B capital securities. COUDERT BROS: Examiners Say Ex-Partners Should Contribute $11.8MM ----------------------------------------------------------------- Harrison J. Goldin, the examiner appointed in Coudert Brothers LLP's bankruptcy case on Feb. 15, 2007, determined that the Debtor's former partners should pay $11.8 million to finance a Chapter 11 plan of liquidation in exchange for an absolution of claims the firm or its creditors is threatening to file against them, Bill Rochelle of Bloomberg News reports citing a 49-page report from the examiner. Mr. Gordin released a list of figures each former partner is to contribute, calling it a "proportionate partner contribution plan," Mr. Rochelle recounts. The range for each active partner is between $169,000 to $6,000. A partner, who retired or left the firm before Jan. 1, 2005, could chip in as little as $84. Mr. Rochelle relates that Mr. Goldin believes that the plan is a "fair and equitable settlement." As reported in the Troubled Company Reporter on May 17, 2007, Mr. Goldin has said the Debtor "likely" was insolvent one year before it filed for chapter 11 protection. Mr. Goldin's findings opened the door for creditors to sue Coudert's former partners for the return of $28 million in distributions they received while the firm was insolvent. Mr. Goldin also concluded that the partners may owe another $9.3 million in loans and overpayments. Coudert Brothers LLP was an international law firm specializing in complex cross border transactions and dispute resolution. The firm had operations in Australia and China. The Debtor filed for Chapter 11 protection on Sept. 22, 2006 (Bankr. S.D.N.Y. Case No. 06-12226). John E. Jureller, Jr., Esq., and Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represent the Debtor in its restructuring efforts. Brian F. Moore, Esq., and David J. Adler, Esq., at McCarter & English, LLP, represent the Official Committee Of Unsecured Creditors. In its schedules of assets and debts, Coudert listed total assets of $29,968,033 and total debts of $18,261,380. The Debtor's exclusive period to file a plan expires on Sunday, May 20, 2007. CROWN MEDIA: Three New Members Elected to Board of Directors ------------------------------------------------------------ On March 26, 2008, Dwight C. Arn, William Cella and Brad R. Moore were elected to the Board of Crown Media Holdings Inc. by its Board of Directors upon the recommendation of the Nominating Committee. Messrs. Arn, Cella and Moore were nominated by Hallmark Entertainment Investments Co., a subsidiary of Hallmark Cards Incorporated. The Board has not determined the committees of the Board on which these directors will serve. Mr. Arn has been Associate General Counsel of Hallmark Cards Incorporated since 1989. Additionally, Mr. Arn has been serving as general counsel of Hallmark International since 1992 and as general counsel of Crayola LLC since 1995. Mr. Arn began his career at Hallmark Cards Incorporated in 1976 and has served in various attorney positions. Mr. Cella is the chairman and chief executive officer of The Cella Group, a media sales representation company. Before forming The Cella Group in 2008, Mr. Cella led MAGNA Global, a media negotiation, research and programming unit of the Interpublic Group of Companies. Prior to that, Mr. Cella served as executive vice president and director of broadcast and programming for Universal McCann North America. From 1994 through 1997, Mr. Cella served as director of national broadcast and programming for McCann-Erickson and, in 1997, was named executive vice president of McCann-Erickson for all of North America. Mr. Moore has been resident of Hallmark Hall of Fame Productions since 1993 and Hallmark Publishing since 1997, both of which are wholly-owned subsidiaries of Hallmark Cards Incorporated. Prior to that, Mr. Moore led the development, production and distribution of the Hallmark Hall of Fame series since 1983. Mr. Moore directed Hallmark Cards Incorporated's U.S. advertising efforts from 1982 to 1983. About Crown Media Headquartered in Studio City, Calif., Crown Media Holdings Inc. (NASDAQ: CRWN) -- http://www.crownmediaholdings.com/-- owns and operates cable television channels dedicated to high quality, broad appeal, entertainment programming. The company currently operates and distributes the Hallmark Channel in the U.S. to approximately 84 million subscribers. The program service is distributed through 5,450 cable systems and communities as well as direct-to-home satellite services across the country. Crown Media also operates a second 24-hour linear channel, Hallmark Movie Channel, and will launch Hallmark Movie Channel HD in April 2008. Significant investors in Crown Media Holdings include: Hallmark Entertainment Holdings Inc., a subsidiary of Hallmark Cards Incorporated, Liberty Media Corp., and J.P. Morgan Partners (BHCA), LP, each through their investments in Hallmark Entertainment Investments Co.; VISN Management Corp., a for-profit subsidiary of the National Interfaith Cable Coalition; and The DIRECTV Group Inc. * * * At Dec. 31, 2007, the company's consolidated balance sheet showed $767.8 million in total assets and $1.247 billion in total liabilities, resulting in a $478.9 million total stockholders' deficit. CSK AUTO: O'Reilly Automotive to Acquire Business for $1.0 Billion ------------------------------------------------------------------ O'Reilly Automotive, Inc. and CSK Auto Corporation announced on April 1 that the companies signed a definitive merger agreement under which O'Reilly will acquire all of the outstanding shares of CSK common stock pursuant to an exchange offer, in a transaction valued at approximately $1.0 billion, including approximately $500 million of debt. The boards of directors of both companies have approved the transaction. Under the terms of the agreement, CSK shareholders will receive $11.00 of O'Reilly common stock, subject to a collar, plus $1.00 in cash for each share of CSK common stock. The amount of consideration to be received per share of CSK common stock will equal a number of shares of O' Reilly common stock based on an exchange ratio equal to $11.00 divided by the average trading price of O' Reilly common stock for the five trading days ending two trading days prior to the consummation of the exchange offer plus $1.00 in cash (subject to reduction); provided, however, that if the average trading price of O'Reilly stock is greater than $29.95, then the exchange ratio shall equal 0.3673, and if the average trading price is less than $25.67, then the exchange ratio shall equal 0.4285. "[It] is an exciting day for both O'Reilly and CSK shareholders," stated O'Reilly Automotive Chief Executive Officer Greg Henslee. "As a combined company, we will be even stronger and more competitive, with the ability to better meet the continuing evolution of the automotive aftermarket industry. Additionally, we are creating a company that will generate significant value for the combined companies' shareholders, growth opportunities for team members and enhanced service to our customers." "The benefits of this transaction are very compelling," said Larry Mondry, CSK Auto's President and Chief Executive Officer. "After careful consideration of a number of viable alternatives, our Board has determined that partnering with O'Reilly is clearly the best course of action for our shareholders. As part of a stronger, more financially flexible company, shareholders, creditors and suppliers will have a meaningful opportunity to participate in the development of a company that will be well positioned to be a nation-wide leader in the automotive aftermarket industry. Equally important, this transaction provides growth and advancement opportunities for CSK's team members." The transaction will create a combined entity that expects to realize several significant strategic benefits, including: -- Leading auto-parts retailer Following the close of the transaction, O'Reilly will be the third largest national auto parts retailer with approximately 3,200 stores located across the United States. The combined company had pro-forma revenues of approximately $4.4 billion in 2007. -- Strengthened and diversified position, creating a national platform O'Reilly and CSK maintain highly complementary business models in two distinctive regions of the country. Building upon the foundation of CSK's strong Western presence and O'Reilly's Midwestern and Southeastern presence, the combined company will be well positioned to further leverage O'Reilly's very effective dual-market strategy. Additionally, acquiring CSK will give O'Reilly a national platform and will allow further expansion into other geographical regions throughout the country. -- Opportunity to enhance existing CSK operations O'Reilly expects to strengthen CSK's existing operations by executing its proven dual market strategy of providing exceptional service to both DIY customers and professional installers. The implementation of O'Reilly's industry- leading distribution and inventory management systems will further improve the combined company's competitiveness in CSK's markets. Financial Considerations O'Reilly anticipates that the transaction will be modestly accretive to O'Reilly's earnings per share in fiscal year 2009. Cost savings are expected to be approximately $100 million annually beginning in fiscal year 2010, resulting in more significant earnings per share accretion. O'Reilly expects synergies to come primarily from leveraging the combined company's buying power to lower product acquisition cost and streamlining CSK's SG&A expense structure by implementing O'Reilly's dual market strategy. Timing, Approvals and Financing The transaction is subject to the successful conclusion of the exchange offer as well as customary closing conditions and antitrust approvals, including expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Based on the closing stock prices on Monday, March 31, 2008, O'Reilly expects to issue approximately 16 million shares of O'Reilly common stock to be issued to CSK shareholders. O'Reilly has entered into a commitment for a $1.2 billion asset based revolving credit facility with Bank of America and Lehman Brothers Inc. which will be used to refinance debt, fund the cash portion of the consideration and other transaction-related expenses and to provide ample liquidity for the combined company going forward. Lehman Brothers Inc. is serving as exclusive financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal adviser to O'Reilly. JP Morgan Securities Inc. is acting as financial advisor and Gibson, Dunn & Crutcher LLP is acting as legal advisor to CSK. About O'Reilly Automotive, Inc. O' Reilly Automotive, Inc. is one of the largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States, serving both the do-it-yourself and professional installer markets. Founded in 1957 by the O'Reilly family, the Company operated 1,830 stores in the states of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Virginia, Wisconsin and Wyoming as of December 31, 2007. About CSK Auto CSK Auto Corporation is the parent company of CSK Auto, Inc., a specialty retailer in the automotive aftermarket. As of January 6, 2008, the Company operated 1,349 stores in 22 states under the brand names Checker Auto Parts, Schuck's Auto Supply, Kragen Auto Parts, and Murray's Discount Auto Stores. At Nov. 4, 2007, the company's consolidated balance sheet showed $1.16 billion in total assets, $985.4 million in total liabilities, and $175.7 million in total stockholders' equity. * * * As reported by the Troubled Company Reporter on Feb. 5, 2008, Moody's Investors Service affirmed the B1 corporate family rating and SGL-3 speculative grade liquidity ratings of CSK Auto, Inc., and changed the outlook on the corporate family rating to developing from negative after the announcement that O'Reilly Automotive plans to buy CSK Auto Corporation. TCR reported on the same day that Standard & Poor's Ratings Services placed its ratings, including the 'B-' corporate credit rating, on CSK Auto Inc. on CreditWatch with Positive implications following the announcement. The TCR reported on Jan. Jan 25, 2008, that S&P lowered the corporate credit rating on CSK Auto Inc. to 'B-' from 'B'. The outlook is negative. At the same time, S&P lowered the bank loan rating on the company's $450 million term loan due 2026 to 'B-' (the same as the corporate credit rating on CSK Auto) from 'B'. The recovery rating remains '3', indicating S&P's expectation for meaningful (50%-70%) recovery in the event of payment default. In addition, S&P lowered the rating on the company's senior unsecured debt to 'CCC' from 'CCC+'. CENVEO INC: Completes Acquisition Contract with Rex Corporation --------------------------------------------------------------- Cenveo Inc. completed its purchase of Jacksonville, Florida-based Rex Corporation. As reported in the Troubled Company Reporter on Jan. 2, 2008, Cenveo Inc. has signed a definitive agreement to acquire Rex Corporation, in an all-cash transaction. "We are pleased to have completed this acquisition and I look forward to working with Chipper Hall and the entire Rex team as we join our two strong franchises," Robert G. Burton, chairman and chief executive officer of Cenveo, stated. "We believe this combination will benefit our customers by increasing the value we offer to them in order to support the growth of their businesses in the future, both domestically and globally. I want to personally welcome each of the fine employees of Rex to the Cenveo family. "Along with closing this strategic acquisition, we have also focused our attention on ensuring that we have the appropriate cost structure during this period of economic uncertainty," Mr. Burton added. "Over the past month we have looked across our entire operating platform for additional opportunities to improve efficiencies and reduce costs." "We have eliminated over $25 million of incremental costs, on an annualized basis, from all aspects of our business by consolidating duplicative functions and processes, by further rationalizing our operating structure and focusing our resources on improving productivity and efficiencies and by asking our people to wear multiple hats and to do more with less," Mr. Burton concluded. "We feel that by taking these incremental steps now, we will be well positioned to achieve our long term financial goals." About Rex Corporation Located in Jacksonville, Florida, Rex Corporation is an independent manufacturer of premium and high-quality packaging solutions with over 35 years' industry experience. Rex, is provides "single source" packaging solution, with design, production, and distribution all handled from one location. Rex has 170 employees offer services in pharmaceutical, healthcare, cosmetics, personal care, food & beverage and apparel markets. About Cenveo Inc. Headquartered in Stamford, Connecticut, Cenveo Inc. (NYSE: CVO) -- http://www.cenveo.com/-- provides its customers with low-cost solutions within its core businesses of commercial printing and packaging, envelope, form, and label manufacturing, and publisher services; offering one-stop services from design through fulfillment. With 10,000 employees worldwide, Cenveo delivers everyday for its customers through a network of production, fulfillment, content management, and distribution facilities. * * * As reported in the Troubled Company Reporter on Dec. 10, 2007, Standard & Poor's Ratings Services raised its ratings on Cenveo Inc. The corporate credit rating was raised to 'BB-' from 'B+'. The rating outlook is stable. CYGNUS ETRANSACTIONS: Case Summary & 19 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Cygnus eTransactions Group Inc. fdba Cygnus Entertainment Inc. 300 Colonial Center Parkway Suite 150 Lake Mary, FL 32746 Bankruptcy Case No.: 08-02272 Chapter 11 Petition Date: March 26, 2008 Court: Middle District of Florida (Orlando) Debtor's Counsel: Kenneth D Herron, Jr., Esq. 1851 West Colonial Drive Orlando, FL 32804 Tel: 407-648-0058 Fax: 407-648-0681 kherron@whmh.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10 million Debtor's list of its 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Universal City Development $835,000 Partners Limited Attn: Tracey Stockwell 1000 Universal Studios Plaza Oralndo, FL 32819 Richard Crowley $668,561 8516 Summerville Place Orlando, FL 32819 Hershey $543,000 300 Park Boulevard Hershey, PA 17033 State of Florida Department $80,135 of Revenue Stanton West $80,000 RMS Foundation Inc. $70,000 MCI DS3 $38,995 Karyn Aly $36,654 Vultron $35,022 Gabriela Aguilar $30,000 Snowbird $29,000 Expedia $25,000 M/I Homes of Orlando LLC $21,627 Robin Nicoloff $19,700 Richard Crowley wages $18,750 UPS - 2W74E5 $18,694 Robert Half Technology $17,500 American Express $16,656 Rackspace $15,408 DIABLO GRANDE: Discloses Receipt of Purchase Offers for Property ---------------------------------------------------------------- Diablo Grande LP officials indicated plans to sell the bankrupt resort to a buyer willing to continue the development, Tim Moran of The Modesto Bee in Modesto, California. Presently, several parties have expressed interest in buying the resort including those from Canada, Modesto Bee quotes Diablo Grande vice president Dwain Sanders. Modesto Bee recounts that the property has been marketed for more than a year for at least $150 million. The report adds that two parties abandoned their purchase deals with the Debtor after analysis of the Debtor's assets and situation. The Debtor's officials said they will determine the best offer for the property in two months, Modesto Bee reports. About Diablo Grande Patterson, California-based Diablo Grande LP owns 33,000-acre real property and runs a resort hotel with golf courses and convention center. Diablo Grande LP's general partner is Diablo Grande Inc. with Donald Panoz as president. It filed for chapter 11 protection on March 10, 2008 (Bankr. E.D. Calif. Case No. 08- 90365). Judge Robert S. Bardwil is presiding the case. Michael H. Ahrens, Esq., represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed asset and debts between $50 million and $100 million. The Debtor did not file a list of its largest unsecured creditors. DIABLO GRANDE: Court to Approve $1.5 Mil. Credit Facility Today --------------------------------------------------------------- Diablo Grande LP is in discussion with lenders on a $1.5 million revolving credit facility to fund its operations through June 1, 2008, Modesto Bee reveals. The credit facility is subject to approval by the unsecured creditors in the Debtor's cases and the U.S. Bankruptcy Court for the Eastern District of California. The Court is set to consider approval of the credit facility request today, April 2, 2008, Modesto Bee relates. Modesto Bee reveals that Diablo Grande's secured creditors include the Bank of Scotland owed by $20.4 million, Atlas Development LLC and DG Capital owed by $1.2 million, and Oak Valley Community Bank owed by $875,000. The Debtor also owes $57 million in Mello-Roos bonds to the Western Hills Water District and owes special and property taxes that accrued since Dec. 10, 2007. According to the report, the water district was entitled foreclosure on the Debtor's property since Oct. 1, 2007. The Debtor received at least $50 million from its limited partners, including Atlas and Lawrence Ventures LLC which gave at least $10 million for the Diablo Grande development, reports Modesto Bee. Mr. Sanders told Modesto Bee that the resort's golf courses which were reopened for three weeks "are doing well" and added that he is optimistic the credit facility will be approved. Water System Issue Diablo Grande is also negotiating with issues regarding its water system, report says. As reported in the Troubled Company Reporter on March 13, 2008, Diablo Grande currently owes $3 million to Veolia Water North America, a water provider and water treatment plant operator. Veolia division president Charles Voltz commented that the bankruptcy of Diablo Grande wasn't a surprise since it was in constant contact with the Debtor while planning to file for bankruptcy. Diablo Grande had issues of water quality caused by its distribution system run by Western Hills Water District, which is managed by Diablo Grande, hence, Veolia is not at fault, Mr. Voltz said. About Diablo Grande Patterson, California-based Diablo Grande LP owns 33,000-acre real property and runs a resort hotel with golf courses and convention center. Diablo Grande LP's general partner is Diablo Grande Inc. with Donald Panoz as president. It filed for chapter 11 protection on March 10, 2008 (Bankr. E.D. Calif. Case No. 08- 90365). Judge Robert S. Bardwil is presiding the case. Michael H. Ahrens, Esq., represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed asset and debts between $50 million and $100 million. The Debtor did not file a list of its largest unsecured creditors. DIAMOND GLASS: Files Voluntary Petition for Reorganization in Del. ------------------------------------------------------------------ Diamond Glass filed a voluntary petition for reorganization in the United States Bankruptcy Court for the District of Delaware. The Debtor also filed a debtor-in-possession financing commitment with its senior secured lender Guggenheim Corporate Funding LLC to provide necessary liquidity during the chapter 11 process. This action is the first step in a financial restructuring plan that Diamond Glass expects will result in increased stability to the company and continued service to its network of service centers and mobile installation vehicles in 42 states. Diamond Glass expects to continue to operate in the normal course of business during the chapter 11 reorganization process with its team of management and employees. All of the company's services will be offered and the company will serve its customers. An important part of the company's financial restructuring plan under consideration is a sale of its business to Diamond Glass's senior secured lenders, through their agent, Guggenheim Corporate Funding LLC. Accordingly, together with the voluntary petitions filed, the company has requested that the Bankruptcy Court approve a sale to Guggenheim or its designee, and an auction process which would take place in early June and permit other interested purchasers to attempt to better the Guggenheim proposal. Under the terms of the Guggenheim purchase agreement, a significant portion of Guggenheim's debt would be exchanged in part for ownership of the business and related assets, and should Guggenheim become the successful purchaser at any auction, upon the closing of the sale, the company expects Guggenheim would carry on the business substantially in the same manner as it is carried on. "Our firm is a healthy, growing business that has faced significant financial challenges stemming from our current debt," president Bill Cogswell, said. "The chapter 11 process, and the potential sale of the business to Guggenheim, will provide us with an opportunity to remove a large obstacle to our future success while allowing our employees to continue to serve our customers with the high-quality service they have come to expect from Diamond Glass. We are optimistic that we will quickly emerge from this restructuring leaner, adequately capitalized, and well- positioned for profitable growth." The principal legal advisor for Diamond Glass in the chapter 11 proceedings is Michael P. Richman of Foley & Lardner LLP. About Diamond Glass Headquartered in Kingston, Pennsylvania, Diamond Glass is a provider of automotive glass replacement and repair services. Founded in 1923 by the Levine family. This business grew into a network of 217 service centers and 900 mobile installation vehicles in 42 states, serviced by three distribution facilities located in Kingston, Pennsylvania; Columbus, Ohio; and Atlanta, Georgia. Approximately 1,600 people are employed by the company, including field technicians, customer service representatives, sales associates and corporate associates. DIAMOND GLASS: Case Summary & 30 Largest Unsecured Creditors ------------------------------------------------------------ Lead Debtor: Diamond Glass, Inc. aka Diamond Auto Glass Works aka Diamond Glass aka Settles Glass aka A-AA Auto Glass aka Prestige Glass aka Triumph Auto Glass aka Agents Glass aka Triumph Glass aka Diamond Triumph Auto Glass, Inc. aka Diamond Glass Companies, Inc. aka A-Above Auto Glass aka Ohio Auto Glass aka Diamond Auto Glass 220 Division Street Kingston, PA 18704 Bankruptcy Case No.: 08-10601 Debtor-affiliate filing separate Chapter 11 petitions: Entity Case No. ------ -------- DT Subsidiary Corp. 08-10602 Type of Business: The Debtors sell auto glass replacements and other auto parts and supplies in wholesale. See http://www.diamondtriumph.com/and http://www.diamondtriumphglass.com/ Chapter 11 Petition Date: April 1, 2008 Court: District of Delaware (Delaware) Judge: Christopher S. Sontchi Debtors' Counsel: Donald J. Bowman, Jr., Esq. (bankfilings@ycst.com) Joseph M. Barry, Esq. (bankfilings@ycst.com) Young, Conaway, Stargatt & Taylor 1000 West Street, 17th Floor Wilmington, DE 19801 Tel: (302) 571-6600 http://www.ycst.com/ Estimated Assets: $10 million to $50 million Estimated Debts: $100 million to $500 million Debtors' Consolidated List of 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Bank National Association indenture trustee, unknown Attn: Michael M. Hopkins 9.25% notes due 2008 225 Asylum Street Hartford, CT 06103 Tel: (860) 241-6820 Fax: (866) 640-1284 Newport Global Advisors bondholder $16,600,000 Attn: Tom Reeg 21 Waterway Avenue, Suite 150 The Woodlands, TX 77380 Tel: (713) 559-7402 Fax: (713) 559-7499 Plainfield Asset Management bondholder $15,365,000 LLC Attn: Jeff Brown & Jean Smith Plainfield Asset Management, LLC 55 Railroad Avenue Greenwich, CT 06830 Tel: (203) 302-1723 Fax: (203) 302-1779 Credit Suisse bondholder $3,000,000 Attn: Jim Potesky Eleven Madison Avenue New York, NY 10010-3629 Tel: (212) 538-8067 Fax: (212) 538-8290 Prudential Invesment bondholder $3,000,000 Management, LLC Attn: George Edwards Three Gateway Center, 14th Floor Newark, NJ 07102-4077 Tel: (973) 802-8505 Fax: (212) 367-8047 Stonegate Capital Management bondholder $3,000,000 Attn: Tim Finn 99 Park Avenue, Suite 1510 New York, NY 10016 Tel: (212) 949-1623 Fax: (212) 949-6219 Patriarch Partners bondholder $2,250,000 Attn: Matt Benson 32 Avenue of the Americas, 17th Floor New York, NY 10013 Tel: (704) 227-7124 Fax: (212) 825-2038 Lyon (Indosuez) bondholder $2,000,000 Attn: Marc Schluroff 1301 Avenue of the Americas New York, NY 10019 Tel: (212) 261-3515 Fax: (212) 261-3404 PPG Industries, Inc. trade debt $717,967 Attn: Mary Ann Leonard 1 PPG Place 8th Floor Pittsburgh, PA 15272 Tel: (412) 434-4038 Fax: (201) 601-1072 Mygrant Glass Co., Inc. trade debt $711,868 Attn: Cindy Kilgore 3271 Arden Road Hayward, CA 94545 Tel: (510) 259-2161 Fax: (510) 785-1724 Greenville Glass Industries trade debt $693,749 Attn: Sarah 301-E Halton Road Greenville, SC 29607 Tel: (864) 281-2760 Fax: (864) 281-2766 PPG Auto Glass LLC trade debt $683,519 Attn: Mary Ann Leonard 1 PPG Place 8th Floor Pittsburgh, PA 15272 Tel: (412) 434-4038 Fax: (201) 601-1072 SIKA Corp. trade debt $554,973 Attn: Mary Jean Stolz 23868 Network Place Chicago, IL 60673 Tel: (201) 508-6637 Fax: (201) 933-9379 Libby Owens Ford-Truckload trade debt $493,408 Attn: Jeff Bowman & Susan Gilbert 13833 Collection Center Drive Chicago, IL 60693 Tel: (419) 247-3799 Fax: (419) 247-3827 American Express credit card $476,352 Attn: Theresa Baugh 6739 West Crabapple Drive Peoria, AZ 85383 Tel: (877) 253-9081 Fax: (877) 253-9081 Automotive Components Holding trade debt $433,110 Attn: Jennifer Dashiel 39200 Six Mile Road Livonia, MI 48152-2689 Tel: (734) 710-5574 Fax: (734) 736-5574 Ketchum Directory Advertising advertising $405,562 Attn: Melanine Whitham P.O. Box 640750 Pittsburgh, PA 15264 Tel: (502) 318-8826 Fax: (502) 318-8818 GE Capital Fleet Services lease $307,769 Attn: Mike Osdoba 6000 Seldwood Road College Park, GA 30349 Tel: (952) 828-2107 Fax: (952) 960-6960 PHH lease $279,946 Attn: Gealetha May 5924 Collections Center Trust Chicago, IL 60693 Tel: 1-877-950-2200 Fax: 410-771-1807 Auto Temp, Inc. trade debt $225,002 Guardian Auto Glass "TL" trade debt $214,346 Shenzen CSG Automotive SAF trade debt $190,512 Xinyi Group (Glass Co.) trade debt $166,035 Libbey Owens Ford (SBWILLCA) trade debt $164,590 Gold Glass Group Corp. trade debt $160,820 Libbey Owens Ford (Shortbuy) trade debt $160,212 Crinamex trade debt $126,331 AGC Automotive Americas trade debt $125,207 PPG-Creighton trade debt $105,925 Bartelstone trade debt $95,754 DIAMOND GLASS: President Still Optimistic Despite Ch. 11 Filing --------------------------------------------------------------- Diamond Glass Inc. filed for Chapter 11 protection with the U.S. Bankruptcy Court for the District of Delaware. Bill Cogswell, president of Diamond Glass, told glassBYTES.com in an exclusive interview that the company was burdened with too much debt and they weren't able to pay secured debt dating from 1998. "I don't know that what we face today [with the current economy] has anything to do with whether you can make money in the industry today. . . [O]ur situation today is that we have a lot of debt and we can't pay it. There [have] been a lot of industry changes over the years' pressures from pricing, for example -- that have been on everybody's minds. But again, at the end of the day, we can't pay the debt," glassBYTES.com quotes Mr. Cogswell as saying. Despite the bankruptcy filing, relates glassBYTES.com, Mr. Cogswell appeared to be optimistic. "We're doing well -- we're healthy, and it's our desire to continue to move forward and look forward and continue to invest in what will make the company healthy," he said. A secured creditor, Guggenheim Corporate Funding LLC, commented that it already has a deal with Diamond Glass as the company enters restructuring, says glassBYTES.com. Guggenheim is set to buy the company, unless other creditors can outbid its proposal. DIRECTED ELECTRONICS: Moody's Holds Ratings on Facility Amendment ----------------------------------------------------------------- Moody's Investors Service confirmed Directed Electronics Inc.'s ratings following the amendment of its credit facility. This concludes the review for possible downgrade initiated on Nov. 28, 2007. The rating outlook is negative. "Although Directed was able to recently amend its credit facility to loosen some of its covenants, Moody's remains concerned about the weak discretionary consumer spending environment and the company's ability to improve its operating performance in such an environment" said Kevin Cassidy, Vice President and Senior Credit officer at Moody's Investors Service. While the company was able to renegotiate its credit agreement for a 100 to 150 basis point increase in its interest rate margin depending on its leverage, Moody's is apprehensive about the company's moderating operating performance with operating margins decreasing by more than 50 basis points in 2007 as all of the company's products are deferrable and the macro economic environment in 2008 will likely be significantly worse than it was in 2007. The negative outlook reflects Moody's concern that the company's operating performance and cash flows will remain under pressure as discretionary consumer spending continues to soften in the midst of high gas prices and the weak housing and credit markets. The current uncertainty regarding the satellite radio merger between Sirius and XM, despite recent DOJ approval, and whether or not Directed will continue with this relationship is also incorporated in the negative outlook. These ratings were confirmed or assessments revised: -- Corporate family rating at B2; -- Probability of default rating at B3; -- $307 million senior secured term loan, due 2013 at B2 (LGD 3, 31% from LGD 3, 34%); -- $60 million senior secured revolver, due 20102 at B2 (LGD 3, 31% from LGD 3, 34%) Directed Electronics, Inc., designs and markets home speakers, consumer branded vehicle security, vehicle remote start and convenience systems and is a supplier of aftermarket satellite radio receivers. Sales for the twelve months ended Dec. 31, 2007 approximated $400 million. DIRECTED ELECTRONICS: Enters Into Amendment to Credit Agreement --------------------------------------------------------------- Directed Electronics Inc. entered into an amendment to its amended and restated credit agreement, effective March 11, 2008. The company's wholly owned subsidiary, DEI Sales Inc. entered into an amendment number 2 to credit agreement with the guarantors, the lenders and Canadian Imperial Bank of Commerce, acting through its New York agency, as administrative agent and collateral agent. The amendment further amended Directed Electronics amended and restated credit agreement to: (i) increase the company's maximum consolidated total leverage ratio to 5.25x through March 31, 2009, stepping down to 4.95x through Dec. 31, 2009, with step-downs thereafter consistent with the previous terms of its credit agreement, (ii) reduce its minimum fixed charge coverage ratio beginning Oct. 1, 2009, (iii) provide the company with the right to execute the sale of certain accounts receivable so long as the proceeds are used to reduce indebtedness, (iv) increase the applicable percentage with respect to the company's consolidated total leverage ratio, Libor rate margin for loans, and alternate base rate margin, (v) reduce the maximum aggregate amount available under Directed Electronics' revolving loans from $100,000,000 to $60,000,000, of which $50,000,000 is available all year and an additional $10,000,000 is available from October through February, and (vi) revise the quarterly repayment terms of the company's term loan to require us to make quarterly principal payments of approximately $670,000 commencing in March 2008, with payments of approximately $5,900,000 due on Dec. 31, 2009 and approximately $11,100,000 on Dec. 31, 2010, 2011, and 2012, with the final installment of the total principal due on Sept. 22, 2013. The amendment was effective March 11, 2008. The amendment will increase Directed Electronics' interest rate by 100 to 150 basis points, depending upon leverage ratios, from its current rate of Libor plus 250 basis points. About Directed Electronics Headquartered in Vista, California, Directed Electronics (Nasdaq: DEIX) -- http://www.directed.com/-- is a designer and marketer of consumer branded vehicle security and convenience systems and a supplier of home audio, mobile audio and video, and satellite radio products. Directed offers a broad range of products, including security, remote start, hybrid systems, GPS tracking and navigation, and accessories, which are sold under its Viper(R), Clifford(R), Python(R), and other brand names. In the home audio market, Directed designs and markets Definitive Technology(R) and a/d/s/(R) premium loudspeakers. Directed's mobile audio products include speakers, subwoofers, and amplifiers sold under its Orion(R), Precision Power(R), Directed Audio(R), a/d/s/(R), and Xtreme(R) brand names. Directed also markets a variety of mobile video systems under the Directed Video(R), Directed Mobile Media(R) and Automate(R) brand names. Directed also markets and sells certain SIRIUS-branded satellite radio products, with exclusive distribution rights for such products to Directed's existing U.S. retailer customer base. DUKE FUNDING XIII: Poor Credit Quality Spurs Moody's Rating Cuts ---------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Duke Funding XIII, Ltd.: Class Description: $944,000,000 Class A1SVF Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Aaa -- Current Rating: Baa3, on review for possible downgrade Class Description: $321,000,000 Class A1J Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Aaa -- Current Rating: Ba2, on review for possible downgrade Class Description: $185,000,000 Class A2S Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: A3 -- Current Rating: B1, on review for possible downgrade Class Description: $55,000,000 Class A2J Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Baa1 -- Current Rating: B2, on review for possible downgrade Class Description: $125,000,000 Class A3 Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Baa3 -- Current Rating: B3, on review for possible downgrade Class Description: $50,000,000 Class B1 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Ba2 -- Current Rating: Caa1, on review for possible downgrade Class Description: $55,000,000 Class B2 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Ba3 -- Current Rating: Caa2, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. DUKE FUNDING XII: Moody's Downgrades Ratings on Eight Note Classes ------------------------------------------------------------------ Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Duke Funding XII, Ltd.: Class Description: $1,388,000,000 Class A-S1VFA Secured Floating Rate Notes Due 2046 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Aa3, on review for possible downgrade Class Description: $75,000,000 Class A-S1VFB Secured Floating Rate Notes Due 2046 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Aa3, on review for possible downgrade Class Description: $260,000,000 Class A1 Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: A3, on review for possible downgrade Class Description: $192,000,000 Class A2 Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Baa1, on review for possible downgrade Class Description: $157,000,000 Class A3 Secured Deferrable Interest Floating Rate Notes Due 2046 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class Description: $14,000,000 Class B1 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2046 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $54,000,000 Class B2 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2046 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca Class Description: $20,000,000 Class B3 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2046B3 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. DUKE FUNDING X: Eroding Credit Quality Prompts Moody's Rating Cuts ------------------------------------------------------------------ Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Duke Funding X Ltd: Class Description: $852,000,000 Senior Swap Agreement dated as of April 12, 2006 -- Prior Rating: Aaa -- Current Rating: Aa2, on review for possible downgrade Class Description: $72,000,000 Class A1 Senior Secured Floating Rate Notes due April 9, 2046 -- Prior Rating: Aaa -- Current Rating: A1, on review for possible downgrade Class Description: $105,000,000 Class A2 Senior Secured Floating Rate Notes due April 9, 2046 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: A3, on review for possible downgrade Class Description: $78,000,000 Class A3 Secured Deferrable Interest Floating Rate Notes due April 9, 2046 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: $19,000,000 Class B1 Mezzanine Secured Deferrable Interest Floating Rate Notes due April 9, 2046 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class Description: $20,000,000 Class B2 Mezzanine Secured Deferrable Interest Floating Rate Notes due April 9, 2046 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. DURA AUTOMOTIVE: Further Amends First Revised Chapter 11 Plan ------------------------------------------------------------- DURA Automotive Systems, Inc., and its debtor affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware on March 31, 2008, a second amendment of their Revised Joint Plan of Reorganization and a disclosure statement explaining the Plan. The Revised Plan contemplates providing the $228,100,000 second lien facility claims with convertible preferred stock and distributing 100% of the new common stock to general unsecured creditors. The Original Plan had contemplated providing cash in satisfaction of the Second Lien Facility Claims. In addition, instead of a backstopped $160,000,000 rights offering, the contemplated Second Amended Revised Plan transactions are to be funded by $80,000,000 in cash proceeds from New Money Investors that will take the form of a second lien term loan with a $100,000,000 face amount. The New Money Investors will comprise certain existing Second Lien Lenders, Senior Noteholders and other investors. The Revised Plan contemplates that a new entity, New Dura Opco, will acquire the assets of Dura Operating Corporation in a taxable transaction through these steps: (a) On or before the Effective Date, certain Dura creditors, or a nominee on behalf of them, will form New Dura, with nominal capitalization; (b) New Dura will then form New Dura Holdings; (c) New Dura Holdings will then form New Dura Opco; (d) New Dura will make a capital contribution of Convertible Preferred Stock and Common Stock to New Dura Holdings, which shares will then be contributed to New Dura Opco; (e) On the Effective Date, Dura Operating Corporation will transfer certain assets and the stock of its subsidiaries to New Dura Opco in exchange for the Convertible Preferred Stock and the New Common Stock; (f) On the Effective Date, one or more of the U.S. Debtors will distribute the New Common Stock and the Convertible Preferred Stock to its creditors; and (g) Dura Operating Corporation will remain in existence and will retain certain assets, which will be leased to New Dura Opco. A full-text copy of the blacklined version of the Revised Plan is available for free at: http://bankrupt.com/misc/dura_blacklinemarch31plan.pdf A full-text copy of the blacklined version of the Disclosure Statement is available for free at: http://bankrupt.com/misc/dura_blacklinemarch31ds.pdf Issuance of New Securities On the Effective Date, New Dura will issue or reserve for issuance all securities required to be issued pursuant to the Revised Plan. New Dura will make a capital contribution of Convertible Preferred Stock and Common Stock to New Dura Holdings, which shares will then be contributed to New Dura Opco. After being exchanged for substantially all of the assets of Dura Operating Corporation, the New Common Stock and Convertible Preferred Stock will be held through The Depository Trust Company and not distributed in the form or certificated stock to the extent possible. Settlements Embodied in the Revised Plan Lawrence A. Denton, chairman, president, and chief executive officer of DURA, relates that the Second Amended Revised Plan contains a number of new settlement terms and conditions that either replace, modify or complement, the settlements embodied in the Plan of Reorganization filed August 22, 2007. The settlements are: 1. Certain existing Second Lien Lenders, Senior Noteholders and other investors, including, but not limited to, any holders of Subordinated Notes or Convertible Preferred Securities willing to invest, will contribute new capital of $80,000,000, in exchange for secured debt, which will have a second lien secured position with a face amount of up to $100,000,000. 2. The Revised Plan contemplates converting the Second Lien Facility Claims, which totals about $228,100,000, into Convertible Preferred Stock with these terms: * Liquidation preference as of the Effective Date equal to Second Lien Allowed Claim amount; * 20% paid-in-kind dividend; * Beginning on the third anniversary of the Effective Date, holders of the Convertible Preferred Stock shares into their pro rata share of 92.5% of the New Common Stock, and thereafter, into New Common Stock based on a percentage reflecting any accrued PIK Dividends through the conversion date since the third anniversary, if the Convertible Preferred Stock were to be converted at its full amount including any accrued PIK Dividends and with no prior redemptions. The percentage will be proportionately reduced to reflect the actual amounts of the unredeemed Convertible Preferred Stock outstanding, including any accrued PIK Dividends as of the conversion date; * Beginning on the fourth anniversary of the Effective Date, the holders of New Common Stock may call the conversion of all outstanding Convertible Preferred Stock; provided that either (i) the Convertible Preferred Stock must be trading at a level equal to or exceeding 115% of the liquidation preference of the Convertible Preferred Stock on the date on which the conversion is called, or (ii) the number of shares of New Common Stock into which the Convertible Preferred Stock is then convertible, in the aggregate, is trading at a similar valuation; * Beginning on the 10th anniversary of the Effective Date, to the extent that the Convertible Preferred Stock remains outstanding, holders representing more than a majority of the Convertible Preferred Stock will have the right to appoint a majority of the New Board's directors; * At any time before the third anniversary of the Effective Date, New DURA may ratably redeem up to 100% of the Convertible Preferred Stock plus accrued PIK Dividends then outstanding; provided that on the date of any redemption, holders may elect to convert a proportion of their Convertible Preferred Stock shares into New Common Stock shares; * The Special Transactions Committee may effectuate a redemption of Convertible Preferred Stock at any time, provided that the post-transaction cost of funds meets certain customary parameters for refinancing indebtedness typically found in an indenture; provided that a majority of the entire Board of Directors must approve any redemption using funds from debt senior to the Convertible Preferred Stock if the size of the proposed redemption is less than $112,500,000. 3. The Revised Plan contemplates paying in full and in cash all DIP Facility Claims. The Plan also contemplates converting Senior Note Claims into approximately 95% of the New Common Stock and the other U.S. General Unsecured Claims into approximately 5% of the New Common Stock. The Plan intends to pay in cash on a pro rata basis all Canadian General Unsecured Claims. The Plan also intends to discharge all other Claims, including Claims arising from the Subordinated Notes and the Convertible Subordinated Debentures, without recovery, and canceling all Equity Interests in the Debtors. 4. The Second Lien Group, the Creditors Committee, and the Commitment Parties will choose six independent board members. The chief executive officer of New DURA will be a member of the New DURA Board. 5. The Plan contemplates a special subcommittee of the New DURA Board that is responsible, if ever, to redeem the Convertible Preferred Stock. Canadian Unsecured Claims Recovery The Second Amended Revised Plan includes a liquidation analysis as of May 13, 2008, prepared by RSM Richter, Inc., the information officer appointed in the proceedings commenced by the Debtors' affiliates under the Canadian Companies' Creditors Arrangement Act pending before the Ontario Superior Court of Justice: Dura Automotive Systems (Canada), Ltd. Projected Liquidation Analysis As of May 13, 2008 (Unaudited) (In Thousands) Estimated Recovery ------------------ Book Value Low High ---------- ------- ------- Property, plant and equipment $15,842 $7,349 $9,153 Intercompany receivables 16,509 - 531 Trade accounts receivables 873 - 87 Other assets 7,759 3,082 6,597 Equity value, non-debtors - - - ---------- ------- ------- Total assets 40,983 10,431 16,368 ---------- ------- ------- Less: Professional fees 500 1,000 Net assets for creditor distribution 9,931 15,368 ======= ======= A full-text copy of the Canadian Liquidation Analysis is available for free at: http://bankrupt.com/misc/dura_canadianliquidationanalysis.pdf The Canadian Liquidation Analysis concludes that creditors of the Dura Automotive Systems (Canada), Ltd., would receive a median recovery of approximately 12.5% in a liquidation. The estimated recovery rate pursuant to the Canadian Liquidation Analysis is equivalent to the projected cash distribution to the Canadian General Unsecured Claim holders under the Revised Plan. The Canadian Information Officer relates that creditors' claims against DAS Canada total $102,399,000: Prepetition trade creditors $2,490,000 Employee pension claims 7,164,000 Severance obligation claims 1,238,000 Intercompany debt owing to Dura Canada LP 91,507,000 ------------ Total unsecured liabilities $102,399,000 ============ The Revised Plan contemplates that New Dura will assume and satisfy all amounts owing in respect of severance, the majority of which is payable to former employees of the Bracebridge facility. The New Dura will also assume and fully satisfy DAS Canada's pension obligation, which relates to the estimated wind- up deficiency in DAS Canada's pension plans. The Financial Services Commission of Ontario has filed a claim for $7,164,000, against the U.S. Debtors in respect of a wind-up deficiency. The Canadian Liquidation Analysis projects that DAS Canada's remaining assets by May 2008 will comprise an asset pool as was available at November 30, 2007, primarily consisting of the land and buildings of the Stratford and Bracebridge Facilities, the mortgage receivable associated with the sale of the Brantford Facility, which is CN$800,000, and the Transferred Assets. In addition, DAS Canada has tax refunds due to it, with a book value of about $7,300,000. New Schedule Counsel to DURA, Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, related, in a status report filing with the Court, that the Debtors' DIP Financing arrangements include a series of plan confirmation milestones: April 15, 2008 -- DURA will procure a commitment from a person or a group of persons to provide equity exit financing to the company and the Guarantors, whether in the form of a rights offering, new equity, or otherwise, on the effectiveness of the Revised Joint Plan of Reorganization, in an amount and on terms and conditions acceptable to the DIP Administrative Agent and Lenders. May 8, 2008 -- DURA will procure a commitment from a person or a group of persons to provide debt exit financing to the company and the Guarantors on the effectiveness of the Revised Plan, in an amount and on terms and conditions acceptable to the Administrative Agent and Lenders. May 15, 2008 -- The Court must have approved the Disclosure Statement explaining the Revised Plan. June 9, 2008 -- The Court must have confirmed the Revised Plan. June 20, 2008 -- The Effective Date of the Revised Plan will have occurred and transactions contemplated as part of the Revised Plan will have closed. Creditors Committee Supports Plan In a filing with the Court, the Official Committee of Unsecured Creditors believes that the Debtors' Revised Plan, as amended, provides the best recovery for unsecured creditors and presents the Debtors with the greatest opportunity to achieve a successful reorganization. The Creditors Committee says the Disclosure Statement explaining the Revised Plan contains adequate information that would enable claim holders in the Chapter 11 cases to make an informed judgment about the Revised Plan, including information regarding the Debtors' estimated enterprise value, financial projections and liquidation analysis. Accordingly, the Creditors Committee recommends approval of the Disclosure Statement. Counsel for the Creditors Committee, Erin Edwards, Esq., at Young Conaway Stargatt and Taylor LLP, in Wilmington, Delaware, notes that, to avoid having to raise the amount of exit financing, the Revised Plan contemplates providing the second lien facility claims with convertible preferred stock and distributing 100% of the new common stock to general unsecured creditors. The range of value for the New Common Stock to be distributed to general unsecured creditors is estimated to be between approximately $29,000,000, and $139,000,000, with a mid-point of about $84,000,000. The Creditors Committee tells the Court that while its financial advisor, Chanin Capital Partners, believes that one could argue that the value of the New Common Stock is greater than the value assigned to it by the Debtors in the Disclosure Statement, Chanin is confident that the value of the New Common Stock does not approach the level necessary to provide a distribution to holders of the Subordinated Notes Claims. J.W. Korth Objects to Disclosure Statement James W. Korth, managing partner of J.W. Korth & Company, on behalf of an ad hoc committee of holders of more than $100,000,000, of 8-5/8% Senior Bonds and 9% Subordinated Bonds issued by DURA Automotive Systems, Inc., argues that the Disclosure Statement explaining the Debtors' Revised Joint Plan of Reorganization does not give claim holders the ability to make informed decisions about the Reorganization Plan and decision on whether the liquidation value of the Debtors is higher than the amounts to be received by the Plan. Mr. Korth points out that: (1) The Debtors' management is believed to have a conflict of interest. Majority of the two highest classes of debt under the DIP Financing is held by two hedge funds, Pacificor LLC and The Blackstone Group, who incidentally may also be insiders in control of the Ad Hoc Committee of Second Lien Holders and the Official Committee of Unsecured Creditors. Under the Revised Plan, Pacificor and Blackstone will receive 100% of the equity in the New DURA, which will wipe out all other debt holders and leave a possible enormous profit in the hands of the management and the Debtors' investors. (2) The valuation and liquidation analysis does not present values of the 94 separate debtor entities as going concerns with associated goodwill, patents and trademarks. (3) DURA's management and their advisors did not account for $900,159,000, stated book value of the non-debtor subsidiaries in the Liquidation Analysis. (4) There is a stark difference in net worth values between the Debtors' monthly operating reports and the balance sheet provided in the Liquidation Analysis. (5) The Debtors' management and its advisors did not evaluate more than 60 patents and trademarks that are owned by the Debtors. (6) In November 2006, DURA's management and advisors wrote off more than $637,000,000, in good will, and the write-off was not explained in the Disclosure Statement or filings at the Securities and Exchange Commission at the time the write-off was executed. (7) The Debtors are not cooperating on the information request to inspect their books and records and is not providing the information the claims holders deserve. Moreover, Mr. Korth asserts that claims holders do not have sufficient information to evaluate the Plan because Pacificor and Blackstone are reported in control of the planned Reorganization and the trustees for the bondholders are receiving guaranteed payments from the Debtors. He adds that there is no disclosure as to why the trustee for senior subordinated notes ceased activities in support of the claim holders, and what the guaranteed payments are for. Mr. Korth further notes that the Disclosure Statement does not provide the details of who owns the majority of the second lien notes and the 8-5/8% senior notes and how the holders are organized. Hence, claim holders would not have sufficient information to decide whether possible insiders have influenced the development of the Plan. He says that there appears to be about $1,100,000,000, in value, that was on the balance sheet on the Petition Date, and is not in the predecessor books shown in the Disclosure Statement. Accordingly, Mr. Korth asks the Court to deny the Disclosure Statement until the matters are addressed. He also asks the Court to allow him to complete a new Liquidation Analysis with the assistance of a qualified independent third party that evaluates the sales price of each of the 94 separately operating subsidiaries, with their goodwill patents and trademarks. To assist him in the preparation of a new Liquidation Analysis, Mr. Korth further seeks the Court's permission to examine the Debtors' books and records, including: * the monthly income statements and balance sheets of each subsidiary of DURA for the past two years until the end of February 2008; * the analysis of the goodwill of each subsidiary whereby the Debtor last certified that goodwill and then wrote off that goodwill in November 2006; * a specific written statement line by line from the Debtor on how the planned Fresh Start balance sheet will differ from the balance sheet included in the Monthly Operating Reports and justification for the differences; * the contracts and any amendments with the Debtors and Alix Partners and Miller Buckfire and Kirkland & Ellis LLP; * copies of the presentation to potential lenders for the failed Exit Financing in December 2007; * the original underwriting files for the bonds including all notes regarding the creation of each issue's indenture and the original proposals by the underwriters for those issues along with the underwriting agreements; * detailed analysis behind the income projections for the next three years as stated in the Disclosure Statement; and * invoices and notes from the trustees for the senior or subordinated bonds. Debtors Ask Court to Overrule Korth Objection The Debtors ask the Court to overrule Mr. Korth's Disclosure Statement Objection because the issues raised therein have either (i) been adequately addressed by the Revised Disclosure Statement filed March 13 as supplemented by the March 31 Disclosure Statement; (ii) asserted confirmation issues that should be adjudicated at the confirmation hearing; or (iii) are otherwise without merit. Mr. DeFranceschi relates that J.W. Korth was part of the ad hoc group of Subordinated Noteholders represented by Ballard Spahr Andrews & Ingersoll, LLP, which initiated the X-Clause Adversary Proceeding. In litigating that Adversary Proceeding, the Subordinated Noteholders asked, and received, extensive discovery materials from the Debtors, he says. Mr. DeFranceschi asserts that Mr. Korth misapprehends the distinctive nature and differing purposes of the monthly operating reports on the one hand and the Revised Disclosure Statement's liquidation analysis and valuation analysis on the other. "Mr. Korth's real objection is thus not the scope or quality of the Revised Disclosure Statement's disclosure. He is really objecting to the Debtors' conclusions regarding enterprise value and liquidation and to the economic deal set forth in the Revised Plan that rests on those conclusions," Mr. DeFranceschi points out. The Debtors tell the Court that modifying the liquidation and valuation analysis contained in the Revised Disclosure Statement to address Mr. Korth's particular concerns would do nothing to enhance the Revised Disclosure Statement in providing adequate information to hypothetical creditors in the three voting classes -- Class 2 Second Lien Facility Claims, Class 3 Senior Notes Claims, and Class 5 Other General Unsecured Claims. The Debtors also ask the Court to deny Mr. Korth's requests for irrelevant information concerning the identify of creditors. The Debtors assert that Mr. Korth seeks disclosure regarding a number of matters irrelevant to determining whether the Disclosure Statement meets the standard under Section 1125 of the Bankruptcy Code. About DURA Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Del. Case No. 06-11202). Marc Kieselstein, P.C., Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., at Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., at Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of Jan. 31, 2008, the Debtor had $1,503,682, 000 in total assets and $1,623,632,000 in total liabilities. The Debtors have asked the Court to extend their plan filing period to April 30, 2008. (Dura Automotive Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Court Extends Exclusivity Deadline to April 30 --------------------------------------------------------------- The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware extended the period within which Dura Automotive Systems Inc. and its debtor-affiliates may file any plan of reorganization until April 30, 2008, and the period within which they may solicit acceptances of the plan until June 30, 2008. As reported in the Troubled Company Reporter on March 19, 2008, the Debtors filed an amended First Revised Joint Plan of Reorganization and Disclosure Statement explaining the Plan on March 13, 2008. The Hon. Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware will convene a hearing tomorrow, April 3, 2008, to determine whether the Disclosure Statement contains adequate information. The Original Plan had contemplated payment in cash, in full, of all Class 2 - Second Lien Facility Claims, a backstopped rights offering open to certain Class 3 Claims and certain Class 5 claims, and an equity or cash distribution equal to approximately 55% for the Class 3 Claims and 22% for the Class 5 Claims. However, without the level of exit financing envisioned by the Original Plan, these recoveries are no longer realistic. The Debtors and their creditor constituencies, therefore, devised the Revised Plan based upon equitizing claims in Classes 2, 3 and 5. Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Del. Case No. 06-11202). Marc Kieselstein, P.C., Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., at Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., at Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of Jan. 31, 2008, the Debtor had $1,503,682, 000 in total assets and $1,623,632,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DUTCH HILL: Five Classes of Notes Obtain Moody's Junk Ratings ------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Dutch Hill Funding II Ltd.: Class Description: $206,400,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $21,200,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class Description: $64,400,000 Class B Third Priority Senior Secured Floating Rate Notes Due 2052 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $8,000,000 Class C Loan Due 2052 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ca Class Description: $24,000,000 Class C Mezzanine Secured Floating Rate Deferrable Notes Due 2052 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ca Class Description: $15,200,000 Class D-1 Mezzanine Secured Floating Rate Deferrable Notes Due 2052 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Ca Class Description: $11,800,000 Class D-2 Mezzanine Secured Floating Rate Deferrable Notes Due 2052 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ca Class Description: $11,800,000 Class D-3 Mezzanine Secured Floating Rate Deferrable Notes Due 2052 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. EAST LANE: S&P Puts 'BB' Debt Rating on $75 Million Class A Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' senior secured debt rating to East Lane Re II Ltd.'s $75 million Series 2008-1 Class A variable-rate notes and $70 million Series 2008-1 Class B variable-rate notes, and assigned its 'B-' senior secured debt rating to the company's $55 million Series 2008-1 Class C variable-rate notes. All these notes are due April 7, 2011. The Class A and Class B notes provide multi-year reinsurance protection (net of certain stated reinsurance) on a per occurrence indemnity basis against certain first and subsequent hurricanes, earthquakes, thunderstorms, winter storms, wildfires, or Other peril loss events in the northeast U.S. The Class C notes provide multi-year reinsurance protection (net of certain stated reinsurance) on a per occurrence indemnity basis against loss events in the contiguous 48 states, D.C., and Canada. Losses to East Lane II will be based on the actual losses incurred by Federal Insurance Co. and other companies commonly referred to as the Chubb Group of Insurance Companies (aka Chubb; the ceding insurer). The risk period for each series will begin at 12:00 a.m. the day after closing and end on March 31, 2011. The reinsurance agreement, which is effectively supported by the proceeds from the issuance of the notes, will provide the Federal Insurance Co. and other associated Chubb companies (AA/Stable/--) with a source of indemnity catastrophe coverage on certain commercial and personal lines business for loss events in the covered areas over a three-year risk period. "East Lane II represents the first occasion that Standard & Poor's will have assigned a rating to notes issued in connection with a catastrophe bond in which the offering expressly includes the modeled peril of wildfire," said Standard & Poor's credit analyst Gary Martucci. S&P's review of modeling associated with the modeled peril of wildfire was complicated by the fact that nonnatural factors (e.g., arson or the ability or desire of communities to finance and enforce fire suppression measures) could directly impact the inherent risk of the peril. To address this challenge, Standard & Poor's considered detailed data provided to it by the ceding insurer and AIR Worldwide Corp. regarding wildfires frequency, severity, and probable cause. Importantly, according to the modeling undertaken by AIR, the modeled peril of wildfire contributed nominally to the modeled probability of attachment. Standard & Poor's was able to conclude that the inclusion of this peril would present a minimal contribution to the overall risk to the transaction. For this transaction, the addition of wildfires increased the modeled probability of attachment for the Class C notes by one basis point, and had no effect on the Class A and B notes. In addition to the modeled data, Standard & Poor's also considered the peril of wildfire impact on the overall risk of the transaction in a historical context. For example, current estimates from the ceding insurer for the October 2007 wildfires in southern California indicate a projected loss of $85 million; meaning that for the Class C attachment point of $900 million to be breached, the ceding insurer would have to suffer a loss due to wildfire that is approximately 10.5x the size of that event or 6.5x the largest wildfire losses (the 1991 Oakland fires) observed. Standard & Poor's would find it challenging to include this peril in this or future transactions if it were to conclude that wildfire represented more than a negligible risk to the note holders for the reasons noted. This offering is also subject to losses from an Other peril loss event, which includes, though is not limited to, loss events such as fire, explosion, lightning, volcanic actions, mudslide, the overflowing of a body of water, falling objects, direct impact of aircraft, and collapse of building. Collectively, an Other peril loss event impacts the probability of attachment to the Class A, Class B, and Class C notes by 0 bps, 10 bps, and 24 bps, respectively. However, the contribution of any individual loss within the category of an Other peril loss event is significantly less. Note that strikes, riots, or civil commotion, unless a consequence of a loss event, are excluded; any loss arising from nuclear reaction, radiation, or radioactive contamination, as well as any loss arising out of an act of terrorism, are specifically excluded. Standard & Poor's observations above related to the challenges of modeling the peril wildfire, insofar as they may be subject to nonnatural factors, are likewise applicable to a man- made Other peril loss event. ELUSTONDO RAMOS: Case Summary & 17 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Elustondo Ramos Inc. 2Luhn Victor Bragger Guaynabo, PR 00966 Bankruptcy Case No.: 08-01772 Chapter 11 Petition Date: March 25, 2008 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Carmen D. Conde Torres, Esq. 254 San Jose Street 5th Floor San Juan, PR 00901-1523 Tel: 787-729-2900 Fax: 787-729-2203 notices@condelaw.com Total Assets: $406,191 Total Debts: $1,126,374 Debtor's list of its 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Banco Popular de Puerto Rico value of $447,143 P.O. Box 362708 collateral: San Juan, PR 00936-2708] $56,111 Enrique Elustondo $138,111 Iriarte Cond. Los Arcos de Suchville Apartment 411 Guaynabo, PR 00966 Dr. Herman J. Flax $40,000 11401 Commonwealth Drive #1 Rockville, MD 20852-2827 IRS $37,452 Raul Ramos and Gladys Rivera $15,000 Matosantos Commercial Corp. $14,000 Departamento de Hacienda $10,690 Seccion de Quiebras Departamento del Trabajo y $6,512 Recurso Humanos AEE $6,467 Arquitectura Olabarrieta $5,850 Century: Small Business $4,515 Solutions Sales Tax Municipal (Guaynabo) $3,369 Amex $3,165 Patente Municipal $3,035 Doctor's Associates Inc. $3,000 Sales Tax Municipal (Bayomon) $1,769 Crim $1,120 ENRON CORP: $1.3 Billion Earmarked for Distribution to Creditors ---------------------------------------------------------------- Enron Creditors Recovery Corp., fka Enron Corp., disclosed that it will distribute around $1.3 billion to creditors of Enron Corp. and its debtor-affiliates. The distribution to holders of allowed general unsecured claims and allowed guaranty claims totals approximately $1,027,000,000, consisting of cash of approximately $980,600,000 and Portland General Electric Company Common Stock equivalents of approximately $37,400,000, plus interest, dividends and gains from the sale of PGE Common Stock of approximately $9,000,000. "Returning funds to creditors is central to the mission of Enron Creditors Recovery Corp., and the Board of Directors is proud of its achievements to date, including [this] distribution," John Ray III, President and Chairman of the Board said. "With the MegaClaims litigation now resolved, we are one step closer to completing our work on behalf of the creditors. Our efforts to date have exceeded original Enron Corp. estimates by greater than 225%, and we remain committed to continuing to work diligently to maximize the total distribution amount." Since November 2004, Enron Creditor's Recovery Corp. has returned approximately $14,558,100,000 to creditors in twice-yearly distributions, in April and October, as well as in "catch-up" distributions paid on an interim basis every two months. This money has been recovered and returned to innocent creditors through Enron Creditors Recovery Corp.'s diligent efforts to monetize assets, reduce overhead costs and recover funds taken fraudulently. Of note, the MegaClaims litigation against 11 banks alleged to have participated in the collapse of Enron generated $3.42 billion in cash settlements to be returned to creditors, plus the subordination of $1.63 billion in claims held by the banks against the Estate. With the recent settlement of the litigation against Citigroup, all outstanding MegaClaims litigation will be resolved upon Bankruptcy Court approval of the settlement. The $1.66 billion of funds available as a result of the Citigroup settlement, plus an anticipated additional release to creditors of $1.7 billion from the Disputed Claims Reserve, are not part of this distribution and instead will be included in a future disbursement. The DCR currently consists of approximately $4,796,500,000, including $4,093,800,000 in cash, approximately $373,400,000 of PGE Common Stock equivalents valued at the Plan value -- $21.008 per share -- and approximately $329,300,000 of interest, dividends and gains from the sale of PGE Common Stock. About Enron Corp. Based in Houston, Texas, Enron Corporation filed for chapter 11 protection on Dec. 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen, Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler, Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP, Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L. Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP represent the Debtors. Jeffrey K. Milton, Esq., Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On Jan. 9, 2004, they filed their fifth Amended Plan and on the same day the Court approved the adequacy of the Disclosure Statement. On July 15, 2004, the Court confirmed the Debtors' Modified Fifth Amended Plan and that plan was declared effective on Nov. 17, 2004. EULER ABS: 10 Notes Get Moody's Rating Cuts on Poor Credit Quality ------------------------------------------------------------------ Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Euler ABS CDO I, Ltd.: Class Description: $270,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes due 2050 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: A1, on review for possible downgrade Class Description: $135,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes due 2050 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $93,750,000 Class A-3 Third Priority Senior Secured Floating Rate Notes due 2050 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: $53,000,000 Class B Fourth Priority Senior Secured Floating Rate Notes due 2050 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $20,000,000 Class C Fifth Priority Senior Secured Floating Rate Notes due 2050 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class Description: $24,500,000 Class D Sixth Priority Mezzanine Deferrable Secured Floating Rate Notes due 2050 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade Class Description: $6,750,000 Class E Seventh Priority Mezzanine Deferrable Secured Floating Rate Notes due 2050 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $22,500,000 Class F Eighth Priority Mezzanine Deferrable Secured Floating Rate Notes due 2050 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Class Description: $12,500,000 Class G Ninth Priority Mezzanine Deferrable Secured Floating Rate Notes due 2050 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $14,000,000 Class H Tenth Priority Mezzanine Deferrable Secured Floating Rate Notes due 2050 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. EVERGREEN INT'L: Liquidity Concerns Prompts S&P's Negative Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Evergreen International Aviation Inc., including the 'B' long-term corporate credit rating, on CreditWatch with negative implications. The CreditWatch placement reflects increased concerns over liquidity and covenant compliance given recent weaker-than-expected operating performance. "Evergreen's revenues and earnings have fallen below our expectations and this has caused covenant compliance to become extremely tight," said Standard & Poor's credit analyst Lisa Jenkins. "If operating performance does not improve over the near term or Evergreen does not negotiate covenant relief, we believe the company could lose access to its credit facility." Ratings on Evergreen reflect the company's participation in a cyclical, competitive, and capital-intensive industry and its highly leveraged capital structure. Offsetting these risks somewhat is the company's established position in certain narrow market segments and its longstanding relationship with many key customers. McMinnville, Oregon-based Evergreen derives a significant portion of its revenues and operating profits from Evergreen International Airlines, its heavy airfreight transportation subsidiary. The company also provides ground logistics services, aircraft maintenance and repair services, helicopter and small aircraft services, and aviation sales and leasing. The company has recently been experiencing profit pressures in its airfreight business, in part because of delays in deliveries of the new Boeing 787 aircraft, for which Evergreen has a contract to provide transportation-related services. The earnings shortfall is of increased concern because of the significant debt service requirements Evergreen faces, with annual interest expense and amortization totaling close to $38 million. This, along with ongoing capital expenditures, consumes much of the company's cash flow. Credit risk is heightened by the cyclical and competitive nature of the industry in which Evergreen competes, the capital intensity of its airline operations, its private ownership (which limits capital raising options and makes the company subject to the influence of the controlling shareholder), and its financial history (which includes a payment default a number of years ago and various subsequent covenant defaults). Evergreen is a private company that does not disclose its financial results to the public. Standard & Poor's will meet with management to discuss near-term operating prospects and liquidity issues. If it appears that Evergreen's operating performance will remain depressed and create increased liquidity pressures or if the company fails to achieve needed covenant relief, ratings will be lowered. FAIRPOINT COMM: Completes Merger Agreement with Verizon's Spinco ---------------------------------------------------------------- FairPoint Communications Inc. closed its transaction in which FairPoint merged with Northern New England Spinco Inc., an entity which owned Verizon Communications' landline and certain related operations in Maine, New Hampshire and Vermont. FairPoint is the surviving company in the merger. As reported in the Troubled Company Reporter on Feb. 28, 2008, Spinco will hold specified assets and liabilities that are used in Verizon's local exchange business and related activities in Maine, New Hampshire and Vermont. On a combined pro forma basis as of Dec. 31, 2007, FairPoint has approximately 1,906,748 total access line equivalents which includes 1,110,722 residential voice access lines; 505,449 business voice access lines; and 290,577 HSD subscribers, including DSL, cable modem and wireless broadband. In connection with the merger, Verizon received a $1.16 billion cash payment from Spinco and $551 million of 13-1/8% senior notes due in 2018 issued by Spinco, and Verizon's stockholders received approximately 54 million shares of FairPoint's common stock. In total, this results in FairPoint total senior secured debt of $1.635 billion, senior notes of $551 million and total shares outstanding of approximately 89 million. "This is a great day in our progression," Gene Johnson, chairman and CEO of FairPoint Communications, said. "Many dedicated employees have worked tirelessly to achieve this milestone and I am ever grateful. The result of our efforts is the creation of the eighth largest telephone company in the United States, one truly dedicated to serving its communities." "We look forward to continuing with the integration and emerging from the Transition Services Agreement on schedule," Mr. Johnson added. "We are all excited about joining with the over 2,500 new employees from Verizon. We are dedicated to putting our customers first in all we do." About Verizon Communications Inc. Headquartered in New York City, Verizon Communications Inc. (NYSE: VZ) - http://www.verizon.com/-- delivers broadband and other wireline and wireless communication innovations to mass market, business, government and wholesale customers. Verizon Wireless operates America's reliable wireless network, serving 63.7 million customers. Verizon's Wireline operations include Verizon Business, which delivers innovative and seamless business solutions to customers around the world, and Verizon Telecom, which brings customers the benefits of converged communications, information and entertainment services over the fiber-optic network. A Dow 30 company, Verizon has a diverse workforce of nearly 238,000. About FairPoint Communications Based in Charlotte, North Carolina, FairPoint Communications Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- provides communications services to rural and small urban communities across the country. FairPoint owns and operates 30 local exchange companies located in 18 states offering an array of services, including local and long distance voice, data, Internet and broadband offerings. * * * As reported in the Troubled Company Reporter on Feb. 29, 2008, Moody's Investors Service assigned a B1 corporate family rating and a positive outlook to FairPoint Communications Inc., after the reports that all three states have approved the proposed merger with Verizon Communications' Maine, New Hampshire and Vermont wireline operations in a reverse Morris Trust transaction, valued at $2.4 billion in cash and stock (net of $235 million of working capital contribution by Verizon). Standard & Poor's Ratings Services raised its corporate credit rating on Charlotte North Carolina-based local exchange carrier, FairPoint Communications Inc. to 'BB' from 'BB-' and removed the ratings from CreditWatch. The outlook is stable. FINANCIAL GUARANTY: S&P Slashes Ratings on 59 Insured ABS Classes ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 59 classes of U.S. asset-backed securities (ABS) insured by Financial Guaranty Insurance Co. and removed them from CreditWatch with negative implications. The downgrades of these U.S. ABS classes, which come from various transactions, follow Standard & Poor's revision of the financial The rating on each of the 59 downgraded U.S. ABS classes has now been de-linked from the financial enhancement rating on FGIC because the underlying ratings on the ABS deals are now higher than that of the monoline. The rating actions affect ABS transactions from 13 asset types. Auto loan ABS was most affected, with 20 downgrades (34% of the total actions). Other asset types affected include aircraft, container lease, credit card, equipment lease, new assets, railcar lease, rental car, recreational vehicle, single-issue synthetic, timeshare, trade receivables, and 12b-1 fee ABS. FINANCIAL GUARANTY: S&P's 'BB' Rating Cues Rating Cuts on 310 RMBS ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on 310 classes from 119 U.S. residential mortgage-backed securities transactions due to the downgrade of bond insurer Financial Guaranty Insurance Co. on March 28, 2008. At the same time, S&P removed 304 of the affected U.S. RMBS ratings from CreditWatch with negative implications. S&P's ratings on five classes from RFMSII Series 2006-HSA1 Trust remain on CreditWatch with negative implications. FGIC guarantees all of the classes affected by these actions. Standard & Poor's lowered its financial enhancement rating on FGIC to 'BB/Negative' from 'A/Watch Neg' on March 28, 2008. The rating action reflects Standard & Poor's concerns regarding regulatory and managerial issues with FGIC. Standard & Poor's is also concerned about FGIC's ability to raise new capital. S&P believes that FGIC has been slow to identify the unfavorable insured portfolio trends that have emerged, and has failed to implement a strategic plan to reestablish itself as a viable operating entity capable of writing new business. The 310 lowered ratings were dispersed: 11 were lowered to 'A-', 47 were lowered 'BBB+', 82 were lowered to 'BBB', 81 were lowered to 'BBB-', and 89 were lowered to 'BB'. The revised ratings reflect the higher of the current rating on FGIC ('BB') and the rating of the respective underlying transaction based on the inherent credit support. Standard & Poor's will continue to monitor its ratings on all classes linked to FGIC and take appropriate rating actions as necessary. FINISAR CORP: Restructures Terms on Convertible Note Due March 26 ----------------------------------------------------------------- On March 21, 2008, Finisar Corporation amended one of the two convertible promissory notes it issued on March 26, 2007, as consideration for the acquisition of AZNA LLC, a privately held developer of photonic components and subsystems based in Boston, Massachusetts. As disclosed in the company's 10-K for the fiscal year ended April 30, 2007, the company completed on March 26, 2007, the acquisition of AZNA LLC for a purchase price of $19.7 million, consisting of convertible promissory notes in the aggregate principal amount of $17.0 million and cash of $2.7 million. The original promissory note in the principal amount of $15.6 million was due and payable on March 26, 2008. The amended promissory note, in the principal amount of $16.5 million, includes accrued interest from the issue date of the original note through March 26, 2008, and is payable in three installments. The first installment of $4.5 million was paid in cash on March 26, 2008. The second installment of $6.0 million is due on June 20, 2008, and the final installment is due on Sept. 22, 2008. The second and final installments are payable, at Finisar's option, in cash, in shares of Finisar common stock or a combination of both, provided that all accrued interest shall be paid in cash. Finisar has filed a registration statement under the Securities Act of 1933, as amended, for the resale of the shares of Finisar common stock underlying the promissory note. The second promissory note issued in the AZNA transaction, in the principal amount of $1.4 million, was paid in cash on March 26, 2008. About Finisar Corporation Headquartered in Sunnyvale, California, Finisar Corporation (NASDAQ: FNSR) -- http://www.finisar.com/-- provides fiber optic components and subsystems and network test and monitoring systems. These products enable high-speed data communications for networking and storage applications over Gigabit Ethernet Local Area Networks, Fibre Channel Storage Area Networks, and Metropolitan Area Networks using Fibre Chanel, IP, SAS, SATA, and SONET/SDH protocols. At Jan. 27, 2008, the company's consolidated balance sheet showed $542.7 million in total assets, $377.4 in total liabilities, and $165.3 million in total stockholders' equity. * * * As reported in the Troubled Company Reporter on July 24, 2007, the company received three substantially identical purported notices of default from the U.S. Bank Trust National Association, as trustee for its 2 1/2% convertible senior subordinated notes due 2010, its 2 1/2% convertible subordinated notes due 2010 and its 5 1/4 % convertible subordinated notes due 2008, asserting that its failure to timely file the 2007 10-K with the SEC and to provide a copy to the trustee constituted a default under each of the Indentures. The notices each indicated that, if the company did not cure the purported default within 60 days, an "Event of Default" would occur under the respective Indenture. On Dec. 4, 2007, the company filed with the SEC, and provided to the trustee, the October and January 10-Qs, as well as the 2007 10-K. In the company's Form 10-K filed on Dec. 4, 2007, the company stated that it instituted a litigation seeking judicial declaration that the company is not in default under the indentures, in anticipation of the assertion by the trustee or the noteholders that "Events of Default" had occurred, and a potential attempt to accelerate payment on one or more series of the notes. On Jan. 2, 2008, the company received an additional notice from the trustee alleging that the company had defaulted under the Indentures by failing to reimburse the trustee for attorney and other fees and expenses it has incurred in the dispute. To forestall any efforts by the trustee to declare an acceleration based on this alleged default, the company has paid the fees and expenses as demanded by the trustee, under protest and subject to reservation of rights to seek recovery of all amounts paid. The court has directed the company and the trustee to file summary judgment motions in the federal court action. As of Jan. 27, 2008, there is $250.3 million in aggregate principal amount of notes outstanding and an aggregate of approximately $3.0 million in accrued interest. FOOT LOCKER: Poor Sales Results Cues Moody's Rating Cuts to 'Ba3' ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings of Foot Locker, Inc., corporate family rating to Ba3. The rating outlook remains negative. The downgrade was prompted by the company's poor sales results for fiscal year 2007, primarily driven by weakness in the athletic retail market in North America as well as an overall weak retail sales environment. This resulted in higher markdowns, a notable deterioration in Foot Locker's profitability, and a weakening in credit metrics. In particular, debt to EBITDA rose to 6.1 times which is significantly higher than the level cited in Moody's credit opinion dated Sept. 26, 2007 that would likely prompt a downgrade. Given the ongoing weak retail sales environment, Moody's expects that Foot Locker will likely sustain weakened credit metrics over the next twelve months. These ratings are downgraded: -- Corporate family rating to Ba3 from Ba2; -- Probability of default rating to Ba3 from Ba2; -- Senior unsecured notes to B1 (LGD4, 61%) from Ba2 (LGD4, 59%). The rating outlook is negative. The Ba3 corporate family rating reflects Foot Locker's weak profitability levels and weakened credit metrics. The company's profitability level fell dramatically during 2007 as a result of heavy markdown activity and is currently below its peer group. The rating also reflects its significant business risk as a specialty retailer and its highly seasonal operations. As a result of the company's narrow focus on athletic footwear and apparel, Foot Locker is highly susceptible to changing fashion trends and its cash flow from operations generation is heavily reliant on the fourth quarter holiday selling season. Balancing these significant risks is the company's global diversification, credible market position, and its moderate scale. The rating is also supported by the company's good liquidity and modest level of funded debt which is currently below its excess cash level. The rating outlook is negative reflecting Moody's expectations that the retail selling environment will continue to be pressured thus constraining Foot Locker's operating performance and will likely cause credit metrics to remain weak over the next twelve months. Foot Locker, Inc., headquartered in New York, New York, is a global, specialty retailer of athletic footwear and apparel. It operates approximately 3,785 primarily mall-based stores in 20 countries in North America, Europe and Asia Pacific, including Australia and New Zealand. Revenues for fiscal year ended Feb. 2, 2008 were approximately $5.4 billion. FORD MOTOR: Total March 2008 U.S. Sales Down 14% at 227, 143 Units ------------------------------------------------------------------ Total Ford Motor Company sales, including Jaguar, Land Rover, and Volvo, totaled 227,143, down 14%. Sales for Fords redesigned small car and acclaimed crossover utility continued to buck economic trends during March. Retail sales for the Ford Focus were the highest for any month since August 2005 - with retail sales up 36% in March and 35% in the first quarter compared with the same periods a year ago. The new Focus has helped Ford increase its share in the growing small car market and is attracting younger buyers. Compared with the previous model, buyers are equipping the Focus with more features, like SYNC, Fords exclusive, in-car connectivity technology that fully integrates most Bluetooth-enabled cell phones and MP3 players by voice activation. Edge retail sales were up 35% in March and 52% in the first quarter, thanks in part to stronger sales on the coasts. The California region accounted for more than 10% of Edge sales in the first quarter of 2008, versus 7% in the first quarter 2007. First quarter retail sales on the west coast and Northeast more than doubled compared with a year ago. This signals the growing appeal of the countrys best-selling crossover in 2007. During the first quarter of 2007, Edges introduction quarter, more than one-third of Edge retail sales came from the Great Lakes area. During the same period in 2008, this region drove only one-fourth of Edge sales. This reflects how much customers who havent traditionally even considered our products are starting to warm up to Ford and is just an indication of more to come, said Jim Farley, Ford group vice president, Marketing and Communications. Were optimistic the new Ford Flex and Lincoln MKS will help increase consumers consideration for our brands beyond our traditional geographic regions of strength. In March, Ford, Lincoln and Mercury sales totaled 213,074, down 14% compared with a year ago. Sales to individual retail customers were 17% lower than a year ago, with essentially the entire decline concentrated among truck and sport utility vehicles. Sales to daily rental companies were down 13% versus a year ago, and total fleet sales, including daily rental, were down 9%. This is a very challenging external environment, reflecting a seismic shift in consumer preferences, said Mr. Farley. These conditions will likely persist in the near future. At Ford, we remain focused on executing our plan, which includes being profitable at lower volume and changed mix. It is crucial we continue to employ a disciplined process to gauge demand and plan production on a segment-by-segment and region-by-region basis, said Mr. Farley. 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: Launches New E-Commerce Web Site ------------------------------------------- After being bought by NRDC Equity Partners LLC -- owner of Lord & Taylor -- through affiliate H Acquisition LLC, Fortunoff Fine Jewelry and Silverware LLC launched a new e-commerce Web site, replacing and redesigning its old system altogether, the International Diamond Exchange reports. According to the IDEX, Fortunoff has in the past generated annual revenues of about $22,000,000, sales that did not grow much over the years. Nevertheless, Fortunoff decided to outsource the project, freeing its technology team to focus on creating new internal back-end and store systems, the IDEX states. "The decision to go outside for hosting and rebuilding the e- commerce site was a good one and a priority for the new owners," IDEX quoted executive vice president David Fortunoff, as saying. "Before, we were restricted by what we could do on the web and now we have much more bandwidth." The new system is noted for its efficiency in content management, payments processing and customer service, the IDEX says. Fortunoff Expands Outdoors Charles Chinni, new chief executive officer of the Fortunoff franchise, has been successful in establishing 14 outdoor stores, Casual Living reports. Mr. Chinni said the Fortunoff franchise is "solid but was slow to change as consumers switched from formal lifestyles to casual ones." Because of the success of the outdoor stores, which convert to indoor furniture from September to January, more outdoor furniture stores are in Fortunoff's budget for 2009, Casual Living says. Meanwhile, Tommy Hilfiger announced on March 13, 2008, that it will open a 22,000 square-foot global flagship store at the Fifth Avenue retail space which Fortunoff occupied for 30 years, Forbes.com reports. Can NRDC Turn Around Fortunoff? Among retail analysts, doubts exist as to whether Fortunoff can ever regain the prominence it held as recently as a decade ago, Kames Bernstein at newsday.com, notes. The advent of retail-chains like Wal-Mart, Target, and Bed Bath & Beyond crushed older retailers in the metropolitan area with outlets by selling merchandise for less, and offering more products, Mr. Bernstein states. "Over the past dozen years or more the management has failed to take full advantage of the opportunities that were right there under their noses. The [Fortunoff] name, the reputation, the merchandise assortment . . . the customer loyalty -- those were all the opportunities," Mr. Bernstein quotes Kurt Barnard, who runs Barnard's Retail Forecasting, as saying. "Fortunoff must . . . get their personality back," Marshal Cohen, a retail analyst at NPD Group, says. Restructuring Results in Employee Layoffs NRDC has confirmed that Fortunoff laid off about 190 workers, Daniel Wagner at Newsday.com reports. "As part of restructuring after emerging from bankruptcy, Fortunoff did lay off associates. However, the total number of associates was less than 8 percent of the workforce company- wide," Mr. Wagner quotes an NRDC spokeswoman, as saying. "[E]very laid-off employee received a severance package." In its bankruptcy petition, Fortunoff said it had 2,400 employees as of February 2008. Mr. Wagner discloses that one former employee, who would not allow his name to be printed because he said speaking to the press would void his severance package, said the cuts ranged from management to customer service representatives. 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: El-Kam Renews Demand for Postpetition Rent Payment ------------------------------------------------------------- El-Kam Realty Co. asked the Hon. James M. Peck of the U.S. Bankruptcy Court for the Southern District of New York to compel Fortunoff Fine Jewelry and Silverware LLC and its debtor- affiliates to pay postpetition rent then due for February 2008, and to timely pay administrative rent due with respect to three leases in New York, until the Leases are assumed or rejected. The Debtors responded by stating that the Leases were scheduled as contracts to be assumed by the Debtors and assigned to H Acquisition LLC, pursuant to the then pending sale of substantially all of the Debtors' assets. Prior to the Sale, H Acquisition advised El-Kam that it had not yet decided whether to assume the Leases, David J. Mark, Esq., at Kasowitz Benson Torres & Friedman LLP, in New York, relates. Subsequently, El-Kam agreed to a short extension in consideration for H Acquisition's agreement to pay the rent due for February and March 2008. Mr. Mark tells the Court that H Acquisition's counsel agreed to make the payments immediately after the closing of the Sale. According to Mr. Mark, H Acquisition has taken over the Leased Premises, and is conducting business there, since the closing of the sale. However, as of March 14, 2008, El-Kam has not received payments from either the Debtors or H Acquisition, with respect to the Postpetition Rent. By this motion, El-Kam asks the Court to direct the Debtors or H Acquisition to promptly pay $939,384 to El-Kam: -- $451,335, for amounts accrued under the Leases since the bankruptcy filing with respect to the February rental; and -- $488,049, for the March rental. As reported in the Troubled Company Reporter on March 3, 2008, the Debtors ask the Court to defer El-Kam Realty Co.'s request for the immediate payment of rent until the closing of the sale of substantially all of the Debtors' assets. 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: Two Creditors Want Goods Returned or Paid ---------------------------------------------------- Two creditors demand the return or immediate payment of their goods from Fortunoff Fine Jewelry and Silverware LLC and its debtor-affiliates: Creditors Amount of Goods --------- --------------- Treasure Garden, Inc. $542,899 Rene Corriveau & Fils, Inc. 25,288 The parties assert that they are entitled to reclamation of their products delivered to the Debtors, pursuant to Uniform Commercial Code Section 2-702 and Section 546(c) 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) GENERAL MOTORS: March 2008 U.S. Sales Down 13% at 282,732 Units --------------------------------------------------------------- General Motors Corp. dealers in the United States delivered 282,732 vehicles in March, a decrease of 13% when compared with the same month a year ago. For the first three months of 2008, GM total sales of 805,720 vehicles were down 11% compared with a year ago. Retail share appears to have remained stable throughout the month and the quarter. "Our new launch vehicles, including the award-winning Chevrolet Malibu, Cadillac CTS, and our new crossovers -- Enclave, Acadia and Outlook -- had a strong month," Mark LaNeve, vice president, GM North America Vehicle Sales, Service and Marketing, said. "Most importantly, despite the tough economy and soft truck market, we anticipate our total retail vehicle sales share to have remained flat for the month and the first three months of the year, Mr. LaNeve added. "We are encouraged by our performance in the key passenger car categories, and we anticipate holding our share for full-size pickups and utilities." There were several bright spots in the truck category, including GMC Sierra pickup sales that were up 4% total and 1% retail for the month. Saturn Vue total sales were up 12% and retail climbed 18%. The Buick Enclave, GMC Acadia and Saturn Outlook crossovers together accounted for more than 14,000 vehicle sales in the month, an increase of 45% compared with the same month last year. Outlook sales were up 18%; Acadia sales increased 39%; and there were more than 4,400 Buick Enclaves sold. The Saab 9-7X also increased its total sales 18% for the month. GM total truck sales for the month declined 16% compared with March 2007. GM's fuel-efficient cars saw strong growth. Chevrolet Malibu total sales were up 7% with retail sales up 122 percent, and Impala sales were up 10% total and 16% retail. Pontiac Vibe total sales were up 39% with retail up 4%, while G6 was up 31% total compared with March 2007. In the luxury car segment, the award- winning Cadillac CTS saw total sales increase 33% with a strong retail increase of 43%. The just-released 2009 Pontiac Vibe and G8 are selling as fast as they are delivered to dealers. "For the first three months of the year, GM has four of the top-10 selling cars in the market with Impala, Cobalt, G6 and Malibu," Mr. LaNeve said. "Our sales performance in mid-cars and crossovers shows the power of new products to attract consumers - even in a tough market. Consumers can always walk into a GM showroom and know they'll get a vehicle with industry-leading value, great fuel economy and the best warranty coverage of any full-line automaker." Certified Used Vehicles March 2008 sales for all certified GM brands, including GM Certified Used Vehicles, Cadillac Certified Pre-Owned Vehicles, Saturn Certified Pre-Owned Vehicles, Saab Certified Pre-Owned Vehicles, and HUMMER Certified Pre-Owned Vehicles, were 43,659 vehicles, down 19% from March 2007 results. Year-to-date sales are 123,633 vehicles, down 12% from the same period last year. GM Certified Used Vehicles posted March sales of 38,612 vehicles, down 19% from last March, when GM Certified set an industry monthly sales record for the certified category. Cadillac Certified Pre-Owned Vehicles sold 3,324 vehicles, down 14%. Saturn Certified Pre-Owned Vehicles sold 1,042 vehicles, down 35%. Saab Certified Pre-Owned Ve hicles sold 518 vehicles, down 32%, and HUMMER Certified Pre-Owned Vehicles sold 163 vehicles, up 39%. "We're encouraged that GM Certified Used Vehicles sales grew 2% from the previous month, the second consecutive monthly sales increase for the brand," Mr. LaNeve said. "The Hummer Certified Pre-Owned Vehicles program posted one of its best months ever, with a 39 percent increase from last March." GM North America Sales In March, GM North America produced 237,000 vehicles (124,000 cars and 113,000 trucks). This is down 164,000 vehicles or 41% compared to March 2007 when the region produced 401,000 vehicles (134,000 cars and 267,000 trucks). (Production totals include joint venture production of 20,000 vehicles in March 2008 and 15,000 vehicles in March 2007.) GM North America built 885,000 vehicles ( 360,000 cars and 525,000 trucks) in the first-quarter of 2008. This is down 178,000 vehicles or 17% compared to first-quarter 2007 actuals when the region produced 1.063 million vehicles (399,000 cars and 664,000 trucks). Nearly 100,000 units of production have been lost due to the strike at American Axle & Manufacturing Holdings Inc. Additionally, the region's 2008 second-quarter production forecast remains unchanged at 1.08 million vehicles (408,000 cars and 672,000 trucks ). 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. GLOBAL EXECUTION: Fitch Confirms 'BB' Rating on Two Note Classes ---------------------------------------------------------------- Fitch Ratings affirmed all classes of Global Execution Auto Receivables Securitization 2005-A as: GEARS 2005-A -- Class A-P notes at 'AAA'; -- Class A-2 notes at 'AAA'; -- Class A-3 notes at 'AAA'; -- Class B notes at 'AA'; -- Class C notes at 'A'; -- Class D-1 notes at 'BBB'; -- Class D-2 notes at 'BBB'; -- Class E-1 notes at 'BB'; -- Class E-2 notes at 'BB'. The securities are backed by a portfolio of retail installment sale contracts secured by new and used automobiles, light-duty trucks, and vans indirectly originated and currently serviced by Bank of America, N.A. The collateral continues to perform within Fitch's expectations, and under the credit enhancement structure, the securities can withstand stress scenarios consistent with the ratings and still make full payments to investors in accordance with the terms of the documents. GREENTREE ESTATES: Case Summary & Largest Unsecured Creditor ------------------------------------------------------------ Debtor: GreenTree Estates, LLC 4870 Ashford Dunwoody Road Atlanta, GA 30338 Tel: (404) 758-9111 Bankruptcy Case No.: 08-66074 Chapter 11 Petition Date: March 31, 2008 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: John A. Moore, Esq. (jmoore@moorelawllc.com) The Moore Law Group, LLC 1745 Martin Luther King Jr. Drive Atlanta, GA 30314 Tel: (404) 758-9111 Fax: (888) 553-0071 http://www.moorelawllc.com/ Total Assets: $1 million to $10 million Total Debts: $1 million to $10 million Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Aristone Development Group LLC contract $500,000 3003 Summit Boulevard, Suite 5065 Atlanta, GA 30319 HERCULES INC: Debt Reduction Cues Moody's Rating Upgrade to 'Ba1' ----------------------------------------------------------------- Moody's Investors Service raised the corporate family rating of Hercules Incorporated to Ba1 from Ba2, adjusted other debt ratings upward, and moved the outlook on the rating to positive. This concludes the review for possible upgrade that was initiated on Jan. 30, 2008. The Ba1 CFR (and positive outlook) reflect Hercules' successful efforts at debt reduction in past years and most recently in 2007. Hercules reduced balance sheet debt by roughly $200 million in 2007 (to about $795 million) and this reduction, along with strong cash flows, has caused credit metrics to improve to levels that support the Ba1 CFR. Moody's assigned a positive outlook to Hercules ratings in June of 2007 in anticipation of Hercules' ongoing positive credit metric performance. At that time, Moody's stated that provided that capital expenditures remain moderate, there are no large acquisitions and prospective dividend actions or share repurchases are prudently sized, the company should be able to generate retained cash flow to adjusted total debt above 20%, free cash flow to adjusted total debt of over 10%, and a fixed charge coverage ratio (EBITDA to interest) of over 4.5 times. At the end of 2007 these metrics were 33%, 23%, and 5.0 times respectively. The positive outlook reflects Moody's expectation of further modest debt reduction in 2008 and 2009 (after which Moody's expects absolute debt levels to stabilize), that Hercules' asbestos settlements and expenses will not exceed $35 million in any twelve month period and that the number of asbestos case levels will continue to decline. Provided capital expenditures remain moderate, there are no large acquisitions and prospective dividend actions or share repurchases remain at prudent levels the company should be able to generate retained cash flow to adjusted total debt above 20%, free cash flow to adjusted total debt of over 10%, and a fixed charge coverage ratio (EBITDA to interest) of over 4.5 times. If these metrics are realized on a sustainable basis Moody's could reassess the appropriateness of the Ba1 ratings by year end 2009. Conversely, an unexpectedly large increase in legacy liabilities, debt financed share repurchases or bolt on acquisitions that would cause debt to remain at or above $800 million could cause Moody's outlook to return to stable. Upgrades: Issuer: Hercules Incorporated -- Corporate Family Rating, Upgraded to Ba1 from Ba2 -- Probability of Default Rating, Upgraded to Ba1 from Ba2 -- Senior Secured Bank Credit Facility, to Baa2 from to Baa3, 15% - LGD2 -- Senior Secured Regular Bond orDebenture, to Baa2 from to Baa3, 15% - LGD2 -- Senior Unsecured Regular Bond or Debenture, Upgraded to Ba1 from Ba3, 62% LGD4 -- Junior Subord. Regular Bond or Debenture, Upgraded to Ba2 from B1, to 92% - LGD6 -- Subord. Conv./Exch. Bond or Debenture, Upgraded to Ba2 from B1, to 92% - LGD6 Outlook Actions: -- Outlook, Changed To Positive From Rating Under Review Hercules Inc., headquartered in Wilmington, Delaware, is a global manufacturer of specialty chemicals for the pulp and paper industry and water-based systems (coatings, construction materials, energy and regulated industries). Revenues for the full year ending Dec. 31, 2007 were about $2.1 billion. HOT WEB: Gets Rid of $1.6 Million Legacy Debt from Snap 'N Sold --------------------------------------------------------------- Hot Web Inc. eliminated approximately $1.6 million in "legacy" debt that was incurred by Snap 'N Sold Corporation, Hot Web's predecessor company, in an effort to prepare the company's for future financial audits, fully-reporting listing status and growth of its businesses. Hot Web Chairman & CEO, George Stevens, stated, "When we hired the legal firm of Ater Wynne LLP in the third quarter of 2007 and began working with them to prepare to become a fully reporting public company, we thoroughly reviewed the outstanding liabilities of Hot Web. Speaking with debt holders, it became readily apparent that some of the debts incurred by the former management team of Hot Web's predecessor, had to be dealt with in order to give the company a fighting chance to succeed moving forward. The overhang from these previous debts would stymie the ability to finance the company responsibly into the future. Unfortunately, it took us nine months to negotiate applicable solutions, but that process has now been completed." Under current Hot Web management, the company reached a restructuring agreement with existing debt holders that eliminated $1.6 million of the company's debts and debentures. The restructuring agreement also provided for an additional equity- based capital infusion of $500,000 for ongoing expansion and marketing of the company's businesses. In consideration for this $2.1 million conversion of debt and increase in net equity, the various debt holders and investors will receive 200,000,000 newly issued restricted common shares of Hot Web at a cost basis of $.0105 -- a 3500% premium to yesterday's closing price for Hot Web's common shares. Pursuant to the restructuring, the capital structure of Hot Web is as follows: Officially, there are currently 750 Million shares Authorized with 454,887,086 shares Issued and Outstanding. Internal estimates of the "tradable" float remain -- otherwise known as shares within the DTC system -- at approximately 191,592,711. Mr. Stevens continued, "Not only were we able to eliminate the debt under favorable terms, but we were also able to improve the capital position of Hot Web. After lengthy discussions with Hot Web's management team and a comprehensive review of the company's business plan and operating models, the cost basis that the debt holders and investors accepted under this agreement truly shows the potential they believe Hot Web possesses." About Hot Web Inc. Hot Web Inc. (PINKSHEETS: HWBI) consigns "big ticket" transportation related items through its diversified presences, both online and offline. The company utilizes both its internal certified regional representative base in addition to online third-party marketing tools like eBay Motors and others to attract and market vehicle listings. The company's current portfolio of niche-focused online businesses consists of -- www.hotautoweb.com -- www.hotboatweb.com -- www.hotcycleweb.com -- www.hotrvweb.com -- and -- www.hotplaneweb.com The company is also currently developing other Hot Web branded online business units to complement its current roster. * * * Based on Google Finance's latest financials on Hot Web, as of June 2004, the company's balance sheet showed total assets of $4.20 million, total liabilities of $5.57 million, and total stockholders' deficit of $1.37 million. In 2003, it had a stockholders' deficit of $660,000 and in 2002 a stockholders' deficit of $750,000. The company has not been incurring losses for the years 2002 through 2004. INTERSTATE BAKERIES: Wants Court to Determine Tax Liabilities ------------------------------------------------------------- Interstate Bakeries Corporation and eight of its subsidiaries and affiliates ask the U.S. Bankruptcy Court for the Western District of Missouri to determine that the Debtors' revised tax liabilities with respect to 16 taxing authorities for 2007 or 2007-2008 tax year, as applicable, are appropriate. Sharon L. Stotle, Esq., at Stinson Morrison Hecker LLP, in Kansas, Missouri, explains that the Debtors retained Assessment Technologies, Ltd., to review: (i) certain property tax liabilities that were asserted by 16 local taxing authorities and (ii) certain tax assessments upon which the Taxing Authorities rely upon to calculate the Debtors' taxes. "Improper Calculation" of Tax Liabilities According to Ms. Stotle, ATL's analysis revealed "significant errors" in the Taxing Authorities' historical assessments of the Debtors' real property and personal property tax accounts, based on these factors, among others: (a) the value realized upon the sale of their assets during the course of their Chapter 11 cases, including sales of other similar assets; (b) appraisals provided by independent third-party appraisers; and (c) the distressed business environment in which the Debtors operated in the years leading up to and during their Chapter 11 cases. In many instances, Ms. Stotle continues, the valuation of the property relied upon by the Taxing Authorities significantly exceeded the Revised Assessed Value of the Property. Subsequently, ATL used applicable state valuation standards for the property values and recalculated the amount of tax due, to determine the 16 Revised Tax Amounts for the periods 2007 or 2007-2008, which aggregates $7,511,140, a full-text copy is available for free at: http://bankrupt.com/misc/IBC_RevisedTaxAmounts.pdf In addition, the Debtors have also determined their asserted market values which will lead to the proper determination of other postpetition liabilities, a copy of which is available for free at http://bankrupt.com/misc/IBC_MarketValues2008-2009.pdf A full-text copy of the Debtors' basis for assessment chart is available at no charge at: http://bankrupt.com/misc/IBC_BasisForTaxAssessment.pdf Ms. Stotle tells the Court that the Debtors have verified that their request and the tax periods as to which any offset is being sought, are within the scope of applicable state law deadlines. Adjustment to Interest Rate Calculation To the extent that the Tax Liabilities are secured by liens against the Debtors' property under state law, and the value of such property is sufficient under Section 506(b) of the Bankruptcy Code, then the claims may be entitled to accrue interest until paid, Ms. Stotle relates. Ms. Stotle says that the statutory interest rates imposed by the Taxing Authorities fall in a range between 8% and 18%. ATL found in its review, however, that the interest rates used by the Taxing Authorities to calculate the interest due on the Tax Liabilities "incorporate a penalty element and do not solely compensate the Taxing Authority for the time-value of money commensurate with the amount of the risk they have as secured creditors," Ms. Stotle says. Accordingly, ATL determined that the correct rate of postpetition interest on the Debtors' Tax Liabilities should be equal to 6.0%, taking into account the appropriate credit risk of the Debtors and the Taxing Authorities' secured status, because the statutory interest rate provided should reflect a true interest rate and not a penalty, Ms. Stotle contends, citing Galveston Indep. School Dist. v. Heartland Fed. Sav. & Loan Assoc., 159 B.R. 198, 204 (S.D. Tex. 1993). For these reasons, the Debtors ask Judge Venters to: (1) determine that the Debtors' Revised Tax Amounts are the correct tax liabilities for the 2007 or 2007-2008 tax years, as applicable; (2) determine that the Debtors' asserted Market Values should be the basis for the computation of the Debtors' tax liabilities; (3) authorize the Debtors to offset the excess amount paid against the Debtors' liability on other accounts within the same jurisdiction and for the same or other tax years; (4) determine that the Adjusted Rate is the appropriate interest rate for calculating the accrued interest, if any, on the Debtors' secured tax liabilities; and (5) extinguish any liens relating to the Debtors' secured tax liabilities addressed upon payment of the Revised Tax Amounts. Objections to the Debtors' request, if any, must be served on or before April 16, 2008. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04 45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. Their exclusive period to file a chapter 11 plan expired on November 8. On Jan. 25, 2008, the Debtors filed their First Amended Plan and Disclosure Statement. On Jan. 30, 2008, the Debtors received Court approval of the First Amended Disclosure Statement. IBC confirmed that it has not received any qualifying alternative proposals for funding its plan of reorganization in accordance with the Court-approved alternative proposal procedures. As a result, no auction was held on Jan. 22, 2008, as would have been required under those procedures. The deadline for submission of alternative proposals was Jan. 15, 2008. (Interstate Bakeries Bankruptcy News, Issue No. 93; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). INNOVATIVE DESIGNS: A. Fonzi Resigns as Chief Financial Officer --------------------------------------------------------------- On March 27, 2008, Anthony Fonzi tendered his resignation as chief financial officer and principal accounting officer at Innovative Designs Inc., effective March 24, 2008. Mr. Fonzi also resigned from the Board of Directors. In his letter of resignation, Mr. Fonzi stated, in part, "Due to overwhelming odds in my personal life, I find I cannot execute my duties in a professional and timely manner." In the meantime, Joseph Riccelli, the company's chief executive officer will assume the duties of chief financial officer and principal accounting officer. About Innovative Designs Headquartered in Bradenton, Florida, Innovative Designs Inc. (OTCBB: IVDNQ) -- http://www.idigear.com/-- manufactures the Arctic Armor(TM) Line, hunting apparel, swimwear, wind shirts, jackets, sleeping bags, and the multi-function "All in One" under the "i.d.i.gear" label featuring INSULTEX(TM). Going Concern Disclaimer As reported in the Troubled Company Reporter on Feb. 13, 2008, Louis Plung & Company, LLP, in Pittsburgh, Pa., expressed substantial doubt about Innovative Designs Inc.'s ability to continue as a going concern after auditing the company's financial consolidated financial statements for the year ended Oct. 31, 2007. The auditing firm pointed to the company's significant losses from operations and working capital and stockholders deficits. INPHONIC INC: Judge Gross Extends Exclusive Plan Filing Period -------------------------------------------------------------- The Hon. Kevin Gross of the United States Bankruptcy Court for the District of Delaware further extended InPhonic Inc. and its debtor-affiliates' exclusive periods to: a) file a Chapter 11 plan until Sept. 3, 2008; and b) solicit acceptances of that plan Nov. 2, 2008. As reported in the Troubled Company Reporter on Marc 13, 2008, the Debtors said that they devoted much of their time selling substantially all of their assets and working closely with their creditors toward a liquidating plan that intends to maximize the value of their estates. As a result, the Debtors were unable to finalize an appropriate plan. Neil B. Glassman, Esq., at Bayard, P.A., related that substantial progress towards resolving some issues facing the Debtors' estate have been resolve. With majority of the issues behind the Debtors, Mr. Glassman said, they can focus on completing an appropriate Chapter 11 plan. According to the Debtors, the extension will not harm or prejudice their creditors or other parties in interest in these cases. About InPhonic Inc. Headquartered in Washington, DC, InPhonic Inc. (NASDAQ:INPC)-- http://www.inphonic.com/-- is an online seller of wireless services in the United States. The company operates its business through three business segments: wireless activation and services; mobile virtual network enabler services, and data services. The company changes its name and the caption of the bankruptcy case to SN Liquidation Inc. The company and its debtor-affiliates filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. D. Del. Case Nos. 07-11666 to 07-11673). Mary E. Augustine, Esq., and Neil B. Glassman, Esq., at The Bayard Firm, in Wilmington, Delaware, represent the Debtors. The Debtors selected BMC Group Inc. as their claims, noticing and balloting agent. The United States Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors in the Debtors' cases. InPhonic Inc. reported $97,046,330 in total assets and $188,040,889 in total debts in its schedules of assets and debts filed with the Court. ISTANA HIGH: Eight Classes of Notes Get Moody's Rating Downgrades ----------------------------------------------------------------- Moody's Investors Service placed on review for possible downgrade the ratings on these notes issued by Istana High Grade ABS CDO I, Ltd.: Class Description: $600,000,000 Class A-1 First Priority Delayed Draw Floating Rate Notes Due 2048 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade Moody's also downgraded and left on review for possible further downgrade the ratings on these notes: Class Description: $250,000,000 Class A-2 Second Priority Floating Rate Notes Due 2048 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: A1, on review for possible downgrade Class Description: $50,000,000 Class A-3 Third Priority Floating Rate Notes Due 2048 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $50,000,000 Class A-4 Fourth Priority Floating Rate Notes Due 2048 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $21,500,000 Class B Fifth Priority Floating Rate Notes Due 2048 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $13,000,000 Class C Sixth Priority Deferrable Floating Rate Notes Due 2048 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $7,500,000 Class D Seventh Priority Deferrable Floating Rate Notes Due 2048 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade In addition, Moody's downgraded these notes: Class Description: $2,550,000 Class E Eighth Priority Deferrable Floating Rate Notes Due 2048 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. JEFFERSON COUNTY: S&P Junks Rating on Series 2003 B-2-B7 Warrants ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its underlying rating on Jefferson County, Alabama's series 2003 B-2 through 2003 B-7 sewer revenue refunding warrants to 'D' from 'CCC' due to the sewer system's failure to make a principal payment on the warrants when due on April 1, 2008, in accordance with the terms of the standby warrant purchase agreement. "Although the county and the relevant banks entered into a forbearance agreement that effectively delayed payment under the standby warrant purchase agreements for two weeks, Standard & Poor's rates an issue 'D' when payments on an obligation are not made on the date due in accordance with the terms of the documents," said Standard & Poor's credit analyst Sussan Corson. The SPURs on the parity series 2003 B-1-A through 2003 B-1-E and series 2003 C-1 through 2003 C-10 auction-rate sewer system revenue bonds are rated 'CCC' as the system has continued to make principal and interest payments on these obligations to date. These ratings remain on CreditWatch with developing implications. In the event that principal and interest payments on other series are not made when due, the SPURs on those series would also be lowered to 'D'. The county's general obligation warrants are rated 'A' and the county's lease revenue warrants are rated 'A-' due to the county's diverse employment base, which is centered on Birmingham, Alabama; strong general fund reserve position; and low debt burden. The county's sales tax warrants are rated 'A' due to its large and diverse economic base, closed lien, and adequate 1.26x maximum annual debt service coverage. However, the general obligation, lease revenue, and sales tax ratings remain on CreditWatch negative, reflecting the uncertainty as to whether the sewer system's deteriorating credit quality could lead to a county bankruptcy, which could disrupt other county revenue flows. J&R STOUT: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: J&R Stout, LLC 2010 Mount Forest Kingwood, TX 77345 Bankruptcy Case No.: 08-32047 Chapter 11 Petition Date: March 31, 2008 Court: Southern District of Texas (Houston) Judge: Marvin Isgur Debtor's Counsel: John Vickers, III, Esq. Attorney at Law 14027 Memorial Drive, Suite 403 Houston, TX 77079 Tel: (281) 589-2242 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor does not have any creditors who are not insiders. JP MORGAN CMS: Credit Degradation of Assets Cues S&P Ratings Cut ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on four classes of commercial mortgage pass-through certificates from JPMorgan Chase Commercial Mortgage Securities Trust 2006-CIBC14. Concurrently, S&P affirmed its ratings on 20 other classes from this transaction. The downgrades reflect the credit degradation of several assets, including seven that are currently with the special servicer. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the March 12, 2007, remittance report, the collateral pool consisted of 198 loans with an aggregate trust balance of $2.720 billion, compared with 198 loans totaling $2.747 billion at issuance. The master servicer, Capmark Finance Inc., reported financial information for 98% of the pool. The servicer-provided financial information was full-year 2006 and interim-2007 data. Using this information, Standard & Poor's calculated a weighted average debt service coverage of 1.63x, up from 1.55x at issuance. The seven loans with the special servicer, Midland Loan Services Inc., total $48 million. Six of these loans are 90-plus-days delinquent and one is 30-plus-days delinquent. An additional loan totaling $6.2 million is 30-plus- days delinquent and is not with the special servicer. The trust has experienced no losses to date. Details on the specially serviced assets are: -- Six of the seven loans with the special servicer are secured by multifamily properties in Tallahassee, Florida. The Tallahassee Apartment loans have a combined total exposure of $45.2 million, including servicing advances and interest thereon, and are secured by 1,266 multifamily units. The loans were transferred to special servicing in September 2007 due to monetary default. The sponsors of the six loans are separate special purpose entities, but all have the same principal borrower. The loans are currently 90-plus-days delinquent, and the combined properties reported a DSC of 1.07x for the nine-month period ended Sept. 30, 2007. Midland recently inspected the properties securing the loans and noted various deferred maintenance issues totaling $1.6 million. -- 10 Neptune Boulevard is a 25,163-sq.-ft. medical office property in Neptune, New Jersey, with a total exposure of $3.2 million, including servicing advances and interest thereon. The loan is 30-plus-days delinquent and was transferred to the special servicer in July 2007 after the sponsor filed for bankruptcy. The bankruptcy trustee is not marketing the vacant space at the property and is planning to auction the property. Midland has ordered a current appraisal to see if it can seek relief to foreclose and sell the property. The property did not report a 2006 DSC. The top 10 loans have an aggregate outstanding balance of $1.176 million (43%) and a weighted average DSC of 1.81x, down from 1.82x at issuance. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 exposures. Three properties were characterized as "fair," two properties were characterized as "excellent," and the remaining collateral was characterized as "good." Credit characteristics for the Houston Galleria and Patrick Henry Building loans are consistent with those of investment-grade obligations. The credit characteristics of the CenterPoint I Portfolio loan are no longer consistent with those of an investment-grade obligation. Details of these loans are: -- The Houston Galleria is the largest loan in the pool, with a trust balance of $290 million (11%) and a whole-loan balance of $812.0 million. The whole loan consists of a $580.0 million senior participation, $290 million of which supports the pooled certificate classes; a $130.0 million rake participation, which supports the nonpooled "HG" certificate; and a $110.0 million junior participation, which is held outside the trust. The loan is collateralized by 1,468,776 sq. ft. of a 2,254,399-sq.-ft. super-regional mall in Houston, Texas. For the nine-month period ended Sept. 30, 2007, the DSC was 1.93x and occupancy was 92%. Standard & Poor's adjusted net cash flow for this loan is up 11% compared with its level at issuance. -- The Patrick Henry Building is the fourth-largest loan in the pool and has a trust and whole-loan balance of $120.0 million (4%). The loan is collateralized by a 520,180-sq.-ft. office building in Washington, District of Columbia. For the nine- month period ended Sept. 30, 2007, the DSC was 1.89x and occupancy was 100%. Standard & Poor's adjusted NCF for this loan is comparable to its level at issuance. -- The CenterPoint I Portfolio is the fifth-largest loan in the pool and has a whole-loan balance of $126.8 million. The whole loan consists of a $117.5 million fixed-rate note, which supports the pooled certificate classes, and a $9.3 million floating-rate note, which supports the pooled certificate classes in JPMorgan Chase Commercial Mortgage Securities Corp.'s series 2006-FL1. The loan is collateralized by 15 warehouse flex properties totaling 5,257,340 sq. ft. Fourteen properties (94% of the net rentable area) are located in the Chicago, Illinois, metropolitan statistical area, and the remaining property is located in the Milwaukee, Wisconsin, MSA. For the 12-month period ended June 30, 2007, the DSC was 1.73x and occupancy was 87%, down from 93% at issuance. Standard & Poor's adjusted NCF for this loan is down 28% compared with its level at issuance. Capmark reported a watchlist of 33 loans ($268.7 million, 10%), and none of the loans on the watchlist has a principal balance greater than $23.0 million. Standard & Poor's stressed the loans on the watchlist and the other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the lowered and affirmed ratings. Ratings Lowered JPMorgan Chase Commercial Mortgage Securities Trust 2006-CIBC14 Commercial mortgage pass-through certificates series 2006-CIBC14 Rating Class To From Credit enhancement L B+ BB- 1.77% M B B+ 1.64% N B- B 1.39% O CCC+ B- 1.14% Ratings Affirmed JPMorgan Chase Commercial Mortgage Securities Trust 2006-CIBC14 Commercial mortgage pass-through certificates series 2006-CIBC14 Class Rating Credit enhancement A-1 AAA 30.30% A-1A AAA 30.30% A-SB AAA 30.30% A-2 AAA 30.30% A-3A AAA 30.30% A-3B AAA 30.30% A-4 AAA 30.30% A-M AAA 20.20% A-J AAA 12.50% B AA 10.23% C AA- 9.22% D A 7.70% E A- 6.82% F BBB+ 5.56% G BBB 4.55% H BBB- 3.03% J BB+ 2.53% K BB 2.02% X-1 AAA N/A X-2 AAA N/A N/A -- Not applicable. JUDY HOUSTON: Case Summary & Five Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Judy T. Houston, LLC 105 Plantation Circle Kathleen, GA 31047 Bankruptcy Case No.: 08-50798 Chapter 11 Petition Date: March 31, 2008 Court: Middle District of Georgia (Macon) Debtor's Counsel: Wesley J. Boyer, Esq. (wjboyer_2000@yahoo.com) Katz, Flatau, Popson and Boyer, LLP 355 Cotton Avenue Macon, GA 31201 Tel: (478) 742-6481 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Small Business second lien on land $938,245 Administration and car wash; 233 Peachtree Street, value of security: Northeast, Suite 1900 $669,000 Atlanta, GA 30303 Sunmark Community Bank $192,492 347 Commerce Street Hawkinsville, GA 31036-0976 In/Out Car Washes, Inc. $165,000 6021 Coca Cola Boulevard Columbus, GA 31909 Goo Goo Car Wash/Beck Bradham $116,138 DLR Associates $23,541 JULIE WASILESKI: Case Summary & 16 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Julie Wasileski 1482 Wilson Street Glenshaw, PA 15116 Bankruptcy Case No.: 08-21898 Chapter 11 Petition Date: March 26, 2008 Court: Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Donald R. Calaiaro, Esq. Calaiaro & Corbett PC Grant Building, Suite 1105 310 Grant Street Pittsburgh, PA 15219-2230 Tel: 412-232-0930 Fax: 412-232-3858 dcalaiaro@calaiarocorbett.com Total Assets: $651,734 Total Debts: $832,848 Debtor's list of its 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ PNC Bank $50,500 2730 Liberty Avenue Pittsburgh, PA 15222-4766 Fidelity Bank $24,200 1009 Perry Highway Pittsburgh, PA 15237 Chase $23,994 Cardmember Service P.O. Box 15153 Wilmington, DE 19886-5153 Bank of America $14,384 National City Bank $9,400 Home Depot $8,000 American Express $6,316 Citifinancial $6,000 RBS Credit Card Services $5,211 Bank of America $4,800 GE Money Bank $4,583 Citifinancial $1,965 Levin Furniture $1,249 Lowes $1,200 National City Bank $867 National City Business $290 KB HOME: Posts $268 Million Net Loss in Quarter Ended February 29 ----------------------------------------------------------------- KB Home reported financial results for its first quarter ended Feb. 29, 2008. The company generated a net loss, including the effect of a $100.0 million deferred tax valuation allowance charge, of $268.2 million in the first quarter of 2008. This compared to net income of $27.5 million in the year-earlier period, including income of $16.8 million from the company's French discontinued operations. Revenues totaled $794.2 million in the first quarter of 2008, down 43% from $1.39 billion in the year-earlier quarter. Housing revenues of $726.7 million for the quarter ended Feb. 29, 2008 declined 47% from the corresponding period of 2007, reflecting a 43% decrease in homes delivered and a 7% decline in the average selling price. The company delivered 2,928 homes at an average selling price of $248,200 in the first quarter of 2008 compared to 5,136 homes at an average selling price of $267,400 in the first quarter of 2007. For the first quarter of 2008, the company reported a loss from continuing operations before income taxes of $267.9 million, including pretax, non-cash charges of $223.9 million associated with inventory and joint venture impairments and the abandonment of certain land option contracts. For the first quarter of 2007, the company reported income from continuing operations before income taxes totaling $15.3 million, including $8.7 million of pretax, non-cash inventory-related impairment and abandonment charges. The company's cash balance of $1.32 billion at Feb. 29, 2008, was largely unchanged from the balance at Nov. 30, 2007. The company's ratio of debt to total capital was 58.0% at Feb. 29, 2008, compared to 53.9% at Nov. 30, 2007. Net of cash, the ratio of debt to total capital was 35.1% at Feb. 29, 2008, compared to 31.1% at Nov. 30, 2007 and 46.2% at Feb. 28, 2007. At Feb. 29, 2008, the company had no borrowings outstanding under the credit facility. Including its cash balance, the Company's liquidity was more than $2.3 billion at February 29, 2008. The company's backlog at Feb. 29, 2008 totaled 4,843 homes, representing potential future housing revenues of approximately $1.23 billion. These backlog measures declined 57% and 59%, respectively, from the Company's 11,183 backlog homes and $3.04 billion in backlog value at Feb. 28, 2007. Company-wide first quarter net orders for homes decreased 75% to 1,449 in 2008 from 5,744 net orders in the same period of 2007, exacerbated by a significant reduction in the number of active selling communities. The company's cancellation rate improved to 53% in the first quarter of 2008 compared to 58% in the fourth quarter of 2007. The company's cancellation rate was 34% in the first quarter of 2007. "Our first quarter financial results reflect the persistently challenging conditions in U.S. housing markets and the strategic measures we have taken over the past several months to streamline our land positions and reduce the number of communities where we operate," Jeffrey Mezger, president and chief executive officer, said. "Our industry continues to confront a growing oversupply of new and resale homes, tight mortgage lending conditions and a highly competitive pricing environment. These conditions drove down sale prices and further compressed margins in the first quarter of 2008, prompting us to recognize additional impairment charges and abandon certain land option contracts that no longer made financial sense. Until prices stabilize and consumer confidence returns, we believe inventory levels will remain significantly out of balance with demand. We do not anticipate meaningful improvement in these conditions in the near term, as it is likely to take some time for the market to absorb the current excess housing supply and for consumer confidence to improve." Total revenues of $794.2 million for the quarter ended Feb. 29, 2008 decreased 43% from $1.39 billion for the year-earlier quarter, reflecting lower housing revenues, which fell 47% to $726.7 million from $1.37 billion for the first quarter of 2007. The year-over-year decline in housing revenues was due to both fewer deliveries and a lower average selling price. The company delivered 2,928 homes in the first quarter of 2008, down 43% from the 5,136 homes delivered in the first quarter of 2007. The decline in deliveries was largely due to the company operating approximately 38% fewer active selling communities as a result of its strategy to reduce inventory levels in light of market conditions. The company's first quarter average selling price declined 7% to $248,200 in 2008 from $267,400 in 2007, mainly due to decreases in the West Coast and Southwest regions. Land sale revenues of $64.6 million in the first quarter of 2008, which occurred primarily in the Southwest region, increased from $11.4 million in the corresponding quarter of 2007. At Feb. 29, 2008, the company's balance sheet showed total assets of $5.1 billion and total debts of $3.5 billion, resulting in a $1.5 billion stockholders' equity. Equity, at Nov. 30, 2007, was $1.8 billion. About KB Home Based in Los Angeles, California, KB Home (NYSE: KBH) -- http://www.kbhome.com/-- is one of the largest homebuilders in the United States. The company has operating divisions in 13 states. * * * As reported in the Troubled Company Reporter on Jan. 11, 2008, Standard & Poor's Ratings Services said its corporate credit and debt ratings and negative outlook on KB Home (BB+/Negative/--) are not currently affected by the company's recently reported noncash charges and fourth-quarter 2007 net loss. KB Home reported a sizable $772.6 million loss in its fourth quarter ended Nov. 30, 2007. KHAMSIN CREDIT: Moody's Junks Rating on $12.5 Mil. Notes From 'B3' ------------------------------------------------------------------ Moody's Investors Service downgraded the rating on these notes issued by Khamsin Credit Products B.V., a leveraged super senior certificate issuer: Issue Description: Khamsin Credit Products B.V. $2,000,000,000 Limited Recourse Secured Note Programme Series 10 $12,500,000 Leveraged Super Senior Portfolio Credit Linked Notes due Feb. 2, 2050 -- Current Rating: Ca -- Prior Rating: B3, on review for downgrade Khamsin issued notes providing investors with a leveraged exposure to the super senior portion of a CDO, whose underlying reference portfolio is comprised of a variety of structured finance securities, including RMBS, Home Equity Loans, CMBS and CDO Securities. The transaction incorporates a trigger event that looks to the total losses of the underlying reference portfolio. According to a notice dated March 13, 2008, this trigger event has occurred. Following a trigger event, the investors have the option to unwind the transaction and incur the mark-to-market loss based on a valuation of the super senior tranche up to the initial investment or to increase the size of their investment. The investors have chosen to unwind. The rating downgrade reflects occurrence of the trigger event, the investors' decision to unwind the transaction, and the expected severity of the market value loss of the super senior tranche. The rating addresses the expected loss to the investors relative to their initial investment and is based on an analysis of the risks in the transaction as well as the notes' legal structure. KROMET AMERICA: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Kromet America, Inc. P.O. Box 4552 Lafayette, IN 47903 Bankruptcy Case No.: 08-90773 Chapter 11 Petition Date: March 31, 2008 Court: Southern District of Indiana (New Albany) Judge: Basil H. Lorch III Debtor's Counsel: Gary Lynn Hostetler, Esq. (glh@hostetler-kowalik.com) Hostetler & Kowalik, P.C. 101 West Ohio Street, Suite 2100 Indianapolis, IN 46204 Tel: (317) 262-1001 Fax: (317) 262-1010 http://www.hostetler-kowalik.com/ Total Assets: $773,000 Total Debts: $2,936,051 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Regions Bank Mortgage on $1,130,000 437 South Street commercial building; P.O. Box 780 accounts receivable; Lafayette, IN 47901 equipment, inventory and the like; value of security: $773,000 Sam C. Newton/John S. Castell Second lien on $300,000 2100 West 500 North accounts receivable, West Lafayette, IN 47906 equipment, inventory and the like; value of security: $273,000 PPG Architectural Finishes Judgment $183,978 P.O. Box 536864 Atlanta, GA 30353-6864 Govesan Manufacturing Judgment $173,938 Royal Powder Corp. Lawsuit $170,748 Midwest Natural Gas Corp. Open account $114,481 Lafayette Wire Products, Inc. Open account $76,330 Nortek Powder Open account $55,477 NPA Coatings, Inc. Lawsuit $55,334 M2K Holding, Inc. Judgment $47,654 Offutt Trucking, Inc. Open account $31,783 Wolke Open account $30,662 PPG Industries Ecoat Lawsuit $30,648 Sadler Trucking Open account $28,375 Valspar Open account $28,252 BASF Corp. Judgment $26,277 Seibert Powder Coatings Open account $22,796 Greater Bay Capital Two forklifts $24,319 value of security: $2,000 Donnie Parks for PPG Open account $17,919 Snyder Filtration Open account $17,579 LARRY HUFFMAN: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Larry H. Huffman 920 Winged Foot Trail Fayetteville, GA 30215 Bankruptcy Case No.: 08-10870 Chapter 11 Petition Date: March 31, 2008 Court: Northern District of Georgia (Newnan) Debtor's Counsel: M. Denise Dotson, Esq. (ddotson@joneswalden.com) Jones & Walden, LLC 21 Eighth Street Northeast Atlanta, GA 30309 Tel: (404) 564-9300 Fax: (404) 564-9301 http://www.joneswalden.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ HomeEq Servicing 920 Winged Foot Trail $1,040,000 P.O. Box 70830 Fayetteville, GA Charlotte, NC 28272-0830 30215; value of security: $489,000 Countrywide 41723 Putters $1,005,610 P.O. Box 660694 Green Court, Dallas, TX 75266-0694 Leesburg, VA 20176; value of security: $525,000 Resurgent Capital Services 920 Winged Foot Trail $249,172 P.O. Box 19006 Fayetteville, GA Greenville, SC 29602 30215; value of security: $489,000; value of senior lien: $1,040,000 National City Bank 41723 Putters; value $121,409 of security: $525,000; value of senior lien: $1,005,610 Chase Bank USA, NA Credit Card $33,287 Cary Huffman Personal Loan $25,000 Fayette Co. Tax Commissioner Taxes $10,997 Bank of America Credit Card $8,945 Citifinancial value of security: $4,500 $1,000 American Express Credit Card $3,500 Armstrong Management HO Dues for $450 Raspberry Falls LEHMAN XS: Moody's Cuts 279 Tranches' Ratings From 27 Alt-A Deals ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 279 tranches from 27 Alt-A transactions issued by Lehman XS Trust Series. 162 downgraded tranches remain on review for possible further downgrade. Additionally, 97 tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going review process. Complete rating actions are: Issuer: Lehman XS Trust Series 2005-1 -- Cl.M1, Downgraded to A1 from Aa2 -- Cl.M2, Downgraded to Ba1 from A2 -- Cl.M3, Downgraded to Ca from Baa2 -- Cl.M4, Downgraded to Ca from Baa3 -- Cl.3-M3, Downgraded to Baa3 from Baa2 Issuer: Lehman XS Trust Series 2005-2 -- Cl.1-M2, Downgraded to Baa3 from A2 -- Cl.1-M3, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl.2-M1, Downgraded to Baa2 from A2 Issuer: Lehman XS Trust Series 2005-3 -- Cl.1-M1, Downgraded to A1 from Aa2 -- Cl.1-M2, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl.1-M3, Downgraded to Ca from B1 -- Cl.2-M1, Downgraded to Ba3 from Aa2 -- Cl.2-M2, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl.2-M3, Downgraded to Ca from Caa1 Issuer: Lehman XS Trust Series 2005-4 -- Cl.1-M1, Downgraded to A1 from Aa2 -- Cl.1-M2, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl.1-M3, Downgraded to Caa2 from Baa3; Placed Under Review for further Possible Downgrade -- Cl.2-M1, Downgraded to A3 from Aa3 -- Cl.2-M2, Downgraded to B2 from A3 -- Cl.2-M3, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade Issuer: Lehman XS Trust Series 2005-6 -- Cl.M1, Downgraded to Baa3 from Aa2 -- Cl.M2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl.3-M1, Downgraded to A1 from Aa2 -- Cl.3-M2, Downgraded to Ba2 from A2 -- Cl.3-M3, Downgraded to Caa1 from Ba1; Placed Under Review for further Possible Downgrade Issuer: Lehman XS Trust Series 2005-8 -- Cl.1-M1, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.1-M2, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.1-M3, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl.1-M4, Downgraded to Ca from Ba3 -- Cl.1-M5, Downgraded to Ca from Caa3 -- Cl.2-M1, Downgraded to A1 from Aa2 -- Cl.2-M2, Downgraded to A3 from Aa3 -- Cl.2-M3, Downgraded to Ba2 from A2 -- Cl.2-M4, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl.2-M5, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl.2-M6, Downgraded to Caa1 from Ba1; Placed Under Review for further Possible Downgrade Issuer: Lehman XS Trust Series 2005-10 -- Cl.1-A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.1-M1, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl.1-M2, Downgraded to Caa1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.1-M3, Downgraded to Caa1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.1-M4, Downgraded to Ca from B2 -- Cl.2-M1, Downgraded to Aa3 from Aa2 -- Cl.2-M2, Downgraded to A1 from Aa3 -- Cl.2-M3, Downgraded to Baa3 from A2 -- Cl.2-M4, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl.2-M5, Downgraded to Ca from Ba1 Issuer: Lehman XS Trust Series 2006-1 -- Cl.1-M2, Downgraded to A1 from Aa2 -- Cl.1-M3, Downgraded to Baa1 from Aa3 -- Cl.1-M4, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl.1-M5, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl.1-M6, Downgraded to Ca from Ba1 -- Cl.1-M7, Downgraded to Ca from B1 -- Cl.2-M1, Downgraded to A2 from Aa2 -- Cl.2-M2, Downgraded to Baa1 from Aa3 -- Cl.2-M3, Downgraded to B1 from A2; -- Cl.2-M4, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl.2-M5, Downgraded to Ca from Ba1 Issuer: Lehman XS Trust Series 2006-3 -- Cl.M1, Downgraded to Ba1 from Aa1 -- Cl.M2, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.M3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.M4, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl.M5, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl.M6, Downgraded to Ca from B2 Issuer: Lehman XS Trust Series 2006-5 -- Cl.1-A1B, Placed on Review for Possible Downgrade, currently Aaa -- Cl.2-A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.2-A3, Placed on Review for Possible Downgrade, currently Aaa -- Cl.2-A4B, Placed on Review for Possible Downgrade, currently Aaa -- Cl.M1, Downgraded to A3 from Aa1 -- Cl.M2, Downgraded to Ba3 from Aa2 -- Cl.M3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.M4, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl.M5, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl.M6, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl.M7, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl.M8, Downgraded to Ca from Ba2 -- Cl.M9, Downgraded to Ca from B1 Issuer: Lehman XS Trust Series 2006-7 -- Cl.1-A1B, Placed on Review for Possible Downgrade, currently Aaa -- Cl.2-A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.2-A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.2-A3A, Placed on Review for Possible Downgrade, currently Aaa -- Cl.2-A3B, Placed on Review for Possible Downgrade, currently Aaa -- Cl.M1, Downgraded to Ba2 from Aa1 -- Cl.M2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.M3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.M4, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl.M5, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl.M6, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl.M7, Downgraded to Ca from Ba1 -- Cl.M8, Downgraded to Ca from Ba2 -- Cl.M9, Downgraded to Ca from B2 Issuer: Lehman XS Trust Series 2006-8 -- Cl.1-A1B, Placed on Review for Possible Downgrade, currently Aaa -- Cl.2-A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.2-A4A, Placed on Review for Possible Downgrade, currently Aaa -- Cl.2-A4B, Placed on Review for Possible Downgrade, currently Aaa -- Cl.3-A5, Placed on Review for Possible Downgrade, currently Aaa -- Cl.M1, Downgraded to A3 from Aa1 -- Cl.M2, Downgraded to Baa3 from Aa2 -- Cl.M3, Downgraded to Ba3 from Aa2 -- Cl.M4, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.M5, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.M6, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl.M7, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl.M8, Downgraded to Ca from Ba2 -- Cl.M9, Downgraded to Ca from B1 Issuer: Lehman XS Trust Series 2006-9 -- Cl.A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.M1, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl.M2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.M3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.M4, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl.M5, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl.M6, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl.M7, Downgraded to Ca from Ba2 -- Cl.M8, Downgraded to Ca from B1 -- Cl.M9, Downgraded to Ca from Caa2 Issuer: Lehman XS Trust Series 2006-11 -- Cl.1-A4, Placed on Review for Possible Downgrade, currently Aaa -- Cl.2-A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.2-A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.2-A3, Placed on Review for Possible Downgrade, currently Aaa -- Cl.2-A4, Placed on Review for Possible Downgrade, currently Aaa -- Cl.M1, Downgraded to B2 from Aa1 -- Cl.M2, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.M3, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.M4, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.M5, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl.M6, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl.M7, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl.M8, Downgraded to Ca from Ba3 -- Cl.M9, Downgraded to Ca from Caa1 Issuer: Lehman XS Trust Series 2006-13 -- Cl.1-A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.1-A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.1-A3, Placed on Review for Possible Downgrade, currently Aaa -- Cl.1-A4, Placed on Review for Possible Downgrade, currently Aaa -- Cl.1-A5, Placed on Review for Possible Downgrade, currently Aaa -- Cl.1-M1, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl.1-M2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.1-M3, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.1-M5, Downgraded to Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl.1-M4, Downgraded to Caa1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.1-M6, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl.1-M7, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl.1-M8, Downgraded to Ca from Ba2 -- Cl.1-M9, Downgraded to Ca from B3 -- Cl.2-M1, Downgraded to Ba1 from Aa2 -- Cl.2-M2, Downgraded to B1 from Aa3 -- Cl.2-M3, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl.2-M4, Downgraded to Ca from Ba2 -- Cl.2-M5, Downgraded to Ca from B3 Issuer: Lehman XS Trust Series 2006-15 -- Cl.A5, Placed on Review for Possible Downgrade, currently Aaa -- Cl.M1, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl.M2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.M3, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.M4, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.M5, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl.M6, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl.M7, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl.M8, Downgraded to Ca from Ba2 -- Cl.M9, Downgraded to Ca from B1 Issuer: Lehman XS Trust 2006-17 -- Cl.1-A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.1-A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.1-A3, Placed on Review for Possible Downgrade, currently Aaa -- Cl.1-A4B, Placed on Review for Possible Downgrade, currently Aaa -- Cl.1-A5, Placed on Review for Possible Downgrade, currently Aaa -- Cl.1-M1, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl.1-M2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.1-M3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.1-M4, Downgraded to Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl.1-M5, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl.1-M6, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl.1-M7, Downgraded to Ca from Ba3 -- Cl.1-M8, Downgraded to Ca from B3 -- Cl.WF-M3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.WF-M1, Downgraded to A2 from Aa1 -- Cl.WF-M2, Downgraded to Ba2 from Aa2 -- Cl.WF-M4, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl.WF-M5, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl.WF-M6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl.WF-M7, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl.WF-M8, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl.WF-M9, Downgraded to Ca from Ba1 Issuer: Lehman XS Trust 2006-19 -- Cl.A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A3, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A4, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A5, Placed on Review for Possible Downgrade, currently Aaa -- Cl.M1, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl.M2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.M3, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.M4, Downgraded to Caa1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.M5, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl.M6, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl.M7, Downgraded to Ca from Ba1 -- Cl.M8, Downgraded to Ca from B1 -- Cl.M9, Downgraded to Ca from B2 Issuer: Lehman XS Trust Series 2006-20 -- Cl.A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A3, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A4, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A5, Placed on Review for Possible Downgrade, currently Aaa -- Cl.AIO, Placed on Review for Possible Downgrade, currently Aaa -- Cl.M1, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl.M2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.M3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.M4, Downgraded to Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl.M5, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl.M6, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl.M7, Downgraded to Ca from Ba3 -- Cl.M8, Downgraded to Ca from B2 -- Cl.M9, Downgraded to Ca from Caa1 Issuer: Lehman XS Trust Series 2007-1 -- Cl.1-A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.1-A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.1-A3, Placed on Review for Possible Downgrade, currently Aaa -- Cl.1-A4, Placed on Review for Possible Downgrade, currently Aaa -- Cl.WF-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.M1, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl.M2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.M3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.M4, Downgraded to Ca from Ba1 -- Cl.M5, Downgraded to Ca from Ba3 -- Cl.M6, Downgraded to Ca from B3 -- Cl.WF-M1, Downgraded to Baa3 from Aa1 -- Cl.WF-M2, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.WF-M3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.WF-M4, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl.WF-M5, Downgraded to Ca from B1 -- Cl.WF-M6, Downgraded to Ca from B3 -- Cl.WF-M7, Downgraded to Ca from Caa2 Issuer: Lehman XS Trust Mortgage Pass-Through Certificates, Series 2007-3 -- Cl.1A-A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.1B-A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.1B-A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.3A-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl.3B-A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.3B-A3, Placed on Review for Possible Downgrade, currently Aaa -- Cl.4A-A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.4A-A3, Placed on Review for Possible Downgrade, currently Aaa -- Cl.4A-A4, Placed on Review for Possible Downgrade, currently Aaa -- Cl.4A-AIO, Placed on Review for Possible Downgrade, currently Aaa -- Cl.4B-A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.4B-A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.4B-AIO, Placed on Review for Possible Downgrade, currently Aaa -- Cl.1-M1, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl.1-M2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.1-M3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.1-M4, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl.1-M5, Downgraded to Ca from Ba1 -- Cl.1-M6, Downgraded to Ca from Ba3 -- Cl.1-M7, Downgraded to Ca from Caa1 -- Cl.2-M1, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl.2-M2, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.2-M3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.2-M4, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl.2-M5, Downgraded to Ca from Ba2 -- Cl.2-M6, Downgraded to Ca from B1 -- Cl.2-M7, Downgraded to Ca from B2 -- Cl.2-M8, Downgraded to Ca from B3 -- Cl.2-M9, Downgraded to Ca from Caa2 -- Cl.3-M1, Downgraded to B1 from Aa1; Placed Under Review for further Possible Downgrade -- Cl.3-M2, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.3-M3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.3-M4, Downgraded to Ca from Ba2 -- Cl.3-M5, Downgraded to Ca from B3 -- Cl.4-M1, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.4-M2, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.4-M3, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl.4-M4, Downgraded to B3 from Ba2; Placed Under Review for further Possible Downgrade -- Cl.4-M5, Downgraded to Ca from Caa1 -- Cl.4-M6, Downgraded to Ca from Caa2 Issuer: Lehman XS Trust 2007-6 -- Cl.1-A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.2-A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.2-AIO, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A3, Placed on Review for Possible Downgrade, currently Aaa -- Cl.I-M1, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl.I-M2, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl.I-M3, Downgraded to Caa1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.I-M4, Downgraded to Caa1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.I-M5, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl.I-M6, Downgraded to Ca from Ba3 -- Cl.I-M7, Downgraded to Ca from B3 -- Cl.I-M8, Downgraded to Ca from Caa2 -- Cl.I-M9, Downgraded to Ca from Caa3 -- Cl.II-M1, Downgraded to A3 from Aa1 -- Cl.II-M2, Downgraded to B1 from Aa2 -- Cl.II-M3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.II-M4, Downgraded to B1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl.II-M5, Downgraded to B2 from Ba2; Placed Under Review for further Possible Downgrade -- Cl.II-M6, Downgraded to B3 from Ba3; Placed Under Review for further Possible Downgrade -- Cl.II-M7, Downgraded to Ca from B1 -- Cl.II-M8, Downgraded to Ca from B3 Issuer: Lehman XS Trust Series 2007-8H -- Cl.A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A3, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A4, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A5, Placed on Review for Possible Downgrade, currently Aaa -- Cl.AIO, Placed on Review for Possible Downgrade, currently Aaa -- Cl.M1, Downgraded to B1 from Aa1; Placed Under Review for further Possible Downgrade -- Cl.M2, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.M3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.M4, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl.M5, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl.M6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl.M7, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl.M8, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade Issuer: Lehman XS Trust Series 2007-9 -- Cl.I-A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.I-A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.I-A3, Placed on Review for Possible Downgrade, currently Aaa -- Cl.I-A4, Placed on Review for Possible Downgrade, currently Aaa -- Cl.I-AIO, Placed on Review for Possible Downgrade, currently Aaa -- Cl.I-M1, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl.I-M2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.I-M3, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.I-M4, Downgraded to Ca from Ba1 -- Cl.I-M5, Downgraded to Ca from Ba2 -- Cl.I-M6, Downgraded to Ca from Ba3 -- Cl.I-M7, Downgraded to Ca from B1 -- Cl.I-M8, Downgraded to Ca from B2 -- Cl.I-M9, Downgraded to Ca from B3 -- Cl.WF-M2, Downgraded to A2 from Aa2 -- Cl.WF-M3, Downgraded to A3 from Aa3 -- Cl.WF-M4, Downgraded to Baa2 from A1 -- Cl.WF-M5, Downgraded to Ba3 from A2 -- Cl.WF-M6, Downgraded to B1 from A3; Placed Under Review for further Possible Downgrade -- Cl.WF-M7, Downgraded to B1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl.WF-M8, Downgraded to B1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl.WF-M9, Downgraded to B2 from Ba2 Placed Under Review for further Possible Downgrade Issuer: Lehman XS Trust 2007-10H -- Cl.I-A1-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.I-A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.I-A3, Placed on Review for Possible Downgrade, currently Aaa -- Cl.I-A4-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.I-AIO, Placed on Review for Possible Downgrade, currently Aaa -- Cl.II-A4, Placed on Review for Possible Downgrade, currently Aaa -- Cl.II-AIO, Placed on Review for Possible Downgrade, currently Aaa -- Cl.I-M1, Downgraded to B1 from Aa1; Placed Under Review for further Possible Downgrade -- Cl.I-M2, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.I-M3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.I-M4, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl.I-M5, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl.I-M6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl.I-M7, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl.I-M8, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl.I-M9, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl.II-M1, Downgraded to Aa3 from Aa1 -- Cl.II-M2, Downgraded to A1 from Aa2 -- Cl.II-M3, Downgraded to A3 from Aa3 Issuer: Lehman XS Trust Series 2007-11 -- Cl.A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A3, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A4, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A5, Placed on Review for Possible Downgrade, currently Aaa -- Cl.AIO, Placed on Review for Possible Downgrade, currently Aaa -- Cl.M1, Downgraded to B1 from Aa1; Placed Under Review for further Possible Downgrade -- Cl.M2, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.M3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.M4, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl.M5, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl.M6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl.M7, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl.M8, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl.M9, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl.M10, Downgraded to Ca from Ba2 -- Cl.M11, Downgraded to Ca from Ba3 Issuer: Lehman XS Trust Series 2007-14H -- Cl.A1-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A1-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A2-1-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A2-1-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A3, Placed on Review for Possible Downgrade, currently Aaa -- Cl.A4, Placed on Review for Possible Downgrade, currently Aaa -- Cl.AIO, Placed on Review for Possible Downgrade, currently Aaa -- Cl.M1, Downgraded to B1 from Aa1; Placed Under Review for further Possible Downgrade -- Cl.M2, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl.M3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl.M4, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl.M5, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl.M6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl.M7, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl.M8, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl.M9, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade LEINER HEALTH: Obtains Court OK to Employ Strom as Special Counsel ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware granted permission to Leiner Health Products Inc. and its debtor- affiliates to employ Strom Law Firm LLC as its special counsel, nunc pro tunc to March 10, 2008. The employment of Strom Law Firm will enable the Debtors to obtain a satisfactory resolution of the U.S. Department of Justice's investigation on the Debtors' alleged deficiencies in their compliance with U.S. Food and Drug Administration good manufacturing practices for over-the-counter pharmaceuticals at their Fort Mill, South Carolina facility, and FDA's investigation in the Debtors' production, control and distribution of certain products at the same Fort Mill facility. The Debtors expect that with the representation of the Strom Law Firm, the FDA and DOJ's investigations will be satisfactorily resolved, and consequently, this would clear the way for the Debtors to effectuate a sale of their businesses. The Debtor will pay the firm for its legal services in accordance with the firm's customary hourly rates. Strom Law Firm professionals wo will have primary responsibility for providing services to the Debtors and their billing rates are: J. Preston Strom Jr., Esq. Partner $675 per hour Mario A. Pacella, Esq. Associate $390 per hour Robert E. Hood, Esq. Associate $390 per hour John Alphin, Esq. Associate $250 per hour Amanda Schlager, Esq. Associate $250 per hour Denise J. Weltz $110 per hour Ryan Alphin $80 per hour Strom Law Firm has received a total retainer of $60,000 as an advance against expenses for services to be performed in the preparation of the Chapter 11 cases. J. Preston Strom, the owner of the law firm of Strom Law Firm LLC, attested that his firm does not hold or represent any interest adverse to the Debtors or their estates. About Leiner Health Based in Carson, California, Leiner Health Products Inc. -- http://www.leiner.com/-- together with three of its debtor- affiliates, manufacture and supply store brand vitamins, minerals and nutritional supplements products, and over-the-counter pharmaceuticals in the US food, drug and mass merchant and warehouse club retail market. In addition to their primary VMS and OTC products, they provide contract manufacturing services. During the fiscal year ended March 31, 2007, the VMS business comprised approximately 61% of net sales. On March 20, 2007, they voluntarily suspended the production and distribution of all OTC products manufactured, packaged or tested at its facilities in the US. The company filed for Chapter 11 protection on March 10, 2008 (Bankr. D. Del. Lead Case No.08-10446). Paul M. Basta, Esq., at Kirkland & Ellis LLP, and Jason M. Madron, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger P.A., represent the Debtors in their restructuring efforts. When the Debtors filed for protection against their creditors, it listed assets and debts between $500 million to $1 billion. LEXINGTON PRECISION: Case Summary & 30 Largest Unsecured Creditors ------------------------------------------------------------------ Lead Debtor: Lexington Precision Corp. 800 Third Avenue, 15th Floor New York, NY 10023 Bankruptcy Case No.: 08-11153 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Lexington Rubber Group, Inc. 08-11156 Type of Business: The Debtors manufacture tight-tolerance rubber and metal components for use in medical, automotive, and industrial applications. See http://www.lexingtonprecision.com/ Chapter 11 Petition Date: April 1, 2008 Court: Southern District of New York (Manhattan) Judge: Martin Glenn Debtor's Counsel: Richard P. Krasnow, Esq. (richard.krasnow@weil.com) Weil, Gotshal & Manges 767 Fifth Avenue New York, NY 10153 Tel: (212) 310-8493 Fax: (212) 310-8007 http://www.weil.com/ Debtors' Consolidated Financial Condition: Total Assets: $52,730,000 Total Debts: $88,705,000 Debtor's 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wilmington Trust Co. 12% Senior $43,154,457 Corporate Capital Markets Subordinated Notes Attn: Steve Cimalore, Senior Due August 1, 2009 Administrator 11100 North Market Street Rodney Square North Wilmington, DE 19890 Tel: (302) 636-6058 Fax: (302) 636-6436 Wacker Silicones Trade payable $1,016,845 Attn: Luann Noelanders 3301 Sutton Road Adrian, MI 49221 Tel: (800) 554-1715 Fax: (517) 264-8580 Dow Corning STI Trade Payable $587,294 Attn: Anne Tipple 111 South Progress Drive Kendallville, IN 46755 Tel: (260) 347-5813 Fax: (866) 804-8812 Chase Brass & Copper, Inc. Trade Payable $445,087 Attn: Cheryl Nofziger P.O. Box 152 Montpelier, OH 43543 Tel: (419) 485-3193 Fax: (419)485-5949 Momentive Performance Trade Payable $314,343 Attn: Linda Ayers Materials, Inc. 187 Danbury Road Wilson, CT 06897 Tel: (800) 332-3390 Fax: (304) 746-1623 Earle M. Jorgensen Co. Trade Payable $240,981 Environmental Products & Professional $173,948 Services services Signature Aluminum Trade Payable $119,527 Shin-Etsu Silicones of Trade Payable $110,711 America, Inc. Ohio Edison Utility $105,335 Keystone Profiles Trade Payable $87,090 Channel Prime Alliance Trade Payable $86,493 Vitex Corp. Trade Payable $81,326 American Express Trade Payable $77,878 PPG Industries, Inc. Trade Payable $71,581 Haley & Aldrich, Inc. Professional $63,452 fees Degussa-Huls Corp. Trade Payable $56,305 Lintech International Trade Payable $54,038 Imperial Die & Manufacturing Trade Payable $53,220 Co. Gold Key Processing, Ltd. Trade Payable $51,451 Process Oils, Inc. Trade Payable $50,886 Goodyear Tire & Rubber Co. Trade Payable $50,457 Copper & Brass Sales Trade Payable $50,068 Dalton Box Trade Payable $44,221 Gosiger Machine Tools Trade Payable $43,757 Tecnnical Machine Products Trade Payable $41,614 Excellus Blue Cross Insurance $41,548 Preferred Rubber Compounding Trade Payable $39,696 China Auto Group Trade Payable $38,077 Burnt Mountain Center, Inc. Trade Payable $37,833 LIFECARE HOLDINGS: Posts $60.8 Million Net Loss in 2007 ------------------------------------------------------- Lifecare Holdings Inc. reported a net loss of $60.8 million for the year ended Dec. 31, 2007, compared with a net loss of $40.8 million for the year ended Dec. 31, 2006. Net patient service revenue decreased by $3.7 million, or 1.1%, for the year ended Dec. 31, 2007, to $322.2 million from $325.9 million for the comparable period in 2006. Patient days in 2007 were 2,616 greater, or 1.2% greater, than the same period in 2006. This decrease in net patient service revenue was comprised of an unfavorable $9.5 million variance as the result of decreased revenue per patient day, offset by a $2.7 million favorable benefit from an increase in patient days and a net increase of $3.1 million attributable to a decrease in unfavorable adjustments related to previously filed cost reports. Total expenses increased by $19.2 million to $382.2 million for the year ended Dec. 31, 2007, as compared to $363.0 million for the comparable period in 2006. Included in the expenses for the year ending Dec. 31, 2007, is a $38.8 million impairment charge related to goodwill and $2.5 million attributable to compensation and benefits accrued in connection with the departure of the company's former chief executive officer. Included in the expenses for the 2006 period is an impairment charge of $43.6 million related to goodwill, a gain of $1.3 million related to the early extinguishment of debt, and $5.3 million in insurance recoveries related to Hurricane Katrina. Excluding the impairment charge and the compensation and benefits accrual for 2007, and the impairment charge, gain on early extinguishment of debt, and the insurance recovery for 2006, expenses increased by $14.9 million from the same period in the prior year. Rent expense increased by $3.6 million during the 2007 period in connection with the increases in bed capacity. Net interest expense increased by $3.1 million during the 2007 period from an increase in the LIBOR rates during 2007 and in the margin spread as the result of the amendments to the company's senior secured credit facility. The remaining $8.2 million increase in expenses was primarily attributable to an increase in salaries, wages and benefits of $8.3 million, and an increase in outside services, contract labor and other operating expenses of $3.1 million. These increases were offset by a decrease in the provision for doubtful accounts of $2.9 million and a decrease in depreciation and amortization expense of $600,000. Excluding goodwill impairment charges, the net loss for the year ended Dec. 31, 2007, would have been $22.0 million as compared to net income of $2.8 million for the year ended Dec. 31, 2006. Total Debt At Dec. 31, 2007, the company's debt structure consisted of $147.0 million aggregate principal amount of senior subordinated notes, a senior secured credit facility, consisting of a $249.3 million term loan facility, which matures on Aug. 11, 2012, and a $60.0 million revolving credit facility subject to availability, including sub-facilities for letters of credit and swingline loans, which matures on Aug. 11, 2011. Balance Sheet At Dec. 31, 2007, the company's consolidated balance sheet showed $481.8 million in total assets, $481.5 million in total liabilities, and $233,000 in total stockholders' equity. 