/raid1/www/Hosts/bankrupt/TCR_Public/080411.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, April 11, 2008, Vol. 12, No. 86
Headlines
1ST NATIONAL: Case Summary & 10 Largest Unsecured Creditors
AEOLUS PHARMA: Obtains Additional Credit Line of $130,000 from UBS
AFFINITY GROUP: Pressured Liquidity Cues Moody's Rating Cuts to B3
ALERIS INT'L: Winds Down Tennessee's Specification Alloys Facility
ALOHA AIRLINES: Court Approves Asset Sale Bidding Procedure
ALTRA INDUSTRIAL: Moody's Raises Ratings to 'B1' From 'B2'
AMERICAN ACHIEVEMENT: Has $172.6 Million Equity Deficit at Feb. 23
AMR CORP: Cancels 570 Flights Today as Aircraft Inspections Resume
AMERICAN AXLE: New UAW Contract is Still Not Market Competitive
AMERICAN AXLE: Union Workers and Supporters to Rally on April 18
AMERICAN AXLE: Strike Could Affect Plastech Operations, Paper Says
AMERICAN HOME: Responds to WARN Act Violations Suit by Ex-Workers
AMPEX CORP: Files Disclosure Statement in New York
BALLYROCK ABS: Five Classes of Notes Get Moody's Rating Downgrades
BAYBERRY FUNDING: Moody's Reviews 'Ba1' Rating For Possible Cut
BCE Inc: Buyout by Investor Group Obtains Industry Minister's Nod
BIG BEAR: Case Summary & 19 Largest Unsecured Creditors
BLAST ENERGY: Emerges From Chapter 11 Protection, Plan Effective
BLB MANAGEMENT: Moody's Lifts Probability of Default Rating to Ca
DRESSER-RAND GROUP: Solid Performance Cues S&P's Rating Upgrades
CBA COMMERCIAL: S&P Downgrades Ratings on 21 Classes of Certs.
C-BASS: Fitch Downgrades Ratings on $292.29 Million Certificates
CDC MORTGAGE: Moody's Lowers 17 Tranches' Ratings From Three Deals
CHENIERE ENERGY: Board Elects Jerry Smith Chief Accounting Officer
CLEAR CHANNEL: Extends Tender Offers Expiration for Senior Notes
CP SHIPS: Court to Hold $1.3 Mil. Settlement Hearing on June 11
CREATIVE NEIGHBORS: Voluntary Chapter 11 Case Summary
CREDIT AND REPACKED: Moody's Cuts Rating on Tranche Notes to 'Ba1'
CREDIT BASED: Fitch Cuts Rating to B from BB on Class B-4 Certs.
DELPHI CORP: Moody's Withdraws Low-B Prospective Debt Ratings
DELTA LIFE: A.M. Best Cuts Financial Strength Rating to B-(Fair)
DISTRIBUTED ENERGY: Appoints UHY LLP as New Independent Auditors
DMG TRADING: Case Summary & 20 Largest Unsecured Creditors
DORMITORY AUTHORITY: Fitch Holds 'BB+' Rating on $264 Mil. Bonds
EMAGIN CORP: Completes $1.7 Million Offering of Stocks & Warrants
ENDURANCE BUSINESS: S&P Assigns 'B' Rating on Negative CreditWatch
ENERGY TRANSFER: Fitch Holds Low-B Ratings with Stable Outlook
ENLIVEN MARKETING: Has Until Sept. 29 to Comply with Nasdaq Rules
FEDERAL-MOGUL: Committee's Special Counsel Seeks $4.1 Mil. Payment
FIELDSTONE MORTGAGE: Wants Plan-Filing Period Extended to Sept. 18
FIELDSTONE MORTGAGE: Wants Glass Jacobson as Accountants
FIELDSTONE MORTGAGE: Fitch Chips Ratings on $385.6MM Certificates
FIRST MARBLEHEAD: To Skip Goldman Sachs' $1BB Warehouse Facility
FRONTIER DRILLING: Moody's Reviews 'B3' Ratings For Likely Cuts
GALLERIA CBO V: Eroding Credit Quality Cues Moody's Rating Reviews
GALLERIA CBO: Moody's Reviews 'B3' Ratings for Likely Downgrades
GENERAL MOTORS: Workers at 3 Michigan Plants Threaten Rally
GMAC LLC: Plans to Declare 100% Dividend to Common Equity Holders
GOLF TRUST: Obtains $2MM Escrowed Funds from Innisbrook Asset Sale
HAMMOND'S CROSSING: Case Summary & Two Largest Unsecured Creditors
HERCULES INC: S&P Upgrades Ratings to 'BB+' on Improved Profile
HOMEBANC MORTGAGE: Wants Until May 7 To File Chapter 11 Plan
HOOP HOLDINGS: Local Tax Entities Protest $35 Mil. DIP Financing
IMMUNICON CORP: Explores Strategic Alternatives w/ Stifel Nicolaus
INTELSAT LTD: Affiliate Launches Change of Control Offer for Notes
IPCS INC: Board Appoints James Ingold as Chief Accounting Officer
ISABELLA FIORE: Selling Assets to Fashion Accessory for $7.4 Mil.
JOANNE'S BED: To Sell Biz to Healthy Back, Files Chapter 11
JOMAR BUILDING: Case Summary & 20 Largest Unsecured Creditors
JORDAN/ZALAZNICK CBO: S&P Withdraws Ratings on Class B and C Notes
KENDALL HOSPITALITY: Voluntary Chapter 11 Case Summary
KRISPY KREME: Lenders Approve Modifications in Credit Facilities
L TERSIGNI: Examiner Says Overbilling Could Reach $10 Million
LEVI STRAUSS: February 24 Balance Sheet Upside-Down by $318.87MM
LINENS 'N THINGS: Liquidity Concerns Cues Fitch to Chip Ratings
LOUISIANA RIVERBOAT: Gets Okay to Hire Heller Draper as Counsel
M FABRIKANT: Court Denies Lenders Plea to Deny Confirmation
MAGNOLIA FINANCE II: Moody's Reviews 'Ba3' Rating on 2005-4 Notes
MANCHESTER INC: Wants Winston & Strawn as Bankruptcy Counsel
MANCHESTER INC: Committee Wants Powell Goldstein as Counsel
MAXXAM INC: Court of Appeals Upholds Judge Hughes' Ruling vs. FDIC
MBH INVESTMENTS: Voluntary Chapter 11 Case Summary
MEGA BRAND: Moody's Chips Ratings After Release of 2007 Results
METROPOLITAN MORTGAGE: Agrees to Sell Western United for $52 Mil.
MI ATHLETIC ASSOC: Slapped $7.4 in Legal Fees, Mulls Bankruptcy
MILLBROOK 2006-4: Poor Credit Quality Prompts Moody's Rating Cuts
MOORE ROAD: Voluntary Chapter 11 Case Summary
MORTGAGE GROUP: Case Summary & 22 Largest Unsecured Creditors
MOVIDA COMMS: Wants Court Nod to Wind Down Business
MS LLC: Case Summary & Three Largest Unsecured Creditors
NATIONAL CITY: Nova Scotia Joins List of Potential Buyers
NORTHWOOD PROPERTIES: Selling 42 Senior Living Condominium Units
PACER HEALTH: Inks $5,786,017 Securities Purchase with YA Global
PAMPELONNE II: Classes of Notes Acquire Moody's Junk Ratings
PAMPELONNE MEZZ: Moody's Junks Ratings on Seven Classes of Notes
PARCS-R 2007-8: Moody's Junks Ratings on $25 Mil. Notes From 'Ba2'
PLASTECH ENGINEERED: Could Be Affected by Axle Strike, Paper Says
PLASTECH ENGINEERED: Court Approves Claim Waiver re DIP Financing
PLASTECH ENGINEERED: Wants Chrysler to Include Defendants in Suit
PLETTENBERG BAY: Moody's Junks Ratings on Five Classes of Notes
PRESS REALTY: Voluntary Chapter 11 Case Summary
RADIAN GROUP: Inks Waiver Agreement to Suspend Covenant Ratings
RAMP TRUSTS: Moody's Lowers Ratings on 156 Tranches From 20 Deals
RASC TRUSTS: Moody's Cuts Ratings of Tranches From 33 RMBS Deals
RENAISSANCE MORTGAGE: Fitch Downgrades $36.8MM Certificates
R&G FINANCIAL: Receives Regulatory OK for April Dividend Payments
RFC CDO: Moody's Reviews 'Ba1' Rating on Class D For Possible Cut
RICHFX INC: Obtains Court Approval on Asset Sale Procedures
RIVERSIDE PARK: S&P Attaches 'BB' Initial Rating on Class D Notes
SAINT VINCENT: Court Expunges Cargill and Fair Harbor Claims
SANCON RESOURCES: Kabani & Company Raises Substantial Doubt
SASCO 2003-BC2: $168,460 Losses Cues S&P's 'D' Rating on Class B1
SCOTTISH RE: Inks LOI to Recapture Business Ceded to Ballantyne Re
SCOTTISH RE: Explores Sale of North America Life Reinsurance Biz
SCRANTON-LACKAWANNA HEALTH: S&P Gives Negative Outlook on Bonds
SEA CONTAINER: Gets Court's Nod to Enter Charter Termination Pacts
SEA CONTAINERS: Contrarian, et al. Wants March 5 Subpoenas Quashed
SECURITY CAPITAL: Fitch Take Rating Actions on XLCA Insured Bonds
SENSUS METERING: Weak Liquidity Cues S&P's Neg. Watch on B+ Rating
SIRVA INC: Files Supplements to Chapter 11 Plan
SOLSTICE ABS: Two Classes of 2038 Notes Get Moody's Junk Ratings
SOMERSET INT'L: WithumSmith+Brown Raises Substantial Doubt
SOUTH STREET: S&P Withdraws AAA Rating; Keeps Three Junk Ratings
SPECIALTY UNDERWRITING: S&P Downgrades Ratings on 26 Cert. Classes
SPIRIT AEROSYSTEMS: S&P Ratings Unmoved by Revised Boeing Contract
SS&C TECHNOLOGIES: S&P Upgrades Rating to 'B+' on Improved Metrics
STATIC RESIDENTIAL: Moody's Downgrades Ratings on Eight Classes
STATIC RESIDENTIAL: Moody's Cuts Rating on $475MM Notes From 'Ba1'
STATIC RESIDENTIAL 2005-C: Moody's Reviews Rating on Class E Notes
STATIC RESIDENTIAL 2006-A: Moody's Cuts Ratings on Seven Classes
STONE MOUNTAIN: Voluntary Chapter 11 Case Summary
SUNCOM WIRELESS: Moody's Raises Rating to 'B2' on T-Mobile Merger
TABS 2005-4: Three Classes of 2045 Notes Get Moody's Junk Ratings
TABS 2007-7: Moody's Junks Rating on $1.31 Bil. Notes From 'B3'
TAPESTRY PHARMA: Form 10K Filing Delay Cues Nasdaq Delisting
TAPESTRY PHARMA: Provides Operations Update; Sells ChomaDex Shares
TAPESTRY PHARMA: Inks TPI 287 Exclusive License Pact with Archer
TEEVEE TOONS: Creditors Panel Taps Sonnenschein Nath as Counsel
TOURO COLLEGE: Moody's Withdraws 'Ba1' Ratings on 1999A Bonds
TERWIN MORTGAGE: S&P Rating on Class B-2 Tumbles to 'D' From 'CCC'
TERWIN MORTGAGE: Fitch Junks Ratings on Six Certificate Classes
TOURMALINE CDO: Moody's Junks Rating on $32 Mil. Notes From 'A2'
TROPICANA ENT: Moody's Slashes Probability of Default Rating to Ca
UNICO INC: Issues New Convertible Debenture to Moore Investment
UNITED HERITAGE: Engages Hein and Associates LLP as New Auditors
UNIVISION COMMS: Fitch Affirms 'CCC+' Rating on Sr. Unsecured Debt
VCA ANTECH: Moody's Holds Ba3 Rating; Changes Outlook to Positive
VERIDIEN CORP: Board Accepts Resignation of Kenneth Cancellara
VERTIS INC: Will Forgo Interest Payment on Second Lien Notes
VERTIS INC: S&P Rating on 9.75% Senior Notes Tumbles to 'D' From C
VICORP RESTAURANTS: Obtains Limited Access to Cash Collateral
VICORP RESTAURANTS: Seeks to Hire Reed Smith as Bankruptcy Counsel
VICORP RESTAURANTS: Wants Wells Fargo Trumbull as Claims Agent
VICORP RESTAURANTS: Sec. 341(a) Creditors Meeting Set for May 2
VIDEOTRON LTEE: Moody's Puts 'Ba2' Rating on $350 Mil. Sr. Notes
VAXGEN INC: To Cut 75% of Workforce Including CFO Matthew Pfeffer
VITAL LIVING: Engages Moore & Associates as New Auditors
WASHINGTON MUTUAL: Moody's Gives Stable Outlook on $1.5BB Equity
WELLMAN INC: Gets Final OK to Use Deutsche Bank's Cash Collateral
WELLMAN INC: Gets Final Court Nod to Obtain $225MM DIP Financing
WELLMAN INC: Court Approves Edwards Angell as Conflicts Counsel
WELLMAN INC: Wants Conway Del Genio as Restructuring Advisor
WESTERN RADIOSONIC: Case Summary & 23 Largest Unsecured Creditors
WESTMORELAND COAL: Names Kevin Paprzycki as Chief Finc'l. Officer
WILLIAMSON CONSTRUCTION: Case Summary & 32 Unsecured Creditors
WINDSWEPT ENVIRONMENTAL: Monthly Payments on Laurus Note Deferred
WJ LANG: Court Dismisses Case Over "Accidental" Filing by Counsel
WORNICK CO: Gets Interim OK to Employ Dinsmore & Shohl as Counsel
WORNICK COMPANY: Section 341(a) Meeting Scheduled on April 17
WORNICK CO: Can Hire Kroll Zolfo as Special Financial Advisors
WR GRACE: Will Keep Medical Program to Support Asbestos Victims
W.R. GRACE: Wants Court's Approval to Appoint Welsh as Mediator
ZIFF DAVIS: Committee Objects to Payment of Critical Vendor Claims
ZIFF DAVIS: Adjourns Hearing on Management Incentive Program
ZIFF DAVIS: Allowed to Hire Winston & Strawn as Counsel
ZIFF DAVIS: Can Assume 80 Executory Contracts with Freelancers
ZIFF DAVIS: Can Hire Alvarez & Marsal as Restructuring Advisor
* Fitch Performs Vintage Analysis on 2000 and 2001 US CMBS
* Moody's Reports Continued Rise in Credit Card Charge-off Rates
* Moody's Says U.S. Commercial Real Estate Largely Stable
* S&P Downgrades 31 Tranches' Ratings From Eight Cash Flows & CDOs
* S&P Says North American Chemicals Sector Faces Tougher Market
* S&P Reports Possible Negative Outlook on Commercial Lines
* Utah's Bankruptcy Filings Increases 44% in First Quarter of 2008
* Ex-Senior Execs. Form CrawfordSpalding Advisory & Mgt. Services
* BOOK REVIEW: Investing in Junk Bonds:
Inside the High Yield Debt Market
*********
1ST NATIONAL: Case Summary & 10 Largest Unsecured Creditors
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Debtor: 1st National Reserve Ltd.
120 Shakespeare
Beaumont, TX 77706
Bankruptcy Case No.: 08-10191
Type of Business: Commodity Broker
Chapter 11 Petition Date: April 3, 2008
Court: Eastern District of Texas (Beaumont)
Judge: Bill Parker
Debtor's Counsel: J. Craig Cowgill, Esq.
J. Craig Cowgill & Associates, P.C.
2211 Norfolk, Suite 1190
Houston, TX 77024
Tel: (713) 956-0254
Fax: (713) 956-6284
jccowgill@cowgillholmes.com
Total Assets: $4,000,001
Total Debts: $2,314,305
Debtor's list of its 10 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Americom LP $6,670
5390 Washington Boulevard
Beaumont, TX 77707
Monroe $6,525
98129826
P.O. Box 3134
Beaumont, TX 77704-3134
First Fidelity Reserve $5,759
130 Shakespeare
Beaumont, TX 77706
Richard Rosas $2,285
Safe T-Mailer $1,066
Becker Printing $687
Office Depot $581
Entire Capital $292
Iron Mountain $220
Americommerce $100
AEOLUS PHARMA: Obtains Additional Credit Line of $130,000 from UBS
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Aeolus Pharmaceuticals on Tuesday entered into an amended credit
agreement with UBS Financial Services for an additional line of
credit of $130,000. The company also drew the additional $130,000
under the amended agreement on the same day.
As reported in the Troubled Company Reporter on April 8, 2008,
Aeolus Pharmaceuticals Inc. entered into a secured credit
agreement in the amount of up to $230,000 with UBS Financial
Services Inc.
As previously reported, the agreement bears interest at the per
annum rate of LIBOR plus 0.25 percent. Availability of the line
of credit is subject to the company's compliance with certain
financial and other covenants. Borrowings under the agreement are
secured by the company's investments held by UBS. The proceeds of
the agreement will be used to provide working capital for the
company and its subsidiaries.
About Aeolus Pharmaceuticals
Aeolus Pharmaceuticals, Inc. (OTC BB: AOLS.OB) --
http://www.aeoluspharma.com/-- is developing a variety of
therapeutic agents based on its proprietary small molecule
catalytic antioxidants, with AEOL 10150 being the first to enter
human clinical evaluation.
At Dec. 31, 2007, the company's consolidated balance sheet showed
$1,293,000 in total assets, $606,000 in total liabilities, and
$687,000 in total stockholders' equity.
Going Concern Disclaimer
Haskell & White LLP, in Irvine, Calif., expressed substantial
doubt about Aeolus Pharmaceuticals Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the years ended Sept. 30, 2007, and 2006. The
auditing firm reported that the company has suffered recurring
losses, negative cash flows from operations and does not currently
possess sufficient working capital to fund its operations
throughout the next fiscal year.
AFFINITY GROUP: Pressured Liquidity Cues Moody's Rating Cuts to B3
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Moody's Investors Service downgraded Affinity Group Holding,
Inc.'s Corporate Family rating to B3, while at the same time
assigning a "weak" SGL-4 liquidity rating.
The rating downgrades are prompted by Moody's heightened concern
regarding Affinity Group's pressured liquidity (exacerbated by the
June 2009 maturity of its senior secured credit facilities) and
its reliance upon the recreation vehicle sector, which continues
to suffer from weak market conditions and high fuel costs.
The negative outlook reflects Moody's concern that Affinity Group
may be unable to successfully conclude a refinancing of its senior
secured credit facilities on acceptable terms and conditions.
Moody's notes that failure to refinance the senior secured credit
facilities prior to June 30, 2008, would likely cause the company
to report approximately $129 million of term loan debt as a
current liability, placing further pressure on its reported credit
metrics.
Details of the rating actions are:
Ratings downgraded:
Affinity Group Holding, Inc.
-- Corporate Family rating: to B3 from B2
-- PDR: to B3 from B2
-- $110 million 10.875% senior notes due 2012: to Caa2
(LGD5, 89%) from Caa1 (LGD5, 89%)
Affinity Group, Inc.
-- $35 million senior secured revolving credit facility due
2009: to Ba3 (LGD2, 17%) from Ba2 (LGD2, 15%)
-- $129 million senior secured term loan, due 2009: to Ba3
(LGD2, 17%) from Ba2 (LGD2, 15%)
-- $152.4 million 9.0% senior subordinated notes due 2012: to
Caa1 (LGD4, 60%) from B3 (LGD4, 59%)
Rating assigned:
-- Speculative Grade Liquidity rating: SGL 4
The rating outlook is negative.
The B3 CFR reflects Affinity Group's high leverage, declining
same-store retail sales, decreasing market sales of mobile homes,
increasing gas prices, softening vendor spending on advertising
targeted towards the RV enthusiast and outdoor market, and
questionable recovery prospects for debtholders in a downside
scenario. The rating is supported by Affinity Group's leading
position as a provider of membership services (affinity clubs),
its loyal customer base (reflected by the high renewal rates) and
management's decision to reduce cash burn by pulling back on new
retail store openings and capex during the first half of 2008.
The SGL-4 liquidity rating incorporates Moody's view that Affinity
Group will not generate sufficient free cash flow (nor does it
maintain sufficient committed external and alternative sources of
capital) during the next twelve months to repay its term loan at
maturity in June 2009, and the SGL methodology would not assume a
refinancing of existing credit facilities when they come due.
Moody's notes that the potential inclusion of "going-concern"
language in the company's audited financial statements at the next
year-end could result in an event of default and an acceleration
of payment according to the covenants of its senior secured loan
agreement. The company does own a portfolio of divisible
properties, which could potentially be sold to provide liquidity,
subject to compliance with the terms of its debt agreements.
In 2007, the company entered into an agreement with a related
company (FreedomRoads Holding Company, LLC) to sell the stock of
its wholly-owned subsidiary, Camping World, Inc. for approximately
$176 million. The sale was not concluded, largely because of
uncertain capital market conditions. There can be no assurance
that capital market conditions will improve sufficiently for the
company and Freedom Roads to execute a new agreement.
Affinity Group Holding, Inc., is a large member-based direct
marketing company, targeting North American recreational vehicle
owners and outdoor enthusiasts. The company reported net revenue
of $562 million for the fiscal year ended Dec. 31, 2007.
ALERIS INT'L: Winds Down Tennessee's Specification Alloys Facility
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Aleris International Inc. will be permanently closing its
Shelbyville, Tennessee specification alloys facility. Production
will be phased-out, and the site is expected to be permanently
closed by the end of the second quarter of 2008.
The plant has approximately 70 employees. Production will be
transferred to other Aleris facilities, and Aleris will provide
the same high quality products and services that customers expect
from its other locations.
Headquartered in Beachwood, Ohio, Aleris International Inc. (NYSE:
ARS) -- http://www.aleris.com/-- manufactures rolled aluminum
products and offers aluminum recycling and the production of
specification alloys. The company also manufactures value-added
zinc products that include zinc oxide, zinc dust and zinc metal.
The company operates 42 production facilities in the United
States, Brazil, Germany, Mexico and Wales, and employs
approximately 4,200 employees.
* * *
Moody's Investor Service placed Aleris International Inc.'s long
term corporate family rating at 'B2' in November 2006. The rating
still holds to date with a stable outlook.
ALOHA AIRLINES: Court Approves Asset Sale Bidding Procedure
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The Hon. Lloyd King of the United States Bankruptcy Court for the
District of Hawaii approved Aloha Airlines Inc. and its debtor-
affiliates' proposed bidding procedures for sale of air cargo
business.
The Debtors entered into an asset purchase agreement dated
March 31, 2008, with Saltchuk Resources Inc., wherein Saltchuk may
obtain substantially all of the Debtors' assets relating to the
Debtors' air cargo business.
To determine the best and highest offer, all qualified bidders are
required to submit their bid along with a deposit of 5% of the
proposed purchase price by April 18, 2008, at 12:00 p.m., (Hawaii
Time). An auction will follow on April 21, 2008, at 10:00 a.m.
PST.
During the auction, bids will be made in increments of at least
$100,000 in cash. The Debtors agree to pay a $400,000 break-up
fee to Saltchuk, if outbid by another party, according to papers
filed with the Court.
A sale hearing is set on April 24, 2008, to consider approval of
the Debtors' request. Objections, if any, are due April 21, 2008,
at 4:00 p.m., (Hawaii Time).
As reported in the Troubled Company Reporter on April 8, 2008,
The Aloha Pilots Master Executive Council of the Air Line Pilots
Association International continued its efforts to help find
buyers for Aloha Airline Inc.'s operations and support Hawaii's
transportation and cargo needs by making a new proposal to assist
with continuing operations.
About Aloha Airlines
Based in Honolulu, Hawaii, Aloha Airgroup Inc., Aloha Airlines
Inc. -- http://www.alohaairlines.com/-- and its affiliates are
carriers that fly passengers and freight to Hawaii's five major
airports, as well as to half a dozen destinations in the western
U.S. They operate a fleet of about 20 aircraft, all Boeing 737s,
including three configured as freighters.
This is the airline's second bankruptcy filing. Aloha filed for
Chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No.
04-03063), and emerged from Chapter 11 bankruptcy protection in
February 2006.
The company and its affiliates filed again for Chapter 11
protection on March 18, 2008 (Bankr. D. Hawaii Lead Case No. 08-
00337). Brian G. Rich, Esq., Jordi Guso, Esq., and Paul Steven
Singerman, Esq., at Berger Singerman P.A., and David C. Farmer,
Esq., represent the Debtors in their restructuring efforts. When
the Debtors filed for protection from their creditors, they listed
estimated assets and debts of $100 million to $500 million.
ALTRA INDUSTRIAL: Moody's Raises Ratings to 'B1' From 'B2'
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Moody's Investors Service upgraded Altra Industrial Motion Inc.'s
corporate family rating and senior secured notes rating to B1 from
B2. It also upgraded the senior unsecured notes rating to B3 from
Caa1 and affirmed the SGL-2 speculative grade liquidity rating.
The outlook is stable. The rating action reflects the significant
improvement of Altra's operating performance and financial metrics
in 2007 and Moody's expectation of a continuously robust financial
profile in the near term.
Moody's recognized Altra's solid 2007 operating performance,
illustrated by good organic growth and margins improvement, as
well as the enhancement of debt protection measures, including a
debt EBITDA ratio well below 4 times and FCF debt near 10%, which
solidly position the company in the B1 rating category. While the
rating agency expects a weakening of the US macro-economic
backdrop and the end-market demand, which could have an adverse
impact on Altra's cyclical operations, it does not believe that
the company's financial profile will materially deteriorate. The
company is expected to focus on debt reduction and liquidity
should remain healthy with the support of healthy cash balances,
positive free cash flow and full availability under its revolving
credit facility.
The stable outlook reflects Moody's expectation that Altra's
financial condition will remain sound for the rating category
despite more challenging market conditions. The ratings could be
however pressured by significant debt-funded acquisitions or cash
distributions to shareholders such that total debt EBITDA would
approach 5 times.
Ratings upgraded:
-- Corporate Family Rating to B1
-- Probability of Default Rating to B1
-- Rating of 9% Senior Secured Notes due 2011 to B1 (LGD
assessment revised to LGD4/53% from LGD3/47%)
-- Rating of 11.25% Senior Unsecured Notes due 2013 to B3 (LGD
assessment revised to LGD6/94% from LGD6/91%)
Rating affirmed: SGL-2 Speculative Grade Liquidity Rating
Headquartered in Quincy, Massachusetts, Altra is a manufacturer of
mechanical power transmission products with net revenues of
approximately $584 million in fiscal 2007.
AMERICAN ACHIEVEMENT: Has $172.6 Million Equity Deficit at Feb. 23
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American Achievement Group Holding Corp.'s consolidated balance
sheet at Feb. 23, 2008, showed $490.9 million in total assets and
$663.5 million in total liabilities, resulting in a $172.6 million
total stockholders' deficit.
American Achievement Group Holding Corp. reported a net loss of
$10.3 million on net sales of $60.6 million for the second quarter
ended Feb. 23, 2008, compared with a net loss of $6.6 million on
net sales of $57.1 million for the same period ended Feb. 24,
2007.
Net sales of class rings increased $1.9 million to $32.9 million
for the three months ended Feb. 23, 2008, from $31.0 million for
the three months ended Feb. 24, 2007.
Net sales of yearbooks decreased $300,000 to $2.3 million for the
three months ended Feb. 23, 2008, from $2.6 million for the three
months ended Feb. 24, 2007.
Net sales of graduation products increased $200,000 to
$15.5 million for the three months ended Feb. 23, 2008, from
$15.3 million for the three months ended Feb. 24, 2007.
Net sales - Other increased $1.8 million to $10.0 million for the
three months ended Feb. 23, 2008, from $8.2 million for the three
months ended Feb. 24, 2007. The increase in net sales - Other was
primarily related to the acquisition of Powers Embroidery Inc. in
April 2007 and an increase in the sale of commercial and fine
books, partially offset by a decrease in sales of recognition and
affinity rings partially due to timing of licensing revenue
between the first two quarters of 2007.
Operating income was $2.0 million, or 3.3% of net sales, for the
three months ended Feb. 23, 2008, as compared with operating
income of $5.3 million, or 9.2% of net sales, for the three months
ended Feb. 24, 2007.
Net interest expense was $16.0 million for the three months ended
Feb. 23, 2008, and $14.4 million for the three months ended
Feb. 24, 2007. The average debt outstanding for the three months
ended Feb. 23, 2008, and the three months ended Feb. 24, 2007, was
$555 million and $535 million, respectively. The weighted average
interest rate on debt outstanding for the three months ended
Feb. 23, 2008, and the three months ended Feb. 24, 2007, was 10.6%
and 9.9%, respectively.
For the three months ended Feb. 23, 2008, and the three months
ended Feb. 24, 2007, the company recorded an income tax benefit of
$3.7 million and $3.1 million, respectively, which represents an
effective tax rate of 26% and 34%, respectively.
Loss from discontinued operations before income taxes during the
three months ended Feb. 23, 2008, and Feb. 24, 2007, was $38,000
and and $986,000.
Capital Resources
On Feb. 23, 2008, the company had total indebtedness of
$551.1 million, of which $188.8 million was senior PIK notes,
$123.9 million was 10.25% senior discount notes, $150.0 million
was 8.25% senior subordinated notes, $80.9 million was
indebtedness under the existing senior secured credit facility and
$7.5 million was the company's mandatory redeemable series A
preferred stock.
The company also has up to $38.2 million in available revolving
loan borrowings under its senior secured credit facility.
Full-text copies of the company's consolidated financial
statements for the quarter ended Feb. 23, 2008, are available for
free at http://researcharchives.com/t/s?2a66
About American Achievement Group Holding
Based in Austin, Tex., American Achievement Group Holding Corp.
is the indirect parent company of American Achievement Corp.
American Achievement manufactures and supplies class rings,
yearbooks and other graduation-related scholastic products for the
high school and college markets and of recognition products, such
as letter jackets, and affinity jewelry designed to commemorate
significant events, achievements and affiliations.
The company markets its products and services primarily in the
United States and operates in four reporting segments: class
rings, yearbooks, graduation products and other.
AMR CORP: Cancels 570 Flights Today as Aircraft Inspections Resume
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AMR Corp. principal subsidiary American Airlines Inc. canceled
approximately 570 flights today, April 11, 2008, as it works to
complete the inspections of its MD-80 fleet. The airline
continues efforts to re-accommodate customers affected by this
week's activity.
As of Thursday afternoon, 132 MD-80 aircraft were returned to
service. Inspections will continue overnight, with approximately
170 MD-80s expected to be available for service on Friday morning.
As reported in yesterday's Troubled Company Reporter, American
Airlines canceled more than 900 flights on Thursday.
As of Wednesday afternoon,
* 179 MD-80 aircraft were completely inspected;
* 60 of the 179 MD-80s were returned to service;
* 119 of the 179 MD-80s were still undergoing work;
* 121 MD-80s remain to be inspected.
On Wednesday, American officially canceled 1,094 flights, in
addition to the 460 canceled on Tuesday.
"We apologize for the inconvenience this has caused our
customers," Gerard Arpey, Chairman and CEO of American Airlines,
said. "American will do whatever it takes to assist those
affected by these flight changes and our employees are working
hard to ensure that we remain their choice for air travel. This
includes compensating those inconvenienced customers who stayed
overnight in a location away from their final destination."
"We continue to inspect every airplane to ensure we are in total
agreement with the specifications of the directive," Mr. Arpey
said. "We will get back to a full schedule as quickly as
possible."
These inspections were conducted to ensure compliance with a
Federal Aviation Administration directive related to the bundling
of wires in the aircraft's wheel well of the MD-80 aircraft.
These inspections -- based on FAA audits -- are related to
detailed, technical compliance issues and not safety-of-flight
issues.
American also plans to contract with an independent third party to
review American's processes for compliance with all future FAA
airworthiness directives. This work will ensure that all
procedures strictly adhere to the technical elements of every
directive so American can avoid this type of schedule disruption
in the future.
Customers who were scheduled on a flight that was canceled may
request a full refund or apply the value of their ticket toward
future travel on American Airlines. Additionally, customers
scheduled to travel on any MD-80 flight April 8-13, even if their
flight has not been canceled, may rebook without a change fee to
any AA flight with availability in the same cabin as long as their
travel begins by April 17.
Headquartered in Forth Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. At the end of 2006, American provided scheduled jet
service to about 150 destinations throughout North America, the
Caribbean, Latin America, Europe and Asia. American is also a
scheduled airfreight carrier, providing freight and mail services
to shippers throughout its system.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
* * *
As reported in the Troubled Company Reporter on Nov. 30, 2007,
following the announcement by AMR Corp. that it intends to divest
its American Eagle Holding Corp. subsidiary in 2008, Fitch expects
no near-term impact on the debt ratings of AMR and its principal
operating subsidiary, American Airlines Inc. Fitch affirmed both
entities' Issuer Default Ratings at 'B-' on Nov. 13, 2007, while
revising the Rating Outlook for AMR to Positive.
AMERICAN AXLE: New UAW Contract is Still Not Market Competitive
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Negotiations between American Axle & Manufacturing Holdings Inc.
and United Auto Workers union representatives will continue
despite the rejection of new UAW proposal by Axle, Reuters
reports. Axle admits the new contract was better, but the total
cost was still roughly 200% above the market rate for Axle's
competitors in the U.S. auto parts industry.
Reuters says negotiators came back to the bargaining table
offering a new contract on Wednesday.
As reported in the Troubled Company Reporter on March 31, 2008,
Axle's Chief Executive Officer Richard Dauch berated the UAW for
the work stoppage that has caused a chain reaction in the U.S.
auto industry. The CEO added that the auto parts manufacturer may
end up outsourcing its manufacturing division if talks with the
UAW negotiations fail.
CEO Dauch said that the company has the right to outsource its
work since they have facilities all over the globe -- Mexico,
South America, Europe, and Asia. Mr. Dauch added that Axle will
not be forced into bankruptcy.
As previously reported in the TCR, labor talks ceased on March 11
after a bargaining that lasted three days failed to produce
results. Union officials weren't happy with the terms proposed by
the auto parts company.
Axle is demanding wage reductions of up to $14 an hour as well as
elimination of future retiree health care and defined benefit
pensions for active workers. Axle, which earned $37 million on
$3.25 billion sales in 2007, wanted a deal like those UAW gave
General Motors Corp., Ford Motor Co., Chrysler LLC, and parts
makers Delphi Corp. and Dana Corp., insisting that cutting labor
costs is essential to be competitive. The auto parts supplier is
asking the union to approve $20 to $30 hourly wage cuts from $73
per hour to $27 per hour, arguing that its original U.S. locations
incurred losses for three years.
The March 11 talks would have resolved a strike, which started
Feb. 26, 2008, of the 3,650 employees at master-contract plants in
Michigan and New York.
Strike Impact on Automakers
GM has about 29 facilities affected by the strike at Axle as the
supplier attempts to negotiate with the union. GM president and
COO Frederick Henderson said GM won't meddle in the labor dispute
between AAM and the UAW.
As reported in the TCR on March 27, 2008, the month-long work
protest of union members at Axle is taking its toll on GM,
threatening the automaker's brake part plant in Lordstown, Ohio,
which has 2,400 workers.
Chrysler LLC is temporarily closing its vehicle assembly facility
in Newark, Delaware as the strike among UAW union members at AAM
stretches. AAM supplies Chrysler components for the Dodge Durango
and Chrysler Aspen sport utility vehicles in Newark and two
versions of the Dodge Ram pickup made in Saltillo, Mexico.
About Axle
Headquartered in Detroit, Michigan, American Axle & Manufacturing
Holdings Inc. (NYSE:AXL) -- http://www.aam.com/-- and its
wholly
owned subsidiary, American Axle & Manufacturing, Inc.,
manufactures, engineers, designs and validates driveline and
drivetrain systems and related components and modules, chassis
systems and metal-formed products for light trucks, sport utility
vehicles and passenger cars. In addition to locations in the
United States (in Michigan, New York and Ohio), the company also
has offices or facilities in Brazil, China, Germany, India, Japan,
Luxembourg, Mexico, Poland, South Korea and the United Kingdom.
* * *
As reported in the Troubled Company Reporter on April 4, 2008,
Moody's Investors Service placed American Axle & Manufacturing
Holdings, Inc.'s Ba3 Corporate Family Rating under review for
downgrade.
As reported in the Troubled Company Reporter on Nov. 27, 2007,
Moody's Investors Service affirmed American Axle & Manufacturing
Holdings, Inc.'s Corporate Family rating of Ba3 as well its
senior unsecured rating of Ba3 to American Axle & Manufacturing
Inc.'s notes and term loan. At the same time, the rating agency
revised the rating outlook to stable from negative and renewed the
Speculative Grade Liquidity rating of SGL-1.
AMERICAN AXLE: Union Workers and Supporters to Rally on April 18
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United Auto Workers union members and supporters will rally at
11:30 a.m. on April 18, 2008, at Detroit's Hart Plaza to support
striking workers at American Axle & Manufacturing Holdings Inc.
More than 3,500 UAW members from UAW Locals 235, 262 and 2093 in
Michigan and UAW Locals 424 and 826 in New York have been on
strike since Feb. 26 to protest unfair labor practices.
"The support our members have received during this strike is
overwhelming," UAW President Ron Gettelfinger said. "We've heard
from members of the clergy, from local businesses, from community
leaders -- and of course from UAW members and the entire labor
movement."
"Our rally on April 18th will be a great time to show solidarity
with American Axle strikers, and to demonstrate support for
keeping manufacturing jobs here in the United States," Mr.
Gettelfinger said.
"Even business publications like the Automotive News can't
understand how American Axle can justify giving pay raises to
executives while demanding pay cuts from workers," UAW Vice
President James Settles Jr., who directs the union's American Axle
Department, said.
"In addition to their unjustified economic demands," Mr. Settles
said, "AAM has refused to provide us the information we need for
bargaining, and has illegally cut off disability payments and
health care for injured workers, as well as compensation --
including health care -- for laid off workers. That's why this is
an unfair labor practices strike."
"Our members at American Axle are standing up for what's right --
and we're inviting our entire community to stand with us on April
18th at Hart Plaza."
Headquartered in Detroit, Michigan, American Axle & Manufacturing
Holdings Inc. (NYSE:AXL) -- http://www.aam.com/-- and its
wholly
owned subsidiary, American Axle & Manufacturing, Inc.,
manufactures, engineers, designs and validates driveline and
drivetrain systems and related components and modules, chassis
systems and metal-formed products for light trucks, sport utility
vehicles and passenger cars. In addition to locations in the
United States (in Michigan, New York and Ohio), the company also
has offices or facilities in Brazil, China, Germany, India, Japan,
Luxembourg, Mexico, Poland, South Korea and the United Kingdom.
About American Axle
Headquartered in Detroit, Michigan, American Axle & Manufacturing
Holdings Inc. (NYSE:AXL) -- http://www.aam.com/-- and its wholly
owned subsidiary, American Axle & Manufacturing, Inc.,
manufactures, engineers, designs and validates driveline and
drivetrain systems and related components and modules, chassis
systems and metal-formed products for light trucks, sport utility
vehicles and passenger cars. In addition to locations in the
United States (in Michigan, New York and Ohio), the company also
has offices or facilities in Brazil, China, Germany, India, Japan,
Luxembourg, Mexico, Poland, South Korea and the United Kingdom.
* * *
As reported in the Troubled Company Reporter on April 4, 2008,
Moody's Investors Service placed American Axle & Manufacturing
Holdings, Inc.'s Ba3 Corporate Family Rating under review for
downgrade.
As reported in the Troubled Company Reporter on Nov. 27, 2007,
Moody's Investors Service affirmed American Axle & Manufacturing
Holdings, Inc.'s Corporate Family rating of Ba3 as well its senior
unsecured rating of Ba3 to American Axle & Manufacturing Inc.'s
notes and term loan. At the same time, the rating agency revised
the rating outlook to stable from negative and renewed the
Speculative Grade Liquidity rating of SGL-1.
AMERICAN AXLE: Strike Could Affect Plastech Operations, Paper Says
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According to the Holland Sentinel, the strike by American Axle
and Manufacturing Holdings Inc. workers could affect Plastech
Engineered Products, Inc. and its debtor-affiliates.
As widely reported, The International Union, United Automobile,
Aerospace and Agricultural Implement Workers of America, which
represents American Axle's employees, has called for a strike
and mass picket against Axle at its Detroit, Michigan,
headquarters.
The strike, which has been ongoing for more than five weeks, has
forced General Motors Corp., one of Plastech's key customers, to
idle or ramp down production at 30 of its plants that make large
trucks and sports utility vehicles. Union officials say the
company may soon have to bring down lines in Kansas City, Kan.,
and Orion Township near Detroit that make the Chevy Malibu, the
Holland Sentinel reported.
Plastech runs Johnson Controls, Inc.' Southview plant in Holland,
Michigan, and has 30 employees who make the floor consoles for
the Malibu. If the Malibu production is interrupted, so too
would the production of the interior parts for the vehicle,
according to the same report.
The strike, which involved 3,650 workers, started due to American
Axle's withholding of data regarding pensions, health care and
profit sharing. The company has also sought to cut wages and
benefits by half, according to the Detroit Free Press.
About Plastech Engineered
Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --
http://www.plastecheng.com/-- is full-service automotive
supplier of interior, exterior and underhood components. It
designs and manufactures blow-molded and injection-molded plastic
products primarily for the automotive industry. Plastech's
products include automotive interior trim, underhood components,
bumper and other exterior components, and cockpit modules.
Plastech's major customers are General Motors, Ford Motor Company,
and Toyota, as well as Johnson Controls, Inc.
Plastech is a privately held company and is the largest family-
owned company in the state of Michigan. The company is certified
as a Minority Business Enterprise by the state of Michigan.
Plastech maintains more than 35 manufacturing facilities in the
midwestern and southern United States. The company's products are
sold through an in-house sales force.
The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts. The Debtors
chose Jones Day as their special corporate and litigation counsel.
Lazard Freres & Co. LLC serves as the Debtors' investment bankers,
while Conway, MacKenzie & Dunleavy provide financial advisory
services. The Debtors also employed Donlin, Recano & Company as
their claims and noticing agent.
An Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases.
As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000. (Plastech Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or
215/945-7000)
About American Axle
Headquartered in Detroit, Michigan, American Axle & Manufacturing
Holdings Inc. (NYSE:AXL) -- http://www.aam.com/-- and its wholly
owned subsidiary, American Axle & Manufacturing, Inc.,
manufactures, engineers, designs and validates driveline and
drivetrain systems and related components and modules, chassis
systems and metal-formed products for light trucks, sport utility
vehicles and passenger cars. In addition to locations in the
United States (in Michigan, New York and Ohio), the company also
has offices or facilities in Brazil, China, Germany, India, Japan,
Luxembourg, Mexico, Poland, South Korea and the United Kingdom.
* * *
As reported in the Troubled Company Reporter on April 4, 2008,
Moody's Investors Service placed American Axle & Manufacturing
Holdings, Inc.'s Ba3 Corporate Family Rating under review for
downgrade.
As reported in the Troubled Company Reporter on Nov. 27, 2007,
Moody's Investors Service affirmed American Axle & Manufacturing
Holdings, Inc.'s Corporate Family rating of Ba3 as well its senior
unsecured rating of Ba3 to American Axle & Manufacturing Inc.'s
notes and term loan. At the same time, the rating agency revised
the rating outlook to stable from negative and renewed the
Speculative Grade Liquidity rating of SGL-1.
AMERICAN HOME: Responds to WARN Act Violations Suit by Ex-Workers
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American Home Mortgage Investment Corp. and its debtor-affiliates
tell the U.S. Bankruptcy Court for the District of Delaware that
an amended complaint filed by Kathy S. Koch, Jarrett Perry, Gina
Pulliam, Michael S. Surowiec, Kathleen Wielgus, and Patricia
Williams fails to state a claim, upon which relief can be granted.
They note that the Plaintiffs have failed to mitigate damages.
As reported by the Troubled Company Reporter on March 25, 2008,
the plaintiffs, on their own behalf and on behalf of all other
former employees of American Home Mortgage Investment Corp. and
its debtor-affiliates, revised their complaint to indicate
additional or amended requests:
(a) The Former Employees ask the Court to provide them with an
administrative priority claim, pursuant to Section
503(b)(a)(A) of the Bankruptcy Code, in favor of each of
the Former Employees and the Class Members equal to the
sum of unpaid wages, salary, commissions, bonuses, accrued
holiday pay, accrued vacation pay, pension and 401(k)
contributions and other ERISA benefits, for 60 days that
would have been covered and paid under applicable employee
benefit plans;
(b) Alternatively, the Former Employees ask the Court to
determine that the first $10,950 of their claims pursuant
to the Workers Adjustment and Restraining Notification Act
is entitled to priority status, under Section 507(a)(4),
and the remainder is entitled a general unsecured claim
status; and
(c) The Former Employees ask the Court to allow them an
administrative priority claim under Section 503 for
reasonable attorneys' fees and costs incurred in
prosecuting the Adversary Proceeding.
The Debtors argue that they were excused from giving notice under
the unforeseeable business circumstances and faltering company
exceptions of the Worker Adjustment and Retraining Notification
Act. They contend that they acted at all times in good faith,
and had reasonable grounds that their actions were in compliance
with the law.
To the extent that any of the Plaintiffs are entitled to recover
sums from the Debtors, then the Debtors are entitled to set-off
and recoup against those amounts previously paid to the
Plaintiffs, including any voluntary or unconditional payments to
Plaintiffs not required by legal obligation, the Debtors assert.
The Debtors contend that they were not an employer or business
enterprise under the WARN Act at the time the alleged violations
occurred. Hence, they ask the Court to dismiss the Amended
Complaint, and award them attorneys' fees with interest and
costs.
Moreover, the Debtors reserve the right to assert and rely on
other applicable affirmative defenses as may later become
available or apparent. They further reserve the right to amend
their answer and affirmative defenses.
Plaintiffs Seek to File 3rd Amended Complaint
The Plaintiffs ask the Court for leave to file a third amended
complaint, which would simply add a claim under the California
counterpart to the WARN Act with respect to the Debtors'
employees in California. They also seek the Court's permission
to amend the Class Notice.
If the amendment is permitted, the Plaintiffs' claim under the
California WARN Act will need to be reflected and updated in the
Class Notice previously approved by the Court, says James E.
Huggett, Esq., at Margolis Edelstein, in Wilmington, Delaware.
Mr. Huggett relates that soon after the discovery was made
concerning plaintiff and facility in Texas, the Plaintiffs
discovered that they had not included a claim under the CA WARN
Act. He informs the Court that the Plaintiffs' proposed claim
under the CA WARN Act is very similar to the federal WARN Act
claim. He notes that the proposed CA WARN claim will affect 170
members of a class of 2,318 former employees. The Debtors
disagree to the proposed amendment, while the Official Committee
of Unsecured Creditors did not respond to Plaintiffs' request to
amend, he continues.
The Debtors will not be prejudiced by the amendment because no
additional discovery, or deadline extension will be necessary to
cater the amendment, Mr. Huggett argues. He assures Judge
Sontchi that the Plaintiffs' previous discovery requests were
broad enough to encompass information relevant to the CA WARN
claim.
The Adversary Proceeding is still in the early stages and
discovery will not conclude for another four months, Mr. Huggett
says. He adds that the Class Notice has not been sent to class
members. Therefore, he notes, there is clearly no undue delay on
the part of the Plaintiffs in seeking to amend its Complaint, and
the Debtors will not be prejudiced by the amendments.
* * *
Judge Christopher S. Sontchi certified the class consisting of (i)
all employees of the Debtors who were terminated without cause or
within 30 days of August 3, 2007, at one of the Debtors' Affected
Facilities; or (ii) any employee who was terminated without cause
and who could have reasonably expected to experience an
employment loss as a consequence of a plant closing or mass lay-
off at one of the Affected Facilities; or (iii) affected
employees within the meaning of Section 2101(a)(5) of the
Judiciary and Judicial Procedure.
The certified Class excludes any employees who voluntarily
resigned, retired, or who were terminated for cause.
Affected Facilities refers to any single site of employment
within the meaning of Section 639.3(i) of the Code of Federal
Regulations, in which 50 or more employees and at least 33% of
the employees were terminated from employment on or within 30
days of August 3, 2007, excluding any part-time employees.
Judge Sontchi also authorizes the certified Class to retain James
Huggett, The Gardner Firm, P.C., Lankenau & Miller, LLP, and
Outten & Golden, LLP, as class counsel.
Judge Sontchi further appoints Kathy Koch, Jarrett Perry, Gina
Pullium, Chan Nguyen, Michael S. Surowiec, Kathleen Wielgus, and
Patricia Williams as class representatives.
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 U.S. Bankruptcy Court for the District of Delaware extends the
exclusive periods for American Home Mortgage Investors Corp. and
its debtor-affiliates to file a plan of reorganization through
June 2, 2008; and solicit and obtain acceptances for that plan
through July 31, 2008.
(American Home Bankruptcy News, Issue No. 31; Bankruptcy
Creditors' Service, Inc., Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
AMPEX CORP: Files Disclosure Statement in New York
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Ampex Corporation and its debtor-affiliates delivered a Disclosure
Statement dated March 31, 2008, explaining their Joint Chapter 11
Plan of Reorganization with the United States Bankruptcy Court for
the Southern District of New York.
Plan Overview
The Plan intends to provide for the restructuring of the Debtors'
liabilities designed to maximize recovery to all stakeholders and
to enhance the financial viability of the reorganized debtors.
Generally, the Plan provides for a balance sheet restructuring
which swaps the Debtors' current debt including, but not limited
to, debt evidenced by the senior secured notes and the Hillside
Notes for cash, new notes and equity, as applicable.
Other secured and unsecured creditors will receive cash or equity
as applicable. All of the Debtors' existing common stock will
have no value and will be canceled.
Upon emergence, at least 80% of the reorganized Debtors' new
common stock will be owned by Hillside Capital Incorporated and
its affiliates. The new common stock will not be registered and
will not trade on any public exchange.
Holders of existing common stock that do not object to
confirmation of the Plan will be eligible to receive distribution
rights entitling such holder to receive certain future payments,
if the net proceeds of future monetization of the Debtors' patents
that are not currently revenue bearing produce proceeds sufficient
to meet certain obligations and funding needs of reorganized
Ampex.
The resulting debt structure of the Reorganized Debtors will
substantially deleverage the company and provide additional needed
liquidity.
Indebtedness
As of March 30, 2008, the Debtors had approximately $59.6 million
of outstanding notes issued by the Debtors. Approximately $6.9
million of such amount represents amounts due under an indenture
dated as of Feb. 28, 2002. Pursuant to the indenture, the
Debtors issued those certain 12% senior secured notes due 2008,
which are secured by liens on the Debtors' future royalty
receipts.
Approximately $52.7 million of the Debtors' outstanding
indebtedness is represented by the Hillside notes that have been
issued in connection with Hillside's satisfaction of required
contribution obligations under the pension plans.
As of Dec. 31, 2007, the media pension plan and the Ampex pension
plan were underfunded by $13.5 million and $44.2 million,
respectively.
Treatment of Claims
Under the Plan, these creditors are expected to get 100% recovery
include:
-- administrative expense claims;
-- fee claims;
-- priority tax claims;
-- priority non-tax claims;
-- other secured claims; and
-- trade unsecured claims.
Senior Secured Note Claims and Other Unsecured Claims will be
entitled to receive their pro rata share of their respective
claims.
Each holder of Hillside Secured Claims, totaling $11 million, will
expect to receive in full of its secured claim.
All equity interests will be canceled. Interests in these classes
are impaired and deemed to have rejected the plan include:
-- existing common stock;
-- existing securities laws claims; and
-- other existing interest.
A full-text copy of Disclosure Statement is available for free
at http://ResearchArchives.com/t/s?2a69
A full-text copy of Joint Chapter 11 Plan of Reorganization is
available for free at http://ResearchArchives.com/t/s?2a6a
About Ampex
Headquartered in Redwood City, California, Ampex Corp. --
http://www.ampex.com-- designs and manufactures data storage
products used in defense application to gather images and other
date from aircrafts, satellites and submarines.
The company and six of its affiliates filed for Chapter 11
protection on March 30, 2008 (Bankr. S.D.N.Y. Lead Case No.08-
11094). Matthew Allen Feldman, Esq., and Rachel C. Strickland,
Esq., at Willkie Farr & Gallagher LLP, represent the Debtors in
their restructuring efforts.
When the Debtors filed for protection against their creditors,
they listed total assets of $26,467,000 and total debts of
$133,602,000.
BALLYROCK ABS: Five 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 Ballyrock ABS CDO 2007-1
Limited.
Class Description: $150,000,000 Class A-1a Variable Funding Senior
Secured Floating Rate Notes Due 2047
-- 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: $150,000,000 Class A-1b Senior Secured Floating
Rate Notes Due 2047
-- Prior Rating: Aaa, on review for possible downgrade
-- Current Rating: Baa3, on review for possible downgrade
Class Description: $56,250,000 Class A-2 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: $56,250,000 Class B Secured Floating Rate Notes
Due 2047
-- Prior Rating: A3, on review for possible downgrade
-- Current Rating: Ba2, on review for possible downgrade
Class Description: $27,500,000 Class C Secured Deferrable Floating
Rate Notes Due 2047
-- Prior Rating: Baa3, on review for possible downgrade
-- Current Rating: B3, on review for possible downgrade
Class Description: $26,250,000 Class D Mezzanine Secured
Deferrable Floating Rate Notes Due 2047
-- Prior Rating: B3, 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.
BAYBERRY FUNDING: Moody's Reviews 'Ba1' Rating For Possible Cut
---------------------------------------------------------------
Moody's Investors Service placed on review for possible downgrade
the ratings on these notes issued by Bayberry Funding, Ltd.
Class Description: $96,00,000 Class II Senior Floating Rate Notes
Due 2041
-- 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: $86,000,000 Class III Senior Floating Rate
Notes Due 2041
-- Prior Rating: Aa2, on review for possible downgrade
-- Current Rating: Aa3, on review for possible downgrade
Class Description: $17,250,000 Class IV Mezzanine Floating Rate
Deferrable Notes Due 2041
-- Prior Rating: A2, on review for possible downgrade
-- Current Rating: A3, on review for possible downgrade
Class Description: $42,500,000 Class V Mezzanine Floating Rate
Deferrable Notes Due 2041
-- Prior Rating: Baa2, on review for possible downgrade
-- Current Rating: Ba1, on review for possible downgrade
According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.
BCE Inc: Buyout by Investor Group Obtains Industry Minister's Nod
-----------------------------------------------------------------
Industry Minister Jim Prentice approved the proposed acquisition
of BCE Inc. by an investor group led by Teachers' Private Capital,
the private investment arm of the Ontario Teachers' Pension Plan,
Providence Equity Partners Inc., Madison Dearborn Partners LLC,
and Merrill Lynch Global Private Equity.
With Minister Prentice's approval, subject to the satisfaction of
the applicable conditions, the regulatory approvals required in
connection with the transaction will have been obtained.
On March 7, 2008, the Quebec Superior Court approved BCE's plan of
arrangement for the transaction and dismissed all claims asserted
by or on behalf of certain holders of Bell Canada debentures.
As a result of an appeal of that decision by the debenture
holders, BCE now expects the transaction to close before the end
of the second quarter of 2008.
Headquartered in Montreal, Quebec, BCE Inc. (TSX/NYSE: BCE) --
http://www.bce.ca/-- is a communications company, providing
comprehensive and innovative suite of communication services to
residential and business customers in Canada. Under the Bell
brand, the company's services include local, long distance and
wireless phone services, high-speed and wireless Internet access,
IP-broadband services, information and communications technology
services (or value-added services) and direct-to-home satellite
and VDSL television services. Other BCE holdings include Telesat
Canada and an interest in CTVglobemedia.
Bell Canada -- http://www.bell.ca/-- is a wholly owned subsidiary
of BCE Inc. Bell offers integrated information and communications
technology services to businesses and governments, and is the
Virtual Chief Information Officer to small and medium businesses.
* * *
As reported in the Troubled Company Reporter on Dec. 14, 2007,
Standard & Poor's Ratings Services kept its ratings on BCE Inc.
and its related entities on CreditWatch with negative
implications, pending the completion of the company's leveraged
buyout by a consortium of private equity investors led by Teachers
Private Capital as announced on June 30, 2007. As a result of the
proposed LBO, S&P expect reported debt to increase to about CDN$37
billion from about CDN$10 billion at Sept. 30, 2007.
As reported in the Troubled Company Reporter on Sept. 26, 2007,
Standard & Poor's Ratings Services lowered its long-term corporate
credit ratings on BCE Inc. and wholly owned subsidiary Bell Canada
to 'BB-' from 'A-'.
BIG BEAR: Case Summary & 19 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: The Big Bear Saloon Ltd.
dba Yogi's
2156 Broadway
New York, NY 10023
Bankruptcy Case No.: 08-11180
Chapter 11 Petition Date: April 3, 2008
Court: Southern District of New York (Manhattan)
Judge: Martin Glenn
Debtor's Counsel: Gabriel Del Virginia, Esq.
Law Offices of Gabriel Del Virginia
641 Lexington Avenue
21st Floor
New York, NY 10022
Tel: (212) 371-5478
Fax: (212) 371-0460
gabriel.delvirginia@verizon.net
Estimated Assets: less than $50,000
Estimated Debts: $1,000,001 to $10 million
Debtor's list of its 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Deya Subin personal injury $1,000,000
Attn: Wingate Russotti &
Shapiro
420 Lexington Avenue
New York, NY 10170
Joshua Subin personal injury $1,000,000
Attn: Wingate Russotti &
Shapiro
420 Lexington Avenue
New York, NY 10170
Steven Spielvogel personal injury $1,000,000
Attn: Wingate Russotti &
Shapiro
420 Lexington Avenue
New York, NY 10170
Raymond, C $29,250
Internal Revenue Service $15,670
Workers Comp. Board $15,290
Southern Wine trade $4,142
Howad Lefkowitz, Esq. legal services $3,500
Empire Merchants trade $2,772
Ravi Sharma, Esq. legal services $1,733
Anheuser Busch trade $1,457
Oak Beverages trade $1,164
Manhattan Beer trade $935
Woolco $319
Signius $214
Beehive Beer trade $205
Verizon $178
Orkin $101
Greta Sheaffer personal injury unknown
lawsuit
BLAST ENERGY: Emerges From Chapter 11 Protection, Plan Effective
----------------------------------------------------------------
Blast Energy Services Inc. and its debtor-affiliates' Second
Amended Plan of Reorganization has become effective and the
Debtors have emerged from Chapter 11 protection, Bloomberg News
said yesterday.
As reported in the Troubled Company Reporter on Feb. 28, 2008,
the U.S. Bankruptcy Court in Houston, Texas, confirmed the
Debtors' Amended Chapter 11 Plan.
Under the terms of the confirmed Plan, the Debtors have raised
$4.0 million in cash proceeds from selling convertible preferred
securities to Clyde Berg and McAfee Capital, two parties related
to the Debtors' largest shareholder, Berg McAfee Companies. Upon
receipt by the escrow agent of the written confirmation order,
these funds will be released to the company and will be used to
pay 100% of the unsecured creditor claims, all administrative
claims, and all statutory priority claims for a total amount of
approximately $2.4 million. The remaining $1.6 million will be
used to execute an operational plan, including but not limited to,
reinvesting in the Satellite Services and Down-hole Solutions
businesses and pursuing an emerging Digital Oilfield business.
The Plan also preserves the equity interests of the Debtors'
existing shareholders. Further, the Debtors will continue to
prosecute the litigation against Quicksilver Resources and
Hallwood Petroleum/Hallwood Energy. Blast has previously
estimated the legal recoveries to be in the range of $15 million
to $45 million (gross). Trial dates have been set for April 14,
2008 and Sept. 15, 2008 for Hallwood and Quicksilver respectively.
Under the terms of the Plan, the company will carry these three
secured notes -- none of which are due and payable for at least
two years:
-- A $2.1 million interest-free senior note with Laurus Master
Fund is secured by the assets of the Debtors and payable
from a 65% portion of the proceeds that may be received for
the customer litigation lawsuits or asset sales;
-- A $125,000 note to McClain County, Oklahoma for property
taxes will also be paid from the receipt of litigation
proceeds, or otherwise, it converts to a six-percent
interest bearing note in February 2010;
-- A pre-existing secured $1.1 million eight-percent note with
Berg McAfee Companies has been extended for an additional
three years and contains an option to be convertible into
the Debtors stock at $0.20 per share. No other claims exist
on the future operating cash flows of the Debtors.
The convertible preferred security issued under the terms of the
Plan carries a cumulative dividend rate of eight percent and is
convertible into common stock at $0.50 per share. The offering
includes 25% warrant coverage with an exercise price of $0.10 over
a three-year term and is subject to certain mandatory conversion
provisions.
Certain other liabilities, including $800,000 in financing
obtained during the bankruptcy period, will be converted into
common stock at $0.20 per share now that the Plan has been
confirmed. As a result, the Company expects to have approximately
64 million shares issued and outstanding on a going forward basis
including the preferred shares issued under the Plan. The
equivalent fully diluted number of shares is expected to be
approximately 88 million, which includes the impact from all
unexercised stock option and warrants and the conversion option of
the Berg McAfee secured note.
Litigation Settlement
As reported in the Troubled Company Reporter on April 9, 2008,
Blast Energy Services' subsidiary Eagle Domestic Drilling
Operations and Hallwood Energy LP and Hallwood Petroleum LLC have
signed an agreement to settle the litigation between them for a
total settlement amount to Eagle of approximately $6.4 million.
Under the terms of this agreement, Hallwood will pay to Eagle
$2.0 million in cash and issue $2.75 million in equity from a
pending major financing and Hallwood has agreed to irrevocably
forgive approximately $1.65 million in Eagle payment obligations
effective immediately. In return, Eagle has agreed to suspend its
legal actions against Hallwood for approximately six months.
About Blast Energy
Headquartered in Houston, Blast Energy Services Inc. and its
debtor-affiliate Eagle Domestic Drilling Operations LLC --
http://www.blastenergyservices.com/-- owns and contracts land
drilling rigs to third parties. The Debtor also provides services
relating to drilling rig operations.
Blast Energy owns and develops abrasive jetting intellectual
property, technology and equipment providing downhole production
enhancement and drilling solutions, and satellite broadband access
for Internet, data, email, applications, VoIP and video streaming
as energy industry management tools providing real-time
supervisory control and data acquisition.
The company filed for Chapter 11 protection on Jan. 19, 2007
(Bankr. S.D. Tex. Case No. 07-30424 and 07-30426). H. Rey
Stroube, III, Esq., represent the Debtors. The Official Committee
of Unsecured Creditors is represented by Alan D. Halperin, Esq.,
at Halperin Battaglia Raicht LLP. When the Debtor filed for
protection from its creditors, it listed total assets of
$63,500,851 and total debts of $51,019,486.
BLB MANAGEMENT: Moody's Lifts Probability of Default Rating to Ca
-----------------------------------------------------------------
Moody's Investors Service upgraded BLB Management's probability of
default rating to Ca from D, and left all ratings on review for
possible downgrade. The upgrade of the probability of default
rating was due to the company's curing the payment default that
occurred on March 4, 2008 and its entering into a forbearance
agreement with its lenders under the first and second lien credit
facilities.
The lenders have agreed to forbear, subject to achievement of a
number of milestones, through Aug. 29, 2008 from declaring a
default under the first and second lien credit facilities. In
exchange for the agreement to forbear, the sponsor group which
owns BLB injected $9.0 million to support near term obligations.
During the next few quarters, the company and its advisors will
explore strategic alternatives. There are a number of near-term
events that could occur that would require the company to
renegotiate the forbearance agreement with its first and second
lien lenders or risk another default, and so the ratings remain on
review for possible downgrade. The review will focus on the
company's ability to meet the milestones outlined in the
forbearance agreement, its near term liquidity profile, as well as
BLB's longer term prospects for improving operating performance
and its overall credit profile.
BLB recently completed the redevelopment of the Twin River racino
near Providence, Rhode Island. Operating performance has been
hurt by construction disruption, food and beverage revenues and
EBITDA well below projected levels and a slower ramp up of gaming
revenues.
Ratings upgraded and remaining on review for possible downgrade:
-- Probability of Default rating to Ca from D
Ratings that remain on review for possible downgrade:
-- Corporate Family Rating at Caa2
-- 1st Lien Revolving Credit Facility at Caa1
-- 1st Lien Term Loan at Caa1
-- 2nd Lien Term Loan at Ca
BLB Management Services, Inc. is a joint venture holding company
comprised of Kerzner International Limited, Starwood Capital
Group, and Waterford Group LLC. BLB's restricted operating
subsidiary, UTGR, Inc., owns and operates the Twin River racino,
located near Providence, Rhode Island. BLB recently completed a
significant renovation of Twin River which included expanded
gaming space, and improved non-gaming amenities.
DRESSER-RAND GROUP: Solid Performance Cues S&P's Rating Upgrades
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
ratings on Houston-based capital equipment provider Dresser-Rand
Group Inc. to 'BB' from 'BB-'. The outlook is stable. In
addition, S&P raised the issue rating on the senior secured
revolving credit facility to 'BBB-' from 'BB+' and left the
recovery rating unchanged at '1'. S&P also raised the issue
rating on the subordinated notes to 'BB-' from 'B+'. The recovery
rating on this debt remains at '5'.
"The ratings upgrade is driven by Dresser-Rand's solid operating
performance, which meaningfully improved credit measures over the
past year," said Standard & Poor's credit analyst Aniki Saha-
Yannopoulos.
In addition, favorable market conditions demonstrated by the
growing margins of the new units, combined with strong aftermarket
service margins, aid performance over the near term. Additional
factors were the company's ability to generate free cash flow and
voluntary debt repayment through 2007.
The stable outlook reflects S&P's expectation that Dresser-Rand
will maintain its improved operating performance and continue to
generate free cash flow.
CBA COMMERCIAL: S&P Downgrades Ratings on 21 Classes of Certs.
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 21
classes of commercial mortgage pass-through certificates from CBA
Commercial Assets LLC's series 2004-1, 2005-1, 2006-1, 2006-2, and
2007-1. Concurrently, S&P affirmed its ratings on 27 other
classes from these transactions.
The downgrades reflect the unfavorable performance of the
collateral pools and the anticipated credit support erosion upon
the eventual resolution of the specially serviced assets in each
of the aforementioned series.
The affirmed ratings reflect credit enhancement levels that
provide adequate support through various stress scenarios.
Details of the five trusts are:
-- For series 2004-1, the collateral pool consisted of 164 loans
with an aggregate trust balance of $58.8 million as of the
March 25, 2008, remittance report, compared with 265 loans
totaling $102.0 million at issuance. Seventeen loans
totaling $7.2 million (12.3%) are with the special servicer,
Midland Loan Services Inc. Appraisal reduction amounts
totaling $625,731 are in effect related to three of the
specially serviced loans. Six of the specially serviced
loans are 90-plus-days delinquent (4.5%), one loan is 60-
plus-days delinquent (0.5%), seven are 30-plus-days
delinquent (5.5%), two are in their grace periods (0.8%), and
one is real estate owned (REO) (1.0%). Nine additional loans
totaling $3.3 million (5.6%) are delinquent but are not with
the special servicer. The trust has experienced five losses
totaling $376,316 to date.
-- For series 2005-1, the collateral pool consisted of 364 loans
with an aggregate trust balance of $137.7 million as of the
March 25, 2008, remittance report, compared with 572 loans
totaling $214.9 million at issuance. Forty-two loans
totaling $15.6 million (11.3%) are with the special servicer,
Midland Loan Services Inc., and one ARA totaling $1.1 million
is in effect. Twenty-two of the specially serviced loans are
90-plus-days delinquent (5.6%), three are 60-plus-days
delinquent (0.3%), three are 30-plus-days delinquent (0.5%),
five are current or in their grace period (1.0%), and nine
are REO or in foreclosure (3.9%). Thirty-six additional
loans totaling $11.6 million are delinquent (8.5%) but are
not with the special servicer. The trust has experienced 11
losses totaling $1.6 million to date.
-- For series 2006-1, the collateral pool consisted of 233 loans
with an aggregate trust balance of $128.9 million as of the
March 25, 2008, remittance report, compared with 303 loans
totaling $166.8 million at issuance. Twenty-nine loans
totaling $15.3 million (11.8%) are with the special servicer,
Litton Loan Servicing L.P. Eleven of the specially serviced
loans are 90-plus-days delinquent (4.0%), six are 60-plus-
days delinquent (1.8%), two are 30-plus-days delinquent
(0.2%), one is current (0.2%), and nine are in foreclosure
(5.6%). Nine additional loans totaling $3.4 million are
delinquent (2.6%) but are not with the special servicer. The
trust has experienced four losses totaling $405,774 to date.
-- For series 2006-2, the collateral consisted of 263 loans with
an aggregate trust balance of $118.8 million as of the
March 25, 2008, remittance report, compared with 294 loans
totaling $130.5 million at issuance. Twenty-three loans
totaling $12.5 million (10.6%) are with the special servicer,
Litton Loan Servicing L.P. Twenty of the specially serviced
loans are 90-plus-days delinquent (7.3%), one is 60-plus-days
delinquent (0.1%), one is 30-plus-days delinquent (0.7%), and
one is in its grace period (2.5%). Eleven additional loans
totaling $1.5 million are delinquent (1.3%) but are not with
the special servicer. The trust has not experienced any
losses to date.
-- For series 2007-1, the collateral pool consisted of 233 loans
with an aggregate trust balance of $125.7 million as of the
March 25, 2008, remittance report, compared with 237 loans
totaling $127.6 million at issuance. Seven loans totaling
$3.6 million (2.9%) are with the special servicer, Litton
Loan Servicing L.P. All of the specially serviced loans are
90-plus-days delinquent. Eighteen additional loans totaling
$3.7 million are delinquent (3.0%) but are not with the
special servicer. The trust has not experienced any losses
to date.
Standard & Poor's stressed the credit impaired loans as part of
its analysis. The resultant credit enhancement levels support the
lowered and affirmed ratings.
Ratings Lowered
CBA Commercial Assets LLC
Commercial mortgage pass-through certificates series 2004-1
Rating
------
Class To From Credit enhancement
----- -- ---- ------------------
M-5 BB+ BBB 6.51%
M-6 CCC+ B 1.53%
CBA Commercial Assets LLC
Commercial mortgage pass-through certificates series 2005-1
Rating
------
Class To From Credit enhancement
----- -- ---- ------------------
M-4 A- A 9.75%
M-5 BB+ BBB- 6.04%
M-6 BB BB+ 5.07%
M-7 CCC- CCC+ 0.97%
CBA Commercial Assets LLC
Commercial mortgage pass-through certificates series 2006-1
Rating
------
Class To From Credit enhancement
----- -- ---- ------------------
M-3 BBB+ A- 8.42%
M-4 BBB- BBB 6.15%
M-5 BB BB+ 4.70%
M-6 CCC B 1.79%
CBA Commercial Assets LLC
Commercial mortgage pass-through certificates series 2006-2
Rating
------
Class To From Credit enhancement
----- -- ---- ------------------
M-3 BBB+ A- 7.28%
M-4 BB+ BBB 5.35%
M-5 BB BBB- 4.39%
M-6 CCC BB 2.20%
M-7 CCC- B 1.24%
CBA Commercial Assets LLC
Commercial mortgage pass-through certificates series 2007-1
Rating
------
Class To From Credit enhancement
----- -- ---- ------------------
M-2 A- A 9.52%
M-3 BBB BBB+ 7.74%
M-4 BBB- BBB 6.60%
M-5 BB+ BBB- 5.20%
M-6 BB- BB+ 4.19%
M-7 B BB 3.05%
Ratings Affirmed
CBA Commercial Assets LLC
Commercial mortgage pass-through certificates series 2004-1
Class Rating Credit enhancement
----- ------ ------------------
A-1 AAA 30.58%
A-2 AAA 30.58%
A-3 AAA 30.58%
M-1 AA 25.60%
M-2 A+ 19.53%
M-3 A 13.24%
M-4 BBB+ 7.82%
M-7 CCC- 0.02%
IO AAA N/A
CBA Commercial Assets LLC
Commercial mortgage pass-through certificates series 2005-1
Class Rating Credit enhancement
----- ------ ------------------
A AAA 23.98%
M-1 AA+ 18.52%
M-2 AA 14.43%
M-3 AA- 12.48%
X-1 AAA N/A
X-2 AAA N/A
CBA Commercial Assets LLC
Commercial mortgage pass-through certificates series 2006-1
Class Rating Credit enhancement
----- ------ ------------------
A AAA 19.41%
M-1 AA+ 15.86%
M-2 AA- 12.30%
M-7 CCC- 0.66%
X-1 AAA N/A
CBA Commercial Assets LLC
Commercial mortgage pass-through certificates series 2006-2
Class Rating Credit enhancement
----- ------ ------------------
A AAA 16.89%
M-1 AAA 13.73%
M-2 A+ 9.63%
X-1 AAA N/A
CBA Commercial Assets LLC
Commercial mortgage pass-through certificates series 2007-1
Class Rating Credit enhancement
----- ------ ------------------
A AAA 15.23%
M-1 AA+ 12.44%
X-1 AAA N/A
N/A -- Not applicable.
C-BASS: Fitch Downgrades Ratings on $292.29 Million Certificates
----------------------------------------------------------------
Fitch Ratings has taken rating actions on C-BASS mortgage pass-
through certificates. Unless stated otherwise, any bonds that
were previously placed on Rating Watch Negative are removed.
Affirmations total $521.1 million and downgrades total
$292.9 million. Additionally, $21.5 million was placed on Rating
Watch Negative. Break Loss percentages and Loss Coverage Ratios
for each class are included with the rating actions as:
C-BASS 2005-CB1
-- $26.3 million class M-1 affirmed at 'AA',
(BL: 73.67, LCR: 4.46);
-- $20.7 million class M-2 affirmed at 'A',
(BL: 29.52, LCR: 1.79);
-- $6.4 million class M-3 downgraded to 'BBB' from 'A-'
(BL: 25.79, LCR: 1.56);
-- $5.5 million class B-1 downgraded to 'BB' from 'BBB+'
(BL: 22.72, LCR: 1.38);
-- $5.1 million class B-2 downgraded to 'B' from 'BBB'
(BL: 20.08, LCR: 1.22);
-- $4.7 million class B-3 downgraded to 'B' from 'BBB-'
(BL: 17.82, LCR: 1.08);
-- $5.5 million class B-4 downgraded to 'B' from 'BB+', placed
on Rating Watch Negative (BL: 15.36, LCR: 0.93);
-- $4.0 million class B-5 downgraded to 'CCC' from 'BB'
(BL: 13.57, LCR: 0.82).
Deal Summary
-- Originators: C-BASS
-- 60+ day Delinquency: 19.13%
-- Realized Losses to date (% of Original Balance): 1.29%
-- Expected Remaining Losses (% of Current balance): 16.50%
-- Cumulative Expected Losses (% of Original Balance): 4.59%
C-BASS 2005-CB2
-- $32.6 million class M-1 affirmed at 'AA',
(BL: 73.99, LCR: 3.69);
-- $19.1 million class M-2 affirmed at 'A',
(BL: 47.27, LCR: 2.36);
-- $6.0 million class M-3 downgraded to 'BB' from 'A-'
(BL: 27.94, LCR: 1.39);
-- $5.6 million class B-1 downgraded to 'B' from 'BBB+'
(BL: 24.31, LCR: 1.21);
-- $3.4 million class B-2 downgraded to 'B' from 'BBB'
(BL: 22.16, LCR: 1.1);
-- $4.8 million class B-3 downgraded to 'B' from 'BBB-'
(BL: 19.78, LCR: 0.99);
-- $4.8 million class B-4 downgraded to 'CCC' from 'BB+'
(BL: 17.55, LCR: 0.87);
-- $4.4 million class B-5 downgraded to 'CCC' from 'BB'
(BL: 15.68, LCR: 0.78).
Deal Summary
-- Originators: C-BASS
-- 60+ day Delinquency: 23.87%
-- Realized Losses to date (% of Original Balance): 2.31%
-- Expected Remaining Losses (% of Current balance): 20.07%
-- Cumulative Expected Losses (% of Original Balance): 6.65%
C-BASS 2005-CB3
-- $14.7 million class AF-2 affirmed at 'AAA',
(BL: 91.41, LCR: 4.75);
-- $15.0 million class AF-3 affirmed at 'AAA',
(BL: 78.89, LCR: 4.1);
-- $9.5 million class AF-4 affirmed at 'AAA',
(BL: 79.56, LCR: 4.13);
-- $26.7 million class M-1 affirmed at 'AA+',
(BL: 55.61, LCR: 2.89);
-- $14.4 million class M-2 affirmed at 'AA-',
(BL: 42.92, LCR: 2.23);
-- $6.5 million class M-3 downgraded to 'A' from 'A+'
(BL: 36.40, LCR: 1.89);
-- $6.1 million class M-4 downgraded to 'BB' from 'A'
(BL: 27.49, LCR: 1.43);
-- $5.6 million class B-1 downgraded to 'B' from 'A-'
(BL: 22.99, LCR: 1.19);
-- $4.8 million class B-2 downgraded to 'B' from 'BBB+'
(BL: 20.24, LCR: 1.05);
-- $4.2 million class B-3 downgraded to 'CCC' from 'BBB+'
(BL: 18.14, LCR: 0.94);
-- $3.8 million class B-4 downgraded to 'CCC' from 'BBB'
(BL: 16.36, LCR: 0.85);
-- $4.2 million class B-5 downgraded to 'CCC' from 'BB+'
(BL: 14.48, LCR: 0.75);
-- $7.1 million class B-6 downgraded to 'CC/DR4' from 'B'
(BL: 11.42, LCR: 0.59).
Deal Summary
-- Originators: C-BASS
-- 60+ day Delinquency: 22.00%
-- Realized Losses to date (% of Original Balance): 1.33%
-- Expected Remaining Losses (% of Current balance): 19.26%
-- Cumulative Expected Losses (% of Original Balance): 7.15%
C-BASS 2005-CB5
-- $2.1 million class AF-1 affirmed at 'AAA',
(BL: 99.19, LCR: 5.17);
-- $34.2 million class AF-2 affirmed at 'AAA',
(BL: 54.85, LCR: 2.86);
-- $21.3 million class AF-3 affirmed at 'AAA',
(BL: 49.58, LCR: 2.58);
-- $13.3 million class AF-4 affirmed at 'AAA',
(BL: 49.83, LCR: 2.6);
-- $45.3 million class AV-2 affirmed at 'AAA',
(BL: 58.89, LCR: 3.07);
-- $3.7 million class AV-3 affirmed at 'AAA',
(BL: 58.89, LCR: 3.07);
-- $13.1 million class M-1 affirmed at 'AA+',
(BL: 44.62, LCR: 2.32);
-- $12.1 million class M-2 affirmed at 'AA',
(BL: 38.65, LCR: 2.01);
-- $8.2 million class M-3 downgraded to 'A' from 'AA-'
(BL: 34.48, LCR: 1.8);
-- $6.0 million class M-4 downgraded to 'BBB' from 'A+'
(BL: 31.36, LCR: 1.63);
-- $6.2 million class M-5 downgraded to 'BB' from 'A'
(BL: 28.13, LCR: 1.47);
-- $5.6 million class M-6 downgraded to 'BB' from 'A-'
(BL: 25.18, LCR: 1.31);
-- $5.6 million class B-1 downgraded to 'B' from 'BBB+'
(BL: 22.11, LCR: 1.15);
-- $3.9 million class B-2 downgraded to 'B' from 'BBB+'
(BL: 19.99, LCR: 1.04);
-- $3.7 million class B-3 downgraded to 'CCC' from 'BBB-'
(BL: 18.03, LCR: 0.94);
-- $4.1 million class B-4 downgraded to 'CCC' from 'BB'
(BL: 16.12, LCR: 0.84);
-- $4.3 million class B-5 downgraded to 'CCC' from 'B'
(BL: 14.32, LCR: 0.75).
Deal Summary
-- Originators: C-BASS
-- 60+ day Delinquency: 21.43%
-- Realized Losses to date (% of Original Balance): 1.49%
-- Expected Remaining Losses (% of Current balance): 19.20%
-- Cumulative Expected Losses (% of Original Balance): 10.48%
C-BASS 2005-CB6
-- $5.9 million class A-2 affirmed at 'AAA',
(BL: 99.31, LCR: 3.9);
-- $76.7 million class A-3 affirmed at 'AAA',
(BL: 58.27, LCR: 2.29);
-- $39.0 million class A-4 affirmed at 'AAA',
(BL: 58.79, LCR: 2.31);
-- $16.0 million class M-1 rated 'AA+', placed on Rating Watch
Negative (BL: 50.08, LCR: 1.97);
-- $16.0 million class M-2 downgraded to 'A-' from 'AA+'
(BL: 43.99, LCR: 1.73);
-- $11.2 million class M-3 downgraded to 'BBB' from 'AA+'
(BL: 39.43, LCR: 1.55);
-- $8.5 million class M-4 downgraded to 'BB' from 'AA'
(BL: 35.86, LCR: 1.41);
-- $8.2 million class M-5 downgraded to 'BB' from 'AA-'
(BL: 32.30, LCR: 1.27);
-- $7.0 million class M-6 downgraded to 'B' from 'A+'
(BL: 29.19, LCR: 1.15);
-- $8.0 million class B-1 downgraded to 'B' from 'A-'
(BL: 25.51, LCR: 1);
-- $5.7 million class B-2 downgraded to 'CCC' from 'BBB'
(BL: 22.86, LCR: 0.9);
-- $5.7 million class B-3 downgraded to 'CCC' from 'BBB-'
(BL: 20.18, LCR: 0.79);
-- $7.2 million class B-4 downgraded to 'CC/DR5' from 'BB'
(BL: 17.10, LCR: 0.67);
-- $5.2 million class B-5 downgraded to 'CC/DR6' from 'B'
(BL: 15.14, LCR: 0.59).
Deal Summary
-- Originators: C-BASS
-- 60+ day Delinquency: 32.55%
-- Realized Losses to date (% of Original Balance): 1.91%
-- Expected Remaining Losses (% of Current balance): 25.47%
-- Cumulative Expected Losses (% of Original Balance): 13.57%
C-BASS 2005-CB7
-- $43.5 million class AF-2 affirmed at 'AAA',
(BL: 74.21, LCR: 3.27);
-- $23.2 million class AF-3 affirmed at 'AAA',
(BL: 60.52, LCR: 2.67);
-- $33.5 million class AF-4 affirmed at 'AAA',
(BL: 60.90, LCR: 2.69);
-- $14.1 million class M-1 affirmed at 'AA+',
(BL: 52.65, LCR: 2.32);
-- $14.1 million class M-2 affirmed at 'AA+',
(BL: 46.18, LCR: 2.04);
-- $9.8 million class M-3 downgraded to 'A' from 'AA+'
(BL: 41.33, LCR: 1.82);
-- $7.6 million class M-4 downgraded to 'BBB' from 'AA'
(BL: 37.43, LCR: 1.65);
-- $7.6 million class M-5 downgraded to 'BB' from 'AA-'
(BL: 33.52, LCR: 1.48);
-- $6.3 million class M-6 downgraded to 'BB' from 'A+'
(BL: 30.21, LCR: 1.33);
-- $6.7 million class B-1 downgraded to 'B' from 'A'
(BL: 26.56, LCR: 1.17);
-- $5.4 million class B-2 downgraded to 'B' from 'A-'
(BL: 23.60, LCR: 1.04);
-- $5.0 million class B-3 downgraded to 'CCC' from 'BBB+'
(BL: 20.92, LCR: 0.92);
-- $6.3 million class B-4 downgraded to 'CCC' from 'BBB'
(BL: 17.91, LCR: 0.79);
-- $5.0 million class B-5 downgraded to 'CC/DR5' from 'BBB-'
(BL: 15.74, LCR: 0.69).
Deal Summary
-- Originators: C-BASS
-- 60+ day Delinquency: 24.20%
-- Realized Losses to date (% of Original Balance): 1.83%
-- Expected Remaining Losses (% of Current balance): 22.67%
-- Cumulative Expected Losses (% of Original Balance): 12.17%
The rating actions are based on changes that Fitch has made to its
subprime loss forecasting assumptions. The updated assumptions
better capture the deteriorating performance of pools from 2007,
2006 and 2005 with regard to continued poor loan performance and
home price weakness.
CDC MORTGAGE: Moody's Lowers 17 Tranches' Ratings From Three Deals
------------------------------------------------------------------
Moody's Investors Service downgraded 17 tranches from three deals
issued by CDC Mortgage Capital Trust in 2004. Moody's has
downgraded 20 tranches from 3 deals issued by IXIS Real Estate
Capital Trust in 2004 and 2005. The transactions are backed by
primarily first-lien, subprime fixed and adjustable rate mortgage
loans.
The actions are based on the analysis of the credit enhancement
provided by subordination, overcollateralization and excess spread
relative to expected losses.
Complete rating actions are:
Issuer: CDC Mortgage Capital Trust 2004-HE1
-- Cl. M-2, downgraded from A2 to Baa3
-- Cl. M-3, downgraded from A3 to B1
-- Cl. B-1, downgraded from Baa1 to Caa1
-- Cl. B-2, downgraded from Baa3 to Ca
-- Cl. B-3, downgraded from Ba3 to C
Issuer: CDC Mortgage Capital Trust 2004-HE2
-- Cl. M-2, downgraded from A2 to Baa2
-- Cl. M-3, downgraded from A3 to B1
-- Cl. B-1, downgraded from Baa1 to Caa1
-- Cl. B-2, downgraded from Ba2 to Caa3
-- Cl. B-3, downgraded from B3 to Ca
-- Cl. B-4, downgraded from Caa2 to C
Issuer: CDC Mortgage Capital Trust 2004-HE3
-- Cl. M-2, downgraded from A2 to Baa2
-- Cl. M-3, downgraded from A3 to Ba1
-- Cl. B-1, downgraded from Baa1 to B1
-- Cl. B-2, downgraded from Baa2 to Caa1
-- Cl. B-3, downgraded from Ba3 to Caa3
-- Cl. B-4, downgraded from Caa2 to C
Issuer: IXIS Real Estate Capital Trust 2004-HE4
-- Cl. M-2, downgraded from A2 to Baa2
-- Cl. M-3, downgraded from A3 to Baa3
-- Cl. B-1, downgraded from Baa1 to Ba3
-- Cl. B-2, downgraded from Baa2 to B1
-- Cl. B-3, downgraded from Baa3 to Caa2
-- Cl. B-4, downgraded from Ba1 to C
Issuer: IXIS Real Estate Capital Trust 2005-HE1
-- Cl. M-4, downgraded from A1 to Baa1
-- Cl. M-5, downgraded from A2 to Ba2
-- Cl. M-6, downgraded from A3 to Caa1
-- Cl. B-1, downgraded from Baa1 to Caa3
-- Cl. B-2, downgraded from Baa2 to Ca
-- Cl. B-3, downgraded from Baa3 to C
-- Cl. B-4, downgraded from Ba1 to C
Issuer: IXIS Real Estate Capital Trust 2005-HE2
-- Cl. M-4, downgraded from A1 to A3
-- Cl. M-5, downgraded from A2 to Baa1
-- Cl. M-6, downgraded from A3 to Baa3
-- Cl. B-1, downgraded from Baa1 to Ba1
-- Cl. B-2, downgraded from Baa2 to B2
-- Cl. B-3, downgraded from Baa3 to Ca
-- Cl. B-4, downgraded from Ba1 to C
CHENIERE ENERGY: Board Elects Jerry Smith Chief Accounting Officer
------------------------------------------------------------------
On April 3, 2008, Jerry D. Smith was elected vice president and
chief accounting officer of Cheniere Energy Inc. by the company's
board of directors.
Mr. Smith, 33, has served as financial controller of the company
since September 2007. From April 2006 to August 2007, he served
as assistant controller of the company. Prior to joining the
company, Mr. Smith was employed by KPMG LLP, where he served as a
manager, Audit, from July 2004 to April 2006 and a senior
associate, Audit, from May 2002 to June 2004.
Mr. Smith is an "at will" employee and does not have an employment
or severance agreement with the company.
Mr. Smith is replacing Craig K. Townsend who resigned as the
company's vice president and chief accounting officer effective
April 2, 2008. On May 31, 2007, Mr. Townsend began a leave of
absence. During Mr. Townsend's leave of absence, Don A.
Turkleson, senior vice president and chief financial officer of
the company, assumed the responsibilities of the principal
accounting officer.
About Cheniere Energy
Based in Houston, Texas, Cheniere Energy Inc. (AMEX: LNG) --
http://www.cheniere.com/-- is developing a network of three LNG
receiving terminals and related natural gas pipelines along the
Gulf Coast of the United States. Cheniere is pursuing related
business opportunities both upstream and downstream of the
terminals. Cheniere is also the founder and holds a 30.0% limited
partner interest in a fourth LNG receiving terminal.
* * *
As reported in the Troubled Company Reporter on March 13, 2008,
Cheniere Energy Inc.'s consolidated balance sheet at Dec. 31,
2007, showed $2.96 billion in total assets and $3.26 billion in
total liabilities, resulting in a $302.1 million total
stockholders' deficit.
CLEAR CHANNEL: Extends Tender Offers Expiration for Senior Notes
----------------------------------------------------------------
In connection with Clear Channel Communications, Inc.'s tender
offer for its outstanding 7.65% Senior Notes due 2010 (CUSIP No.
184502AK8) and Clear Channel's subsidiary AMFM Operating Inc.'s
tender offer for its outstanding 8% Senior Notes due 2008 (CUSIP
No. 158916AL0), Clear Channel extended the date on which the
tender offers are scheduled to expire from 8:00 a.m. New York City
time on April 11, 2008 to 8:00 a.m. New York City time on April
18, 2008 and the consent payment deadline for the Notes from 8:00
a.m. New York City time on April 11, 2008 to 8:00 a.m. New York
City time on April 18, 2008. The Offer Expiration Date and the
Consent Payment Deadline are subject to extension by Clear
Channel, with respect to the CCU Notes, and AMFM, with respect to
the AMFM Notes, in their sole discretion.
The completion of the tender offers and consent solicitations for
the Notes is conditioned upon the satisfaction or waiver of all of
the conditions precedent to the Agreement and Plan of Merger by
and among Clear Channel, CC Media Holdings, Inc., B Triple Crown
Finco, LLC, T Triple Crown Finco, LLC and BT Triple Crown Merger
Co., Inc., dated Nov. 16, 2006, as amended by Amendment No. 1,
dated April 18, 2007, and Amendment No. 2, dated May 17, 2007 and
the closing of the merger contemplated by the Merger Agreement.
The closing of the Merger has not occurred. On March 26, 2008,
Clear Channel, joined by CC Media Holdings, Inc., filed a lawsuit
in the Texas State Court in Bexar County, Texas, against
Citigroup, Deutsche Bank, Morgan Stanley, Credit Suisse, The Royal
Bank of Scotland, and Wachovia, the banks who had committed to
provide the debt financing for the Merger. Clear Channel intends
to complete the tender offers and consent solicitations for the
CCU Notes, and AMFM intends to complete the tender offers and
consent solicitations for the AMFM Notes, upon consummation of the
Merger.
Clear Channel, on Jan. 2, 2008, received, pursuant to its tender
offer and consent solicitation for the CCU Notes, the requisite
consents to adopt the proposed amendments to the CCU Notes and the
indenture governing the CCU Notes applicable to the CCU Notes, and
that AMFM had received, pursuant to its previously announced
tender offer and consent solicitation for the AMFM Notes, the
requisite consents to adopt the proposed amendments to the AMFM
Notes and the indenture governing the AMFM Notes.
As of April 9, 2008, approximately 87% of the AMFM Notes have been
validly tendered and not withdrawn and approximately 98% of the
CCU Notes have been validly tendered and not withdrawn. The Clear
Channel tender offer and consent solicitation is being made
pursuant to the terms and conditions set forth in the Clear
Channel Offer to Purchase and Consent Solicitation Statement for
the CCU Notes dated Dec. 17, 2007, and the related Letter of
Transmittal and Consent. The AMFM tender offer and consent
solicitation is being made pursuant to the terms and conditions
set forth in the AMFM Offer to Purchase and Consent Solicitation
Statement for the AMFM Notes dated Dec. 17, 2007, and the related
Letter of Transmittal and Consent.
Clear Channel has retained Citi to act as the lead dealer manager
for the tender offers and lead solicitation agent for the consent
solicitations and Deutsche Bank Securities Inc. and Morgan Stanley
& Co. Inc. to act as co-dealer managers for the tender offers and
co-solicitation agents for the consent solicitations. Global
Bondholder Services Corporation is the Information Agent for the
tender offers and the consent solicitations. Questions regarding
the tender offers should be directed to Citi at (800) 558-3745
(toll-free) or (212) 723-6106 (collect). Requests for
documentation should be directed to Global Bondholder Services
Corporation at (212) 430-3774 (for banks and brokers only) or
(866) 924-2200 (for all others toll-free).
Based in San Antonio, Texas, Clear Channel Communications Inc.
(NYSE:CCU) -- http://www.clearchannel.com/-- is a media
and entertainment company specializing in "gone from home"
entertainment and information services for local communities and
premiere opportunities for advertisers. The company's
businesses include radio, television and outdoor displays. Outside
U.S., the company operates in 11 countries -- Norway,
Denmark, the United Kingdom, Singapore, China, the Czech
Republic, Switzerland, the Netherlands, Australia, Mexico and
New Zealand. As of Dec. 31, 2007, it owned 717 core radio
stations, 288 non-core radio stations which are being marketed for
sale and a leading national radio network operating in the United
States.
* * *
As reported in the Troubled Company Reporter on March 28, 2008,
Standard & Poor's Ratings Services said its ratings on Clear
Channel Communications Inc., including the 'B+' corporate credit
rating, remain on CreditWatch with negative implications.
Fitch Ratings stated that in line with previous guidance, Clear
Channel Communications' 'BB-' Issuer Default Rating and Senior
Unsecured Ratings would remain in place if the going-private
transaction is not completed.
Moody's stated that assuming the transaction is completed as
currently contemplated, Clear Channel will likely be assigned a
Corporate Family Rating of B2 and the rating on the existing
senior notes is likely to be notched down to Caa1 based on their
expected subordination to the new senior secured debt facilities
and the new senior notes.
CP SHIPS: Court to Hold $1.3 Mil. Settlement Hearing on June 11
---------------------------------------------------------------
The Honorable James D. Whittemore of the U.S. District Court
for the Middle District of Florida will hold a hearing on the
merits of a $1.3 million settlement proposed by CP Ships Ltd., on
June 11, 2008, at 3:00 p.m., Courtroom 13B, at the Sam M. Gibbons
U.S. Courthouse, 801 North Florida Avenue, in Tampa, Florida.
The settlement arose out of several class actions filed against CP
Ships and certain of its officers and directors, by purchasers of
CP Ships' securities during the period between Jan. 29, 2003 and
Aug. 9, 2004. The complainants alleged that, during the class
period, the defendants caused CP Ships' shares to trade at
artificially inflated levels through the issuance of false and
misleading financial statements.
Judge Whittemore, at the hearing, will determine whether:
1) the proposed settlement is fair, reasonable, and adequate;
2) CP Ships lead counsel's compensation and fees should be
approved; and
3) claims against the defendants should be dismissed with
prejudice.
The Court says that members of the class may be entitled to share
in the settlement fund. Requests for copies of notice and claim
forms may be made to:
Daniel S. Sommers, Esq.
Matthew B. Kaplan, Esq.
Cohen Milstein, Hausfeld & Toll, PLLC
1100 New York Avenue, Northwest
West Tower, Suite 500
Washington, D.C. 20005
-- and --
Michael K. Yarnoff, Esq.
Jennifer L. Ench, Esq.
Schiffrin Barroway Topaz & Kessler LLP
280 King of Prussia Road
Radnor, PA 19087
To participate in the settlement, a member must submit a claim for
no later than July 23, 2008.
The Court also set May 14, 2008 as the deadline for submitting
objections and requests for exclusion.
CP Ships -- http://www.cpships.com/-- a subsidiary of TUI AG,
provides international container transportation in four key
regional markets: TransAtlantic, Australasia, Latin America and
Asia with 38 services in 21 trade lanes. As of Sept. 30, 2005 its
vessel fleet was 80 ships. CP Ships also owns Montreal Gateway
Terminals, which operates one of Canada's largest marine container
terminal facilities. TUI expects to complete its acquisition of
100% of CP Ships on Dec. 20, 2005, at which time CP Ships is
expected to delist from the Toronto and New York stock exchanges.
TUI plans to integrate CP Ships into its other shipping subsidiary
Hapag-Lloyd to create the world's fifth-largest container shipping
company.
CREATIVE NEIGHBORS: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Creative Neighbors Always Sharing, Inc.
3847 South Western Avenue
Los Angeles, CA 90062
Tel: (323) 373-1910
Bankruptcy Case No.: 08-14645
Type of Business: The Debtor provides shelter for the homeless.
Chapter 11 Petition Date: April 9, 2008
Court: Central District of California
Judge: Richard M. Neiter
Debtor's Counsel: Frederick A McNeill, Esq.
728 West Century Boulevard
Los Angeles, CA 90043
Tel: (310) 497-2124
Estimated Assets: $1 million to $10 million
Estimated Debts: $1 million to $10 million
The Debtor did not file a list of its largest unsecured creditors.
CREDIT AND REPACKED: Moody's Cuts Rating on Tranche Notes to 'Ba1'
------------------------------------------------------------------
Moody's Investors Service downgraded the rating of these notes
issued by Credit and Repacked Securities Limited 2005-3:
Class Description: Tranche Notes due Dec. 20, 2010
-- Prior Rating: Baa3, on review for possible downgrade
-- Current Rating: Ba1
According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's
underlying collateral pool.
CREDIT BASED: Fitch Cuts Rating to B from BB on Class B-4 Certs.
----------------------------------------------------------------
Fitch Ratings has affirmed 3 and downgraded 5 classes from these
Credit Based Asset Servicing and Securitization LLC series:
Series 2004-CB8:
-- Class AF-4 affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 downgraded to 'A-' from 'A';
-- Class B-1 downgraded to 'BBB+' from 'A-';
-- Class B-2 downgraded to 'BBB-' from 'BBB+';
-- Class B-3 downgraded to 'BB' from 'BBB';
-- Class B-4 downgraded to 'B' from 'BB', and is removed from
Rating Watch Negative.
The collateral for the above trusts consists primarily of first
liens extended to subprime borrowers with minimal percentages of
FHA/VA loans and sub- and re-performing loans.
The affirmations reflect a satisfactory relationship between
credit enhancement and future loss expectations and affect
approximately $71 million of outstanding certificates. The
$35.8 million of outstanding certificates being downgraded reflect
deterioration in the relationship of CE to future loss
expectations.
The above transaction is being serviced by Litton Loan Servicing
LP, which is Rated 'RPS1', Rating Watch Negative by Fitch.
DELPHI CORP: Moody's Withdraws Low-B Prospective Debt Ratings
-------------------------------------------------------------
Moody's Investors Service withdrawn Delphi Corporation's
prospective debt ratings for its emergence financing. Although
Delphi was successful in arranging commitments for its first lien
term loans of $1.7 billion, a first lien revolving credit of
$1.6 billion and General Motors Corporation and a GM affiliate
agreed to accept up to $2.825 billion of second lien term debt,
equity participants in the financing structure have filed a notice
of termination on their earlier undertaking to provide
$2.55 billion of capital. The absence of equity funding
terminates Delphi's plans to emerge from bankruptcy by April 4,
2008.
Delphi may need to renegotiate multiple agreements with other
parties as well as seek new investors to proceed with a fresh
emergence plan. Significant agreements with the Internal Revenue
Service and the Pension Benefit Guaranty Corporation will have to
be extended. In addition, the company may need to revisit the
maturity of its current Debtor in Possession financing which is
set to expire at the end of June 2008. Material agreements with
its domestic workforce are not affected by developments on the
emergence financing.
Ratings being withdrawn are those listed in Moody's earlier
releases which were:
Delphi Corporation
-- Corporate Family Rating, (P)B2
-- Probability of Default, (P)B2
-- Outlook, Stable
-- $1,500 million first lien term loan, (P)Ba2 (LGD-2, 17%)
-- $2,825 million second lien term loan, (P)B2 (LGD-4, 52%)
-- Speculative Grade Liquidity rating, SGL-2
-- Delphi Holdings Luxembourg S.ar.l
-- equivalent of $200 million first lien term loan, guaranteed
by Delphi Corporation, (P)Ba2 (LGD-2, 17%)
Moody's ratings had been assigned on a prospective basis and
assumed a full subscription to Delphi's proposed debt and equity
financing as well as receiving bankruptcy court affirmation of an
effective date of emergence. As those events have not occurred,
the ratings have been withdrawn.
Delphi Corporation, headquartered in Troy, Michigan, is a global
tier-1 automotive supplier with products and services addressing
electrical or electronic architecture, electronics & safety,
powertrain systems, thermal systems, and aftermarket product and
service solutions. The company expects to have revenues from
continuing operations of roughly $20 billion and employs
approximately 171,000 people at 163 manufacturing sites around the
world.
DELTA LIFE: A.M. Best Cuts Financial Strength Rating to B-(Fair)
----------------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to B-
(Fair) from B(Fair) and issuer credit rating to "bb-" from "bb"
for Delta Life Insurance Company. The outlook for the ratings has
been revised to stable from negative.
Concurrently, A.M. Best has affirmed the FSR of B+(Good) and ICR
of "bbb-" of Delta Fire & Casualty Insurance Company. The outlook
for these ratings is stable. Subsequently, A.M. Best has
withdrawn the ratings and assigned a category NR-4 to both
companies in response to a request from the companies' management
to be removed from A.M. Best's interactive rating process.
Delta Life continues to hold an extremely large position in
Wachovia Corporation's common stock in comparison to its total
capital and surplus position. These rating actions reflect a
significant reduction in the company's capital and surplus level
from unrealized capital losses resulting primarily from a material
devaluation of its Wachovia stock in 2007. The market value of
Wachovia's stock has eroded further in 2008.
Delta Fire, a sister company to Delta Life, also holds a large
portion of its policyholders' surplus in Wachovia common stock as
well as Regions Financial Corp. common stock, and while Delta
Fire's underwriting results in 2007 were in line with its most
recent year's results, unrealized capital losses on the
aforementioned bank holdings served to reduce surplus by
$2 million, or 17%. The market value of the Wachovia and Regions
Financial holdings shrunk further during 2008. Nevertheless,
Delta Fire's risk-adjusted capitalization remains more than
supportive of its FSR and ICR, which were affirmed prior to
withdrawal of the ratings.
DISTRIBUTED ENERGY: Appoints UHY LLP as New Independent Auditors
----------------------------------------------------------------
On April 2, 2008, the Audit Committee of the Board of Directors of
Distributed Energy Systems Corp. dismissed PricewaterhouseCoopers
LLP as the company's independent registered public accounting
firm. The company informed PwC of this decision on April 3, 2008.
On the same day, the company's Audit Committee appointed UHY LLP
as its new independent registered public accounting firm, to
perform auditing services commencing with the fiscal year ending
Dec. 31, 2008.
PwC's reports with respect to the company's financial statements
for the fiscal years ended Dec. 31, 2006, and 2007, did not
contain an adverse opinion or disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope or accounting
principle, except that such reports included an explanatory
paragraph raising substantial doubt about the company's ability to
continue as a going concern.