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?29d3 About LifeCare Holdings Headquartered in Plano, Texas, LifeCare Holdings Inc. -- http://www.lifecare-hospitals.com/-- operates 19 long term acute care hospitals located in nine states. Long term acute care hospitals specialize in the treatment of medically complex patients who typically require extended hospitalization. LifeCare is owned by private equity firm The Carlyle Group. * * * As reported in the Troubled Company Reporter on Jan. 16, 2008, Moody's Investors Service upgraded the Speculative Grade Liquidity Rating of LifeCare Holdings Inc. to SGL-3 from SGL-4. In addition, Moody's affirmed LifeCare's Caa1 Corporate Family Rating and the ratings on the credit facility and subordinated notes. The ratings outlook remains negative. LILLIAN VERNON: Committee Wants to Hire Traxi as Financial Advisor ------------------------------------------------------------------ The Official Committee of Unsecured Creditors of Lillian Vernon Corporation requests authority from the U.S. Bankruptcy Court for the District of Delaware to retain Traxi LLC as its financial advisor effective Feb. 25, 2008. The services that the Committee may request include: (a) financial analysis related to the proposed DIP financing motion and other first day motions including assistance in negotiations, attendance at hearings, and testimony; (b) the review of all financial information prepared by Lillian Vernon and its debtor-affiliates or its consultants as requested by the Committee including, but not limited to, a review of Debtors financial statements as of the filing of the petition, showing in detail all assets and liabilities and priority and secured creditors; (c) monitoring of the Debtors activities regarding cash expenditures, receivable collections, asset sales and projected cash requirements; (d) attendance at meetings including the Committee, the debtors, creditors, their attorneys and consultants, Federal and state authorities, if required; (e) review of Debtors' periodic operating and cash flow statements; (f) review of Debtors' books and records for intercompany transactions, related party transactions, potential preferences, fraudulent conveyances and other potential pre-petition investigations; (g) any investigation that may be undertaken with respect to the pre-petition acts, conduct, property, liabilities and financial condition of the Debtors, their management, creditors including the operation of their businesses, and as appropriate, avoidance actions; (h) review of any business plans prepared by the Debtors or their consultants; (i) review and analysis of proposed transactions for which the Debtors seek Court approval; (j) review and analysis of proposed transactions for which the Debtors seek Court approval; (k) assist the Committee in developing, evaluation, structuring and negotiating the terms and conditions of all potential plans of reorganization; (l) estimate the valueof the securities, if any, that may be issued to unsecured creditors under any such plan; (m) provide expert testimony on the results of the Committee's findings; (n) analysis of potential divestitures of the company's operations; (o) assist the Committee in developing alternative plans including contacting potential plan sponsors if appropriate; and (p) provide the committee with other and further financial advisory services with respect to the company, including valuation, general restructuring and advice with respect to financial, business and economic issues, as may arise during the course of the restructuring as requested by the Committee. The Committee attests that to the best of its knowledge, Traxi represents no other entity in connection with this case, is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code, and does not hold or represent any interest adverse to the Debtor's estate. Traxi attests that neither it nor any of its principal or professional employee is related professionally to the Debtors, their creditors or any other party-in- interest. The customary hourly rates of Traxi's professionals are: Partners & Managing Directors $500-$550 Managers & Directors $275-$475 Associate & Analysts $125-$275 About Lillian Vernon Based in Virginia Beach, Virginia, Lillian Vernon Corp. -- http://www.lillianvernon.com/-- and its affiliates are direct mail specialty catalog and online companies concentrating on the marketing of gifts, holiday products, toys and children's products, personal and home accessories, kitchen and houseware products and garden and outdoor products. They have developed a proprietary customer database containing information about its customers, including such data as order frequency, size and date of last order and type of products purchased. The database contains information with respect to over 27 million customers, gift recipients and people who have requested its catalogs. In the fiscal year ended Feb. 22, 2003, they published 33 catalog editions and mailed approximately 150,000,000 catalogs to past and prospective customers. They also offer products over the Internet. The company and six of its affiliates filed for Chapter 11 protection on Feb. 20, 2008 (Bankr. D.D., Delaware, Case No. 08- 10323). Ann C. Cordo, Esq., Daniel B. Butz, and Esq., J. Dehney, Esq. at Morris, Nichols, Arsht & Tunnell, L.L.P. represent the Debtors in their restructuring efforts. Lillian Vernon's parent, Sun Capital Partners Inc., a privately held investment company with offices in Boca Raton, Fla., is not included in the bankruptcy filing. The company listed assets of $1 million to $100 million and debts of $1 million to $100 million in its bankruptcy filing. LILLIAN VERNON: Panel Wants to Hire Cooley Godward as Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors of Lillian Vernon Corporation seeks permission from the U.S. Bankruptcy Court for the District of Delaware for authority to retain and employ Cooley Godward Kronish LLP as counsel. The Committee is of the opinion that it is necessary to employ CGK and that the employment is in the best interest of the Debtors' estates. CGK has advised the Committee that its fees will be commensurate with fees charged to its other clients and fees charged in cases of this size. CGK declares that based upon the affidavit of Jay r. Indyke, Esq., an attorney at CGK, the Committee is satisfied that (i) CGK represents no interest adverse to the Committee, the Debtors, or their estates, (ii) CGK has no connection with the U.S. Trustee or any other person employed in the office of the US Trustee; and (CGK) has not been paid any retainer against which to bill fees and expenses. About Lillian Vernon Based in Virginia Beach, Virginia, Lillian Vernon Corp. -- http://www.lillianvernon.com/-- and its affiliates are direct mail specialty catalog and online companies concentrating on the marketing of gifts, holiday products, toys and children's products, personal and home accessories, kitchen and houseware products and garden and outdoor products. They have developed a proprietary customer database containing information about its customers, including such data as order frequency, size and date of last order and type of products purchased. The database contains information with respect to over 27 million customers, gift recipients and people who have requested its catalogs. In the fiscal year ended Feb. 22, 2003, they published 33 catalog editions and mailed approximately 150,000,000 catalogs to past and prospective customers. They also offer products over the Internet. The company and six of its affiliates filed for Chapter 11 protection on Feb. 20, 2008 (Bankr. D.D., Delaware, Case No. 08- 10323). Ann C. Cordo, Esq., Daniel B. Butz, and Esq., J. Dehney, Esq. at Morris, Nichols, Arsht & Tunnell, L.L.P. represent the Debtors in their restructuring efforts. Lillian Vernon's parent, Sun Capital Partners Inc., a privately held investment company with offices in Boca Raton, Fla., is not included in the bankruptcy filing. The company listed assets of $1 million to $100 million and debts of $1 million to $100 million in its bankruptcy filing. LILLIAN VERNON: Panel Wants to Hire Ballard Spahr as Co-counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Lillian Vernon Corporation seeks permission from the U.S. Bankruptcy Court for the District of Delaware to retain Ballard Spahr Andrews & Ingersoll, LLP, as co-counsel to the Committee. The Committee believes that it would be extremely cost effective for it to retain Ballard Spahr as its counsel. Ballard Spahr has extensive experience and knowledge in the field of debtors' and creditors' rights and business reorganizations under chapter 11 of the Bankruptcy Code. Accordingly, the Committee believes that Ballard Sphar is well qualified and uniquely able to represent it in an efficient and timely manner, and their expertise is well established and known, which should enable fees to be minimized. The Committee says that Ballard Sphar is a disinterested party under Section 101(14) of the U.S. Bankruptcy Code and does not hold or represent an interest adverse to the estate. The regular rates for Ballard Spahr's attorneys and paralegals are: Professionals Rates ------------- ----- Partners $260 to $720 Associates $175 to $370 Paralegals $90 to $210 The hourly rates for the attorneys and paralegals that will be primarily responsible for Ballard Spahr's representation of the Committee are: Professionals Rates ------------- ----- Partner Tobey M. Daluz $530.00 Associate Leslie C. Heilman $265.00 Associate Katie A. D'Emilio $250.00 Paralegal Kelly G. Iffland $185.00 About Lillian Vernon Based in Virginia Beach, Virginia, Lillian Vernon Corp. -- http://www.lillianvernon.com/-- and its affiliates are direct mail specialty catalog and online companies concentrating on the marketing of gifts, holiday products, toys and children's products, personal and home accessories, kitchen and houseware products and garden and outdoor products. They have developed a proprietary customer database containing information about its customers, including such data as order frequency, size and date of last order and type of products purchased. The database contains information with respect to over 27 million customers, gift recipients and people who have requested its catalogs. In the fiscal year ended Feb. 22, 2003, they published 33 catalog editions and mailed approximately 150,000,000 catalogs to past and prospective customers. They also offer products over the Internet. The company and six of its affiliates filed for Chapter 11 protection on Feb. 20, 2008 (Bankr. D.D., Delaware, Case No. 08- 10323). Ann C. Cordo, Esq., Daniel B. Butz, and Esq., J. Dehney, Esq. at Morris, Nichols, Arsht & Tunnell, L.L.P. represent the Debtors in their restructuring efforts. Lillian Vernon's parent, Sun Capital Partners Inc., a privately held investment company with offices in Boca Raton, Fla., is not included in the bankruptcy filing. The company listed assets of $1 million to $100 million and debts of $1 million to $100 million in its bankruptcy filing. LILLIAN VERNON: Wants to Hire McGuireWoods as Special Counsel ------------------------------------------------------------- Lillian Vernon Corporation and its debtor-affiliates ask authority from the U.S. Bankruptcy Court for the District of Delaware to retain and employ McGuireWoods LLP as special counsel. The Debtors have previously applied to retain Morris, Nichols, Arsht & Tunnell LLP as bankruptcy counsel. However, the Debtors believe that the services of McGuireWoods are also necessary to enable it to execute faithfully its duties as debtor-in- possession. McGuireWoods will: (a) advise the Debtors with regard to employment, labor, compensation, benefits, ERISA, and immigration matters; and (b) represent the Debtors with regard to employment, labor, ERISA, and immigration litigation. McGuireWoods' requested compensation for professional services rendered to the Debtors will be based upon the hours actually expended by each assigned professional at each professional's hourly billing rate. McGuireWoods' current hourly rates for work at this nature are: Partners and Of Counsel $330.00 to $590.00 Associates $245.00 to $350.00 Pararprofessionals $165.00 to $215.00 During the year prior to the Petition Date, McGuire represented the Debtors with multiple matters relating to employment, labor, compensation, benefits, ERISA, and immigration and for which McGuireWoods incurred $113,432 in professional fees and $639.06 in expenses and costs. As of the Debtors' bankruptcy filing, McGuire was owed approximately $12,973.00 in unpaid professional fees and expensees from the Debtors. Following the Petition Date, McGuireWoods received $15,000.00 as an advance for postpetition services to be rendered and expenses to be incurred in connection with its representation of the Debtors. McGuireWoods has not been paid any other compensation by the Debtors. Attorneys and paralegals principally responsible for the representation of the Debtors rates are: James p. McElligott (Partner) $590.00 per hour Robert M. Cipolla (Partner) $465.00 per hour David F. Dabbs (Of Counsel) $405.00 per hour David Z. Izakowitz (Partner) $360.00 per hour Ruth L. Goodboe (Partner) $330.00 per hour Daniel F. Blanks (Associate) $350.00 per hour Keith P. Zanni (Associate) $265.00 per hour Regina J. Elbert (Associate) $245.00 per hour Dorothy J. Hannan (Paralegal) $215.00 per hour Linda J. Neilson (Paralegal) $165.00 per hour McGuireWoods declares that neither the law firm, nor any partner, counsel or its associate, has any connection with the Debtors, their significant secured and unsecured creditors or any other parties-in-interest. About Lillian Vernon Based in Virginia Beach, Virginia, Lillian Vernon Corp. -- http://www.lillianvernon.com/-- and its affiliates are direct mail specialty catalog and online companies concentrating on the marketing of gifts, holiday products, toys and children's products, personal and home accessories, kitchen and houseware products and garden and outdoor products. They have developed a proprietary customer database containing information about its customers, including such data as order frequency, size and date of last order and type of products purchased. The database contains information with respect to over 27 million customers, gift recipients and people who have requested its catalogs. In the fiscal year ended Feb. 22, 2003, they published 33 catalog editions and mailed approximately 150,000,000 catalogs to past and prospective customers. They also offer products over the Internet. The company and six of its affiliates filed for Chapter 11 protection on Feb. 20, 2008 (Bankr. D.D., Delaware, Case No. 08- 10323). Ann C. Cordo, Esq., Daniel B. Butz, and Esq., J. Dehney, Esq. at Morris, Nichols, Arsht & Tunnell, L.L.P. represent the Debtors in their restructuring efforts. Lillian Vernon's parent, Sun Capital Partners Inc., a privately held investment company with offices in Boca Raton, Fla., is not included in the bankruptcy filing. The company listed assets of $1 million to $100 million and debts of $1 million to $100 million in its bankruptcy filing. LOCAL INSIGHT: Moody's Puts 'Ba3' Rating on Proposed $365MM Credit ------------------------------------------------------------------ Moody's Investors Service has assigned a Ba3 rating to Local Insight Regatta Holdings Inc.'s proposed $365 million senior secured credit facilities. At the same time, Moody's downgraded Local Insight Regatta's Corporate Family rating to B2 from B1 and changed the rating outlook to negative. Details of the rating action are: Ratings assigned: -- Proposed $30 million senior secured revolving credit facility due 2014: Ba3, LGD2, 29% -- Proposed $335 million senior secured term loan due 2015: Ba3, LGD2, 29% Ratings downgraded: -- Corporate Family rating: to B2 from B1 -- Probability of Default rating: to B2 from B1 -- $210.5 million senior subordinated notes due 2017 -- to Caa1, LGD5, 84% from B2, LGD4, 65% Ratings confirmed, subject to withdrawal at closing: -- $20 million senior secured first lien revolving credit facility -- $66 million senior secured term loan B The rating outlook is negative. This concludes the review for possible downgrade which was initiated on Feb. 4, 2008 following Local Insight Regatta's announcement that it had executed a definitive agreement to acquire the assets of The Berry Company's Independent Line of Business from AT&T Inc. (A2 Senior Unsecured). The downgrade of the Corporate Family rating to B2 largely reflects the increase in Local Insight Regatta's debt burden (by approximately $260 million), higher ensuing leverage (management expects that leverage will increase by over a turn to around 5.5 times debt to EBITDA pro-forma for the acquisition of ILOB), and a reduction in the implied equity support provided to debtholders following a recent slump in public market valuations for yellow pages publishers. The B2 CFR incorporates Local Insight Regatta's limited track record operating under current ownership (since December 2007), its vulnerability to softening market spending on print yellow pages advertising, and the increasing threat posed by competing directory publishers and web-based directory service providers in virtually all its markets. The negative outlook incorporates the integration risk posed by the proposed ILOB acquisition and the combination of Local Insight Regatta Holdings and Local Insight Media, the possibility that worsening market conditions may prevent the company from reducing consolidated debt below a 5.5 times multiple of EBITDA by the end of 2008 (as currently planned by management) and the overhang of event risk, including the possibility of future debt-funded dividends or acquisitions Pro-forma for the ILOB acquisition, around half of Local Insight Regatta's business will come from sales generated under its exclusive 50 year publishing rights and non-compete agreement with Windstream Communications. Local Insight Regatta will generate the remainder of its revenues (including all ILOB sales) from shorter-term sales and marketing contracts with independent telephone companies. Moody's values Local Insight Regatta's sales and marketing business at a lower multiple than its incumbent yellow pages business. The ILOB business includes a sizeable sales and marketing workforce. Moody's considers that the ILOB acquisition marks a departure from Local Insight Media's prior acquisitions of predominantly outsourced properties. The B2 CFR is based upon the successful completion of: (1) the proposed acquisition of ILOB by Local Insight Regatta expected in 2Q08, (2) the proposed combination of Local Insight Regatta Holdings with Local Insight Media later in 2008 and , (3) management's commitment to use cash generated from operations to reduce debt instead of rewarding shareholders. Of note, Moody's has not been provided with audited carve-out financials for ILOB and has based its ratings upon unaudited financials derived from an independently-prepared "quality of earnings report" for ILOB (including management adjustments). The company expects to complete a fiscal 2007 carve--out audit of ILOB within 75 days of closing (which includes a 30 day grace period). Local Insight Regatta may effect a debt-funded special dividend of up to $200 million, subject to compliance with the 7.25 times debt incurrence test of its subordinated notes indenture. The assigned ratings do not incorporate any expectation that the company will issue additional debt or restricted payments within the unutilized capacity remaining under its debt or restricted payments covenants. Ratings could be subject to downward pressure if Local Insight Regatta announces plans to issue more debt over closing levels and effect shareholder dividends. Moody's notes that management intends to change ILOB's revenue recognition policy in two areas: (1) by presenting the share of income that is distributed to the yellow page directory owners on a gross basis, as revenue with an offsetting cost (historically these transactions were netted), and; (2) by deferring and amortizing directory revenues over the life of the directory (historically these were recorded as incurred). Local Insight Regatta Holdings, headquartered in Hudson, Ohio, is a publisher of print and online yellow page directories in the United States. The company reported revenues of $143 million for the LTM period ended Sept. 30, 2007. LUMINENT MORTGAGE: Unit Registers Planned REIT Conversion to PTP ---------------------------------------------------------------- An affiliated company of Luminent Mortgage Capital Inc. filed a Form S-4 registration statement with the Securities and Exchange Commission on March 28, 2008, with respect to the company's proposed conversion to a publicly traded partnership and other matters. The company relates that maintaining its qualification as a real estate investment trust, or REIT, is no longer beneficial to it or its stockholders. Accordingly, the company's board of directors has approved a restructuring whereby the company will convert from a Maryland corporation qualified as a REIT to a Delaware limited liability company that would be considered a publicly traded partnership taxable as a partnership, or PTP. The company states that the restructuring is in the best interests of its stockholders, and that since the PTP will not be required to comply with the REIT income and asset tests and distribution requirements, it will significantly enhance its flexibility for investment diversification and cash management. In addition, after the restructuring, the PTP plans to diversify and offer fee-based services, including credit risk management, asset management advisory services and sub-manager services for investment funds. These fee-based activities generally will be conducted through corporate subsidiaries that would be subject to corporate income tax. The restructuring is subject to stockholder approval and, if approved, it is expected that the restructuring will be completed in the second quarter of 2008. The proposed restructuring will result in each share of currently issued and outstanding Luminent Mortgage Capital Inc. common stock being exchanged for one-third of a newly issued common share of the PTP. About Luminent Mortgage Headquartered in San Francisco, California, Luminent Mortgage Capital Inc. -- http://www.luminentcapital.com/-- (NYSE: LUM) is a real estate investment trust, or REIT. Luminent is an asset management company that invests in prime whole loans, U.S. agency and other highly-rated, single-family, adjustable-rate, hybrid adjustable-rate and fixed-rate mortgage-backed securities, which it acquires in the secondary market. Luminent Mortgage's consolidated balance sheet at Sept. 30, 2007, showed $5.37 billion in total assets and $5.46 billion in total liabilities, resulting in a $90.5 million total stockholders' deficit. MAGNOLIA FINANCE 2006-11: Moody's Junks Rating on $40 Mil. Notes ---------------------------------------------------------------- Moody's Investors Service downgraded the ratings on these notes issued by Magnolia Finance VI Series 2006-11: Class Description: $40,000,000 Series 2006-11 Notes Due 2046 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. MAGNOLIA FINANCE 2007-1: Moody's Junks Rating on Notes From 'B2' ---------------------------------------------------------------- Moody's Investors Service downgraded the ratings on these notes issued by Magnolia Finance VI Series 2007-1: Class Description: Magnolia Finance VI plc Series 2007-1 ABS Portfolio Variable Notes due February 2052 -- Prior Rating: B2, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. MANCHESTER INC: Lender to Foreclose Assets or File Chapter 11 Plan ------------------------------------------------------------------ Palm Beach Multi-Strategy Fund LP, a secured lender of Manchester Inc. and its debtor-affiliates, seeks authority from the United States Bankruptcy Court for the Northern District of Texas to foreclose on Manchester's assets and recover at least 65% of Palm Beach's claim or, to the possible extent, submit a Chapter 11 plan for the Debtor, Bloomberg News reports. Palm Beach's proposed plan provides "substantial distribution" to unsecured creditors, Bloomberg relates. Palm Beach holds $100 million in claims when the Debtors filed for Chapter 11 protection in February 2008. Palm Beach's move to foreclose will stem the further decline of the Debtors' cash collateral, report says. A status conference in the Debtor's case is set today April 2, 2008, at 10:30 a.m., at Earle Cabell Federal Building, 1100 Commerce Street, 14th Floor in Dallas, Texas. About Manchester Inc. Based in Dallas, Texas, Manchester Inc. (OTCBB: MNCS) -- http://www.manchesterinc.net/-- is in the Buy-Here/Pay-Here auto business. Buy-Here/Pay-Here dealerships sell and finance used cars to individuals with limited credit histories or past credit problems, generally financing sales contacts ranging from 24 to 48 months. It operates six automotive sales lots, which focus on the Buy-Here/Pay-Here segment of the used car market. The company and its seven affiliates filed for chapter 11 protection on Feb. 7, 2008 (Bankr. N.D. Tex. Case No.08-30703). Winston & Strawn LLP represents the Debtors in their restructuring efforts. Eric A. Liepins, Esq., is the Debtors' local counsel. As of the Debtors' bankruptcy filing, it listed total assets of $131,582,157 and total debts of $123,881,668. MATHIS PARTNERS: Files Voluntary Chapter 11 Petition in Georgia --------------------------------------------------------------- Mathis Partners LLC, a Georgia limited liability company, filed a voluntary petition for reorganization in the Georgia court. The action was in response to a foreclosure proceeding scheduled for April 1, 2008, which was initiated by Mathis' lender, Haven Trust Bank, on the single project owned by Mathis. The foreclosure proceedings were initiated when Mathis and Haven were unable to reach an agreement with respect to certain modifications sought by Mathis on an approximately $5 million loan relating to the Gates of Luberon residential development project in Forstyth County, Georgia. Mathis was formed by Parker Chandler Homes Inc. to develop the Project with Haven Trust as its lender. The formation of Mathis and the initiation of financing with Haven Trust pre-date the acquisition of PCH by Comstock from PCH founders James Parker and Andrew Chandler. "For several months we have been trying to reach agreement with Haven Trust regarding loan modifications that would allow for successful completion of the project," Bruce Labovitz, chief financial officer of Comstock, said. "This is a chapter 11 bankruptcy filing of the Mathis Partners entity only and does not affect the ability of Comstock to conduct the remainder of its business in any way." "This situation is not indicative of the relationships we have with our other lenders," Mr. Labovitz added. "Other than Haven Trust, we have a group of lenders made up principally of large, well capitalized, regional and national banks that have a good understanding of current market conditions and have demonstrated a commitment to Comstock." "We remain committed to the Gates of Luberon project and hope to be afforded the time necessary to complete the development." About Mathis Partners LLC Mathis Partners LLC is a single purpose limited liability company. The company is a wholly owned subsidiary of Comstock Homebuilding Companies Inc. (NASDAQ: CHCI). 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. MEGA BRANDS: Gets Lender Approval on Changes to Debt Facilities --------------------------------------------------------------- MEGA Brands Inc. received lender approval for certain amendments to its senior secured credit facilities maturing in 2012. The amendment waives the funded debt to EBITDA ratio covenant and the fixed charge coverage ratio covenant as of Dec. 31, 2007, and until Sept. 30, 2008, inclusively. On March 27, 2008, the corporation executed a fifth amending agreement to its credit agreement dated July 26, 2005, providing for certain changes to the terms and conditions of its senior secured credit facilities maturing in 2012. In addition, the EBITDA definition has been amended and a new financial covenant is added whereby the Corporation will have to maintain a minimum cumulative EBITDA at the end of each of its second, third and fourth financial quarters of its 2008 financial year. Furthermore, through this amendment, the lenders consent to the sale of the Stationery and Activities business and to the release of the liens on the assets sold provided that the net consideration received from this sale will be used to make prepayment offers to the current lenders. On March 5, 2008, MEGA Brands disclosed that after a comprehensive strategic review, it intended to explore a sale of its Stationery and Activities business. The company related that this initiative will bring significant benefits like: -- focusing on its core toy business, leveraging its strengths and innovation culture; -- dedicating resources and management's attention to creating value through the execution of the Value Enhancement Plan; and -- providing a stronger and more flexible capital structure. ". . . The sale of the company's Stationary and Activities business was considered as a means of generating meaningful cash proceeds to reduce its existing debt and allow the company to place increased focus on its core toy business," Marc Bertrand, president and CEO of MEGA Brands, said. "Our Stationery and Activities business has consistently delivered solid performance. This is a strong business with solid market positions in North America and we believe it would be an attractive acquisition to both strategic and financial buyers." Stationery and Activities is a participant in the North American school supplies and arts & crafts markets. Product lines are comprised of art materials like crayons, colored pencils, highlighters and markers, sold mainly under the ROSE ART brand; writing instruments like pens, mechanical pencils and wood case pencils, sold mainly under the ROSE ART, SRX and USA GOLD brands; dry-erase and cork presentation boards, organizers and accessories sold mainly under the BOARD DUDES brand, and ROSE ART craft and activity sets. The corporation relates these amendments provide the necessary financial flexibility to implement the Value Enhancement Plan and to conduct the sale of the AST business through an orderly process. About Mega Brands Inc. MEGA Brands Inc. (TSE: MB) -- http://www.megabrands.com/-- designs, manufactures and markets high quality toys and stationery products. Headquartered in Montreal, the company has approximately 4,500 employees with offices, manufacturing facilities or distribution centers in 14 countries. The Corporation's products are sold in over 100 countries. * * * As reported in the Troubled Company Reporter on Jan. 25, 2008, Standard & Poor's Ratings Services lowered its corporate credit and bank loan ratings on Mega Brands Inc. to 'B' from 'B+'. The ratings remain on CreditWatch with negative implications, where they were placed Nov. 9, 2007. The '3' recovery rating on the bank loan is unchanged. MERCY REGIONAL: Undergoes Restructuring Due to Meager Earnings -------------------------------------------------------------- Mercy Regional Health Center in Manhattan laid off 61 workers and closed two hospital programs this week, The Wichita Eagle reports, citing hospital officials. The ailing hospital has not been profitable for several months with almost $0 earnings, Wichita Eagle quotes Mercy president and chief executive Richard Allen as stating. He pointed to the tough competition and poor reimbursement rates especially from Medicaid and Tricare government insurance plans, reveals the report. According to Mr. Allen, the hospital tried to offer various services but had to eventually let go of programs that didn't service many patients, report says. He said that 41 out of the 61 laid off workers were urged to seek other posts within the hospital, Wichita Eagle reports. Mercy Regional Health Center in Manhattan is a 120-bed regional hospital. Via Christi Health System owns 50% of Mercy Hospital. MERISANT COMPANY: Moody's Rates Proposed $210 Mil. Loan at 'B3' --------------------------------------------------------------- Moody's Investors Service rated Merisant Company's proposed new $35 million bank revolving credit agreement and $210 million bank term loan at B3. The new bank facilities will replace the existing $35 million revolving credit agreement and approximately $206 million in outstanding bank term loans, whose ratings will be withdrawn when the new facilities are executed. Moody's affirmed Merisant's other ratings, including its corporate family rating of Caa3 and its probability of default rating of Caa3. The rating outlook remains stable. Rating assigned: Merisant Company -- New $35 million senior secured revolving credit agreement at B3 (LGD2,16%) -- New $210 million senior secured term loans at B3 (LGD2,16%) Ratings affirmed: Merisant Worldwide, Inc. -- Corporate family rating at Caa3 -- Probability of default rating at Caa3 -- $137 million senior subordinated discount notes maturing May 2014 at Ca (LGD6,91%) Merisant Company -- $35 million first lien senior secured revolving credit expiring in January 2009 at B3 (LGD2,16%) -- $190 million first lien senior secured Term Loan B maturing in January 2010 at B3 (LGD2, 16%) -- $15.7 million (original EU 50 million) 1st lien senior secured Term Loan A maturing in January 2009 at B3 (LGD2, 16%) Rating affirmed, and LGD % revised: Merisant Company -- $225 million senior subordinated notes maturing in July 2013 at Ca (LGD4). LGD % to 63% from 65% The new bank facilities, like the existing ones, will be senior secured obligations. Borrower will likewise be Merisant Company, with guarantees from holding company Merisant Worldwide and Merisant Company's direct and indirect domestic subsidiaries and material foreign subsidiaries. Security will be a first priority lien on capital stock of Merisant Company, and substantially all of the personal property assets of Merisant Company and each guarantor (limited to 65% for first tier foreign subsidiaries). The proposed new revolving credit agreement will expire in January 2012, and the new term loan will mature in January 2013; this lengthening of maturities is a credit positive. However, the maturities of the new bank facilities will be accelerated to the earliest date on or after April 15, 2009 if the holding company or Merisant Company would not be permitted by the terms of any indebtedness to make the next scheduled cash payment of interest on the holding company's senior subordinated discount notes due 2014, whose interest will no longer be pay-in-kind as of May 2009. The affirmation of Merisant's existing ratings is based on the greater stability in the company's operating performance. Reported operating profit margin in each of the first three quarters of fiscal 2007 was stronger than in the same period in the prior year, even when excluding $30 million in other income in the second quarter of fiscal 2007. Profitability has benefited from supply chain programs to streamline manufacturing and from the introduction of new products such as Sweet Simplicity(R). Cost structure has also been helped by the current excess of global aspartame supply. Further cost savings and the leveraging of manufacturing capacity through the production of private label goods represent opportunities to enhance profitability, while greater international expansion could boost sales over the intermediate term. Merisant is anticipated to be able to fund working capital, capital expenditures, and modest term debt repayments with cash on hand ($51 million at Dec. 31, 2007), its $35 million revolving credit agreement, and modest operating cash flow. Merisant's Caa3 corporate family rating reflects the company's very heavy debt burden relative to its earnings and cash flow and the likelihood, in Moody's view, that the company might need to further restructure its debt in order to be able to meet fierce competition and to invest in growth opportunities. The rating outlook is stable, given that the current corporate family rating adequately captures debt recovery expectations for the enterprise. Headquartered in Chicago, Merisant Worldwide, Inc. is a leading global producer and marketing of low-calorie tabletop sweeteners. Its premium-priced brands are Equal and Canderel, which are sweetened with aspartame. Merisant has an estimated 21% dollar share of the global retail market for low-calorie tabletop sweeteners, and sales of approximately $290 million for the fiscal year ended Dec. 31, 2007. MICHAEL DAVIS: Involuntary Chapter 11 Case Summary -------------------------------------------------- Alleged Debtor: Michael Davis 1934 Brightwaters Boulevard, Northeast St. Petersburg, Fl 33704 Case Number: 08-04348 Involuntary Petition Date: March 31, 2008 Court: Middle District of Florida (Tampa) Judge: Michael G. Williamson Petitioner's Counsel: Asher Rabinowitz, Esq. (azr@andersonbadgley.com) Anderson & Badgley, P.L. 1270 Orange Avenue, Suite D Winter Park, FL 32789 Tel: (407) 478-4600 Fax: (407) 478-4777 http://www.andersonbadgley.com/ Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Brain Dowling final judgment $803,818 368 Fairbank Road Riverside, Il 60548 North Shore Community Bank guaranty/deficiency $604,688 7800 Lincoln Avenue Skolda, Il 60077 MaryAnne Davis child support $184,000 3653 King Road 4-102 Palm Harbor, FL 34885 David P. Pasulka judgment $13,000 70 West Madison Street, Suite 650 Chicago, Il 60602-4296 Tel: (312) 236-9150 NATIONAL RV: Exclusive Plan Filing Period Extended Until June 27 ---------------------------------------------------------------- The Hon. Peter H. Carroll of the United States Bankruptcy Court for the Central District of California extended National R.V. Holdings Inc. and National R.V. Inc.'s exclusive periods to: a) file a Chapter 11 plan until June 27, 2008; and b) solicit acceptances of that plan until May 28, 2008. As reported in the Troubled Company Reporter on March 28, 2008, David M. Guess, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP in Los Angeles, California, said that the Debtors are in the process of liquidating their assets. Mr. Guess related that the Debtor have generated at least $22 million of cash from the sale of certain personal property assets and sold about 145 recreational vehicles to Dennis Dillon RV LLC for approximately $14.25 million. The Debtors told the Court that they need more time to implement and to complete the final phase of their liquidation. About National R.V. Headquartered in Perris, California, National R.V. Holdings Inc. (Pink Sheets: NRVH) -- http://www.nrvh.com/-- through its wholly owned subsidiary, National RV Inc., produces motorized recreational vehicles. National RV designs, manufactures and markets Class A gas and diesel motorhomes under model names Surf Side, Sea Breeze, Dolphin, Tropi-Cal, Pacifica and Tradewinds. The Companies filed for Chapter 11 protection on Nov. 30, 2007 (Bankr. C.D. Calif. Lead Case No. 07-17937). David Guess, Esq., at Klee Tuchin Bogdanoff & Stern LLP, represents the Debtors in their restructuring efforts. The Debtors selected OMNI Management Group LLC as their claim, notice and balloting agent. The U.S. Trustee of Region 16 appointed seven creditors to serve on an Official Committee of Unsecured Creditors in this case. Pachulski Stang Ziehl & Jones LLP represents the Committee. When the Debtors filed for protection against their creditors, it listed total assets of $54,442,000 and total debts of $30,128,000. NEFF CORP: Posts $119.9 Million Net Loss in Year Ended Dec. 31 -------------------------------------------------------------- Neff Corp. reported a net loss of $119.9 million for the year ended Dec. 31, 2007, compared to net income of $35.1 million for the year ended Dec. 31, 2006. The effect of purchase accounting adjustments decreased net income by approximately $26.2 million for the year ended Dec. 31, 2007. Total revenues for the year ended Dec. 31, 2007, decreased 0.1% to $329.9 million from $330.3 million for the year ended Dec. 31, 2006. Gross profit for the year ended Dec. 31, 2007, decreased $25.8 million, or 15.8%, to $137.9 million from $163.7 million for the year ended Dec. 31, 2006. After testing its intangibles for impairment in 2007, the company concluded that its goodwill and trademarks and tradenames were impaired and recognized impairment losses of $56.2 million and $1.6 million, respectively, during the fourth quarter of 2007. There was no impairment loss on intangibles during 2006. Other depreciation and amortization expense for the year ended Dec. 31, 2007, increased to $30.3 million from $5.9 million for the year ended Dec. 31, 2006. The increase in other depreciation and amortization is primarily due to the effect of purchase accounting adjustments related to the amortization of intangible assets which increased amortization expense in the period June 1, 2007, to Dec. 31, 2007, by approximately $21.5 million. Transaction-related operating costs were $7.3 million for the year ended Dec. 31, 2007. These costs consisted of seller-related expenses of $7.3 million for investment banking fees, outside attorney fees, and other third-party fees in connection with the acquisition. There were no transaction-related operating costs recorded in 2006. Loss from operations for the year ended Dec. 31, 2007, increased $122.1 million, to a loss of $39.2 million from income of $82.9 million for the year ended Dec. 31, 2006. Transaction-related financing costs were $57.8 million for the year ended Dec. 31, 2007. These costs consisted of $42.6 million in tender premiums related to the company's Existing Notes, all of which were repurchased in connection with the Transactions, a non- cash charge of $12.5 million to write-off the remaining net book value of previously-capitalized financing fees related to the company's then-existing credit facility and Existing Notes and a non-cash charge of $2.7 million to write-off the unamortized discount on the 13% Notes. There were no transaction-related financing costs recorded in 2006. Acquisition of the Company On March 31, 2007, the company entered into a definitive merger agreement under which affiliates of Lightyear Capital LLC, a private equity firm, and certain other investors agreed to acquire all of the company's outstanding shares. The acquisition closed on May 31, 2007. On the effective date, LYN Holdings Corp., now known as Neff Holdings Corp., acquired all of the outstanding shares of the company for approximately $935.9 million in total consideration. About Neff Corporation Headquartered in Miami, Neff Corp. -- http://www.neffrental.com/ -- is an equipment rental company in the United States. Through its 66 branches located primarily in the Sunbelt states, the company rents a broad variety of construction and industrial equipment, including earthmoving, material handling, aerial, compaction and related equipment. * * * As reported in the Troubled Company Reporter on Jan. 21, 2008, Standard & Poor's Ratings Services revised its outlook on Neff Corp. to negative from stable as a result of persistent weakness in some of Neff's end markets that have been affected by the residential housing slump. Neff Corp. continues to carry Standard and Poor's long term foreign and local issuer credit rating at 'B+'. NEO PLASTICS: Assets Acquired by RTS Plastics for $880,000 ---------------------------------------------------------- RTS Plastics Inc. in Waterloo, Canada bought NEO Plastics out of bankruptcy, Canadian Plastics reports. The report says, citing other sources, that RTS paid $550,000 for the Debtor's real property and $330,000 for its other assets. NEO's 33 workers need to re-apply in order to keep their positions, CanPlastics quotes Vicki Cegliastro, general manager/controller at RTS. She added that there are no planned work reduction related to the acquisition, report adds. RTS intends to renovate NEO's facility and expand its operations during the first year of its ownership and double the number of workers in the next five years, CanPlastics reports, citing Ms. Cegliastro. About RTS Plastics RTS Plastics Inc., formerly Canbar, was founded as a manufacturer of wood stave barrels for storing and shipping whisky and dry goods. The original business evolved over the decades into the manufacture of wood stave tanks and pipelines and later into the production of rotationally molded products. Recently Canbar sold its plastics division and has changed its name to RTS Plastics Incorporated. From its rotational molding facility in Waterloo, Ontario and our U.S. fabrication and distribution center in Kennesaw, Georgia, RTS Plastics continues the tradition of producing custom plastic products. With computer directed molding machines, RTS manufactures custom and proprietary molded plastic products. About NEO Plastics NEO Plastics operates a rotatinal molding shop based in Austinburg, Ohio. It sought protection under chapter 11 in February 2007. A receiver was appointed in the case. NORTHSHORE SERVICE: Case Summary & Six Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Northshore Service Center Inc. 2501 North Highway 190 Covington, LA 70433 Bankruptcy Case No.: 08-10610 Chapter 11 Petition Date: March 25, 2008 Court: Eastern District of Louisiana (New Orleans) Judge: Elizabeth W. Magner Debtor's Counsel: Phillip K. Wallace, Esq. 2027 Jefferson Street Mandeville, LA 70448 Tel: (985) 624-2824 Fax: (985) 624-2823 PhilKWall@aol.com Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million Debtor's list of its Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Statewide Bank real estate; $3,500,000 2008 Ronald Reagan Highway value of Covington, LA 70433 security: $3,100,000; value of senior lien: $2,544,270 Department of Treasury real estate $233,405 Internal Revenue Service 1555 Poydras Street, Suite 220 Stop 47 New Orleans, LA 70112-3701 Chase Bank line of credit $33,968 P.O. Box 9001022 KY 42090-1022 State of Louisiana real estate $28,358 Aldon Wahl, CPA accounting $7,990 services Cleco electrical $2,396 services for company NOVELL INC: Augments Operations with PlateSpin Buyout Completion ---------------------------------------------------------------- Novell Inc. completed its acquisition of PlateSpin Ltd. The company related that PlateSpin allows the movement of workloads between physical and virtual environments regardless of platform or operating system. These capabilities, combined with Novell's systems management solutions, enable customers to fully leverage their virtualization investments and reduce both costs and server sprawl in their data centers. As reported in the Troubled Company Reporter on Feb. 28, 2008, Novell Inc. entered into a definitive agreement to acquire PlateSpin Ltd. for $205 million. "The addition of PlateSpin to Novell's existing enterprise IT management and Linux solutions will give customers the capabilities they need to build their next generation data center," Joe Wagner, senior vice president and general manager of Novell(R) Systems and Resource Management, said. "With solutions for data center consolidation, virtualization, relocation, disaster recovery and ongoing optimization, customers now have powerhouse technology to reduce cost, minimize risk and create value across heterogeneous environments with flexibility, interoperability and agility." "We are excited to be joining the Novell organization and a global team of people committed to the vision of optimizing the data center," Stephen Pollack, founder and CEO of PlateSpin, said. "We will continue to focus on the development of the PlateSpin product line and look forward to the new synergies our combined offerings will bring to customers." With the closing of the acquisition, PlateSpin will become part of the Novell Systems and Resource Management business unit and continue to develop and market its solutions to the customer base. This is another key step in Novell's strategy to help customers integrate their mixed IT environments, allowing people and technology to work as one. About PlateSpin Ltd. PlateSpin offers extensive solutions for the management of heterogeneous workloads that encapsulate data, applications and operating systems residing on a physical or virtual host. These solutions improve the speed and quality of server consolidation, data center relocation and disaster recovery. About Novell Inc. Headquartered in Waltham, Massachusetts, Novell Inc. (Nasdaq: NOVL) -- http://www.novell.com/-- delivers infrastructure software for the Open Enterprise. Novell provides desktop to data center operating systems based on Linux and the software required to secure and manage mixed IT environments. * * * Novell Inc. continues to carry Moody's Investors Service's 'B1' subordinated debt rating, which was placed in September 1988. NUVEEN INVESTMENT: Funds to Refinance Auction-Rate Securities ------------------------------------------------------------- Four taxable closed-end funds sponsored by Nuveen Investments Inc. announced on April 1 the refinancing of $714 million of their auction-rate securities, including auction-rate preferred shares and auction-rate notes. The four funds are: Nuveen Multi-Strategy Income and Growth Fund (NYSE: JPC); Nuveen Real Estate Income Fund (AMEX: JRS); Nuveen Tax-Advantaged Total Return Strategy Fund (NYSE: JTA); and Nuveen Tax-Advantaged Dividend Growth Fund (NYSE: JTD). Each fund's Board of Trustees has approved the refinancing, which is expected to lower the relative costs of leverage for each fund over time while also providing liquidity at par for the holders of at least some of each fund's ARS. As part of the refinancing, all or a significant portion of each fund's outstanding ARS will be redeemed as follows: $450 million of $708 million ARPS in JPC (approximately 64%); $150 million of $222 million ARPS in JRS (approximately 68%); $78 million of $123 million ARS in JTA (approximately 63%); and the entire $36 million of ARPS in JTD. Funds redeeming less than all of their outstanding ARPS will redeem securities on a pro rata basis by series. Depository Trust Company (DTC), the securities' holder of record, determines how a partial series redemption will be allocated among each participant broker-dealer account. Each participant broker- dealer, as nominee for underlying beneficial owners (street name shareholders), in turn determines how redeemed shares are allocated among its underlying beneficial owners. The procedures used by different broker-dealers to allocate redeemed shares among beneficial owners may differ from each other as well as from the procedures used by DTC. "This marks the initial implementation of our plan to seek to refinance all the ARS issued by our taxable closed-end funds, which we announced several weeks ago," said Bill Adams, Executive Vice President, Nuveen Investments, Inc. "We expect to make similar announcements regarding our other taxable funds in coming weeks." The four funds identified above expect to begin issuing redemption notices in the next several days. Redemptions will be funded with new borrowings. Due to legal requirements, JRS and JPC will need to complete the announced partial redemptions in two stages. The funds anticipate that the refinancings for JTA (partial) and JTD (full) will be completed by the end of April and that the partial refinancings for JRS and JPC will be completed by the end of May. Progress on Other Restructuring Alternatives for ARS Nuveen Investments is continuing to explore various alternatives for refinancing the remaining portion of these funds' ARS and remains committed to restructuring the leverage of all Nuveen closed-end funds that have issued ARS. In addition to the refinancings, Nuveen is continuing to arrange debt financing for the remaining taxable funds, and to work on a new form of preferred stock -- Variable Rate Demand Preferred (VRDP) -- which could replace the ARPS issued by municipal and taxable closed-end funds. VRDP would have a put feature designed to enable VRDP to appeal to a broader investor audience, especially money market funds. The existing ARPS issued by Nuveen closed-end funds are not eligible for purchase by money market funds. Nuveen still seeks to complete the refinancing of all the taxable funds' ARS within four to six months and begin refinancing some of the municipal fund ARPS within two to three months. Due to highly challenging financial market conditions and other regulatory, market and economic factors, Nuveen cannot be certain that it will be able to refinance all its funds' ARS, that VDRP will be successfully and cost-effectively issued, or that it will be able to take all the necessary actions within the specified time frames. "We continue to make progress in arranging debt financing for our taxable funds and on the development of VRDP as a potential solution for our municipal and taxable funds," Adams said. "We are well aware of the importance of addressing the auction rate securities challenge as effectively and quickly as possible, and in that effort serving the interests of both the common and preferred shareholders of the funds. We are committed to providing our shareholders periodic updates on our progress." * * * As reported by the Troubled Company Reporter on March 4, Moody's Investors Service affirmed the B1 corporate family rating on Nuveen Investments and has changed the rating outlook to negative from stable. The outlook change was primarily driven by the challenges that the company currently faces with regards to the liquidity crisis in the auction rate securities market for closed-end funds and the potential for a protracted equity market downturn in 2008. This rating action has no impact on any auction rate preferred stock or other indebtedness issued by Nuveen's closed-end funds that are rated by Moody's. Nuveen Investments, Inc., headquartered in Chicago, is a U.S.