During the company's fiscal years ended Dec. 31, 2006, and 2007,
and through April 2, 2008, there have been no disagreements with
PwC on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure., which
disagreements if not resolved to the satisfaction of PwC would
have caused them to make reference thereto in their reports on the
financial statements for such years.
About Distributed Energy
Based in Wallingford, Connecticut, Distributed Energy Systems
Corp. (NasdaqCM: DESC) -- http://www.distributed-energy.com/--
provides products and services for distributed, or on-site, power
generation and storage.
At Dec. 31, 2007, the company's consolidated balance sheet showed
$41,750,604 in total assets, $18,827,203 in total liabilities, and
$22,923,401 in total stockholders' equity.
Going Concern Doubt
As reported in the Troubled Company Reporter on April 1, 2008,
Pricewaterhousecoopers LLP expressed substantial doubt about
Distributed Energy Systems Corp.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007. The auditing firm
reported that the company has incurred significant recurring
operating losses and cash outflows from operations.
DMG TRADING: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: DMG Trading Inc.
dba Da Mincci Jewelers
35 Via Brianza, Suite 100
Henderson, NV 89011
Bankruptcy Case No.: 08-13145
Chapter 11 Petition Date: April 3, 2008
Court: District of Nevada (Las Vegas)
Judge: [has yet to be assigned]
Debtor's Counsel: Nancy L. Allf, Esq.
Gonzalez Saggio & Harlan LLP
411 E. Bonneville, Suite 100
Las Vegas, NV 89101
Tel: (702) 366-1866
Fax: (702) 366-1945
nancy_allf@gshllp.com
Total Assets: $819,534
Total Debts: $2,122,779
Debtor's list of its 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Community Bank of line of credit $248,912
Nevada
7580 W. Sahara
Las Vegas, NV 89117
Cartier North America $686,850
3 Enterprise Drive, Suite 300
Shelton, CT 06484
Movado Group Inc. $195,673
107 State Street
Moonachie, NJ 07074
Timbo Fine Jewelry Inc. $79,649
Spectrum Diamonds $63,850
Ziva Jewels Inc. $63,477
Wells Fargo Bank business line of $59,545
Anthem Village credit
JD Factors LLC domusHORA Inc. $59,071
assignment
Black Diamonds Trading $56,685
Corp.
Bashoura $52,074
TP Collection $44,289
MJC Contracting Inc. $30,000
I. Gansky & Co. $23,402
Forum Group $18,787
Chad Allison $17,695
Jale International $16,490
Polanti Inc. $14,600
Liel Design $14,303
Sol Cohen & Associates $14,160
Citizen Watch Company $13,253
of America Inc.
DORMITORY AUTHORITY: Fitch Holds 'BB+' Rating on $264 Mil. Bonds
----------------------------------------------------------------
Fitch Ratings has affirmed the 'BB+' rating on approximately
$264 million of the Dormitory Authority of the State of New York
(Orange Regional Medical Center Project) revenue bonds, series
2008. The bonds, which were originally scheduled to price around
March 15, 2008, are now expected to price around April 22. The
Rating Outlook is Stable.
The rating affirmation and the Stable Outlook reflect Orange
Regional Medical Center's positive operating performance for
fiscal 2007 as well as a revised pro forma debt service schedule
and par amount for the 2008 bonds based on a revised feasibility
study. ORMC finished fiscal 2007 with an operating gain of
$2.4 million (0.9% operating margin) and a $6.9 million gain
including non-operating income (2.4% excess margin). ORMC's
fiscal 2007 operating margin exceeds its budgeted performance and
Fitch's below investment grade median of negative 0.3%. ORMC's
unrestricted cash and investments as of Dec. 31, 2007 were
$53.7 million, down from $59.8 million 12 months earlier. The
decline in cash represents part of the $18.2 million ORMC has
pledged to spend on its replacement hospital project through cash
contributions.
Since Fitch rated the 2008 bonds in December 2007, ORMC has
revised the maximum annual debt service for the 2008 bonds from
$18.3 million to $22.3 million mainly as a result of an increase
in assumed interest rates and additional costs. As a result of
the increase, the par amount for the 2008 bonds will increase to
$264 million from the originally proposed $247 million, mainly to
account for additional funds needed for higher required
capitalized interest expense and the debt service reserve fund.
The revised fiscal 2007 pro forma MADS coverage and debt-to-
capitalization ratios of 0.9 times and 79.6% are comparable to the
1.1x coverage and 78.3% debt-to-capitalization ratios Fitch used
in its analysis when the rating was first assigned.
EMAGIN CORP: Completes $1.7 Million Offering of Stocks & Warrants
-----------------------------------------------------------------
eMagin Corporation completed $1.7 million private placement of its
common stock and warrants with both new and existing institutional
investors. The net proceeds from the financing will be used to
provide working capital.
On April 2, 2008, eMagin entered into a Securities Purchase
Agreement with certain qualified institutional buyers and
accredited investors to sell an aggregate of 1,586,539 shares of
the companys common stock, par value $0.001 per share, and
warrants to purchase an additional 793,273 shares of common stock,
for an aggregate purchase price of $1,650,000.
Under the terms of the agreement, the purchase price of the common
stock was $1.04 per share and the strike price of the warrant was
$1.30 per share. The warrants will expire on April 2, 2013.
"We are pleased to receive the support of both existing and new
investors," Admiral Thomas Paulson, eMagin's interim chief
executive officer, said. "These funds will not only help to
support our balance sheet, but will also allow us to undertake
capital expenditures on our production line to support our efforts
to increase revenues and meet expected demand this year and
enhance the introduction of new products that will drive our
growth in the years to come."
Sichenzia Ross Friedman Ference LLP acted as the company's
counsel.
About eMagin Corporation
Headquartered in Bellevue, Washington, eMagin Corporation (AMEX:
EMA) -- http://www.emagin.com/-- designs, develops, manufactures,
and markets virtual imaging products which utilize OLEDs, or
organic light emitting diodes, OLED-on-silicon microdisplays and
related information technology solutions.
Going Concern Doubt
Eisner LLP expressed substantial doubt on eMagin Corp.'s ability
to continue as a going concern after auditing the company's annual
report for the year ended Dec. 31, 2006. Eisner reported that the
company has had recurring losses from operations which is likely
to continue, and has working capital and capital deficits at
Dec. 31, 2006.
ENDURANCE BUSINESS: S&P Assigns 'B' Rating on Negative CreditWatch
------------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Endurance
Business Media Inc., including its 'B' corporate credit rating, on
CreditWatch with negative implications, reflecting S&P's concern
over the impact of persisting weakness in the U.S. real estate
market and rising paper costs on the company's operating
performance.
Endurance publishes residential real estate and rental property
advertising publications in the U.S. These free publications,
which are distributed in supermarkets, restaurants, and sidewalk
kiosks, help to connect potential homebuyers with real estate
brokers and agencies. The company's main titles include Home &
Land, Rental Guide, Home Guide, and Estate & Homes.
"In resolving the CreditWatch listing, we will continue to monitor
Endurance's operating results and ability to maintain an adequate
cushion of covenant compliance amid broad cyclical pressures in
the U.S. real estate market," said Standard & Poor's credit
analyst Michael Altberg.
ENERGY TRANSFER: Fitch Holds Low-B Ratings with Stable Outlook
--------------------------------------------------------------
Fitch Ratings has affirmed the ratings for Energy Transfer
Partners, L.P. and Energy Transfer Equity, L.P. as listed below.
ETE owns approximately 62.5 million ETP limited partner units and
ETP's 2% general partner interest. Approximately $5.1 billion of
outstanding debt securities are affected. The Rating Outlooks for
ETP and ETE are Stable.
Energy Transfer Partners, L.P.
-- Issuer Default Rating at 'BBB-';
-- Senior unsecured debt at 'BBB-'.
Energy Transfer Equity, L.P.
-- IDR at 'BB-';
-- Senior secured term loan at 'BB';
-- Senior secured revolving credit facility at 'BB'.
ETP's ratings and Stable Outlook reflect the increasing scale,
scope, and diversity of its operations, strong quantitative credit
measures, a conservative distribution policy, a favorable near-
term regional natural gas supply position from expanding Barnett
Shale and Bossier Sands development, and the expected benefits of
ongoing contractually supported pipeline expansions. ETP's credit
measures are consistent with its peer group of investment grade
MLPs. However, a substantial capital spending program directed
mostly toward pipeline expansion projects, estimated to
approximate $1.8 billion for calendar 2008, will result in
increased debt leverage until the new projects generate operating
returns.
In December 2007, ETP raised approximately $270 million in new
equity proceeds. Management is committed to periodically issue
new equity throughout the current construction phase. The
company's debt to EBITDA for the twelve months ended December 2007
was approximately 3.4 times. Debt leverage will move higher in
2008 but should remain consistent with its rating category, albeit
at the high end of the range for its MLP peer group. Maintaining
appropriate future leverage measures will in good part depend on
ETP completing timely equity financings.
ETE's ratings and Stable Outlook are primarily dependent the
financial and operating characteristics of ETP, the standalone
credit profile of ETE and the strong recovery prospects for its
senior secured creditors under distressed conditions. Fitch
considers fiscal 2007 debt-to-EBITDA of 3.6x as reasonable for a
master limited partnership holding company structure and does not
present an inordinate amount of risk for ETE and ETP given the
amount and predictability of its cash flow stream. ETP's upstream
cash distributions should increase and as a result, ETE's cash
flow ratios will strengthen as several ongoing expansion projects
become operational. However, Fitch recognizes that ETE's
outstanding $1.572 billion of debt is substantial and its ability
to refinance the debt in the future could be impaired by
deteriorating capital market conditions.
Fitch also considered recovery prospects for ETE's senior secured
lenders in a distressed situation. Based on the value to loan
ratio definition in the ETE credit agreement, at current market
prices creditors would have recovery valuations in excess of 400%.
Moreover, under reasonable stress case scenarios Fitch found that
above average recoveries for creditors were likely.
On Sept. 12, 2007, Fitch changed ETP's Rating Outlook to Stable
from Positive. The rating action was primarily the result of
legal proceedings commenced against the company by the Federal
Energy Regulatory Commission and The U.S. Commodities Futures
Trading Commission relating for the most part to charges of
natural gas market manipulation or attempted gas market
manipulation. On Mar. 17, 2008, it was announced that the legal
action brought against ETP by CFTC was dismissed. In a consent
order ETP agreed to pay CFTC $10 million while CFTC agreed to
release ETP from claims it had brought against the company.
The agreement between ETP and the CFTC contains no findings of
fact or conclusions of law. However, resolution to the FERC case
could extend well into calendar 2009 and beyond and continues to
have a negative overhang on ETP's operations. Currently FERC's
enforcement staff is recommending penalties against ETP and its
affiliates totaling $198 million. The size of a future
settlement, if any, or the results of a fully litigated case
cannot be determined at this stage. However, eventual payments to
FERC and any potential third party claims could be material.
The uncertainty caused by the regulatory proceedings has most
certainly contributed to increasing ETP's borrowing costs and
depressing the market value of its LP units. ETP's $2 billion
revolving credit facility maturing in 2012 is expandable to
$3 billion. Approximately $500 million is currently outstanding
under the facility. In addition, Midcontinent Express Pipeline
has established a $1.4 billion three-year bank credit facility
severally guaranteed by its 50% sponsors, ETP and Kinder Morgan
Energy Partners, L.P. to provide construction period financing for
the project. While ETP's liquidity is adequate for the near term,
given its aggressive capital budget, an impaired ability to issue
long-term debt and equity would have negative credit implications.
While ETP's track record of acquiring, integrating and expanding
energy infrastructure assets has been favorable, several
challenges remain. Of ongoing concern is the event and
integration risk inherent in ETP's active growth strategy. In
particular, given the industry-wide inflation of pipeline
construction costs and their effect on project economics, Fitch
will continue to monitor the status of Transwestern Pipeline's
$710 million pipeline expansion into Phoenix and the development
of the $1.3 billion MEP joint venture with KMP.
In addition to its ongoing legal proceedings, factors also
considered by Fitch in ETP's rating analysis include: the
structural subordination of the ETP notes to approximately
$768 million of combined subsidiary debt at Transwestern and
Heritage Operating L.P.; the financial exposure to changes in
commodity price and supply and demand conditions across its
operations; and the structural relationships between affiliated
companies, including approximately $1.57 billion of debt at ETE.
ENLIVEN MARKETING: Has Until Sept. 29 to Comply with Nasdaq Rules
-----------------------------------------------------------------
Enliven Marketing Technologies Corporation received written
notification from the NASDAQ Listing Qualifications Department
that, for the last 30 consecutive business days, the bid price of
the company's common stock has closed below the minimum $1.00 per
share requirement for continued inclusion under NASDAQ Marketplace
Rule 4310(c)(4).
The company, in accordance with NASDAQ Marketplace Rule 4310(c)
(8)(D), has been provided 180 calendar days, or until Sept. 29,
2008, to regain compliance. To regain compliance, the bid price
of the company's common stock must close at $1.00 per share or
more for a minimum of ten consecutive business days at any time
before Sept. 29, 2008.
If the company does not regain compliance with the Rule by
September 29, 2008, the Staff will determine whether the company
meets The Nasdaq Capital Market initial listing criteria as set
forth in Marketplace Rule 4310(c), except for the bid price
requirement.
If the company meets the initial listing criteria, the Staff will
notify the company that it has been granted an additional 180
calendar day compliance period. If the company is not eligible
for an additional compliance period, the Staff will provide
written notification that the company's securities will be
delisted. At that time, the company may appeal the Staff's
determination to delist its securities to a Listing Qualifications
Panel.
Based in New York, Enliven Marketing Technologies Corporation,
formerly Viewpoint Corporation, -- http://www.viewpoint.com/--
(NasdaqCM: ENLV) is an Internet marketing technology company that
focuses on using its technical capabilities to help companies
market their products and services on the Internet. It provides
digital products, services and consulting for Internet marketers.
It employs its visualization technology to drive customer-facing
marketing tools that enable companies to showcase complex products
in a simple way, and allows for user interaction. In addition, it
builds digital assets that serve as productivity and sales tools
for automotive, heavy industry, technology and other vertical
markets. Its three product segments have their roots in its core
software offering, the Viewpoint Media Player. The company was
founded in 1987 and changed its name to Enliven Marketing
Technologies Corporation in January 2008.
* * *
As reported in the Troubled Company Reporter on March 26, 2008,
Enliven Marketing Technologies Corporation, in its 2007 annual
report filed with the Securities and Exchange Commission, admitted
there was substantial doubt as to its ability to continue as a
going concern at the time of a second amendment to three
subordinated notes it issued in 2003 with a face value of
$3.5 million. The company concluded that it was deemed to be
experiencing financial difficulties.
FEDERAL-MOGUL: Committee's Special Counsel Seeks $4.1 Mil. Payment
------------------------------------------------------------------
Ashurst LLP seeks payment of $4,030,507 for its professional fees
covering the period November 2, 2001, through July 31, 2006, and
reimbursement of $81,942 for the firm's actual and necessary
expenses incurred during the same period.
The Official Committee of Unsecured Creditors retained Ashurst as
its special counsel in the Federal Mogul bankruptcy cases.
Among other services, Ashurst provided the Creditors Committee
with legal advice:
(1) with respect to English Administration proceedings and
interrelationship between U.K. Administration and the
Chapter 11 proceedings;
(2) on the manner in which the commercial solution achieved in
respect of the Debtors' U.S. Chapter 11 proceedings could
be implemented in the U.K. under schemes of arrangement
and company voluntary arrangements;
(3) on English law issues relating to matters like the ability
potential asbestos creditors to claim in English schemes
of arrangement and company voluntary arrangements; and
(4) on drafts of the Fourth Amended Plan, schemes of
arrangement and voluntary arrangements.
Federal-Mogul Corporation -- http://www.federal-mogul.com/--
(OTCBB: FDMLQ) is a global supplier, serving the world's foremost
original equipment manufacturers of automotive, light commercial,
heavy-duty, agricultural, marine, rail, off-road and industrial
vehicles, as well as the worldwide aftermarket. Founded in
Detroit in 1899, the company is headquartered in Southfield,
Michigan, and employs 45,000 people in 35 countries. Aside from
the U.S., Federal-Mogul also has operations in other locations
which includes, among others, Mexico, Malaysia, Australia, China,
India, Japan, Korea, and Thailand.
The Company filed for chapter 11 protection on Oct. 1, 2001
(Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F.
Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown &
Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl &
Jones, P.C., represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $10.15 billion in assets and $8.86 billion in liabilities.
Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at
Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein
Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer,
Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the
Official Committee of Unsecured Creditors.
On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan.
They submitted a Disclosure Statement explaining that plan on
April 21, 2003. They submitted several amendments and on June 6,
2004, the Bankruptcy Court approved the Third Amended Disclosure
Statement for their Third Amended Plan. On July 28, 2004, the
District Court approved the Disclosure Statement. The estimation
hearing began on June 14, 2005. The Debtors submitted a Fourth
Amended Plan and Disclosure Statement on Nov. 21, 2006, and the
Bankruptcy Court approved that Disclosure Statement on Feb. 6,
2007. The Fourth Amended Plan was confirmed by the Bankruptcy
Court on Nov. 8, 2007, and affirmed by the District Court on
Nov. 14. Federal-Mogul emerged from Chapter 11 on December 27,
2007.
* * *
As reported in the Troubled Company Reporter on Jan. 10, 2008,
Moody's Investors Service confirmed the ratings of the reorganized
Federal-Mogul Corporation -- Corporate Family Rating, Ba3;
Probability of Default Rating, Ba3; and senior secured bank credit
facilities, Ba2. The outlook is stable. The financing for the
company's emergence from Chapter 11 bankruptcy protection has been
funded in line with the structure originally rated by Moody's in a
press release dated Nov. 28, 2007.
As reported in the Troubled Company Reporter on Jan. 7, 2008,
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to Southfield, Michigan-based Federal-Mogul Corp.
following the company's emergence from Chapter 11 on Dec. 27,
2007. The outlook is stable.
FIELDSTONE MORTGAGE: Wants Plan-Filing Period Extended to Sept. 18
------------------------------------------------------------------
Fieldstone Mortgage Co. asks the U.S. Bankruptcy Court for the
District of Maryland to extend its exclusive periods to:
a) file a Chapter 11 plan of reorganization until Sept. 18,
2008, and
b) solicit acceptances of that plan until Nov. 17, 2008.
The original exclusive proposal period will terminate on March 22,
2008, and the exclusive solicitation period will expire May 21,
2008.
The Debtor tells the Court that since initiating this Chapter 11
case, the Debtor has proceeded along two distinct paths:
(a) the Debtor has continued the wind-down of its operations
and liquidated certain assets that are no longer necessary
to its reorganization; and
(b) the Debtor has met with and conducted extensive
negotiations with various parties who have expressed an
interest in either buying the assets of the Debtor or in
assisting the Debtor in formulating a plan of
reorganization structured around the Debtor's existing
lending platform.
As of this motion, the Debtor has received proposals from several
parties and is in the process of evaluating those proposals. In
light of the volatile financial markets, there is no certainty
that any proposal will ultimately result in the proposal of a plan
of reorganization. However, each offer is predicated on an agreed
upon plan of reorganization, as well as the funding necessary to
carry that plan to consummation.
The Debtors further disclosed that because the parties are still
in the negotiation phase, the Debtor is not yet in a position to
craft the final terms of a plan of reorganization. The Debtor
expects, at this juncture, that the plan process will take several
more months. Due to the status of negotiations with respect to a
potential plan, the current credit crisis and failings of the
national mortgage industry, the Debtor can only carry out its
fiduciary obligations to creditors if it is given a reasonable
additional period of time to finalize a plan process.
Because of the complexity of the D b r business operations and
assets, its various licenses and bonding required for its
operations throughout the country, the market conditions in the
Debtor's industry, and the significant national credit turmoil,
the Debtor has determined that a transaction through a plan is in
the best interests of creditors and the proper exercise of the
Debtor's sound and reasoned business judgment.
Headquartered in Columbia, Maryland, Fieldstone Mortgage Co. --
http://www.fieldstonemortgage.com/-- is a direct lender that
offers mortgage loans for multiple credit situations in the United
States. In September 2007, Fieldstone was the target of a lawsuit
by Morgan Stanley over 72 mortgages worth $26.5 million that had
no, or late, payments.
The company filed for chapter 11 bankruptcy on Nov. 23, 2007
(Bankr. D. Md. Case No. 07-21814) citing loan payment lapses and
credit market woes. Joel I. Sher, Esq., at Shapiro, Sher, Guinot
& Sandler represents the Debtor in its restructuring efforts. The
U.S. Trustee for Region 4 has yet to appoint creditors to serve on
an Official Committee of Unsecured Creditors in this case.
According to its Schedules, total assets were $14,465,348 and
total debts were $121,342,790.
FIELDSTONE MORTGAGE: Wants Glass Jacobson as Accountants
--------------------------------------------------------
Fieldstone Mortgage Co. asks the U.S. Bankruptcy Court for the
District of Maryland for permission to employ Glass Jacobson as
its accountants.
The firm will audit statement of net assets available for benefits
of the Fieldstone Mortgage 401(k) Plan as of Dec. 31, 2006, and
the related statement of changes in net assets available for
benefits for the year ended. Also, the document the firm will
submit will include these supplemental schedules, as applicable,
that will be subjected to the auditing procedures applied in the
firm's audit of the financial statements:
a) Assets (Held at End of Year) and Assets (Acquired and
Disposed of Within Year, and
b) Reportable Transactions.
In addition, the firm will perform certain procedures directed at
considering the plan's compliance with the Internal Revenue
Service requirements.
The firm will be responsible for establishing and maintaining
internal controls, including monitoring ongoing activities; for
the selection and application of accounting principles; and for
the fair presentation in the financial statements of the net
assets available for benefits and changes in net assets available
for benefits of the plan in conformity with accounting principles
generally accepted in the U.S.
The firm will also make all financial records and related
information available to the firm and for the accuracy and
completeness of that information. The firm's responsibilities
include adjusting the financial statements to correct material
misstatements.
According to the payment plan of the firm, Glass has advised the
Debtor its current hourly rates it will charge in connection
with this case range from $75 to $300. The Debtor understands
that the hourly rates are subject to periodic adjustment to
reflect economic and other conditions. In addition, Glass has
agreed to cap its total fees for the representation at $30,000,
even if it incurs in excess of that amount.
To the best of the Debtor's knowledge, the members and associates
of Glass do not have any connection with the Debtor or its estate,
its creditors or any other party in interest, their respective
attorneys and accountants, the United States Trustee, or any
person employed in the Office of the United States Trustee and is
a "disinterested person" as that term is defined in Section
101(14) of the U.S. Bankruptcy Code.
Headquartered in Columbia, Maryland, Fieldstone Mortgage Co. --
http://www.fieldstonemortgage.com/-- is a direct lender that
offers mortgage loans for multiple credit situations in the United
States. In September 2007, Fieldstone was the target of a lawsuit
by Morgan Stanley over 72 mortgages worth $26.5 million that had
no, or late, payments.
The company filed for chapter 11 bankruptcy on Nov. 23, 2007
(Bankr. D. Md. Case No. 07-21814) citing loan payment lapses and
credit market woes. Joel I. Sher, Esq., at Shapiro, Sher, Guinot
& Sandler represents the Debtor in its restructuring efforts. The
U.S. Trustee for Region 4 has yet to appoint creditors to serve on
an Official Committee of Unsecured Creditors in this case.
According to its Schedules, total assets were $14,465,348 and
total debts were $121,342,790.
FIELDSTONE MORTGAGE: Fitch Chips Ratings on $385.6MM Certificates
-----------------------------------------------------------------
Fitch Ratings has taken rating actions on three Fieldstone
mortgage pass-through certificates. Affirmations total
$319.6 million and downgrades total $385.6 million. Additionally,
$388.3 million was placed on Rating Watch Negative. Break Loss
percentages and Loss Coverage Ratios for each class are included
with the rating actions as:
Fieldstone Mortgage Investment Trust, Series 2005-1
-- $25.1 million class M2 affirmed at 'AA',
(BL: 91.39, LCR: 3.86);
-- $15.4 million class M3 affirmed at 'AA-',
(BL: 78.52, LCR: 3.32);
-- $13.5 million class M4 affirmed at 'A+',
(BL: 67.16, LCR: 2.84);
-- $12.0 million class M5 affirmed at 'A',
(BL: 56.99, LCR: 2.41);
-- $12.0 million class M6 affirmed at 'A-',
(BL: 46.74, LCR: 1.98);
-- $9.8 million class M7 downgraded to 'BBB' from 'BBB+'
(BL: 37.99, LCR: 1.61);
-- $9.8 million class M8 downgraded to 'BB' from 'BBB'
(BL: 29.50, LCR: 1.25);
-- $7.5 million class M9 downgraded to 'CCC' from 'BB'
(BL: 22.80, LCR: 0.96).
Deal Summary
-- Originators: Fieldstone (100%);
-- 60+ day Delinquency: 39.34%;
-- Realized Losses to date (% of Original Balance): 1.60%;
-- Expected Remaining Losses (% of Current balance): 23.65%;
-- Cumulative Expected Losses (% of Original Balance): 5.50%;
Fieldstone Mortgage Investment Trust, Series 2005-2
-- $69.2 million class 1-A1 affirmed at 'AAA',
(BL: 75.97, LCR: 2.68);
-- $17.3 million class 1-A2 affirmed at 'AAA',
(BL: 66.53, LCR: 2.35);
-- $94.2 million class 2-A2 affirmed at 'AAA',
(BL: 75.43, LCR: 2.66);
-- $24.6 million class 2-A3 affirmed at 'AAA',
(BL: 66.01, LCR: 2.33);
-- Notional balance class A-IO affirmed at 'AAA',
(BL: 100, LCR: 3.52);
-- $36.2 million class M1 affirmed at 'AA+',
(BL: 57.00, LCR: 2.01);
-- $33.3 million class M2 downgraded to 'BBB' from 'AA'
(BL: 47.86, LCR: 1.69);
-- $21.8 million class M3 downgraded to 'BBB' from 'AA-'
(BL: 42.81, LCR: 1.51);
-- $16.4 million class M4 downgraded to 'BB' from 'A+'
(BL: 38.78, LCR: 1.37);
-- $16.4 million class M5 downgraded to 'B' from 'A'
(BL: 34.61, LCR: 1.22);
-- $15.0 million class M6 downgraded to 'B' from 'A-'
(BL: 30.78, LCR: 1.08);
-- $15.5 million class M7 downgraded to 'CCC' from 'BBB+'
(BL: 26.77, LCR: 0.94);
-- $11.1 million class M8 downgraded to 'CCC' from 'BBB-'
(BL: 23.86, LCR: 0.84);
-- $11.1 million class M9 downgraded to 'CC/DR5' from 'BB'
(BL: 20.93, LCR: 0.74).
Deal Summary
-- Originators: Fieldstone;
-- 60+ day Delinquency: 39.20%;
-- Realized Losses to date (% of Original Balance): 1.90%;
-- Expected Remaining Losses (% of Current balance): 28.37%;
-- Cumulative Expected Losses (% of Original Balance): 14.30%;
Fieldstone Mortgage Investment Trust, Series 2005-3
-- $118.9 million class 1-A rated 'AAA', placed on Rating Watch
Negative (BL: 56.26, LCR: 1.82);
-- $254.4 million class 2-A2 rated 'AAA', placed on Rating Watch
Negative (BL: 57.27, LCR: 1.85);
-- $15.0 million class 2-A3 rated 'AAA', placed on Rating Watch
Negative (BL: 54.70, LCR: 1.77);
-- $44.3 million class M1 downgraded to 'BBB' from 'AA+'
(BL: 47.69, LCR: 1.54);
-- $41.4 million class M2 downgraded to 'BB' from 'AA'
(BL: 41.09, LCR: 1.33);
-- $28.0 million class M3 downgraded to 'B' from 'AA-'
(BL: 36.38, LCR: 1.17);
-- $19.8 million class M4 downgraded to 'B' from 'A+'
(BL: 33.20, LCR: 1.07);
-- $19.2 million class M5 downgraded to 'CCC' from 'A'
(BL: 30.09, LCR: 0.97);
-- $18.6 million class M6 downgraded to 'CCC' from 'BBB+'
(BL: 27.05, LCR: 0.87);
-- $18.6 million class M7 downgraded to 'CCC' from 'BBB'
(BL: 23.97, LCR: 0.77);
-- $12.8 million class M9 downgraded to 'CC/DR6' from 'BB'
(BL: 19.30, LCR: 0.62).
-- $15.1 million class M8 downgraded to 'CC/DR5' from 'BB'
(BL: 21.44, LCR: 0.69);
Deal Summary
-- Originators: Fieldstone;
-- 60+ day Delinquency: 37.50%;
-- Realized Losses to date (% of Original Balance): 1.56%;
-- Expected Remaining Losses (% of Current balance): 30.99%;
-- Cumulative Expected Losses (% of Original Balance): 19.19%;
The rating actions are based on changes that Fitch has made to its
subprime loss forecasting assumptions. The updated assumptions
better capture the deteriorating performance of pools from 2007,
2006 and 2005 with regard to continued poor loan performance and
home price weakness.
FIRST MARBLEHEAD: To Skip Goldman Sachs' $1BB Warehouse Facility
----------------------------------------------------------------
An affiliate of Goldman, Sachs & Co. committed in December 2007 to
offer First Marblehead Corporation a $1 billion warehouse
facility. Subsequently, based on a determination that it would
facilitate the receipt of required regulatory approvals and
determinations, First Marblehead advised Goldman Sachs that it has
determined not to proceed with the warehouse facility at this
time, and the commitment of the Goldman Sachs affiliate has
expired.
GSCP Equity Investment
In December 2007, First Marblehead disclosed a definitive
agreement with affiliates of GS Capital Partners relating to a
strategic equity investment in First Marblehead. GSCP invested
$59.8 million to acquire Series A non-voting preferred stock
convertible into approximately 5.3 million shares of First
Marblehead's common stock at a conversion price of $11.24 per
share.
In addition, GSCP agreed to invest subsequently, upon receipt of
applicable regulatory approvals and determinations and
satisfaction of other conditions, up to roughly $200.7 million to
acquire shares of Series B non-voting preferred stock convertible
into shares of First Marblehead's common stock at a conversion
price of $15.00 per share. The total investment by GSCP,
including its initial $59.8 million investment, is capped by the
terms of the Agreement at an amount equal to 25% of the total
stockholders' equity of First Marblehead, consistent with
regulations of the Office of Thrift Supervision.
First Marblehead is in the process of preparing its financial
statements as of March 31, 2008, including an assessment of the
assumptions it uses to estimate the fair value of its service
receivables. The results of First Marblehead's operations for the
quarter ended March 31, 2008, including any write-down of
residuals as a result of adjustments to First Marblehead's key
accounting assumptions or The Education Resources Institute,
Inc.'s bankruptcy filing, would affect First Marblehead's
stockholders' equity as of March 31, 2008.
First Marblehead believes that a write-down of residuals
receivable as of March 31, 2008 is likely, although it has not
completed its assessment or quantified any such write-down. As a
result, the aggregate amount of the subsequent investment by GSCP
could be less than $200.7 million.
TERI's Chapter 11 Filing
As reported in the Troubled Company Reporter on April 9, 2008,
First Marblehead's stocks dropped 37% after The Education
Resources Institute, Inc., guarantor of its loans, filed for
Chapter 11 protection. First Marblehead declined $2.84 to $4.86
in New York Stock Exchange trading after TERI's bankruptcy filing.
The descent was the biggest one-day drop in the securities' record
and reduces First Marblehead below 89% for the past 12 months.
First Marblehead is scheduled as TERI's largest unsecured
creditor, holding claims of $11 million, according to papers TERI
filed in bankruptcy court.
First Marblehead said it is analyzing the implications of TERI's
Chapter 11 filing on its lenders, investors, borrowers, well as
the The National Collegiate Student Loan Trusts, committing to
provide an integrated suite of services including product
development, processing and securitization services
"The company is working diligently on securing an alternative
guarantor as well as structural solutions for loan default
guarantees for future originations," Jack Kopnisky, The First
Marblehead's chief executive officer and president, said. "In
addition, we have adjusted our collection and underwriting
strategies to adapt to the challenges presented by the turmoil in
the capital markets and the current consumer credit cycle."
"The First Marblehead has been in a strategic alliance with TERI
since 2001, pursuant to which the non-profit has been the
exclusive third-party provider of borrower default guarantees for
our clients' private student loans," Mr. Kopnisky said. "TERI
also guarantees the loans held by NCSLT, the series of trusts we
use in our securitization program. According to the filing, TERI
is developing a long-term business plan so that it can continue
its College Access Programs well as its guarantee activities."
Class Action Lawsuit
Investors, who acquired First Marblehead securities from Aug. 10,
2006, through and including April 7, 2008, filed a class action
complaint against First Marblehead on April 10, 2008, with the
U.S. District in Massachusetts. The complaint, filed as case no.
08-cv-10612, seeks damages for violations of federal securities
laws and remedies under the Securities Exchange Act of 1934.
According to the complaint, the defendants made materially false
and misleading statements about the performance and quality of
First Marblehead's securitizations in the Securities and Exchange
Commission filings and other statements to the investing public.
Among other things, First Marblehead misrepresented the level of
default rates in its portfolio and the default rates' effect on
its ability to securitize additional student loan underwritings.
The complaint also states that First Marblehead recklessly
disregarded that its student loan guarantor, TERI, was under-
reserved and unable to adequately insure student loans
underwritten by First Marblehead.
About TERI
Headquartered in Boston, Massachussetts, The Education Resources
Institute Inc. -- http://www.teri.org/-- aka Boston Systems
Resources Inc., Brockton Education Opportunity Center, TERI, TERI
College Access, TERI College Access Centers and TERI Marketing
Services Inc., is a nonprofit organization that promotes
educational opportunities for all through its college access and
loan guarantee activities. Founded in 1985, TERI is a guarantor
of private or non-government student loans with more than $17
billion in outstanding guarantees.
The Debtor filed for Chapter 11 petition on April 7, 2008 (Bankr.
D. Mass. Case No.: 08-12540.) Daniel Glosband, Esq., Gina L.
Martin, Esq. at Goodwin Procter LLP represent the Debtor in its
restructuring efforts. The Debtor's Conflicts Counsel is Craig
and Macauley PC, its financial advisor is Grant Thornton LLP, its
Claims Agent is Epiq Bankruptcy Solutions LLC, its investment
Banker is Citigroup Global Markets Inc., and its Public Relations
& Public Affairs Advisor is Rasky Baerlein Strategic
Communications Inc. When the Debtor filed for protection from its
creditors, it listed estimated assets of more that $1 billion and
estimated debts of $500,000 to $1 billion.
(TERI Bankruptcy News; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
About The First Marblehead
First Marblehead Corporation -- http://www.firstmarblehead.com/--
provides financial solutions that help students achieve their
dreams. The company helps meet the growing demand for private
education loans by providing national and regional financial
institutions and educational institutions, well as businesses and
other enterprises, with an integrated suite of design,
implementation and securitization services for student loan
programs.
First Marblehead supports responsible lending for borrowers and is
a strong proponent of the smart borrowing principle, which
encourages students to access scholarships, grants and federally
guaranteed loans before considering private education loans. At
Dec. 31, 2008, the company's balance sheet showed total assets of
$1,584,564,000, total liabilities of $663,514,000 and total
stockholders' equity of $921,050,000
FRONTIER DRILLING: Moody's Reviews 'B3' Ratings For Likely Cuts
---------------------------------------------------------------
Moody's Investors Service placed Frontier Drilling ASA's, B3
Corporate Family Rating, B3 probability of default rating, B1
first secured credit facilities (LGD2, 28%), and Caa1 second lien
senior secured term loan (LGD5, 73%) under review for possible
downgrade.
The review for possible downgrade is prompted by the drillship
Duchess coming off a well to well contract earlier than expected
in January resulting in lost revenues and cash flows. The lower
than expected earnings and cash flows from the Duchess, the
company's election to accelerate planned shipyard work for the
Duchess, and another set of cost overruns for the drillship
Phoenix (formerly named the Deepwater) upgrade will result in the
need for additional liquidity over the next quarter, which will
also cause leverage to increase. The company also faces a
potential covenant violation under its secured credit facilities
as early as Q2'08.
In addition to the Duchess coming off its contract early, FDR
elected to have the Duchess undergo early shipyard work, including
its five-year survey that was originally planned for Q4'08.
Moody's is concerned that this acceleration expense for the
Duchess combined with the Phoenix costs currently estimated to be
at least $20 million higher (going from $255 million to
$275 million) than previous estimates, will result in the company
having a funding shortfall of at least $40 million, even factoring
in the Company's $60 million senior secured revolver that has been
fully drawn in March in anticipation of the funding need prior to
completion of the Phoenix. Moody's also notes that this is the
second upward cost revision for the Phoenix and that FDR is
undergoing a more detailed project cost analysis that could
potentially result in even further upward costs revisions.
While the company is currently evaluating new contracts for the
Duchess, nothing has been signed yet. When the shipyard work is
completed in the next couple of weeks, it will not be generating
any earnings and cash flows unless a new contract is signed. As a
result, the company faces the potential risk of not meeting the
minimum EBITDA test for Q2'08 unless it signs a contract (at
projected dayrates) and starts working by the end of April.
In its review, Moody's will focus on the equity sponsors Carlyle
Riverstone and DLJ Merchant Banking Partners (or any other third
party) decision as to whether it will provide equity contributions
to help fund the cash shortfall. Moody's would also need more
clarification on the timing, amount, and form of equity
contribution that may be made as well as assess any contract
signed for the Duchess and review the project cost review being
conducted on the Phoenix.
Frontier Drilling ASA is incorporated in Norway, however,
maintains its administrative offices in Houston, Texas.
GALLERIA CBO V: Eroding Credit Quality Cues Moody's Rating Reviews
------------------------------------------------------------------
Moody's Investors Service placed on review for possible downgrade
the ratings on these notes issued by Galleria CBO V (formerly
Beacon Hill III):
Class Description: $18,000,000 Class B Second Priority Floating
Rate Term Notes, Due 2037
-- Prior Rating: Aa2
-- Current Rating: Aa2, on review for possible downgrade
Moody's also downgraded and left on review for possible further
downgrade the ratings on these notes:
Class Description: $9,000,000 Class C-1 Third Priority Floating
Rate Term Notes, due 2037
-- Prior Rating: Ba1, on review for possible downgrade
-- Current Rating: B2, on review for possible downgrade
Class Description: $9,000,000 Class C-2 Third Priority Fixed Rate
Term Notes, due 2037
-- Prior Rating: Ba1, on review for possible downgrade
-- Current Rating: B2, on review for possible downgrade
According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.
GALLERIA CBO: Moody's Reviews 'B3' Ratings for Likely Downgrades
----------------------------------------------------------------
Moody's Investors Service downgraded and left on review for
possible further downgrade the ratings on these notes issued by
Galleria CBO IV (formerly Beacon Hill II):
Class Description: $160,500,000 Class A-1 Senior Secured Floating
Rate Term Notes, Due 2034
-- Prior Rating: Baa2, on review for possible downgrade
-- Current Rating: B3, on review for possible downgrade
Class Description: $160,500,00 Class A-2 Senior Secured Floating
Rate Revolving Notes, Due 2034
-- Prior Rating: Baa2, on review for possible downgrade
-- Current Rating: B3, on review for possible downgrade
According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.
GENERAL MOTORS: Workers at 3 Michigan Plants Threaten Rally
-----------------------------------------------------------
United Auto Workers union workers at three General Motors Corp.
factories in Michigan are threatening to rally in five days if
discussions on plant-specific issues, including work rules and
seniority, will not be resolved, Terry Kosdrosky of Dow Jones
Newswires reports.
Dow Jones relates citing GM spokesman Dan Flores that the
automaker is doing its best to reach a new labor contract as soon
as possible, pointing at a recent settlement between GM and a UAW
local at a Parma, Ohio plant.
Dow Jones discloses the three plants threatening to strike are the
Delta Township plant, which manufactures large crossover utility
vehicles -- the Buick Enclave, GMC Acadia and Saturn Outlook; the
Warren plant, which produces transmissions, and the Flint plant,
produces pickup trucks and medium-duty commercial trucks, though
pickup truck production is idled due to the strike at supplier
American Axle & Manufacturing Holdings Inc.
If talks fail, the strike will greatly affect auto production
which is still reeling on the impact of the 6-week Axle strike.
To date, 30 GM plants was shut down as Axle continues negotiations
with the UAW.
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.
GMAC LLC: Plans to Declare 100% Dividend to Common Equity Holders
-----------------------------------------------------------------
GMAC LLC on Tuesday announced that it is implementing a plan
related to GMACI Holdings LLC, the holding company for its
insurance operations, in the interest of maintaining the current
financial strength rating for the GMAC Insurance Group of
companies, including Motors Insurance Corporation.
A.M. Best Co. placed the current rating of A- (Excellent) under
review with negative implications on Feb. 27, 2008.
The plan contemplates a dividend by GMAC of 100% of the voting
interest of GMACI Holdings LLC to the current holders of GMAC's
common membership equity, which include FIM Holdings LLC, which is
controlled by Cerberus FIM Investors LLC, and subsidiaries of
General Motors Corporation.
The dividend will be pro rata in accordance with the current
common equity ownership percentages held by these entities. GMAC
will continue to hold 100% of the economic interests in GMACI
Holdings LLC. The plan is subject to internal and regulatory
approvals, and even if implemented there can be no assurances that
it would result in maintaining the current rating.
About GMAC LLC
GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors
Acceptance Corporation, is a global, diversified financial
services company that operates in approximately 40 countries in
automotive finance, real estate finance, insurance and other
commercial businesses. GMAC was established in 1919 and employs
approximately 26,700 people worldwide. Cerberus Capital
Management LP bought 51% GMAC LLC stake from General Motors Corp.
on December 2006.
At Dec. 31, 2007, the company's consolidated balance sheet showed
$247.710 billion in total assets, $232.145 billion in total
liabilities, and $15.565 billion in equity.
* * *
As reported in the Troubled Company Reporter on March 5, 2008,
Fitch Ratings downgraded and removed from Rating Watch
Negative the long-term Issuer Default Rating of GMAC LLC and
related subsidiaries to 'BB' from 'BB+'. Fitch has also affirmed
the 'B' short-term ratings. Fitch originally placed GMAC on
Rating Watch Negative on Nov. 14, 2007. The Rating Outlook is
Negative.
GOLF TRUST: Obtains $2MM Escrowed Funds from Innisbrook Asset Sale
------------------------------------------------------------------
Golf Trust of America Inc. received $2,000,000 in escrowed funds,
plus accrued interest of $31,118. The company added that no
claims of liability were submitted by entities affiliated with
Salamander Hospitality.
On July 16, 2007, the company sold the Innisbrook Resort and Golf
Club to entities affiliated with Salamander Hospitality. Pursuant
to terms of the Asset Purchase Agreement, $2,000,000 of the
purchase price was placed in escrow until March 31, 2008, subject
to future allowable claims of liability.
Headquartered in Charleston, South Carolina, Golf Trust of America
Inc. (AMEX:GTA) -- http://www.golftrust.com/-- was formerly a
real estate investment trust. From May 22, 2001 to Nov. 8, 2007,
the company was engaged in the liquidation of its interests in
golf courses in the United States pursuant to a plan of
liquidation approved by its stockholders. The company owns two
properties (6 eighteen-hole equivalent golf courses).
As reported in the Troubled Company Reporter on Nov. 15, 2007,
Stockholders of Golf Trust of America Inc. approved the
termination of the company's Plan of Liquidation and Dissolution
at a special meeting of stockholders, held on Nov. 8,2007.
The Plan of Liquidation was originally approved by the board of
directors of the company on Feb. 25, 2001, and adopted by the
holders of both the company's common and preferred stock on
May 22, 2001.
HAMMOND'S CROSSING: Case Summary & Two Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Hammond's Crossing Property Management LLC
154 Pond Drive
Cleveland, GA 30528
Bankruptcy Case No.: 08-20896
Chapter 11 Petition Date: April 1, 2008
Court: Northern District of Georgia (Gainesville)
Judge: Robert Brizendine
Debtor's Counsel: Paul Reece Marr, Esq.
Paul Reece Marr, P.C.
300 Galleria Parkway, N.W.
Suite 960
Atlanta, GA 30339
Tel: 770-984-2255
Fax: (770) 984-0044
pmarr@mindspring.com
Estimated Assets: $1,000,001 to $10 million
Estimated Debts: $1,000,001 to $10 million
Debtor's list of its Two Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Forsyth County Tax porperty tax $19,715
Commissioner
110 East Main Street
Cumming, GA 30040
White County Tax Commissioner real estate tax $1,800
59 South Main Street
Suite C
Cleveland, GA 30528
HERCULES INC: S&P Upgrades Ratings to 'BB+' on Improved Profile
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Hercules
Inc., including the corporate credit rating to 'BB+' from 'BB'.
The outlook is stable. The upgrades reflect the company's
improved financial profile and the likelihood that cash flow
protection measures and other key ratios will be maintained at
levels that are in line with S&P's expectations for the revised
ratings.
"Hercules' strengthened financial metrics have benefited in part
from management's commitment to improve credit quality, as
evidenced by steady debt reduction," said Standard & Poor's credit
analyst Wesley E. Chinn.
The ratings reflect Wilmington, Delaware-based Hercules' slightly
aggressive, albeit much reduced, debt balance; low-growth, very
competitive pulp and paper chemicals markets; and some exposure to
asbestos-related liabilities. These negatives are partially
offset by Hercules' satisfactory business profile--generating
annual revenues of about $2 billion--in the specialty chemical
sector, a long track record of good operating margins, and
strengthening cash flow protection measures.
Hercules derives roughly 60% of its consolidated operating
earnings from the Aqualon group, a leading producer of water-
soluble polymers. Diverse end markets include water-based paints
and coatings, construction materials, personal care,
pharmaceutical, food, and oil and gas drilling. A positive for
business fundamentals is a strong global presence, as more than
60% of Aqualon's sales come from outside the U.S.
HOMEBANC MORTGAGE: Wants Until May 7 To File Chapter 11 Plan
------------------------------------------------------------
HomeBanc Mortgage Corporation and its debtor-affiliates ask the
United States Bankruptcy Court for the District of Delaware to
further extend their exclusive period to file a Chapter 11 plan
through and including May 7, 2008, and their exclusive period to
solicit acceptances for the plan through and including July 7,
2008.
Since the Petition Date, the Debtors have been working to wind-
down their operations and liquidate their assets. The Debtors
have sold all aspects of their Servicing Business and have been
working to sell remaining loans to third parties. In addition,
the Debtors are currently completing the sale of their owned real
property and remaining loans, according to Joseph M. Barry, Esq.,
at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware.
The Debtors have communicated regularly with legal and financial
advisors to their major creditor constituencies to report upon,
and solicit input regarding, the sale process, as well as other
potential means for maximizing the value of these estates,
Mr. Barry tells the Court. The Debtors have a nearly-final draft
of a plan and have been working with various creditor
constituencies to finalize the proposed plan, he adds.
Indeed, the Debtors, the Official Committee of Unsecured
Creditors and JPMorgan Chase Bank, N.A., as DIP Lender pursuant
to the DIP Financing Agreement, have engaged in extensive
negotiations over the past several months, and believe they are
close to resolving all issues that will enable the filing of a
largely consensual plan, supported by the Debtors' major
constituencies, Mr. Barry says.
Moreover, the Debtors have been operating under a budget,
monitored closely by JPMorgan and the Creditors Committee. The
Debtors are current on their postpetition expenses. The Debtors
are not trying to seek an extension to, in any way, pressure
their creditors, Mr. Barry assures the Court.
The Debtors have acted in good faith in order to achieve the most
value from their assets in order to develop a successful plan of
liquidation. Extension of the Exclusive Periods is necessary to
enable the Debtors to finalize the terms of a Chapter 11 plan,
Mr. Barry asserts.
This matter is scheduled for hearing on May 6, 2008. Pursuant
to Del.Bankr.LR 9006-2, the Exclusive Solicitation Period is
automatically extended until the conclusion of that hearing.
Headquartered in Atlanta, Georgia, HomeBanc Mortgage Corporation
-- http://www.homebanc.com/-- is a mortgage banking company
focused on originating primarily prime purchase money residential
mortgage loans in the Southeast United States.
HomeBanc Mortgage together with five affiliates filed for chapter
11 protection on Aug. 9, 2007 (Bankr. D. Del. Case Nos. 07-11079
through 07-11084). Joel A. Waite, Esq., at Young, Conaway,
Stargatt & Taylor was selected by the Debtors to represent them in
these cases. The Official Committee of Unsecured Creditors
selected the firm Otterbourg, Steindler, Houston and Rosen, P.C.
as its counsel. The Debtors' financial condition as of June 30,
2007, showed total assets of $5,100,000,000 and total liabilities
of $4,900,000,000. The Debtors' exclusive period to file a plan
ends on April 7, 2008.
(HomeBanc Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000).
HOOP HOLDINGS: Local Tax Entities Protest $35 Mil. DIP Financing
----------------------------------------------------------------
Local Texas Tax Authorities and City of Memphis object to Hoop
Retail Stores LLC's request for final order to obtain up to
$35,000,000 of debtor-in-possession financing from Wells Fargo
Retail Finance LLC, as collateral agent and administrative agent.
The tax authorities assert $250,000 in secured claims for 2007 and
2008 ad valorem taxes owed on the Debtors' personal property,
which are secured with a security interest that is superior to any
other secured claim.
Specifically, the tax authorities object to:
1. any priming of their lien position by either the DIP lien or
any adequate protection liens, and specifically requiring
clarification that their liens are deemed "permitted liens"
and are not primed.
2. any provisions that proceeds of the sale of collateral will
go first to satisfy the prepetition debt or the DIP, when
these tax claims are senior to both.
The tax authorities say that Hoop Retail's financing request have
failed to demonstrate that the liens of the tax authorities are
adequately protected under Section 364(d)(1)(b) of the Bankruptcy
Code.
The tax authorities further object to the use of their collateral
to pay any other creditors of this estate.
Accordingly, the tax authorities is seeking appropriate provision
to protect the position of these secured tax creditors.
As reported in the Troubled Company Reporter on April 1, 2008,
the Court gave Hoop Retail to obtain, on an interim basis,
up to $35,000,000 of debtor-in-possession financing from Wells
Fargo Retail Finance LLC, as collateral agent and administrative
agent.
The Court allowed Hoop Retail to access at least $30,000,000
from the facility on the interim. The DIP facility will mature
Sept. 25, 2008. The facility, however, will expire and become due
on April 30, 2008, if the Court has not entered a final order by
that date. The facility will bear interest at a rate per annum
equal to the base rate plus base rate loans of 1.5%.
The Debtor said it has an immediate need for postpetition
financing to fund business operations, and to administer and
preserve the value of assets. Specifically the Debtors will
apply the fund to finance, among other things:
-- working capital and general corporate purposes;
-- payment of costs of administration of the case;
-- all prepetition issued under the prepetition loan
agreement will bee deemed issued under the DIP loan
agreement; and
-- payment in full of the priority facility, upon entry of the
final DIP order.
The Debtor will pay a host of fees to the lender including a
$337,500 closing fee and a non-refundable servicing fee of $5,000
per month. It will also pay an unused line fee of 0.375% per
annum.
To secure its DIP Obligations, the Debtor will grant Wells Fargo a
superpriority administrative claim over all administrative expense
claims and unsecured claims against the Debtors and their estate.
The DIP liens are subject to a carve-out for fees payable to
bankruptcy professionals, the U.S. Trustee and the Clerk of Court.
The Hon. Mary F. Walrath will hold a hearing April 16, 2008, at
11:00 a.m. to consider final approval of the Debtor's request.
Objections, if any, are due April 9, 2008, at 4:00 p.m. Objections
must be delivered to the Debtors; Wells Fargo; The Children's
Place Retail Stores, Inc., the Debtor's ultimate parent company;
and The Walt Disney Company, as well as the United States Trustee
for Region 3 and counsel to any statutory committee appointed in
the cases.
Wells Fargo is represented in the chapter 11 cases by Donald E.
Rothman, Esq., at Riemer & Braunstein, LLP, in Boston
Massachusetts; and Steven K. Kortanek, Esq., at Womble Carlyle
Sandridge & Rice PLLC in Wilmington, Delaware.
The Children's Place Retail Stores, Inc., is represented by Lori
R. Fife, Esq., at Weil Gotshal & Manges LLP, in New York. The
Walt Disney Company is represented by Lisa Hill Fenning, Esq., at
Dewey & LeBoeuf LLP in Los Angeles, California.
About Hoop Holdings
Headquartered in Secausus, New Jersey, Hoop Holdings LLC owns and
operates gift, novelty, and souvenir shops. The company and two
of its affiliates (Hoop Retail Stores, LLC and Hoop Canada
Holdings, Inc.) filed for Chapter 11 protection on March 27, 2008
(Bankr. D. Del. Lead Case No.08-10544). Daniel J. DeFranceschi,
Esq., at Richards, Layton & Finger, represents the Debtors in
their restructuring efforts. The U.S. Trustee for Region 3 has
not appointed creditors to serve on an official committee of
unsecured creditors or examiner under these cases. When the
Debtors' filed for protection against their creditors, they listed
assets and debts between $100 million to $500 million.
IMMUNICON CORP: Explores Strategic Alternatives w/ Stifel Nicolaus
------------------------------------------------------------------
Immunicon Corporation retained Stifel Nicolaus & Company as its
financial advisor to assist in exploring and evaluating various
financial and strategic alternatives for the company, including
the sale of some or all of its businesses.
Immunicon further stated that there could be no assurance that its
retention of Stifel, Nicolaus & Company will result in any
specific transaction. Immunicon does not intend to comment
further publicly with respect to any potential financial and
strategic alternatives unless a specific transaction is approved
by its board of directors.
Immunicon Corporation (NASDAQ: IMMC) -- http://www.immunicon.com/
-- develops and commercializes proprietary cell- and molecular-
based human diagnostic and life science research products with an
initial focus on cancer disease management. Immunicon has
developed platform technologies for selection and analysis of rare
cells in blood, such as circulating tumor cells and circulating
endothelial cells that are important in many diseases and
biological processes. Immunicon's products and underlying
technology platforms also have application in the clinical
development of cancer drugs and in cancer research and may have
applications in other fields of medicine, such as cardiovascular
and infectious diseases.
As reported in the Troubled Company Reporter on March 12, 2008,
Immunicon Corporation reduced staff levels and incurred certain
expenses in order to better facilitate the company's current
strategy, near-term outlook and ongoing operations. This
initiative, the company explained, principally includes a
workforce reduction of approximately 40% of the company's full-
time equivalent staff, primarily in platform development programs,
research and development of new products, marketing of current and
new products and related roles at the company.
INTELSAT LTD: Affiliate Launches Change of Control Offer for Notes
------------------------------------------------------------------
Intelsat Ltd.'s indirect subsidiary, Intelsat Intermediate Holding
Company Ltd., commenced offering to purchase for cash any and all
of its outstanding 9-1/4% Senior Discount Notes due 2015 at a
purchase price of $869.32944 for each $1,000 principal amount at
maturity of Notes validly tendered, which represents 101% of the
Accreted Value.
Intelsat Intermediate Holdco is required by the terms of the
indenture governing the Notes to make this offer as a result of
the acquisition of Intelsat Holdings Ltd., the indirect parent of
Intelsat Ltd., by Intelsat Global Subsidiary Ltd. fka Serafina
Acquisition Limited, a direct subsidiary of Intelsat Global Ltd.
fka Serafina Holdings Limited, an entity formed by funds advised
by BC Partners Holdings Limited, Silver Lake Partners and certain
other equity investors.
The Acquisition constitutes a change of control under the
indenture governing the Notes.
The change of control offer will expire at 5:00 p.m., New York
City time, on May 29, 2008, and will have a settlement date of
June 3, 2008. Holders whose Notes are accepted for payment
pursuant to the offer will receive 101% of the Accreted Value of
such Notes on the Settlement Date.
Intelsat Intermediate Holdco has retained Wells Fargo Bank,
National Association to act as Depositary in connection with the
change of control offer for the Notes.
About Intelsat Ltd.
Headquartered in Pembroke, Bermuda, Intelsat Ltd. --
http://www.intelsat.com/-- is a provider of fixed satellite
services to the media, network services and government customer
sectors. The company has a fleet of 51 satellites and seven owned
teleports and terrestrial facilities. It supplies video, data and
voice connectivity in over 200 countries and territories for over
1,800 customers. The company's business is diversified by service
offering, customer group, satellite and geography. The company's
customers include media and communications companies,
multinational corporations, Internet service providers and
government/military organizations.
* * *
As reported in the Troubled Company Reporter on Jan. 31, 2008,
Moody's Investors Service downgraded Intelsat Ltd.'s corporate
family rating by two notches to Caa1. The company's speculative
grade liquidity rating was downgraded to SGL-3 from SGL-1.
IPCS INC: Board Appoints James Ingold as Chief Accounting Officer
-----------------------------------------------------------------
Effective April 4, 2008, the Board of Directors of iPCS Inc.
appointed James F. Ingold, the company's vice president and
controller, as the company's principal accounting officer. Mr.
Ingold replaces Patricia M. Greteman, who continues as the
company's vice president, Internal Audit. The terms of Mr.
Ingold's employment were not amended in connection with his
appointment.
Mr. Ingold joined the company in January 2008. From August 2003
to January 2008, he was the corporate controller for Littelfuse
Inc., a publicly-traded manufacturer of electronic products. From
January 1999 to August 2003, he was the director of Accounting for
FleetPride Inc., a retailer and distributor of truck parts.
>From July 1990 to January 1999, he held various corporate
financial positions with Tenneco Packaging Inc., a publicly-traded
manufacturer of consumer and specialty-packaging products, which
has since changed its name to Pactiv Corporation. Prior to July
1990, he was an accountant with Deloitte & Touche LLP.
About iPCS Inc.
Headquartered in Schaumburg, Illinois, iPCS Inc. (Nasdaq: IPCS) --
http://www.ipcswirelessinc.com/ -- is an affiliate of Sprint
Nextel Corporation with the exclusive right to sell wireless
mobility communications network products and services under the
Sprint brand in 81 markets including markets in Illinois,
Michigan, Pennsylvania, Indiana, Iowa, Ohio and Tennessee.
The territory includes key markets such as Grand Rapids (MI), Fort
Wayne (IN), Tri-Cities (TN), Scranton (PA), Saginaw-Bay City (MI)
and Quad Cities (IA/IL). As of Dec. 31, 2007, iPCS' licensed
territory had a total population of approximately 15.1 million
residents, of which its wireless network covered approximately
12.0 million residents, and iPCS had approximately 629,900
subscribers.
* * *
As reported in the Troubled Company Reporter on March 5, 2008,
iPCS Inc.'s consolidated balance sheet at Dec. 31, 2007, showed
$546.82 million in total assets and $586.65 million in total
liabilities, resulting in a $39.83 million total stockholders'
deficit.
ISABELLA FIORE: Selling Assets to Fashion Accessory for $7.4 Mil.
-----------------------------------------------------------------
Isabella Fiore LLC has entered into an agreement to sell to
Fashion Accessory Bazaar LLC for $7.4 million substantially all of
the Debtor's assets. The deal includes $200,000 in cash and
assumption of prepetition secured debt, Bill Rochelle of Bloomberg
News reports.
Mr. Rochelle says all qualified bids must be delivered by
April 25, 2008, followed by an auction set on April 29, 2008.
A sale hearing is scheduled on April 30, 2008, to consider final
approval of the Debtors' request, adds Mr. Rochelle.
Headquartered in Bellflower, California, Isabelle Fiore, LLC --
http://www.isabellafiore.com/-- is a wholesaler of women's and
children's clothing. The company filed for Chapter 11 protection
on March 21, 2008 (Bankr. C.D. Cal. Case No.08-13682). Steven T.
Gubner, Esq., at Ezra Brutzkus Gubner LLP, represents the Debtor.
When the Debtor filed for protection against its creditors, it
listed assets between $1 million to $10 million and debts between
$10 million to $50 million.
JOANNE'S BED: To Sell Biz to Healthy Back, Files Chapter 11
-----------------------------------------------------------
JoAnne's Bed and Back Stores has entered into a deal to sell
substantially all of its assets to The Healthy Back Store, subject
to better offers, David Perry at Furniture Today reports.
To effect that transaction, JoAnne's, which sells specialty
mattresses, adjustable beds and massage chairs, filed for chapter
11 bankruptcy protection April 2 before the United States
Bankruptcy Court for the District of Maryland, in Greenbelt.
Salient terms of the deal weren't disclosed.
"We are saddened by this decision but I am excited to be able to
announce the agreement with The Healthy Back Store which, if it
proves to be the best offer, provides the possibility of strong
continuity for our customers and employees," Furniture Today
quotes Jon Studner, president of JoAnne's Bed and Back Stores, as
saying.
Mr. Studner cited "a dramatic drop in sales levels," which he
attributed to the softening economy, weak consumer confidence, the
housing slowdown and changing buying habits, as the cause for the
company's demise, Furniture Today relates.
JoAnne's listed 18 stores in Maryland, Virginia and Washington,
D.C.; Healthy Back also operates 18 stores in eight states,
including Maryland and Virginia, Furniture Today says.
According to Furniture Today, Mr. Studner disclosed that an
individual, whom he did not identify, has made available a
$250,000 debtor-in-possession financing facility to enable the
company to continue to purchase inventory to run its business
during the bankruptcy process, pending the sale.
The sale is expected to close in May.
JoAnne's bedding vendors include Tempur-Pedic, Sealy and Leggett &
Platt, Furniture Today notes.
JOMAR BUILDING: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Jomar Building Company Inc.
P.O. Box 44020
Detroit, MI 48244-0020
Bankruptcy Case No.: 08-48069
Chapter 11 Petition Date: April 2, 2008
Court: Eastern District of Michigan (Detroit)
Judge: Walter Shapero
Debtor's Counsel: Robert E. Reed, Esq.
220 West Congress
2nd Floor
Detroit, MI 48226
Tel: (313) 961-7258
bankruptcy@robertereed.com
Estimated Assets: $100,001 to $500,000
Estimated Debts: $1,000,001 to $10 million
Debtor's list of its 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Internal Revenue Service accounts $660,000
SBSE Unit receivable;
P.O. Box 330500-Stop 15 value of
Detroit, MI 48232-0500 security:
$70,000
Comerica Bank $322,609
P.O. Box 75000
Detroit, MI 48275-3240
Pepper Hamilton LLP $184,940
100 Renaissance Center
36th floor
Detroit, MI 48243-1157
Michigan Department of $106,347
Treasury
E.L. Plumbing & Mechanical $97,442
Odell Jones III $90,000
Joland Investments $72,000
Hydraulic Concrete Breaking $70,321
Cecily Hoagland $60,000
Prentice Walker $55,000
Lasalle Bank $51,715
Jaffe Raitt Heuer & Weiss PC $51,553
Penn Mutual Life Insurance insurance policy $48,986
value of
security:
$12,091
Kenneth J. Dalto & $46,912
Associates
Transamerica Retiement funds withheld $32,000
Services from wages
Couzens, Lansky, Fealk & $29,311
Lazar
Bumler Mechanical $23,344
Industrial Electric Co. of Det. $22,067
Cement Mason's Fringe Benefit $20,400
J.Hale Electrical Inc. $17,841
JORDAN/ZALAZNICK CBO: S&P Withdraws Ratings on Class B and C Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings on the
class B and C notes issued by J/Z CBO (Delaware) LLC, an arbitrage
corporate high-yield collateralized bond obligation transaction
managed by Jordan/Zalaznick Advisors Inc..
The rating withdrawals follow the complete paydown of the class B
and C notes.
Ratings Withdrawn
J/Z CBO (Delaware) LLC
Rating Balance (million)
------ -----------------
Class To From Current Original
----- -- ---- ------- --------
B NR AA- 0.000 $21.775
C NR BB- 0.000 $19.400
NR -- Not rated.
KENDALL HOSPITALITY: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Kendall Hospitality, LLC
11811 Hillcrest Drive
Bellevue, NE 68005
Bankruptcy Case No.: 08-80900
Type of Business: The Debtor owns and operates a hotel.
Chapter 11 Petition Date: April 8, 2008
Court: District of Nebraska
Debtor's Counsel: Howard T. Duncan, Esq.
Duncan & Davis, PC, LLO
1910 South 72nd Street, Suite 304
Omaha, NE 68124-1734
Tel: (402) 391-4904
Fax: (402) 391-0088
(cathy@hduncanlaw.com)
http://www.hduncanlaw.com/
Estimated Assets: $1 million to $10 million
Estimated Debts: $10 million to $50 million
The Debtor did not file a list of its largest unsecured creditors.
KRISPY KREME: Lenders Approve Modifications in Credit Facilities
----------------------------------------------------------------
Krispy Kreme Doughnuts Inc. obtained amendments to the company's
secured credit facilities which, among other things, relax certain
financial covenants. Those covenants were scheduled to become
more stringent during fiscal 2009.
The amendments also provide that the interest rate on the loans
outstanding under the facilities will increase from LIBOR plus
3.50% to LIBOR plus 5.50%, with a minimum LIBOR rate of 3.25%, and
fees on letters of credit outstanding under the facilities will
increase from 3.75% to 5.75%.
As of Feb. 3, 2008, the outstanding balance of the term loan was
$76.1 million and outstanding letters of credit were
$20.3 million. There were no amounts drawn under the revolving
facility, which was reduced from $50 million to $30 million.
The term loan balance reflects a prepayment of $10.9 million made
on February 1 in connection with the completion of the sale of the
company's mix manufacturing and distribution facility in
Effingham, Illinois.
$160,000,000 Credit Facility
Krispy Kreme Doughnut Corporation, a wholly owned subsidiary of
Krispy Kreme Doughnuts, Inc., entered into a $160 million credit
agreement, dated as of February 16, 2007, with Credit Suisse,
Cayman Islands Branch, as administrative agent, collateral agent,
issuing lender and swingline lender, and the lenders party. The
credit facility comprises a $110 million term loan and a
$50 million revolving loan.
The term loan amortizes in quarterly installments of $275,000
beginning in April 2007 with a final payment of the remaining term
loan balance due in February 2014. The revolving facility has a
six year term ending in February 2013.
The revolving credit facility provides that up to $30 million of
the facility may be used by KKDC to obtain letters of credit. The
new facility may be retired without penalty at any time.
Proceeds of the term loan were used to repay the approximately
$107 million outstanding balance under KKDC's prior credit
facility -- which had been arranged by Credit Suisse, Cayman
Island Branch -- and to pay fees and expenses related to the new
financing and the retirement of the prior facility.
Loans under the new credit agreement bear interest at LIBOR plus
3.00% -- subject to a stepdown based on credit ratings. Upon the
occurrence of customary events of default set forth in the credit
agreement, including payment defaults, breaches of covenants, a
change of control and insolvency/bankruptcy events, the
administrative agent may and, upon the request of a majority of
the lenders, shall, accelerate repayment of the loans.
In connection with the credit agreement, Krispy Kreme and its
affiliates and subsidiaries that guaranteed the loan obligations,
entered into a security agreement with Credit Suisse, Cayman
Islands Branch, dated as of February 16, 2007.
Under the credit facility, Krispy Kreme Doughnuts Inc. covenants
with its lenders not to permit its Consolidated Leverage Ratio to
exceed these ratios for any Test Period:
Period Ratio
------ -----
1st Fiscal Quarter of 2008 Fiscal Year 4.50 to 1.00
2nd and 3rd Fiscal Quarters of 2008 Fiscal Year 4.25 to 1.00
4th Fiscal Quarter of 2008 Fiscal Year 4.00 to 1.00
1st First Fiscal Quarter of 2009 Fiscal Year 3.75 to 1.00
2nd, 3rd and 4th Fiscal Quarters
of 2009 Fiscal Year 3.50 to 1.00
2010 Fiscal Year 3.25 to 1.00
2011 and 2012 Fiscal Years 3.00 to 1.00
2013 Fiscal Year and Thereafter 2.75 to 1.00
Krispy Kreme Doughnuts Inc. also covenants with its lenders not to
permit its Consolidated Interest Coverage Ratio to be less than
these ratios for any Test Period:
Period Ratio
------ -----
1st Fiscal Quarter of 2008 Fiscal Year 2.75 to 1.00
2nd and 3rd Fiscal Quarters of 2008 Fiscal Year 3.00 to 1.00
4th Fiscal Quarter of 2008 Fiscal Year 3.25 to 1.00
1st Fiscal Quarter of 2009 Fiscal Year 3.50 to 1.00
2nd and 3rd Fiscal Quarters of 2009 Fiscal Year 3.75 to 1.00
4th Fiscal Quarter of 2009 Fiscal Year 4.00 to 1.00
2010 Fiscal Year 4.25 to 1.00
2011 Fiscal Year and Thereafter 4.50 to 1.00
Krispy Kreme Doughnuts Inc. also covenants with its lenders not to
permit the aggregate amount of Capital Expenditures to exceed
specific amounts at these periods:
Period Amount
------ ------
2008 Fiscal Year $15,000,000
2009 Fiscal Year $17,500,000
2010 Fiscal Year and each
Fiscal Year thereafter $20,000,000
If the aggregate amount of Capital Expenditures for any Fiscal
Year would be less than the amount permitted to be made in that
Fiscal Year, then 50% of the shortfall will be added to the amount
of Capital Expenditures permitted for the immediately succeeding
-- but not any other -- Fiscal Year and the amount of Capital
Expenditures made during any Fiscal Year will be deemed to have
been made first from the amount permitted to be made in that
Fiscal Year and last from carryover from the preceding Fiscal
Year.
A full-text copy of the $160,000,000 CREDIT AGREEMENT dated as of
February 16, 2007, among KRISPY KREME DOUGHNUT CORPORATION, KRISPY
KREME DOUGHNUTS, INC., The SUBSIDIARY GUARANTORS, on the one hand;
and CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as Administrative Agent,
Collateral Agent, Issuing Lender and Swingline Lender; CREDIT
SUISSE SECURITIES (USA) LLC, as Sole Bookrunner and Sole Lead
Arranger; WELLS FARGO FOOTHILL, INC. and WACHOVIA BANK, NATIONAL
ASSOCIATION as Co-Syndication Agents; and CAROLINA FIRST BANK, as
Documentation Agent, is available at no charge at:
http://ResearchArchives.com/t/s?29f1
About Krispy Kreme
Headquartered in Winston-Salem, North Carolina, Krispy Kreme
Doughnuts Inc. (NYSE: KKD) -- http://www.krispykreme.com/--
retails doughnuts. There are about 411 Krispy Kreme stores
including satellites operating system-wide in 41 U.S. states,
Australia, Canada, Hong Kong, Indonesia, Japan, Kuwait, Mexico,
the Philippines, the Republic of South Korea, the United Arab
Emirates and the United Kingdom.
* * *
Standard & Poor's placed Krispy Kreme Doughnuts Inc.'s long term
foreign and local issuer credit ratings at 'B-' in September 2007.
The ratings still hold to date with a negative outlook.
L TERSIGNI: Examiner Says Overbilling Could Reach $10 Million
-------------------------------------------------------------
Hugh M. Ray, the Court-appointed Examiner to the Chapter 11 case
of L. Tersigni Consulting, CPA, P.C., in its first report with
the U.S. Bankruptcy Court for the District of Connecticut,
Bridgeport Division, estimated that overbillings done by the
accounting firm's owner, Loreto Tersigni, could be between
$5.5 million, to $10.3 million. Mr. Tersigni died in May 2007.
The Tersigni Examiner, after investigation on the accounting
firm's existing documents, found that Mr. Tersigni's overbilling
practices began as early as 2002 and ended around March 2007, and
ranges from 12.3% to 23% of the firm's bills.
The Examiner said that based on the facts available and
presumptions allowed by law, Mr. Tersigni committed torts
including fraud and breach of fiduciary duty for which he may be
held personally liable. He added that claims may also be filed
against Mr. Tersigni's wife, Nancy Tersigni, and the Tersigni
estate as a transferee of fraudulently transferred funds.
Investigation showed that about $9,300,000 was deposited into
accounts jointly held by the Tersigni couple, which became Ms.
Tersigni's property after her husband's death.
The Examiner informed the Connecticut Bankruptcy Court that 17
claims have already been filed against Tersigni's bankruptcy
estate, several of which seek disgorgement, recovery of
overpayment, or damages for improper billing, while others
directly allege fraud and breach of fiduciary duty.
The accounting firm was engaged, for virtually all of its work,
by Caplin & Drysdale, Chartered, and Stutzman, Bromberg, Esserman
& Plifka, P.A., two law firms representing asbestos creditors
committee in high-profile asbestos bankruptcy cases, including
Federal-Mogul, W.R. Grace, and Owens Corning.
LEVI STRAUSS: February 24 Balance Sheet Upside-Down by $318.87MM
----------------------------------------------------------------
Levi Strauss & Co.'s balance sheet at Feb. 24, 2008, showed total
assets of $2,956,586,000 and total liabilities of $3,275,460,000,
resulting to total stockholders' deficit of roughly $318,874,000.
The company's net income was $97.107 million in the first quarter
ended Feb. 24, 2008, compared to net income of $86.635 million
for the same quarter in 2007. The a 12% increase in the net
income reflected lower interest expense and a lower tax rate.
"Our performance in the first quarter represents a solid start for
the year, despite an increasingly difficult retail environment,"
John Anderson, president and chief executive officer, said. "Our
Levi's(R) brand continues to perform well on a global basis, and
benefited from continued growth in our emerging Asia Pacific
markets and in Europe."
"We are cautious given the economic uncertainty in the United
States and key markets around the world," Mr. Anderson added.
"Nonetheless, we remain focused on product innovation, retail
expansion and optimizing our global footprint."
The company reported that its board of directors declared a
$50 million cash dividend to common shareholders. In addition,
the company reported that on March 25 it redeemed its remaining
12-1/4 % bonds, further reducing long-term debt by $19 million.
"Our solid operating margins and strong cash flows have allowed us
to continue to reduce debt, and to invest in our brands and retail
expansion," Hans Ploos van Amstel, chief financial officer, said.
"We have made significant progress in managing inventory levels.
Our priority continues to be cash generation as we work to further
support our brands and strengthen our financial position."
Liquidity
The company ended the first quarter with cash and cash equivalents
of $222 million, an increase of $66 million from the year ended
Nov. 25, 2007. Cash provided by operating activities was
$107 million for the first quarter, compared with $17 million used
for operating activities for the same period in 2007, reflecting
lower interest payments and a reduction of cash used for inventory
and accounts payable.
The company reduced long-term debt by $18 million in the quarter.
Total debt was $1.95 billion at the end of the first quarter.
About Levi Strauss & Co.
Headquartered in San Francisco, California, Levi Strauss & Co. --
http://www.levistrauss.com/-- is a branded apparel company. The
company designs and markets jeans and jeans-related pants, casual
and dress pants, tops, jackets and related accessories for men,
women and children under its Levi's, Dockers and Levi Strauss
Signature brands in markets around the world. Levi Strauss & Co.
distributes its Levi's and Dockers products primarily through
chain retailers and department stores in the United States, and
through department stores, specialty retailers and franchised
stores abroad. The company distributes its Levi Strauss Signature
products through mass channel retailers in the United States and
abroad.
* * *
Moody's Investors Service placed Levi Strauss & Co.'s long term
corporate family and probability of default ratings at 'B1' in
March 2007. The ratings still holds to date with a positive
outlook.
LINENS 'N THINGS: Liquidity Concerns Cues Fitch to Chip Ratings
---------------------------------------------------------------
Fitch Ratings has downgraded its ratings on Linens 'n Things, Inc.
as:
-- Issuer Default Rating to 'CC' from 'CCC';
-- Asset-based revolver to 'CCC-/RR3' from 'CCC+/RR3';
-- Senior secured notes to 'C/RR5' from 'CCC-/RR5'.
At the same time, LIN remains on Rating Watch Negative by Fitch.
The downgrades reflect Fitch's concerns about LIN's vendor
relationships and liquidity position due to the company's
deteriorating credit profile. Other concerns include the
challenging operating environment and intense competition from
other specialty retailers, discounters and department stores in
the home furnishings segment.
In 2007, comparable store sales declined 3.4% on top of a negative
0.7% in 2006 and operating EBITDA margin fell 370 basis points to
-1.5%. Given the company's weak financial results, LIN generated
negative free cash flow of $160 million in 2007, and credit
metrics deteriorated. In 2007, total adjusted debt/EBITDAR was
12.5 times compared to 8.6x in 2006. Interest coverage, defined
as EBITDAR/interest expense plus rent, decreased to 0.6x from 1x
in 2007.
Given LIN's worsening credit metrics, Fitch is concerned some
vendors have either stopped or decreased the amount of merchandise
to be shipped to LIN. This would hinder LIN's sales and cash flow
generation. In addition, this would negatively affect the
company's borrowing base on the credit facility, as the borrowing
base is based on eligible inventory and receivables. While LIN
had $302.9 million available under its credit facility as of
Dec. 29, 2007, Fitch remains concerned about the company's
liquidity position. The credit facility states that 'the
collateral agents have the right to establish, modify or eliminate
reserves against eligible inventory from time to time in their
permitted discretion.' Thus, availability can be reduced as long
as 'the determination is made in good faith and in the exercise of
reasonable business judgment.'
In resolving the Rating Watch Negative status, Fitch is monitoring
LIN's ability to sustain operations.
LOUISIANA RIVERBOAT: Gets Okay to Hire Heller Draper as Counsel
---------------------------------------------------------------
Louisiana Riverboat Gaming Partnership and certain of its
affiliates sought and obtained authority from the U.S. Bankruptcy
Court for the Western District of Louisiana, Shreveport Division,
to employ William H. Patrick, III and the law firm of Heller,
Draper, Hayden, Patrick & Horn, L.L.C., as their bankruptcy
counsel, nunc pro tunc to their filing date.
Heller Draper will render general legal services to the Debtors as
needed throughout the course of the chapter 11 cases, including
bankruptcy, corporate, employee benefits, environmental, finance,
intellectual property, labor and employment, litigation, mergers
and acquisitions, real estate, securities and tax advice.
The firm's hourly billing rates for bankruptcy work range from
$225.00 to $425.00 for attorneys and from $80.00 to $120.00 for
paralegals. The firm's professionals who are presently expected
to have primary responsibility for providing services to the
Debtors with current applicable rates are:
William H. Patrick, III $425.00
Douglas S. Draper $425.00
Tristan Manthey $350.00
Other Partners $325.00 - $425.00
Associates $225.00 - $300.00
Paralegal $80.00 - $120.00
The firm will also be reimbursed for actual and necessary
expenses.
Mr. Patrick, Esq., attests that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code, as modified by Section 1107(b). Heller Draper
does not hold or represent an interest adverse to the Debtors or
their estates, Mr. Patrick says.
Mr. Patrick discloses that on March 11, 2008, prior to the
Debtors' bankruptcy filings, Heller Draper received a $160,000
retainer from the Debtors to serve as security for services to be
rendered prepetition and the filing fees for the bankruptcy cases
in accordance with an engagement letter. The retainer was placed
in a trust account. Up to and including the Petition Date, Heller
Draper provided prepetition services and incurred prepetition
expenses in connection with the Debtors chapter 11 proceedings.
The amount of attorneys' fees and costs that were incurred for its
prepetition services rendered and expenses incurred on behalf of
the Debtors was $121,448. The source of the prepetition payments
was the Debtors' operating cash.
Prior to the filing of the petition, $121,448 was paid to Heller
Draper out of the funds held in the trust account on account of
the fees and expenses owed to Heller Draper for prepetition
services. Heller Draper also paid the prepetition filing fees of
$6,234.00 out of the funds held in the trust account. Thus,
Heller Draper holds $38,551.15 as security for fees and expenses
to be incurred postpetition and in accordance with the Engagement
Letter, the retainer will be held until the conclusion of Heller
Draper's representation.
Heller Draper believes that the Debtors do not owe Heller Draper
any amounts for legal services rendered before the Petition Date.
Heller Draper can be reached at:
William H. Patrick, III, La. Bar No. 1035
Tristan Manthey, La. Bar No. 24539
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130
Tel: (504) 299-3300
Fax: (504) 299-3399
About Louisiana Riverboat
Headquartered in Bossier City, Louisiana, Louisiana Riverboat
Gaming Partnership, which does business as Diamond Jacks Casino &
Resort, and its debtor-affiliates -- http://www.islecorp.com/--
operate casinos and hotels. The company and five of its
affilaites filed for Chapter 11 protection on March 11, 2008
(Bankr. W.D. La. Lead Case No.08-10824). Tristan E. Manthey, Esq.
and William H. Patrick, III, Esq., at Heller Draper Hayden Patrick
and Horn represent the Debtors. The U.S. Trustee for Region 5
When they filed for protection from its creditors, the companies
listed consolidated assets and debts both between $100 million to
$500 million.
M FABRIKANT: Court Denies Lenders Plea to Deny Confirmation
-----------------------------------------------------------
The Hon. Stuart M. Bernstein of the U.S. Bankruptcy Court for the
Southern District of New York overruled the objections filed by
M. Fabrikants & Sons Inc. and Fabrikant-Leer International Ltd.'s
prepetition secured lenders -- including JPMorgan Chase & Co. --
to deny the Debtors for confirmation of their Chapter 11 Plan of
Liquidation.
Judge Bernstein said in a memorandum decision he considered the
arguments made by the secured lenders lack merit. He did not
confirm the Debtors' Chapter 11 Plan of Liquidation until
objections are resolved, as previously reported in the Troubled
Company Reporter in December 2007.
A full-text copy of of Judge Bernstein's Memorandum Decision is
available for free at: http://ResearchArchives.com/t/s?2a65
In their objection filed with Court, the secured lenders contends
that:
i) the Debtors' Plan violated the priority of distribution
under section 1129(a)(9)(A) by failing to provide for the
payment in full of their Reimbursement Rights;
ii) the Plan failed to separately classify their Reimbursement
Rights and specify their treatment;
iii) their Reimbursement Rights were impaired under the Plan;
and
iv) the treatment of their Reimbursement Rights was not fair and
equitable under section 1129(b)(1) and (b)(2) of the Code
because the Plan did not contemplate the establishment
of a reserve to pay them.
The other secured lenders include ABN, ADB, Bank of America,
N.A., Bank Leumi USA, HSBC Bank USA, National Association, Israel
Discount Bank of New York, JPMorgan Chase Bank, N.A., Sovereign
and Sovereign Precious Metals LLC, pursuant to court documents
filed with the Court.
As reported in the Troubled Company Reporter on Dec. 28, 2007, the
prepetition secured claims held by the prepetition secured lenders
against the Debtors were sold to a third party purchaser.
Steven J. Mandelsberg, Esq., and Joshua I. Divack, Esq., at Hanh &
Hessen LLP represents JPMorgan in this proceeding
Andrew C. Gold, Esq., and Frederick E. Schmidt, Esq., at Herrick,
Feinstein LLP represents Bank Leumi.
William J. Brown, Esq., and Allan L. Hill, Esq., at Phillips Lytle
LLP represents HSBC.
Jeffrey D. Ganz, Esq., at Riemer & Braunstein LLP, represents Bank
of America.
About M. Fabrikant
Headquartered in New York City, M. Fabrikant & Sons, Inc. --
http://www.fabrikant.com/-- sells diamonds and jewelries. The
company and its affiliate, Fabrikant-Leer International Ltd.,
filed for chapter 11 protection on Nov. 17, 2006 (Bankr. S.D.N.Y.
Lead Case No. 06-12737). Mitchel H. Perkiel, Esq., Lee W.
Stremba, Esq., and Paul H. Deutch, Esq., at Troutman Sanders LLP
represent the Debtors in their restructuring efforts. Alan Kolod,
Esq., Lawrence L. Ginsberg, Esq., and Christopher J. Caruso, Esq.,
at Moses & Singer LLP serve as counsel to the Official Committee
of Unsecured Creditors. In schedules filed with the Court, M.
Fabrikant disclosed total assets of $225,612,204 and total debts
of $439,993,890.
MAGNOLIA FINANCE II: Moody's Reviews 'Ba3' Rating on 2005-4 Notes
-----------------------------------------------------------------
Moody's Investors Service placed its rating of these notes issued
by Magnolia Finance II plc Series 2005-4 on review for possible
downgrade:
Class Description: Magnolia Finance II plc Series 2005-4 due 2010
-- Prior Rating: Ba3
-- Current Rating: Ba3, on review for possible downgrade
Moody's explained that this rating action reflects deterioration
in the credit quality of the transaction's underlying collateral
pool, which consists of corporate securities.
MANCHESTER INC: Wants Winston & Strawn as Bankruptcy Counsel
-----------------------------------------------------------
The United States Bankruptcy Court for the Northern District of
Texas approved the application of Manchester, Inc. and its
bankrupt affiliates to employ Winston & Strawn LLP as their
bankruptcy counsel.
The Debtors needed Winston & Strawn's services to enable them to
execute faithfully their duties as debtors-in-possession and to
develop, propose and consummate Chapter 11 plans.
The Debtors will pay the Firm for its legal services in accordance
with the following hourly rates.:
Partners $400 to $945 per hour
Associates $235 to $440 per hour
Paralegals $95 to $250 per hour
Prior to the bankruptcy filing, the Debtors paid the firm an
advance fee payments of $125,000.
Jeff J. Marwil, Esq., a partner at Winston & Strawn, LLP, attested
that his firm represented no other interests adverse to the
Committee, and that the firm is a "disinterested person", as
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Jeff J. Marwil, Esq.
Winston & Strawn LLP
35 West Wacker Drive
Chicago, IL 60601-9703
Tel: (312) 558-5600
Fax: (312) 558-5700
http://www.winston.com/
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.
MANCHESTER INC: Committee Wants Powell Goldstein as Counsel
-----------------------------------------------------------
The Official Committee of Unsecured Creditors of Manchester, Inc.
and its bankrupt affiliates asks the United States Bankruptcy
Court for the Northern District of Texas to approve the employment
of Powell Goldstein, LLP as its bankruptcy counsel.
The Committee needs Powell Goldstein for advice and assistance on
its rights, powers and duties as a committee of unsecured
creditors to the debtors-in-possession.
The Committee will pay the Firm for its legal services in
accordance with customary hourly rates. The Firm's professionals
who will have primary responsibility for providing services to the
Committee and their billing rates are:
E. Penn Nicholson Attorney $605 per hour
Wendy L. Hagenau Attorney $495 per hour
Robert M.D. Mercer Attorney $415 per hour
Keith Miles Aurzada Attorney $395 per hour
Brian Kilmer Attorney $375 per hour
Gwendolyn Godfrey Attorney $285 per hour
Deborah A. Field Paraprofessional $200 per hour
Guadalupe M. Paraprofessional $200 per hour
Rojas-Wiederaenders
Keith Miles Aurzada, Esq., a partner at Powell Goldstein, LLP,
attests that his firm represents no other interests adverse to the
Committee, and that the firm is a "disinterested person", as
defined in Section 101 (14) of the Bankruptcy Code.
The firm can be reached at:
Keith Miles Aurzada, Esq.
(kaurzada@pogolaw.com)
Powell Goldstein, LLP
2200 Ross Avenue, Suite 3300
Dallas, Texas 75201
Tel: (214) 721-8000
Fax: (214) 721-8100
http://www.pogolaw.com/
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.
MAXXAM INC: Court of Appeals Upholds Judge Hughes' Ruling vs. FDIC
------------------------------------------------------------------
MAXXAM Inc. disclosed that the United States Court of Appeals for
the Fifth Circuit has upheld substantial parts of a ruling by
District Judge Lynn Hughes of the United States District Court for
the Southern District of Texas. The District Court ruled in 2005
that the Federal Deposit Insurance Corporation engaged in
sanctionable misconduct in connection with legal proceedings
brought against MAXXAM and others.
The Fifth Circuit decision returns the matter to the District
Court for a determination of the amount of sanctions. While the
final dollar award must be determined, it could be as much as
$15 million, making it one of the largest sanction awards against
the federal government ever.
"We are pleased by the Court of Appeals' decision to uphold Judge
Hughes' finding that the FDIC acted improperly by using litigation
tactics of delay and harassment to pressure MAXXAM into a
settlement," J. Kent Friedman, general counsel of MAXXAM, said.
"We have always believed that the FDIC wasted taxpayer money, and
after years of legal battles and several rulings in favor of
MAXXAM, it is clear that the litigation was meritless."
The case stems from a decision by the FDIC to sue MAXXAM and
others in order to force a "debt-for-nature" trade as a financial
settlement for the failure of the United Saving Association of
Texas. MAXXAM had made a substantial investment in United
Financial Group Inc., which in turn owned USAT.
Judge Hughes found that the FDIC brought the litigation to help
the Interior Department acquire old-growth redwood trees located
in the so-called Headwaters Forest of Northern California.
Although the FDIC had concluded it had a legally weak case, it
faced extraordinary pressure from certain members of Congress and
environmental advocacy groups to sue MAXXAM and its CEO, Charles
Hurwitz.
The FDIC's goal was to create the threat of a debt regarding USAT
that could be swapped for the Headwaters Forest, which at the time
was owned by The Pacific Lumber Company, an entirely separate
entity owned by MAXXAM. The Fifth Circuit upheld Judge Hughes'
finding that acquiring the redwood trees was one of the FDIC's
purposes in filing the suit, well as his finding that the FDIC
used improper litigation tactics to cause delay and harassment in
an effort to increase the costs of the litigation and force a
settlement.
"No government agency is above the law," Charles E. Hurwitz,
chairman and CEO of MAXXAM, said. "There should be consequences
when a government entity illegitimately uses the tremendous power
and resources of the United States government for an improper
purpose. This is a fantastic victory for all of us at MAXXAM and
innocent Americans across the country who thinks the government is
too big to fight."
While the Fifth Circuit reversed the District Court's award of
$57 million for costs incurred in an associated administrative
proceeding brought, at the direction of the FDIC, by the Office
of Thrift Supervision, it did not do so on the ground that the
FDIC's use of the OTS to advance its agenda was entirely proper.
It simply ruled that the District Court did not have power to
sanction for conduct in the administrative proceedings.
About MAXXAM
Headquartered in Houston, Texas, MAXXAM Inc. (AMEX: MXM)
operates businesses ranging from aluminum and timber products to
real estate and horse racing. MAXXAM's top revenue source is
Kaiser Aluminum, which has been in Chapter 11 bankruptcy since
2002. MAXXAM's timber subsidiary, Pacific Lumber, owns about
205,000 acres of old-growth redwood and Douglas fir timberlands
in Humboldt County, California. MAXXAM's real estate interests
include commercial and residential properties in Arizona,
California, Texas, and Puerto Rico. The company also owns the
Sam Houston Race Park, a horseracing track near Houston. Its
chairperson and chief executive officer, Charles Hurwitz,
controls 77% of MAXXAM.
At Sept. 30, 2007, the company's balance sheets showed total
assets of $543.7 million and total liabilities of $785.3 million
resulting to total stockholders' deficit $241.6 million.
MBH INVESTMENTS: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: MBH Investments, LLC
42210 North 10th Street
Phoenix, AZ 85086
Tel: (623) 521-2832
Bankruptcy Case No.: 08-03832
Chapter 11 Petition Date: April 9, 2008
Court: District of Arizona (Phoenix)
Debtor's Counsel: Richard Ray Thomas, Esq.
(rthomas@thomas-schern.com)
Thomas Schern Richardson
1640 South Stapley Drive, Suite 205
Mesa, AZ 85204
Tel: (480) 632-1929
Fax: (480) 632-1938
http://www.thomas-schern.com/
Estimated Assets: Less than $50,000
Estimated Debts: $1 million to $10 million
The Debtor did not file a list of its largest unsecured creditors.
MEGA BRAND: Moody's Chips Ratings After Release of 2007 Results
---------------------------------------------------------------
Moody's lowered Mega Brand Inc.'s ratings to B2 from B1 after the
company posted its full year results for 2007. The rating remains
on review for possible further downgrade. The SGL 3 was affirmed.
Moody's said that the financial flexibility of the company had
deteriorated significantly in 2007 due both to lower than expected
sales of Magnetix products and new special charges related to a
new recall and special items. The weak results led to the
downgrade of the CFR to B2. Debt to EBITDA jumped to over 5.5
times as of year-end 2007 from 3.9 times in 2006 (per Moody's FM)
and cash flow was negative.
The SGL 3 was maintained largely because of the provisions under
the amended credit facility which provide for greater flexibility
both on covenants and for the proposed asset sales.
A successful sale of the stationery and activities businesses
could significantly improve credit metrics, liquidity and could
result in a rating confirmation or even put positive pressure on
the rating.
Nevertheless, the review for downgrade continues both until such a
sale materializes, and pending clearer understanding of post-sale
core toy business momentum and management's future financial
targets. Failure to sell the businesses combined with ongoing
softness in core toy businesses could lead to further downgrade.
Although the potential sale of the stationery and activities
business will allow Mega to focus on its core toy brands and to
reduce existing debt, which Moody's would view positively, Mega
would also become a much smaller, less diversified, and more
seasonal company with greater retailer concentration.
Furthermore, management's plans for its future capital structure
would also need to be considered. Other key concerns include:
* Questions around consumer acceptance of the new generation of
Magnetix products after the damage suffered over the last years
due to product safety issues and the resulting recalls and
lawsuits.
* Ongoing litigation, and issues around the company's self
insurance for product liability for Magnetix products
manufactured before May 1, 2006 and for incidents occurring
after Dec. 1, 2006
* The resolution of and likely timing and payout of the disputed
Rose Art earn-out payment.
These ratings were downgraded and remain on review for downgrade:
MEGA Brands, Inc.
-- Corporate Family Rating to B2 from B1;
-- Probability of Default to B3 from B2;
-- $120 million 5-year revolving credit facility maturing July
2010 to B1 (LGD 2, 26%) from Ba3 (LGD 2, 26%);
-- $40 million, 5-year term loan A facility to B1 (LGD-2, 26%)
from Ba3 (LGD 2, 26%)
MEGA Brands Finco
-- $260 million 7-year term loan B facility to B1 (LGD 2, 26%)
from Ba3 (LGD 2, 26%)
MEGA Brands manufactures and markets a broad line of toys and
stationery and activities products. It is based in Montreal,
Canada and had sales of $525 million in 2007.
METROPOLITAN MORTGAGE: Agrees to Sell Western United for $52 Mil.
-----------------------------------------------------------------
Metropolitan Mortgage & Securities Inc. agreed to sell its
insurance affiliate Western United Life Assurance Co. to Global
Life Holdings LLC for $52 million, the seattlepi.com reports.
Washington Insurance Commission Mike Kreidler said that the sale
would benefit Met Mortgage investors and end Western United's
receivership status, relates seattlepi.com.
As reported in the Troubled Company Reporter on March 12, 2008,
Met Mortgage filed for bankruptcy in February 2004, devastating
nearly 10,000 investors throughout the Pacific Northwest who had
invested approximately $450 million in the once high-flying real
estate company.
The U.S. Bankruptcy Court for the Eastern District of Washington
confirmed, on Feb. 13, 2006, Met Mortgage and debtor-affiliate
Summit Securities Inc.'s Amended Joint Plan of Reorganization.
The Plan provided for the establishment of trusts, the funds of
which will be distributed among the investors that took a huge
loss in Met Mortgage's bankruptcy.
The Chapter 11 Trustee for Met Mortgage complained that she and
her counsel had been shut out of the deal, seattlepi.com says.
Based in Spokane, Washington, Metropolitan Mortgage & Securities
Co., Inc., owns insurance businesses. Metropolitan filed for
Chapter 11 protection (Bankr. E.D. Wash. Case No. 04-00757), along
with Summit Securities Inc., on Feb. 4, 2004. Bruce W. Leaverton,
Esq., at Lane Powell Spears Lubersky LLP and Doug B. Marks, Esq.,
at Elsaesser, Jarzabek, Anderson, Marks, Elliot & McHugh represent
the Debtors in their restructuring efforts. When Metropolitan
Mortgage filed for Chapter 11 protection, it listed total assets
of $420,815,186 and total debts of $415,252,120.
MI ATHLETIC ASSOC: Slapped $7.4 in Legal Fees, Mulls Bankruptcy
---------------------------------------------------------------
The Michigan High School Athletic Association said Wednesday that
it is considering an appeal of a district court order requiring it
to pay about $7.4 million in legal fees, including interest. The
MHSAA also said it is preparing to file for protection against
creditors.
These precautions will assure the future of the MHSAA, the
organization said in a news statement.
Fred Girard at The Detroit News reports that the Hon. Richard Alan
Enslen of the United States District Court for the Western
District of Michigan awarded $4.6 million in fees and expenses to
lawyers for a group of Grand Rapids mothers who won a decade-long
battle to change discriminatory scheduling for high-school girl
athletes. Judge Enslen also awarded interest from the date the
suit was filed in June 1998, ballooning the payout to over $7.4
million, Detroit News says.
In a statement released to the member schools, MHSAA Executive
Director John E. "Jack" Roberts said:
"We are sincerely appreciative of the encouragement received from
school representatives, contest officials and many others during
the past ten days.
"A year ago when we learned the appeal to the U.S. Supreme Court
would not be heard, on the same day I went before this state's
media; and through them and the MHSAA Web site, I spoke to you
face to face. It was not responsible for us to speak as quickly
this year; and even now, we cannot comment fully."
Prejudment Interest a Big Surprise
"During the long history of the sports seasons litigation, MHSAA
staff were able to serve you without distraction, and the cost of
the defense of schools' sports seasons schedule was reimbursed
through two inexpensive insurance policies the MHSAA had
purchased," Mr. Roberts said.
"The MHSAA also prepared for the possibility that, if that defense
was unsuccessful, a petition for reimbursement of plaintiffs'
attorneys' reasonable fees and costs would follow. In considering
exposure, we were guided by the result of a decade-long Title IX
lawsuit after which a university settled plaintiffs' attorneys'
fees at approximately $1 million. When the petition for fees and
expenses was filed in our case for more than $5 million, MHSAA
contingency planning was guided by the affirmative action case
involving the University of Michigan where the demand for
attorneys' fees was reduced approximately 40 percent by the U.S.
District Court for the Eastern District of Michigan.
"The court's order in our case exceeded even our worst-case
scenario preparations. The requested attorneys' fees award of
$5,023,991.25 was reduced to $4,921,241.25 through an across-the-
board reduction for "fees on fees" hours claimed and public
relations hours claimed. This was reduced further by a ten
percent across-the-board reduction for "vagueness, excessiveness
and duplicity in the hours billed," which is how the court arrived
at $4,429,117.13 in attorneys' fees and $131,144.80 in costs, for
a total award of $4,560,261.93.
"The bigger surprise was the award of prejudgment interest paid on
that total award, starting from the date the complaint was filed
in 1998. This issue had not been briefed by the parties. This
means that a case that was not about money damages has now become
such a case. And it pushes the total well beyond the MHSAA's
assets."
According to Mr. Roberts, "The MHSAA is not funded by schools
through membership dues and assessments and tournament entry fees
but generates revenue through the programs it sponsors and
conducts, sharing revenue with schools which host and participate
in those events. Therefore, when the MHSAA is harmed, local
school programs feel the effect."
"It is reasonable to anticipate that member schools will continue
to have nearly the MHSAA's full range of services for students,
coaches, administrators and officials, although there may not be
the same level of financial support available for some MHSAA
programs and events for some length of time.
In closing, Mr. Roberts said, "The sports seasons decisions were
made by the schools of Michigan themselves; and the placements of
MHSAA tournaments have always followed those local choices. At
trial, school people (not MHSAA staff) testified to the merits of
their decisions. On appeal, arguments on behalf of those
decisions were briefed by school organizations, including the
Michigan Association of School Boards, Michigan Association of
Secondary School Principals, and Michigan Interscholastic Athletic
Administrators Association.
"We are where we are today because this is a democratic
organization, and schools count on their elected representatives
and leaders to promote and defend their decisions. We accept that
plaintiffs acted on principle they believed in; it is unfortunate
that defendants are being penalized for doing the same.
"Nevertheless, with your continuing support, the MHSAA will get
through this, gain in character and grow in service."
The Michigan High School Athletic Association is a private, not-
for-profit corporation of voluntary membership by more than 1,800
public and private senior high schools and junior high and middle
schools, which exists to develop common rules for athletic
eligibility and competition. No government funds or tax dollars
support the MHSAA, which was the first association nationally to
not accept membership dues or tournament entry fees from schools.
Member schools which enforce the rules are permitted to
participate in MHSAA tournaments, which attract approximately 1.6
million spectators each year.
MILLBROOK 2006-4: Poor Credit Quality Prompts Moody's Rating Cuts
-----------------------------------------------------------------
Moody's Investors Service downgraded and left on review for
possible downgrade these notes issued by Rutland Rated Investments
Series 31, 32, 33, 34, 35 (Millbrook 2006-4):
Class Description: Series 31 (Millbrook 2006-4) USD 15,500,000
Asset Backed Securities Class A Variable Rate Credit-Linked Notes
Due May 2046
-- Prior Rating: Baa3, on review for possible downgrade
-- Current Rating: Ba2, on review for possible downgrade
Class Description: Series 32 (Millbrook 2006-4) USD 42,000,000
Asset Backed Securities Class B Variable Rate Credit-Linked Notes
Due May 2046
-- Prior Rating: Ba2, on review for possible downgrade
-- Current Rating: B1, on review for possible downgrade
Class Description: Series 33 (Millbrook 2006-4) USD 22,500,000
Asset Backed Securities Class C Variable Rate Credit-Linked Notes
Due May 2046
-- Prior Rating: B3, on review for possible downgrade
-- Current Rating: Caa2, on review for possible downgrade
In addition, Moody's also announced that it has downgraded these
notes:
Class Description: Series 34 (Millbrook 2006-4) USD 10,000,000
Asset Backed Securities Class E Variable Rate Credit-Linked Notes
Due May 2046
-- Prior Rating: Caa3
-- Current Rating: Ca
Class Description: Series 35 (Millbrook 2006-4) USD 4,000,000
Asset Backed Securities Class D Variable Rate Credit-Linked Notes
Due January 2040
-- Prior Rating: Caa3
-- Current Rating: Ca
According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's
underlying collateral pool, which consists primarily of structured
finance securities.
MOORE ROAD: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Moore Road Estates, LP
3825 Atherton Road, Suite 115
Rocklin, CA 95765
Bankruptcy Case No.: 08-24474
Chapter 11 Petition Date: April 8, 2008
Court: Eastern District of California (Sacramento)
Judge: Thomas Holman
Debtor's Counsel: W. Steven Shumway, Esq.
2140 Professional Drive, Suite 250
Roseville, CA 95661
Tel: (916) 789-8821
Total Assets: $6,000,500
Total Debts: $2,650,000
The Debtor does not have any creditors who are not insiders.
MORTGAGE GROUP: Case Summary & 22 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Mortgage Group III LLC
5619 West Lake Street
Saint Louis Park, MN 55416
Bankruptcy Case No.: 08-41520
Chapter 11 Petition Date: April 1, 2008
Court: District of Minnesota (Minneapolis)
Judge: Dennis D O'Brien
Debtor's Counsel: Joseph W. Dicker, Esq.