- domiciled holding company whose subsidiaries provide investment management products and services to retail and institutional investors predominantly in the US. The company's assets under management were $164 billion as of Dec. 31, 2007, according to Moody's. PETROQUEST ENERGY: S&P Upgrades Corporate Credit Rating to 'B' -------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings, including the corporate credit rating, on oil and gas exploration and production company PetroQuest Energy Inc. to 'B' from 'B-'. The outlook is stable. "The upgrade reflects PetroQuest's strong operating performance and expectations for continued solid financial measures," said Standard & Poor's credit analyst Paul B. Harvey. During 2007, PetroQuest continued to increase both reserves and production while maintaining competitive costs for its peer group. Also, the company continued to have solid organic reserve replacement--a necessity given its short, five-year reserve life. Finally, despite its still-very-high debt leverage, around $9 per barrel of oil equivalent when including preferred equity as debt, strong near-term financial measures, such as debt to EBITDA of around 1x, provide a buffer. However, ratings also incorporate PetroQuest's limited reserves, short reserve life, dependence on the capital-intensive, higher risk Gulf of Mexico region for the bulk of production, and a high cost structure that would inhibit financial results in a less robust price environment. Proved reserves as of Dec. 31, 2007, were 157 billion cubic feet equivalent, and were 90% natural gas and 70% developed. PINNACLE ENTERTAINMENT: Moody's Holds 'B2' Corporate Family Rating ------------------------------------------------------------------ Moodys Investors Service affirmed all ratings for Pinnacle Entertainment Inc. and revised the rating outlook to stable from positive. This was in anticipation of a moderation in the company's consolidated operating performance through 2008 as a result of less favorable economic conditions along with the expectation that Pinnacle intends to pursue new development opportunities in Louisiana and Atlantic City, New Jersey. This makes it unlikely that the company will achieve the credit metrics required for higher rating. Pinnacle's B2 corporate family, B2 probability of default, Ba2 (LGD-2, 17%) senior secured bank loan, and B3 (LGD-5, 76%) senior subordinated note ratings were affirmed. Pinnacle recently announced that it may delay new development in Atlantic City, New Jersey and potentially other projects as well, because of volatile capital markets and debt restrictions included in two of its senior subordinated note indentures. However, when market conditions improve, it's expected that Pinnacle will pursue a refinancing of its existing capital structure and raise additional debt to give it the flexibility and funding necessary to proceed with these new development projects. As a result, debt EBITDA is expected to peak at a level greater that the company's fiscal 2007 debt EBITDA of 5.5 times. Pinnacle's ratings reflect the company's high leverage, the competition its Belterra casino faces from two new Indiana racinos that are scheduled to open relatively soon, and intense competition in Bossier City. Ratings are supported by the good initial ramp-up results at the recently opened Lumiere casino in St. Louis, Missourri and strong results from Pinnacle's L'Auberge casino in Lake Charles, Lousiana. L'Auberge has been operating for two full years and has exceeded original expectations in terms of revenue and EBITDA. Also considered are Pinnacle's good liquidity position and delayed development timeline which will allow the company to accumulate surplus cash flow that can be used for future development. Pinnacle owns and operates casinos in Nevada, Louisiana, Indiana, Missouri, Argentina and The Bahamas. Reported net revenues for the fiscal year ended Dec. 31, 2007 were $924 million. PONTIAC HOSPITAL: S&P's Rating on $35.8 Mil. Bonds Tumbles to 'D' ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on Pontiac Hospital Finance Authority, Michigan's $35.8 million series 1993 bonds issued for North Oakland Medical Center to 'D' from 'B'. The downgrade reflects a payment default to bondholders on Feb. 1, 2008, after missing its Jan. 15, 2008 payment to the trustee. "Based on internal financial statements, NOMC lost $13.4 million from operations in fiscal year 2007 and $12.3 million on the bottom line," said Standard & Poor's credit analyst Cynthia Keller Macdonald. At year-end, NOMC had $4.6 million in unrestricted cash and investments, which equals a meager 18 days' cash on hand. Although a new management team was able to reduce expenses by $23 million over the past two years, revenue decreased at a faster rate resulting in increasing losses. Management's efforts to restructure the hospital's relationship with the City of Pontiac have been unsuccessful. Additionally, management's efforts to find a joint operating partner for the facility have failed to date. The next payment to the bondholders is scheduled for August 2008. QUEBECOR WORLD: Jefferies & Co. as Committee Bankers Approved ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized the Official Committee of Unsecured Creditors in Qubebecor World Inc.'s cases to retain Jefferies & Company, Inc., as its investment bankers, on an interim basis, nunc pro tunc to Feb. 5, 2008. Further objections must be filed by April 10, 2008. Absent timely filed objections, the application will be approved on a final basis, without further hearing. The Court will consider all objections, if any, at a hearing scheduled for April 17, 2008. The Office of the United States Trustee retains the right to object to any interim or final fee application filed by Jefferies on any grounds provided for under the Bankruptcy Code, the Bankruptcy Rules, or any Local Rules or orders of the Court. The Debtors and their estates will be bound by the indemnification, contribution and exculpations provisions of the engagement letter dated February 5, 2008, between Jefferies and the Creditors Committee. The Debtors will indemnify, defend and hold harmless Jefferies and its affiliates, and its members, provided that in no event will the firm be indemnified or receive contribution in the case of bad-faith, self-dealing, breach of fiduciary duty, if any, gross negligence or willful misconduct. 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: Kurtzman Carson Hiring as Committee Agent Approved ------------------------------------------------------------------ The Official Committee of Unsecured Creditors of Quebecor World Inc. and its affiliates obtained the U.S. Bankruptcy Court for the Southern District of New York's authority to retain Kurtzman Carson Consultants, LLC, as its communications agent, nunc pro tunc to Feb. 21, 2008. As reported in the Troubled Company Reporter on March 28, 2008, according to Madeleine Fequeire, director of Abitibi-Consolidated Sales Corp. and co-chairperson of the Committee, the Committee seeks to employ Kurtman Carson in compliance to its obligation under Section 1102(b)(3) of the Bankruptcy Code. 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: Mesirow Hiring as Panel Financial Advisor Approved ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorized the Official Committee of Unsecured Creditors in Qubebecor World Inc.'s cases to retain Mesirow Financial Consulting, LLC, as its financial advisors, on an interim basis, effective Feb. 1, 2008. Objections to Mesirow's retention are due April 10, 2008. Absent timely filed objections, or if all objections are resolved, the application will be approved on a final basis, without further hearing. The Court will consider all unresolved objections at a hearing scheduled for April 17, 2008. On a final basis, the Court authorized Mesirow to receive compensation and reimbursement of expenses, which in will not be subject to challenge except under the standard of review set forth in Section 328(a) of the Bankruptcy Code. The Office of the United States Trustee retains the right to object to any interim or final fee application filed by Mesirow on any grounds provided for under the Bankruptcy Code, the Bankruptcy Rules, or any Local Rules or orders of the Court. The Debtors and their estates will not indemnify Mesirow or its members for any acts of bad-faith, self-dealing, breach of fiduciary duty, if any, gross negligence or willful misconduct. 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. RANDALL MARTIN: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Randall Martin Home Higley Park LLC 20875 North Pima Road Suite c-253 Scottsdale, AZ 85255 Bankruptcy Case No.: 08-03097 Chapter 11 Petition Date: March 25, 2008 Court: District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: Michael W. Carmel, Esq. Michael W. Carmel Limited 80 East Columbus Avenue Phoenix, AZ 85012-4965 Tel: 602-264-4965 Fax: 602-277-0144 michael@mcarmellaw.com Total Assets: $9,096,698 Total Debts: $33,810,936 Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ New Home Interiors $270,585 4545 East Broadway Road Phoenix, AZ 85040 Younger Brothers $260,507 7101 Northwest Grand Avenue Glendale, AZ 85301 B/H Drywall Stucco $108,479 627 West Commerce Avenue Gilbert, AZ 85233 Complete Door & Trim $76,793 Kachina Roofing $63,769 Whitton Concrete $73,318 Arizona Wholesale $50,756 Universal Electric Inc. $36,003 Falco Plumbing $30,801 Paramount Windows $28,712 Leach Painting $28,482 Sonoran Air Inc. $19,449 CF Design Inc. $16,819 Precision Kitchens $16,248 Shasta Pools $15,000 Higley Park Community Association $11,991 Jade Grading $10,852 CJS Enterprises LLC $9,121 Kastle Stair & Finish $8,810 JR Mcdade Co. Inc. $7,937 READER'S DIGEST: Increase in Debt Spurs Moody's Negative Outlook ---------------------------------------------------------------- Moody's Investors Service changed The Reader's Digest Association, Inc.'s rating outlook to negative from stable. The outlook change reflects the increase in debt subsequent to the March 2007 leveraged buyout and Moody's opinion that RDA will face challenges in fully converting its cost saving initiatives into higher EBITDA. Given these factors, Moody's believes there is greater uncertainty that RDA will be able to reduce debt-to-EBITDA (exceeding 10.0x LTM Dec. 31, 2007 incorporating Moody's standard adjustments and excluding RDA's estimate of projected cost savings) to a level below the 8.0x upper limit anticipated in the B2 CFR. Outlook Actions: Issuer: Reader's Digest Association, Inc. (The) -- Outlook, Changed To Negative From Stable LGD Updates: Issuer: Reader's Digest Association, Inc. (The) -- Senior Secured Bank Credit Facility, to B1, LGD3-34% from B1, LGD3-36% -- Senior Subordinated Notes, to Caa1, LGD5-85% from Caa1, LGD5-87% RDA's B2 CFR reflects the moderate growth prospects and low EBITDA margin generated from the mature and largely print-based publishing portfolio, and the high debt-to-EBITDA leverage following the March 2007 LBO. Improving the operating margin and cash flow through cost reductions is a key driver of potential leverage reduction, and the company has indicated it is ahead of its planned pace in implementing its various restructuring initiatives. Nevertheless, a sizable gap exists between reported performance and the company's estimate of EBITDA incorporating the run rate savings from its cost actions. Closing this gap to generate meaningful free cash flow and reduce debt-to-EBITDA below 8.0x is crucial to maintaining the B2 CFR. In Moody's view, there is risk that weakness in demand for the company's products -- including the effect of a consumer-led U.S. slowdown - and increases in compensation, direct marketing, and materials costs could dilute the incremental benefit from restructuring initiatives and prevent the company from bridging the gap. The company's credit facility terms, including the ability to incorporate certain cost savings in the calculation of covenant EBITDA, continues to provide a reasonable liquidity cushion for the highly seasonal operations. Moody's also updated the loss given default point estimates for the senior secured credit facility and senior subordinate notes based on changes in the mix of debt and non-debt liabilities since the original rating assignment on Feb. 16, 2007. The Reader's Digest Association, Inc., headquartered in Pleasantville, New York, is a global publisher and direct marketer of products including books (37% of 2007 revenue), magazines (32%), recorded music collections and home videos (18%), and food and gifts (9%). A group of investors led by Ripplewood Holdings L.L.C. (Ripplewood) acquired RDA in March 2007 and combined with Ripplewood portfolio companies WRC Media, Inc. (Weekly Reader) and Direct Holdings U.S. Corp. (Direct Holdings) in a transaction valued at approximately $2.4 billion (including refinanced debt). Annual revenue approximates $2.9 billion. REMINGTON ARMS: Posts $1.5 Million Net Loss in Year Ended Dec. 31 ----------------------------------------------------------------- Remington Arms Company Inc. reported a net loss of $1.5 million on net sales of $489 million for the twelve months ended Dec. 31, 2007, compared with net income of $300,000 on net sales of $446 million in 2006. The increase in net sales was primarily due to increases in ammunition net sales and sales of accessories, licensing income, clay targets, powder metal products, and technology products, partly offset by a decrease in firearms net sales. Ammunition net sales increased $43.3 million to $248.2 million due predominantly to realized price increases as well as higher sales volumes. All other net sales increased $3.9 million to $21.6 million. Firearms net sales decreased $4.2 million to $219.2 million. The decrease in firearms net sales is due primarily to lower sales volumes of shotguns. Adjusted EBITDA increased to $61.3 million during the twelve months ended Dec. 31, 2007, compared with $42.5 million in 2006. Adjusted EBITDA is a non-GAAP financial measure which the company utilizes primarily to evaluate the performance of its segments and to allocate resources to those business segments. In addition to adjusting net income or loss to exclude income taxes, interest expense, and depreciation and amortization, Adjusted EBITDA also adjusts net income or loss by excluding items or expenses not typically excluded in the calculation of "EBITDA", such as non-cash items as gain or loss on asset sales or write- offs, and other extraordinary, unusual or nonrecurring items. Thes other extraordinary, unusual or nonrecurring items includes transaction expenses associated with the American Heritage Arms LLC's acquisition of 100% of the shares of RACI Holding, and certain "special payments" to Remington employees who held options and deferred shares in respect of RACI Holding common stock. Total Debt As of Dec. 31, 2007, the company had outstanding approximately $229.8 million of indebtedness, consisting of approximately $203.2 million aggregate carrying amount of the $200.0 million 10.5% Senior Notes due 2011, a $25.0 million term loan, $700,000 in capital lease obligations and a $900,000 note payable to RACI Holding. As of Dec. 31, 2007, the company also had aggregate letters of credit outstanding of $4.4 million. Balance Sheet At Dec. 31, 2007, the company's consolidated balance sheet showed $502.1 million in total assets, $394.1 million in total liabilities, and $108 million in total stockholders' equity. 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?29d9 About Remington Arms Headquartered in Madison, North Carolina, Remington Arms Company Inc. -- http://www.remington.com/-- designs, produces and sells sporting goods products for the hunting and shooting sports markets, as well as solutions to the military, government and law enforcement markets. Founded in 1816 in upstate New York, the company is one of the nation's oldest continuously operating manufacturers. The company is the only U.S. manufacturer of both firearms and ammunition products and one of the largest domestic producers of shotguns and rifles. The company distributes its products throughout the U.S. and in over 55 foreign countries. * * * Moody's Investor Service placed Remington Arms Company Inc.'s long-term corporate family and probability of default ratings at 'B2' in May 2007. The ratings still hold to date with a stable outlook. REMINGTON ARMS: Edward Rensi Appointed to Board of Directors ------------------------------------------------------------ The board of directors of Remington Arms Company Inc. appointed on March 24, 2008, Edward H. Rensi to the Board. Mr. Rensi has been an owner and chief executive officer of Team Rensi Motorsports, which sponsors two cars in the NASCAR Nationwide Series, since 1998. From 1997 to 1998, he was a consultant to McDonald's U.S.A. He was president and chief executive officer of McDonald's U.S.A. from 1991 to 1997. Mr. Rensi also serves as a director of Great Wolf Resorts Inc. and International Speedway Corporation. A graduate of Ohio State University in Columbus, Ohio, he holds a B.S. in Business Education. As an outside director of Remington, Mr. Rensi will be eligible to receive an annual retainer of $25,000 for service as a director, a fee per meeting for each Board and committee meeting attended in person or via teleconference, will be reimbursed for reasonable travel and lodging incurred to attend Board and committee meetings and will be eligible for certain other benefits that may be offered to outside directors. About Remington Arms Headquartered in Madison, North Carolina, Remington Arms Company Inc. -- http://www.remington.com/-- designs, produces and sells sporting goods products for the hunting and shooting sports markets, as well as solutions to the military, government and law enforcement markets. Founded in 1816 in upstate New York, the company is one of the nation's oldest continuously operating manufacturers. The company is the only U.S. manufacturer of both firearms and ammunition products and one of the largest domestic producers of shotguns and rifles. The company distributes its products throughout the U.S. and in over 55 foreign countries. * * * Moody's Investor Service placed Remington Arms Company Inc.'s long-term corporate family and probability of default ratings at 'B2' in May 2007. The ratings still hold to date with a stable outlook. ROLLAND ENERGY: CEO McLellan Provides Second Restructuring Update ----------------------------------------------------------------- Rolland Energy Inc. released a second update to shareholders from its president and chief executive officer Michael McLellan, B. Comm, CFA. Mr. McLellan reported that some six months have passed since the board of directors adopted a restructuring plan to prevent insolvency. At that time, he recounted that the corporation was facing very serious financial difficulties and could not meet its short-term financial obligations. "The financial situation remains difficult, but has improved dramatically as a result of various successes we have had in executing the restructuring plan. The corporation today is on more solid financial footing than it has been for several years. For the first time in several years, the corporation has sufficient revenue-generating assets that will make the corporation cash-flow positive from operations. In addition, we have attracted many new opportunities, some of which should provide the Corporation with excellent future growth prospects," Mr. McLellan assured. The three key objectives of the restructuring to be met so that the corporation becomes cash-flow positive and profitable have not changed. They are: 1. Recapitalize; 2. Maximize net cash generated from existing assets, and; 3. Increase the size and quality of the corporation's asset base via exploration, development and acquisitions. "We have made significant progress towards meeting these objectives. New capital has been raised, with which we have improved production from our Manitoba oil properties and participated in the drilling of gas wells in Alberta. However, at both our Manitoban and Albertan properties we are three months behind schedule in bringing greater revenues online. With respect to our Manitoba properties, the General Manager was replaced with a more experienced operator early in January 2008. Production levels have now increased substantially and continue to increase. Regarding our Alberta properties, the drilling and completion of the wells were delayed for various operational reasons. The drilling phase is now completed, and the results have so far exceeded our expectations. One well will be brought on production prior to seasonal road bans, which normally occur throughout the months of April and May. This is because is because field access is required to lay gathering lines. The remaining wells are therefore expected to be on production in July 2008." Recapitalization In the months of October and December 2007, the corporation raised a total of $2.4 million. These funds were raised under very difficult conditions, but represent the majority of the first phase of our recapitalization. The corporation will make efforts to raise additional funds from equity investors to fund further exploration, development, acquisitions and to pay down debt to continue the clean-up of the corporation's balance sheet. Alberta Gas Well Results Mr. McLellan said that ". . . the corporation farmed-in for a 20% interest of a well at Abee, and for a 25% interest in wells located at Bolloque, French and two wells at Thorhild. All wells are located in the Radway area, approximately The well at French was not deemed to have sufficient gas to be completed. The results of the remaining four wells have, on average, exceeded our expectations." Abee: The well was completed in the McMurray and the Glauconite zones. The tie-in for the well is now complete and the well will go on production March 28, 2008. The expected comingled production from this well, based on flow-testing, is approximately 600 mcf per day initial gross production. Bolloque: The well was perforated in the Wabumum zone. The tested flow rate from the Wabumum was 120 mcf per day. The partners are evaluating tie-in costs to attempt to obtain economic production. Thorhild 1: This well was perforated in the Lower McMurray, and had an encouraging show of gas. The partners are planning to stimulate the formation. The Second White Specs also shows good potential, and the partners may perforate and stimulate this formation too. Comingled production from both zones is expected to be economic. Thorhild 2: The well was perforated and completed in the Wabumum zones. Based on flow-testing, the expected initial gross production from the Wabumum is 700 mcf per day. The Glauconite zone also has very good potential, but will not be completed until such time as production from the Wababum has been effectively depleted. Gross cumulative initial production from 2 of the 4 wells is expected to be 1,300 mcf per day. The corporation estimates that its share of the gross revenues from these wells will be at minimum $75,000 per month, using a constant gas price of $8.00 per mcf. With only these two wells on production the Corporation's share of net revenues will be approximately $27,000 per month. The corporation will provide an update regarding the other two wells as more information becomes available, according to the report. With these new revenues coming online, in combination with the corporation's properties in Manitoba, the Corporation will be cash-flow positive from its total operations, excluding any debt repayments. Manitoba Light Crude Oil Properties Production has now begun to increase substantially. The corporation has re-invested in its properties to increase production and made the necessary management changes, and revenues from the Manitoba properties have increased as a result. Production reached a historical low for the months of October through December, averaging 21 barrels per day for the quarter, due to both a lack of re-investment and the management practices of previous management. Delays in improving production since the adoption of the restructuring plan can be attributed mainly to personnel problems, which have now been resolved. Revenues are projected for March and April using a constant $97.00 per barrel. The production obtained in April is expected to stay constant until July 2008, because the corporation's two wells at Maples have been shut down until the Maples battery is upgraded, which is planned for June 2008. Once the Maples wells are brought online again, production is expected to increase further. One well reactivation and two well workovers are also planned, which should increase production further yet. International Division The corporation has made important progress towards the establishment its international division, with the goal to trade in large quantities of petroleum products. If the corporation succeeds in closing a single transaction would have an extensive and favourable material effect on the business of the corporation. The corporation is bidding on products and engaged in negotiations for numerous allocations of petroleum products in various countries, from various companies. Outlook Mr. McLellan stated "It has been a difficult yet exciting six months, and we are now half way towards meeting the objectives of our Restructuring Plan. Internationally, we continue to aggressively pursue our first transaction. In Canada and the USA, we are currently evaluating or negotiating for several different development opportunities and acquisitions. To pay for new opportunities we plan to raise new funds, as required. As I have said before, we are operating under the belief that new investors will invest in the corporation to fund these opportunities because of both the value that will be created by the opportunities themselves, and because of the effects of leverage when adding new cash-generating assets to a cash-flow positive corporation." "Now that we have improved the corporation's financial position, and improved the size and quality of its asset base, we are well positioned for the growth we aspire to," he added. About Rolland Energy Quebec, Canada-based Rolland Energy Inc. (TSX-V: ROE) -- http://www.rollandenergy.com/-- formerly Rolland Virtual Business Systems Ltd., sells oil it produces from wells located in Manitoba. The company had manufactured and had marketed security Internet based enterprise commerce (e-Commerce) software providing merchant ready Internet business solutions until the sale of the division on June 29, 2007. SAIL TRUSTS: Write-downs Spurs S&P's 'D' Rating on Five Classes --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on five classes of mortgage pass-through certificates issued by five Structured Asset Investment Loan (SAIL) Trust deals. All five classes were downgraded to 'D' because they had experienced principal write-downs as of the February 2008 remittance period, as follows: $252,138 (series 2003-BC9), $869,271 (series 2005-8), $1,158,466 (series 2005-9), $3,833,859 (series 2005-HE1), and $300,141 (series 2006-BNC1). Subordination, overcollateralization, and excess spread provide credit support for these transactions. A portion of the loans from all five deals are covered by PMI policies covering them to a loan-to-value ratio of 60%. The collateral for these transactions originally consisted primarily of adjustable- and fixed-rate, fully amortizing and balloon mortgage loans secured by first and second liens on one- to four-family properties. Ratings Lowered Structured Asset Investment Loan Trust Mortgage pass-through certificates Rating ------ Transaction Class To From ----------- ----- -- ---- 2003-BC9 M5 D CCC 2005-8 B D CCC 2005-9 B2 D CCC 2005-HE1 B3 D CCC 2006-BNC1 M7 D CC SECURITY CAPITAL: S&P's Rating on Preference Shares Tumbles to 'D' ------------------------------------------------------------------ Standard & Poor's Rating Services lowered its rating on Security Capital Assurance Ltd.'s series A perpetual noncumulative preference shares to 'D' from 'C'. At the same time, Standard & Poor's removed the rating from CreditWatch with negative implications. The rating action follows the company's failure to make its March 31, 2008, dividend payment. SINCLAIR-DWYER & CO: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Sinclair-Dwyer & Co. Inc. aka SDI Services 15890 Foothill Boulevard San Leandro, CA 94578 Bankruptcy Case No.: 08-41425 Type of Business: Insurance Broker Chapter 11 Petition Date: March 26, 2008 Court: Northern District of California (Oakland) Judge: Edward D. Jellen Debtor's Counsel: Michael St. James, Esq. St. James Law 155 Montgomery St. #1004 San Francisco, CA 94104 Tel: (415) 391-7566 ecf@stjames-law.com Estimated Assets: $500,001 to $1 million Estimated Debts: $1,000,001 to $10 million Debtor's list of its 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Mutual Holding (Bermuda) Ltd. business debt $2,500,000 c/o Manatt, Phelps & Phillips 111 Sutter Street, Suite 700 San Francisco CA 94104 Sutter Insurance business debt $395,000 1301 Redwood Way Petaluma CA 94954 Liquidator of Legion Insurance judgment lien; $358,798 Attn: Ronald Williams value of 1 Logan Square, Suite 1400 security: Philadelphia PA 19103 $14,000 Michael Dwyer business debt $160,000 Bank of America business debt $98,202 John McDonnell business debt $35,000 Citibank business debt $18,514 Capital One FSB business debt $6,000 Dell Business Credit computer $25,641 purchase; value of security: $20,000 American Express business debt $3,600 Discover business debt $2,422 SIRVA INC: Triple Files Appeal on DIP Financing & Payment Orders ---------------------------------------------------------------- Triple Net Investments IX, LP asks the U.S. Bankruptcy Court for the Southern District of New York for an order authorizing leave for it to take an appeal to the U.S. District Court for the Southern District of New York from Judge James M. Peck's: * final order allowing the Debtors to obtain postpetition financing, authorizing them to use cash collateral, and granting adequate protection to prepetition secured parties; and * approval of a stipulation resolving a reconsideration request of the Bankruptcy Court's order authorizing the payment of prepetition unsecured claims, entered into by the Debtors and the Official Committee of Unsecured Creditors in their Chapter 11 cases, and the Official Committee of Unsecured Creditors of 360networks (USA) Inc., to the extent the Bankruptcy Court deems either of the Orders to be interlocutory. Triple Net Investments IX, LP, holds a claim against Debtor North American Van Lines, Inc. As reported by the Troubled Company Reporter on March 5, 2008, the Bankruptcy Court approved, on a final basis, the debtor-in- possession credit facility of the Debtors. The order allowed the debtors to obtain up to $150,000,000 of postpetition financing, authorized them to use cash collateral, and granted adequate protection to secured parties prior to the Debtors' bankruptcy filing. As reported by the TCR on March 6, 2008, Judge Peck approved a Stipulation entered by the Debtors regarding payments of prepetition unsecured claims. Triple Net wants the District Court to clarify if: -- the entry of the Orders, without prior notice to any adverse party, is a denial of due process, which requires reversal of the Orders on appeal; -- the Bankruptcy Court committed a reversible error in entering the Orders; -- given the fast track confirmation process for Debtors' Plan, Triple Net will be denied due process or a meaningful opportunity to have an appellate review of the Orders, if leave to appeal is denied; and -- there is a likelihood that appellate review at the conclusion of the case will have effectively been rendered moot by the entry of subsequent court orders, including orders approving a disclosure statement and confirming the Plan, if Triple Net is denied access to immediate appellate review of the Orders. This is a renewed request from Triple Net. The Bankruptcy Court had previously denied Triple Net's request for a stay of the Orders pending a ruling on its prior appeals. Judge Peck held that Triple Net failed to demonstrate irreparable harm in the event that the stay is denied, and noted that a stay, on the other hand, will cause substantial injury to the Debtors and their creditors. In the same vein, District Court Judge Gerard E. Lynch pointed out that the Bankruptcy Court had already concluded that Triple Net's arguments were without merit. Judge Lynch held that the Bankruptcy Court had given careful consideration to its finding that the Final DIP Order and the Prepetition Claims Order will facilitate the Debtors' business and secure maximum benefit for all parties. Robert E. Nies, Esq., at Wolff & Samson PC, in New York, states that there is ample support for the DIP and Stipulation Orders being final and, therefore, immediately appealable. Mr. Nies notes that the Second Circuit Court of Appeals has stated that an order is final if "[n]othing in the order . . . indicates any anticipation that the decision will be reconsidered," citing In re Palm Coast, Matanza Shores Ltd. P'ship, 101 F.3d 253, 256 (2d Cir. 1996). He points out that Orders had been entered on the first day of the Debtors' bankruptcies on an interim basis. The Orders had then been subject to motions for modification and reconsideration. The Court had entered the interim orders on a final basis, Mr. Nies says, and they include the Interim DIP Order and the Prepetition Claims Order. The Debtors owe $2,000,000 to Triple Net. Absent appellate review of the Orders, Mr. Nies maintains, Triple Net likely will have no recovery on its claim under the Plan, which currently proposes to pay nothing to Triple Net. According to Triple Net, unless challenged and reversed on appeal, the Orders will likely render moot any successful appellate review of the Orders, or objection to the confirmation of the Plan. Triple Net Seeks To Consolidate Appeals Triple Net asks the Court to consolidate its appeal from the Final DIP Order and the Reconsideration Motion, since they share a common record and are integral to the proposed Plan. Debtors Reserve Their Right to Respond To Appeals The Debtors state that they do not contest the substantive merits of Triple Net's request, because the subject matter of the appeals are related. In addition, consolidating the two appeals will serve judicial economy. The Debtors, however, preserve their rights to respond to the appeals, including the right to seek their dismissal from the Court. About Sirva Inc. Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets : SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation solutions to a well-established and diverse customer base. The company handles all aspects of relocation, including home purchase and home sale services, household goods moving, mortgage services and home closing and settlement services. SIRVA conducts more than 300,000 relocations per year, transferring corporate and government employees along with individual consumers. SIRVA's brands include Allied, Allied International, Allied Pickfords, Allied Special Products, DJK Residential, Global, northAmerican, northAmerican International, Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA Settlement. The company has operations in Costa Rica. The company and 61 of its affiliates filed separate petitions for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis, L.L.P. is representing the Debtor. An official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for bankruptcy, it reported total assets of US$924,457,299 and total debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007. The combined hearing on the adequacy of the disclosure statement and the confirmation of the Debtors' proposed Plan of Reorganization is set April 18, 2008. (Sirva Inc. Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SP NEWSPRINT: Completes $350 Million Buyout Deal with White Birch ----------------------------------------------------------------- SP Newsprint Co. completed the $350 million acquisition agreement with Peter Brant, certain related persons and his partners. The sale includes SP Newsprint's two newsprint mills in the United States well as SP Recycling Corp., SP Newsprint's recycling subsidiary. As reported in the Troubled Company Reporter on Jan. 24, 2008, SP Newsprint entered into an agreement with certain affiliates of Peter Brant, who is the controlling shareholder of White Birch Paper Company, to be acquired for $350 million in an all-cash transaction. GE Corporate Lending provided the acquisition financing and GE Capital Markets acted as sole lead arranger and bookrunner for the financing transaction. TD Securities (USA) LLC acted as financial advisor to SP Newsprint in connection with the sale. Cahill Gordon & Reindel LLP represented Mr. Brant in connection with the acquisition and the borrower in connection with the financing. King & Spalding LLP represented SP Newsprint in connection with the sale to the buyers. About White Birch Paper Company Headquartered in Greenwich, Connecticut, White Birch Paper -- http://www.whitebirchpaper.com-- is a producer of newsprint in north america with production totaling approximately 1.35 million metric tons. The company's manufacturing facilities are located in Riviere du Loup, Quebec, Ashland, Virginia, Quebec City, Quebec, and Gatineau, Quebec. In addition to newsprint, the company produces directory paper and paper board products. About SP Newsprint Co. Headquartered in Atlanta, Georgia, SP Newsprint Co. -- http://www.spnewsprint.com-- is a general partnership among affiliates of Cox Enterprises Inc., Media General Inc. and The McClatchy Company. The company operates newsprint mills in Dublin, Georgia, and Newberg, Oregon as well as SP Recycling Corp., a wholly owned fiber procurement subsidiary with facilities primarily in the southeast and western portions of the United States. Annual newsprint production totals approximately one million tons. Going Concern Doubt As reported in the Troubled Company Reporter on March 14, 2008, Ernst & Young LLP in Atlanta, Georgia, raised substantial doubt about the ability of SP Newsprint Co. to continue as a going concern after it audited the company's financial statements for the year ended Dec. 30, 2007. The auditor reported that the company's revolving credit facility, which had an outstanding balance at Dec. 30, 2007, of $19,850,000, is due and payable on May 30, 2008. In addition, the company is in violation of a covenant pursuant to its credit agreement. At Dec. 30, 2007, there were letters of credit issued under the credit agreement totaling $143,000,000 used to support the company's Industrial Revenue Bond (IRB) debt of $138,250,000. Accordingly, the IRB balance has been classified as a current liability in the accompanying balance sheet as of Dec. 30, 2007. The company does not currently have the funds to repay the revolving credit facility and the IRB debt, nor does it have a commitment from a lender to refinance these amounts. SR TELECOM: Selling Assets to Groupe Lagasse for $6 Million ----------------------------------------------------------- SR Telecom Inc. said that the Quebec Superior Court authorized the sale of the majority of the company's assets to Groupe Lagasse. As announced on March 24, 2008, Groupe Lagasse will purchase SR Telecom's brand, trademarks, intellectual property, patents, inventories and equipment relating to its symmetryMX product line. The transaction is expected to close on or before April 4, 2008. SR Telecom signed an asset purchase agreement to sell majority of its assets, including its WiMAZ Forum-certified symmetryMX product line, to Groupe Lagasse for an aggregate consideration of $6.05 million payable at closing and by the assumption of certain stated liabilities. The transaction, once completed, will provide continuity for SR Telecom's international customer base and permit the company to grow and capitalize on its many WiMAX opportunities. "We are pleased to reach this agreement with Groupe Lagasse," said Serge Fortin, President and CEO of SR Telecom. "Their international presence, financial strength and entrepreneurial spirit, along with their knowledge and expertise in the high technology field, make Groupe Lagasse a strong financial and operational purchaser for SR Telecom's business. This deal clearly benefits our employees and our customers around the world as it will enable us to quickly resume normal operations, and accelerate the development, delivery and deployment of our leading-edge WiMAX solutions." "Groupe Lagasse had been searching for ways to tap in to the WiMAX market for quite some time," Louis Lagasse, Chairman of Groupe Lagasse said. "In SR Telecom, we saw an organization possessing a solid business plan, a strong management team, a significant order pipeline, and an unequaled depth of expertise and experience in wireless telecommunications. This acquisition allows us to leverage the synergies between our current organization and SR Telecom to immediately enter the rapidly- growing global WiMAX market as a major player with a feature- rich, field-proven product line." Under terms of the agreement, Groupe Lagasse will purchase SR Telecom's brand, trademarks, intellectual property, patents, inventories and equipment relating to its symmetryMX product line. It is not expected that SR Telecom shareholders will receive any value out of the proceeds of such sale. Delay of Filing 4Q and Annual 2007 Results In addition, SR Telecom announced that it will delay the release of its fourth quarter and year-end results for the period ended Dec. 31, 2007 until the transaction with Groupe Lagasse is closed. The company expects to be in a position to release its audited consolidated financial statements for the year ended Dec. 31, 2007 in the days following the close of this transaction. SR Telecom is currently operating under the protection of the Companies' Creditors Arrangement Act (CCAA). On Feb. 29, 2008, it obtained a court order to extend the period of the Court-ordered stay of proceedings under the CCAA to May 2, 2008. The company filed for creditor protection under the CCAA on Nov. 19, 2007. About SR Telecom Headquartered in Quebec, Canada, SR Telecom (TSX: SRX) -- http://www.srtelecom.com/-- delivers broadband wireless access (BWA) solutions that enable service providers to deploy voice, Internet and next-generation services in urban, suburban and remote areas. The company has offices in Mexico, France and Thailand. SR Telecom Inc.'s consolidated balance sheet at June 30, 2007, showed CDN$83.9 million in total assets and CDN$97.9 million in total liabilities, resulting in a CDN$14.0 million total stockholders' deficit. STEELCASE INC: Plans Job Cuts and Plant Closures in North America ----------------------------------------------------------------- Steelcase Inc. plans a restructuring to reduce costs after its financial results for the fourth quarter ended Feb. 29, 2008, missed projected levels, Julia Bauer writes for The Grand Rapids Press. Net income for the fourth quarter 2008 were $30.6 million, or 22 cents per share, down from the expected 23 cents to 28 cents per share. Current quarter net income was negatively impacted by specific operational challenges in the International segment and lower cash surrender value appreciation on company-owned life insurance policies in the North America segment. The company reported earnings per share of $0.20 in the prior year, which included a negative $6.1 million of after-tax restructuring costs. In addition, the prior year included favorable tax adjustments and goodwill and intangible asset impairment charges, which, when combined with related adjustments to variable compensation expense, had the net effect of increasing last year's fourth quarter net income by $10.8 million. Reported revenue of $901.3 million for the fourth quarter increased 15.8%, compared to $778.4 million in the prior year quarter. The increase in revenue was largely driven by the International segment which grew 32.6% over the prior year and represented 30.9% of reported revenue in the current quarter. In addition, revenue benefited from an extra shipping week in the current quarter and approximately $26 million of favorable currency translation effects compared to the prior year. Reported net income increased 24.6% to $133.2 million or $0.93 per share. Net income in fiscal 2007 was $106.9 million, or $0.72 per share, which included net restructuring costs of negative $15.6 million after-tax. Revenue for fiscal 2008 increased 10.4% to $3.4 billion compared to $3.1 billion last year. Fiscal 2008 revenue included an extra shipping week due to the timing of the fiscal year-end, approximately $73 million from favorable currency translation effects and negative $70.1 million from dealer deconsolidations, net of acquisitions, as compared with the prior year. "From an operational perspective, the fundamentals of our business remain strong," said David C. Sylvester, vice president and CFO. "However, various economic indicators suggest our industry may continue to moderate in the near-term and face increasing inflationary headwinds at the same time. As a result, we intend to take this opportunity to accelerate various strategic actions to improve our operating margins." Mr. Sylvester continued, "The actions, which will take place over the next nine to 12 months, are targeted toward further modernizing our industrial system, improving the profitability at PolyVision and rebalancing our workforce to better align with our growth opportunities." "Fiscal 2008 marked another year of improved profitability and fitness of the business," said James P. Hackett, president and CEO. "We are pleased with the improvements each business segment is making in its operating efficiency while pursuing targeted growth strategies." Restructuring of North American Operations The company expects first quarter fiscal 2009 revenue growth to be in a range of plus or minus two percent compared to the prior year. The International segment is expected to continue its expansion, while the North America segment is expected to be impacted by on-going economic uncertainty in the U.S. and the effect of dealer deconsolidations within the last four quarters. Steelcase expects to report earnings per share for the first quarter of fiscal 2009 between $0.14 and $0.19, including restructuring costs of approximately $7 million after-tax. These estimates reflect increasing inflationary concerns and potential disruption associated with the planned restructuring actions. The company reported earnings per share of $0.23 in the first quarter of the prior year, including restructuring costs of $1.1 million after-tax. The company is not providing full year revenue or earnings estimates. However, it is estimating full year restructuring costs of $25 to $30 million after-tax, including the amounts estimated above for the first quarter. These anticipated charges relate primarily to planned facility closures, production moves and specific workforce reductions within our North America segment and other category. The restructuring actions, once completed, are expected to generate annualized savings of approximately $25 million after-tax. Mr. Hackett concluded, "Our company has an established track record of implementing the changes necessary to improve profitability and shareholder value. The execution of our growth strategies around the world requires improved fitness in all areas of our business, particularly in uncertain economic times. The actions we are announcing [] will help us do just that." About Steelcase Grand Rapids, Michigan-based About Steelcase Inc. (NYSE: SCS) -- http://www.steelcase.com/-- designs, markets, and manufactures office furniture, and complimentary products and services. The company offers a range of products with a variety of aesthetic options and performance features, and at various price points that address three core elements of a work environment: furniture, interior architecture and technology. On Sept. 6, 2006, the company acquired Softcare Innovations Inc., a privately held manufacturer of healthcare furnishings. Steelcase also acquired Softcare's sister company in Waterloo, DJRT Manufacturing Inc. STONE ENERGY: S&P Changes Outlook to Stable; Confirms 'B+' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on independent exploration and production firm Stone Energy Corp. to stable from negative and affirmed the 'B+' corporate credit rating on the company. "The outlook revision is predicated on Stone's strengthening credit metrics, liquidity position, and operating performance," said Standard & Poor's ratings analyst Jeffrey B. Morrison. "We also consider the company's improving internal reserve replacement and finding and developing cost trends." The ratings on Stone reflect a small reserve base, highly concentrated in the mature