Joseph W. Dicker PA
1406 West Lake Street
Suite 208
Minneapolis, MN 55408
Tel: 612-827-5941
Fax: 612-822-1873
joe@joedickerlaw.com
Total Assets: $4,845,418
Total Debts: $4,838,816
Debtor's list of its 22 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Impool $322,944
5619 West Lake Street
Saint Louis Park, MN 55416
Sharon Lyon $280,000
214 West 9th Street
P.O. Box 420
Onaga, KS 66521
Selma Sinks $140,000
8133 Fourth Street North
#302
Oakdale, MN 55128
Jean Rauch $130,000
Elma Ruthardt Trust $115,000
Larkin Charitable Trust $105,000
Gary C Hammerbeck IRA $85,000
Joseph M. Rauch $85,000
Lloyd and Rosie Beadle $80,000
David L. Grant $75,000
Gilbert and Ione Degrave $70,000
James Family Trust $70,000
Deanna C. Shirey IRA $69,000
Lyda Jeurink Trust $65,000
Joseph Rauch and Lorraine Anderson $65,000
Ray V. Volkman $65,000
James and Myrna Winkelman $65,000
PLAAS Retirement Plan $60,000
Bergquist Trust $55,000
Evelyn V. Mikolai $55,000
Grace Nehmer $55,000
Inez R. Johnson $55,000
MOVIDA COMMS: Wants Court Nod to Wind Down Business
---------------------------------------------------
Movida Communications, Inc., ask authority from the U.S.
Bankruptcy Court for the District of Delaware to:
a) wind down it business and effectuate the immediate
termination of its pay-as-you-go wireless voice and data
communications service;
b) enter into one or more agreements with third party service
providers to facilitate customer transitions to these third
party service providers; and
c) take other actions as may be necessary to effectuate a wind-
down, transition or as an alternative, a sale of the
Debtor's operations and assets, including approval of bid
procedures and entry into a management services agreement
for a stalking horse bidder.
Prior to the March 31 bankruptcy filing, the Debtor, with the
assistance of its legal and financial advisors, and as part of its
effort to maximize the value of its assets and estate, began to
consider a number of alternative approaches, including a sale of
its business, a sale of its assets, a liquidation ans wind-down of
its operations. In connection with such attempts, the Debtor
negotiated with, in good faith, and completed multiple due
diligence requests of, a potential purchaser for the sale of its
business. When discussions with the potential purchaser ended
without success, the Debtor was immediately forced to file for
bankruptcy protection.
The Debtor tells the Court that their assets are fully encumbered
by the liens of the Debtor's prepetition lenders. As a result,
without the consent of its prepetition lenders, the Debtor does
not have the ability to fund its operating business expense.
Given the Debtor's dire financial constraints, absent concessions
from its key creditors and a viable proposal for the immediate
sale of its assets, the Debtor will be forced to discontinue
service and terminate operations. To do otherwise would cause the
Debtor to incur administrative expenses which would erode any
value to its estate may have.
Headquartered in Kansas City, Missouri, Movida Communications Inc.
-- http://www.movidacellular.com/-- is a wireless service
provider that offers pay-as-you-go wireless voice and data
communications services using a national providers digital
network. The company filed for Chapter 11 protection on March 31,
2008 (Bankr. D. Del. Case No. 08-10600). Michael R. Nestor, Esq.,
at Young Conaway Stargatt & Taylor, in Wilmington, Delaware,
represents the Debtor. When the Debtor filed for protection from
its creditors, it listed asstes between $10 million to $50 million
and debts between $50 million to $100 million. No trustee,
examiner or official committee of unsecured creditors has been
appointed in this case.
MS LLC: Case Summary & Three Largest Unsecured Creditors
--------------------------------------------------------
Debtor: M.S. LLC, Debtor
aka Crossroads Apartment Site
1105 Quail Street
Newport Beach, CA 92660
Bankruptcy Case No.: 08-11748
Chapter 11 Petition Date: April 8, 2008
Court: Central District Of California (Santa Ana)
Judge: Robert N. Kwan
Debtor's Counsel: Paul J. Couchot, Esq.
(jmartinez@winthropcouchot.com)
Winthrop Couchot, PC
660 Newport Center Drive, Suite 400
Newport Beach, CA 92660
Tel: (949) 720-4100
Fax: (949) 720-4111
http://www.winthropcouchot.com/
Estimated Assets: $1 million to $10 million
Estimated Debts: $1 million to $10 million
Debtor's Three Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Rick Engineering Co. trade debt $10,205
1223 University Avenue,
Suite 240
Riverside, CA 92507
Salisbury Law Group legal services $6,879
1600 Dove
Newport Beach, CA 92660
Steven C. Kiser legal services $1,089
240 Newport Center Drive,
Suite 210
Newport Beach, CA 92660
NATIONAL CITY: Nova Scotia Joins List of Potential Buyers
---------------------------------------------------------
Canada's Bank of Nova Scotia has joined several U.S. banks and
private-equity firms that seek to buy National City Corp., people
familiar with the matter said, according to The Wall Street
Journal.
National City is under regulatory pressue to increase its capital
or find a buyer before it reports first-quarter results,
tentatively April 22. The company has seen its market value
plunge to about $5 billion, the report said. In an April 1
statement, National City announced that its Board of Directors is
reviewing a range of strategic alternatives for the company. It
has retained Goldman Sachs as advisor for the review.
Cleveland-based KeyCorp and Cincinnati-based Fifth Third Bancorp
have submitted offers for National City, the report said. Both
offers are believed to be at prices lower than what National City
is seeking. The report did not say the price National City is
asking.
Meanwhile, buyout firm Warburg Pincus LLC has reportedly withdrawn
from the bidding process, while Corsair Capital LLC, a New York
private-equity firm is considering making a bid.
According to WSJ, "With a market value of roughly $45 billion,
Bank of Nova Scotia is better positioned than many U.S. banks to
shell out money for National City..." Bank of Nova Scotia has
offered to buy at least a stake in National City. The move is
seen as a way for Canada's third-largest bank by stock-market
value to put itself in U.S. ground, where Scotiabank currently
lacks a retail-banking presence, said people familiar with the
talks.
A Scotiabank spokesman declined to comment, according to the
report.
A WSJ report by Valerie Bauerlein stated that potential buyers are
particularly looking at some $25 billion in high-risk assets on
National City's book. "These risky loans are critical to the
structure and price of any potential deal, because they directly
affect how much capital a combined company would require," the
report said.
Headqurtered in Cleveland, Ohio, National City Corporation --
http://www.nationalcity.com/-- is financial holding company that
operates through an extensive distribution network in Ohio,
Florida, Illinois, Indiana, Kentucky, Michigan, Missouri,
Pennsylvania, and Wisconsin, and also conducts selected lending
and other financial services businesses on a nationwide basis. The
primary source of National City's revenue is net interest income
from loans and deposits, revenue from loan sales and servicing,
and fees from financial services provided to customers. Its
operations are primarily conducted through more than 1,400 branch
banking offices located within National City's nine-state
footprint. In addition, National City operates over 410 retail
mortgage offices throughout the United States.
At year ended December 31, 2007, National City reported total
assets of $143.559 billion, total liabilities of $130.359 billion
and total stockholders' equity of $13.200 billion. It posted a
loss of $333 million in the fourth quarter.
NORTHWOOD PROPERTIES: Selling 42 Senior Living Condominium Units
----------------------------------------------------------------
Northwood Properties has retained Keen Consultants, the real
estate division of KPMG Corporate Finance LLC and its subsidiary
KPMG CF Realty LLC under Bankruptcy Court Order, to market
and sell the remaining building rights for 42 senior living
condominium units located outside of Boston, in Sudbury,
Massachusetts.
The senior living complex, known as Northwood at Sudbury was
originally approved for 66 units and an activities building. Two
buildings, containing 24 units, have already been constructed,
sold and are occupied, while current and valid permits are in
place for the remaining 42 units.
All units are designed to average 1,984 sq. ft. and contain either
1 or 2 bedrooms and 2 baths. Additionally, the activities
building has been completed, is in current use and includes
an indoor pool, activities rooms, offices, kitchen, men's and
women's locker rooms, exercise room with equipment, elevator and
an unfinished basement.
"The purchaser of these rights will only have to incur the costs
of obtaining building permits and the construction for the next
42 units, as all town required approvals are in place," said
Matthew Bordwin, managing director & group head, KPMG Corporate
Finance LLC. "There is nothing in the original permits that
prevents the developer from building those units in less than 3
buildings."
"A bid deadline of May 29, 2008 and an auction date of June 5,
2008 have been established, subject to Bankruptcy Court approval,
and all interested parties are required to submit bids in
accordance with the bid procedures that will be filed with the
Court, Mr. Bordwin added. "Interested parties must act
immediately as this is a very attractive opportunity."
For more information regarding the disposition of the property,
please contact:
Keen Consultants/KPMG Corporate Finance LLC
Attn: Matthew Bordwin
Suite 200, 1305 Walt Whitman Road
Melville, NY 11747
Tel (631) 351-7800
Fax (6310 794-2491
About Northwood Properties
Headquartered El Segundo, Calofornia, Northwood Properties --
http://northwoodprops.com/-- is a real estate development,
redevelopment, building management and project management company
that acquires, renovates, and manages a portfolio of industrial
and office properties.
PACER HEALTH: Inks $5,786,017 Securities Purchase with YA Global
----------------------------------------------------------------
On April 1, 2008, Pacer Health Corporation entered into a
Securities Purchase Agreement with YA Global Investments, L.P.
pursuant to which the company sold up to $5,786,017 of secured
convertible debentures, which shall be convertible into shares of
the company's common stock, par value $0.001 per share and a five-
year warrant to acquire up to 5,500,000 additional shares of
common stock at an exercise price of $0.0001 per share, of which
was funded to the company on April 1, 2008.
The debentures shall accrue interest at a rate equal to thirteen
percent (13%) per annum and shall mature, unless extended by the
holder in accordance with the terms of the debentures, on April 1,
2012.
The debentures are secured by (i) a security interest in all of
the assets of the company and of each of the company's
subsidiaries as evidenced by that certain Amended and Restated
Security Agreement, dated April 1, 2008, by and among the company,
YA Global and each of the company's subsidiaries made a party
thereto.
A full-text copy of the Securities Purchase Agreement, dated
April 1, 2008, by and between the company and YA Global
Investments, L.P., is available for free at:
http://researcharchives.com/t/s?2a6c
A full-text copy of the Amended and Restated Security Agreement,
dated April 1, 2008, by and among the company, the company's
subsidiaries made a party thereto and YA Global Investments, L.P.,
is available for free at:
http://researcharchives.com/t/s?2a6d
About Pacer Health
Headquartered in Miami, Florida, Pacer Health Corp. (OTC BB: PHLH)
-- http://www.pacerhealth.com/-- is an owner-operator of
acute care hospitals, medical treatment centers and psychiatric
care facilities serving non-urban areas throughout the Southeast.
* * *
As reported in the Troubled Company Reporter pon Nov. 29, 2007,
Pacer Health Corp.'s consolidated balance sheet at Sept. 30, 2007,
showed $17.1 million in total assets, $15.3 million in total
liabilities, and $8.6 million in minority interest in consolidated
subsidiary company, resulting in a $6.8 million total
stockholders' deficit.
PAMPELONNE II: Classes of Notes Acquire Moody's Junk Ratings
------------------------------------------------------------
Moody's Investors Service downgraded these notes issued by the
Pampelonne II Mezz Swap Transactions:
Issuer: Pampelonne II Mezz Swap A1
Class Description: $20,000,000 Initial Tranche Notional Amount
Credit Default Swap
-- Prior Rating: Baa3, on review for possible downgrade
-- Current Rating: Ca
Issuer: Pampelonne II Mezz Swap A2
Class Description: $20,000,000 Initial Tranche Notional Amount
Credit Default Swap
-- Prior Rating: Ba2, on review for possible downgrade
-- Current Rating: Ca
Issuer: Pampelonne II Mezz Swap B1
Class Description: $20,000,000 Initial Tranche Notional Amount
Credit Default Swap
-- Prior Rating: Ba3, on review for possible downgrade
-- Current Rating: Ca
Issuer: Pampelonne II Mezz Swap B2
Class Description: $20,000,000 Initial Tranche Notional Amount
Credit Default Swap
-- Prior Rating: B2, on review for possible downgrade
-- Current Rating: Ca
Issuer: Pampelonne II Mezz Swap C1
Class Description: $20,000,000 Initial Tranche Notional Amount
Credit Default Swap
-- Prior Rating: B1, on review for possible downgrade
-- Current Rating: Ca
Issuer: Pampelonne II Mezz Swap C2
Class Description: $20,000,000 Initial Tranche Notional Amount
Credit Default Swap
-- Prior Rating: B3, on review for possible downgrade
-- Current Rating: Ca
Issuer: Pampelonne II Mezz Swap D1
Class Description: $20,000,000 Initial Tranche Notional Amount
Credit Default Swap
-- Prior Rating: B1, on review for possible downgrade
-- Current Rating: Ca
Issuer: Pampelonne II Mezz Swap D2
Class Description: $20,000,000 Initial Tranche Notional Amount
Credit Default Swap
-- Prior Rating: B3, on review for possible downgrade
-- Current Rating: Ca
Issuer: Pampelonne II Mezz Swap E1
Class Description: $20,000,000 Initial Tranche Notional Amount
Credit Default Swap
-- Prior Rating: Ba1, on review for possible downgrade
-- Current Rating: Ca
Issuer: Pampelonne II Mezz Swap E2
Class Description: $20,000,000 Initial Tranche Notional Amount
Credit Default Swap
-- Prior Rating: Ba3, on review for possible downgrade
-- Current Rating: Ca
According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's
underlying collateral pool, which consists primarily of structured
finance securities.
PAMPELONNE MEZZ: Moody's Junks Ratings on Seven Classes of Notes
----------------------------------------------------------------
Moody's Investors Service downgraded the ratings on these notes
issued by Pampelonne Mezz Swap A, B, C1, C2, D1, D2, E:
Issuer: Pampelonne Mezz Swap A
Class Description: $12,500,000 Initial Tranche Notional Amount
Credit Default Swap
-- Prior Rating: B2, on review for possible downgrade
-- Current Rating: Ca
Issuer: Pampelonne Mezz Swap B
Class Description: $12,500,000 Initial Tranche Notional Amount
Credit Default Swap
-- Prior Rating: Baa3, on review for possible downgrade
-- Current Rating: Ca
Issuer: Pampelonne Mezz Swap C1
Class Description: $12,500,000 Initial Tranche Notional Amount
Credit Default Swap
-- Prior Rating: Ba2, on review for possible downgrade
-- Current Rating: Ca
Issuer: Pampelonne Mezz Swap C2
Class Description: $12,500,000 Initial Tranche Notional Amount
Credit Default Swap
-- Prior Rating: B2, on review for possible downgrade
-- Current Rating: Ca
Issuer: Pampelonne Mezz Swap D1
Class Description: $12,500,000 Initial Tranche Notional Amount
Credit Default Swap
-- Prior Rating: B3, on review for possible downgrade
-- Current Rating: Ca
Issuer: Pampelonne Mezz Swap D2
Class Description: $12,500,000 Initial Tranche Notional Amount
Credit Default Swap
-- Prior Rating: Caa1, on review for possible downgrade
-- Current Rating: Ca
Issuer: Pampelonne Mezz Swap E
Class Description: $12,500,000 Initial Tranche Notional Amount
Credit Default Swap
-- Prior Rating: Baa3, 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.
PARCS-R 2007-8: Moody's Junks Ratings on $25 Mil. Notes From 'Ba2'
------------------------------------------------------------------
Moody's Investors Service downgraded these notes issued by PARCS-R
2007-8:
Class Description: $25,000,000 PARCS-R Master Trust, Class 2007-8
Variable Funding Units
-- 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.
PLASTECH ENGINEERED: Could Be Affected by Axle Strike, Paper Says
-----------------------------------------------------------------
According to the Holland Sentinel, the strike by American Axle
and Manufacturing Holdings Inc. workers could affect Plastech
Engineered Products, Inc. and its debtor-affiliates.
As widely reported, The International Union, United Automobile,
Aerospace and Agricultural Implement Workers of America, which
represents American Axle's employees, has called for a strike
and mass picket against Axle at its Detroit, Michigan,
headquarters.
The strike, which has been ongoing for more than five weeks, has
forced General Motors Corp., one of Plastech's key customers, to
idle or ramp down production at 30 of its plants that make large
trucks and sports utility vehicles. Union officials say the
company may soon have to bring down lines in Kansas City, Kan.,
and Orion Township near Detroit that make the Chevy Malibu, the
Holland Sentinel reported.
Plastech runs Johnson Controls, Inc.' Southview plant in Holland,
Michigan, and has 30 employees who make the floor consoles for
the Malibu. If the Malibu production is interrupted, so too
would the production of the interior parts for the vehicle,
according to the same report.
The strike, which involved 3,650 workers, started due to American
Axle's withholding of data regarding pensions, health care and
profit sharing. The company has also sought to cut wages and
benefits by half, according to the Detroit Free Press.
About American Axle
Headquartered in Detroit, Michigan, American Axle & Manufacturing
Holdings Inc. (NYSE:AXL) -- http://www.aam.com/-- and its wholly
owned subsidiary, American Axle & Manufacturing, Inc.,
manufactures, engineers, designs and validates driveline and
drivetrain systems and related components and modules, chassis
systems and metal-formed products for light trucks, sport utility
vehicles and passenger cars. In addition to locations in the
United States (in Michigan, New York and Ohio), the company also
has offices or facilities in Brazil, China, Germany, India, Japan,
Luxembourg, Mexico, Poland, South Korea and the United Kingdom.
* * *
As reported in the Troubled Company Reporter on April 4, 2008,
Moody's Investors Service placed American Axle & Manufacturing
Holdings, Inc.'s Ba3 Corporate Family Rating under review for
downgrade.
As reported in the Troubled Company Reporter on Nov. 27, 2007,
Moody's Investors Service affirmed American Axle & Manufacturing
Holdings, Inc.'s Corporate Family rating of Ba3 as well its senior
unsecured rating of Ba3 to American Axle & Manufacturing Inc.'s
notes and term loan. At the same time, the rating agency revised
the rating outlook to stable from negative and renewed the
Speculative Grade Liquidity rating of SGL-1.
About Plastech Engineered
Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --
http://www.plastecheng.com/-- is full-service automotive
supplier of interior, exterior and underhood components. It
designs and manufactures blow-molded and injection-molded plastic
products primarily for the automotive industry. Plastech's
products include automotive interior trim, underhood components,
bumper and other exterior components, and cockpit modules.
Plastech's major customers are General Motors, Ford Motor Company,
and Toyota, as well as Johnson Controls, Inc.
Plastech is a privately held company and is the largest family-
owned company in the state of Michigan. The company is certified
as a Minority Business Enterprise by the state of Michigan.
Plastech maintains more than 35 manufacturing facilities in the
midwestern and southern United States. The company's products are
sold through an in-house sales force.
The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts. The Debtors
chose Jones Day as their special corporate and litigation counsel.
Lazard Freres & Co. LLC serves as the Debtors' investment bankers,
while Conway, MacKenzie & Dunleavy provide financial advisory
services. The Debtors also employed Donlin, Recano & Company as
their claims and noticing agent.
An Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases.
As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000. (Plastech Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or
215/945-7000)
PLASTECH ENGINEERED: Court Approves Claim Waiver re DIP Financing
-----------------------------------------------------------------
The Honorable Phillip Shefferly of the U.S. Bankruptcy Court for
the Eastern District of Michigan approved Plastech Engineered
Products, Inc. and its debtor-affiliates' waiver and release of
any and all claims against their lenders and their agents under or
in connection with:
i) the Postpetition Loan and Security Agreement, which
initially provided for a $38,000,000 revolving credit
facility; and
ii) the $200,000,000 Revolving Credit Facility, entered into
prepetition, on Feb. 12, 2007.
The same group of lenders, with Bank of America, N.A., as
administrative agent, provided the Revolving Loans.
At the Debtors' behest, the Court also orders that all liens of
the Revolving DIP Lenders and the Revolving Lenders against
property of the Debtors' estates are legal, valid, binding,
enforceable, perfected and non-avoidable.
Additionally, the Court confirms that:
(a) Plastech's prepetition debt to the Revolving Lenders is
allowable as a fully secured claim against the Debtors,
and is not subject to offset, counterclaim, recoupment,
avoidance, recharacterization or equitable subordination;
and
(b) the Revolving DIP Lenders' liens and security interests in
the Debtors' assets, and the prepetition liens and
security interests of the Revolving Lenders in the
Debtors' assets are legal, valid, binding, enforceable,
perfected and non-avoidable liens.
The Court approves the Debtors' waiver from:
(i) challenging the validity or amount of, and from seeking to
offset or subordinate, any of the Prepetition Debt;
(ii) challenging the validity, extent, perfection or priority
of, and from seeking to avoid or subordinate, any security
interests or other liens of the Revolving Lenders in any
prepetition collateral; and
(iii) asserting against the Revolving Lenders a claim under any
contract or tort liability theories or pursuant to
Sections 105, 510, 544, 547, 548, 549, 550 or 553 of the
Bankruptcy Code; and
(iv) seeking to surcharge Revolving Lenders or Revolving DIP
Lenders, or to recover any amounts from any of them or any
collateral securing any of their respective claims,
pursuant to Section 506(c) or otherwise.
The waiver of the Section 506(c) surcharge will not be be
effective until the closing of the DIP financing provided by an
entity sponsored by Plastech's major customers, which include
General Motors Corporation, Ford Motor Company, and Johnson
Controls Inc. Plastech had informed the Court that absent the
waiver and release of the potential claims, the Participating
Customers will not consummate the Customer Financing, which
contemplates the purchase of the Revolving Facility provided by
the BofA, in addition to the infusion of additional cash.
About Plastech Engineered
Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --
http://www.plastecheng.com/-- is full-service automotive
supplier of interior, exterior and underhood components. It
designs and manufactures blow-molded and injection-molded plastic
products primarily for the automotive industry. Plastech's
products include automotive interior trim, underhood components,
bumper and other exterior components, and cockpit modules.
Plastech's major customers are General Motors, Ford Motor Company,
and Toyota, as well as Johnson Controls, Inc.
Plastech is a privately held company and is the largest family-
owned company in the state of Michigan. The company is certified
as a Minority Business Enterprise by the state of Michigan.
Plastech maintains more than 35 manufacturing facilities in the
midwestern and southern United States. The company's products are
sold through an in-house sales force.
The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts. The Debtors
chose Jones Day as their special corporate and litigation counsel.
Lazard Freres & Co. LLC serves as the Debtors' investment bankers,
while Conway, MacKenzie & Dunleavy provide financial advisory
services. The Debtors also employed Donlin, Recano & Company as
their claims and noticing agent.
An Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases.
As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000. (Plastech Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or
215/945-7000)
PLASTECH ENGINEERED: Wants Chrysler to Include Defendants in Suit
-----------------------------------------------------------------
Plastech Engineered Products Inc. and its debtor-affiliates ask
the U.S. Bankruptcy Court for the Eastern District of Michigan to
dismiss Chrysler LLC's complaint for failing to join several
parties-in-interest as defendants in Chrysler's adversary
proceedings against the Debtors, pursuant to Rule 12(b)(7)
of the Federal Rules of Civil Procedure.
According to the Debtors, Chrysler has failed to join as
defendants:
* Goldman Sachs Credit Partners L.P. -- as collateral agent
for the Debtors' First Lien Term Loan Lenders;
* the Bank of New York -- as collateral agent for the
Debtors' Second Lien Term Loan Lenders;
* Wells Fargo Foothill, Inc. -- as collateral agent for the
Debtors' Prepetition Revolving Lenders;
* Bank of America, N.A. -- as collateral agent for the
Debtors' Postpetition Revolving Lenders;
* manufacturers of the Tooling, each of which have asserted
a secured claim against the Tooling, and;
* the Debtors' other major customers -- Ford Motor Company,
General Motors Corporation, and Johnson Controls, Inc.
The Steering Committee of First Lien Term Loan Lenders also asked
for the dismissal of the case due to Chrysler's failure to join,
particularly, Goldman Sachs Credit Partners, L.P., and for
failing to provide reason for the exclusion.
Subsequently, the Debtors sought the Court's permission to amend
their Motion to Dismiss to clarify that:
i) Plastech Manufacturing Corporation and Plastech Engineered
Products, Inc., are the same entities;
ii) Huron Plastics Group, Inc., does business as LDM
Technologies, Inc, and are the same entities;
iii) Romulus, Inc., was improperly named as defendant.
Chrysler contends that to include joinder parties, such as
Goldman Sachs, is unnecessary, pursuant to Civil Rule 19(b),
because:
a) the Court can grant the relief among the existing parties
by granting Chrysler possession of the tooling while
deferring any adjudication of related issues. The
escrowed fund for $167,000,000, which Chrysler provided
would sufficiently address many of the objections by these
joinder parties;
2) the joinder parties have already submitted to the
jurisdiction of the Court;
3) the Court can simply order that Chrysler is entitled to
possession of tooling and defer on any additional issues.
According to Michael C. Hammer, Esq., at Dickinson Wright PLLC,
in Ann Arbor, Michigan, Civil Rule 19 provides that the Court
must determine whether a party is "necessary, and simply join the
parties, unless a joinder is impossible, in which case the Court
may dismiss the case without prejudice, only if the party at
issue is indispensable."
Parties Intervene
Reko Tool & Mould and Roush Manufacturing, Inc., have sought the
Court's permission to intervene. Reko claims to have validly
perfected liens on the tooling while Roush asserts that unless it
is a party to the proceeding, Roush cannot protect its interest
in the molds, which are the subject of Chrysler's adversary
proceeding.
The Debtors, however, oppose Roush's request to intervene stating
that Roush failed to comply with the procedures set forth in the
Michigan Mold Lien Act, thereby failing to perfect its lien on
the molds.
Meanwhile, the Court has allowed H.S. Die & Engineering, Inc., to
participate as an intervening defendant. The decision was
opposed by the Debtors purporting that H.S. Die's crossclaim
should be dismissed, pursuant to Civil Rule 12(b)(6). The
Debtors assert that H.S. Die's failure to state a claim signifies
a lack of secured interest in the contested tooling.
On the contrary, H.S. Die asserts, among others, that it holds a
valid, perfected and first priority liens in the tooling, and is
entitled to immediate possession of the tools in accordance with
Article 9 of the Uniform Commercial Code in the State of
Michigan.
About Plastech Engineered
Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --
http://www.plastecheng.com/-- is full-service automotive
supplier of interior, exterior and underhood components. It
designs and manufactures blow-molded and injection-molded plastic
products primarily for the automotive industry. Plastech's
products include automotive interior trim, underhood components,
bumper and other exterior components, and cockpit modules.
Plastech's major customers are General Motors, Ford Motor Company,
and Toyota, as well as Johnson Controls, Inc.
Plastech is a privately held company and is the largest family-
owned company in the state of Michigan. The company is certified
as a Minority Business Enterprise by the state of Michigan.
Plastech maintains more than 35 manufacturing facilities in the
midwestern and southern United States. The company's products are
sold through an in-house sales force.
The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts. The Debtors
chose Jones Day as their special corporate and litigation counsel.
Lazard Freres & Co. LLC serves as the Debtors' investment bankers,
while Conway, MacKenzie & Dunleavy provide financial advisory
services. The Debtors also employed Donlin, Recano & Company as
their claims and noticing agent.
An Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases.
As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000. (Plastech Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or
215/945-7000)
PLETTENBERG BAY: Moody's Junks Ratings on Five Classes of Notes
---------------------------------------------------------------
Moody's Investors Service downgraded ratings of six classes of
notes issued by Plettenberg Bay CDO Limited, and left on review
for possible further downgrade the ratings of two of these
classes. The notes affected by this rating action are:
Class Description: $96,000,000 Class A-1 Floating Rate Senior
Secured Notes Due 2047
-- Prior Rating: Baa3, on review for possible downgrade
-- Current Rating: Ba2, on review for possible downgrade
Class Description: $40,000,000 Class A-2 Floating Rate Senior
Secured Notes Due 2047
-- Prior Rating: Ba2, on review for possible downgrade
-- Current Rating: Caa3, on review for possible downgrade
Class Description: $24,000,000 Class B Floating Rate Subordinate
Secured Deferrable Notes Due 2047
-- Prior Rating: B3, on review for possible downgrade
-- Current Rating: Ca
Class Description: $13,000,000 Class C Floating Rate Junior
Subordinate Secured Deferrable Notes Due 2047
-- Prior Rating: Ca
-- Current Rating: C
Class Description: $10,250,000 Class D Floating Rate Junior
Subordinate Secured Deferrable Notes Due 2047
-- Prior Rating: Ca
-- Current Rating: C
Class Description: $19,500,000 Income Notes Due 2047
-- Prior Rating: Ca
-- Current Rating: C
The rating downgrade actions reflect deterioration in the credit
quality of the underlying portfolio, as well as the occurrence on
March 4, 2008, as reported by the Trustee, of an event of default
that occurs when the Class A Principal Coverage Ratio is less than
100 per cent, as described in Section 5.1(h) of the Indenture
dated March 8, 2007.
As provided in Article V of the Indenture during the occurrence
and continuance of an Event of Default, certain parties to the
transaction may be entitled to direct the Trustee to take
particular actions with respect to the Collateral Debt Securities
and the Notes.
The rating downgrades taken reflect the increased expected loss
associated with each tranche. Losses are attributed to diminished
credit quality on the underlying portfolio. The severity of
losses of certain tranches may be different, however, depending on
the timing and choice of remedy to be pursued following an event
of default. Because of this uncertainty, the ratings assigned to
the Class A-1 Notes and Class A-2 Notes remain on review for
possible further action.
Plettenberg Bay CDO Limited is a collateralized debt obligation
backed primarily by a portfolio of RMBS securities and CDO
securities.
PRESS REALTY: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Press Realty Advisors II, LLC
P.O. Box 170
Kaysville, UT 84037
Bankruptcy Case No.: 08-22212
Chapter 11 Petition Date: April 9, 2008
Court: District of Utah (Salt Lake City)
Debtor's Counsel: Andres' Diaz, Esq.
(courtmail@adexpresslaw.com)
1 On 1 Legal Services
307 West 200 South, Suite 3004
Salt Lake City, UT 84101
Tel: (801) 596-1661
Fax: (801) 359-6803
http://www.adexpresslaw.com/
Estimated Assets: Less than $50,000
Estimated Debts: $1 million to $10 million
The Debtor did not file a list of its largest unsecured creditors.
RADIAN GROUP: Inks Waiver Agreement to Suspend Covenant Ratings
---------------------------------------------------------------
Radian Group Inc. entered into a waiver agreement with its lenders
under its credit facility. The agreement provides for a
suspension of the ratings covenant included in such credit
facility.
Radian is not in default of that covenant, but has requested
temporary relief from it prospectively. The relief under the
waiver agreement is intended to provide Radian and its lenders
with sufficient time to discuss a definitive amendment to the
credit agreement, which must be entered into by April 30, 2008, to
avoid reinstatement of the covenant.
Radian is currently in discussions with its lenders regarding this
amendment. During the period the waiver is in effect, Radian may
not borrow any additional amounts under the credit facility.
Headquartered in Philadelphia, Pennsylvania, Radian Group Inc.
(NYSE:RDN) -- http://www.radian.biz/-- is a credit risk
management company. Radian develops innovative financial
solutions by applying its core mortgage credit risk expertise and
structured finance capabilities to the credit enhancement needs of
the capital markets, through credit insurance products. The
company also provides credit enhancement for public finance and
other corporate and consumer assets on both a direct and
reinsurance basis and holds strategic interests in credit-based
consumer asset businesses. The company has operations in New York
and London.
RAMP TRUSTS: Moody's Lowers Ratings on 156 Tranches From 20 Deals
-----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of 156 tranches
from 20 transactions issued by RAMP. Additionally, 38 downgraded
tranches remain on review for possible further downgrade and 4
tranches previously on review have been confirmed.
The collateral backing these transactions consists primarily of
first-lien, fixed and adjustable-rate, subprime residential
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 surveillance process.
Issuer: RAMP Series 2005-EFC4 Trust
-- Cl. M-7, Downgraded to Baa2 from Baa1
-- Cl. M-8, Downgraded to Ba2 from Baa2
-- Cl. M-9, Downgraded to Caa1 from Baa3
-- Cl. M-10, Downgraded to Caa2 from Ba1
Issuer: RAMP Series 2005-EFC5 Trust
-- Cl. M-8, Downgraded to Ba2 from Baa2
-- Cl. M-9, Downgraded to B3 from Baa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-10, Downgraded to Caa2 from Ba1
Issuer: RAMP Series 2005-EFC6 Trust
-- Cl. M-7, Downgraded to Ba1 from Baa1
-- Cl. M-8, Downgraded to B3 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-9, Downgraded to Caa2 from Baa3
Issuer: RAMP Series 2005-RS6 Trust
-- Cl. M-4, Confirmed at A1
-- Cl. M-5, Confirmed at A2
-- Cl. M-6, Confirmed at A3
-- Cl. M-7, Downgraded to Baa3 from Baa1
-- Cl. M-8, Downgraded to B2 from Baa2
-- Cl. M-9, Downgraded to Caa1 from Baa3
-- Cl. M-10, Downgraded to Caa2 from Ba1
Issuer: RAMP Series 2005-RS7 Trust
-- Cl. M-3, Confirmed at Aa3
-- Cl. M-4, Downgraded to A2 from A1
-- Cl. M-5, Downgraded to Baa2 from A2
-- Cl. M-6, Downgraded to Ba3 from A3
-- Cl. M-7, Downgraded to B2 from Baa1
-- Cl. M-8, Downgraded to B2 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-9, Downgraded to B3 from Baa3; Placed Under Review for
further Possible Downgrade
-- Cl. B, Downgraded to Caa2 from Ba1
Issuer: RAMP Series 2005-RS8 Trust
-- Cl. M-2, Downgraded to A3 from Aa2
-- Cl. M-3, Downgraded to Baa2 from Aa3
-- Cl. M-4, Downgraded to Ba2 from A1
-- Cl. M-5, Downgraded to B1 from A2
-- Cl. M-6, Downgraded to B2 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to B3 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-8, Downgraded to Caa1 from Baa2
-- Cl. M-9, Downgraded to Caa2 from Baa3
-- Cl. B-1, Downgraded to Caa3 from Ba1
-- Cl. B-2, Downgraded to Ca from Ba2
Issuer: RAMP Series 2005-RZ3 Trust
-- Cl. M-7, Downgraded to Baa3 from Baa1
-- Cl. M-8, Downgraded to B1 from Baa2
-- Cl. M-9, Downgraded to B2 from Baa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-10, Downgraded to Caa1 from Ba1
Issuer: RAMP Series 2006-EFC1 Trust
-- Cl. M-6, Downgraded to Baa1 from A3
-- Cl. M-7, Downgraded to B1 from Baa2
-- Cl. M-8, Downgraded to B3 from Ba1; Placed Under Review for
further Possible Downgrade
-- Cl. M-9, Downgraded to Caa1 from Ba3
Issuer: RAMP Series 2006-EFC2 Trust
-- Cl. M-4, Downgraded to A3 from A1
-- Cl. M-5, Downgraded to Baa3 from A3
-- Cl. M-6, Downgraded to B1 from Baa1
-- Cl. M-7, Downgraded to B1 from Ba1; Placed Under Review for
further Possible Downgrade
-- Cl. M-8, Downgraded to B2 from Ba2; Placed Under Review for
further Possible Downgrade
-- Cl. M-9, Downgraded to B3 from Ba3; Placed Under Review for
further Possible Downgrade
-- Cl. B, Downgraded to Caa1 from B3
Issuer: RAMP Series 2006-NC1 Trust
-- Cl. M-3, Downgraded to A1 from Aa3
-- Cl. M-4, Downgraded to Baa3 from A1
-- Cl. M-5, Downgraded to B2 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to B3 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to Caa1 from Ba1
-- Cl. M-8, Downgraded to Caa2 from Ba3
-- Cl. M-9, Downgraded to Caa3 from B3
Issuer: RAMP Series 2006-NC2 Trust
-- Cl. M-2, Downgraded to A2 from Aa2
-- Cl. M-3, Downgraded to Ba1 from Aa3
-- Cl. M-4, Downgraded to B1 from A1; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B2 from A2; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to B3 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to Caa1 from Baa3
-- Cl. M-8, Downgraded to Caa2 from Ba1
-- Cl. M-9, Downgraded to Caa3 from B2
-- Cl. B-1, Downgraded to Ca from B3
Issuer: RAMP Series 2006-NC3 Trust
-- Cl. M-2, Downgraded to Baa1 from Aa2
-- Cl. M-3, Downgraded to Ba2 from Aa3
-- Cl. M-4, Downgraded to B1 from A1; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B2 from A2; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to B3 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to Caa1 from Baa3
-- Cl. M-8, Downgraded to Caa2 from Ba2
-- Cl. M-9, Downgraded to Caa3 from B2
-- Cl. M-10, Downgraded to Ca from B3
Issuer: RAMP Series 2006-RS1 Trust
-- Cl. M-2, Downgraded to Baa1 from Aa2
-- Cl. M-3, Downgraded to Ba2 from Aa3
-- Cl. M-4, Downgraded to B1 from A1; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B2 from A2; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to B3 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to Caa1 from Baa1
-- Cl. M-8, Downgraded to Caa2 from Baa2
-- Cl. M-9, Downgraded to Caa3 from Baa3
Issuer: RAMP Series 2006-RS2 Trust
-- Cl. M-2, Downgraded to Baa1 from Aa2
-- Cl. M-3, Downgraded to Ba1 from Aa2
-- Cl. M-4, Downgraded to B2 from Aa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B3 from A1; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to B3 from A2; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to Caa1 from A3
-- Cl. M-8, Downgraded to Caa2 from Baa1
-- Cl. M-9, Downgraded to Caa3 from Ba1
Issuer: RAMP Series 2006-RS3 Trust
-- Cl. A-3, Downgraded to A1 from Aaa
-- Cl. A-4, Downgraded to Baa1 from Aaa
-- Cl. M-1, Downgraded to Ba3 from Aa1
-- Cl. M-2, Downgraded to B1 from Aa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-4, Downgraded to Caa1 from A1
-- Cl. M-5, Downgraded to Caa2 from A2
-- Cl. M-6, Downgraded to Caa3 from A3
-- Cl. M-7, Downgraded to Caa3 from Baa1
-- Cl. M-8, Downgraded to Ca from Baa2
-- Cl. M-9, Downgraded to C from Baa3
Issuer: RAMP Series 2006-RS4 Trust
-- Cl. M-3, Downgraded to A3 from Aa3
-- Cl. M-4, Downgraded to Ba1 from A1
-- Cl. M-5, Downgraded to B2 from A2
-- Cl. M-6, Downgraded to B2 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to B3 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-8, Downgraded to Caa1 from Baa1
-- Cl. M-9, Downgraded to Caa2 from Baa2
Issuer: RAMP Series 2006-RS5 Trust
-- Cl. A-3, Downgraded to Aa1 from Aaa
-- Cl. A-4, Downgraded to Aa2 from Aaa
-- Cl. M-1, Downgraded to Baa3 from Aa1
-- Cl. M-2, Downgraded to Ba3 from Aa2
-- Cl. M-3, Downgraded to B1 from Aa3
-- Cl. M-4, Downgraded to B1 from A1; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B2 from A2; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to B3 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to Caa1 from Baa1
-- Cl. M-8, Downgraded to Ca from Baa2
-- Cl. M-9, Downgraded to C from Baa3
Issuer: RAMP Series 2006-RS6 Trust
-- Cl. A-2, Downgraded to Aa1 from Aaa
-- Cl. A-3, Downgraded to Baa3 from Aaa
-- Cl. A-4, Downgraded to Ba2 from Aaa
-- Cl. M-1, Downgraded to B1 from Aa1
-- Cl. M-2, Downgraded to B2 from Aa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-4, Downgraded to Caa1 from A1
-- Cl. M-5, Downgraded to Caa2 from A2
-- Cl. M-6, Downgraded to Caa3 from A3
-- Cl. M-7, Downgraded to Caa3 from Baa1
-- Cl. M-8, Downgraded to Ca from Baa2
-- Cl. M-9, Downgraded to C from Baa3
-- Cl. B, Downgraded to C from Ba2
Issuer: RAMP Series 2007-RS1 Trust
-- Cl. A-2, Downgraded to Aa2 from Aaa
-- Cl. A-3, Downgraded to Ba2 from Aaa
-- Cl. A-4, Downgraded to B2 from Aaa
-- Cl. A-5, Downgraded to B2 from Aaa
-- Cl. M-1, Downgraded to B3 from Aa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-2, Downgraded to Caa1 from Aa2
-- Cl. M-3, Downgraded to Caa2 from Aa3
-- Cl. M-4, Downgraded to Caa3 from A1
-- Cl. M-5, Downgraded to Ca from A2
-- Cl. M-6, Downgraded to Ca from A3
-- Cl. M-7, Downgraded to C from Baa1
-- Cl. M-8, Downgraded to C from Baa2
-- Cl. M-9, Downgraded to C from Baa3
-- Cl. M-10, Downgraded to C from Ba1
Issuer: RAMP Series 2007-RS2 Trust
-- Cl. A-2, Downgraded to Aa2 from Aaa
-- Cl. A-3, Downgraded to Aa3 from Aaa
-- Cl. M-1, Downgraded to Aa2 from Aa1
-- Cl. M-2, Downgraded to Baa1 from Aa2
-- Cl. M-3, Downgraded to Ba2 from Aa3
-- Cl. M-4, Downgraded to B1 from A1; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B2 from A2; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to B3 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to Caa1 from Baa1
RASC TRUSTS: Moody's Cuts Ratings of Tranches From 33 RMBS Deals
----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of 205 tranches
from 33 subprime RMBS transactions issued by RASC. Additionally,
68 tranches remain on review for possible further downgrade.
The collateral backing these transactions consists primarily of
first-lien, fixed and adjustable-rate, subprime residential
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 surveillance process.
Complete rating actions are:
Issuer: RASC Series 2005-AHL1 Trust
-- Cl. M-4, Downgraded to A2 from A1
-- Cl. M-5, Downgraded to Baa3 from A2
-- Cl. M-6, Downgraded to B2 from A3
-- Cl. M-7, Downgraded to Caa1 from Baa1
-- Cl. M-8, Downgraded to Caa2 from Baa2
-- Cl. M-9, Downgraded to Caa3 from B2
Issuer: RASC Series 2005-AHL2 Trust
-- Cl. M-3, Downgraded to A2 from Aa3
-- Cl. M-4, Downgraded to Baa2 from A1
-- Cl. M-5, Downgraded to Ba3 from A2
-- Cl. M-6, Downgraded to B2 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to B3 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-8, Downgraded to Caa1 from Baa2
-- Cl. M-9, Downgraded to Caa2 from Baa3
-- Cl. M-10, Downgraded to Caa3 from Ba1
Issuer: RASC Series 2005-AHL3 Trust
-- Cl. M-1, Downgraded to A1 from Aa1
-- Cl. M-2, Downgraded to Ba1 from Aa2
-- Cl. M-3, Downgraded to B3 from Aa3
-- Cl. M-4, Downgraded to B3 from A1; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to Caa1 from A2
-- Cl. M-6, Downgraded to Caa2 from Baa2
-- Cl. M-7, Downgraded to Caa3 from Ba1
-- Cl. M-8, Downgraded to Ca from B1
-- Cl. M-9, Downgraded to C from Caa1
Issuer: RASC Series 2005-EMX3 Trust
-- Cl. M-8, Downgraded to Baa3 from Baa2
-- Cl. M-9, Downgraded to B3 from Baa3
-- Cl. M-10, Downgraded to Caa1 from Ba1
Issuer: RASC Series 2005-EMX4 Trust
-- Cl. M-7, Downgraded to Baa2 from Baa1
-- Cl. M-8, Downgraded to Ba2 from Baa2
-- Cl. M-9, Downgraded to B2 from Baa3; Placed Under Review for
further Possible Downgrade
Issuer: RASC Series 2005-KS10 Trust
-- Cl. M-6, Downgraded to Baa3 from A3
-- Cl. M-7, Downgraded to B2 from Baa1
-- Cl. M-8, Downgraded to B2 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-9, Downgraded to B3 from Baa3; Placed Under Review for
further Possible Downgrade
-- Cl. B, Downgraded to Caa1 from Ba1
Issuer: RASC Series 2005-KS11 Trust
-- Cl. M-5, Downgraded to A3 from A2
-- Cl. M-6, Downgraded to Baa3 from A3
-- Cl. M-7, Downgraded to B2 from Baa1
-- Cl. M-8, Downgraded to B2 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-9, Downgraded to Caa1 from Baa3
Issuer: RASC Series 2005-KS12 Trust
-- Cl. M-6, Downgraded to Baa2 from A3
-- Cl. M-7, Downgraded to Ba3 from Baa1
-- Cl. M-8, Downgraded to B3 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-9, Downgraded to Caa1 from Baa3
Issuer: RASC Series 2005-KS7 Trust
-- Cl. M-9, Downgraded to Ba3 from Baa3
-- Cl. M-10, Downgraded to B3 from Ba1; Placed Under Review for
further Possible Downgrade
Issuer: RASC Series 2005-KS8 Trust
-- Cl. M-8, Downgraded to Ba2 from Baa2
-- Cl. M-9, Downgraded to B2 from Baa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-10, Downgraded to B3 from Ba3; Placed Under Review for
further Possible Downgrade
Issuer: RASC Series 2005-KS9 Trust
-- Cl. M-9, Downgraded to B1 from Baa3
-- Cl. B-1, Downgraded to B3 from Ba1; Placed Under Review for
further Possible Downgrade
-- Cl. B-2, Downgraded to Caa1 from B1
Issuer: RASC Series 2006-EMX1 Trust
-- Cl. M-7, Downgraded to Baa3 from Baa1
-- Cl. M-8, Downgraded to B2 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-9, Downgraded to B3 from Ba2; Placed Under Review for
further Possible Downgrade
Issuer: RASC Series 2006-EMX2 Trust
-- Cl. M-6, Downgraded to Baa2 from A3
-- Cl. M-7, Downgraded to B2 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-8, Downgraded to B3 from Ba1; Placed Under Review for
further Possible Downgrade
-- Cl. M-9, Downgraded to Caa1 from Ba3
Issuer: RASC Series 2006-EMX3 Trust
-- Cl. M-4, Downgraded to Baa1 from A1
-- Cl. M-5, Downgraded to B1 from A3
-- Cl. M-6, Downgraded to B2 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to Caa1 from Ba2
-- Cl. M-8, Downgraded to Caa2 from B1
-- Cl. M-9, Downgraded to Caa3 from B3
Issuer: RASC Series 2006-EMX4 Trust
-- Cl. M-2, Downgraded to A3 from Aa2
-- Cl. M-3, Downgraded to Ba1 from Aa3
-- Cl. M-4, Downgraded to B1 from A2; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B2 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to Caa1 from Baa3
-- Cl. M-7, Downgraded to Caa2 from Ba3
-- Cl. M-8, Downgraded to Caa3 from B3
Issuer: RASC Series 2006-EMX5 Trust
-- Cl. M-2, Downgraded to Baa1 from Aa2
-- Cl. M-3, Downgraded to Ba3 from Aa3
-- Cl. M-4, Downgraded to B2 from A2; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B3 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to Caa1 from Baa3
-- Cl. M-7, Downgraded to Caa2 from Ba2
-- Cl. M-8, Downgraded to Caa3 from B3
Issuer: RASC Series 2006-EMX6 Trust
-- Cl. M-1, Downgraded to Aa3 from Aa1
-- Cl. M-2, Downgraded to Ba2 from Aa2
-- Cl. M-3, Downgraded to B1 from Aa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-4, Downgraded to B2 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B3 from Baa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to Caa1 from Ba2
-- Cl. M-7, Downgraded to Caa2 from B3
-- Cl. M-8, Downgraded to Caa3 from B3
-- Cl. M-9, Downgraded to Ca from Caa1
Issuer: RASC Series 2006-EMX7 Trust
-- Cl. M-1, Downgraded to Aa3 from Aa1
-- Cl. M-2, Downgraded to Ba1 from Aa2
-- Cl. M-3, Downgraded to B1 from Aa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-4, Downgraded to B2 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B2 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to B3 from Ba1; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to Caa1 from Ba3
-- Cl. M-8, Downgraded to Caa2 from B3
-- Cl. M-9, Downgraded to Caa3 from B3
Issuer: RASC Series 2006-EMX8 Trust
-- Cl. M-1, Downgraded to A3 from Aa1
-- Cl. M-2, Downgraded to B1 from Aa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-3, Downgraded to B2 from Aa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-4, Downgraded to B3 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B3 from Ba1; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to Caa1 from Ba2
-- Cl. M-7, Downgraded to Caa2 from B3
-- Cl. M-8, Downgraded to Caa3 from B3
Issuer: RASC Series 2006-EMX9 Trust
-- Cl. M-1, Downgraded to Aa3 from Aa1
-- Cl. M-2, Downgraded to B1 from Aa2
-- Cl. M-3, Downgraded to B1 from Aa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-4, Downgraded to B2 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B3 from Baa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to Caa1 from Ba2
-- Cl. M-7, Downgraded to Caa2 from Ba3
-- Cl. M-8, Downgraded to Caa3 from B3
-- Cl. M-9, Downgraded to Ca from Caa1
-- Cl. M-10, Downgraded to C from Ca
Issuer: RASC Series 2006-KS1 Trust
-- Cl. M-7, Downgraded to B3 from Ba3
-- Cl. M-8, Downgraded to B3 from B2; Placed Under Review for
further Possible Downgrade
-- Cl. M-9, Downgraded to Caa1 from B3
Issuer: RASC Series 2006-KS2 Trust
-- Cl. M-7, Downgraded to Ba2 from Baa1
-- Cl. M-8, Downgraded to B2 from Baa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-9, Downgraded to B3 from Ba1; Placed Under Review for
further Possible Downgrade
-- Cl. M-10, Downgraded to Caa2 from B2
Issuer: RASC Series 2006-KS3 Trust
-- Cl. M-5, Downgraded to Baa2 from A2
-- Cl. M-6, Downgraded to B1 from A3
-- Cl. M-7, Downgraded to B3 from Baa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-8, Downgraded to Caa1 from Ba1
-- Cl. M-9, Downgraded to Caa2 from Ba3
-- Cl. M-10, Downgraded to Caa3 from B3
Issuer: RASC Series 2006-KS4 Trust
-- Cl. M-3, Downgraded to A1 from Aa3
-- Cl. M-4, Downgraded to Baa2 from A1
-- Cl. M-5, Downgraded to B1 from Baa1
-- Cl. M-6, Downgraded to B2 from Baa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to B3 from Ba3; Placed Under Review for
further Possible Downgrade
-- Cl. M-8, Downgraded to Caa2 from B3
-- Cl. M-9, Downgraded to Ca from Caa2
Issuer: RASC Series 2006-KS5 Trust
-- Cl. M-3, Downgraded to A1 from Aa3
-- Cl. M-4, Downgraded to Baa3 from A1
-- Cl. M-5, Downgraded to B1 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to B2 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to Caa1 from Ba1
-- Cl. M-8, Downgraded to Caa2 from Ba3
-- Cl. M-9, Downgraded to Caa3 from B2
-- Cl. B, Downgraded to Ca from B3
Issuer: RASC Series 2006-KS6 Trust
-- Cl. M-3, Downgraded to A1 from Aa3
-- Cl. M-4, Downgraded to Baa2 from A1
-- Cl. M-5, Downgraded to B1 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to B2 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to B3 from Ba2; Placed Under Review for
further Possible Downgrade
-- Cl. M-8, Downgraded to Caa1 from Ba3
-- Cl. M-9, Downgraded to Caa2 from B3
-- Cl. B, Downgraded to Caa3 from B3
Issuer: RASC Series 2006-KS7 Trust
-- Cl. M-2, Downgraded to Aa3 from Aa2
-- Cl. M-3, Downgraded to Baa1 from Aa3
-- Cl. M-4, Downgraded to Ba3 from A1
-- Cl. M-5, Downgraded to B1 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to B2 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to B3 from Ba2; Placed Under Review for
further Possible Downgrade
-- Cl. M-8, Downgraded to Caa1 from Ba3
-- Cl. M-9, Downgraded to Caa2 from B3
Issuer: RASC Series 2006-KS8 Trust
-- Cl. M-1, Downgraded to A2 from Aa1
-- Cl. M-2, Downgraded to Ba3 from Aa2
-- Cl. M-3, Downgraded to B1 from Aa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-4, Downgraded to B2 from A2; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B3 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to Caa1 from Baa3
-- Cl. M-7, Downgraded to Caa2 from Ba2
-- Cl. M-8, Downgraded to Caa3 from Ba3
-- Cl. M-9, Downgraded to Ca from B3
Issuer: RASC Series 2006-KS9 Trust
-- Cl. M-1S, Downgraded to A3 from Aa1
-- Cl. M-2S, Downgraded to B1 from Aa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-3S, Downgraded to B2 from Aa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-4, Downgraded to B3 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to Caa1 from Ba1
-- Cl. M-6, Downgraded to Caa2 from Ba3
-- Cl. M-7, Downgraded to Caa3 from B3
-- Cl. M-8, Downgraded to Ca from Caa2
Issuer: RASC Series 2007-KS1 Trust
-- Cl. M-2S, Downgraded to A1 from Aa2
-- Cl. M-3S, Downgraded to Baa1 from Aa3
-- Cl. M-4, Downgraded to Ba2 from A3
-- Cl. M-5, Downgraded to B1 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to B2 from Ba1; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to B3 from B1; Placed Under Review for
further Possible Downgrade
-- Cl. M-8, Downgraded to Caa2 from B3
Issuer: RASC Series 2007-KS2 Trust
-- Cl. M-1, Downgraded to Aa3 from Aa1
-- Cl. M-2, Downgraded to Baa3 from Aa2
-- Cl. M-3, Downgraded to B1 from Aa3
-- Cl. M-4, Downgraded to B1 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B2 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to B3 from Ba2; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to Caa1 from B1
-- Cl. M-8, Downgraded to Caa2 from B2
Issuer: RASC Series 2007-KS3 Trust
-- Cl. M-1S, Downgraded to A1 from Aa1
-- Cl. M-2S, Downgraded to Ba3 from Aa2
-- Cl. M-3S, Downgraded to B1 from Aa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-4, Downgraded to B1 from A2; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B2 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to B3 from Baa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to Caa1 from Ba3
-- Cl. M-8, Downgraded to Caa2 from B3
Issuer: RASC Series 2007-KS4 Trust
-- Cl. M-2S, Downgraded to Baa1 from Aa2
-- Cl. M-3S, Downgraded to Baa2 from Aa2
-- Cl. M-4, Downgraded to B1 from A2; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B2 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to B3 from Baa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to Caa1 from Ba3
-- Cl. M-8, Downgraded to Caa2 from B3
RENAISSANCE MORTGAGE: Fitch Downgrades $36.8MM Certificates
-----------------------------------------------------------
Fitch Ratings has taken rating actions on Renaissance mortgage
pass-through certificates. Unless stated otherwise, any bonds
that were previously placed on Rating Watch Negative are now
removed. Affirmations total $201.4 million and downgrades total
$36.8 million. Additionally, $237.8 million was placed on Rating
Watch Negative. Break Loss percentages and Loss Coverage Ratios
for each class are included with the rating actions:
Renaissance HELT 2005-4
-- $151.8 million class A-3 affirmed at 'AAA',
(BL: 50.85, LCR: 2.76);
-- $49.6 million class A-4 affirmed at 'AAA',
(BL: 44.15, LCR: 2.39);
-- $73.1 million class A-5 rated 'AAA', placed on Rating Watch
Negative (BL: 39.44, LCR: 2.14);
-- $54.0 million class A-6 rated 'AAA', placed on Rating Watch
Negative (BL: 39.69, LCR: 2.15);
-- $28.9 million class M-1 rated 'AA+', placed on Rating Watch
Negative (BL: 33.59, LCR: 1.82);
-- $25.8 million class M-2 rated 'AA+', placed on Rating Watch
Negative (BL: 28.43, LCR: 1.54);
-- $17.1 million class M-3 rated 'AA', placed on Rating Watch
Negative (BL: 25.00,LCR: 1.36);
-- $13.6 million class M-4 rated 'AA-', placed on Rating Watch
Negative (BL: 22.29, LCR: 1.21);
-- $13.6 million class M-5 rated 'A+', placed on Rating Watch
Negative (BL: 19.57, LCR: 1.06);
-- $11.8 million class M-6 rated 'A', placed on Rating Watch
Negative (BL: 17.21, LCR: 0.93);
-- $10.9 million class M-7 downgraded to 'B' from 'BBB+'
(BL: 15.08, LCR: 0.82);
-- $8.3 million class M-8 downgraded to 'CCC' from 'BBB'
(BL: 13.55, LCR: 0.73);
-- $8.8 million class M-9 downgraded to 'CC/DR5' from 'BBB'
(BL: 12.00, LCR: 0.65);
-- $8.8 million class M-10 downgraded to 'C/DR5' from 'BBB-'
(BL: 10.73, LCR: 0.58);
Deal Summary
-- Originators: Delta
-- 60+ day Delinquency: 19.12%
-- Realized Losses to date (% of Original Balance): 0.48%
-- Expected Remaining Losses (% of Current balance): 18.45%
-- Cumulative Expected Losses (% of Original Balance): 11.07%
The rating actions are based on changes that Fitch has made to its
subprime loss forecasting assumptions. The updated assumptions
better capture the deteriorating performance of pools from 2007,
2006 and late 2005 with regard to continued poor loan performance
and home price weakness.
R&G FINANCIAL: Receives Regulatory OK for April Dividend Payments
-----------------------------------------------------------------
R&G Financial Corporation received regulatory permission to make
dividend payments for April on its four outstanding series of
preferred stock and distributions for April on its trust preferred
securities issues.
Regulatory approvals are necessary as a result of the company's
agreements with the board of governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation and Commissioner
of Financial Institutions of the Commonwealth of Puerto Rico.
The permission granted by the Federal Reserve was conditioned upon
the financial support provided by Mr. Victor Galan, a director and
former chairman and chief executive officer of the company,
through his purchase of a small portfolio of delinquent loans,
which will assist the company in the partial funding of the
company's April dividend payments.
The company relates that it is very uncertain that future
dividends and distributions will be approved absent material
improvements to the company's liquidity, capital and cash flows.
While it is possible that approval may be obtained and the company
is taking steps to apply for further approvals, the company
expects that the payment of dividends and distributions on its
outstanding preferred stock or its trust preferred securities is
unlikely in the foreseeable future.
About R&G Financial Corp.
Headquartered in San Juan, Puerto Rico, R&G Financial Corp.
(PNK: RGFC.PK) -- http://www.rgonline.com/-- is a financial
holding company with operations in Puerto Rico and the
United States, providing banking, mortgage banking, investments,
consumer finance and insurance through its wholly owned
subsidiaries, R-G Premier Bank, R-G Crown Bank, R&G Mortgage
Corporation, Puerto Rico's second largest mortgage banker, R-G
Investments Corporation, the company's Puerto Rico broker- dealer,
and R-G Insurance Corporation, its Puerto Rico insurance agency.
At June 30, 2006, the company operated 37 bank branches in Puerto
Rico, 35 bank branches in the Orlando, Tampa/St. Petersburg and
Jacksonville, Florida and Augusta, Georgia markets, and 49
mortgage offices in Puerto Rico, including 37 facilities located
within R-G Premier Bank's banking branches.
* * *
R&G Financial Corporation continues to carry Fitch's 'CCC' long-
term issuer default rating which was assigned in September 2007.
RFC CDO: Moody's Reviews 'Ba1' Rating on Class D For Possible Cut
-----------------------------------------------------------------
Moody's Investors Service placed on review for possible downgrade
the ratings on these notes issued by RFC CDO III Ltd.:
Class Description: $92,500,000 Class A-2 Notes Due Dec. 15, 2040
-- 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: $50,000,000 Class B Notes Due Dec. 15, 2040
-- Prior Rating: Aa2
-- Current Rating: A1, on review for possible downgrade
Class Description: $12,500,000 Class C Notes Due Dec. 15, 2040
-- Prior Rating: A2
-- Current Rating: Baa1, on review for possible downgrade
Class Description: $35,000,000 Class D Notes Due Dec. 15, 2040
-- Prior Rating: Baa2
-- Current Rating: Ba1, on review for possible downgrade
According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.
RICHFX INC: Obtains Court Approval on Asset Sale Procedures
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved the bidding procedures submitted by RichFx Inc. in
relation to the auction of its assets.
Bids for the Debtor's assets must be submitted with a letter
indicating its interest to:
a. Debtor's Counsel
Morrison Cohen LLP
909 Third Avenue
New York, NY 10022
Attn: Joseph T. Moldovan, Esq.
Fax: (212) 735-8708
b. Committee Counsel
c. Buyer's Counsel
Cooley Godward Kronish LLP
1114 Avenue of the Americas
New York, NY 10036
Attn: Adam C. Rogoff, Esq.
Nicholas Smithberg, Esq.
Fax: (212) 479-6275
A confidentiality agreement must be signed and requisite financial
and other information must be provided by the bidder. Bids must
be received no later than April 14, 2008, at 10:00 a.m., EST.
Objections to the relief requested in the sale motion -- which the
Debtor submitted to the Court on March 18, 2008, and subsequently
approved by the Court on March 20, 2008 -- should: (i) in writing;
(ii) specify the basis of the objection; and (iii) be filed with
the Court and sent to:
a. Debtor's Counsel
b. Committee Counsel
c. Buyer's Counsel
d. RichFx Ltd.
c/o Ofer Shapira, Adv., Zellermayer, Pelossof & Co.
The Rubenstein House, 20 Lincoln Street
Tel-Aviv, Israel 67134
Fax: 972 (3)625-5500
e. Plenus
c/o Moti Weiss
Delta House, 16 Abba Eban Avenue
Herzeliya, Israel 46725
f. U.S. Trustee for the S.D.N.Y
33 Whitehall Street, 21st Floor
New York, NY 10004
Objections must be received by 4:00 p.m. EST on April 18, 2008.
The hearing on the sale is scheduled for April 21, 2008, at 10:00
a.m.
Requests for information concerning the assets should be directed
to the Debtor's Counsel.
New York-based RichFx Inc. filed for chapter 11 bankruptcy on
March 18, 2008 (Bankr. S.D.N.Y. Case No. 08-10942). Judge Robert
D. Drain presides the case. Joseph Thomas Moldovan, Esq., at
Morrison Cohen LLP represents the Debtors in their restructuring
efforts. The Debtor listed $1 million to $10 million when it
filed for bankruptcy.
RIVERSIDE PARK: S&P Attaches 'BB' Initial Rating on Class D Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Riverside Park CLO Ltd. and Riverside Park CLO Corp.'s
$438.75 million floating-rate notes due 2018.
The preliminary ratings are based on information as of April 8,
2008. Subsequent information may result in the assignment of
final ratings that differ from the preliminary ratings.
The preliminary ratings reflect:
-- The transaction's cash flow structure, which was subjected to
various stresses requested by Standard & Poor's;
-- The collateral manager's experience; and
-- The transaction's legal structure, including the issuer's
bankruptcy remoteness.
Preliminary Ratings Assigned
Riverside Park CLO Ltd.
Riverside Park CLO Corp.
Class Rating Amount (million)
----- ------ ----------------
A AAA $380.25
B A $32.50
C BBB $13.00
D BB $13.00
Subordinated notes NR $71.00
NR -- Not rated.
SAINT VINCENT: Court Expunges Cargill and Fair Harbor Claims
------------------------------------------------------------
At the behest of Saint Vincent Catholic Medical Centers and its
debtor-affiliates, the U.S. Bankruptcy Court for the Southern
District of New York disallowed and expunged:
(a) two claims that are duplicative of other claims filed
against the Debtors' estates:
Claimant Claim No. Claim Amount
-------- --------- ------------
Cargill Financial Services 3269 $258,207
Fair Harbor Capital, LLC 1129 5,900
(b) KT Trust's Claim No. 1479 for $32,850 because the Claim
has been satisfied pursuant a Court-approved stipulation
reducing and allowing proof of Claim No. 2490 filed by GFJ
Construction Corp., doing business as Builders Group; and
(c) N.S. Low & Co., Inc.'s Claim No. 3315 because it was filed
after the Claims Bar Date.
The Court also allowed two claims in their reduced amounts:
Claimant Claim No. Reduced Claim Amt.
-------- --------- -----------------
Homecare Concepts, Inc. 1790 $34,000
KT Trust 1565 96,523
About Saint Vincent's
Based in New York City, Saint Vincent's Catholic Medical Centers
of New York -- http://www.svcmc.org/-- the healthcare provider in
New York State, operates hospitals, health centers, nursing homes
and a home health agency. The hospital group consists of seven
hospitals located throughout Brooklyn, Queens, Manhattan, and
Staten Island, along with four nursing homes and a home health
care agency.
The company and six of its affiliates filed for chapter 11
protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945
through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst,
Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter
11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil,
Gotshal & Manges LLP took over representing the Debtors in their
restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid &
Priest LLP, represents the Official Committee of Unsecured
Creditors. As of Apr. 30, 2005, the Debtors listed $972 million
in total assets and $1 billion in total debts. The Debtors filed
their Chapter 11 Plan of Reorganization accompanying a disclosure
statement explaining that Plan on Feb. 9, 2007. On June 1, 2007,
the Debtors filed an Amended Plan & Disclosure Statement. The
Court confirmed the Debtors' Amended Plan on July 27, 2007.
(Saint Vincent Bankruptcy News, Issue No. 69; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).
As of July 31, 2007, Saint Vincent's balance sheet listed total
assets of $404,332,138, total liabilities $951,171,700, and total
net assets/equity deficit of $546,839,562.
SANCON RESOURCES: Kabani & Company Raises Substantial Doubt
-----------------------------------------------------------
Kabani & Company, Inc., in Los Angeles raised substantial doubt
about Sancon Resources Recovery, Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007. The auditing firm
pointed to the company's accumulated deficit and negative working
capital.
At Dec. 31, 2007, the company's balance sheet showed $1,587,936 in
total assets, $1,527,190 in total liabilities, and $153,220 in
minority interest, resulting in a $140,593 stockholders' deficit.
The company's balance sheet at Dec. 31, 2007, also showed strained
liquidity with $1,037,601 in total current assets available to pay
$1,527,190 in total current liabilities.
On August 15, 2007, the Company completed the acquisition of 70%
of the equity interest in Sancon Resources Recovery (Shanghai)
Co., Ltd by exercising its option to convert $200,000 of
convertible promissory note.
Subsequent Event
On March 10, 2008, the company issued 1,448,572 shares. This
includes 1,000,000 shares, which were recorded as shares to be
issued as of Dec. 31, 2008. The remaining 448,572 shares were
erroneously issued and to be cancelled.
A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2a01
Sancon Resources Recovery, Inc. (OTCBB: SRRY) --
http://www.sanconinc.com/-- is an industrial recycling company
with operations based in Melbourne, Australia; Hong Kong (SAR);
and Shanghai, China. Sancon aims to provide solutions to today's
soaring raw material cost for manufactures and assists in solving
environmental problems.
SASCO 2003-BC2: $168,460 Losses Cues S&P's 'D' Rating on Class B1
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
class B1 and M4 mortgage pass-through certificates from Structured
Asset Securities Corp.'s 2003-BC2. S&p also affirmed its ratings
on three classes from the same series.
S&P downgraded class B1 to 'D' because it experienced a realized
loss of $168,460.82 during the February 2008 remittance period.
The downgrade of class M4 reflects continuous adverse collateral
performance that erodes available credit support. As of the March
2008 remittance period, cumulative losses were $21.183 million, or
7.69% of the original principal balance. Serious delinquencies
(90-plus days, foreclosures, and REOs) were $4.756 million and
losses have consistently outpaced excess interest for 11 of the
past 12 most recent months.
The affirmations reflect current and projected credit support
percentages that are sufficient to support the ratings at their
current levels.
Subordination, excess interest, and overcollateralization provide
credit support for this transaction. At issuance, the collateral
backing the deals consisted of subprime fixed- and adjustable-rate
fully amortizing first-lien mortgage loans secured by one- to
four-family residential properties.
Ratings Lowered
Structured Asset Securities Corp.
Mortgage pass-through certificates series 2003-BC2
Rating
------
Class To From
----- -- ----
B1 D CCC
M4 CCC B-
Ratings Affirmed
Structured Asset Securities Corp.
Mortgage pass-through certificates series 2003-BC2
Class Rating
----- ------
M1 AA
M2 A
M3 B
SCOTTISH RE: Inks LOI to Recapture Business Ceded to Ballantyne Re
------------------------------------------------------------------
On March 31, 2008, Scottish Re Group Limited, Scottish Re (U.S.)
Inc., Scottish Re Life (Bermuda) Limited, Scottish Re (Dublin)
Limited and Scottish Annuity & Life Insurance Company (Cayman)
Ltd. entered into a binding letter of intent with ING North
America Insurance Corporation, ING America Insurance Holdings
Inc., Security Life of Denver Insurance Company and Security Life
of Denver International Ltd.
Under the letter of intent, Security Life of Denver Insurance
Company consented to the recapture, in one or more transactions,
of a pro-rata portion of the business that had been ceded by
Scottish Re (U.S.) Inc. to Ballantyne Re plc, an orphan special
purpose vehicle incorporated under the laws of Ireland for the
purpose of collateralizing the statutory reserve requirements of
the Valuation of Life Insurance Policies Model Regulation XXX for
a portion of the business acquired by the company from Security
Life of Denver Insurance Company and Security Life of Denver
International Ltd. at the end of 2004.
The Recaptures would extend to up to $375,000,000 of excess
statutory reserves on the subject business and would involve,
among other things, amendments to the coinsurance agreements
between Scottish Re (U.S.) Inc. and Security Life of Denver
Insurance Company. The consent to the Recaptures is subject to
several conditions. The Recaptures are primarily designed to
allow Scottish Re (U.S.) Inc. to continue to receive full credit
for reinsurance for the business ceded to Ballantyne.
Immediately following the consummation of each Recapture, Security
Life of Denver Insurance Company will recapture the Recaptured
Business from Scottish Re (U.S.) Inc. in exchange for
consideration from Scottish Re (U.S.) Inc. to Security Life of
Denver Insurance Company. Security Life of Denver Insurance
Company will then cede the Recaptured Business to Security Life of
Denver International Ltd., which will cede the Recaptured Business
to Scottish Re Life (Bermuda) Limited.
Scottish Re Life (Bermuda) Limited may cede the Recaptured
Business to either of Scottish Annuity & Life Insurance Company
(Cayman) Ltd. or Scottish Re (Dublin) Limited.
Security Life of Denver International Ltd. has agreed to provide,
or cause the provision of, one or more letters of credit in order
to provide Security Life of Denver Insurance Company with
statutory financial statement credit for the excess of the U.S.
statutory reserves associated with the Recaptured Business over
the economic reserves held in an account related thereto.
The company will bear the costs of the Letters of Credit by paying
to Security Life of Denver Insurance Company a facility fee based
on the face amount of such Letters of Credit outstanding as of the
end of the preceding calendar quarter. If certain conditions are
not satisfied by Dec. 31, 2008, or otherwise satisfied on or
before April 30, 2009, the facility Fee will be stepped up and the
company will pay a commitment fee for use of the facility.
Under the letter of intent, the parties also agreed to promptly
effect, following the completion of the first Recapture, an
assignment from Scottish Re (U.S.) Inc. to Security Life of Denver
Insurance Company, and the assumption by Security Life of Denver
Insurance Company, of all of Scottish Re (U.S.) Inc.'s rights and
obligations solely with respect to the reinsurance agreement and
reinsurance trust agreement previously entered into between
Scottish Re (U.S.) Inc. and Ballantyne, with the effect that
Security Life of Denver Insurance Company would be substituted for
Scottish Re (U.S.) Inc. as the ceding company under such
reinsurance agreement and as the beneficiary under the related
reinsurance trust account.
Security Life of Denver Insurance Company would not assume any
other rights or obligations of Scottish Re (U.S.) Inc. with regard
to Ballantyne. The parties have agreed to use reasonable best
efforts to complete such transaction by June 30, 2008.
The LOI further provides that Security Life of Denver Insurance
Company's consent to any Recapture is subject to the condition
that the parties receive the consent (as necessary) of the
financial guarantors to the outstanding Ballantyne debt to the
assignment and assumption, and also that ING receive certain
regulatory approvals and explications.
About Scottish Re
Scottish Re Group Ltd. -- http://www.scottishre.com/-- is a
global life reinsurance specialist. Scottish Re has operating
businesses in Bermuda, Ireland, Singapore, the United Kingdom and
the United States. Its flagship operating subsidiaries include
Scottish Annuity & Life Insurance Company (Cayman) Ltd., Scottish
Re (U.S.) Inc., and Scottish Re Limited.
As of Sept. 30, 2007, the company's consolidated balance sheet
showed $13.372 billion in total assets, $11.939 billion in total
liabilities, $7.4 million in minority interest, $555.9 million in
convertible cumulative participating preferred shares, and
$869.3 million in total shareholders' equity.
* * *
As reported in the Troubled Company Reporter on March 13, 2008,
Moody's Investors Service downgraded the preferred stock debt
rating of Scottish Re Group Limited to Caa3 from B2, and the
insurance financial strength ratings of the company's core
insurance subsidiaries, Scottish Annuity & Life Insurance Company
Ltd. and Scottish Re Inc., were lowered to Ba3 from Baa3. The
ratings were left on review for possible further downgrade,
continuing a review that had been initiated on February 15th.
SCOTTISH RE: Explores Sale of North America Life Reinsurance Biz
----------------------------------------------------------------
Scottish Re Group Ltd. disclosed in a regulatory filing with the
Securities and Exchange Commission dated April 4, 2008, that the
company's Board of Directors, in furtherance of its previously
announced strategy to develop opportunities to maximize the value
of the company's core competitive capabilities within the Life
Reinsurance North America Segment, has instructed management to
explore the possible sale of all or part of the business
constituting the Life Reinsurance North America Segment.
The company has retained Merrill Lynch to act as financial advisor
for this purpose.
With respect to the sale of the Life Reinsurance International
Segment, the company retained Keefe, Bruyette & Woods to act as
its financial advisor.
About Scottish Re
Scottish Re Group Ltd. -- http://www.scottishre.com/-- is a
global life reinsurance specialist. Scottish Re has operating
businesses in Bermuda, Ireland, Singapore, the United Kingdom and
the United States. Its flagship operating subsidiaries include
Scottish Annuity & Life Insurance Company (Cayman) Ltd., Scottish
Re (U.S.) Inc., and Scottish Re Limited.
As of Sept. 30, 2007, the company's consolidated balance sheet
showed $13.372 billion in total assets, $11.939 billion in total
liabilities, $7.4 million in minority interest, $555.9 million in
convertible cumulative participating preferred shares, and
$869.3 million in total shareholders' equity.
* * *
As reported in the Troubled Company Reporter on March 13, 2008,
Moody's Investors Service downgraded the preferred stock debt
rating of Scottish Re Group Limited to Caa3 from B2, and the
insurance financial strength ratings of the company's core
insurance subsidiaries, Scottish Annuity & Life Insurance Company
Ltd. and Scottish Re Inc., were lowered to Ba3 from Baa3. The
ratings were left on review for possible further downgrade,
continuing a review that had been initiated on February 15th.
SCRANTON-LACKAWANNA HEALTH: S&P Gives Negative Outlook on Bonds
---------------------------------------------------------------
Standard & Poor's Ratings Services removed its rating on Scranton-
Lackawanna Health and Welfare Authority, Pennsylvania's
$35.2 million bonds, issued for Moses Taylor Hospital, from
Creditwatch, where it had been placed April 12, 2007, with
developing implications. Standard & Poor's also affirmed its
'B-'rating on the bonds. The outlook is now negative.
The Creditwatch removal reflects the failure of MTH's planned
affiliation with a local competitor, and its very weak financial
profile, highlighted by persistent operating losses at the system
level and very limited liquidity. Standard & Poor's placed MTH on
CreditWatch in April 2007 pending an affiliation with Community
Medical Center. The affiliation, which would have been funded
with $50 million from Blue Cross of Northeastern Pennsylvania, was
questioned by the attorney general's office with respect to
antitrust law violations and the parties are currently exploring
other opportunities.
The rating reflects continued operating losses generating weak
debt service coverage; thin liquidity highlighted by 21 days' cash
on hand; and location in a competitive, overcrowded market that is
not likely to be able to sustain three acute-care hospitals in
their current form.
MTH is one of three hospitals in Scranton, Pennsylvania and
competes in the Lackawanna County market with competitors that are
relatively close in size and are fighting for a fairly weak
market. A key factor in the low volume growth is the local
demographics: Scranton's population, at 72,997, has declined
nearly 50% since before World War II. Lackawanna County's
population has not declined as much as Scranton's, but at 208,800,
it is at best stable and well-below earlier decades' levels.
"The negative outlook reflects MTH's very thin liquidity position
and persistent operating losses," said Standard & Poor's credit
analyst Jessica Goldman. "MTH needs to demonstrate continued
improved operations and an improvement in liquidity to provide
enough momentum to continue as a stand-alone hospital for the next
one to two years," added Ms. Goldman.
However, Standard & Poor's believes that the long-term prospects
for MTH to survive are in doubt, given its very weak financial
condition and the stronger condition of its two local competitors.
SEA CONTAINER: Gets Court's Nod to Enter Charter Termination Pacts
------------------------------------------------------------------
The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware authorized Sea Containers Ltd. and its
debtor-affiliates to enter into two Charter Termination Agreements
in connection with the sale of SeaStreak America, Inc., and
Highlands Landing Corporation by non-debtor affiliate, Sea
Containers America, Inc., to New England Fast Ferries for
$3,000,000.
Upon consummation of the Agreements, the Charter Guarantees and
all other related obligations of SCL will be deemed terminated
and otherwise released in accordance with the terms of the
Agreements.
Judge Carey ruled that for the avoidance of doubt, nothing will
be deemed to:
(i) alter or elevate the prepetition nature and priority of
any claims asserted by CitiCapital Commercial Leasing
Corporation and Chase Equipment Leasing, Inc., with
respect to any obligations arising under the Charter
Guarantees or the Charter Termination Agreements; or
(ii) give rise to postpetition administrative claims with
respect to those obligations.
Judge Carey maintained that with respect to the Debtors, the
Official Committee of Unsecured Creditors of Sea Containers Ltd.,
and the Official Committee of Unsecured Creditors of Sea
Containers Services Ltd., the Agreements and the sale of
SeaStreak America, Inc., will not prejudice any parties' rights
and defenses with respect to:
-- the Services Agreement dated August 18, 1989, between SCL
and SCSL, to the extent applicable;
-- the final determination of the existence, amount and
treatment of any related or underlying inter-company
claims; and
-- the appropriate allocation of any proceeds, costs or
obligations.
About Sea Containers
Based in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore. The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,
Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in
their restructuring efforts.
The Official Committee of Unsecured Creditors and the Financial
Members Sub-Committee of the Official Committee of Unsecured
Creditors of Sea Containers Ltd. is represented by William H.
Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,
Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s
Official Committee of Unsecured Creditors is represented by
attorneys at Willkie Farr & Gallagher LLP.
In its schedules filed with the Court, Sea Containers disclosed
total assets of $62,400,718 and total liabilities of
$1,545,384,083.
The Court gave the Debtors until April 15, 2008 to file
a plan of reorganization. (Sea Containers Bankruptcy News, Issue
No. 39; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SEA CONTAINERS: Contrarian, et al. Wants March 5 Subpoenas Quashed
------------------------------------------------------------------
Bondholders Contrarian Capital Advisors, LLC, J.P. Morgan
Securities Inc., Credit Trading Group, Post Advisory Group, LLC,
Trilogy Capital LLC, and Varde Investment Partners, L.P., ask the
U.S. Bankruptcy Court for the District of Delaware to quash
certain subpoenas dated March 5, 2008, served by the Official
Committee of Unsecured Creditors of Sea Containers Services Ltd.
In the alternative, the Bondholders seek a protective order
pursuant to Rule 45(c)(3) of the Federal Rules of Civil Procedure,
made applicable by Rule 9016 of the Federal Rules of Bankruptcy
Procedure.
The Debtors had asked the Court to approve their proposed
settlement with the SCSL Committee, and the Trustees of the 1983
and 1990 Pension Schemes.
Neal J. Levitsky, Esq., at Fox Rothschild LLP, in Wilmington,
Delaware, relates that the Official Committee of Unsecured
Creditors of Sea Containers Ltd. has indicated that it will
object to the Settlement Request, and accordingly, has served
document requests and deposition notices on the Settlement
Parties. He notes that the SCSL Committee, but not the Pension
Schemes, has also served discovery requests on the SCL Committee.
Mr. Levitsky discloses that the Bondholders' counsel has attended
the Settlement negotiations, but the Bondholders have not
formally objected to the Settlement, filed any pleadings or
participated in any discovery. Yet, the SCSL Committee served
each of the Bondholders with separate Subpoenas, seeking
extensive document productions and depositions under Rule
30(b)(6) of the Federal Rule of Civil Procedure on 17 separate
topics.
The Bondholders assert that the discovery requests "overwhelmingly
appear to relate" to communications between them and others
concerning the Settlement or the Settlement Request, including:
-- communications related to the claims asserted by the
Pension Schemes, analyses and valuations of the Pension
Claims, and the application of prudent investor discount
rate;
-- documents, expert reports, and other evidence, on which the
Bondholders would rely if they file an objection to the
Settlement Request;
-- documents concerning communications between the Bondholders
and The Pensions Regulator; and
-- communications between the Bondholders, the Debtors, the
SCL Committee, or any of the Debtors' DIP Lenders
concerning whether the SCSL Committee violated the
automatic stay.
In addition, the Subpoenas seek information related to the SCSL
Committee's request for compliance under Rule 2019(a) of
the Federal Rules of Bankruptcy Procedure, including documents
and deposition testimony concerning amounts of the Bondholders'
claims or interests and notes, the jurisdiction in which the
account holding the notes is located, and the name of the
beneficial holders of the notes, among other things.
Mr. Levitsky contends that the discovery sought by the SCSL
Committee is improper, and the Court should quash the Subpoenas
or enter a Protective Order. He argues that it is unclear what
litigation value, if any, is gained from the pursuit of extensive
and costly discovery from third-party creditors like the
Bondholders, regarding a decision that the Debtors have made and
must justify. He further notes that the Bondholders are not
parties to the Settlement, and cannot provide evidence as to why
the Debtors believe the Settlement is a reasonable one.
The extensive discovery sought by the Subpoenas is not only
irrelevant, it will also impose substantial burden and costs on
the Bondholders, Mr. Levitsky tells the Court. He points out
that the Subpoenas were served by the SCSL Committee, which is
not a party to the Settlement Request, or even a creditor of the
SCL bankruptcy estate. Therefore, he says, the SCSL Committee
can demonstrate no proper reason or legal basis to seek
discovery.
About Sea Containers
Based in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore. The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,
Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in
their restructuring efforts.
The Official Committee of Unsecured Creditors and the Financial
Members Sub-Committee of the Official Committee of Unsecured
Creditors of Sea Containers Ltd. is represented by William H.
Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,
Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s
Official Committee of Unsecured Creditors is represented by
attorneys at Willkie Farr & Gallagher LLP.
In its schedules filed with the Court, Sea Containers disclosed
total assets of $62,400,718 and total liabilities of
$1,545,384,083.
The Court gave the Debtors until April 15, 2008 to file
a plan of reorganization. (Sea Containers Bankruptcy News, Issue
No. 39; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SECURITY CAPITAL: Fitch Take Rating Actions on XLCA Insured Bonds
-----------------------------------------------------------------
Fitch Ratings has taken various rating actions on eight U.S.
asset-backed securities bonds wrapped by XL Capital Assurance
Inc., which is a subsidiary of Security Capital Assurance Ltd.
SCA. The revisions are based upon the performance of each
transaction, current credit enhancement as well as the financial
and legal structure. The downgrades are based on the guaranty of
XLCA, recently downgraded by Fitch.
Initially, all classes were rated 'AAA' based solely on the
financial guaranty provided by XCLA. As a result, upon Fitch's
downgrade of XLCA on Jan. 24, 2008 to 'A' and placement on Rating
Watch Negative, each ABS transaction was downgraded accordingly.
Subsequently, on March 26, 2008, XLCA's IFS rating was again
downgraded to 'BB' with a Negative Outlook. Following the most
recent downgrade, the ratings on all XLCA insured ABS transactions
remained at 'A' and on Rating Watch Negative to review the
underlying ratings of each transaction.
Based upon its review of each transaction's performance and credit
enhancement absent the XLCA policies, Fitch has determined that a
revised rating is appropriate on several transactions. Even
though this revised rating does not rely on the XLCA guaranty,
XLCA remains obligated to insure timely interest and ultimate
principal payments to the bondholders.
Consistent with Fitch's policy in other structured finance
sectors, in the event that a transaction's underlying rating is
higher than the insurer's current Insurer Financial Strength
rating, the Fitch rating will be based on the underlying rating
rather than the insurer's IFS rating. Alternatively, if the
underlying rating is lower than the insurer's current IFS rating,
the Fitch rating will be based on the insurer's IFS rating rather
than the underlying rating.
As a result of the review, Fitch has revised the ratings of these
transactions and removed them from 'Rating Watch Negative' based
on the insurers IFS rating:
Auto loan ABS:
AmeriCredit Automobile Receivables Trust 2005-A-X
-- Class A-4 revised to 'AA-' from 'A'.
AmeriCredit Automobile Receivables Trust 2007-A-X
-- Class A-2 downgraded to 'BBB' from 'A';
-- Class A-3 downgraded to 'BBB' from 'A';
-- Class A-4 downgraded to 'BBB' from 'A'.
Rental car ABS:
Rental Car Finance Corp., Series 2005-1
-- Class A-1 revised to 'BB' from 'A';
-- Class A-2 revised to 'BB' from 'A'.
Equipment lease ABS:
LEAF II Receivables Funding LLC, Series 2007-1
-- Class A-2 revised to 'A' from 'A'/Rating Watch Negative;
-- Class A-3 revised to 'A' from 'A'/Rating Watch Negative.
SENSUS METERING: Weak Liquidity Cues S&P's Neg. Watch on B+ Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Raleigh,
North Carolinabased Sensus Metering Systems Inc., including its
'B+' corporate credit rating, on CreditWatch with negative
implications. The company's debt totaled about $478 million as of
Dec. 29, 2007.
"The CreditWatch placement reflects the present weakness of
Sensus' liquidity profile, marked by limited headroom under its
financial covenants," said Standard & Poor's credit analyst James
Siahaan. Sensus is an international manufacturer of utility
meters and provider of automated meter reading technology.
During 2008, a step-down in financial covenants will make
compliance more difficult. Although Sensus continues to produce
positive free cash flow, challenges in credit markets could make
it difficult for the company to obtain relief or additional
liquidity in a timely manner. S&P will monitor the company's
progress in resolving this issue.
SIRVA INC: Files Supplements to Chapter 11 Plan
-----------------------------------------------
As supplements to their Chapter 11 Plan of Reorganization, Sirva
Inc. and its debtor-affiliates delivered to the U.S. Bankruptcy
Court for the Southern District of New York:
-- A schedule of their rejected executory contracts and
unexpired leases, a copy of which is available at no charge
at:
http://bankrupt.com/misc/SIRVAPlanRejectedLeases.pdf
-- A nonexclusive list of retained causes of action, a copy
which available at no charge at:
http://bankrupt.com/misc/SIRVAPlanCausesofAction.pdf
-- A list of the seven individuals who will serve as directors
of the Reorganized Debtors after the confirmation of the
Plan:
(a) Kevin I. Dowd, chairman and managing principal of
Berkeley Square Advisors;
(b) Douglas C. Laux, chief financial officer of Remy
International;
(c) Frances M. Scricco, president of Avaya Global Services
and Avaya Inc.;
(d) Jeffrey A. Sell, former managing director of J.P.
Morgan Chase;
(e) Mark Sotir, managing director of Equity Group
Investments;
(f) Anthony DiSimone, managing partner of Aurora Resurgence
Management Partners LLC; and
(g) Individual to be appointed pursuant to a stockholder's
agreement.
Moreover, nine persons propose to serve as officers of
the Reorganized Debtors:
(a) Robert W. Tieken, president and chief executive
officer;
(b) James J. Bresingham, senior vice-president and chief
executive officer;
(c) Timothy Callahan, senior vice-president for global
sales;
(d) Douglas V. Gathany, treasurer, and senior vice-
president for investor relations;
(e) Rene C. Gibson, senior vice-president for human
resources;
(f) Michael B. MacMahon, president of Global Relocation
Services;
(g) Daniel F. Mullin, chief accounting officer;
(h) Eryk J. Spytek, senior vice-president, general counsel,
and secretary; and
(i) Michael T. Wolfe, president of Moving Services North
America.
-- An Amended and Restated Certificate of Incorporation of
Reorganized SIRVA, as well as its Amended and Restated By-
Laws.
A full-text copy of the Amended and Restated Certificate of
Incorporation of Reorganized SIRVA is available for free
at:
http://bankrupt.com/misc/SIRVARestatedCertofIncorporation.pdf
A full-text copy of the Amended and Restated By-Laws of
Reorganized SIRVA is available for free at:
http://bankrupt.com/misc/SIRVAPlanRestatedByLaws.pdf
Credit Agreements
The Debtors have included, as exhibits to their Plan, their
amended and restated Debtor-in-Possession Credit Agreement.
The Debtors' DIP Credit Agreement contains an option for the
Debtors to convert the DIP Financing into an exit financing
facility after they exit Chapter 11.
The Exit Credit Agreement provides that upon satisfaction of
certain conditions, the loans made under the DIP Credit
Agreement, as well as other commitments of the DIP Lenders, will
be converted to an exit financing facility for the Debtors on the
the Effective Date of the Debtors' Plan.
A full-text copy of the Debtors' Exit Credit Agreement is
available for free at:
http://bankrupt.com/misc/SIRVAPlanNewCreditAgreement.pdf
With respect to the Debtors' Prepetition Credit Agreement with
certain lenders, the Debtors also propose to convert the loans
made under the Prepetition Credit Agreement, as well as other
commitments of the Prepetition Lenders, to an exit financing
facility for the Debtors on the the Effective Date of the
Debtors' Plan.
A full-text copy of the Debtors' Second Lien Credit Agreement is
available for free at
http://bankrupt.com/misc/SIRVAPlan2ndLienCreditAgreement.pdf
Pursuant to the Credit Agreements, the Debtors have also filed
their intercreditor agreement with JPMorgan Chase Bank, N.A., as
administrative agent, and each of the Loan Parties.
A full-text copy of the Intercreditor Agreement is available for
free at
http://bankrupt.com/misc/SIRVAPlanIntercreditorAgreement.pdf
Registration Rights Agreement
In connection with the acquisition of the Debtors' common stock
pursuant to the Plan, each original holder will own the number of
shares specified in a registration rights agreement. To induce
the original holder to vote in favor of the Plan, the Debtors
will register the Registrable Common Stock under the Securities
Act of 1933, as amended.
A full-text copy of the Registration Rights Agreement is
available for free at
http://bankrupt.com/misc/SIRVAPlanRegistrationRightsAgreement.pdf
The Debtors have also included, as an exhibit to their Plan, the
Stockholders' Agreement, to be entered into among the Debtors,
their Creditors, the management stockholders, the directors,
stockholders, and other parties-in-interest.
A full-text copy of the Stockholders' Agreement is available for
free at
http://bankrupt.com/misc/SIRVAPlanStockholdersAgreement.pdf
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).
SOLSTICE ABS: Two Classes of 2038 Notes Get Moody's Junk Ratings
----------------------------------------------------------------
Moody's Investors Service placed on review for possible downgrade
the ratings on these notes issued by Solstice ABS CBO II, Ltd.:
Class Description: $237,000,000 Class A-1 First Priority Senior
Secured Floating Rate Delayed Draw Notes due 2038
-- Prior Rating: Aaa
-- Current Rating: Aaa, on review for possible downgrade
Class Description: $96,000,000 Class A-2 First Priority Senior
Secured Floating Rate Term Notes due 2038
-- 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: $66,500,000 Class B Second Priority Senior
Secured Floating Rate Notes due 2038
-- Prior Rating: Aa2, on review for possible downgrade
-- Current Rating: A3, on review for possible downgrade
Additionally, Moody's downgraded these notes:
Class Description: $22,000,000 Class C Mezzanine Floating Rate
Notes due 2038
-- Prior Rating: Caa2, on review for possible downgrade
-- Current Rating: Ca
Class Description: $7,500,000 Preference Shares due 2038
-- 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.
SOMERSET INT'L: WithumSmith+Brown Raises Substantial Doubt
----------------------------------------------------------
WithumSmith+Brown, P.C., in Somerville, N.J., raised substantial
doubt about Somerset International Group, Inc.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the years ended Dec. 31,
2007, and 2006. The auditing firm pointed to the company's net
losses for the years ended Dec. 31, 2007, and 2006, accumulated
deficit, utilized net cash in operating activities, and negative
working capital.
For the year ended Dec. 31, 2007, the company posted a $1,484,332
net loss on $3,879,312 of total revenues as compared with a
$1,137,359 net loss on $1,740,391 of total revenues in 2006.
At Dec. 31, 2007, the company's balance sheet showed $6,908,443 in
total assets, $6,578,053 in total liabilities, and $330,390 in
total stockholders' equity.
The company's balance sheet at Dec. 31, 2007, showed strained
liquidity with $1,903,814 in total current assets available to pay
$2,882,634 in total current liabilities.
The company had an accumulated deficit of $31,042,252 as of
Dec. 31, 2007.
A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2a17
Based in Bedminster, N.J., Somerset International Group, Inc.
(OTCBB: SOSI) -- http://www.somersetinternational.com/-- formerly
known as ORS Automation, Inc., ceased conducting operations
effective Dec. 31, 2001. The decision to cease operations was
made after the company's two principal customers, who accounted
for substantially all of its sales, canceled all orders for its
products. The company's current activity is to acquire profitable
and near-term profitable, private, small and medium sized
businesses that provide proprietary security products and
solutions for people and enterprises - from personal safety to
information security - and to act as a holding company for those
entities.
The company acquired Secure Systems Inc., Meadowlands Fire,
Safety, and Electrical Supply Co., Vanwell Electronics Inc., and
Fire Control Electrical Systems Inc. These companies provide
wireless security products and services, and specialize in the
distribution, sale, installation and maintenance of fire and
security equipment and systems that include fire detection, video
surveillance, and burglar alarm equipment.
SOUTH STREET: S&P Withdraws AAA Rating; Keeps Three Junk Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'AAA' rating on
the class A-2L notes issued by South Street CBO 2000-1 Ltd., an
arbitrage corporate high-yield collateralized bond obligation
transaction managed by Colonial Advisory Services Inc.
The rating withdrawal follows the complete paydown of the class A-
2L notes on the Nov. 30, 2007, payment date.
Rating Withdrawn
South Street CBO 2000-1 Ltd.
Rating Balance (million)
------ -----------------
Class To From Current Original
----- -- ---- ------- --------
A-2L NR AAA $0.000 $95.00
Other Outstanding Ratings
South Street CBO 2000-1 Ltd.
Balance (million)
-----------------
Class Rating Current Original
----- ------ ------- --------
A-3 BBB+ $22.899 $30.000
A-3L BBB+ $11.450 $15.000
A-4A CC $8.000 $8.000
A-4C CC $10.000 $10.000
A-4L CC $20.000 $20.000
NR - Not rated.
SPECIALTY UNDERWRITING: S&P Downgrades Ratings on 26 Cert. Classes
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 26
classes of mortgage loan asset-backed certificates from nine
Specialty Underwriting and Residential Finance Trust series.
Thirteen of the classes were downgraded to speculative-grade from
investment-grade. In addition, S&P affirmed the ratings on 24
other classes from five Specialty Underwriting and Residential
Finance Trust series.
These table shows the current performance data for the nine
downgraded series.
Performance Data
Cumulative
realized Severe
Series losses (i) delinquencies (ii)
------ ---------- ------------------
2003-BC3 1.99% 8.53%
2003-BC4 1.37% 5.98%
2004-BC2 1.76% 12.72%
2004-BC3 1.60% 10.96%
2004-BC4 1.08% 16.58%
2005-AB3 1.48% 15.00%
2005-BC1 2.69% 23.17%
2005-BC2 2.85% 26.01%
2005-BC4 2.84% 27.75%
(i) As a percentage of original pool balance.
(ii) As a percentage of current pool balance.
Current pool balance Months
Series (original pool balance) seasoned
------ ----------------------- --------
2003-BC3 11.68% 54
2003-BC4 12.72% 51
2004-BC2 16.42% 45
2004-BC3 17.10% 41
2004-BC4 18.91% 39
2005-AB3 47.72% 27
2005-BC1 21.65% 36
2005-BC2 25.25% 34
2005-BC4 45.80% 27
The downgrades reflect the erosion of credit support caused by a
reduction in subordination. The reduced subordination is due to
the fact that monthly losses have exceeded excess interest,
resulting in the deterioration of overcollateralization (O/C). At
the current loss levels, current and projected credit support
percentages are not sufficient to support the ratings at their
previous levels.
The dollar amount of loans in the delinquency pipeline in many of
the transactions strongly suggests that the trend of realized
losses generally outpacing excess interest will continue, further
compromising credit support.
The affirmations are based on loss coverage percentages that are
sufficient to maintain the current ratings despite the negative
trends in the underlying collateral of many of the transactions.
Subordination, O/C, and excess spread provide credit support for
all of the affected deals. The collateral for these transactions
primarily consists of subprime, adjustable- and fixed-rate
mortgage loans secured by first liens on one- to four-family
residential properties.
Ratings Lowered
Specialty Underwriting and Residential Finance Trust
Mortgage loan asset-backed certificates
Rating
------
Series Class To From
------ ----- -- ----
2003-BC3 M-3 A- A
2003-BC3 B-1 B BB
2003-BC3 B-2 CCC B
2003-BC3 B-3 D CCC
2003-BC4 B-1 BBB BBB+
2003-BC4 B-2 B BBB
2003-BC4 B-3 CCC BBB-
2004-BC2 B-2 BB+ BBB-
2004-BC3 B-3 BB+ BBB
2004-BC4 M-2 AA- AA
2004-BC4 M-3 BBB AA-
2004-BC4 B-1 BB A+
2004-BC4 B-2 BB- A
2004-BC4 B-3 B A-
2005-AB3 M-6 BBB A-
2005-AB3 B-1 BB BBB+
2005-BC1 B-1 BBB BBB+
2005-BC1 B-2 BB BBB
2005-BC1 B-3 B BBB-
2005-BC2 B-2 BBB- BBB
2005-BC2 B-3 B BBB-
2005-BC2 B-4 CCC BB+
2005-BC4 M-4 A A+
2005-BC4 M-5 BB+ A
2005-BC4 M-6 BB- A-
2005-BC4 B-1 B- BB
Ratings Affirmed
Specialty Underwriting and Residential Finance Trust
Mortgage loan asset-backed certificates
Series Class Rating
------ ----- ------
2003-BC3 A AAA
2003-BC3 S AAA
2003-BC3 M-1 AAA
2003-BC3 M-2 AA
2003-BC4 A-3B AAA
2003-BC4 M-1 AA+
2003-BC4 M-2 A
2003-BC4 M-3 A-
2004-BC2 A-1 AAA
2004-BC2 A-2 AAA
2004-BC2 M-1 AA
2004-BC2 M-2 A
2004-BC2 M-3 A-
2004-BC2 B-1 BBB
2004-BC3 A-2C AAA
2004-BC3 M-1 AA+
2004-BC3 M-2 AA-
2004-BC3 M-3 A+
2004-BC3 B-1 A-
2004-BC3 B-2 BBB
2004-BC4 A-1A AAA
2004-BC4 A-1B AAA
2004-BC4 A-2C AAA
2004-BC4 M-1 AA+
SPIRIT AEROSYSTEMS: S&P Ratings Unmoved by Revised Boeing Contract
------------------------------------------------------------------
Standard & Poor's Ratings Services said the revised terms on
Spirit AeroSystems Inc.'s (BB/Stable/--) 787 aircraft supply
agreement with Boeing Co. (A+/Stable/A-1) have no impact on its
ratings or outlook on Spirit. Under the new agreement, Spirit
will receive advance payments in 2008, starting with $124 million
to be reflected in the company's first-quarter results. There
will be additional payments in the year, approximating the value
that was to be delivered by Spirit in 2008 in the original 787
program schedule.
The amendment also eliminates the exiting delayed payment schedule
for ship sets delivered prior to aircraft certification and ties
future payments to the date that Spirit delivers to Boeing. The
revised payment terms, together with a recently expanded revolving
credit facility, provides Spirit with sufficient liquidity cushion
to mitigate adverse effects on the company's cash flow from delays
on the 787 program. In addition, Boeing's current plans call for
a more gradual 787 production ramp-up, which should ease working
capital pressures on suppliers, including Spirit.
SS&C TECHNOLOGIES: S&P Upgrades Rating to 'B+' on Improved Metrics
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Windsor, Connecticut-based SS&C Technologies Inc. to
'B+' from 'B', following improved operating trends and financial
metrics. The outlook is stable.
At the same time, Standard & Poor's raised its issue-level ratings
on SS&C's senior secured financing and senior subordinated notes.
The issue-level rating on the company's $350 million senior
secured credit facility was raised to 'BB-' (one notch above the
corporate credit rating) from 'B+'. The recovery rating remains
unchanged at '2', indicating the expectation for substantial
(70% to 90%) recovery in the event of a payment default. The
senior secured financing consists of a $275 million term loan due
2012 and a $75 million revolving credit facility due 2011. S&P
also raised its issue-level rating on the company's $205 million
senior subordinated notes to 'B-' (two notches below the corporate
credit rating) from 'CCC+'. The recovery rating remains unchanged
at '6', indicating the expectation for negligible (0% to 10%)
recovery in the event of a payment default.
"The ratings on SS&C reflect the company's high leverage,
acquisitive growth strategies, and dependence on financial
services information technology spending," said Standard & Poor's
credit analyst David Tsui. "These factors are offset partially by
the currently favorable outsourcing environment, as well as the
company's recurring revenue base and good profitability and cash
flow generation."
SS&C provides software and outsourcing services to the financial
services industry, focusing on portfolio management and trading
systems.
STATIC RESIDENTIAL: Moody's Downgrades Ratings on Eight Classes
---------------------------------------------------------------
Moody's Investors Service placed on review for possible downgrade
the ratings on these notes issued by Static Residential CDO 2006-C
Ltd.:
Class Description: Up to $375,000,000 Class A-1(a) Floating Rate
Notes, due 2041
-- Prior Rating: Baa2, on review for possible downgrade
-- Current Rating: B3, on review for possible downgrade
Additionally, Moody's downgraded these notes:
Class Description: $40,000,000 Class A-1(b) Floating Rate Notes,
due 2041
-- Prior Rating: Baa3, on review for possible downgrade
-- Current Rating: Ca
Class Description: $115,250,000 Class A-2 Floating Rate Notes, due
2041
-- Prior Rating: Ba2, on review for possible downgrade
-- Current Rating: Ca
Class Description: $60,000,000 Class B-1 Floating Rate Notes, due
2041
-- Prior Rating: Ba3, on review for possible downgrade
-- Current Rating: Ca
Class Description: $26,250,000 Class B-2 Floating Rate Notes, due
2041
-- Prior Rating: B2, on review for possible downgrade
-- Current Rating: Ca
Class Description: $43,750,000 Class C Deferrable Interest
Floating Rate Notes, due 2041
-- Prior Rating: Caa3, on review for possible downgrade
-- Current Rating: Ca
Class Description: $22,500,000 Class D-1(a) Deferrable Interest
Floating Rate Notes, due 2041
-- Prior Rating: Caa3, on review for possible downgrade
-- Current Rating: Ca
Class Description: $5,000,000 Class D-1(b) Deferrable Interest
Floating Rates Notes, due 2041
-- Prior Rating: Caa3, on review for possible downgrade
-- Current Rating: Ca
Class Description: $24,750,000 Class D-2 Deferrable Interest
Floating Rate Notes, due 2041
-- Prior Rating: Caa3, 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.