U.S. Gulf of Mexico shelf region, a short reserve life on a proved developed producing basis, and participation in a historically cyclical and capital-intensive industry. Concerns are partially tempered by stronger near-term liquidity and cash flow measures, lower year-over-year debt levels, and favorable near-term trends in realized commodity prices and per-unit cash margins. As of Dec. 31 2007, Lafayette, Lousiana-based Stone had $400 million in long-term debt, $589 million when fully adjusted for operating leases and asset retirement obligations. SUPERIOR OFFSHORE: Defaults on JPMorgan Chase Credit Facility ------------------------------------------------------------- Superior Offshore International Inc. is in default under its senior secured credit facility with JPMorgan Chase Bank N.A. The company disclosed that as of March 31, 2008, the company had less than approximately $1.8 million outstanding under this credit facility. The company's borrowing base capacity under such credit facility, which is affected by the composition of the company's eligible domestic accounts receivable, was not sufficient to enable the company to borrow significant additional funds under the facility as of March 31, 2008. The company related that it has limited liquidity and requires substantial additional financing to fund its operations and pay its obligations. As of March 31, 2008, the company estimates on a preliminary basis that its total current liabilities exceeded its total current assets, before considering current deferred tax assets, by approximately $7 million. Additional Financing On Feb. 1, 2008, the company retained Tudor Pickering Holt & Co. Securities Inc. as the company's financial advisor to assist the company's board of directors in exploring a range of financial and strategic alternatives. These alternatives include, among others, obtaining additional or alternate sources of debt or equity financing, a sale or merger of the company or other strategic transaction, a sale of certain company assets and execution of the company's business plan. In the event that the company is unable to obtain additional financing in early April 2008, the company will need to sell additional assets or obtain capital from other sources to fund its operations and pay its obligations. Additional indebtedness or equity financing may not be available to the company or, if available, such additional indebtedness or equity financing may not be available on a timely basis or on terms acceptable to the company. In addition, the company can provide no assurance as to the timing of any asset sales or the proceeds that could be realized by the company from any such asset sales. Failure to obtain adequate financing or to raise funds from asset sales, should the need develop, could impair the company's ability to meet its working capital requirements, to fund vessel charter obligations as they become due, to make necessary capital expenditures, to repay the company's debts as they come due and otherwise to operate its business, and ultimately could require the company to liquidate or initiate bankruptcy proceedings. Cost Savings Initiatives Since the appointment of E. Donald Terry as interim president and chief executive officer, the company has undertaken a number of initiatives to reduce costs and improve its efficiency and results of operations. In January 2008, the company terminated the charter for the Adams Surveyor. In February 2008, the company restructured its ROV division and terminated approximately 43 persons in that division. In March 2008, the company closed its fabrication operation and approximately 80 individuals employed at that facility were terminated or resigned. In addition, in March 2008 the company terminated approximately 11 persons on its corporate staff. Because of the timing of these initiatives, the benefit of the cost savings will not be fully reflected in the company's results of operations until the second quarter of 2008. The company is continuing to evaluate its operations and cost structure in an effort to identify additional cost savings. Asset Sales and Contract Terminations In January 2008, the company sold the Superior Achiever, which was under construction, to Hornbeck Offshore Services LLC for approximately $70 million, the proceeds of which the company used, among other things, to repay in full its term loan obligation to Fortis Capital Corp. and to repay a portion of its borrowings under its senior secured credit facility with JPMorgan Chase Bank. Following the sale, the company has no further obligations to the shipbuilder with respect to the construction of the vessel; however, if certain construction costs for the Superior Achiever exceed $120 million, the company will reimburse Hornbeck for the amount of such excess, up to $8 million. In addition, in connection with the sale of the Superior Achiever, the company and Hornbeck entered into a five-year time charter for the Superior Achiever, or under certain circumstances, the HOS Iron Horse. The company has the option to terminate the charter by giving 90 days' advance notice and paying a termination fee prior to the end of each six-month period within the term. The company has provided Hornbeck with an $8 million cash secured letter of credit to secure its obligations to Hornbeck. On Feb. 29, 2008, the company sold its subsidiary, Superior Offshore South Africa (Pty) Ltd., which owns the subsea construction, commercial diving, offshore crude oil and natural gas logistical support and marine salvage businesses that were acquired in December 2006 from Subtech Diving and Marine, in exchange for the settlement of a remaining liability of approximately $2.5 million under the related purchase agreement. The company has received a refundable deposit of $1.8 million for the sale or charter of the Gulf Diver V, one of the company's four-point vessels, from a related party. The company expects to consummate the sale, which is subject to lender approval and definitive documentation, in early April 2008. The company may be required to recognize an impairment of up to $2 million in connection with the sale of the vessel. The company may sell certain additional assets to generate cash to fund its operations and to pay its obligations. The assets that may be sold include, among others, two work class ROVs, and certain equipment used in the company's fabrication operations. About Superior Offshore International Inc. Based in Lafayette, Louisiana, Superior Offshore International Inc. (NASDAQ:DEEP) -- http://www.superioroffshore.com/-- is a provider of subsea construction and commercial diving services to the crude oil and natural gas exploration, and production, gathering and transmission industries on the outer continental shelf of the Gulf of Mexico. The company's subsea construction services include installation, upgrading and decommissioning of pipelines and production infrastructure. Its commercial diving services include recurring inspection, maintenance and repair services, well as support services for subsea construction and salvage operations. Superior performs its services in both surface and saturation diving modes in water depths of up to 1,000 feet. SUPERIOR OFFSHORE: Review of Financial Records Delays 10-K Filing ----------------------------------------------------------------- Superior Offshore International Inc. was unable to file its Annual Report on Form 10-K for the year ended Dec. 31, 2007, within the prescribed time period because the company's management needs additional time to complete the financial statement review and approval process and needs to provide additional documentation to its independent registered public accounting firm, KPMG LLP, in order to resolve certain pending items. In addition, management's negotiations to obtain additional financing in order to address the company's liquidity position has contributed to this delay. If the company is unable to obtain adequate additional or alternate financing, the company expects that KPMG LLP would be required to include an explanatory paragraph in their opinion with respect to the company's financial statements for the year ended Dec. 31, 2007, expressing doubt about the ability of the company to continue as a going concern. Even if the company obtains additional financing, KPMG LLP may still conclude that it is necessary to include such a paragraph in its opinion. Operations Update The company has entered into a contract for the Superior Endeavor to work in Saudi Arabia for approximately one year. The vessel is in transit and is expected to arrive in approximately two weeks. The company has entered into a subcharter for the Gulmar Condor, which the company has chartered until April 2009, to work in the U.S. Gulf of Mexico for approximately six months, beginning March 10, 2008. On March 24, 2008, the charter for the Gulmar Falcon was terminated by the vessel owner due to the company's inability to pay its obligations thereunder when due. Although the vessel owner has terminated the charter for Gulmar Falcon, the company is continuing to use the vessel on a short term basis until it completes its current project. The Seamec III, which the company has chartered until July 2008, is in Trinidad. The company expects the vessel to return to the U.S. Gulf of Mexico, upon settlement of certain vendor invoices in the amount of approximately $1 million. During the first quarter of 2008, the company experienced very low utilization and day rates for its four point vessels, which are used in the U.S. Gulf of Mexico. First Quarter of 2008 Update The company has not yet finalized its financial statements for the three months ended March 31, 2008. Based on preliminary unaudited financial information that is not yet complete and may materially change, the company expects that its revenues for the first quarter of 2008 will not exceed $21 million and that its net loss for the first quarter of 2008 will be more than $32 million. The company has undertaken a number of cost savings initiatives the benefit of which will not be fully reflected in the company's results of operations until the second quarter of 2008. If the company incurs any pre-tax loss for the remainder of 2008 in excess of the amount recognized in the first quarter of 2008, management does not expect the company to recognize any additional tax benefits associated with that loss. The company expects to record these charges in the first quarter of 2008, which are reflected in the calculation of the company's estimated net loss for the quarter disclosed above: -- approximately $4.6 million related to the disposition of the company's subsidiary, Superior Offshore South Africa (Pty) Ltd.; -- approximately $650,000 on the sale of the Superior Achiever; -- approximately $5.5 million related to the cancellation of a contract to build a portable Saturation Diving System with Unique Systems LLC; -- approximately $825,000 related to the early termination of the charter for the Adams Surveyor; -- approximately $3.5 million related to the early termination of the Gulmar Falcon; -- a severance charge of approximately $675,000 and $1.6 million stock-based compensation severance in the first quarter of 2008 related to Roger D. Burks' resignation as chief financial officer and director from the company and the disposition of the company's subsidiary, Superior Offshore South Africa (Pty) Ltd., which; and -- approximately $1.4 million for early extinguishment of debt in conjunction with the payoff of the term loan with Fortis Capital Corp. upon the sale of the Superior Achiever in January 2008. Pending Litigation Several putative class-action lawsuits have been filed against the company alleging violations of the federal securities laws. In addition, two shareholder derivative lawsuits have been filed alleging violations of various laws. The company believes that each of these lawsuits is without merit and the company will defend itself vigorously. About Superior Offshore International Inc. Based in Lafayette, Louisiana, Superior Offshore International Inc. (NASDAQ:DEEP) -- http://www.superioroffshore.com/-- is a provider of subsea construction and commercial diving services to the crude oil and natural gas exploration, and production, gathering and transmission industries on the outer continental shelf of the Gulf of Mexico. The company's subsea construction services include installation, upgrading and decommissioning of pipelines and production infrastructure. Its commercial diving services include recurring inspection, maintenance and repair services, well as support services for subsea construction and salvage operations. Superior performs its services in both surface and saturation diving modes in water depths of up to 1,000 feet. As of March 31, 2008, the company had less than approximately $1.8 million outstanding under its senior secured credit facility with JPMorgan Chase Bank N.A. The company is in default under such credit facility. The company's borrowing base capacity under such credit facility, which is affected by the composition of the company's eligible domestic accounts receivable, was not sufficient to enable the company to borrow significant additional funds under the facility as of March 31, 2008. TAYLOR TELFAIR: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Taylor Telfair Regional Hospital, Inc. Highway 341 Mcrae, GA 31055 Tel: (229) 868-4145 Bankruptcy Case No.: 08-30159 Type of Business: The Debtor owns and manages a critical access hospital. It has 15 beds, of which 15 are adult and pediatric. Chapter 11 Petition Date: March 31, 2008 Court: Southern District of Georgia (Dublin) Debtor's Counsel: Frank J Perch, III, Esq. (fperch@huntermaclean.com) Hunter, Maclean, Exley & Dunn, PC P.O. Box 9848 Savannah, GA 31412 Tel: (912) 236-0261 Fax: (912) 236-4936 http://www.huntermaclean.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Cary Martin Loan $1,272,312 R.J. Taylor Memorial Hospital, Inc. P.O. Box 1297 Hawkinsville, GA 31036 Tel: (478) 934-6211 Beckman Coulter, Inc. Reagents, Lab $172,289 Department CH10164 Supplies Palatine, IL 60055-0164 McRae Emergency Physicians, ER Staffing $135,408 LLC agreement P.O. Box 203251 Houston, TX 77216 Great America Leasing Corp. 3 Equipment leases $66,132 Telfair County Hospital Physician Office $64,800 Authority Space lease CPSI Computer Services $57,901 Southeastern Pathology Lab Tests $51,802 Associations Georgia Hospital Association Meeting Fees and $46,660 Dues Owens & Minor Medical Supplies $41,689 Philips Medical Capital Equipment Lease $40,102 Key Equipment Finance, Inc. Equipment lease $39,000 Leasing Services II, Inc. Equipment lease $29,587 Linton Harris, CPA Accounting services $28,050 Med-Dispense, LLC Equipment Lease $25,296 Olympus America, Inc. Equipment lease $24,595 De Lage Landen Financial Equipment Lease $24,150 Services, Inc. Hometown Health Meeting Fees and Dues $23,550 Airgas South Oxygen $17,285 American Heritage Life Supplemental $17,618 Insurance Co. Insurance for Employees Beckman Coulter Capital Equipment lease $15,647 TOUSA INC: Wants Automatic Stay Lifted to Advance Defense Costs --------------------------------------------------------------- TOUSA Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Florida to lift the automatic stay to permit payment by Federal Insurance Company of defense costs (i) incurred by Debtor or non-Debtor parties before the Petition Date, TOUSA and the Individual Defendants, and (ii) that may be incurred during the pendency of the Debtors' Chapter 11 cases. The Debtors have in place a comprehensive insurance program, which includes seven layers of coverage -- consisting of a primary policy and six "excess" policies -- totaling $100,000,000, available to cover losses, costs and expenses of the type incurred in certain consolidated lawsuits against TOUSA, Inc. and various of its current and former officers and directors. The Durgin Action In 2006, as a result of the decline in TOUSA's stock price, four plaintiffs filed securities lawsuits against TOUSA and its current and former officer and directors. Judge Kenneth A. Marra in the U.S. District Court for the Southern District of Florida consolidated the lawsuits in an action is captioned George Durgin v. TOUSA, Inc., et al., Case No. 06-61844-CIV-KAM. The Durgin Action alleges violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 against three categories of defendants -- (i) two "Company Defendants," (ii) fifteen "Individual Defendants," and (iii) four "Underwriter Defendants." The Individual Defendants are current and former directors, officers and employees of TOUSA or Technical Olympic S.A. Technical Olympic, the Individual Defendants and the Underwriter Defendants are not debtors in these Chapter 11 cases. The Durgin Action has been stayed as to TOUSA by virtue of the company's bankruptcy filing. The plaintiffs, however, are proceeding against the other defendants, including members of TOUSA's senior management team, according to Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami, Florida. The Debtors inform the Court that TOUSA, TOSA and the Individual Defendants have incurred, and continue to incur, costs associated with their defense of the Durgin Action. While those costs will not likely be substantial unless or until discovery begins, it is extremely important from a defense perspective that TOUSA continues to monitor the Durgin Action and preserve documents, Mr. Singerman states. Accordingly, the Debtors ask the Court to lift the automatic stay to permit payment by Federal Insurance Company of defense costs (i) incurred by Debtor or non-Debtor parties before the Petition Date, TOSA and the Individual Defendants, and (ii) that may be incurred during the pendency of the Debtors' Chapter 11 cases. Federal Insurance is unwilling to pay defense costs absent Court order authorizing the payment or stating that such authorization is not necessary, the Debtors note. The Debtors' request addresses only TOUSA's $15,000,000 primary director and officer liability policy with Federal Insurance, Policy No. 8181-4693, which represents the first of those seven layers of insurance coverage, Mr. Singerman clarifies. The Federal Policy provides coverage to TOUSA, TOSA, and each of their directors, officers and employees. The Federal Policy expressly prioritizes payment for the directors and officers over payment for others covered in the policy. "As a result, the Debtors' insurance coverage provides directors and officers protection in the event they are subject to claims and the Debtors are unable to meet their legal indemnification obligation, as is the case here," Mr. Singerman tells the Court. The Debtors simply cannot afford to lose the efforts, cooperation and attention of their officers and directors, which could ultimately jeopardize their reorganization efforts, Mr. Singerman maintains. In addition, the Debtors have an obligation to indemnify their officers and directors for liabilities incurred in connection with their positions at the company, he asserts. Granting the Debtors' request will in no way harm their estates or abridge their contractual rights because the Federal Policy's "Payment of Loss" provision subordinates the Debtors' potential rights to payment to the rights of their directors and officers, Mr. Singerman says. Indeed, granting the request is the key to also allowing payments of the Debtors' costs, he clarifies. Moreover, because the Federal Policy is a "claims made" policy that was in effect from December 15, 2005, through December 15, 2006, and the claims asserted in connection with the Durgin Action are the only claims made within the coverage period, Mr. Singerman avers that no new, unrelated claims can be made with respect to the Federal Policy. Mr. Singerman maintains that granting the Debtors' request would not deplete or jeopardize insurance proceeds that could otherwise be utilized in connection with any other action, including any estate causes of action and, therefore, those causes of action are not implicated or affected by the Debtors' request. 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). TOUSA INC: Committee Wants to Hire Garden City as Info Agent ------------------------------------------------------------ The Official Committee of Unsecured Creditors of TOUSA Inc. and its debtor-affiliates seek the authority of the U.S. Bankruptcy Court for the Southern District of Florida to retain The Garden City Group, Inc., as its information agent, nunc pro tunc to February 27, 2008. The Court has granted the Creditors Committee's request to clarify its requirement to provide access to information for the Debtors' unsecured creditors pursuant to Section 1102(b)(3)(A) of the Bankruptcy Code. The Creditors Committee requires the services of Garden City to comply with its obligations under Section 1102(b)(3), according to Patricia A. Redmond, Esq., at Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., in Miami, Florida. In the normal course of its business, Garden City is often called upon to create Web sites for the purpose of providing access to information for creditors. Ms. Redmond relates that large Chapter 11 cases that the firm has represented include Calpine Corp., Propex Inc., Sure Fit, Inc., and Federal-Mogul. The Creditors Committee believes that Garden City's assistance will add to the effective administration of the Debtors' Chapter 11 cases and reduce the overall expense of administering those cases. As the Committee's information agent, Garden City will: (a) establish and maintain an Internet-accessed Web site that provides, among other things: * a link or form of access to the Web site maintained by the Debtors' Notice, Claims and Balloting Agent at http://www.kccllc.net/tousa * highlights of significant events in the Debtors' Chapter 11 cases; * a calendar with upcoming significant events in the Debtors' bankruptcy cases; * answers to frequently asked questions; and * names and contact information for the Debtors' counsel and restructuring advisors, and the Creditors Committee's counsel and financial advisors. (b) distribute updates regarding the Chapter 11 cases via electronic mail for creditors that have registered for the service on the Committee Website; and (c) establish and maintain a telephone number and electronic mail address for creditors to submit questions and comments. Garden City will be paid by the Debtors' estates for professional services rendered on behalf of the Creditors Committee in accordance with provisions of a retention agreement between the Committee and the firm. Garden City's hourly rates are: Administrative $45 to $70 Data Entry Processors $55 Mailroom and Claims Control $55 Project Administrators $70 to $85 Quality Assurance Staff $80 to $125 Project Supervisors $95 to $110 Systems & Technology Staff $100 to $200 Graphic Support $125 Project Managers, Senior Project $125 to $150 Managers, & Dept. Managers Directors, Senior Consultants $175 to $250 Senior Management $250 to $295 The Creditors Committee proposes that the fees and expenses to be paid to Garden City under the proposed engagement be deemed administrative in nature and, therefore, should not be subject to standard fee application procedures of professionals. Alternatively, the Creditors Committee asks the Court (i) to exempt Garden City from the Interim Compensation Procedures Order and (ii) to authorize the Debtors to pay Garden City on a monthly basis in accordance with the Retention Agreement, upon the firm's submission of monthly invoices to the Committee and the Debtors. The Creditors Committee and the Debtors will have 10 days to advise Garden City of any objections to the monthly invoices. If an objection cannot be resolved, the Creditors Committee will schedule a hearing before the Court to consider the disputed invoice. Unless advised of an objection, the Debtors will pay each invoice within 30 days after the 10th day after receipt of the invoice. If an objection is raised, the Debtors will remit to Garden City only the undisputed portion of the invoice, if applicable, and pay the remainder upon resolution of the dispute. Jeffrey S. Stein, Garden City's vice president, tells the Court that neither Garden City nor any of its professionals have any relationship with the Creditors Committee or the Debtors that would impair the firm's ability to serve as the Information Agent. Garden City's relationship with some of the Debtors' creditors and certain of the Debtors' and Creditors Committee's professionals are in matters completely unrelated to the Debtors' Chapter 11 cases, Mr. Stein says. The firm has and will continue to represent clients, and has had and will continue to have relationships in the ordinary course of business with certain vendors and professionals, in matters unrelated to the Debtors' bankruptcy cases, he avers. Mr. Stein discloses that: -- Garden City has been a wholly owned subsidiary of Crawford & Company since 1999. Crawford has no material relationship with the Creditors Committee and the Debtors, and while it may have rendered services to certain creditors, or have a vendor relationship with some creditors, the relationships were in no way connected to Garden City's representation of the Creditors Committee in these bankruptcy cases; and -- Ernst & Young LLP serves as Crawford's auditor. Ernst & Young has been provisionally retained by the Debtors as their independent auditor and tax services provider. Garden City is a disinterested person, as the term is defined in Section 101(14) of the Bankruptcy Code, Mr. Stein assures the Court. 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). TOUSA INC: Committee Seeks to Retain Jefferies as Advisor --------------------------------------------------------- The Official Committee of Unsecured Creditors of TOUSA Inc. and its debtor-affiliates seeks authority from the U.S. Bankruptcy Court for the Southern District of Florida to retain Jefferies & Company, Inc., as its financial advisor, nunc pro tunc to February 19, 2008. Jefferies provides a broad range of corporate advisory services to its clients, including services pertaining to general financial advice; mergers, acquisitions and divestitures; special committee assignments; capital raising; and corporate restructuring, Patricia A. Redmond, Esq., at Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., in Miami, Florida, tells the Court. The firm has extensive experience in the reorganization and restructuring of troubled companies, both out-of-court and in Chapter 11 proceedings, Ms. Redmond avers. Since 2001, the professionals at Jefferies have been involved in more than 125 restructurings, representing more than $175,000,000,000 in restructured debt. Among those cases are In re AmeriServe Food Distribution, Inc., In re Ames Department Stores, Inc., In re Federal Mogul Corporation, and In re Delphi Corporation. According to Ms. Redmond, in light of the size and complexity of the Debtors' Chapter 11 cases, the Creditors Committee requires the services of a seasoned and experienced financial advisor, and one that is familiar with the Debtors' business and operations, and the Chapter 11 process. Jefferies has been retained for financial advisory services by the ad hoc committee of certain unaffiliated holders of certain senior notes issued by TOUSA, Inc., which was formed for the purpose of negotiating a consensual restructuring of certain of the Debtors' debt obligations. The Ad Hoc Committee ceased to function in mid-December 2007 and has released Jefferies from any continuing service, Ms. Redmond notes. As a result of the Ad Hoc Committee's engagement and the Creditors Committee's proposed engagement of the firm, Jefferies is familiar with the Debtors' business operations, capital structure, financing documents and other material information, and is thus able to advise the Creditors Committee in connection with the Debtors' restructuring efforts, Ms. Redmond asserts. The Debtors and Jefferies entered into an engagement letter dated February 19, 2008, which provides for the services to be rendered by the firm. As the Committee's advisors, Jefferies will: (a) become familiar with, and analyze, the business, business plan operations, assets, financial condition and prospects of the Debtors; (b) provide valuation analyses of the Debtors, if requested, and provide testimony relating to that valuation; (c) advise the Creditors Committee on the current state of the restructuring and capital markets; (d) assist and advise the Creditors Committee in examining and analyzing any potential or proposed strategy for restructuring or adjusting the Debtors' outstanding indebtedness or overall capital structure, whether pursuant to a plan of reorganization or liquidation, a sale of assets of equity under Section 363 of the Bankruptcy Code, a liquidation or otherwise; (e) assist and advise the Creditors Committee in evaluating and analyzing the proposed implementation of any Restructuring that may be issued under any plan of reorganization; and (f) render other investment banking services as may from time to time be agreed upon by the Creditors Committee and Jefferies. Ms. Redmond states that for the contemplated services to be rendered, Jefferies will be entitled to monthly fees and a transaction fee: (1) Jefferies will receive a $15,000 monthly fee until the expiration or termination of the Engagement Letter. The first Monthly Fee will be earned as of February 19, 2008, will be payable as soon as practicable, and will reflect the firm's retention nunc pro tunc to February 19. Each subsequent Monthly Fee will be fully accrued, due and payable in advance for the period beginning on the first day of each month and payable in accordance with applicable provisions of the Bankruptcy Code, Bankruptcy Rules, Local Rules of the Bankruptcy Court and any applicable Court orders. (2) Upon consummation of a Restructuring or similar transaction, Jefferies will be entitled to a transaction fee in an amount equal to $3,000,000. Jefferies will not be entitled to the Transaction Fee in the event that the only Restructuring or similar transaction consummated is a sale of the Debtors' assets outside a plan of reorganization or liquidation, which assets represent less than 75% of the Debtors' value. Jefferies will also be reimbursed for all Court-approved out-of- pocket expenses incurred. The Creditors Committee believes that the Fee Structure is comparable to those generally charged by financial advisory and investment banking firms of similar stature to Jefferies and for comparable engagements, both in and out of bankruptcy proceedings. Similar fixed and contingency fee arrangements have been approved and implemented in other large Chapter 11 cases, Ms. Redmond notes. The Engagement Letter also includes certain indemnification and arbitration provisions, which the Creditors Committee believes are reasonable terms and conditions of the Jefferies engagement as indemnification and arbitration are standard contract terms for investment bankers and financial advisors. William Q. Derrough, managing director of Jefferies, informs the Court that his firm, as part of its diverse global activities, is involved in numerous cases, proceedings and transactions involving many different professionals, accountants and financial consultants, some of which may represent claimants and parties- in-interest in the Debtors' Chapter 11 cases. Jefferies has in the past, and may in the future, be represented by several attorneys and law firms in the legal community, some of whom may be involved in the Debtors' Chapter 11 cases, Mr. Derrough continues. The firm has in the past, and may in the future, be working with or against other professionals involved in the Debtors' bankruptcy cases in unrelated matters. None of those business relationships constitute interests materially adverse to the Creditors Committee in matters upon which Jefferies is to be retained, and none are in connection with the Debtors' bankruptcy cases, Mr. Derrough assures the Court. The firm disclosed that certain of its affiliates serve as managers for a number of investment vehicles. The Managed Funds are intended principally for investment by third parties unrelated to Jefferies. Those investors may include financial institutions or affiliates of Jefferies and various of its officers and employees, according to Mr. Derrough. Jefferies employees working in connection with the Debtors' Chapter 11 cases have no control over the investment decisions or business decisions made for the Managed Funds, Mr. Derrough assures the Court. Jefferies, its principals and professionals (i) do not have any relevant connections with the Debtors or their affiliates, creditors or any other party-in-interest, and (ii) do not hold or represent any interest adverse to the Debtors' estates, Mr. Derrough maintains. He attests that the firm is a disinterested person under Section 101(14) of the Bankruptcy Code. 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). TOWERS OF CHANNELSIDE: Taps Cascade Capital as Financial Advisors ----------------------------------------------------------------- The Towers of Channelside LLC seeks permission from the U.S. Bankruptcy Court for the Middle District of Florida to employ Cascade Capital Group LLC as its financial advisors, nunc pro tunc to March 13, 2008. Cascade Capital will provide financial, operations, and real estate advice to the Debtors. As compensation for its services, Cascade Capital will bill the firm in accordance with the firm's customary hourly rates. Cascade Capital professionals who will have primary responsibility for providing services to the Debtor and their billing rates are: Mark Calvert $400 Tod McDonald $300 Cascade Capital will charge 50% of its regular hourly rate for travel time. Subject to Court approval, the Debtor has agreed to pay Cascade Capital a retainer in the amount of $15,000. To the best of the Debtor's knowledge, Cascade Capital does not hold or represent any interest adverse to the Debtor or its estate. About Towers of Channelside Based in Plant City, Florida, the Towers of Channelside, LLC -- http://www.towersatchannelside.com/-- operates a 29-story twin tower condominium overlooking the Tampa Bay area. The developer filed for Chapter 11 protection on Jan. 25, 2008 (Bankr. M.D. Fla. Case No. 08-00939). Edward J. Peterson, III, Esq. and Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser P.A., represents the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors appointed in this bankruptcy case has selected Forizs & Dogali, P.L. as its counsel. As reported in the Troubled Company Reporter on March 4, 2008, the Debtor's schedules showed total assets of $109,783,667 and total debts of $94,258,253. TOWERS OF CHANNELSIDE: Taps Dennis Noto & Associates as Appraiser ----------------------------------------------------------------- The Towers of Channelside LLC asks the United States Bankruptcy Court for the Middle District of Florida for authority to employ Dennis Noto & Associates Inc. as its real estate appraiser, nunc pro tunc to March 13, 2008. The Debtor needs the services of Dennis Noto & Associates to provide an opinion of the value of its luxury urban downtown development known as the "Towers of Channelside" based on various methods. The Debtor will pay the firm a $18,000 retainer. Mr. Dennis J. Noto, the firm's president, who will be responsible for the overall engagement, bills at $195 per hour. Mr. Dennis Noto attests that his firm does not hold or represent any interest adverse to the Debtor or its estate. About Towers of Channelside Based in Plant City, Florida, the Towers of Channelside, LLC -- http://www.towersatchannelside.com/-- operates a 29-story twin tower condominium overlooking the Tampa Bay area. The developer filed for Chapter 11 protection on Jan. 25, 2008 (Bankr. M.D. Fla. Case No. 08-00939). Edward J. Peterson, III, Esq. and Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser P.A., represents the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors appointed in this bankruptcy case has selected Forizs & Dogali, P.L. as its counsel. As reported in the Troubled Company Reporter on March 4, 2008, the Debtor's schedules showed total assets of $109,783,667 and total debts of $94,258,253. US AIRWAYS: Court of Appeals Upholds Ruling on R. Bosiger's Suit ---------------------------------------------------------------- The United States Court of Appeals for the Fourth Circuit affirmed the ruling of the United States District Court for the Eastern District of Virginia, at Alexandria, dismissing Edwin Perrow Bosiger, Jr.'s complaint that he was not notified of the claims bar date in US Airways Group Inc.'s case. Mr. Bosiger previously asserted he was not able to file a timely claim asserting his pension benefits due to the non-notification. Judges James Harvie Wilkinson III, Diana Gribbon Motz and Kathy M. Flanagan comprised the panel reviewing the Appeal. Mr. Bosiger brought a suit in the District Court six months after USAir II's emergence from bankruptcy, contending that US Airways Inc. had improperly terminated his pension during USAir I's Bankruptcy. US Airways sought and obtained the Bankruptcy Court's authority to restructure its pilot pension obligations so that it can meet conditions in securing the financing it needed to emerge from Chapter 11. The retired pilots asked the District Court to restore their old pension benefits. But since the retired pilots had neglected to have the termination and reorganization orders stayed, and since the orders had been implemented and relied on by third parties, the District Court held that the suit was equitably moot. Mr. Bosiger was provided with the general bar date and certain administrative and rejection damage claims bar date notices, but did not file a claim during USAir II's Bankruptcy. Mr. Bosiger instead chose to bring a suit against US Airways in the United States District Court for the Eastern District of Virginia. The District Court dismissed the suit on the grounds that US Airways had properly terminated a Non-Qualified Plan Top Hat Retirement Plan, and that Mr. Bosiger failed to file a proof of claim in USAir II's Bankruptcy Cases. Judge Wilkinson, among others, says: -- the principal purpose of bankruptcy is straightforward: to grant a fresh start to the honest but unfortunate debtor; -- unwinding the finality of bankruptcy upsets not only the expectations of the creditors who actually do participate in the bankruptcy proceedings, but also the reliance interests of the creditors who have advanced funds based on the new capital structure laid out in the reorganization plan; and -- Mr. Bosiger's general denial of receiving bar dates notices does not constitute the strong evidence needed to overcome the presumption of receipt. "If we were to hold that [Mr.] Bosiger's general denial was sufficient, it would make it discernibly more difficult for any court to grant summary judgment in any case where proper notice is required. The result would be to prolong and undercut the bankruptcy process by civil actions on the part of creditors who failed to pursue their claims when it was timely and appropriate for them to do so. The District Court was right to recognize this danger, and its decision is affirmed. . . . Given the tentative nature of the claims put forward by Bosiger's counsel, we accord little weight to the argument that Bosiger's notice was mailed to the wrong address. At the very least, the speculative nature of the claims demonstrate that they do not offer sufficient evidence that Bosiger did not receive his notice letters," Judge Wilkinson says. A full-text copy of Judge Wilkinson III, et al.'s Opinion is available for free at: http://bankrupt.com/misc/USAirCourtofAppealsOpinion.pdf 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 Settle MD Aviation Claim by Paying $11,500,000 ------------------------------------------------------------- US Airways Group Inc. and The Maryland Aviation Administration filed with the U.S. Bankruptcy Court for the Eastern District of Virginia: Status Amount Claim No. Debtor Asserted Asserted --------- ------ -------- -------- 5063 US Airways, Inc. unsecured $413,046 priority 23,343,868 ---------- total 23,756,914 5064 Piedmont Airlines, Inc. unsecured 98,462 priority 23,343,868 ---------- total 24,442,330 The Maryland Department of the Environment filed: Status Amount Claim No. Debtor Asserted Asserted --------- ------ -------- -------- 5066 US Airways, Inc. unsecured $23,343,868 5083 Piedmont Airlines, Inc. unsecured 23,343,868 The Debtors have established a reserve under Claim No. 5083, to be used for distributions for any of the MAA environmental claims that are allowed. MDE transferred Claim Nos. 5066 and 5083 to MAA. To resolve their dispute, the parties agreed that: 1. Claim Nos. 5064, 5066 and 5083 are disallowed in their entirety; 2. Claim No. 5063 is reclassified, reduced and allowed as a Class USAI-9 or General Unsecured Claim under the Debtors' Joint Plan of Reorganization in the compromised amount of $11,500,000, in full satisfaction of MAA's environmental claims against the Debtors; 3. The Stipulation is without prejudice to any claims or causes of action that MAA or its assignor, MDE, may have against any third parties; and 4. The Stipulation resolves all remaining claims of MDE and MAA against the Debtors. The Stipulation is deemed effective without further Court order. 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: R. Thomas Demands Retirement Benefits Continued ----------------------------------------------------------- Roger N. Thomas asks the U.S. Bankruptcy Court for the Eastern District of Virginia to: -- deny US Airways Group Inc.' request to disallow his claim; -- grant his previously vested retirement benefits; and -- direct all the Debtors and their affiliates to continuously pay him the benefits. Mr. Thomas asserts that he was a known creditor of Piedmont Airlines, Inc. He wrote Piedmont's in-house retirement administrator on Aug. 12, 2002, to ask for documents so he may begin estimating his options in the pension plan, and convey his expectations for travel and social security supplement benefits. He says US Airways, Inc.'s Benefits Coordinator Dianne Green answered his letter on August 20, and acknowledged his pension fund claim but disagreed he had rights to any other benefit. He further says that he, to his knowledge and belief, is the first and only person to have been awarded cash settlement and retirement benefits in any grievance procedure with Henson Aviation, Inc., or Piedmont. Piedmont assured that the retirement benefits would not be affected in any way by the Debtors' first bankruptcy cases, Mr. Thomas relates. Ms. Green reassured him this; that is why, according to Mr. Thomas, he felt he did not need to initiate a filing as a creditor. Mr. Thomas asserts that the USAir I Bankruptcy Cases and its bar date should not reduce his vested retirement interest. He contends that the retired Piedmont pilots have received their full retirement package including travel, retirement plan and insurance -- without break and without reduction -- since he left the company, until now. According to him, the retirement plan contractually includes both the pension benefit and the social security supplement benefit. In his case, Mr. Thomas says the Debtors define "Retirement Plan" as a monthly pension only, further eroding his retirement interest. The Debtors are using their own tardiness as a means to reduce his pension, Mr. Thomas says. He also adds that the grievance settlement states that his release of Piedmont from claims arising from his employment or cessation of employment from the company is "made without out prejudice to and does not serve to bar any claims arising from his previously vested retirement interest." Mr. Thomas asserts he is 100% vested and, thus, is entitled to all retirement benefits listed in the pilot contract. R. Thomas' Request Mr. Thomas asks the Court to direct the Debtors to grant all his vested retirement benefits including all the contractual obligations for retirement contained in the General, Retirement, and Insurance headings of the agreement between Henson Aviation, Inc., and its pilots as represented by the Airline Pilots Association, signed Nov. 30, 1989, and side letters. Mr. Thomas also asks the Court to direct the Debtors to use, in defining and calculating retirement benefits for his pension, certain contract and side letters in effect when his employment was involuntarily terminated on April 5, 1995, and Grievance Settlement signed on March 21, 1996, between him and Piedmont. According to him, these includes a normal retirement age of 60 and a calculation of his final average earnings as stated in the agreement between Piedmont Airlines, Inc., and its pilots as represented by the ALPA, signed May 16, 1994, with its Retirement Plan for Pilots and side letters, then current. Mr. Thomas asserts that according to the Settlement, he is entitled to his "previously vested retirement interest." This is the retirement interest he says is the one he claims. He further asserts that his claim does not "significantly exceed," as the Debtors argue, that to which he is entitled. His claim is entirely supported in writing in contracts that apply to him, he says. According to Mr. Thomas, the Debtors have added the words "accrued" and "in the Retirement Plan" which narrows the meaning of the Settlement to only the pension portion of the retirement benefits. He contends the Debtors have mixed disputed with undisputed items in their response and cross-motion for summary judgment against his claim. The Debtors base their statements on the wrong contract, specifically the 2001 Piedmont contract including an amendment signed only in December 2007, he says. Neither the contract nor tis amendment applies to him, he adds. The contracts that have bearing on the matter, according to Mr. Thomas, are: 1. the Agreement between Henson Aviation, Inc., and its pilots as represented by the Air Line Pilots Association, signed November 30, 1989, and side letters; and 2. the Agreement between Piedmont Airlines, Inc., and its pilots as represented by the Air Line Pilots Association, signed May 16, 1994, with its Retirement Plan for Pilots and side letters. Mr. Thomas asserts that the Grievance Settlement acknowledges his involuntary termination before the age of 60 and by affirming his right to his "vested retirement interest," the Settlement implicitly treats him as a person who worked until the age of 60. He further asserts this is the point of the Settlement and it entirely does not indicate otherwise. The Contracts do not require him to "formally request" his pension to begin, Mr. Thomas contends. Instead, the Contracts make it clear that the responsibility lies with the Debtors to begin payments on the normal retirement date, he says. Mr. Thomas further notes that the United States Postal Service has acknowledged that he did not know of the existence of a package of payment option materials. According to him, the Debtors say they are not delinquent because the package was returned to them by the USPS. Debtors Answer Back The Debtors argue that the only benefits and claims that Mr. Thomas would be entitled to receive were those under the Retirement Plan, not from the Reorganized Debtors. The Debtors add that they were "under no obligation to treat every discharged or furloughed employee as a potential creditor on the off chance that the employee might assert the claim." Douglas M. Foley, Esq., at McGuirewoods LLP, in Norfolk, Virginia, contends that notice by publication was constitutionally sufficient as to Mr. Thomas because he was not a "known" creditor. Mr. Foley asserts that whether Mr. Thomas was entitled to receive actual notice of the November 4, 2002 bar date for filing non- governmental claims in the Debtors' first Chapter 11 Cases or the notice of the commencement of the Debtors' first Chapter 11 Cases is only relevant if he held any "claims" against the Debtors. However, Mr. Thomas "forever and finally released, settled, waived, discharged, acquitted and reached full accord and satisfaction of all claims, demands, causes of action, and actions arising or existing up to the date of execution of the Settlement Agreement, except any claims arising from his previously vested retirement interest." Accordingly, Mr. Foley adds, Mr. Thomas is not entitled to any other and further relief except those that were previously vested in the Retirement Plan -- nothing more and nothing less. The Debtors, thus, ask the Court to enter an order disallowing Mr. Thomas' claim. 