STATIC RESIDENTIAL: Moody's Cuts Rating on $475MM Notes From 'Ba1'
------------------------------------------------------------------
Moody's Investors Service downgraded and left on review for
possible downgrade the ratings on these notes issued by Static
Residential CDO 2006-B Ltd.:
Class Description: $475,000,000 Class A-1(a) Floating Rate Notes
Due October 2037
-- Prior Rating: Aaa, on review for possible downgrade
-- Current Rating: Ba1, on review for possible downgrade
Class Description: $197,000,000 Class A-1(b) Floating Rate Notes
Due October 2037
-- Prior Rating: Baa1, on review for possible downgrade
-- Current Rating: B1, on review for possible downgrade
Class Description: $110,000,000 Class A-2 Floating Rate Notes Due
October 2037
-- Prior Rating: Baa2, on review for possible downgrade
-- Current Rating: B3, on review for possible downgrade
Class Description: $80,000,000 Class B Floating Rate Notes Due
October 2037
-- Prior Rating: Ba1, on review for possible downgrade
-- Current Rating: Caa2, on review for possible downgrade
Additionally, Moody's downgraded these notes:
Class Description: Class B-2 Deferrable Interest Floating Rate
Notes, due 2037
-- 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.
STATIC RESIDENTIAL 2005-C: Moody's Reviews Rating on Class E Notes
------------------------------------------------------------------
Moody's Investors Service placed on review for possible downgrade
the ratings on these notes issued by Static ResidenTial CDO 2005-
C:
Class Description: $325,000,000 Class A-1 F Floating Rate Variable
Funding Notes Due May 2038
-- 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: $59,500,000 Class A-2 Floating Rate Notes Due
November 2038
-- Prior Rating: Aaa
-- Current Rating: Aa2, on review for possible downgrade
Class Description: $44,000,000 Class B Floating Rate Notes Due
November 2038
-- Prior Rating: Aa1
-- Current Rating: Aa3, on review for possible downgrade
Class Description: $17,500,000 Class C Deferrable Interest
Floating Rate Notes Due November 2038
-- Prior Rating: Aa3, on review for possible downgrade
-- Current Rating: A2, on review for possible downgrade
Class Description: $23,000,000 Class D Deferrable Interest
Floating Rate Notes Due November 2038
-- Prior Rating: A2, on review for possible downgrade
-- Current Rating: Baa1, on review for possible downgrade
Class Description: $10,000,000 Class E Deferrable Interest
Floating Rate Notes Due November 2038
-- Prior Rating: Baa2, on review for possible downgrade
-- Current Rating: Ba1, on review for possible downgrade
According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.
STATIC RESIDENTIAL 2006-A: Moody's Cuts Ratings on Seven Classes
----------------------------------------------------------------
Moody's Investors Service downgraded and left on review for
possible downgrade the ratings on these notes issued by Static
Residential CDO 2006-A Ltd.:
Class Description: $475,000,000 Class A-1(a) Floating Rate Notes
Due October 2038
-- Prior Rating: Aaa
-- Current Rating: A2, on review for possible downgrade
Class Description: $197,000,000 Class A-1(b) Floating Rate Notes
Due October 2038
-- Prior Rating: Aaa
-- Current Rating: Baa1, on review for possible downgrade
Class Description: $110,000,000 Class A-2 Floating Rate Notes Due
October 2038
-- Prior Rating: Aaa, on review for possible downgrade
-- Current Rating: Baa2, on review for possible downgrade
Class Description: $80,000,000 Class B Floating Rate Notes Due
October 2038
-- Prior Rating: Aa1, on review for possible downgrade
-- Current Rating: Baa3, on review for possible downgrade
Class Description: $35,000,000 Class C Deferrable Interest
Floating Rate Notes Due October 2038
-- Prior Rating: Aa3, on review for possible downgrade
-- Current Rating: Ba1, on review for possible downgrade
Class Description: $43,000,000 Class D Deferrable Interest
Floating Rate Notes Due October 2038
-- Prior Rating: A3, on review for possible downgrade
-- Current Rating: Ba2, on review for possible downgrade
Class Description: $18,000,000 Class E Deferrable Interest
Floating Rate Notes Due October 2038
-- Prior Rating: Baa3, 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.
STONE MOUNTAIN: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Stone Mountain Development, LLC
fka NAC Company, LLC
P.O. Box 53
Payson, UT 84651
Bankruptcy Case No.: 08-22181
Type of Business: The Debtor is a home builder & developer.
Chapter 11 Petition Date: April 8, 2008
Court: District of Utah (Salt Lake City)
Debtor's Counsel: Robert Fugal, Esq.
(robfugal@birdfugal.com)
Bird & Fugal
384 East 720 South, Suite 201
Orem, UT 84058
Tel: (801) 426-4700
http://www.birdfugal.com/
Estimated Assets: $1 million to $10 million
Estimated Debts: $1 million to $10 million
The Debtor did not file a list of its largest unsecured creditors.
SUNCOM WIRELESS: Moody's Raises Rating to 'B2' on T-Mobile Merger
-----------------------------------------------------------------
Moody's Investors Service upgraded the corporate family rating of
Suncom Wireless Inc. to B2 with a stable outlook from Caa1
following completion of the acquisition of Suncom by T-Mobile USA,
Inc., a subsidiary of Deutsche Telekom AG ("DT", A3 under review
for possible downgrade).
The ratings upgrade reflects Moody's view that the acquisition of
Suncom by T-Mobile materially enhances Suncom's standalone credit
profile despite the fact that neither T-Mobile or DT will
guarantee any of Suncom's debt obligations. The magnitude of the
rating's lift has been capped at two notches based on Moody's
published methodology to rating non-guaranteed subsidiaries.
Concurrent with this rating action, Moody's upgraded the various
instrument ratings of Suncom pursuant to Moody's loss-given-
default methodology. Finally, Moody's said it will withdraw all
ratings for Suncom as the bank debt has been repaid and no future
standalone financial information on Suncom will be available.
Moody's believes T-Mobile is likely to redeem Suncom's senior
unsecured notes once they are callable in June 2008. This
concludes the ratings review commenced when the acquisition
agreement between T-Mobile and Suncom was announced in September
2007.
Upgrades:
Issuer: Suncom Wireless, Inc
-- Probability of Default Rating, Upgraded to B2 from Caa1
-- Corporate Family Rating, Upgraded to B2 from Caa1
-- Senior Subordinated Regular Bond/Debenture, Upgraded to Caa1,
LGD6 - 96% from Caa3, LGD6 - 96%
-- Senior Secured Bank Credit Facility, Upgraded to Ba2, LGD1-
8% from B1, LGD1- 8%
-- Senior Unsecured Regular Bond/Debenture, Upgraded to B3,
LGD4- 63% from Caa2, LGD4- 63%
Outlook Actions:
Issuer: Suncom Wireless, Inc
-- Outlook, Changed To Stable From Positive
Headquartered in Berwyn, Pennsylvania, Suncom Wireless, Inc. is a
regional wireless telecommunications service provider operating in
the southeastern US and Puerto Rico. Suncom is a wholly-owned
subsidiary of Suncom Wireless Holdings, Inc.
Headquartered in Bonn, Deutsche Telekom is the leading provider of
wireline and wireless telephony services in Germany. It is also
one of the leading international providers of wireless services.
DT is currently 31.70% government-owned (14.83% directly and
16.87% through state-owned investment vehicle KfW).
TABS 2005-4: Three Classes of 2045 Notes Get Moody's Junk Ratings
-----------------------------------------------------------------
Moody's Investors Service downgraded ratings of five classes of
notes issued by TABS 2005-4, Ltd., and left on review for possible
further downgrade the rating of three of these classes. The notes
affected by this rating action are:
Class Description: $264,000,000 Class A Senior Secured Floating
Rate Notes Due 2045
-- Prior Rating: Aaa, on review for possible downgrade
-- Current Rating: Aa3, on review for possible downgrade
Class Description: $60,000,000 Class B Senior Secured Floating
Rate Notes Due 2045
-- Prior Rating: A2, on review for possible downgrade
-- Current Rating: Ba2, on review for possible downgrade
Class Description: $30,000,000 Class C Senior Secured Floating
Rate Notes Due 2045
-- Prior Rating: Baa2, on review for possible downgrade
-- Current Rating: Caa3, or review for possible downgrade
Class Description: $10,000,000 Class D Mezzanine Secured
Deferrable Floating Rate Notes Due 2045
-- Prior Rating: Ba1, on review for possible downgrade
-- Current Rating: C
Class Description: $20,000,000 Class E Mezzanine Secured
Deferrable Floating Rate Notes Due 2045
-- Prior Rating: Ba2, on review for possible downgrade
-- Current Rating: C
The rating downgrade actions reflect deterioration in the credit
quality of the underlying portfolio, as well as the occurrence on
March 19, 2008, as reported by the Trustee, of an event of default
described in Section 5.1(i) of the Indenture dated Jan. 26, 2006.
TABS 2005-4, Ltd., is a collateralized debt obligation backed
primarily by a portfolio of RMBS securities and CDO securities.
Recent ratings downgrades on the underlying portfolio caused
ratings-based haircuts to affect the calculation of the event of
default trigger. Thus, the Senior Overcollateralization Ratio
without regard to clause (l) of the definition of Principal
Balance is less than 100%, as required in Section 5.1(i) of the
Indenture.
As provided in Article V of the Indenture during the occurrence
and continuance of an Event of Default, holders of Notes may be
entitled to direct the Trustee to take particular actions with
respect to the Collateral Debt Securities and the Notes.
The rating downgrades taken reflect the increased expected loss
associated with each tranche. Losses are attributed to diminished
credit quality on the underlying portfolio. The severity of
losses of certain tranches may be different, however, depending on
the timing and choice of remedy to be pursued by certain
Noteholders. Because of this uncertainty, the ratings assigned to
the Class A Notes, the Class B Notes, and the Class C Notes,
remain on review for possible further action.
TABS 2007-7: Moody's Junks Rating on $1.31 Bil. Notes From 'B3'
---------------------------------------------------------------
Moody's Investors Service downgraded ratings of nine classes of
notes issued by TABS 2007-7, Ltd. The notes affected by this
rating action are:
Class Description: $65,550,000 Class X Senior Secured Fixed Rate
Notes Due 2013
-- Prior Rating: B1, on review direction uncertain
-- Current Rating: Caa3
Class Description: $1,310,000,000 Class A1S Variable Funding
Senior Secured Floating Rate Notes Due 2047
-- Prior Rating: B3, on review direction uncertain
-- Current Rating: C
Class Description: $352,500,000 Class A1J Senior Secured Floating
Rate Notes Due 2047
-- Prior Rating: Ca
-- Current Rating: C
Class Description: $240,000,000 Class A2 Senior Secured Floating
Rate Notes Due 2047
-- Prior Rating: Ca
-- Current Rating: C
Class Description: $80,000,000 Class A3 Secured Deferrable
Interest Floating Rate Notes Due 2047
-- Prior Rating: Ca
-- Current Rating: C
Class Description: $20,000,000 Class B1 Mezzanine Secured
Deferrable Interest Floating Rate Notes Due 2047
-- Prior Rating: Ca
-- Current Rating: C
Class Description: $77,500,000 Class B2 Mezzanine Secured
Deferrable Interest Floating Rate Notes Due 2047
-- Prior Rating: Ca
-- Current Rating: C
Class Description: $47,500,000 Class B3 Mezzanine Secured
Deferrable Interest Floating Rate
-- Prior Rating: Ca
-- Current Rating: C
Class Description: $32,500,000 Class C Mezzanine Secured
Deferrable Interest Floating Rate Notes Due 2047
-- Prior Rating: Ca
-- Current Rating: C
TABS 2007-7, Ltd. is a collateralized debt obligation backed
primarily by a portfolio of RMBS securities and CDO securities.
The transaction experienced an event of default under the
Indenture .
As provided in Article V of the Indenture during the occurrence
and continuance of an Event of Default, holders of certain Notes
may be entitled to direct the Trustee to take particular actions
with respect to the Collateral Debt Securities and the Notes. In
this regard, the majority of the Controlling Class directed the
Trustee to proceed with the disposition of the Collateral in
accordance with the Indenture. The Trustee notified Moody's that
it sold all of the Collateral and made a final distribution and
applied the proceeds of the liquidation in accordance with
applicable provisions of the Indenture on March 19, 2008. In that
distribution, according to the trustee, the only noteholders to
receive a distribution of liquidation proceeds were holders of
Class X Notes. Available funds were not sufficient to pay the
Class X Notes in full.
The rating actions taken reflect the changes in severity of loss
associated with certain tranches and reflect the final liquidation
distribution.
TAPESTRY PHARMA: Form 10K Filing Delay Cues Nasdaq Delisting
------------------------------------------------------------
Tapestry Pharmaceuticals Inc. received a letter from the Nasdaq
Stock Market formally notifying it that Nasdaq has not received
Tapestry's Form 10-K for the period ended Jan. 2, 2008, as
required by Marketplace Rule 4310(c)(14) and that unless appealed,
trading in Tapestry's common stock will be suspended.
Tapestry does not intend to appeal this determination. As a
result, trading of Tapestry's common stock will be suspended at
the opening of business on April 11, 2008, and a Form 25-NSE will
be filed with the Securities and Exchange Commission, which will
remove its securities from listing and registration on the Nasdaq
Stock Market.
Nasdaq has advised Tapestry that Tapestry's common stock will not
be immediately eligible to trade on the OTC Bulletin Board or the
"Pink Sheets"; however, it may become eligible if a market maker
makes application to register in and quote it in accordance with
SEC Rule 15c2-11 and such application is cleared.
Tapestry is attempting to work out settlements with its creditors
at this time, but there is no assurance that Tapestry will be
able to avoid bankruptcy.
About Tapestry Pharmaceuticals
Based in Boulder, Colorado, Tapestry Pharmaceuticals Inc. --
http://www.tapestrypharma.com/-- is a biopharmaceutical company
focused on the development of proprietary therapies for the
treatment of cancer. Tapestry's lead candidate, TPI 287 is in
multiple Phase 2 clinical studies funded by a development partner.
At Sept. 26, 2007, the company's consolidated balance sheet showed
$11.9 million in total assets, $3.7 million in total liabilities,
and $8.2 million in total stockholders' equity.
* * *
The company has no revenue and has incurred significant operating
losses since its inception. The company reported a net loss of
$16.7 million for the nine months ended Sept. 27, 2007.
The company believes that its existing cash and cash equivalents
and short-term investments are not sufficient to enable it to fund
operating expenses and capital expenditures for the next twelve
months.
Should the company be unable to raise the needed capital, it may
be required to slowdown, further curtail or cease operations.
TAPESTRY PHARMA: Provides Operations Update; Sells ChomaDex Shares
------------------------------------------------------------------
In a regulatory filing dated April 8, 2008, with the Securities
and Exchange Commission, the company disclosed that all of its
laboratory operations have been discontinued and much of the
related equipment has been, or will be sold. The company sold its
shares in ChomaDex which had a carrying value of $459,000 for
$250,000. To date, the company has sold equipment and supplies
for approximately $340,000 in cash and about $55,000 in debt
relief. Some of the sales are subject to delivery and acceptance
and have not yet been paid for.
As previously disclosed in Tapestry Pharmaceuticals Inc.'s current
report on Form 8-K filed on Feb. 12, 2008, the company has
significantly curtailed its operations and has been working
diligently to convert assets to cash for the settlement of its
creditors.
At the present time, seven individuals continue as employees in a
full-time capacity and one individual continues as an employee in
a part-time capacity.
Mr. Gordon H. Link, Jr., chief executive officer, and Martin Batt,
senior vice president and chief operating officer, continue to
serve as officers on an at-will basis, each for a monthly base
salary, $12,500 of which is being paid currently and the remainder
of which ($7,500 per month and $10,000 per month, respectively) is
being deferred until such time, if any, that the company has
sufficient funds to pay it.
Non-executive employees are being paid 90% of their earnings
currently with the remainder being deferred until such time, if
any, that the company has sufficient funds to pay them.
As previously reported, Grant Thornton LLP resigned as the
company's independent registered public accounting firm. As a
result of such resignation, the company has no independent
registered public accounting firm, and the company has not yet
retained, and may not be able to retain another independent
registered public accounting firm. Therefore, the company did not
file an Annual Report on Form 10-K for the fiscal year ended
Jan. 2, 2008.
About Tapestry Pharmaceuticals
Based in Boulder, Colorado, Tapestry Pharmaceuticals Inc. --
http://www.tapestrypharma.com/-- is a biopharmaceutical company
focused on the development of proprietary therapies for the
treatment of cancer. Tapestry's lead candidate, TPI 287 is in
multiple Phase 2 clinical studies funded by a development partner.
At Sept. 26, 2007, the company's consolidated balance sheet showed
$11.9 million in total assets, $3.7 million in total liabilities,
and $8.2 million in total stockholders' equity.
* * *
The company has no revenue and has incurred significant operating
losses since its inception. The company reported a net loss of
$16.7 million for the nine months ended Sept. 27, 2007.
The company believes that its existing cash and cash equivalents
and short-term investments are not sufficient to enable it to fund
operating expenses and capital expenditures for the next twelve
months.
Should the company be unable to raise the needed capital, it may
be required to slowdown, further curtail or cease operations.
TAPESTRY PHARMA: Inks TPI 287 Exclusive License Pact with Archer
----------------------------------------------------------------
On April 2, 2008, Tapestry Pharmaceuticals Inc. entered into an
Exclusive License Agreement for TPI 287 with Archer Biosciences
Inc. Archer is a corporation duly organized and existing under
the laws of Delaware that is separately funded and not affiliated
with the company.
Under the agreement, the company licensed to Archer all
intellectual property rights as well as the right to make, have
made, use , import, export, offer for sale, distribute and market
TPI 287 either themselves or through one or more sublicensees in
North America and Japan. Archer made a $500,000 upfront payment
to the company and will take over all financial responsibilities
with respect to the development and marketing of TPI 287 in North
America and Japan.
The company is eligible to receive certain signing and development
milestones depending on the location, use and formulation of TPI
287 that, in the aggregate, will not exceed $23 million. In
addition, the company may receive single digit royalties and sales
milestones based on net sales of TPI 287. The agreement may be
terminated by either party for material breach after a specified
notice and cure period and may be terminated by Archer upon 30
days written notice to the company.
About Tapestry Pharmaceuticals
Based in Boulder, Colorado, Tapestry Pharmaceuticals Inc. --
http://www.tapestrypharma.com/-- is a biopharmaceutical company
focused on the development of proprietary therapies for the
treatment of cancer. Tapestry's lead candidate, TPI 287 is in
multiple Phase 2 clinical studies funded by a development partner.
At Sept. 26, 2007, the company's consolidated balance sheet showed
$11.9 million in total assets, $3.7 million in total liabilities,
and $8.2 million in total stockholders' equity.
* * *
The company has no revenue and has incurred significant operating
losses since its inception. The company reported a net loss of
$16.7 million for the nine months ended Sept. 27, 2007.
The company believes that its existing cash and cash equivalents
and short-term investments are not sufficient to enable it to fund
operating expenses and capital expenditures for the next twelve
months.
Should the company be unable to raise the needed capital, it may
be required to slowdown, further curtail or cease operations.
TEEVEE TOONS: Creditors Panel Taps Sonnenschein Nath as Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Teevee
Toons Inc.'s bankruptcy case seeks permission from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Sonnenschein Nath & Rosenthal LLP as its bankruptcy counsel.
As the Committee's counsel, Sonnenschein Nath will primarily
advise the Committee of its rights, duties and powers, as well as
assist and advise the Committee in its consultations with the
Debtor with respect to the administration of this Chapter 11 case.
The current hourly rates charged by Sonnenschein Nath are:
Partners/Of Counsel $265-$855 per hour
Associates $190-$590 per hour
Paraprofessionals $120-$300 per hour
Attorneys who are currently expected to have primary
responsibility for providing services to the Committee and their
hourly rates are:
Carole Neville, Esq. $740 per hour
Sarah Chenetz, Esq. $670 per hour
Michael Carney, Esq. $410 per hour
Carole Neville, Esq., a member at Sonnenschein Nath, attests that
the firm neither holds nor represents any interest adverse to the
Debtor or their estates, and that no member of the firm has been,
within two years from the date of the Debtor's petition, a
director, officer or employee of the Debtor as specified in
subparagraph(B) of Section 101(14) of the bankruptcy code.
Headquartered in New York City, TEEVEE Toons Inc. dba T.V.T.
Records -- http://www.tvtrecords.com/-- is an American record
label. The Debtor filed for Chapter 11 petition on Feb. 19, 2008
(Bankr. S. D. N.Y. Case No.: 08-10562.) Alec P. Ostrow, Esq. at
Stevens & Lee, P.C. represents the Debtor in its restructuring
efforts. When the Debtor filed for protection from its creditors,
it listed estimated assets and debts of between $10 million and
$50 million.
TOURO COLLEGE: Moody's Withdraws 'Ba1' Ratings on 1999A Bonds
-------------------------------------------------------------
Moody's Investors Service has withdrawn its Ba1 long-term rating
assigned to Touro College's bonds, including the Series 1999A
bonds issued by the New York City Industrial Development Agency
and the Certificates of Participation (1999) issued through the
City of Vallejo, CA.
The ratings have been withdrawn due to the defeasance of the
College's obligation under the indentures. The College no longer
has any debt with a Moody's rating based on its own credit
quality.
TERWIN MORTGAGE: S&P Rating on Class B-2 Tumbles to 'D' From 'CCC'
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
B-2 asset-backed securities from Terwin Mortgage Trust 2005-13SL
to 'D' from 'CCC'.
The downgrade reflects the deteriorating performance of the
collateral pool as monthly net losses continue to significantly
outpace monthly excess interest cash flows, resulting in the
complete erosion of overcollateralization (O/C) and a complete
write-down to the principal balance of the subordinate B-3 and B-4
classes.
Subordination, O/C, and excess spread provide credit support for
this deal. The collateral for this transaction primarily consists
of closed-end second-lien, adjustable- and fixed-rate mortgage
loans secured by one- to four-family residential properties.
TERWIN MORTGAGE: Fitch Junks Ratings on Six Certificate Classes
---------------------------------------------------------------
Fitch Ratings has taken rating actions on Terwin Mortgage Trust
mortgage pass-through certificates. Unless stated otherwise, any
bonds that were previously placed on Rating Watch Negative are now
removed. Affirmations total $336.2 million and downgrades total
$86.3 million. Additionally, $20.0 million was placed on Rating
Watch Negative. Break Loss percentages and Loss Coverage Ratios
for each class are included with the rating actions as:
Terwin Mortgage Trust 2005-8HE
-- $24.6 million class A-2 affirmed at 'AAA',
(BL: 93.75, LCR: 5.02);
-- $65.1 million class A-3 affirmed at 'AAA',
(BL: 64.25, LCR: 3.44);
-- $12.9 million class M-1 affirmed at 'AA+',
(BL: 57.93, LCR: 3.1).
Deal Summary
-- Originators: Various
-- 60+ day Delinquency: 26.04%
-- Realized Losses to date (% of Original Balance): 1.42%
-- Expected Remaining Losses (% of Current balance): 18.68%
-- Cumulative Expected Losses (% of Original Balance): 7.17%
Terwin Mortgage Trust 2005-14HE
-- $47.6 million class AF-2 affirmed at 'AAA',
(BL: 50.66, LCR: 2.65);
-- $5.8 million class AF-3 affirmed at 'AAA',
(BL: 45.10, LCR: 2.36);
-- $21.3 million class AF-4 affirmed at 'AAA',
(BL: 29.39, LCR: 1.54);
-- $18.1 million class AF-5 affirmed at 'AAA',
(BL: 30.27, LCR: 1.58);
-- $22.9 million class AV-2 affirmed at 'AAA',
(BL: 47.90, LCR: 2.51);
-- $4.6 million class AV-3 downgraded to 'AA' from 'AAA'
(BL: 37.25, LCR: 1.95);
-- $13.0 million class M-1 downgraded to 'B' from 'AA-'
(BL: 21.12, LCR: 1.1);
-- $6.2 million class M-2 downgraded to 'CCC' from 'A'
(BL: 17.16, LCR: 0.9);
-- $3.2 million class M-3 downgraded to 'CCC' from 'BBB+'
(BL: 15.06, LCR: 0.79);
Deal Summary
-- Originators: Various
-- 60+ day Delinquency: 24.61%
-- Realized Losses to date (% of Original Balance): 1.41%
-- Expected Remaining Losses (% of Current balance): 19.12%
-- Cumulative Expected Losses (% of Original Balance): 10.76%
Terwin Mortgage Trust 2005-16HE
-- $60.3 million class AF-2 affirmed at 'AAA',
(BL: 53.20, LCR: 2.22);
-- $4.9 million class AF-3 affirmed at 'AAA',
(BL: 49.53, LCR: 2.07);
-- $29.7 million class AF-4 affirmed at 'AAA',
(BL: 34.05, LCR: 1.42);
-- $23.8 million class AF-5 affirmed at 'AAA',
(BL: 34.65, LCR: 1.45);
-- $52.9 million class AV-2 affirmed at 'AAA',
(BL: 57.81, LCR: 2.41);
-- $20.0 million class AV-3 downgraded to 'AA' from 'AAA',
placed on Rating Watch Negative (BL: 39.98, LCR: 1.67);
-- $11.3 million class M-1A downgraded to 'B' from 'AA-'
(BL: 25.34, LCR: 1.06);
-- $11.3 million class M-1B downgraded to 'B' from 'AA-'
(BL: 25.34, LCR: 1.06);
-- $5.5 million class M-2A downgraded to 'CCC' from 'A'
(BL: 21.02, LCR: 0.88);
-- $5.5 million class M-2B downgraded to 'CCC' from 'A'
(BL: 21.02, LCR: 0.88);
-- $2.9 million class M-3A downgraded to 'CCC' from 'BBB+'
(BL: 18.74, LCR: 0.78);
-- $2.9 million class M-3B downgraded to 'CCC' from 'BBB+'
(BL: 18.74, LCR: 0.78).
Deal Summary
-- Originators: Various
-- 60+ day Delinquency: 28.93%
-- Realized Losses to date (% of Original Balance): 1.61%
-- Expected Remaining Losses (% of Current balance): 23.94%
-- Cumulative Expected Losses (% of Original Balance): 13.01%
The rating actions are based on changes that Fitch has made to its
subprime loss forecasting assumptions. The updated assumptions
better capture the deteriorating performance of pools from 2007,
2006 and late 2005 with regard to continued poor loan performance
and home price weakness.
TOURMALINE CDO: Moody's Junks Rating on $32 Mil. Notes From 'A2'
----------------------------------------------------------------
Moody's Investors Service downgraded ratings of seven classes of
notes issued by Tourmaline CDO II Ltd. and left on review for
possible downgrade the ratings of five of these classes of notes.
The classes affected by this rating actions are:
Class Description: Up to $700,000,000 Class A-1 Senior Variable
Funding Floating Rate Notes Due 2046
-- Prior Rating: Aaa
-- Current Rating: Aa3, on review for possible downgrade
Class Description: Up to $700,000,000 Class A-2 Senior Floating
Rate Notes Due 2046
-- Prior Rating: Aaa
-- Current Rating: Aa3, on review for possible downgrade
Class Description: Up to $700,000,000 Class A-3 Senior Floating
Rate Notes Due 2046
-- Prior Rating: Aaa
-- Current Rating: Aa3, on review for possible downgrade
Class Description: $100,000,000 Class B Senior Floating Rate Notes
Due 2046
-- Prior Rating: Aaa
-- Current Rating: A3, on review for possible downgrade
Class Description: $90,000,000 Class C Senior Floating Rate Notes
Due 2046
-- Prior Rating: Aa2, on review for possible downgrade
-- Current Rating: Baa2, on review for possible downgrade
Class Description: $32,000,000 Class D Mezzanine Floating Rate
Deferrable Notes Due 2046
-- Prior Rating: A2, on review for possible downgrade
-- Current Rating: Ca
Class Description: $38,000,000 Class E Mezzanine Floating Rate
Deferrable Notes Due 2046
-- Prior Rating: Baa2, on review for possible downgrade
-- Current Rating: C
The rating actions reflect deterioration in the credit quality of
the underlying portfolio, as well as the occurrence on March 28,
2008, as reported by the Issuer, of an event of default caused by
a failure of the Senior Par Value Coverage Ratio to be greater
than of equal to 100%, as described in Section 5.1(d) of the
Indenture dated March 30, 2006.
As provided in Article V of the Indenture during the occurrence
and continuance of an Event of Default, certain parties to the
transaction may be entitled to direct the Trustee to take
particular actions with respect to the Collateral Debt Securities
and the Notes.
The rating downgrades taken reflect the increased expected loss
associated with the tranche. Losses are attributed to diminished
credit quality on the underlying portfolio. The severity of
losses of certain tranches may be different, however, depending on
the timing and choice of remedy to be pursued following the event
of default. Because of this uncertainty, the ratings assigned to
the Class A1, A2, A3, B and C Notes remain on review for possible
further action.
Tourmaline CDO II Ltd. is a collateralized debt obligation backed
primarily by a portfolio of RMBS securities and CDO securities and
synthetic securities in the form of credit default swaps.
Reference obligations for the credit default swaps are RMBS, CMBS
and CDO securities.
TROPICANA ENT: Moody's Slashes Probability of Default Rating to Ca
------------------------------------------------------------------
Moody's Investors Service downgraded Tropicana Entertainment's
probability of default rating to Ca from Caa3, and upgraded the
senior secured first lien bank loan ratings to B3 from Caa2.
The downgrade reflects the greater probability the Company will be
unable to cure a technical default under its senior subordinate
note indenture, the likelihood additional technical defaults could
be triggered by Tropicana's failure to file its Form 10-K, as well
as the challenging operating environment that puts into question
the Company's ability to meet the June 2008 interest payment on
its senior subordinated notes.
Moody's changed its 50% standard family recovery rate assumption
to 65% based upon a fundamental company valuation approach. The
higher family recovery rate assumes a value of approximately
$1.46 billion for the Company's assets which equates to an
approximate 5.5 times multiple of trailing EBITDA. The upgrade of
the first lien term loan reflects improved recovery prospects due
to the implementation of a higher estimated family recovery rate
and Moody's assumption that the revolving credit facility will
remain unavailable to the company resulting in a lower amount of
senior secured first lien debt outstanding.
On Tuesday, April 3, 2008, the New Jersey Gaming Control
Commission denied the state appointed Trustee's request to
transfer title of the Atlantic City property back to Adamar. The
NJGCC's decision jeopardizes the company's ability to cure the
technical default that exists under section 4.06 (Asset
Dispositions) of the senior subordinate note indenture by the
required April 20th deadline. Moody's notes Tropicana has a
motion pending before the Delaware Chancery Court that seeks to
excuse its obligation to cure this technical default; the outcome
of this proceeding is difficult to predict.
Tropicana's ratings remain on review for further downgrade given
the number of near-term events that could trigger a default, a
distressed debt exchange, or bankruptcy filing. The review will
focus on the company's negotiations with it lenders, progress with
planned assets and operating performance.
Moody's also downgraded Tropicana Las Vegas Resort & Casino LLC's
CFR to Caa2 from Caa1and its PDR to Ca from Caa3 because the
probability of default is correlated with that of Tropicana. As a
result of a higher probability of default, the rating of Trop Las
Vegas' senior secured credit facility was downgraded to Caa2 from
Caa1. If an event of default under Tropicana's senior subordinate
notes causes the holders thereof to accelerate, it would trigger a
default under Tropicana's senior credit facilities. If the senior
lenders accelerate, it may also cause an event of default under
the Trop Las Vegas term loan.
Tropicana Entertainment LLC
These ratings were downgraded and remain on review for possible
downgrade:
-- Probability of Default Rating to Ca from Caa3
These ratings were upgraded and remain on review for possible
downgrade:
-- First lien senior secured revolving credit facility to B3
from Caa2.
-- First lien senior secured term loan to B3 from Caa2.
These ratings remain on review for possible downgrade:
-- Corporate Family Rating at Caa3
-- Senior Subordinate notes at Ca
Tropicana Las Vegas Resort and Casino, LLC
These ratings were downgraded and remain on review for possible
downgrade:
-- Corporate Family Rate to Caa2 from Caa1
-- Probability of Default Rating to Ca from Caa3
-- First lien senior secured term loan to Caa2 from Caa1
Moody's last rating action occured on March 5, 2008 when
Tropicana's CFR was downgraded to Caa3 and Tropicana's Las Vegas'
CFR was downgraded to Caa1.
Tropicana Entertainment, headquartered in Kentucky, is a privately
owned gaming company that owns and operates eleven casino
properties, ten of which form the Restricted Group. The
properties are located in Atlantic City, New Jersey, Baton Rouge,
Louisiana, and Vicksburg and Greenville, Mississippi, Laughlin and
Lake Tahoe, Nevada, Las Vegas, Nevada, and Evansville, Indiana.
UNICO INC: Issues New Convertible Debenture to Moore Investment
---------------------------------------------------------------
On March 27, 2008, Unico Inc. issued one new Convertible Debenture
Moore Investment Holdings LLC in the amount of $200,000.
Unico received $200,000 from the transaction.
The Convertible Debenture bears interest at the rate of 8.0% per
annum, is convertible to shares of Unico's common stock at 50.0%
of the bid price of Unico's common stock on the date of
conversion, and is due and payable six months from its issue date.
This Convertible Debenture is substantially identical in its terms
to the Convertible Debentures issued by Unico numerous times to
unrelated third parties during the last three years.
Moore Investment Holdings LLC is a Nevada limited liability
company controlled by Joseph A. Lopez, and his wife, Patricia A.
Lopez. Joseph A. Lopez is the father of Mark A. Lopez, chief
executive officer of Unico.
About Unico Inc.
Based in San Diego, Calif., Unico Inc. (OTC BB: UCOI.OB) --
http://www.unicomining.com/-- is a publicly traded natural
resource company in the precious metals mining sector that is
focused on the exploration, development and production of gold,
silver, lead, zinc, and copper concentrates at its three mine
properties: the Deer Trail Mine, the Bromide Basin Mine and the
Silver Bell Mine.
As reported in the Troubled Company Reporter on Jan. 18, 2008,
Unico Inc.'s consolidated balance sheet at Nov. 30, 2007, showed
$6.5 million in total assets and $13.4 million in total
liabilities, resulting in a $6.9 million total stockholders'
deficit.
Going Concern Doubt
As reported in the Troubled Company Reporter on June 15, 2007,
HJ Associates & Consultants LLP, in Salt Lake City, expressed
substantial doubt about Unico Inc.'s ability to continue as a
going concern after auditing the company's financial statements
for the years ended Feb. 28, 2007, and 2006. The auditing firm
pointed to the company's recurring losses from operations and
stockholders' deficit.
UNITED HERITAGE: Engages Hein and Associates LLP as New Auditors
----------------------------------------------------------------
On March 28, 2008, the Audit Committee of United Heritage Corp.'s
Board of Directors approved the engagement of Hein and Associates
LLP as the company's new principal independent accountant to audit
its consolidated financial statements for the year ending
March 31, 2008.
Weaver and Tidwell LLP, Certified Public Accountants, stepped down
as United Heritage's independent auditors effective Feb. 25, 2008.
The company sald that the report of Weaver and Tidwell LLP on its
financial statements as of and for the years ended March 31, 2007,
and March 31, 2006 did not contain an adverse opinion, or a
disclaimer of opinion, however the report issued on the financial
statements for the year ended March 31, 2007, was modified as to
the company's ability to continue as a going concern.
The company further said that during the periods ended March 31,
2007, and March 31, 2006, and the interim period from April 1,
2007, through the date of resignation, it did not have any
disagreements with Weaver and Tidwell LLP on any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope or procedure.
During the fiscal year ended March 31, 2007, Weaver and Tidwell
LLP advised the company that significant deficiencies in its
internal control had come to its attention which represented a
material weakness. Weaver and Tidwell LLP concluded that certain
of the significant deficiencies resulted in more than a remote
likelihood that a material misstatement of its financial
statements to be issued covering the fiscal year ended March 31,
2007, would not be prevented or detected. The company disclosed
the material weakness in its Annual Report on Form 10-KSB for the
fiscal year ended March 31, 2007.
About United Heritage
Headquartered in Midland, Texas, United Heritage Corporation
(NasdaqCM: UHCP) -- http://www.unitedheritagecorp.com/-- is an
independent producer of natural gas and crude oil based in
Midland, Texas. The company produces from properties it leases in
Texas. Lothian Oil Inc., formerly the company's largest
shareholder, provided the company with the funds to operate from
November 2005 until it declared bankruptcy on June 13, 2007.
As reported in the Troubled Company reporter on Feb. 26, 2008, the
company's consolidated balance sheet at Dec. 31, 2007, showed
$6,223,378 in total assets, $3,518,832 in total liabilities, and
$2,704,546 in total stockholders' equity.
Going Concern Doubt
Weaver and Tidwell L.L.P., in Fort Worth, Texas, expressed
substantial doubt about United Heritage Corp.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the years ended March 31,
2007, and 2006. The auditing form reported that the company sold
all of its proved reserves in 2006 and currently does not have
significant revenue producing assets. In addition, the auditing
firm said that the company has limited capital resources and its
majority shareholder who was financing the company's development
filed for bankruptcy subsequent to March 31, 2007.
UNIVISION COMMS: Fitch Affirms 'CCC+' Rating on Sr. Unsecured Debt
------------------------------------------------------------------
Fitch Ratings affirmed these ratings of Univision Communications,
Inc.:
-- Issuer Default Rating 'B';
-- Senior secured bank 'B+/RR3';
-- Senior secured notes 'B+/RR3';
-- Second-Lien Loan 'B-/RR5';
-- Senior Unsecured debt 'CCC+/RR6'.
In a filing on April 8, 2008, Univision disclosed that it borrowed
$700 million from its seven year revolving credit facility to
provide the company with greater financial flexibility in light of
current financial market conditions. Fitch does not believe that
the borrowing changes the company's financial profile or
probability of default at its existing 'B' rating. The Outlook
remains Stable.
While there may be some uncertainty regarding whether the drawing
is related to an undisclosed adverse event, Fitch believes the
forward-looking component of the Material Adverse Effect
Representation somewhat mitigates this risk.
As detailed in a Fitch press release dated March 4, Fitch believes
the company has various alternatives to pay down its $500 million
second-lien loan due March 2009, including sale proceeds from its
music division, the sale of non-cash flow producing assets and the
sale of non-core assets. Fitch views the company's TV stations
that are not in top Hispanic markets and/or do not have duopolies
(Salt Lake City, Cleveland, Raleigh) and stand-alone radio
stations (Las Vegas, San Diego) as non-core. Beyond 2009, the
company does not have any debt maturities until $500 million due
2011. Fitch believes the company will be cash flow positive over
the intermediate term.
The ratings are still supported by the company's underlying
portfolio of assets which include duopoly TV stations and radio
stations in most of the top Hispanic markets, with a national
overlay of broadcast and cable networks. The ratings are
restrained from a highly leveraged capital structure that includes
cash interest coverage of under 1.5x. Fitch expects the company
to pay cash interest on its PIK Notes for the existing six month
period, however any period with revolver availability under
$300 million results in automatic PIK election on these notes.
The ratings are also restrained by the ongoing litigation disputes
with Televisa. As Fitch have mentioned before, there is limited
potential for upward momentum to ratings in the future unless the
company is able to agree to a longer term contract with Televisa.
These concerns are balanced by Fitch's continued expectations for
strong growth over the intermediate term.
VCA ANTECH: Moody's Holds Ba3 Rating; Changes Outlook to Positive
-----------------------------------------------------------------
Moody's Investors Services affirmed the Ba3 Corporate Family
Rating of VCA Antech, Inc. and changed the outlook to positive
from stable.
The positive outlook anticipates a moderate increase in
profitability and improving credit metrics in 2008. Veterinary
services are somewhat discretionary and a weakening economy should
slow organic growth rates from the levels achieved in the past few
years. However, Moody's expects that a low to mid-single digit
organic revenue increase combined with the effect of acquisitions
completed in 2007 and early 2008 will drive profit improvement
over the next year.
The Ba3 CFR is supported by strong financial strength metrics for
the rating category, leading market positions in the animal
hospital and veterinary testing markets and a consistent track
record of organic revenue growth. The ratings remain constrained
by the potential for further debt-financed acquisitions. However,
VCA's track record of effectively managing and integrating
acquired entities while maintaining a conservative financial
profile mitigates this risk.
These ratings were affirmed (LGD assessments and point estimates
were changed as indicated below):
-- Ba3 Corporate Family Rating;
-- B1 Probability of Default Rating;
-- Ba3 (to LGD 2- 29% from LGD 3- 31%) on the $75 million Senior
Secured Revolver due 2010; and
-- Ba3 rating (to LGD 2- 29% from LGD 3- 31%) on the
$528 million Senior Secured Term Loan due 2011.
VCA, headquartered in Los Angeles, California, is a leading animal
healthcare services company operating 438 animal hospitals and 36
laboratories in the United States. For the year ended Dec. 31,
2007, the company reported total revenues of approximately
$1.2 billion.
VERIDIEN CORP: Board Accepts Resignation of Kenneth Cancellara
--------------------------------------------------------------
On March 28, 2008, the Board of Directors of Veridien Corp.
accepted the resignation of Kenneth Cancellara as director and
executive of the company. The resignation did not result from a
disagreement with the company on any matter relating to the
company's operations, policies or practices.
Mr. Cancellara was named Veridien's executive chairman and was
appointed to the Board of Directors on May 8, 2007.
About Veridien Corp.
Headquartered in Largo, Fla., Veridien Corporation (OTC BB: VRDE)
-- http://www.veridien.com/-- is a Health Care company focusing
on infection control and healthy lifestyle roducts. Veridien was
founded in 1991 in St. Petersburg, Florida to develop, manufacture
and distribute a new generation of disinfectant and antiseptic
products.
At Dec. 31, 2007, the company's consolidated balance sheet showed
$3,147,056 in total assets, $2,546,795 in total liabilities,
$90,049 in minority interest, and $510,212 in total stockholders'
equity.
* * *
Houston-based Malone & Bailey, PC exressed substantial doubt about
Veridien Corp.'s ability to continue as a going concern after
auditing the company's consolidated financial statements for the
years ended Dec. 31, 2007, and 2006. The auditing firm pointed to
the company's recurring losses from operations, negative cash flow
from operations, and accumulated deficit.
VERTIS INC: Will Forgo Interest Payment on Second Lien Notes
------------------------------------------------------------
Vertis Inc. disclosed Monday that as part of its strategy to
preserve and enhance its near-term liquidity, on April 1, 2008,
the company elected to forego making a $17.1 million interest
payment on its 9¾% Senior Secured Second Lien Notes.
Under the terms of the indenture governing the Second Lien Notes,
the company has a thirty-day grace period in which to make this
interest payment before it would be an event of default. The
company may seek a waiver or deferral from the holders of the
Second Lien Notes and to the extent waivers or deferrals are not
received and the interest payments are not made within the thirty-
day grace period, it would be an event of default under the
indenture.
The company also disclosed that pursuant to a forbearance
agreement dated April 3, 2008, the lenders under the company's
four-year revolving credit agreement agreed to forbear from
exercising their right to not make any additional advances or
incur any additional letter of credit obligations under the credit
agreement until the earliest to occur of:
(i) May 27, 2008,
(ii) the failure of the company to satisfy certain borrowing
availability conditions under the Credit Agreement or
(iii) the occurrence of certain other events described in the
Forbearance Agreement.
The lenders also agreed to forbear during the Forbearance Period
from exercising certain of their other rights and remedies against
the company that may exist as a result of the company's failure to
make the interest payment on the Second Lien Notes.
About Vertis Inc.
Headquartered in Baltimore, Vertis Inc., doing business as Vertis
Communications -- http://www.vertisinc.com/-- is a provider of
print advertising and direct marketing solutions to America's
leading retail and consumer services companies.
At Dec. 31, 2007, the company's consolidated balance sheet showed
$528.2 million in total assets and $1.403 billion in total
liabilities, resulting in a $875.1 million total stockholders'
deficit.
* * *
As reported in the Troubled Company Reporter on April 4, 2008,
Deloitte & Touche LLP, in Baltimore, Maryland, expressed
substantial doubt about Vertis Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the years ended Dec. 31, 2007, and 2006. The
auditing firm said that the company has incurred recurring net
losses and is experiencing difficulty in generating sufficient
cash flow to meet its obligations and sustain its operations.
As reported in the Troubled Company Reporter on April 3, 2008,
Standard & Poor's Ratings Services revised its CreditWatch
implications for its 'CC' corporate credit rating on Vertis Inc.
to negative from developing following the company's announcement
that it had engaged a financial advisor to assist in a possible
debt exchange offering.
At the same time, Standard & Poor's lowered its ratings on
Vertis's $350 million senior secured second-lien notes and
$350 million senior unsecured notes to 'C' from 'CCC'. The notes
remain on CreditWatch with negative implications, where they were
originally placed on April 4, 2007.
VERTIS INC: S&P Rating on 9.75% Senior Notes Tumbles to 'D' From C
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Vertis
Inc.'s 9.75% senior secured second-lien notes due 2009 to 'D' from
'C'. S&P also lowered the corporate credit rating on the company
to 'SD' (selective default) from 'CC'. These ratings were removed
from CreditWatch, where they were placed with negative
implications April 1, 2008. The rating on Vertis' 10.875% senior
unsecured notes remains unchanged at 'C', and this rating is still
on CreditWatch with negative implications.
The rating actions stem from the company's announcement that it
has elected to forego making a $17.1 million interest payment on
the notes. Vertis has a thirty-day grace period in which to make
this interest payment before it would be an event of default under
provisions of the indenture. The company stated that it may seek
a waiver or deferral from the holders of the second-lien notes
prior to the end of the grace period.
"While a payment default has not occurred relative to the legal
provisions of the notes, we consider a default to have occurred
when a payment related to an obligation is not made, even if a
grace period exists, when the nonpayment is a function of the
borrower being under financial stress--unless we are confident
that the payment will be made in full during the grace period,"
explained Standard & Poor's credit analyst Liz Fairbanks.
Vertis also stated that bank lenders agreed to forbear from
exercising their right to not make any additional advances or
incur any additional letter of credit obligations under the
company's four-year revolving credit facility until the earliest
of:
(1) May 27, 2008,
(2) the failure of the company to satisfy certain borrowing
availability conditions under its credit agreement, or
(3) the occurrence of certain other events described in its
forbearance agreement.
VICORP RESTAURANTS: Obtains Limited Access to Cash Collateral
-------------------------------------------------------------
The Hon. Kevin Gross of the United States Bankruptcy Court for the
District of Delaware authorized VICORP Restaurants Inc. and VI
Acquisition Corp. limited access to the cash collateral of Wells
Fargo Foothill Inc. and Ableco Finance LLC until July 10, 2008.
Judge Gross will convene a hearing on April 22, 2008, at 4:00
p.m., Prevailing Eastern Time, at 824 North Market Street in
Wilmington, Delaware, to consider final approval of the Debtors'
request. Objections, if any, are due April 15, 2008.
Wells Fargo and Ableco are also the Debtors' postpetition facility
lenders. The Debtors owed the prepetition lenders $22,732,088 in
the aggregate -- inclusive of outstanding letters of credit of
$7,365,139 -- pursuant to the prepetition financing documents.
The Debtors said they have an immediate need to use cash
collateral to continue to operate their business in the ordinary
course, pay wages and generally conduct their business affairs so
as to avoid immediate and irreparable harm to their estates and
the value of their assets.
As adequate protection to the limited access of cash collateral,
the prepetition liens will be subject and subordinate only to (i)
the DIP liens, (ii) any liens on the DIP collateral to which the
DIP liens are junior, and (iii) the carve-out for U.S. Trustee
fees, Clerk of Court fees, and bankruptcy professional fees.
A full-text copy of VICORP's Pro-Forma Weekly Cash Flow Forecast
is available for fee at http://ResearchArchives.com/t/s?2a1b
About VICORP Restaurants
Headquartered in Denver, Colorado, VICORP Restaurants Inc. and VI
Acquisition Corp. -- http://www.vicorpinc.com/-- owns and
operates 306 restaurants in 25 states and were the franchisor for
93 restaurants operated under the name of Village Inn or Bakers
Square, as of April 1, 2008. The Debtor closed 56 of their
company-owned restaurants before April 2, 2008, in attempt to
eliminate the underperforming locations.
The Debtors employed approximately 12,750 employees -- comprised
of 7,500 part-time workers and 5,250 full-time employees. The
total personnel was reduced to 11,000 employees as of the Debtors'
bankruptcy filing, due primarily to the closure of the
restaurants.
The companies filed for Chapter 11 protection on April 3, 2008
(Bankr. D. Del. Lead Case No.08-10623). Donna L. Culver, Esq.,
at Morris, Nichols, Arsht & Tunnell, and Kimberly Ellen Connolly
Lawson, Esq., Kurt F. Gwynne, Esq., and Richard A. Robinson, Esq.,
at Reed Smith LLP, represent the Debtors in their restructuring
efforts.
When the Debtors filed for protection against their creditors,
they listed assets and debts between $100 million and
$500 million.
VICORP RESTAURANTS: Seeks to Hire Reed Smith as Bankruptcy Counsel
------------------------------------------------------------------
VICORP Restaurants Inc. and its debtor-affiliate, VI Acquisition
Corp., ask permission from the U.S. Bankruptcy Court for the
District of Delaware to employ Reed Smith LLP as their general
bankruptcy counsel, nunc pro tunc to April 3, 2008.
Reed Smith will, among others, advise the Debtors of their rights,
powers, and duties as debtors and debtors-in-possession, and will
take all necessary action to protect and preserve the Debtors'
estates, including assisting the Debtors in prosecuting a plan of
reorganization.
Claudia Z. Springer, Esq., a partner at Reed Smith, tells the
Court that the firm's professionals bill:
Claudia Z. Springer Partner $645 per hour
Richard A. Robinson Partner $565 per hour
Kurt F. Gwynne Partner $560 per hour
J. Cory Falgowski Associate $325 per hour
Kimberly E.C. Lawson Associate $430 per hour
Elizabeth McGovern Associate $315 per hour
John B. Lord Paralegal $235 per hour
Lisa Lankford Paralegal $135 per hour
Ms. Springer assures the Court that the the firm does not hold or
represent any interests adverse to the Debtors' estates.
About VICORP Restaurants
Based in Denver, Colorado, VICORP Restaurants Inc. --
http://www.vicorpinc.com/-- operates two restaurant concepts
under proven and well-recognized brands, Village Inn and Bakers
Square. Founded in 1958, VICORP has 343 restaurants in 25 states,
consisting of 250 company-operated restaurants and 93 franchised
restaurants. Known for its strong breakfast heritage, Village Inn
has been serving its signature breakfast items like one-of-a-kind
skillet dishes and made-from-scratch pancakes for 50 years. In
addition, Village Inn offers traditional American fare for lunch
and dinner.
The company and its affiliates filed for Chapter 11 protection on
April 3, 2008 (Bankr. D. Del. Lead Case No. 08-10623). Donna L.