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. VALMONT INDUSTRIES: Revenue Growth Cues Moody's Rating Lift to Ba1 ------------------------------------------------------------------ Moody's upgraded the Corporate Family and Probability of Default Ratings of Valmont Industries, Inc. to Ba1 from Ba2. Concurrently, Moody's raised the senior unsecured credit facility rating to Baa3 from Ba1 and raised the senior subordinated notes rating to Ba2 from Ba3. These rating actions acknowledge the solid organic revenue growth and steady margin improvement achieved over several years and since the ratings were placed on positive outlook, resulting in operating performance that exceeded previous expectations. The upgrade further reflects Moody's expectation that fiscal policies will remain conservative and key credit metrics, including leverage, will be maintained at levels appropriate for the Ba1 rating category. Further supporting the Ba1 Corporate Family Rating are Valmont's leading market positions, low customer concentration and good liquidity profile. Valmont's rating is constrained by a relatively small revenue base for the rating category. Additionally, approximately 75% of revenues is concentrated in North America which, in Moody's opinion, together with size make the business potentially vulnerable to macroeconomic and end- market demand cyclicality in this region. Liquidity is expected to be good over the next twelve months, as indicated by the affirmation of the SGL-2 Speculative Grade Liquidity Rating. Moody's took these rating actions: -- $150 million senior unsecured revolver due 2009, upgraded to Baa3 (LGD3, 35%) from Ba1 (LGD3, 44%); -- $37 million senior unsecured term loan due 2009, upgraded to Baa3 (LGD3, 35%) from Ba1 (LGD3, 44%); -- $150 million senior subordinated notes due 2014, upgraded to Ba2 (LGD5, 81%) from Ba3 (LGD5, 82%); -- Corporate Family Rating, upgraded to Ba1 from Ba2; -- Probability of Default Rating, upgraded to Ba1 from Ba2; -- Speculative Grade Liquidity Rating, affirmed SGL-2. Valmont Industries, Inc. is a global producer of metal and concrete pole and tower structures, mechanized irrigation systems and coatings. Customers and end-users include state and federal governments, contractors, utility and telecommunications companies, manufacturers of commercial lighting fixtures and large farms. Headquartered in Omaha, Nebraska, the company is publicly held and reported revenues of $1.5 billion for the year ended Dec. 29, 2007. VAXGEN INC: CEO Says MedCap's Analysis is Incorrect and Shallow --------------------------------------------------------------- In a statement to shareholders a week ago, James P. Panek, president and CEO of VaxGen Inc., said the press releases issued by VaxGen stockholder MedCap Management & Research LLC on March 19, 2008, contains false and misleading information. According to Mr. Panek, "MedCap presents a financial analysis which is both incorrect and shallow, selectively extracting information from VaxGen's 2007 financial statements and misrepresenting its meaning. MedCap implies poor stewardship by the company's Board and executives by substantially inflating and mischaracterizing expenditures. In fact, VaxGen's net cash used in operating activities was reduced by nearly 65% for 2007 versus 2006 and staffing was reduced by 89%; hardly a record of inaction or mismanagement by management and the Board. "Likewise, MedCap's liquidation analysis shows a profound misunderstanding of the liquidation process, and fails to distinguish between the radically different outcomes for debt versus equity holders in a liquidation. Both of these analyses are addressed in more detail in the addendum to this letter. MedCap's Inaccurate Use of Third Party References "Because professional investment analysts would typically draw a distinction between cash burn and P&L expenses, and understand the implications of a liquidation, MedCap's flawed assertions could easily mislead stockholders of VaxGen. This situation is further exacerbated by MedCap's inaccurate and highly selective use of third party references. "MedCap draws on the views of two third parties to bolster its arguments: Sharon Seiler, Ph.D., the Senior Biotechnology Analyst at Punk Ziegel and Co.; and Dr. George Schreiner, Raven Biotechnologies Inc. CEO. These references, which are abbreviated and taken out of context, also potentially mislead our stockholders in an attempt to encourage them to vote against the proposed merger. "In the case of Dr. Seiler, MedCap neglected to point out that in her recent report (dated March 18, 2008, and subtitled "We endorse the merger and remain cautiously optimistic regarding the vote"), she encourages stockholders to support the proposed merger and further states: "We think a shareholder vote to reject the merger with Raven would represent a fairly disastrous outcome for VaxGen and would view it as a clear signal to sell VaxGen shares". Instead, MedCap chose to reference only a fraction of a quotation from Dr. Seiler's recent report, thus changing the meaning entirely. Dr. Seiler's full quote is provided in the addendum to this letter. "In the case of Dr. Schreiner, MedCap misquotes him in an attempt to imply that Raven's goal to eventually find a development partner for its lead clinical candidate (RAV12, now entering a Phase 2 trial) indicates a lack of confidence in this compound. This argument is disingenuous at best. Any sophisticated investor in biotechnology companies is aware that they routinely partner their programs with pharmaceutical companies to reduce the risk and expense associated with extensive and costly late stage clinical trials. Indeed, many investors believe that attracting a strong development partner constitutes validation of the underlying scientific program. "MedCap continues this pattern of selective quotation in a further release dated March 20, 2008 entitled: "ISS recommends vote against VaxGen proposals -- applauded by MedCap". MedCap states that it "agrees entirely with the newly published [ISS] recommendations." If that is the case, then it should be noted that ISS estimates the present value of VaxGen liquidation proceeds to be $0.49 per share. Put simply, the ISS estimated liquidation outcome is not supportive of MedCap's position and, consequently, not referenced by MedCap. "MedCap's selective use of these third party sources is especially disturbing because they are based on limited distribution reports, usually only available to professional investors. Hence, MedCap's selective use of such information could easily mislead many or most of VaxGen's stockholders who do not have access to the full text of those reports. The ISS recommendations and their rationale are discussed in the addendum to this letter. VaxGen Believes MedCap Wants to Sway Merger with Raven VaxGen, Mr. Panek stated, believes these recent communications from MedCap show a flagrant disregard for accuracy. He explained that the company has reason to believe that MedCap has made even more inaccurate and misleading claims in its conversations with other stockholders and third parties. VaxGen can only conclude that MedCap cares not about the truth; but rather about defeating the proposed merger at any cost, he asserted. In summary, Mr. Panek indicated that MedCap and its principals have apparently determined to sway the VaxGen-Raven merger vote any way they can. VaxGen believes this includes the use of flawed arguments as well as false and misleading information. As the CEO of VaxGen, Mr. Panek added that he urged stockholders to examine the facts objectively. He said that if stockholders examine the facts well, the correct outcome is to vote "Yes" in favor of the merger. A full-text copy of Mr. Panek's letter to stockholders, including detailed discussion regarding financial and liquidation claims and ISS recommendation, is available for free at: http://ResearchArchives.com/t/s?29d8 That merger, which is between the company's two merger units, TLW Merger Sub Inc. and TLW LLC, and Raven Biotechnologies Inc. dated Nov. 12, 2007, and subsequently amended, was terminated March 28, 2008, after the company determined a stronger opposition from its stockholders. A story on the terminated merger pact is reported in today's Troubled Company Reporter. Reduction of Operating Costs As reported in the Troubled Company Reporter on Jan. 12, 2007, VaxGen has restructured to significantly reduce operating costs and is actively pursuing avenues to enhance shareholder value through a strategic transaction. Additionally, the company announced that Lance K. Gordon, Ph.D., has resigned as VaxGen's president, chief executive officer, and executive director. He will remain as an adviser to the company. VaxGen's Board of Directors unanimously appointed James P. Panek, VaxGen's executive vice president, as its new president and CEO and appointed him to fill the board vacancy left by Dr. Gordon. Strategic Alternatives VaxGen has retained Lazard to advise the company in exploring strategic alternatives. The process is being overseen by Mr. Caudill, former co-head of Investment Banking for Prudential Securities, and will entail a broad evaluation of potential M&A opportunities. Mr. Caudill will be joined in this effort by Franklin M. Berger, CFA, a VaxGen director and former Managing Director, Equity Research, and Senior Biotechnology Analyst at J.P. Morgan Securities, Inc. 51% Workforce Reduction As a result of the restructuring, VaxGen estimates that the company's workforce will decrease by approximately 51% and its monthly net cash expenditures will be halved to less than $3 million. As part of the restructuring plan, VaxGen has substantially downsized its manufacturing and quality assurance or quality control functions, but has retained the resources needed to develop, manufacture, test and release cGMP product at commercial scale, albeit at a reduced throughput. The company will also retain capabilities necessary should it transfer its anthrax vaccine technology. About VaxGen VaxGen (Pink Sheets: VXGN.PK) -- http://www.vaxgen.com/-- is a biopharmaceutical company based in Brisbane, California. The company owns a state-of-the-art biopharmaceutical manufacturing facility with a 1,000-liter bioreactor that can be used to make cell culture or microbial biologic products. VAXGEN INC: Ends Raven Merger Over Likely Stockholder Objection --------------------------------------------------------------- VaxGen Inc. and Raven Biotechnologies Inc. have mutually agreed to terminate their merger agreement in light of stronger than anticipated opposition to the proposed merger by VaxGen stockholders. On March 28, 2008, VaxGen entered into a termination of merger agreement, acknowledgment and amendment to loan agreement and secured promissory note. An agreement and plan of merger was entered into among Raven and two wholly-owned subsidiaries of VaxGen, TLW Merger Sub Inc. and TLW LLC, dated Nov. 12, 2007, as amended Dec. 20, 2007, and Feb. 28, 2008, and amending that certain loan agreement entered into by and between VaxGen and Raven on Nov. 12, 2008. In addition, VaxGen's Board has withdrawn from stockholder consideration the proposed 2008 equity incentive plan, which is unnecessary in the absence of the merger. It has recently become apparent to both companies that despite initial indications to the contrary, the proposed merger and related equity plan proposals would be rejected by VaxGen stockholders. "We are obviously very disappointed that the proposed merger with Raven was not approved by our stockholders," said James P. Panek, VaxGen President and CEO. "Despite the strong support of some institutions, and solid support by so many individual investors, it has become quite clear that there is sufficient opposition, such that this merger will not be approved." Possible Liquidation of VaxGen VaxGen previously intended to open the special meeting of stockholders scheduled for March 28. The board of directors intends to immediately assess the company's strategic alternatives, including a possible liquidation of the company. A copy of the termination of merger agreement can be obtained for free at http://ResearchArchives.com/t/s?29d7 Reduction of Operating Costs As reported in the Troubled Company Reporter on Jan. 12, 2007, VaxGen has restructured to significantly reduce operating costs and is actively pursuing avenues to enhance shareholder value through a strategic transaction. Additionally, the company announced that Lance K. Gordon, Ph.D., has resigned as VaxGen's president, chief executive officer, and executive director. He will remain as an adviser to the company. VaxGen's Board of Directors unanimously appointed James P. Panek, VaxGen's executive vice president, as its new president and CEO and appointed him to fill the board vacancy left by Dr. Gordon. Strategic Alternatives VaxGen has retained Lazard to advise the company in exploring strategic alternatives. The process is being overseen by Mr. Caudill, former co-head of Investment Banking for Prudential Securities, and will entail a broad evaluation of potential M&A opportunities. Mr. Caudill will be joined in this effort by Franklin M. Berger, CFA, a VaxGen director and former Managing Director, Equity Research, and Senior Biotechnology Analyst at J.P. Morgan Securities, Inc. 51% Workforce Reduction As a result of the restructuring, VaxGen estimates that the company's workforce will decrease by approximately 51% and its monthly net cash expenditures will be halved to less than $3 million. As part of the restructuring plan, VaxGen has substantially downsized its manufacturing and quality assurance or quality control functions, but has retained the resources needed to develop, manufacture, test and release cGMP product at commercial scale, albeit at a reduced throughput. The company will also retain capabilities necessary should it transfer its anthrax vaccine technology. About VaxGen VaxGen (Pink Sheets: VXGN.PK) -- http://www.vaxgen.com/-- is a biopharmaceutical company based in Brisbane, California. The company owns a state-of-the-art biopharmaceutical manufacturing facility with a 1,000-liter bioreactor that can be used to make cell culture or microbial biologic products. VERASUN ENERGY: Completes Merger Agreement with US BioEnergy ------------------------------------------------------------ VeraSun Energy Corp. closed the merger with US BioEnergy Corp. after the transaction was approved by a majority vote of shareholders of both companies. The merger will be effective as of April 1, 2008. As reported in the Troubled Company Reporter on Dec. 3, 2007, VeraSun Energy Corp. and US BioEnergy Corp. entered into a definitive merger agreement. "We are pleased to complete the merger with US BioEnergy and we are well on our way to integrating our companies," Don Endres, VeraSun CEO, said. "We look forward to realizing the synergies of our combined business as we expect to reach 16 biorefineries and an operating capacity of more than 1.6 billion gallons by the end of 2008." "The size and scale that results from this merger will allow us to become more relevant to our customers in the petroleum industry and continue to position VeraSun as a premier platform company in the renewable fuels industry," Mr. Endres added. Under the merger agreement, each outstanding share of US BioEnergy common stock will be converted into 0.810 shares of VeraSun common stock, representing a premium of approximately 11% based on Nov. 23, 2007, closing prices. The existing VeraSun shares will remain outstanding and will represent approximately 59% of the shares outstanding after the merger. VeraSun common stock will continue to trade on the NYSE under the symbol "VSE". With the completion of the merger, VeraSun owns and operates 10 ethanol production facilities with an annual capacity of 980 million gallons per year. Seven other facilities are under construction or development. By the end of 2008, the company expects to have 16 production facilities in operation with a capacity of approximately 1.64 billion gallons. About US BioEnergy Corporation Based in St. Paul, Minnesota, US BioEnergy Corporation (Nasdaq: USBE) is a producer and marketer of ethanol and distillers grains. Founded in 2004, the company currently owns and operates four ethanol plants in Albert City, IA, Ord, NE, Platte Valley, NE, and Woodbury, MI. About VeraSun Energy Corporation Headquartered in Brookings, South Dakota, VeraSun Energy Corporation (NYSE: VSE) -- http://www.verasun.com/and http://www.VE85.com/-- is a producer of renewable fuel. The company has three operating ethanol production facilities located in Aurora, South Dakota, Fort Dodge and Charles City, Iowa. The company markets E85, a blend of 85% ethanol and 15% gasoline for use in Flexible Fuel Vehicles, directly to fuel retailers under the brand VE85(TM). VE85(TM) is available at more than 90 retail locations. * * * Moody's Investor Service placed VeraSun Energy Corporation's long term corporate family and probability of default ratings at 'B2' in September 2006. The ratings still hold to date with a stable outlook. VESTA INSURANCE: Gaines Trustee Settlement with SG/SPV Approved --------------------------------------------------------------- Judge Thomas B. Bennett approved a settlement agreement entered into between Kevin O'Halloran, in his capacity as Plan Trustee for J. Gaines, Inc., and SG/SPV Property I, LLC. The Court ruled that SG/SPV is deemed to have an allowed general unsecured claim for $175,000, with respect to Gaines' lease of a non-residential real property located in Birmingham, Alabama. As reported by the Troubled Company Reporter on Feb. 8, 2008, Mr. O'Halloran asked the U.S. Bankruptcy Court for the Northern District of Alabama to approve a settlement agreement he entered into, on the Debtors' behalf, with SG/SPV Property I, LLC, in order to settle the claims and issues among the parties. SG/SPV Property filed a rejection claim against the company and its affiliates for $1,609,549, alleging future damages with respect to the Debtors' non-residential leased property in Birmingham, Alabama. The Landlord's claim relates to one year of base rent totaling $1,209,419 and a year of estimated operating expenses totaling $400,129. After engaging in extensive arm's-length negotiations, the parties reached a compromise and agreed that Mr. O'Halloran will pay SG/SPV Property its allowed general unsecured claim for $175,000. According to Mr. O'Halloran, the SG/SPV Settlement limits J. Gaines' liability to the Landlord without further expense, and advances the objective of being able to make distributions to allowed unsecured claimholders. The Gaines Plan Trustee adds that absent the Settlement, SG/SPV's claims might be subjected to a lengthy and expensive litigation. The Settlement, according to him, removes any uncertainty and delay and eliminates substantial litigation costs. About Vesta Insurance Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc. (Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding company for a group of insurance companies that primarily offer property insurance in targeted states. Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership III, L.P., filed an involuntary chapter 7 petition against the company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517). The case was converted to a voluntary chapter 11 case on Aug. 8, 2006 (Bankr. N.D. Ala. Case No. 06-02517). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, represents the petitioning creditors. In its schedules of assets and liabilities, Vesta listed $14,919,938 in total assets and $214,278,847 in total liabilities. J. Gordon Gaines Inc. is a Vesta Insurance-owned unit that manages the company's numerous insurance subsidiaries and employs the headquarters workers. The company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represent the Debtor in its restructuring efforts. In its schedules of assets and liabilities, Gaines listed $19,818,094 in total assets and $16,046,237 in total liabilities. On Aug. 1, 2006, the District Court of Travis County, Texas entered an order appointing the Texas Commissioner of Insurance as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries: Vesta Fire Insurance Corporation; The Shelby Insurance Company; Shelby Casualty Insurance Corporation; Texas Select Lloyds Insurance Company; and Select Insurance Services, Inc. Florida Select Insurance Agency Inc., an affiliate, filed for chapter 11 protection on April 24, 2007 (Bankr. N.D. Ala. Case No. 07-01849). Rufus Dorsey, IV, Esq., at Parker Hudson Rainer & Dobbs LLP, represents Florida Select. FSIA's exclusive period to file a plan of reorganization expired Dec. 20, 2007. (Vesta Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) VIASYSTEMS INC: Earns $17.3 Million in Year Ended Dec. 31 --------------------------------------------------------- Viasystems Inc. reported net income of $17.3 million on net sales of $714.3 million for the year ended Dec. 31, 2007, compared with net income of $202.4 million on net sales of $735.0 million for 2006. Printed Circuit Boards segment net sales, including intersegment sales, for the year ended Dec. 31, 2007, declined by $17.4 million, or 3.4%, to $489.8 million. In 2007 compared to 2006, the decline in the Printed Circuit Boards segment primarily is the result of decreased sales volume resulting from weak demand experienced in the company's telecommunications, and computer and data communications end markets, partially offset by increased demand in the company's automotive end market and price increases. Operating income of $34.5 million for the year ended Dec. 31, 2007, represents a decrease of $1.1 million compared to operating income of $35.6 million during the year ended Dec. 31, 2006. Results for the year ended Dec. 31, 2006, included a net gain of $211.2 million associated with the sale of the company's discontinued wire harness operations on May 1, 2006. Liquidity The company had cash and cash equivalents at Dec. 31, 2007, and 2006, of $64.0 million and $38.0 million, respectively. At Dec. 31, 2007, the company had open letters of credit issued in the amount of $5.4 million, and no outstanding borrowings under the $80.0 million revolving credit facility of the company's 2006 Credit Agreement, resulting in available credit of $74.6 million. The terms of the 2006 Credit Agreement included an option to increase the total credit facility by $40 million to $120 million; and in December 2007 the company elected not to exercise this option and allowed it to expire. Balance Sheet At Dec. 31, 2007, the company's consolidated balance sheet showed $629.2 million in total assets, $422.0 million in total liabilities, and $207.2 million in total stockholders' equity. 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?29da About Viasystems Inc. Headquartered in St. Louis, Missouri, Viasystems Inc. -- http://www.viasystems.com/-- provides complex multi-layer printed circuit boards and electro-mechanical solutions. The company's products are used in a wide range of applications, including automotive dash panels and control modules, data networking equipment, telecommunications switching equipment, and complex medical and technical instruments. * * * Viasystems Inc. still carries Moody's Investors Service 'Caa1' Senior Subordinated Debt rating assigned on Sept. 26, 2006. Outlook is Stable. VILLAGE HOTEL: Case Summary & 27 Largest Unsecured Creditors ------------------------------------------------------------ Lead Debtor: Village Hotel Investors, LLC aka Ritz Carlton, Lake Las Vegas Resort 1605 Lake Las Vegas Parkway Henderson, NV 89011 Bankruptcy Case No.: 08-13043 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Village Hotel Holdings, LLC 08-13044 Type of Business: The Debtors own the AAA Four Diamond Ritz- Carlton Lake Las Vegas, a Mediterranean-style resort nestled in the midst of the Southern Nevada desert and mountain landscape. See http://www.ritzcarlton.com Chapter 11 Petition Date: April 1, 2008 Court: District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtors' Counsel: Brett A. Axelrod, Esq. (baxelrod@lrlaw.com) Lewis and Roca, LLP 3993 Howard Hughes Parkway, Suite 600 Las Vegas, NV 89169 Tel: (702) 949-8200 Fax: (702) 216-6184 http://www.lrlaw.com/ Village Hotel Investors, LLC's Financial Condition: Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million A. Village Hotel Investors, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ JP Morgan Chase $367,068 P.O. Box 29063 Phoenix, AZ 85038-9063 Nevada Department of Taxation annual publication $149,600 Bankruptcy Section 555 East Washington, Suite 1300 Las Vegas, NV 89101 City of Henderson occupancy tax $177,846 240 Water Street Henderson, NV 89009 Lodgenet Stayonline $111,827 American Hotel Register Co., $75,143 Inc. LA Speciality Produce Co. $41,365 Inc. Prime Event Group, Inc. $40,228 United Hospitality, LLC $34,907 LMG, Inc. $22,503 The Wassertrom Co. $20,053 Southland Industries $17,683 True Blue Property Service $16,750 K&M Meat Co., Inc. $16,680 Data Projections, Inc. $14,554 Las Vegas Window Tinting $13,252 Comstock Wine & Spirit $12,151 Ty Robes $11,330 Pacific Seafood Co. $10,677 JRS International, Inc. $9,200 Rhino Las Vegas, LLC $9,195 B. Village Hotel Holdings, LLC's Seven Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Douglas Parking, LLC $141,812 1721 Webster Street Tel: (510) 444-7412 Oakland, CA 94612-3411 Friedmutter Group $50,000 4022 Industrial Road Tel: (510) 444-7412 Las Vegas, NV 89103 AOK Cleaning Professionals $6,009 46660 South Eastern Avenue, Suite 207 Tel: (702) 449-6111 Las Vegas, NV 89119 Lake Las Vegas Marina, LLC $4,847 Nevada Power Co. $129 Nevada Department of Taxation $25 Vision Financial Group unknown VOUGHT AIRCRAFT: Boeing Agrees to Buy Share of Global Aeronautica ----------------------------------------------------------------- Boeing agreed to acquire Vought Aircraft Industries' interest in Global Aeronautica LLC, a South Carolina fuselage sub-assembly facility for Boeing's newest airplane, the 787 Dreamliner. After the transaction is complete, Global Aeronautica will become a 50-50 joint venture between The Boeing Company and Alenia North America, a subsidiary of Italy's Alenia Aeronautica, a Finmeccanica Company. Vought will continue to produce the aft fuselage for the 787 at its facility adjacent to Global Aeronautica in North Charleston. Closing will occur after receipt of regulatory approvals. Terms of the transaction were not disclosed. The transaction will not affect Boeing's current financial guidance. Boeing's supplier management organization will continue to oversee Global Aeronautica along with the other major 787 supplier-partner team members. "As a partner in the Global Aeronautica joint venture, Boeing will work with Alenia to apply proven lean manufacturing expertise to continue improving the efficiency and productivity of GA's operations, while Vought will focus on its primary business of delivering quality aft fuselage structures for the 787," Pat Shanahan, vice president and general manager of the 787 program, said. "All three partners in this transaction Boeing, Vought and Alenia believe these changes will enable the 787 team to continue to overcome supply-chain challenges of the program." "This seamless transition of joint venture ownership will build upon the strong foundation already established within Global Aeronautica," Elmer Doty, president and chief executive officer, Vought Aircraft Industries, said. "Selling our interest has no impact on our adjacent facility, where the Vought 787 team remains focused on manufacturing composite fuselage sections for this incredible airplane." "The 787 program is a strategic program for Alenia and its presence in South Carolina," Giuseppe Giordo, president and chief executive officer, Alenia North America, said. "We are confident that with Boeing as an investor, the successful work of Global Aeronautica will continue thanks to the hard work and dedication of its management and employees." "We look forward to working with the Global Aeronautica team and continuing our relationships with Vought and Alenia as we move ahead on the 787 program," Mr. Shanahan concluded. About Boeing Company Headquartered in Chicago, Illinois, The Boeing Company -- http://www.boeing.com/-- designs, develops, manufactures, sells and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight, and launch systems and services. The company operates in five principal segments: commercial airplanes, precision engagement and mobility systems, network and space systems, support systems and boeing capital corporation. On July 8, 2007, Boeing unveiled its lightweight, carbon-composite 787 Dreamliner. About Vought Aircraft Headquartered in Dallas, Vought Aircraft Industries Inc. -- http://www.voughtaircraft.com/-- is a a privately held company, owned by The Carlyle Group since 2000. The company designs and manufactures major airframe structures such as wings, fuselage subassemblies, empennages, nacelles and other components for prime manufacturers of aircraft. Vought has annual sales of approximately $1.6 billion and about 6,000 employees in nine U.S. locations. VOUGHT AIRCRAFT: S&P Says 50% Stake Sale Won't Affect Its Rating ---------------------------------------------------------------- Vought Aircraft Industries Inc. (B-/Negative/--) recently announced that it would be selling its 50% stake in Global Aeronautica LLC to Boeing Co. (A+/Stable/A-1) for an undisclosed amount. Standard & Poor's Ratings Services said that its rating and outlook on Vought are not affected by this transaction. Global Aeronautica, a joint venture with the Alenia North America unit of the Italian company Finmeccanica SpA (BBB/Stable/A-2), was set up to integrate and assemble fuselage sections for Boeing's 787 jetliner produced by Alenia, Vought, and other suppliers. Vought will continue to produce the two aft fuselage sections of the 787. In addition, the company produces aerostructures for a number of other Boeing and Airbus jetliners, military aircraft and helicopters, and business jets. Global Aeronautica is being accounted for under the equity method and has been realizing losses due to start-up costs. The announced delays in the first delivery of the 787 to customers has adversely affected working capital and cash flow at Vought. In addition, initial deliveries are widely believed to soon be further delayed. However, Boeing has been in discussion with Vought and other suppliers regarding changes in the supply agreements, which in many cases specified that vendors would receive payment for their shipments only when the 787 was certified and delivered to the first airline customer, to improve cash flow on the program. VPG INVESTMENTS: Files Schedules of Assets and Liabilities ---------------------------------------------------------- VPG Investments, Inc. delivered to the United States Bankruptcy Court for the District of Idaho its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $1,675,000.00 B. Personal Property 27,672,137.00 C. Property Claimed as Exempt D. Creditors Holding $265,475,595.47 Secured Claims E. Creditors Holding 0.00 Unsecured Priority Claims F. Creditors Holding 35,931,922.63 Unsecured Nonpriority Claims -------------- ---------------- TOTAL $29,347,137.00 $301,407,518.10 About VPG Investments Beverly Hills, California-based VPG Investments Inc. owns 27% of Tamarach Resorts LLC. It filed for chapter 11 protection on Feb. 15, 2008 (Bankr. D. Idaho Case No. 08-00253). Joseph M. Meier, Esq., at Cosho Humphrey LLP serves as the Debtor's counsel. It listed assets of $29,214,653 and debts of $301,407,518 when it filed for bankruptcy. WADSWORTH CDO: Moody's Junks Rating on $38 Mil. Notes From 'Baa1' ----------------------------------------------------------------- Moody's Investors Service downgraded ratings of five classes of notes issued by Wadsworth CDO, Ltd and left on review for possible downgrade the rating of one class of these notes. The classes affected by this rating actions are: Class description: $72,500,000 Class A-2 Senior Secured Floating Rate Notes due 2046 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class description: $38,000,000 Class B Senior Secured Floating Rate Notes due 2046 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Ca Class description: $15,000,000 Class C Senior Secured Deferrable Floating Rate Notes due 2046 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: C Class description: $8,250,000 Class D Secured Deferrable Floating Rate Notes due 2046 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: C Class description: $1,375,000 Class S-1A Subordinated Notes due 2046 -- Prior Rating: B2, on review for possible downgrade -- Current Rating: C The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence on March 6, 2008, as reported by the Trustee, of an event of default caused by a failure of the Class AB Overcollateralization Test Percentage to be greater than or equal to 96%, as described in Section 5.1(g) of the Indenture dated Sept. 28, 2006. As provided in Article V of the Indenture, during the occurrence and continuance of an Event of Default, holders of certain Notes may take particular actions with respect to the Collateral Debt Securities and the Notes. In this regard Moody's has received notice from the Trustee that the Controlling Party declared the principal of all of the Notes to be immediately due and payable and also terminated the Reinvestment Period. The rating downgrades taken reflect the increased expected loss associated with the tranches. Losses are attributed to the diminished credit quality of the underlying portfolio. The severity of losses of tranches may be different, however, depending on the timing and choice of remedy to be pursued following the event of default by certain Noteholders. Because of this uncertainty, the rating of the Class A-2 Notes remains on review for possible further action. Wadsworth CDO, Ltd. is a collateralized debt obligation transaction backed by a portfolio constituted primarily of residential mortgage-backed securities and collateralized debt obligation securities. WOODSIDE AMR 107: Case Summary & 40 Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: Woodside AMR 107, Inc. 11870 Pierce Street, Suite 100 Riverside, CA 92505 Tel: (801) 299-6700 Bankruptcy Case No.: 08-13394 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Woodside Portofino, Inc. 08-13396 Type of Business: The Debtors develop real estate. Chapter 11 Petition Date: March 31, 2008 Court: Central District Of California (Riverside) Judge: Peter Carroll Debtors' Counsel: Linda F Cantor, Esq. (lcantor@pszjlaw.com) Pachulski Stang Ziehl & Jones LLP 10100 Santa Monica Boulevard, Suite 1100 Los Angeles, CA 90067 Tel: (310) 277-6910 Fax: (310) 201-0760 http://www.pszjlaw.com/ Estimated Assets Estimated Debts ---------------- --------------- Woodside AMR 107, Inc. $10 million to $500 million to $50 million $1 billion Woodside Portofino, Inc. $10 million to $500 million to $50 million $1 billion A. Woodside AMR 107, Inc's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ JP Morgan Chase Bank, N.A. bank debt $63,829,208 Commercial Real Estate Attn: Michele Pearce 50 West Broadway, Suite 1000 Salt Lake City, UT 84101 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 Bank of America, N.A. bank debt $47,331,326 Corporate Headquarters 100 North Tryon Street Charlotte, NC 28202 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 Metropolitan Life Insurance noteholder debt $40,000,000 Co. Investments 10 Park Avenue P.O. Box 1902 Morristown, NJ 07962-1902 Counsel for Noteholder Group Attn: Michael J. Reilly, Esq. & Mark W. Deveno, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022-4689 Tel: (212) 705-7000 Fax: (212) 752-5378 Alliance Capital Management noteholder debt $40,000,000 Corp. 1345 Avenue of the Americas 39th Floor New York, NY 10105 Counsel for Noteholder Group Attn: Michael J. Reilly, Esq. & Mark W. Deveno, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022-4689 Tel: (212) 705-7000 Fax: (212) 752-5378 John Hancock Life Insurance noteholder debt $39,250,000 Co. Attn: Isaca Epps 197 Clarendon Street C-2 Boston, MA 02117 Counsel for Noteholder Group Attn: Michael J. Reilly, Esq. & Mark W. Deveno, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022-4689 Tel: (212) 705-7000 Fax: (212) 752-5378 The Guardian Life Insurance noteholder debt $38,000,000 Co. of America Attn: Thomas Donohue Investment Department 20-D 7 Hanover Square New York, NY 10004-2616 Counsel for Noteholder Group Attn: Michael J. Reilly, Esq. & Mark W. Deveno, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022-4689 Tel: (212) 705-7000 Fax: (212) 752-5378 Wachovia Bank, N.A. bank debt $35,498,494 Corporate Headquarters 1 Wachovia Center Charlotte, NC 28288-0013 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 ING Investment Management LLC noteholder debt $30,000,000 Operations/Settlements 5780 Powers Ferry Road Northwest, Suite 300 Atlanta, GA 30327-4349 Counsel for Noteholder Group Attn: Michael J. Reilly, Esq. & Mark W. Deveno, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022-4689 Tel: (212) 705-7000 Fax: (212) 752-5378 Washington Mutual Bank bank debt $28,398,795 Corporate Headquarters 1301 Second Avenue Seattle, WA 98101 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 Guaranty Bank Corporate bank debt $28,398,795 Lending Headquarters 8333 Douglas Avenue Dallas, TX 75225 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 U.S. Bank, National bank debt $23,665,663 Association Corporate Headquarters U.S. Bancorp Center 800 Nicollet Mall Minneapolis, MN 55402 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 Hare & Co. noteholder debt $20,571,429 Attn: The Bank of New York Audit Confirmation Unit Oriskany, NY 13424 Counsel for Noteholder Group Attn: Michael J. Reilly, Esq. & Mark W. Deveno, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022-4689 Tel: (212) 705-7000 Fax: (212) 752-5378 Keybank, National Association bank debt $18,932,530 Corporate Headquarters 127 Public Square Cleveland, OH 44144 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 New York Life Insurance Co. noteholder debt $18,500,000 Attn: New York Life Investment Management LLC, Securities Investment Group, Private Finance, 2nd Floor, 51 Madison Avenue New York, NY 10010-1603 Counsel for Noteholder Group Attn: Michael J. Reilly, Esq. & Mark W. Deveno, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022-4689 Tel: (212) 705-7000 Fax: (212) 752-5378 Regions Bank (successor by bank debt $16,565,964 merger to AmSouth Bank) Regional Headquarters 3700 Glenwood Avenue Raleigh, NC 27612 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 Bank of the West bank debt $16,565,964 Corporate Headquarters 180 Montgomery Street San Francisco, CA 94104 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 Metropolitan Life Insurance noteholder debt $12,000,000 Co. of Connecticut Attn: Metropolitan Life Insurance Co. 10 Park Avenue P.O. Box 1902 Morristown, NJ 07962-1902 Counsel for Noteholder Group Attn: Michael J. Reilly, Esq. & Mark W. Deveno, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022-4689 Tel: (212) 705-7000 Fax: (212) 752-5378 Wells Fargo Bank, N.A. bank debt $11,832,831 Corporate Headquarters 420 Montgomery Street San Francisco, CA 94163 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 Union Bank of California, N.A. bank debt $11,832,831 UnionBanCal Corp. 400 California Street, 9th Floor San Francisco, CA 94104 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 CUNA Mutual Life Insurance noteholder debt $11,250,000 Society Attn: Managing Director- Investments 5910 Mineral Point Road Madison, WI 53705-4456 Counsel for Noteholder Group Attn: Michael J. Reilly, Esq. & Mark W. Deveno, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022-4689 Tel: (212) 705-7000 Fax: (212) 752-5378 J.P. Morgan Chase Bank, N.A. agent to lenders notice only Administrative Agent Commercial Real Estate Attn: George W. Welch 201 North Central Avenue, 14th Floor Phoenix, AZ 85004 B. Woodside Portofino, Inc's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ JP Morgan Chase Bank, N.A. bank debt $63,829,208 Commercial Real Estate Attn: Michele Pearce 50 West Broadway, Suite 1000 Salt Lake City, UT 84101 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 Bank of America, N.A. bank debt $47,331,326 Corporate Headquarters 100 North Tryon Street Charlotte, NC 28202 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 Metropolitan Life Insurance noteholder debt $40,000,000 Co. Investments 10 Park Avenue P.O. Box 1902 Morristown, NJ 07962-1902 Counsel for Noteholder Group Attn: Michael J. Reilly, Esq. & Mark W. Deveno, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022-4689 Tel: (212) 705-7000 Fax: (212) 752-5378 Alliance Capital Management noteholder debt $40,000,000 Corp. 1345 Avenue of the Americas 39th Floor New York, NY 10105 Counsel for Noteholder Group Attn: Michael J. Reilly, Esq. & Mark W. Deveno, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022-4689 Tel: (212) 705-7000 Fax: (212) 752-5378 John Hancock Life Insurance noteholder debt $39,250,000 Co. Attn: Isaca Epps 197 Clarendon Street C-2 Boston, MA 02117 Counsel for Noteholder Group Attn: Michael J. Reilly, Esq. & Mark W. Deveno, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022-4689 Tel: (212) 705-7000 Fax: (212) 752-5378 The Guardian Life Insurance noteholder debt $38,000,000 Co. of America Attn: Thomas Donohue Investment Department 20-D 7 Hanover Square New York, NY 10004-2616 Counsel for Noteholder Group Attn: Michael J. Reilly, Esq. & Mark W. Deveno, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022-4689 Tel: (212) 705-7000 Fax: (212) 752-5378 Wachovia Bank, N.A. bank debt $35,498,494 Corporate Headquarters 1 Wachovia Center Charlotte, NC 28288-0013 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 ING Investment Management LLC noteholder debt $30,000,000 Operations/Settlements 5780 Powers Ferry Road Northwest, Suite 300 Atlanta, GA 30327-4349 Counsel for Noteholder Group Attn: Michael J. Reilly, Esq. & Mark W. Deveno, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022-4689 Tel: (212) 705-7000 Fax: (212) 752-5378 Washington Mutual Bank bank debt $28,398,795 Corporate Headquarters 1301 Second Avenue Seattle, WA 98101 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 Guaranty Bank Corporate bank debt $28,398,795 Lending Headquarters 8333 Douglas Avenue Dallas, TX 75225 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 U.S. Bank, National bank debt $23,665,663 Association Corporate Headquarters U.S. Bancorp Center 800 Nicollet Mall Minneapolis, MN 55402 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 Hare & Co. noteholder debt $20,571,429 Attn: The Bank of New York Audit Confirmation Unit Oriskany, NY 13424 Counsel for Noteholder Group Attn: Michael J. Reilly, Esq. & Mark W. Deveno, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022-4689 Tel: (212) 705-7000 Fax: (212) 752-5378 Keybank, National Association bank debt $18,932,530 Corporate Headquarters 127 Public Square Cleveland, OH 44144 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 New York Life Insurance Co. noteholder debt $18,500,000 Attn: New York Life Investment Management LLC, Securities Investment Group, Private Finance, 2nd Floor, 51 Madison Avenue New York, NY 10010-1603 Counsel for Noteholder Group Attn: Michael J. Reilly, Esq. & Mark W. Deveno, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022-4689 Tel: (212) 705-7000 Fax: (212) 752-5378 4 Regions Bank (successor by bank debt $16,565,964 merger to AmSouth Bank) Regional Headquarters 3700 Glenwood Avenue Raleigh, NC 27612 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 Bank of the West bank debt $16,565,964 Corporate Headquarters 180 Montgomery Street San Francisco, CA 94104 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 Metropolitan Life Insurance noteholder debt $12,000,000 Co. of Connecticut Attn: Metropolitan Life Insurance Co. 10 Park Avenue P.O. Box 1902 Morristown, NJ 07962-1902 Counsel for Noteholder Group Attn: Michael J. Reilly, Esq. & Mark W. Deveno, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022-4689 Tel: (212) 705-7000 Fax: (212) 752-5378 Wells Fargo Bank, N.A. bank debt $11,832,831 Corporate Headquarters 420 Montgomery Street San Francisco, CA 94163 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 Union Bank of California, N.A. bank debt $11,832,831 UnionBanCal Corp. 400 California Street, 9th Floor San Francisco, CA 94104 Counsel for Bank Group Attn: David Sprentall, Esq. & Donald Gaffney, Esq. Snell & Wilmer LLP One Arizona Center 400 East Van Buren, 10th Floor Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 CUNA Mutual Life Insurance noteholder debt $11,250,000 Society Attn: Managing Director- Investments 5910 Mineral Point Road Madison, WI 53705-4456 Counsel for Noteholder Group Attn: Michael J. Reilly, Esq. & Mark W. Deveno, Esq. Bingham McCutchen LLP 399 Park Avenue New York, NY 10022-4689 Tel: (212) 705-7000 Fax: (212) 752-5378 J.P. Morgan Chase Bank, N.A. agent to lenders notice only Administrative Agent Commercial Real Estate Attn: George W. Welch 201 North Central Avenue, 14th Floor Phoenix, AZ 85004 X-RITE INC: Weak Performance Cues Moody to Cut Ratings to 'B2' -------------------------------------------------------------- Moody's Investors Service lowered X-Rite, Inc.'s corporate family rating to B2 from B1. Moody's also lowered the rating on the company's first lien senior secured credit facilities to B1 from Ba3 and the rating on the second lien term loan to Caa1 from B3. All ratings were placed under review for possible downgrade. As part of this action, Moody's also lowered the company's speculative grade liquidity rating to SGL-4 from SGL-1. The review for possible further downgrade was prompted by Moody's concern over the company's ability to comply with the financial covenants governing its senior secured credit facilities given softening demand from its key OEM customers and slowing sales activity in the retail business unit. Moody's review will focus on X-Rite's plan to address any potential covenant violations and its ability to secure a timely waiver or amendment to its credit facilities. The review will also focus on the status of the Pantone and Amazys integrations as well as an assessment of the company's operating performance, business strategy, and liquidity. The downgrade of the speculative grade liquidity rating reflects Moody's opinion that there is potential for covenant violations during the next twelve months, and the likelihood that softening demand levels and a weak economic environment will pressure the company's cash flows. The ratings downgrade reflects the likelihood for weaker than expected operating performance relative to Moody's expectations, the concern that lower earnings will translate into credit metrics that are no longer consistent with the B1 ratings category, and concerns that a weak economic environment will apply ongoing pressure to the company's operating performance. These ratings were downgraded: -- Corporate family rating, to B2 from B1; -- Probability-of-default rating, to B2 from B1; -- $40 million senior secured revolving credit facility due 2012, to B1 (LGD3, 35%) from Ba3 (LGD3, 35%); -- $270 million first lien senior secured term loan due 2012, to B1 (LGD3, 35%) from Ba3 (LGD3, 35%); -- $105 million second lien senior secured term loan due 2013, to Caa1 (LGD5, 87%) from B3 (LGD5, 87%). X-Rite, Inc., headquartered in Grand Rapids, Michigan, is the world's largest provider of color measurement systems offering hardware, software, and support solutions that ensure color accuracy. The company reported sales of approximately $249 million for the fiscal year ended Dec. 29, 2007. ZIFF DAVIS: Court Grants Final Approval to Cash Collateral Use -------------------------------------------------------------- Judge Burton R. Lifland has given Ziff Davis Media, Inc., and its debtor-affiliates final approval to use their noteholders' cash collateral on terms agreed by the parties. The Debtors presented to the U.S. Bankruptcy Court for the Southern District of New York a stipulation signed by (i) U.S. Bank National Association, as indenture trustee for senior secured floating rate notes due 2012, of which $205,000,000 in principal were originally issued by the Debtors, and (ii) the Floating Rate Noteholder Group, composed of holders of in excess of 80% the principal amount of the Floating Rate Senior Secured Notes. The Noteholders assert security interests on the proceeds from the prepetition sale of the Debtors' Enterprise business, which provided the Debtors with $125,100,000 in cash. The Court-approved stipulation provides that the Debtors are authorized to use: (i) up to $12,000,000 of the Remaining Net Proceeds from the Petition Date through a "termination date", plus (ii) the balance of the $5,000,000 the Debtors were authorized to use pursuant to the Court's prior interim order approving the cash collateral use. Merrill Lynch, Pierce, Fenner & Smith Inc., will transfer the $12,000,000 from the segregated account to Ziff Davis' operating account. The Debtors will use the cash collateral in accordance with the budget approved by the financial advisor to the Noteholder Group, and U.S. Bank, as collateral trustee. The Debtors will promptly turnover all Remaining Net Proceeds from the segregated account to the Collateral Trustee. The Debtors, will, however retain: -- $7,500,000 in the Segregated Account, plus -- $5,500,000, which will be turned over to the Collateral Trustee after the expiration of the Official Committee of Unsecured Creditors' deadline to challenge period validity, perfection, priority or enforceability of the liens of the Floating Rate Senior Secured Noteholders. The Creditors Committee will have until May 13, 2008 to commence proceedings asserting potential claims against the Floating Rate Senior Secured Noteholders or challenge the validity, perfection and priority of the liens of the Floating Rate Senior Secured Noteholders. As adequate protection pursuant to Section 363(e) of the Bankruptcy Code, U.S. Bank, as collateral trustee, will be granted perfected replacement security interest in and valid, binding, enforceable and perfected liens on certain "Post- Petition Collateral", defined as all of each of the Debtors' assets, except for claims, or proceeds from claims, pursuant to Sections 502(d), 544, 545, 547, 548, 549, 550 or 553 of the Bankruptcy Code. The Floating Rate Senior Secured Noteholders' liens will only be subject to the Carve-Out, which includes: -- unpaid fees and expenses of the Debtors' retained professionals in an amount not to exceed $1,000,000; -- unpaid fees and expenses of professionals retained by the Creditors Committee in an amount not to exceed $250,000' -- $50,000 to any Chapter 7 trustee appointed after a "Termination Event." U.S. Bank will also receive super-priority claims, which will have priority over all administrative expense claims and unsecured claims, including administrative expenses specified in pursuant to Sections 105, 330, 331, 503(a), 503(b), 506(c), 507(a), 507(b), 546(c), and 546(d) of the Bankruptcy Code, and subordinate only to the Carve-Out. The Debtors will no longer be authorized to use Cash Collateral after the earlier to occur of: (i) July 30, 2008, and (ii) the occurrence of certain "Termination Events", including: * entry of an order approving any postpetition financing; * conversion of the Chapter 11 cases to Chapter 7; * the Debtors' payment of prepetition claims in excess of $20,000, without prior approval by U.S. Bank and the Majority Noteholder Group; or * The Debtors seeking approval for the payment of any employee stay, retention or performance bonus without the consent of U.S. Bank and the Majority Noteholder Group. Six Months Cash Budget (in Thousands) Mar-08 Apr-08 May-08 Jun-08 ------ ------ ------ ------ Projected EBITDA $900 $393 $667 $960 CapEx (281) (297) (274) (250) Working Capital (1,468) (1,162) (571) 587 Cash Taxes - (50) - - Interest Income - - - - Earnout Payments (2,762) - - - Professional Fees (1,125) (1,025) (1,505) (1,475) Operational Restructuring (325) (337) (332) (215) Chapter 11 and US Trustee Fees (7) (22) - - Utilities -- Adeq. Assurance (665) - - - Prepetition Amount Owed to Critical Vendors - - - - Cash Payable Upon Emergence - Professional Fees - - - - Convenience Class at 100% payout - - - - Unsecured Payout (excl. Compounders) - - - - -------- -------- -------- -------- Total Cash Flow - Preliminary ($5,733) ($2,499) ($2,015) ($394) LOW DRAW SCENARIO Less: Chapter 11 EBITDA Impact (551) (543) (560) (575) -------- -------- -------- -------- Total Cash Flow w/ Chapter 11 Impact (6,284) (3,043) (2,576) (969) Beginning Available Cash Balance 1,392 108 9,065 6,490 Funds from (to) Segregated Account 5,000 12,000 - - Total Cash Flow (6,284) (3,043) (2,576) (969) -------- -------- -------- -------- Ending Available Cash Balance $108 $9,065 $6,490 $5,520 Segregated Account Beginning Balance $118,190 $113,615 $7,500 $7,529 Funds from (to) ZDM Operating Cash (5,000) (12,000) - - Interest Income 425 142 29 29 Working Capital Settlement - - - - Distribution to Secured Noteholders (94,257) - - - -------- -------- -------- -------- Ending Balance $113,615 $7,500 $7,529 $7,559 ======== ======== ======== ======== HIGH DRAW SCENARIO Less: Chapter 11 EBITDA Impact (1,129) (1,114) (1,149) (1,180) Total Cash Flow with Chapter 11 Impact (6,862) (3,614) (3,164) (1,574) Beginning Available Cash Balance 1,392 (471) 7,916 4,752 Funds from (to) Segregated Account 5,000 12,000 - - Total Cash Flow (6,862) (3,614) (3,164) (1,574) -------- -------- -------- -------- Ending Available Cash Balance ($471) $7,916 $4,752 $3,178 Segregated Account Beginning Balance $118,190 $113,615 $7,500 $7,529 Funds from (to) ZDM Operating Cash (5,000) (12,000) - - Interest Income 425 142 29 29 Working Capital Settlement - - - - Distribution to Secured Noteholders - (94,257) - - -------- -------- -------- -------- Ending Balance $113,615 $7,500 $7,529 $7,559 ======== ======== ======== ======== Jul-08 Aug-08 Sum ------ ------ --- Projected EBITDA $135 $956 $4,011 CapEx (277) (176) (1,556) Working Capital 268 2,301 (43) Cash Taxes (50) - (100) Interest Income (Expense) - - - Earnout Payments - - (2,762) Professional Fees (1,425) - (6,555) Operational Restructuring (193) (177) (1,580) Ch 11 and US Trustee Fees (32) - (61) Utilities - Adequate Assurance - - (665) Prepetition Amount Owed to Critical Vendors - - - Cash Payable Upon Emergence Professional Fees - (4,280) (4,280) Convenience Class at 100% payout - (748) (748) Unsecured Payout (exc. Compounders) - - - -------- -------- -------- Total Cash Flow - Preliminary ($1,574) ($2,124) ($14,340) LOW DRAW SCENARIO Less: Chapter 11 EBITDA Impact (458) (572) (3,260) -------- -------- -------- Total Cash Flow with Chapter 11 Impact (2,032) (2,696) (17,599) Beginning Available Cash Balance 5,520 3,489 1,392 Funds from (to) Segregated Account - 4,207 21,207 Total Cash Flow (2,032) (2,696) (17,599) -------- -------- -------- Ending Available Cash Balance $3,489 $5,000 $5,000 Segregated Account Beginning Balance $7,559 $7,588 $118,190 Funds from (to) ZDM Operating Cash - (4,207) (21,207) Interest Income (Expense) 29 30 655 Working Capital Settlement - - - Distribution to Secured Noteholders - (3,381) (97,638) -------- -------- -------- Ending Balance $7,588 $- $- HIGH DRAW SCENARIO Less: Chapter 11 EBITDA Impact (938) (1,174) (6,684) Total Cash Flow with Chapter 11 Impact (2,512) (3,298) (21,024) Beginning Available Cash Balance 3,178 665 1,392 Funds from (to) Segregated Account - 7,500 24,500 Total Cash Flow (2,512) (3,298) (21,024) -------- -------- -------- Ending Available Cash Balance $665 $4,868 $4,868 Segregated Account Beginning Balance 7,559 $7,588 $118,190 Funds from (to) ZDM Operating Cash - (7,500) (24,500) Interest Income (Expense) 30 - 655 Working Capital Settlement - - - Distribution to Secured Noteholders - (88) (94,345) -------- -------- -------- Ending Balance $7,588 $- $- ======== ======== ======== The Debtors will not use, absent U.S. Bank's consent, the Cash Collateral with respect to any one line item in the Cash Collateral Budget in an amount exceeding 15% of the amount originally identified for the line item in any week, so long as the aggregate amount of the variance from the Budget for any week on a rolling net basis is not exceeded by more than 10%. The Creditors Committee, prior to entry of the Court's order, aired its objection to the approval of the Cash Collateral Stipulation. Creditors Committee's Objection The Creditors Committee notes that under the Plan Support Agreement, the Floating Rate Senior Secured Noteholders will receive, in exchange for their claims (a) the balance of the disputed Enterprise proceeds of $95,000,000 in cash, (b) a new $50,000,000 senior secured note, which may, under certain circumstances, be increased up to $57,000,000, and (c) 88.8% of the Debtors' new common equity upon emergence from Chapter 11. Thereafter, the Debtors have sought the Court's authority to pay the Disputed Proceeds to the Senior Noteholders 28 days after the Petition Date. The Committee asked the Court to deny the Debtors' request because the proposed payment would be made during the 60-day Challenge Period. "This leaves open the possibility that after the Disputed Proceeds are disbursed, the Court might determine that the Lenders' liens were not perfected or the Lenders were not otherwise entitled to receive the funds," the Creditors Committee's proposed counsel, Michael J. Sage, Esq., at O'Melveny & Myers LLP, in New York, said. Moreover, there is no legal or business justification for the pre-plan payment sought by the Debtors because the payment of claims before they have been allowed and outside the plan process is not expressly sanctioned by the Bankruptcy Code, Mr. Sage asserts. Mr. Sage adds that even if the Noteholders have perfected and unavoidable liens on the Debtors' assets, the Court should delay distribution of the Disputed Proceeds until after a Plan has been confirmed which provides for the distributions. The Creditors Committee also objects to: * the pre-plan payment of any future asset sale proceeds to the Lenders since there is no reason why asset sale proceeds must be paid to the Lenders pre-confirmation. * the grant of a lien on avoidance actions since the Debtors' avoidance actions are not transferable estate property, and therefore, may not be distributed under the guise of an adequate protection lien. * the payment of certain of the Lenders' professional fees without Court approval. If payments are made to the professionals retained by the Collateral Trustee and the Floating Rate Noteholder Group without being subject to the approval of this Court, the Debtors will be unable to meet one of the statutory requirements for plan confirmation. Plan Support Parties Defend Enterprise Proceeds Distribution (A) Noteholder Group The Floating Rate Group argues that the Creditors Committee's proposal -- the Enterprise proceeds should not be distributed at least until the Committee completes its lien review -- is lacking both in credibility and legal merit. Brian S. Hermann, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York, asserts that the Collateral Trustee's lien on the Disputed Proceeds is valid and perfected is well known at least to (i) several Creditors Committee members, who were formerly members of the ad hoc group of holders of Subordinated Notes that was formed long before the Chapter 11 cases commenced, and (ii) the Creditors Committee's proposed counsel, who previously acted as counsel for the ad hoc group. Additionally, the Creditors Committee's objection overlooks entirely the Noteholder Group's claim that the Disputed Proceeds are not property of the Debtors' estates, but rather are the exclusive property of the Collateral Trustee. Mr. Hermann states that for an overwhelming majority of unsecured creditors in the Chapter 11 cases, the lien review is entirely meaningless in view of the contractual subordination of their claims to the Prepetition Senior Secured Debt Obligations. "Even if the Collateral Trustee's Liens are invalidated, the holders of the Pre-Petition Senior Secured Debt Obligations still enjoy priority over the holders of Subordinated Notes," Mr. Hermann said. Mr. Hermann relates that the Committee's objections to the grant of a lien on avoidance actions and avoidance proceeds, the Section 506(c) waiver and the payment of the Noteholder Group's and the Collateral Trustee's professional fees also lacks merit. He explains that the Debtors have very little to offer the Collateral Trustee as adequate protection for their use of the Disputed Proceeds. He adds the adequate protection package that has been negotiated and agreed to, while "inadequate", represents the best the Debtors can do, and the minimum the Noteholder Group and the Collateral Trustee are prepared to accept. (B) U.S. Bank U.S. Bank National Association, in its capacity as Collateral Trustee, also asserts the Creditors Committee's objections are without merit and should be overruled. U.S. Bank avers it has a valid and perfected lien on the funds in the segregated account, pursuant to a collateral trust agreement dated April 22, 2005. James S. Carr, Esq., at Kelley Drye & Warren LLP, in New York, notes the Creditors Committee has not alleged any basis for objecting to the rights, liens, and interests granted to U.S. Bank. Even if the liens could be challenged, the vast majority of unsecured creditors in the Chapter 11 cases are contractually subordinated to the holders of the Debtors' secured obligations, Mr. Carr notes. Thus, distribution of the $95,000,000 to U.S. Bank will not prejudice or harm the vast majority of creditors, he asserts. Debtors: Creditors Committee Privy of Noteholders' Perfected Liens The Debtors reiterate that many, if not a majority, of the members of the Creditors Committee were formerly members of the prepetition ad hoc unsecured note holders committee, which existed for several months prior to the Petition Date. Additionally, the Creditors Committee counsel is the same law firm that represented the prepetition ad hoc unsecured note holders committee. "In essence, both the members of the prepetition committee and its counsel had months to investigate the validity, priority and extent of the Collateral Trustee's asserted liens," Daniel J. McGuire, Esq., at Winston & Strawn LLP, in New York, said. The Debtors believe the investigation has already taken place, and the results confirm the Collateral Trustee holds first- priority, properly-perfected security interests in and liens upon the Disputed Proceeds. Therefore, there is no reason to allow postpetition interest to accrue for the benefit of the Collateral Trustee while yet another investigation period runs its course, Mr. McGuire asserts. Mr. McGuire also argues that payment of the Disputed Proceeds to the Collateral Trustee for the benefit of the holders of the Senior Secured Notes is in furtherance of the relative priorities of the Debtors' constituents. He explains that even if the Disputed Proceeds constituted the Debtors' property and even if the Collateral Trustee had no liens on the Disputed Proceeds, under the subordination provisions of the unsecured bond indentures, the unsecured note holders cannot obtain a dividend from the proceeds unless the Floating Rate Senior Secured Notes Claims are paid in full, in cash. Also, if the Floating Rate Senior Secured Notes Claims do not have perfected liens on the Disputed Proceeds, those claims still would constitute well over 90% of all non-subordinated unsecured claims. The Debtors believe that the Creditors Committee has no reason to object to granting the Collateral Trustee an adequate protection lien on Avoidance Actions, since the Bankruptcy Code specifically provides that adequate protection may be provided through granting an adequate protection lien on unencumbered assets. About Ziff Davis Media, Inc. Headquartered in New York city, New York, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768). Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the Debtors in their restructuring efforts. An Official Committee of Unsecured Creditors have been appointed in the case. When Ziff Davis filed for bankruptcy protection, it listed assets of between $100 million to $500 million and debts of $500 million to $1 billion. The Debtors delivered to the United States Bankruptcy Court for the Southern District of New York, a Joint Chapter 11 Plan of Reorganization, on March 26, 2008. (Ziff Davis Bankruptcy News, Issue No. 6, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) ZIFF DAVIS: Disclosure Statement Hearing Set April 29 ----------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved a proposed timetable for hearings on the adequacy of the disclosure statement explaining the terms of the Joint Plan of Confirmation, and the confirmation of the Reorganization Plan of Ziff Davis Media Inc. and its debtor- affiliates. Pursuant to Bankruptcy Rules 2002(b) and 9006(c)(1), the deadline for filing objections to the approval of the Disclosure Statement is 4:00 p.m., prevailing Eastern time, on April 25, 2008. A hearing to consider approval of the Disclosure Statement is scheduled for April 29, 2008 at 10:00 a.m., prevailing Eastern time. The Plan confirmation hearing is scheduled for June 25, 2008 at 10:00 a.m., prevailing Eastern time. Objections, if any, to confirmation of the Plan must be filed and served no later June 18. Furthermore, memoranda in support of confirmation of the Plan must be filed and served no later than two days prior to the commencement of the Plan Confirmation Hearing. The Disclosure Statement Hearing and the Confirmation Hearing may be continued from time to time without further notice other than adjournments announced in open Court. Prior to the Court hearing on March 27, 2008, the Official Committee of Unsecured Creditors asked the Court to deny the Debtors' proposed procedures if they are not modified. The Committee claimed that the Debtors proposed to establish unnecessary and improper limits on (a) the evidence that may be presented at the proposed Disclosure Statement Hearing and Confirmation Hearing, and (b) related discovery. The Court's order provides that all discovery in connection with any contested proceedings related to Plan confirmation will be governed by a court-approved discovery procedures available for free at: http://bankrupt.com/misc/Ziff_DiscoveryProcedures.pdf Reorganization Plan As reported by the Troubled Company Reporter on March 26, 2008, the Debtors and an ad hoc group of holders of more than 80% in principal amount of the Debtors' Senior Secured Floating Rate Notes have reached an agreement on the terms of a Plan of Reorganization that would substantially reduce the Debtors' funded indebtedness. That agreement is incorporated into a Restructuring, Settlement and Plan Support Agreement by and between the Debtors and the Secured Noteholder Group dated as of February 29, 2008. Furthermore, the Restructuring Agreement incorporates a term sheet which sets forth the principal terms of the reorganization plan agreed by the Debtors and the Secured Noteholder Group. Among other things, the Term Sheet provides that in exchange for the full amount outstanding under the $225,000,000 in principal amount of the Debtors' senior secured notes, the holders will receive: (a) the balance of certain net proceeds due to the Debtors from the Debtors' 2007 sale of its Enterprise Group; (b) a new $50,000,000 senior secured note, which, under certain circumstances, may be increased up to $57,500,000; and (c) 88.8% of the new common equity of the Debtors upon emergence from Chapter 11. The Restructuring Agreement also provides that the holders of the Secured Notes will allow the Debtors to retain sufficient cash proceeds from the Enterprise Sale to fund operations during the Chapter 11 cases, as well as to fund the Debtors' business plan and operations after emergence from Chapter 11. Based on positions taken in prepetition negotiations, the Debtors anticipate that certain parties-in-interest may contest Plan confirmation on the ground that the Plan is premised on an understated valuation of the Debtors' enterprise value. By this motion, the Debtors seek the authority of the U.S. Bankruptcy Court for the Southern District of New York to: * set the date and time of the hearing on the Debtors' disclosure statement and approving the manner of notice; * schedule the date and time of the hearing on confirmation of the Debtors' plan of reorganization; and * establish discovery procedures. About Ziff Davis Media, Inc. Headquartered in New York city, New York, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768). Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the Debtors in their restructuring efforts. An Official Committee of Unsecured Creditors have been appointed in the case. When Ziff Davis filed for bankruptcy protection, it listed assets of between $100 million to $500 million and debts of $500 million to $1 billion. The Debtors delivered to the United States Bankruptcy Court for the Southern District of New York, a Joint Chapter 11 Plan of Reorganization, on March 26, 2008. (Ziff Davis Bankruptcy News, Issue No. 6, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) ZIFF DAVIS: Winston & Strawn Clarifies Pre-Bankruptcy Transactions ------------------------------------------------------------------ Mark K. Thomas, Esq., at Winston & Strawn LLP, in Chicago, Illinois, discloses that Winston & Strawn has represented Willis Stein & Partners in the past, and continues to do so in matters not related to the Chapter 11 cases of Ziff Davis Media Inc. and its debtor-affiliates. Mr. Thomas informs Judge Burton R. Lifland that Winston & Strawn did not receive any transfers on account of an antecedent debt owed to it by the Debtors during the 90 days preceding the Petition Date. "The only payment received by Winston & Strawn in connection with services provided to the Debtors prior to the Petition Date was payment of the March 4, 2008 invoice via set off against prior advance fee payments made by the Debtors," Mr. Thomas tells the Court. As reported by the Troubled Company Reporter on March 13, 2008, Ziff Davis Media, Inc. and its debtor-affiliates sought authority from the U.S. Bankruptcy Court for the Southern of District of New York to employ Winston & Strawn LLP as their attorneys, nunc pro tunc to their bankruptcy filing. Winston & Strawn will act as the Debtors' counsel for insolvency and related matters, and will render legal services relating to the day-to-day administration of the Chapter 11 cases. Pursuant to an engagement agreement entered into by the Debtors and Winston & Strawn, dated February 4, 2008, the Debtors hired the firm to provide legal advice in connection with their efforts to resolve their financial difficulties, including advice related to the filing of the Chapter 11 cases. The Debtors will pay Winston & Strawn based on the firm's applicable hourly rates: Professional Hourly Rate ------------ ----------- Partner $405 to $975 Associate $270 to $590 Paralegal/Legal Assistant $135 to $285 Four professionals are presently expected to have primary responsibility for providing services to the Debtors: 1. Mark K. Thomas 2. Carey D. Schreiber 3. Daniel J. McGuire 4. Mindy D. Cohn. Pursuant to the parties' prepetition engagement agreement, Winston & Strawn received advance fee payments totaling $700,000 in connection with its representation of the Debtors prior to the Petition Date, including, without limitation, preparation of the Chapter 11 cases and other matters. Mr. Thomas assured the Court that his firm is a "disinterested person," as the term is defined in Section 101(14) of the Bankruptcy Code. About Ziff Davis Media, Inc. Headquartered in New York city, New York, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768). Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the Debtors in their restructuring efforts. When Ziff Davis filed for bankruptcy protection, it listed assets of between $100 million to $500 million and debts of $500 million to $1 billion. (Ziff Davis Bankruptcy News, Issue No. 5, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) * S&P Downgrades Ratings on 65 Classes From 19 RMBS Transactions ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 65 classes from 19 residential mortgage-backed securities transactions backed by U.S. subprime mortgage loan collateral issued in 2006. At the same time, S&P removed all of the lowered ratings from CreditWatch with negative implications. In addition, S&P affirmed its ratings on 67 classes from 19 RMBS transactions backed by U.S. subprime loans and removed them from CreditWatch negative. All of the revised ratings were placed on CreditWatch negative on Jan. 30, 2008. The downgrades reflect S&P's opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings, given S&P's current projected losses. Due to current market conditions, S&P is assuming that it will take approximately 15 months to liquidate loans in foreclosure and approximately eight months to liquidate loans categorized as real estate owned. In addition, S&P are assuming a loss severity of approximately 45% for U.S. subprime RMBS transactions issued in 2006. The lowered ratings reflect S&P's assessment of credit support under two constant prepayment rate scenarios. The first scenario utilizes the lower of the lifetime or 12-month CPR, while the second utilizes a six-month CPR, which is very slow by historical standards. S&P assumed a constant default rate for each pool. Because the analysis focused on each individual class with varying maturities, prepayment scenarios may cause an individual class or the transaction itself to prepay in full before it incurs the entire loss projection. Slower prepayment assumptions lengthen the average life of the mortgage pool, which increases the likelihood that total projected losses will be realized. The longer a class remains outstanding, however, the more excess spread it generates. Standard & Poor's has updated its projected excess spread to account for the recent cuts in U.S. interest rates. In an upwardly sloping mortgage rate environment, Standard & Poor's announced that it would be discounting a portion of excess spread to account for potential interest rate modifications. An interest rate modification may extend the initial fixed-rate period of a mortgage loan to five years from two and three years. The reduction in interest rates has effectively extended the initial interest rates beyond the interest rate reset period. As a result of the reduction in excess spread, many loan modifications may no longer be needed. Standard & Poor's has updated its assumptions on excess spread to reflect the current environment. In assessing the creditworthiness of each class, S&P reviewed the individual delinquency and loss trends of each transaction for changes, if any, in risk characteristics, servicing, and the ability to withstand additional credit deterioration. For pools that are continuing to show increasing delinquencies, S&P increased S&P's cash flow stresses to account for potential increases in monthly losses. In order to maintain a rating higher than 'B', a class had to absorb losses in excess of the base case assumption S&P assumed in its analysis. For example, a class may have to withstand 115% of S&P's base case loss assumption in order to maintain a 'BB' rating, while a different class may have to withstand 125% of S&P's base case loss assumption to maintain a 'BBB' rating. Each class that has an affirmed 'AAA' rating can withstand approximately 150% of S&P's base case loss assumptions under S&P's analysis, subject to individual caps assumed on specific transactions. S&P determined the caps by limiting the amount of remaining defaults to 90% of the current pool balances. A combination of subordination, excess spread, and overcollateralization provide credit support for the affected transactions. The underlying collateral for these deals consists of fixed- and adjustable-rate U.S. subprime mortgage loans that are secured by first and second liens on one- to four-family residential properties. To date, including the classes listed below and actions on both publicly and confidentially rated classes, S&P have resolved the CreditWatch placements of the ratings on 1,019 classes from 198 U.S. RMBS subprime transactions from the 2006 and 2007 vintages. Currently, S&P's ratings on 1,585 classes from 317 U.S. RMBS subprime transactions from the 2006 and 2007 vintages are on CreditWatch negative. Standard & Poor's will continue to monitor the RMBS transactions it rates and take rating actions, including CreditWatch placements, when appropriate. Ratings Lowered and Removed From CreditWatch Negative Argent Securities Trust 2006-M2 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-M2 A-1 A AAA/Watch Neg 2006-M2 A-2D A AAA/Watch Neg 2006-M2 M-1 BB AA+/Watch Neg 2006-M2 M-2 B AA-/Watch Neg Asset Backed Securities Corporation Home Equity Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-HE3 M2 BBB AA-/Watch Neg 2006-HE3 M3 BB AA-/Watch Neg AMQ 2006-HE7 M1 BB AA+/Watch Neg AMQ 2006-HE7 M2 B AA/Watch Neg AMQ 2006-HE7 M3 CCC AA-/Watch Neg BNC Mortgage Loan Trust 2006-2 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-2 A1 BB AAA/Watch Neg 2006-2 A4 BBB AAA/Watch Neg 2006-2 A5 BB AAA/Watch Neg 2006-2 M1 B AA+/Watch Neg 2006-2 M2 CCC AA/Watch Neg 2006-2 M3 CCC AA-/Watch Neg Carrington Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-NC3 M-2 BBB AA/Watch Neg 2006-NC3 M-3 BB AA-/Watch Neg 2006-NC5 M-1 AA AA+/Watch Neg 2006-NC5 M-2 BB AA-/Watch Neg CWABS Asset-Backed Certificates Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-20 M-2 A AA/Watch Neg 2006-20 M-3 BBB AA/Watch Neg 2006-20 M-4 BB AA/Watch Neg 2006-25 M-3 A AA-/Watch Neg Fieldstone Mortgage Investment Trust 2006-3 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-3 M1 BBB AA+/Watch Neg 2006-3 M2 B AA/Watch Neg 2006-3 M3 B AA-/Watch Neg First Franklin Mortgage Loan Trust 2006-FF17 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-FF17 A1 BB AAA/Watch Neg 2006-FF17 A2 BB AAA/Watch Neg 2006-FF17 A5 BB AAA/Watch Neg 2006-FF17 A6 BB AAA/Watch Neg 2006-FF17 M1 B AA+/Watch Neg 2006-FF17 M2 CCC AA/Watch Neg 2006-FF17 M3 CCC AA-/Watch Neg Fremont Home Loan Trust 2006-1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-1 M-1 BB AA/Watch Neg 2006-1 M-2 B AA-/Watch Neg Long Beach Mortgage Loan Trust 2006-11 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-11 I-A BB AAA/Watch Neg 2006-11 II-A3 BB AAA/Watch Neg 2006-11 II-A4 BB AAA/Watch Neg 2006-11 M-1 B AA+/Watch Neg 2006-11 M-2 CCC AA/Watch Neg 2006-11 M-3 CCC AA-/Watch Neg MASTR Asset Backed Securities Trust 2006-AM3 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-AM3 M-2 BBB AA+/Watch Neg 2006-AM3 M-3 BB AA+/Watch Neg 2006-AM3 M-4 B AA+/Watch Neg 2006-AM3 M-5 CCC AA-/Watch Neg People's Financial Realty Mortgage Securities Trust 2006-1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-1 1A3 BBB AAA/Watch Neg 2006-1 1A4 BB AAA/Watch Neg 2006-1 2A1 BB AAA/Watch Neg 2006-1 2A2 BB AAA/Watch Neg 2006-1 M1 B AA+/Watch Neg 2006-1 M2 CCC AA/Watch Neg 2006-1 M3 CCC AA-/Watch Neg Securitized Asset Backed Receivables LLC Trust 2006-NC3 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-NC3 M1 A AA+/Watch Neg 2006-NC3 M2 BB AA/Watch Neg 2006-NC3 M3 B AA-/Watch Neg SG Mortgage Securities Trust 2006-OPT2 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-OPT2 M-1 BB AA+/Watch Neg 2006-OPT2 M-2 B AA/Watch Neg 2006-OPT2 M-3 CCC AA-/Watch Neg Soundview Home Loan Trust 2006-OPT2 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-OPT2 M-2 A AA/Watch Neg 2006-OPT2 M-3 BB AA/Watch Neg 2006-OPT2 M-4 B AA-/Watch Neg Structured Asset Securities Corporation Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-BC6 M1 BBB AA+/Watch Neg 2006-BC6 M2 BB AA/Watch Neg 2006-BC6 M3 B AA-/Watch Neg 2006-W1 M3 A AA-/Watch Neg Ratings Affirmed and Removed From CreditWatch Negative Argent Securities Trust 2006-M2 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-M2 A-2A AAA AAA/Watch Neg 2006-M2 A-2B AAA AAA/Watch Neg 2006-M2 A-2C AAA AAA/Watch Neg Asset Backed Securities Corporation Home Equity Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-HE3 M1 AA AA/Watch Neg AMQ 2006-HE7 A1 AAA AAA/Watch Neg AMQ 2006-HE7 A2 AAA AAA/Watch Neg AMQ 2006-HE7 A-3 AAA AAA/Watch Neg AMQ 2006-HE7 A-4 AAA AAA/Watch Neg AMQ 2006-HE7 A5 AAA AAA/Watch Neg BNC Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-2 A2 AAA AAA/Watch Neg 2006-2 A3 AAA AAA/Watch Neg Carrington Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-NC3 M-1 AA+ AA+/Watch Neg 2006-NC5 A-1 AAA AAA/Watch Neg 2006-NC5 A-2 AAA AAA/Watch Neg 2006-NC5 A-3 AAA AAA/Watch Neg 2006-NC5 A-4 AAA AAA/Watch Neg 2006-NC5 A-5 AAA AAA/Watch Neg CWABS Asset-Backed Certificates Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-20 1-A AAA AAA/Watch Neg 2006-20 2-A-1 AAA AAA/Watch Neg 2006-20 2-A-2 AAA AAA/Watch Neg 2006-20 2-A-3 AAA AAA/Watch Neg 2006-20 2-A-4 AAA AAA/Watch Neg 2006-20 M-1 AA+ AA+/Watch Neg 2006-25 1-A AAA AAA/Watch Neg 2006-25 2-A-1 AAA AAA/Watch Neg 2006-25 2-A-2 AAA AAA/Watch Neg 2006-25 2-A-3 AAA AAA/Watch Neg 2006-25 2-A-4 AAA AAA/Watch Neg 2006-25 M-1 AA+ AA+/Watch Neg 2006-25 M-2 AA AA/Watch Neg Fieldstone Mortgage Investment Trust 2006-3 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-3 1-A AAA AAA/Watch Neg 2006-3 2-A1 AAA AAA/Watch Neg 2006-3 2-A2 AAA AAA/Watch Neg 2006-3 2-A3 AAA AAA/Watch Neg 2006-3 2-A4 AAA AAA/Watch Neg First Franklin Mortgage Loan Trust 2006-FF17 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-FF17 A3 AAA AAA/Watch Neg 2006-FF17 A4 AAA AAA/Watch Neg Fremont Home Loan Trust 2006-1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-1 I-A-1 AAA AAA/Watch Neg 2006-1 II-A-2 AAA AAA/Watch Neg 2006-1 II-A-3 AAA AAA/Watch Neg 2006-1 II-A-4 AAA AAA/Watch Neg Long Beach Mortgage Loan Trust 2006-11 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-11 II-A1 AAA AAA/Watch Neg 2006-11 II-A2 AAA AAA/Watch Neg MASTR Asset Backed Securities Trust 2006-AM3 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-AM3 A-1 AAA AAA/Watch Neg 2006-AM3 A-2 AAA AAA/Watch Neg 2006-AM3 A-3 AAA AAA/Watch Neg 2006-AM3 A-4 AAA AAA/Watch Neg 2006-AM3 M-1 AA+ AA+/Watch Neg People's Financial Realty Mortgage Securities Trust 2006-1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-1 1A1 AAA AAA/Watch Neg 2006-1 1A2 AAA AAA/Watch Neg RASC Trust 2006-EMX3 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-EMX3 M-4 AA- AA-/Watch Neg Securitized Asset Backed Receivables LLC Trust 2006-NC3 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-NC3 A-1 AAA AAA/Watch Neg 2006-NC3 A-2A AAA AAA/Watch Neg 2006-NC3 A-2B AAA AAA/Watch Neg 2006-NC3 A-2C AAA AAA/Watch Neg SG Mortgage Securities Trust 2006-OPT2 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-OPT2 A-1 AAA AAA/Watch Neg 2006-OPT2 A-2 AAA AAA/Watch Neg 2006-OPT2 A-3A AAA AAA/Watch Neg 2006-OPT2 A-3B AAA AAA/Watch Neg 2006-OPT2 A-3C AAA AAA/Watch Neg 2006-OPT2 A-3D AAA AAA/Watch Neg Soundview Home Loan Trust 2006-OPT2 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-OPT2 M-1 AA+ AA+/Watch Neg Structured Asset Securities Corporation Mortgage Loan Trust 2006-BC6 Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-BC6 A1 AAA AAA/Watch Neg 2006-BC6 A2 AAA AAA/Watch Neg 2006-BC6 A3 AAA AAA/Watch Neg 2006-BC6 A4 AAA AAA/Watch Neg 2006-BC6 A5 AAA AAA/Watch Neg * Stressed Markets Mean Poor 2008 Thrift Performance, S&P Says -------------------------------------------------------------- The weak fourth-quarter results for the U.S. thrift sector are prophetic of earnings prospects in 2008, Standard & Poor's Ratings Services reports. Residential mortgage credit trends continue to be quite negative as losses on second-lien and subprime mortgages hit record highs, and prime mortgages in weak housing markets and with higher loan- to-value ratios are close behind in posting record losses. In fourth-quarter 2007, the thrifts posted higher credit provisions, which were a multiple of net loan charge-offs, in preparation for the realization of higher net loan losses throughout 2008. "The concentrated nature of the thrifts' business franchises makes this credit cycle even more challenging as the size and scope of other business lines are not significant enough to generate revenues that offset the underperformance of the core mortgage business," said Standard & Poor's credit analyst Victoria Wagner. * S&P Says Most Nonbulge-Bracket Brokers Survive Turbulent Markets ------------------------------------------------------------------ Many rated U.S. nonbulge bracket brokers fared well, while others were challenged in the volatile and uncertain markets, said a report by Standard & Poor's Ratings Services. "At retail brokers, we expect the margin losses due to rapid share price declines, including Bear Stearns, to be minimal or manageable (relative to total margin balances)," said Standard & Poor's credit analyst Helene De Luca. If market levels and volumes drop while investors disengage from the market, daily average revenue trades and trading revenues will drop. In addition, lower interest rates will pressure interest income to varying degrees, but we expect overall recurring revenues to help ease the negative effect on earnings. * U.S. Senate Advances Bill to Stem Housing Foreclosures --------------------------------------------------------- Bloomberg News reports that the U.S. Senate has advanced a bill designed to stem housing foreclosures following a resolution of a standoff with Democrats over a proposal to let judges modify mortgage terms in bankruptcy court. The chamber voted 94 to 1 in favor of the proposed legislation. Republican Senator Jim Bunning from Kentucky was the lone voter against proceeding with the measure. The three presidential contenders did not vote on the proposed measure. Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, and Alabama Republican Senator Richard Shelby, are to write a new, bipartisan bill that will be substituted for the current proposal. Chairman Dodd said he hoped that they would be able to present the bill by noon Washington time. Bankruptcy Provisions Senate Majority Leader Harry Reid, a Nevada Democrat, said it will be up to Chairman Dodd and Sen. Shelby to decide whether to include the bankruptcy provisions in the new compromise plan. He said the legislation will still be subject to amendment on the Senate floor. Chairman Dodd said the bill may include his proposal to allow the Federal Housing Administration to insure a mortgage after a lender reduces the principal to a level a borrower can afford. Senate Republicans and the Bush administration had objected to the bankruptcy court provisions in the current Democratic proposal, saying it would prompt mortgage lenders to recover losses in court by raising interest rates on other borrowers. * IWIRC to Honor Achievement of Bankruptcy Professionals -------------------------------------------------------- The International Women's Insolvency and Restructuring Confederation will honor two women and its Chicago Network for outstanding achievement at their Spring 2008 Luncheon and Presentation of IWIRC Founders Awards in Washington DC on April 3, 2008. Join in congratulating the recipients and to hear from our keynote speaker, Michael Beschloss, NBC News Presidential Historian. Register to attend at http://www.iwirc.com. The Melnik Award for Exceptional IWIRC Member will be awarded to Francine Gordon. Francine Gordon, a Senior Managing Consultant with Kurtzman Carson Consultants LLC in El Segundo, Calif., is a veteran of the Chapter 11 bankruptcy and claims administration industry with nearly 20 years of experience. Throughout her career, she has spearheaded the administration of several Chapter 11 cases including Revco D.S. Inc., PharMor, McCrory Stores and HomePlace Stores, Inc. Currently, she serves as the Recruitment Director for IWIRC and serves on the Steering Committee for the IWIRC NorthEast Ohio Chapter. She is also a member of ABI and TMA. Prior to joining KCC, Francine was one of the chief executives of a national claims administration consulting firm. The Fetner Award for Outstanding International IWIRC Contribution will be awarded to Dr. Annerose Tashiro. Dr. Annerose Tashiro is the Head of Cross-Border Restructuring and Insolvencies at Schultze & Braun GmbH in Achern, Germany. Annerose specializes in reorganization, distressed investments, transnational insolvency laws and liability issues in cross-border cases advising creditors, creditor bodies and investors, but also debtors and their affiliates. She speaks often at international insolvency and restructuring conferences and company-internal seminars. Currently, Annerose acts as IWIRC's Communications Vice-Director and is Editor of IWIRC's Newsletter. She is also a member of ABI, INSOL Europe, and the German-Japanese Association of Jurists. The Ryan Award for Outstanding IWIRC Network will be awarded to the Chicago (USA) Network. The Chicago Network applauds all members of the Chicago Network who have dedicated significant time and resources to making the network a success. This year's board is comprised of Chair: Jill Murch (Foley & Lardner LLP); Vice Chair: Sherri Morissette (Biomet, Inc.); Treasurer: Theresia Wolfe-McKenzie (Arnstein & Lehr LLP); Secretary: Lori Stanovich (Bowne); Membership Chair: Elizabeth Vrato (BMC Group, Inc.); and Ex Oficio Chair: Cheri Anderson. About IWIRC Founded in 1994, IWIRC works to enhance the professional status and reputation of women in the insolvency practice. Its membership includes attorneys, bankers, corporate-turnaround professionals, financial advisors and other professionals, both women and men. It fulfills its charter by creating opportunities for networking, professional development, education, leadership and mentoring on local and international levels. The organization has nearly 1,000 members worldwide, with 27 local networks that include most major markets in the USA as well as Europe, Hong Kong, Australia and Canada. * CRG Partners Forms Strategic Alliance with Smith & Williamson --------------------------------------------------------------- CRG Partners is entering into a strategic alliance with the United Kingdom's Smith & Williamson Limited, a financial services group with preeminent expertise in restructuring and recovery within Europe. The alliance will develop joint opportunities for the respective firms' global restructuring activities. "Through Smith & Williamson, CRG Partners will continue to grow its overseas practice and meet the ever increasing demand of our North American clients' overseas activities as well as the activities of our European-based clients," said Michael Epstein, a Managing Partner of CRG Partners. "It will further our ability to serve our clients with a broader array of consulting services." CRG Partners and Smith & Williamson expect the venture will enable both firms to expand their professional reach in multiple countries simultaneously, providing multi-national clients with superior and efficient resources. "We are extremely pleased to work with CRG Partners to increase our North American presence and resources," said Stephen Cork, Head of Restructuring and Recovery at Smith & Williamson. "We will now be able to better support our clients' international activities and growth." CRG Partners and Smith & Williamson each offer a comprehensive suite of restructuring services, including turnaround consulting, interim management, crisis management, performance improvement, and financial restructuring and advisory services. Both firms focus on developing and implementing operational and financial initiatives to maximize the value of underperforming companies. The deal is not a merger or acquisition, according to Krista Simmons, Director of Public Relations at Burk Advertising & Marketing. About CRG Partners New York-based CRG Partners provides operational and financial restructuring services, specializing in creating value for the stakeholders of underperforming companies. CRG Partners has offices in Atlanta; Bethesda; Boston; Charlotte; Chicago; Dallas; Los Angeles; New York; and Vienna, Austria. On the Web: http://www.crgpartners.com/ Media Contact: Sarah Michael CRG Partners sarah.michael@crgpartners.com Tel: (310) 954-8757 About Smith & Williamson's Restructuring and Recovery Team Smith & Williamson is a professional and financial group with a private bank, investment house and accountancy firm operating from key U.K. locations with offices overseas. Smith & Williamson's restructuring and recovery team has a market-leading reputation built upon innovation and performance. New offices have been opened in the British Virgin Islands and the Cayman Islands as part of Smith & Williamson's commitment to providing offshore expertise. Smith & Williamson's clients include leading European banks, overseas financial institutions and corporations with the asset value of the assignments up to GBP16 billion. On the Web: http://www.smith.williamson.co.uk/ * FTI Acquires Real Estate Consulting Firm Schonbraun McCann ------------------------------------------------------------ FTI Consulting, Inc., the global business advisory firm dedicated to helping organizations protect and enhance their enterprise value, has signed a definitive agreement to acquire The Schonbraun McCann Group in a transaction valued at approximately $125 million, of which approximately $100 million is in cash and approximately $25 million is in restricted FTI stock. In addition, there will be the opportunity for additional consideration if earnings exceed certain targets over the next five years. The Company expects to close on April 1, 2008. Founded in 1973 by its Managing Partner Bruce Schonbraun, SMG is the leading, dedicated national real estate and finance consulting firm. SMG is headquartered in New York City and has additional offices in New Jersey and Florida. The firm offers a full range of real estate financial consulting services including complex financial analysis and transaction structuring, tax planning and compliance, restructuring and bankruptcy, litigation support, mergers and acquisitions, due diligence, IPO advisory, valuations, corporate strategy and executive compensation. SMG is a trusted adviser to the most prominent REITs, REOCs, leading owners and developers from the private and public sectors, financial institutions, sovereign funds, hedge funds and pension fund advisors. Importantly, SMG also has a high percentage of recurring revenue from major real estate clients. SMG has advised on some of the largest and most complex real estate transactions in recent years, including SL Green on its $6.0 billion acquisition of Reckson Associates Realty Corp.; Beacon Capital Partners on its $6.4 billion acquisition of office properties in Seattle and Washington D.C.; Broadway Partners on its $4.7 billion acquisition of 14 office properties; Gale International on its $30 billion master development of Songdo City, South Korea; Mack-Cali on its $600 million acquisition of the Bellemeade portfolio; and many recent REIT IPOs including Douglas Emmett, Northstar Realty, and Gramercy Capital. In the last two years, SMG has been involved in transactions valued at over $100 billion. Mr. Schonbraun will join FTI as a Senior Managing Director and Group Leader of its Real Estate Practice. In addition, SMG brings 170 professionals to FTI, 11 of whom will become Senior Managing Directors. SMG will operate and function as the Real Estate Division of FTI within the Company's Corporate Finance Sector and continue to operate under its highly recognized name. "We are delighted to welcome The Schonbraun McCann Group, the most respected advisory firm to the real estate industry, to FTI," said Jack Dunn, President and CEO of FTI. "No other firm has SMG's unparalleled depth of experience in the real estate and real estate finance markets, breadth of capabilities or its elite clientele. Increasingly, we believe the basis of competition, the path to better serve clients, will be based on focused industry expertise -- not merely product knowledge -- and SMG provides that expertise to FTI." Mr. Dunn continued, "SMG brings three important attributes to FTI. First, SMG is the leading and most recognized provider of premium, value added services to the real estate industry an industry that comprises almost 12 percent of the U.S. GDP. Second, SMG's practice continues to expand the portion of our business that is based on a recurring revenue model from important clients. Similar to our strategic communications business which has approximately 70% of revenue from retainer-based clients and our hosting business in the technology group, SMG will provide consistency and stability to our future revenues and earnings. Third, SMG and FTI will benefit from our combined ability to drive growth in Europe and Asia where SMG's intellectual capital and demonstrated expertise in real estate coupled with FTI's existing practices should open significant new channels for growth." Mr. Dunn added, "We think now is a particularly opportune time to join practices with SMG. The precipitous decline in liquidity in the global financial system is creating stress in the real estate market and driving demand for conflict resolution, restructuring and strategic counsel from even the strongest players. Furthermore, in markets such as these there is often a transfer of wealth from those shedding their holdings to opportunistic buyers with the foresight and financial strength to invest in a down cycle. With its access to the capital markets, strong relationships with strategic investors and deep expertise in real estate restructuring, valuation, complex financial transactions, tax planning and financing, SMG expands our capacity and capabilities to provide the most robust advice and opportunistic financing to our clients both domestically and abroad as they confront these challenges." "We are thrilled to be part of FTI Consulting, a $1 billion plus firm that ranks among the most respected and fastest growing in the industry," said SMG Managing Partner Bruce Schonbraun. "As part of FTI, we will be able to more rapidly develop our real estate industry platform, not just on a national, but on a global basis. SMG is now part of an organization that is in virtually every major business center around the world. As a result, we will be able to provide dedicated, localized service wherever our clients need us. The combination of world class, global expertise with local "last mile" execution is becoming increasingly important as our real estate clients are expanding their developments and investments abroad. Similarly, FTI's global reach will help us better serve our international clients, notably the so-called "sovereign funds," that are seeking real estate opportunities in the U.S. Finally, FTI's expertise in restructuring is especially valuable at this time in our economy and will leverage SMG's expanding practice in this area." The deal with SMG is FTI's eighth deal announced in 2008. The other deals include: February 12, 2008 -- Strategic Discovery, Inc. February 12, 2008 -- Rubino & McGeehin Consulting Group, Inc. February 20, 2008 -- Thompson Market Services Limited February 28, 2008 -- TSC Brasil Limitada March 18, 2008 -- Brewer Consulting Ltd. and Blueprint Partners March 28, 2008 -- Forensic Accounting LLP FTI Conference Call FTI hosted a conference call to discuss its acquisition of The Schonbraun McCann Group and other recent transactions yesterday, April 1, at 8:30 AM Eastern Daylight Time. The live call can be accessed via Internet broadcast through the Home Page of the Company's Web site at http://www.fticonsulting.com/ About The Schonbraun McCann Group The Schonbraun McCann Group is a national real estate and finance consulting firm, headquartered in midtown Manhattan, with offices in New Jersey and Florida. Established in 1973, the firm has a staff of approximately 170 professionals and provides these services: Mergers & Acquisitions, Real Estate Due Diligence, REIT Services, IPO Advisory, Tax Structuring & Compliance, Executive Compensation, State & Local Tax Services, Private Client Tax & Advisory Services, Restructuring & Bankruptcy, Strategy Group, Lease Consulting, Hospitality, Litigation Support, Cost Segregation, Valuation Services, and Financial Outsourcing. About FTI Consulting, Inc. FTI Consulting, Inc. (NYSE:FCN) is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. With more than 3,000 employees located in most major business centers in the world, we work 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. On the Web: http://www.fticonsulting.com/ To contact FTI Consulting: FTI Consulting, Inc. 500 East Pratt Street, Suite 1400 Baltimore, MD 21202 USA Tel: (410) 951-4800 * BDO Consulting Forms Strategic and Financial Consulting Services ------------------------------------------------------------------ BDO Consulting, a division of BDO Seidman LLP, formed BDO Consulting Corporate Advisors LLC. Building on BDO Consulting's legacy of services to companies facing the need for restructuring or operational turnaround, the practice will provide strategic and financial consulting services to companies in distress. BDO Consulting Corporate Advisors LLC services include interim management, strategic and operational improvement, financial advisory and chief restructuring officer services. Bill Lenhart, the national director of Business Restructuring Services at BDO Consulting, will lead BDO Consulting Corporate Advisors LLC. The practice also welcomes Tony Wolf and Bob Starzyk as managing directors. The appointments are effective immediately. "With the creation of BDO Consulting Corporate Advisors LLC and the appointments of [Mr. Wolf] and [Mr. Starzyk], we can assist companies in distress or facing business challenges, by identifying strategic alternatives, recommending reorganization strategies and restoring profitability to their operations," Mr. Lenhart said. "BDO Consulting Corporate Advisors LLC will complement the solid track record the Business Restructuring Services practice has built over the years providing financial advisory, strategy, debt restructuring and forensic and litigation support to distressed companies, trustees, secured creditors and unsecured creditors." "BDO Consulting Corporate Advisors, LLC has access to the full range of our expertise including fraud detection and prevention, investigative due diligence, business process improvements and internal controls reviews across a wide range of industries," said Carl W. Pergola, executive director of BDO Consulting. "Given the current economic climate, there will be more opportunities for us to provide hands-on interim management and operational improvement services to help privately-held and publicly traded companies in distressed situations." BDO Consulting Corporate Advisors LLC service offerings include: -- C-level Interim management -- Change management -- Business plan validation -- Chief Restructuring Officer -- Strategic repositioning -- Visibility assessment -- Profit and cash flow improvement -- Stakeholder negotiations -- Refinancing and equity capital procurement -- Board advisory -- Post-restructuring due diligence Mr. Lenhart, 52, has more than 25 years of experience in insolvency, restructuring and financial advisory services for companies in distress with business reorganization or debt restructuring issues. As the national director of the Business Restructuring Service practice at BDO Consulting, Mr. Lenhart has represented shareholders, debtors, secured lenders, bondholders, official and unofficial creditor and equity committees and their related counsels in complex bankruptcy, insolvency and turnaround cases, from strategy through implementation and project management. He serves as a member of the board of directors for the Turnaround Management Association and is a Certified Turnaround Professional and a Certified Insolvency and Restructuring Advisor. Mr. Lenhart, who is based in the New York office of BDO Consulting, received a Bachelor of Science degree in accounting from Villanova University. Mr. Wolf, 54, joins BDO Consulting Corporate Advisors LLC from Glass & Associates, where he served as a Principal. He has more than 14 years of experience in corporate restructuring and executive management with particular emphasis on: competitive strategy and market expansion, productivity and margin enhancement, operations and performance improvement and creditor negotiations. A Certified Turnaround Professional, his turnaround experience includes serving as a CEO, interim CEO, and interim CFO of various private companies. He has also served as a financial advisor to numerous middle market companies from industries including: aerospace, telecommunications, agriculture, technology, food distribution, medical products, real estate, oil and gas and refining and distribution. Mr. Wolf, who will be based in Dallas, received a Bachelor of Arts degree in history from Harvard College, a Master of Business Administration degree from the University of Chicago and a Masters degree from the University of Southern California and the U.S. Naval War College. Mr. Starzyk, 62, joins BDO Consulting Corporate Advisors LLC from Morris Anderson & Associates, where he served as Principal. He has more than 25 years of experience in business turnaround and crisis management. He has served in executive levels of management in both privately held and publicly traded companies. A Certified Turnaround Professional, his turnaround experience includes serving as a chief operating officer, chief restructuring officer, executive vice president and vice president of operations for companies in the manufacturing, distribution, high technology, transportation and service industries. Mr. Starzyk, who will be based in Dallas, received a Bachelor of Science degree in accountancy from the University of Illinois. About BDO Consulting BDO Consulting, a division of BDO Seidman LLP, provides litigation, investigation, restructuring and risk advisory services to major corporations, law firms, insurance companies, financial services entities, and government organizations. Our highly experienced and well-credentialed professionals draw upon a range of industry knowledge and completed consulting engagements throughout the United States and internationally to provide clients with unparalleled service. BDO Consulting leverages the industry and accounting knowledge of the BDO International network, providing rapid, strategic advice to assist our clients with dispute resolution, risk management, mergers and acquisitions, financial solvency and regulatory compliance issues. About BDO Seidman LLP Based in Chicago Illinois, BDO Seidman LLP -- http://www.bdo.com/ -- is the U.S. arm of BDO International. The firm provides assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. BDO Seidman LLP serves clients through 35 offices and more than 300 independent alliance firm locations nationwide. As a member firm of BDO International, BDO Seidman LLP serves multi-national clients by leveraging a network of resources comprised of 621 Member Firm offices in 110 countries. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Apr. 3, 2008 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION Annual Spring Luncheon Renaissance Hotel, Washington, District of Columbia Contact: 703-449-1316 or www.iwirc.org Apr. 3, 2008 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners - East The Renaissance, Washington, District of Columbia Contact: http://www.abiworld.org/ Apr. 3-6, 2008 AMERICAN BANKRUPTCY INSTITUTE 26th Annual Spring Meeting The Renaissance, Washington, District of Columbia Contact: http://www.abiworld.org/ Apr. 7-8, 2008 PRACTISING LAW INSTITUTE 30th Annual Current Developments in Bankruptcy & Reorganization PLI Center New York, New York Contact: http://www.pli.edu/ Apr. 10-11, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Ninth Annual Conference on Healthcare -24-24Transactions Successful Strategies for Mergers, Acquisitions, Divestitures and Restructurings The Millennium Knickerbocker Hotel, Chicago Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ Apr. 25-27, 2008 NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES NABT Spring Seminar Eldorado Hotel & Spa, Santa Fe, New Mexico Contact: http://www.nabt.com/ Apr. 29, 2008 TURNAROUND MANAGEMENT ASSOCIATION Why Prospects Become Clients Citrus Club, Orlando, Florida Contact: http://www.turnaround.org// May 1-2, 2008 TURNAROUND MANAGEMENT ASSOCIATION 2nd Annual Credit & Bankruptcy Symposium Foxwoods Resort Casino, Ledyard, Connecticut Contact: http://www.turnaround.org// May 1-2, 2008 AMERICAN BANKRUPTCY INSTITUTE Debt Symposium Hilton Garden Inn, Champagne/Urbana, Illinois Contact: 1-703-739-0800; http://www.abiworld.org/ May 9, 2008 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners - NYC Alexander Hamilton U.S. Custom House, New York Contact: 1-703-739-0800; http://www.abiworld.org/ May 12, 2008 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference Millennium Broadway Hotel & Conference Center, New York Contact: 1-703-739-0800; http://www.abiworld.org/ May 12-13, 2008 PRACTISING LAW INSTITUTE 30th Annual Current Developments in Bankruptcy & Reorganization PLI Center San Francisco, California Contact: http://www.pli.edu/ May 13-16, 2008 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Tulane University, New Orleans, Louisiana Contact: 1-703-739-0800; http://www.abiworld.org/ May 15-16, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Fifth Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel - London Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ May 18-20, 2008 INTERNATIONAL BAR ASSOCIATION 14th Annual Global Insolvency & Restructuring Conference Stockholm, Sweden Contact: http://www.ibanet.org/ May 21, 2008 TURNAROUND MANAGEMENT ASSOCIATION What Happened to My Money - The Restructuring of a Loan Servicer Marriott North, Fort Lauderdale, Florida Contact: http://www.turnaround.org// June 4-7, 2008 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 24th Annual Bankruptcy & Restructuring Conference J.W. Marriott Spa and Resort, Las Vegas, Nevada Contact: http://www.airacira.org/ June 12-14, 2008 AMERICAN BANKRUPTCY INSTITUTE 15th Annual Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: http://www.abiworld.org/ June 19 & 20, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Corporate Reorganizations Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ June 24, 2008 TURNAROUND MANAGEMENT ASSOCIATION Fraud Panel Citrus Club, Orlando, Florida Contact: http://www.turnaround.org/ June 26-29, 2008 NORTON INSTITUTES ON BANKRUPTCY LAW Western Mountains Bankruptcy Law Seminar Jackson Hole, Wyoming Contact: http://www.nortoninstitutes.org/ July 10, 2008 TURNAROUND MANAGEMENT ASSOCIATION Cynthia Jackson of Smith Hulsey & Busey University Club, Jacksonville, Florida Contact: http://www.turnaround.org/ July 10-13, 2008 AMERICAN BANKRUPTCY INSTITUTE 16th Annual Northeast Bankruptcy Conference Ocean Edge Resort Brewster, Massachussets Contact: http://www.abiworld.org/events July 29, 2008 TURNAROUND MANAGEMENT ASSOCIATION Employment Issues Following Hurricanes & Disasters Centre Club, Tampa, Florida Contact: http://www.turnaround.org/ July 31 - Aug. 2, 2008 AMERICAN BANKRUPTCY INSTITUTE 4th Annual Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay Cambridge, Maryland Contact: http://www.abiworld.org/ Aug. 16-19, 2008 AMERICAN BANKRUPTCY INSTITUTE 13th Annual Southeast Bankruptcy Workshop Ritz-Carlton, Amelia Island, Florida Contact: http://www.abiworld.org/ Aug. 20-24, 2008 NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES NABT Convention Captain Cook, Anchorage, Alaska Contact: http://www.nabt.com/ Aug. 26, 2008 TURNAROUND MANAGEMENT ASSOCIATION Do's and Don'ts of Investing in a Turnaround Citrus Club, Orlando, Florida Contact: http://www.turnaround.org// Sept. 4-5, 2008 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Four Seasons, Las Vegas, Nevada Contact: http://www.abiworld.org/ Sept. 4-6, 2008 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Four Seasons, Las Vegas, Nevada Contact: http://www.abiworld.org/ Sept. 17, 2008 TURNAROUND MANAGEMENT ASSOCIATION Real Estate / Condo Restructuring Panel Marriott North, Fort Lauderdale, Florida Contact: http://www.turnaround.org// Sept. 24-26, 2008 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION IWIRC 15th Annual Fall Conference Scottsdale, Arizona Contact: http://www.ncbj.org/ Sept. 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Desert Ridge Marriott, Scottsdale, Arizona Contact: http://www.iwirc.org/ Sept. 30, 2008 TURNAROUND MANAGEMENT ASSOCIATION Private Equity Panel Centre Club, Tampa, Florida Contact: http://www.turnaround.org// Oct. 9, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Luncheon - Chapter 11 University Club, Jacksonville, Florida Contact: http://www.turnaround.org/ Oct. 28, 2008 TURNAROUND MANAGEMENT ASSOCIATION State of the Capital Markets Citrus Club, Orlando, Florida Contact: http://www.turnaround.org// Oct. 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott New Orleans, Louisiana Contact: 312-578-6900; http://www.turnaround.org/ Oct. 30 & 31, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Physicians Agreements and Ventures Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ Nov. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Interaction Between Professionals in a Restructuring/Bankruptcy Bankers Club, Miami, Florida Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2008 AMERICAN BANKRUPTCY INSTITUTE 20th Annual Winter Leadership Conference Westin La Paloma Resort & Spa Tucson, Arizona Contact: http://www.abiworld.org/ May 7-10, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center National Harbor, Maryland Contact: http://www.abiworld.org/ June 11-13, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ BEARD AUDIO CONFERENCES 2006 BACPA Library Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES BAPCPA One Year On: Lessons Learned and Outlook Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Carve-Out Agreements for Unsecured Creditors Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Chinas New Enterprise Bankruptcy Law Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Clash of the Titans -- Bankruptcy vs. IP Rights Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Corporate Bankruptcy Bootcamp: A Nuts & Bolts Primer for Navigating the Restructuring Process Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Deepening Insolvency Widening Controversy: Current Risks, Latest Decisions Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Diagnosing Problems in Troubled Companies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Claims Trading Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Market Opportunities Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Equitable Subordination and Recharacterization Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Examining the Examiners: Pros and Cons of Using Examiners in Chapter 11 Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Handling Complex Chapter 11 Restructuring Issues Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Homestead Exemptions under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Hospitals in Crisis: The Insolvency Crisis Plaguing Hospitals Across the U.S. Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES IP Rights In Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES KERPs and Bonuses under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES New 'Red Flag' Identity Theft Rules Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Non-Traditional Lenders and the Impact of Loan-to-Own Strategies on the Restructuring Process Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Partnerships in Bankruptcy: Unwinding The Deal Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Real Estate Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergersthe New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Second Lien Financings and Intercreditor Agreements Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in E-Discovery and Records Management for Bankruptcy Practitioners and Litigators Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Technology as a Competitive Advantage For Todays Legal Processes Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Battle of Green & Red: Effect of Bankruptcy on Obligations to Clean Up Contaminated Property Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Subprime Sector Meltdown: Legal Developments and Latest Opportunities Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Twenty-Day Claims Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite Corporate Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite M&A and Insolvency Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES When Tenants File -- A Landlord's BAPCPA Survival Guide Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ * * * Featured Conferences Beard Conferences presents: April 10-11, 2008 Ninth Annual Conference on Healthcare Transactions Successful Strategies for Mergers, Acquisitions, Divestitures and Restructurings The Millennium Knickerbocker Hotel, Chicago, Illinois Brochure available soon! May 15-16, 2008 Fifth Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel - London Brochure available soon! * * * The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, Philline P. Reluya, Joseph Medel C. Martirez, Ma. Cristina I. Canson, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2008. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***