Culver, Esq., at Morris Nichols Arsht & Tunnell, and Kimberly
Ellen Connolly Lawson, Esq., Kurt F. Gwynne, Esq., and Richard A.
Robinson, Esq., at Reed Smith LLP, represents the Debtors in their
restructuring efforts. The Debtors chose Wells Fargo Trumbull as
their claims, noticing, and balloting agent.
When the Debtors filed for protection from their creditors, they
listed estimated assets and debts of $100 million to $500 million.
VICORP RESTAURANTS: Wants Wells Fargo Trumbull as Claims Agent
--------------------------------------------------------------
VICORP Restaurants Inc. and its debtor-affiliate, VI Acquisition
Corp., seek authority from the U.S. Bankruptcy Court for the
District of Delaware to employ Wells Fargo Trumbull as their
claims, noticing, and balloting agent.
As agent for and custodian of the records of the bankruptcy clerk
in these cases, Trumbull will, among others, prepare and serve all
notices required in these cases, maintain an official claims
register, assist the Debtors with the reconciliation and
resolution of claims, and mail and tabulate ballots for purposes
of plan voting.
Pursuant to an engagement agreement, Trumbull professionals will
be paid at these rates:
Designation Hourly Rate
----------- -----------
Consultant $225 - $295
Operations Manager $110 - $185
Automation Consultant $140 - $175
Case Manager $85 - $135
Data Specialist $65 - $80
Administrative Support $55
Kenneth L. Keymer, the CEO and president of the Debtors, tells the
Court in a consolidated affidavit that Trumbull is experienced and
is well qualified to serve as agent in these Chapter 11 cases, and
its employment will provide the Debtors with efficient management
of the claims, noticing, and balloting processes in these cases.
About VICORP Restaurants
Based in Denver, Colorado, VICORP Restaurants Inc. --
http://www.vicorpinc.com/-- operates two restaurant concepts
under proven and well-recognized brands, Village Inn and Bakers
Square. Founded in 1958, VICORP has 343 restaurants in 25 states,
consisting of 250 company-operated restaurants and 93 franchised
restaurants. Known for its strong breakfast heritage, Village Inn
has been serving its signature breakfast items like one-of-a-kind
skillet dishes and made-from-scratch pancakes for 50 years. In
addition, Village Inn offers traditional American fare for lunch
and dinner.
The company and its affiliates filed for Chapter 11 protection on
April 3, 2008 (Bankr. D. Del. Lead Case No. 08-10623). Donna L.
Culver, Esq., at Morris Nichols Arsht & Tunnell, and Kimberly
Ellen Connolly Lawson, Esq., Kurt F. Gwynne, Esq., and Richard A.
Robinson, Esq., at Reed Smith LLP, represents the Debtors in their
restructuring efforts. The Debtors chose Wells Fargo Trumbull as
their claims, noticing, and balloting agent.
When the Debtors filed for protection from their creditors, they
listed estimated assets and debts of $100 million to $500 million.
VICORP RESTAURANTS: Sec. 341(a) Creditors Meeting Set for May 2
---------------------------------------------------------------
The United States Trustee for Region 3 will convene a meeting of
VICORP Restaurants Inc. and its debtor-affiliates' creditors at
10:00 a.m., on May 2, 2008, at the J. Caleb Boggs Federal
Building, 2nd Floor, Room 2112, 844 King Street, in Wilmington,
Delaware.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Denver, Colorado, VICORP Restaurants Inc. --
http://www.vicorpinc.com/-- operates family dining restaurants
under the Village Inn and the Bakers Square brands. They also
operate three pie production facilities that produce premium pies
that are available in their restaurants or are sold to select
third-party customers including supermarkets and other restaurant
chains. The company and its parent VI Acquisition Corp. filed
separate Chapter 11 petitions on April 3, 2008 (Bankr. D. Del.
Lead Case No. 08-10624).
Donna L. Culver, Esq., at Morris, Nichols, Arsht & Tunnell, and
Kimberly Ellen Connolly Lawson, Esq., Kurt F. Gwynne, Esq.,
Richard A. Robinson, Esq., at Reed Smith LLP, represent the
Debotrs as bankruptcy counsels. When the Debtors filed for
bankruptcy protection they each listed estimated assets and debts
of between $100 million to $500 million.
VIDEOTRON LTEE: Moody's Puts 'Ba2' Rating on $350 Mil. Sr. Notes
----------------------------------------------------------------
Moody's Investors Service rated Videotron Ltee's $350 million
senior unsecured note issue Ba2. Videotron is a wholly-owned
subsidiary of Quebecor Media Inc., a diversified media company
whose corporate family rating is Ba3. As part of the rating
action, QMI's CFR was affirmed along with the prevailing stable
outlook. In addition, a speculative grade liquidity rating of
SGL-3, indicating adequate liquidity, was assigned.
Videotron plans to use the note proceeds to repay drawings under
its senior secured revolving credit facility with any excess being
for general corporate purposes. Videotron is concurrently
increasing the size of its RTL to CN$575 million from
CN$450 million. The amended facility will mature in April, 2012.
Moody's assesses these transactions as being initiated to ensure
that Videotron will have the financial resources with which to
finance a spectrum purchase and wireless network build-out should
it be a successful bidder in the pending auction of Canadian
Advanced Wireless Services spectrum. At this juncture, it is not
certain that QMI will be a successful bidder, nor is the form of
the company's prospective participation certain; it may be limited
to a Quebec-only footprint or it could also involve licenses
outside of Quebec. Similarly, the competitive environment is
subject to significant uncertainties as the AWS auction is likely
to cause margins to be somewhat suppressed relative to historic
norms. There is also a potential change in the behavior of
Canada's largest telecommunications company as it is taken private
later this spring. There are also the usual execution risks
related to a network build-out. In short, there are a number of
contingencies that may or may not come to pass.
In contrast to this is the background of a company whose cash flow
has been expanding, and this trend may continue thereby providing
a significant positive factor that off-sets the potential impact
of the various contingencies. Accordingly, at this juncture, the
financing transactions are neutral to both Videotron's and QMI's
credit profiles (with the exception of the LGD impact that sees
senior unsecured debt at operating companies repositioned at the
Ba2 rating level). As the various contingencies are addressed,
should it appear that credit protection measures are likely to
deviate significantly from expectations for an extended period, it
may become necessary to reassess the outlook and CFR. In the
interim, QMI's existing Ba3 CFR (which balances expectations of
volatile credit protection metrics and a lack of commitment to a
specific leverage target against strength provided by a
diversified portfolio of businesses that generate stable-to-
growing operating cash flow and average leverage in the +/- 4.0x
range) and stable outlook continue to be warranted.
Assignments:
Issuer: Videotron Ltee
-- Senior Unsecured Regular Bond or Debenture, Assigned Ba2
(LGD2, 29)
Issuer: Quebecor Media, Inc.
-- Speculative Grade Liquidity Rating, Assigned SGL-3
Downgrades:
Issuer: Quebecor Media, Inc.
-- Senior Secured Bank Credit Facility, Unchanged at B1, with
the LGD assessment downgraded to (LGD5, 73) from (LGD4, 68)
-- Senior Unsecured Regular Bond or Debenture, Unchanged at B2,
with the LGD assessment downgraded to (LGD5, 89) from
(LGD5, 88)
Issuer: Sun Media Corporation
-- Senior Unsecured Regular Bond or Debenture, Downgraded to Ba2
(LGD2, 29) from Ba1 (LGD2, 27)
Issuer: Videotron Ltee
-- Senior Unsecured Regular Bond or Debenture, Downgraded to Ba2
(LGD2, 29) from Ba1 (LGD2, 27)
Withdrawals:
Issuer: Sun Media Corporation
-- Senior Secured Bank Credit Facility, Withdrawn, previously
rated Baa3 (LGD1, 5)
While the new debt offering does not impact QMI's CFR (which is an
expression of expected loss), probability of default rate, or
expected family recovery rate, the transaction necessitates
adjustments to QMI's consolidated waterfall of liabilities. With
the application of Moody's loss given default methodology, this
causes ratings of individual debt instruments in the QMI corporate
family to be adjusted. Importantly, the combination of the new
senior unsecured debt issue and the upsized secured revolving
credit facility suggest there is an increased priority claim on
secured assets and, also, a larger pool of subsecquent unsecured
claims. Consequently, senior unsecured debts issued at operating
companies are now rated Ba2 whereas they were previously Ba1. As
the new Videotron debt issue is senior unsecured and issued by an
operating company, it is rated Ba2.
QMI's practice of arranging financing piece meal rather on a
consolidated basis implies that liquidity is not seen as a credit
strength. This is especially the case at the parent holding
company since the receipt of dividends from operating companies is
conditional upon compliance with financial covenants and
restricted payments baskets. Some CN$815 million of revolving
term loans are maintained in four separate legal entities.
Moody's anticipates that each of the key operating subsidiaries
will be cash flow positive over the next few quarters (depending
upon Videotron's AWS spectrum and related network build-out).
While financial covenants are not public, given the FCF
expectations, it is unlikely they will limit access. In addition
to positive operating cash flow and credit facility availability,
QMI could also divest of non-core assets to raise cash, but this
is not viewed as a strong likelihood. The aggregate of these four
factors suggests that QMI's liquidity arrangements are adequate
for its needs. Accordingly, an SGL-3 rating was assigned.
The rating action also included an administrative matter related
to Sun Media's bank credit facilities, which, for business
reasons, are no longer rated.
Headquartered in Montreal, Canada, Videotron is a wholly-owned
subsidiary of Quebecor Media Inc., a privately held leading
Canadian media holding company. Videotron is focused in cable
distribution and the business, residential and mobile wireless
telecommunications businesses.
VAXGEN INC: To Cut 75% of Workforce Including CFO Matthew Pfeffer
-----------------------------------------------------------------
VaxGen Inc. moved to terminate the staff which it had retained in
anticipation of the needs of the merged company. Vaxgen will be
terminating approximately 75% of its remaining staff of 22
persons, including Matthew Pfeffer, the company's CFO and senior
vice president of finance and administration.
The restructuring was initiated to minimize expenses after the
termination of the proposed merger between VaxGen and Raven
Biotechnologies Inc.
As reported in the Troubled Company Reporter on April 2, 2008,
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.
"It is quite unfortunate that VaxGen must now terminate so many of
our most capable and loyal staff, including Matt Pfeffer," said
James P. Panek, VaxGen president and CEO. "Matt's performance
since joining VaxGen in 2006 has been nothing short of
outstanding. His talents, both as CFO and as a senior leader,
became increasingly obvious as he brought VaxGen current with its
financial filing obligations, worked to reduce expenditures and
financial liabilities, and contributed notably to our pursuit of
strategic initiatives."
"My tenure at VaxGen, while filled with many challenges, has also
been marked by many successes and opportunities to work with many
remarkable colleagues," Mr. Pfeffer said. "With VaxGen's
financial filing obligations now current and the scope of its
business greatly reduced, I am confident that VaxGen can ably
fulfill all required financial and administrative responsibilities
in my absence."
VaxGen's near term plan of action is quite straightforward: reduce
staffing and expenses to reflect the realities of not merging with
Raven; continue our efforts to sell the Anthrax vaccine program
and manufacturing facility, and deal as best we can with our lease
obligations; and importantly, reconfigure our board to deal with
the future course of the company. VaxGen is speaking with a
number of its largest stockholders in order to get their input,
including suggestions for potential new board members, and will be
completing this reconfiguration process as expeditiously as
possible.
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.
Possible Liquidation of VaxGen
VaxGen's board of directors intends to immediately assess the
company's strategic alternatives, including a possible liquidation
of the company.
VITAL LIVING: Engages Moore & Associates as New Auditors
--------------------------------------------------------
Vital Living Inc.'s Board of Directors on Feb. 21, 2008, engaged
the accounting firm of Moore & Associates, Chartered, as the
company's new independent registered public accountants to audit
the company's financial statements.
On Feb. 21, Shelley International CPA informed Vital Living that
it was resigning as the independent registered public accounting
firm for the Company.
Shelley International served as the company's independent
registered public accounting firm from May 1, 2007, through and
including the effective termination date of Feb. 21, 2008. During
this period, there were (i) no disagreements between the company
and Shelley International on any matter of accounting principles
or practices, financial statement disclosure, auditing scope, or
procedure, and (ii) no "reportable events" as that term is defined
in Item 304(a)(1)(v) of Regulation S-K.
About Vital Living
Headquartered in Phoenix, Ariz., Vital Living Inc. (OTC BB: VTLV)
-- http://www.vitalliving.com/-- develops and markets nutritional
fruit and vegetable supplements, protein supplements, and
nutraceuticals products.
* * *
At Dec. 31, 2007, the company's consolidated balance sheet showed
$5,090,000 in total assets and $6,145,000 in total liabilities,
resulting in a $1,055.000 total stockholders' deficit.
WASHINGTON MUTUAL: Moody's Gives Stable Outlook on $1.5BB Equity
----------------------------------------------------------------
Moody's Investors Service changed the outlook on Washington
Mutual, Inc. and Washington Mutual Bank to stable from negative
following the announcement that WaMu has entered into a definitive
agreement to raise $1.5 billion of common equity and $5.5 billion
of contingently convertible, perpetual non-cumulative preferred
stock. The preferred stock will automatically convert into common
stock upon receipt of various approvals including approval of WaMu
shareholders. The aggregate $7 billion investment is split
between TPG Capital, current WaMu institutional shareholders and
other investors. Moody's expects the company to receive the
required shareholder approvals given the involvement of current
WaMu shareholders in the transaction.
The change in the rating outlook reflects Moody's view that the
capital raise of $7 billion provides sufficient cushion for the
company to maintain capital ratios which are greater than 100
basis points above the regulatory well capitalized minimums.
Moody's expects this to hold throughout the current credit cycle
despite the large credit provisions WaMu will need to take in 2008
and 2009.
The previous negative outlook reflected concerns regarding;
(1) WaMu's ability to raise sufficient capital, and
(2) asset quality deterioration.
This capital raise addresses the first concern, and, although
asset quality is expected to be weak, the $7 billion amount should
provide sufficient cushion to absorb future losses.
"We view this capital raise as a positive for bondholders," said
Moody's Vice President and Senior Credit Officer Craig Emrick.
Moody's expects lifetime provisioning needs of greater than
$12 billion on WaMu's residential mortgage portfolio. We believe
the company's capital cushion created by this equity raise could
absorb provisioning needs of up to $18 billion. However, if
residential mortgage provisioning needs are above Moody's worst
case expectations, the company could face an additional capital
shortfall and a ratings downgrade.
Moody's said that WaMu's investment grade rating is based on the
expectation that management will undertake prudent capital
management. "Management actions that reduce the capital base
during this period of elevated provisioning would likely trigger a
downgrade," continued Mr. Emrick.
Moody's expects WaMu's financial performance to be poor throughout
2008 and 2009 as the company addresses credit costs related to its
mortgage exposure. Moody's sees a low probability of upward
pressure on the rating over this period.
Outlook Actions:
Issuer: Bank United
-- Outlook, Changed To Stable From Negative
Issuer: Providian Capital I
-- Outlook, Changed To Stable From Negative
Issuer: Providian Financial Corporation
-- Outlook, Changed To Stable From Negative
Issuer: Washington Mutual Bank
-- Outlook, Changed To Stable From Negative
Issuer: Washington Mutual Bank FSB
-- Outlook, Changed To Stable From Negative
Issuer: Washington Mutual Capital I
-- Outlook, Changed To Stable From Negative
Issuer: Washington Mutual Capital Trust 2001
-- Outlook, Changed To Stable From Negative
Issuer: Washington Mutual Pfd Funding (Cayman) I Ltd
-- Outlook, Changed To Stable From Negative
Issuer: Washington Mutual Preferred Funding Trust I
-- Outlook, Changed To Stable From Negative
Issuer: Washington Mutual Preferred Funding Trust II
-- Outlook, Changed To Stable From Negative
Issuer: Washington Mutual Preferred Funding Trust III
-- Outlook, Changed To Stable From Negative
Issuer: Washington Mutual Preferred Funding Trust IV
-- Outlook, Changed To Stable From Negative
Issuer: Washington Mutual, Inc.
-- Outlook, Changed To Stable From Negative
Washington Mutual, Inc. is headquartered in Seattle, Washington,
and its reported assets at Dec. 31, 2007 were $328 billion.
WELLMAN INC: Gets Final OK to Use Deutsche Bank's Cash Collateral
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
has issued a final order granting Wellman Inc. and its debtor-
affiliates access to their prepetition lenders' cash collateral.
The cash collateral will be used to fund the Debtors' business
operations, paying employees, and satisfying other working capital
and operational needs.
As condition for using the cash collateral, the Debtors will
repay $125 million owed to Deutsche Bank Trust Company Americas,
and other senior lenders under the First Lien Revolving Credit
Agreement. Deutsche Bank Trust is also granted a valid,
perfected replacement security interest, and lien on the
collateral which secures the $185 million loan under the First
Lien Senior Credit Agreement.
Deutsche Bank Trust is also granted a valid and perfected
replacement lien on:
(i) the First DIP Lien Collateral and the DIP Priming Lien
Collateral, subject to the liens of the DIP Agent and
Lenders; and
(ii) the Second Lien DIP Collateral, subject to the liens
of the First Lien Agent and Lenders, and of the DIP
Agent and Lenders.
In addition, Deutsche Bank Trust will receive from the Debtors
current cash payment of all reasonable fees and expenses payable
under the First Lien Senior Credit Agreement, including fees and
expenses of its advisors.
Headquartered in Fort Mill, South Carolina, Wellman Inc. --
http://www.wellmaninc.com/-- manufactures and markets
packaging and engineering resins used in food and beverage
packaging, apparel, home furnishings and automobiles. They
manufacture resins and polyester staple fiber a three major
production facilities.
The company and its debtor-affiliates filed for Chapter 11
protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-
10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in
New York City, represents the Debtors.
Wellman Inc., in its bankruptcy petition, listed total assets
of $124,277,177 and total liabilities of $600,084,885, as of
Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG,
Inc., listed assets between $500 million and $1 billion on a
stand-alone basis at the time of the bankruptcy filing.
Debtor-affiliates Fiber Industries Inc., Prince Inc., and
Wellman of Mississippi Inc., listed assets between $100 million
and $500 million at the time of their bankruptcy filings.
On a consolidated basis, Wellman Inc., and its debtor-affiliates
listed $498,867,323 in assets and $684,221,655 in liabilities as
of Jan. 31, 2008.
(Wellman Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
WELLMAN INC: Gets Final Court Nod to Obtain $225MM DIP Financing
----------------------------------------------------------------
Wellman, Inc., and its debtor-affiliates won final approval from
the U.S. Bankruptcy Court for the Southern District of New York to
borrow on a $225 million loan from Deutsche Bank Securities Inc.,
as lead arranger and bookrunner for a syndicate of lenders.
The bankruptcy loan will be used to pay off more than $125 million
the Debtors owe to Deutsche Bank Trust Company Americas, as
administrative agent, and other senior lenders under the
$225 million Amended and Restated Credit Agreement dated as of
May 4, 2006. The Debtors also intend to use the loan to fund
their business operations until August 2008, when their assets
will be sold as a going concern.
As protection from the diminution in value of their lenders'
collateral, the Debtors will provide adequate protection to the
prepetition secured lenders under:
(i) the $185 million First Lien Senior Credit Agreement, dated
as of Feb. 10, 2004, which had Deutsche Bank Trust as
administrative agent; and
(ii) the $265 million Second Lien Senior Credit Agreement, dated
as of Feb. 10, 2004, which also had Deutsche Bank, as
agent.
The Debtors' obligations under the DIP Financing will constitute
allowed senior administrative claims pursuant to Section
364(c)(1) of the Bankruptcy Code. The DIP Lenders are granted
fully-perfected first priority lien, and security interest in:
* all unencumbered prepetition property of the Debtors,
including those which none of the Prepetition Secured
Parties hold a valid and perfected prepetition lien;
and
* all unencumbered postpetition property, including proceeds
from any avoidance actions.
The DIP Lenders are also granted (i) liens junior to First Lien
Term Facility Liens; (ii) liens priming Second Lien Term Loan
Lenders' liens; and (iii) liens senior to certain other liens.
The DIP Lenders' rights and liens with respect to the Prepetition
Term Loan Collateral, are subject and junior to the rights and
liens of Deutsche Bank Trust and the lenders under the First Lien
Senior Credit Agreement.
The proceeds from the sale of the Debtors' assets will be paid to
the DIP Lenders and the Prepetition Secured Parties. The Court
has directed the Debtors to pay in full in cash at the sale
closing their debt under the DIP Financing Agreement in the event
that the asset sale is consummated. It ruled, however, that the
Debtors' indebtedness under the DIP Financing Agreement will not
be paid from the proceeds of the Prepetition Term Loan Collateral
until they pay in full the $185 million loan they availed from
Deutsche Bank Trusts, and the lenders under the First Lien Senior
Credit Agreement.
The Court overruled all objections to DIP Financing.
The Court, however, ruled that the Committee will have until 90
days since its formation -- until June 8, 2008 -- but not later
than the confirmation of a reorganization plan of the Debtors to
to:
(i) challenge the stipulations and admissions made by the
Debtors in connection with the liens and claims of the
Prepetition Secured Parties, and
(ii) assert any claims or causes of action against these
parties.
Headquartered in Fort Mill, South Carolina, Wellman Inc. --
http://www.wellmaninc.com/-- manufactures and markets
packaging and engineering resins used in food and beverage
packaging, apparel, home furnishings and automobiles. They
manufacture resins and polyester staple fiber a three major
production facilities.
The company and its debtor-affiliates filed for Chapter 11
protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-
10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in
New York City, represents the Debtors.
Wellman Inc., in its bankruptcy petition, listed total assets
of $124,277,177 and total liabilities of $600,084,885, as of
Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG,
Inc., listed assets between $500 million and $1 billion on a
stand-alone basis at the time of the bankruptcy filing.
Debtor-affiliates Fiber Industries Inc., Prince Inc., and
Wellman of Mississippi Inc., listed assets between $100 million
and $500 million at the time of their bankruptcy filings.
On a consolidated basis, Wellman Inc., and its debtor-affiliates
listed $498,867,323 in assets and $684,221,655 in liabilities as
of Jan. 31, 2008.
(Wellman Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
WELLMAN INC: Court Approves Edwards Angell as Conflicts Counsel
---------------------------------------------------------------
Wellman Inc. and its debtor-affiliates sought and obtained
authority from the U.S. Bankruptcy Court for the Southern District
of New York to employ Edwards Angell Palmer & Dodge LLP, as
conflicts and special counsel, nunc pro tunc to Feb. 22, 2008.
Edwards Angell Palmer & Dodge has acted as general corporate
counsel to the Debtors since 1985. EAPD is entirely familiar
with the Debtors' businesses and operations. Thus, the Debtors
have asked EAPD to continue to represent them as special general
corporate counsel in their Chapter 11 cases.
The Debtors believe that EAPD's proposed employment is in the
best interest of the Debtors, their estates and creditors.
EAPD is expected to render these services to the Debtors:
a. advise on matters such as general corporate, tax, labor and
employment, intellectual property, patent and trademark,
and patent prosecution and defense, securities,
environment, and litigation;
b. give assistance to Debtors in management and coordination
of other litigation counsel;
c. appear before courts to protect the interests of the
Debtors' estates within the scope of EAPD's retention;
d. act as bankruptcy conflicts counsel; and
e. perform all other necessary legal services and provide all
other necessary legal advice to the Debtors.
The principal attorneys and paralegals to represent the Debtors
and their rates are:
Professional Hourly Rate
------------ -----------
D. Roger Glenn $630
Shmule Vasser $625
Stuart M. Brown $580
James I. Rubens $575
William E. Chapman, Jr. $525
Scott D. Wolfsy $525
Patricia A. Sullivan $525
Douglas G. Gray $515
Paul J. Labov $400
Brian R. Pollack $390
Mark D. Olivere $315
Timothy D. Watson $305
Carolyn Fox $180
Other attorneys and paralegals who will be serving from time to
time are paid at these rates:
Title Hourly Rate
----- -----------
Partners $315 to $755
Counsel $275 to $600
Asscociates $125 to $480
Legal Assistants/Paralegals $90 to $265
The firm will also seek reimbursement of out-of-pocket expenses.
William Chipman Jr., a partner at EAPD, assures the Court that
the firm does not hold or represent any interest adverse to the
Debtors or their Chapter 11 cases, their creditors, or any other
party in this case. Mr. Chipman says the firm is a
"disinterested person," as that term is defined in Section
101(14) of the Bankruptcy Code, as modified by Section 1107(b).
Headquartered in Fort Mill, South Carolina, Wellman Inc. --
http://www.wellmaninc.com/-- manufactures and markets packaging
and engineering resins used in food and beverage packaging,
apparel, home furnishings and automobiles. They manufacture
resins and polyester staple fiber a three major production
facilities.
The company and its debtor-affiliates filed for Chapter 11
protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595).
Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York
City, represents the Debtors.
Wellman Inc., in its bankruptcy petition, listed total assets
of $124,277,177 and total liabilities of $600,084,885, as of
Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG,
Inc., listed assets between $500 million and $1 billion on a
stand-alone basis at the time of the bankruptcy filing.
Debtor-affiliates Fiber Industries Inc., Prince Inc., and
Wellman of Mississippi Inc., listed assets between $100 million
and $500 million at the time of their bankruptcy filings.
On a consolidated basis, Wellman Inc., and its debtor-affiliates
listed $498,867,323 in assets and $684,221,655 in liabilities as
of Jan. 31, 2008.
(Wellman Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
WELLMAN INC: Wants Conway Del Genio as Restructuring Advisor
------------------------------------------------------------
Wellman Inc. and its debtor-affiliates seek authority from the
U.S. Bankruptcy Court for the Southern District of New York to
employ Conway, Del Genio, Gries & Co., LLC, to provide
restructuring management services.
The Debtors selected CDG because of its long-standing reputation
in assisting companies through complex financial restructuring,
including Chapter 11 cases. Since CDG was founded, it has
advised on over 90 restructuring and interim management
transactions.
In connection with the firm's retention, the Debtors also ask the
Court to appoint Michael F. Gries, a certified public accountant
at CDG, as their chief restructuring officer. Mr. Gries has more
than 25 years of experience advising companies and creditors
on complex corporate reorganizations.
Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New York,
says that the Debtors will default on their postpetition loan if
they do not employ a chief restructuring officer during their
Chapter 11 cases. He explains that the retention of a CRO is
one of the requirements to avail of the postpetition loan.
The Debtors' request for postpetition financing was approved by
the Court on an interim basis on Feb. 27, 2008.
Pursuant to the engagement letter dated March 12, 2008, Mr. Gries
will assist the Debtors' chief executive and financial officers,
and the rest of the senior management team in the restructuring
efforts. Specifically, Mr. Gries will:
(a) work with the Debtors in generating information and
analyses required during the bankruptcy process, including
cash flow projections, variance analyses, and collateral
monitoring reports;
(b) assist in preparing and presenting reports and
communications to the Court, the Debtors' lenders,
creditors and other parties-in-interest;
(c) assist in evaluating strategic alternatives, including
reviewing comparative analyses;
(d) assist in addressing issues and in discussions with
existing lenders, creditors and other parties in interest
in connection with maintaining an ongoing dialogue aimed
at consensus building regarding appropriate courses of
action during the Chapter 11 process;
(e) assist in the development, evaluation and negotiation of
any potential restructuring transaction and reorganization
plan;
(f) assist in preparing reorganization plan and disclosure
statement; and
(g) provide expert testimony at hearings in the bankruptcy
cases.
Mr. Gries will be assisted by CDG Vice-President Craig Cheng,
and other personnel of the firm on an as-needed basis.
In exchange for CGD's services, the firm will be paid a $125,000
monthly fee, and will be reimbursed on a monthly basis for out-
of-pocket expenses it may incur in connection with its duties.
The Debtors will also indemnify the firm for any damages, losses,
among other things, that may result from working with the
Debtors. The firm will not be indemnified, however, for damages
or losses resulting from its gross negligence and willful
misconduct.
The Debtors advise the Court that CDG will not be submitting
periodic fee applications since the firm is not being employed as
a professional under Section 327 of the Bankruptcy Code.
Headquartered in Fort Mill, South Carolina, Wellman Inc. --
http://www.wellmaninc.com/-- manufactures and markets packaging
and engineering resins used in food and beverage packaging,
apparel, home furnishings and automobiles. They manufacture
resins and polyester staple fiber a three major production
facilities.
The company and its debtor-affiliates filed for Chapter 11
protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595).
Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York
City, represents the Debtors.
Wellman Inc., in its bankruptcy petition, listed total assets
of $124,277,177 and total liabilities of $600,084,885, as of
Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG,
Inc., listed assets between $500 million and $1 billion on a
stand-alone basis at the time of the bankruptcy filing.
Debtor-affiliates Fiber Industries Inc., Prince Inc., and
Wellman of Mississippi Inc., listed assets between $100 million
and $500 million at the time of their bankruptcy filings.
On a consolidated basis, Wellman Inc., and its debtor-affiliates
listed $498,867,323 in assets and $684,221,655 in liabilities as
of Jan. 31, 2008.
(Wellman Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
WESTERN RADIOSONIC: Case Summary & 23 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Western Radiosonic Inc.
105 Mendez Vigo Street
Mayaguez, PR 00680
Bankruptcy Case No.: 08-01956
Type of Business: Health Care Business
Chapter 11 Petition Date: March 31, 2008
Court: District of Puerto Rico (Old San Juan)
Judge: Brian K. Tester
Debtor's Counsel: Angelique Doble Bravo, Esq.
Gallart Law Firm
420 Ponce De Leon Avenue
Midtown Build Suite 304
San Juan, PR 00918
Tel: 787-754-7171
Fax: 787-250-1041
gallartlaw@yahoo.com
Estimated Assets: $2,397,552
Estimated Debts: $1,437,825
Debtor's list of its 23 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Department of Treasury taxes $736,150
Bankruptcy Section
424 B P.O. Box 9024140
San Juan, PR 00902
Internal Revenue Services taxes $281,075
Philadelphia, PA 19255
Crim taxes $174,606
P.O. Box 195387
San Juan, PR 00919
Department of Labor unemployment $57,624
Asociacion Condominio La Palma maintainance $49,013
contract
Medintek Corp. trade debt $47,500
Gallart Law Firm trade debt $47,783
CPA Israel Dominicci & Co. PSC trade debt $35,000
Rodriguez Rivera & Toro trade debt $29,654
Municipio De Mayaguez taxes $21,450
Autoridad De Energia Electrica utilities $15,711
Aguadilla Airlines trade debt $7,316
Samuel Olmeda trade debt $4,377
Luis Rivera trade debt $4,620
Sepulveda & Sepulveda trade debt $4,000
Asociacion Condominio Centro maintainance $1,500
Servicios Medicos contract
Centennial Cellular utilities $1,319
Puerto Rico Telephone trade debt $978
Centennial Data utilities $503
Tischer & Company trade debt $254
Asociacion Condominio maintainance $169
Popular Center contract
Autoridad De Acueductos utilities unknown
y Alcantarillados
Old San Juan Station trade debt unknown
WESTMORELAND COAL: Names Kevin Paprzycki as Chief Finc'l. Officer
-----------------------------------------------------------------
Westmoreland Coal Company appointed Kevin A. Paprzycki as chief
financial officer, replacing David J. Blair who is leaving the
company. Mr. Paprzycki has served as the company's controller and
principle accounting officer since june 2006.
The company also disclosed these management changes:
-- Douglas P. Kathol has been named treasurer and will assume
that role in addition to his duties as vice president,
development. Mr. Kathol joined the Ccompany in August 2003.
-- Mary A. Hauck has joined the company as vice president,
human resources. Ms. Hauck was corporate senior HR director
for Davita Inc., a Fortune 500 healthcare company.
-- Russ H. Werner has been named director of accounting. Mr.
Werner joined the company in June 2006.
-- Bruno J. LaCrampe has been named director of internal
controls. Mr. LaCrampe, joined the company in June 2006.
Based in Colorado Springs, Colorado, Westmoreland Coal Company
(AMEX: WLB) -- http://www.westmoreland.com/-- is an independent
coal company in the United States and a developer of independent
power projects. The company's coal operations include coal mining
in the Powder River Basin in Montana and lignite mining operations
in Montana, North Dakota and Texas. Its power operations include
ownership and operation of the two-unit ROVA coal-fired power
plant in North Carolina, an interest in a natural gas-fired power
plant in Colorado, and the operation of four power plants in
Virginia.
As reported in the Troubled Company Reporter on March 25, 2008,
Westmoreland Coal Company's consolidated balance sheet at
Sept. 30, 2007, showed $757.8 million in total assets and
$942.1 million in total liabilities, resulting in a $184.3 million
total stockholders' deficit.
At Sept. 30, 2007, the company's consolidated balance sheet also
showed strained liquidity with $115.2 million in total current
assets available to pay $200.7 million in total current
liabilities.
The company reported a net loss of $7.0 million on revenues of
$130.2 million for the third quarter ended Sept. 30, 2007,
compared with a net loss of $2.0 million on revenues of
$129.7 million in the same period in 2006.
WILLIAMSON CONSTRUCTION: Case Summary & 32 Unsecured Creditors
--------------------------------------------------------------
Debtor: Williamson Construction LLC
119 Larkin Ridge Road
Front Royal, VA 22630
Bankruptcy Case No.: 08-50309
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Christopher Mark Williamson 08-50308
Chapter 11 Petition Date: April 3, 2008
Court: Western District of Virginia (Harrisonburg)
Judge: Ross W. Krumm
Debtor's Counsel: Andrew George Simpson, Esq.
Andrew G. Simpson PLC
111 Oronoco Street
Alexandria, VA 22314
Tel: (703) 548-3900
andrew@andrewsimpson.com
Williamson Construction LLC's financial condition:
Total Assets: $2,241,000
Total Debts: $2,623,565
Christopher Mark Williamson's financial condition:
Total Assets: $3,194,570
Total Debts: $2,679,345
A. Williamson Construction LLC's list of its 13 Largest Unsecured
Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Catepillar Financial business $405,802
2120 West End Avenue equipments;
Nashville, TN 37203-0001 value of
security:
$542,000;
value of senior
lien: $300,000
Shirley Roberts real estate $400,000
7427 Carroll Avenue
Takoma Park, MD 20912
United Bank real estate; $298,492
1729 N. Shenandoah Avenue value of
Front Royal, VA 22630 security:
$265,000
Virginia Savings Bank real estate;
$120,000
value of
security:
$110,000
84 Lumber building $46,760
materials
Internal Revenue Service federal $34,253
employment tax
Warren County Treasurer unpaid taxes $15,000
Stone House Floors installation $10,000
services
Internal Revenue Service judgment tax lien $8,417
American Express business credit $8,077
line
Sprint cell phone $8,036
Gilliam's Lumber credit line $7,317
HN Funkerhouser & Company credit line $7,317
Prime Rate Premium Finance insurance $6,840
Winchester Equipment Company service repairs $5,225
A. Christopher Mark Williamson's list of its 19 Largest Unsecured
Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Shirley Roberts personal loan $400,000
7427 Carroll Avenue
Takoma Park, MD 20912
Virginia Savings Bank FSB real estate; $280,000
600 Commerce Avenue value of
Front Royal, VA 22630 security:
$205,000
United Bank real estate; $136,500
1729 N. Shenandoah Avenue value of
Front Royal, VA 22630 security:
$130,000
84 Lumber building $46,760
materials
Internal Revenue Service federal $34,253
employment tax
Gilliam's Lumber building supplies $25,000
Catepillar Financial building $24,140
equipment
American Express business expenses $8,077
Sprint cell phone $8,036
HN Funkerhouser & Company credit line $7,317
Allen & Allen legal fees $7,000
Chase credit card $7,000
Prime Rate Premium Finance insurance $6,840
Holtzman Propane LC propane services $3,290
Winchester Equipment Company service repairs $5,225
The Home Depot building $4,960
materials
Treasurer of Warren County unpaid taxes $4,860
Lowe's building supplies $3,757
Sherwin Williams Commpany painting supplies $3,200
WINDSWEPT ENVIRONMENTAL: Monthly Payments on Laurus Note Deferred
-----------------------------------------------------------------
On March 31, 2008, Windswept Environmental Group Inc. entered into
an Omnibus Amendment to Warrant, Waiver to Note and Lockup
Agreement with Laurus Master Fund Ltd., Valens Offshore SPV I
Ltd., Valens U.S. SPV I LLC and PSource Structured Debt Limited
and LV Administrative Services Inc., as agent for the benefit of
each of the Holders.
The Omnibus Amendment amends (i) the Amended and Restated Secured
Convertible Term Note, dated Sept. 29, 2006, and (ii) the Common
Stock Purchase Warrant, dated June 30, 2005, to purchase
13,750,000 shares of common stock of the company, each of which
were originally issued by the company in favor of Laurus.
Pursuant to the Omnibus Amendment, the Holders waived payment of
the monthly amount due under the Note on March 1, 2008, and
April 1, 2008. The Deferred Amount will be payable by the company
no later than April 30, 2008. In addition, the Holders waived
payment of $50,000 of the monthly amount due under the Note on
May 1, 2008, which will be payable by the company no later than
May 31, 2008.
The Omnibus Amendment also amends and extends the expiration date
of the Warrant from June 30, 2012, to June 30, 2022.
Pursuant to the Omnibus Amendment, each of PSource and Valen U.S.
agreed, for the period commencing on the date of the Omnibus
Amendment and ending on the three month anniversary thereof, that
it will not:
(i) sell, offer to sell, contract to sell, grant any option to
purchase or otherwise transfer or dispose of, pledge,
hypothecate or otherwise transfer, directly or indirectly,
any Warrant Shares,
(ii) establish or increase a put equivalent position or
liquidate or decrease a call equivalent position with
respect to any Warrant Shares,
(iii) enter into any swap or other arrangement that transfers to
another person or entity, in whole or in part, any of the
economic consequences of ownership of any Warrant Shares,
whether such transaction is to be settled by delivery of
Warrant Shares or such other securities, in cash or
otherwise, or
(iv) publicly announce any intention to effect any transaction
specified in clause (i), (ii), or (iii) above.
A full-text copy of the Omnibus Amendment, dated March 31, 2008,
is available for free at http://researcharchives.com/t/s?2a13
About Windswept Environmental
Based in Bay Shore, New York, Windswept Environmental Group Inc.
(OTC BB: WEGI) through its subsidiaries, Trade-Winds Environmental
Restoration Inc. -- http://www.tradewindsenvironmental.com/-- and
North Atlantic Laboratories Inc., provides the full range of
emergency/catastrophe response and environmental restoration
services.
As reported in the Troubled Company Reporter on Feb. 26, 2008,
Windswept Environmental Group Inc.'s consolidated balance sheet at
Dec. 31, 2007, showed $10,368,999 in total assets, $12,799,496 in
total liabilities, and $1,300,000 in Series A redeemable
convertible preferred stock, resulting in a $3,730,497 total
stockholders' deficit.
Going Concern Doubt
As reported in the Troubled Company Reporter on Oct. 22, 2007,
Holtz Rubenstein Reminick LLP expressed substantial doubt about
Windswept Environmental Group Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended June 30, 2007. The auditing firm
pointed to the company's losses from operations, dependence on
outside financing, and stockholders' deficit.
WJ LANG: Court Dismisses Case Over "Accidental" Filing by Counsel
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona dismissed
the chapter 11 case of WJ Lang Construction, Inc. after it was
found out that the petition was filed accidentally by the Debtor's
counsel, Christie Smythe writes for the AzStarBiz in Tucson,
Arizona, citing court filings.
According to the court filings, the petition was not signed by the
founder of the construction firm, William J. Lang, report says.
Steven M. Cox, Esq., at Waterfall, Economidis, Caldwell, Hanshaw &
Villamana, PC told reporters "that he hadn't meant to file the
petition."
No comments was derived from the Debtor's side.
AzStarBiz relates that Mr. Lang is left to decide the course of
its company and debts amid the declining housing and financial
markets.
Tucson, Arizona-based WJ Lang Construction Inc. --
http://www.wjlangconstruction.com/-- provides construction
management services, including commercial construction and
remodel, concrete construction, custom residential construction,
and comprehensive project planning and advising services. It is a
family-owned and operated business founded by William J. Lang in
1979. It filed for chapter 11 protection on March 27, 2008
(Bankr. D. Ariz. Case No. 08-03236). Steven M. Cox, Esq., at
Waterfall, Economidis, Caldwell, Hanshaw & Villamana, PC is
counsel to the Debtors. When the Debtor filed for bankruptcy, it
listed assets and debts between $1 million and $10 million. The
Debtor did not file a list of its largest unsecured creditors.
WORNICK CO: Gets Interim OK to Employ Dinsmore & Shohl as Counsel
-----------------------------------------------------------------
The Wornick Company and its debtor-affiliates obtained interim
authorization from the U.S. Bankruptcy Court for the Southern
District of Ohio in Cincinnati to employ Dinsmore & Shohl LLP as
their counsel.
Dinsmore & Shohl is expected:
(a) advise the Debtors with respect to their powers and
duties as debtors in possession in the continued
management and operation of their businesses and
properties;
(b) attend meetings and negotiate with representatives of
creditors and other parties-in-interest;
(c) take all necessary action to protect and preserve the
Debtors' estates, including the prosecution of actions on
the Debtors' behalf, the defense of any action commenced
against the Debtors, negotiations concerning all
litigation in which the Debtors are involved, and
objections to claims filed against the estates;
(d) prepare on behalf of the Debtors certain motions,
applications, answers, orders, reports, and papers
necessary to the administration of the estates;
(e) promote the plan of reorganization, disclosure statement,
and all related agreements or documents, and take any
necessary action on behalf of the Debtors to obtain
confirmation of the plan, as necessary;
(f) represent the Debtors in connection with obtaining post
petition financing and exit financing, as necessary;
(g) advise the Debtors in connection with any potential sales
of assets;
(h) appear before this court, any appellate courts, and the
United States Trustee and protect the interests of the
Debtors' estates before such Courts and the United States
Trustee;
(i) consult with the Debtors regarding tax matters; and
(j) perform all other necessary legal services and provide
all other necessary legal advise to the Debtors in
connection with these chapter 11 cases.
D&S assured the Court it is a "disinterested person" as that term
in defined in Section 101(14) of the Bankruptcy Code, as modified
by Section 1107(b) of the Bankruptcy Code.
Kim Martin Lewis, Esq., a partner at Dinsmore & Shohl, said the
firm has not represented the Debtors' creditors, equity security
holders, or any other parties-in-interest, or their attorneys and
accountants, the United States Trustee or any person employed in
the office of the United States Trustee, in any matter relating to
the Debtors or their estates.
Ms. Lewis, together with Donald W. Mallory, Esq., and Patrick
Burns, Esq., will represent the Debtors in their restructuring
efforts.
For professional services, D&S's fees are based upon the standard
hourly rates of professionals and paraprofessionals. The firm's
current hourly rates range from $220 to $550 for partners, $130 to
$452 for of counsel, $160 to $345 for associates and $110 to $175
for paralegals.
During the 12-month period preceding the Debtors' bankruptcy
filing, the Debtors paid D&S roughly $1,042,550 in the aggregate
for fees and expenses for all legal services rendered to the
Debtors, including, but not limited to, the preparation and
commencement of the Debtors' cases, well as to serve as a
retainer.
D&S received $250,000 as advance payment retainer from the Debtors
for its Chapter 11 services and expenses. As of Feb. 14, 2008,
after the application of all prepetition fees, charges and
disbursements incurred and posted as of that date, the amount of
the Retainer was approximately $250,000. D&S will apply the
Retainer to pay any fees, charges and disbursements which remain
unpaid as of the Petition Date and will retain the remainder of
the Retainer to be applied to any fees, charges and disbursements
which remain unpaid at the end of these reorganization cases.
The Debtors have agreed that any portion of the advance payment
retainer not used to compensate D&S for its prepetition services
and expenses ultimately will be used by D&S to apply against other
D&S invoices as ordered by the Court.
Headquartered in Cincinnati, Ohio, The Wornick Company --
http://www.wornick.com/-- is a leading supplier of individual and
group military field rations to the Department of Defense. In
addition the company continues to extend its core capabilities to
commercial markets where its customers include, but are not
limited to, Kraft Foods, Inc., Gerber Products Company, as well as
retail and grocery outlets including Walgreens Co., 7-Eleven, The
Kroger Co., Publix Super Markets and Meijer.
Wornick specializes in the production, packaging, and distribution
of shelf-life, shelf-stable, and frozen foods in flexible pouches
and semirigid products. The firm's two main lines of business are
military rations (approximately 70% of revenues) and co-
manufacturing for leading food brands (30%). The company produces
both individual (including MRE) and group rations (including
Unitized Group Rations-A or UGR-A) for the U.S. military. MREs
comprise about 65% of military revenues.
The company and and five of its affiliates filed for Chapter 11
protection on Feb. 14, 2008 (Bankr. S.D.O., Case No. 08-10654).
The company listed between $100 million and $500 million assets
and between $100 million and $500 million in debts in its
bankruptcy filing.
WORNICK COMPANY: Section 341(a) Meeting Scheduled on April 17
-------------------------------------------------------------
The U.S. Trustee for Region 9, will convene a meeting of creditors
in The Wornick Company's Chapter 11 case, on April 17, 2008,
2:00 p.m., at the Office of the U.S. Trustee, Suite 2050, 36 East
Seventh Street, Cincinnati, Ohio.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in the Debtors' case. The Section
341(a) Meeting has been scheduled within the time required by
Rule 2003 of the Federal Rules of the Bankruptcy Procedure.
All creditors are invited, but not required, to attend. The
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible officer of the
Debtors under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Cincinnati, Ohio, The Wornick Company --
http://www.wornick.com/-- is a supplier of individual and
group military field rations to the Department of Defense. In
addition the company continues to extend its core capabilities to
commercial markets where its customers include, but are not
limited to, Kraft Foods Inc., Gerber Products Company, well as
retail and grocery outlets including Walgreens Co., 7-Eleven, The
Kroger Co., Publix Super Markets and Meijer.
Wornick specializes in the production, packaging, and distribution
of shelf-life, shelf-stable, and frozen foods in flexible pouches
and semi-rigid products. The firm's two main lines of business
are military rations (approximately 70% of revenues) and co-
manufacturing for leading food brands (30%). The company produces
both individual (including MRE) and group rations (including
Unitized Group Rations-A or UGR-A) for the U.S. military. MREs
comprise about 65% of military revenues.
The company and and five of its affiliates filed for Chapter 11
protection on Feb. 14, 2008 (Bankr. S.D. Ohio, Case No. 08-10654).
Donald W. Mallory, Esq., Kim Martin Lewis , Esq., and Patrick
Burns, Esq. at Dinsmore & Shohl LLP represent the Debtors in
their restructuring efforts. The Debtor selected Kurtzman Carson
Consultants LLC as claims, noticing and balloting agent. An
official committee of unsecured creditors has not been appointed
in these cases. The company listed between $100 million and $500
million assets and between $100 million and $500 million in debts
in its bankruptcy filing.
WORNICK CO: Can Hire Kroll Zolfo as Special Financial Advisors
--------------------------------------------------------------
The Wornick Company and its debtor-affiliates obtained authority
from the U.S. Bankruptcy Court for the Southern District of Ohio
in Cincinnati to employ Kroll Zolfo Cooper LLC as their bankruptcy
consultants and special financial advisors.
The Debtors engaged KZC to advise and assist their board of
directors with regard to the short and long-term financial outlook
of the Debtors, and to provide recommendations to the board
regarding potential financing restructuring options.
The Debtors further engaged KZC to:
(i) assist management in developing an information memorandum;
(ii) assist management in developing a list of potential and
viable acquirers in connection with a potential
Transaction and providing all support assistance relating
thereto;
(iii) make initial contact, if requested by the board, with
potential acquirers in connection with a potential
Transaction;
(iv) assist management in the analysis, structuring,
negotiation and closing of a Transaction; and
(v) perform and provide a written financial analysis of the
Debtors in the context of a potential Transaction. KZC
provided the services from the date of its engagement up
to immediately prior to the bankruptcy filing.
KZC has received a $250,000 retainer from the Debtors, less
application of any outstanding prepetition fees and expenses.
The Debtors expected KZC to:
(a) advise and assist management in organizing the Debtors'
resources and activities so as to effectively and
efficiently plan, coordinate, and manage the chapter 11
process and communicate with customers, lenders, suppliers,
employees, shareholders, and other parties in interest;
(b) assist management in designing and implementing programs
to manage or divest assets, improve operations, reduce
costs, and restructure as necessary with the objective of
rehabilitating the business;
(c) advise the Debtors concerning interfacing with any
statutory committees named in these chapter 11 cases,
other constituencies and their professionals, including
the preparation of financial and operating information
required by such parties or the Bankruptcy Court;
(d) advise and assist management in efforts to seek
confirmation of the Joint Plan of Reorganization that was
filed on the Petition Date and underlying Business Plan,
including the related assumptions and rationale, along
with other information to be included in the Disclosure
Statement;
(e) advise and assist the Debtors in forecasting, planning,
controlling, and other aspects of managing cash, and, if
necessary, obtaining alternative DIP or exit financing;
(f) advise the Debtors with respect to resolving disputes and
otherwise managing the claims process;
(g) advise and assist the Debtors in negotiating the Joint
Plan of Reorganization with the various creditor and
other constituencies;
(h) as requested, render expert testimony concerning the
feasibility of the Joint Plan of Reorganization and other
matters that may arise in these chapter 11 cases;
(i) advise and assist the Debtors in developing an
information memorandum;
(j) advise and assist the Debtors in developing a list of
potential and viable acquirers in connection with
competing bids for the Transaction and providing related
support assistance;
(k) make initial contact, if requested by the Debtors, with
potential competing bidders in connection with the
Transaction;
(l) advise and assist the Debtors in the analysis,
structuring, negotiation and closing of the Transaction;
(m) perform and provide a written financial analysis of the
Debtors in the context of the potential Transaction; and
(n) provide other services as may be required by the Debtors.
The Debtors assured the Court that the firm is a "disinterested
person," as that term is defined in Section 101(14) of the
Bankruptcy Code and as required by Section 327(a) of the
Bankruptcy Code.
KZC assured that none of the employees of KZC is related to the
Debtors, their creditors, and other parties-in-interest.
The firm's billing rates:
Managing Directors $695-$775
Professional Staff $200-$665
Support Personnel $45-$225
The firm's fee will be based on a $75,000 monthly fee payable in
advance on the 1st business day of each month. The company agrees
to pay an enhancement fee.
About The Wornick Company
Headquartered in Cincinnati, Ohio, The Wornick Company --
http://www.wornick.com/-- is a leading supplier of individual and
group military field rations to the Department of Defense. In
addition the company continues to extend its core capabilities to
commercial markets where its customers include, but are not
limited to, Kraft Foods, Inc., Gerber Products Company, as well as
retail and grocery outlets including Walgreens Co., 7-Eleven, The
Kroger Co., Publix Super Markets and Meijer.
Wornick specializes in the production, packaging, and distribution
of shelf-life, shelf-stable, and frozen foods in flexible pouches
and semirigid products. The firm's two main lines of business are
military rations (approximately 70% of revenues) and co-
manufacturing for leading food brands (30%). The company produces
both individual (including MRE) and group rations (including
Unitized Group Rations-A or UGR-A) for the U.S. military. MREs
comprise about 65% of military revenues.
The company and and five of its affiliates filed for Chapter 11
protection on Feb. 14, 2008 (Bankr. S.D.O., Case No. 08-10654).
Donald W. Mallory, Esq., Kim Martin Lewis , Esq., and Patrick
Burns, Esq. at Dinsmore & Shohl LLP represent the Debtors in their
restructuring efforts. The company listed between $100 million
and $500 million assets and between $100 million and $500 million
in debts in its bankruptcy filing.
WR GRACE: Will Keep Medical Program to Support Asbestos Victims
---------------------------------------------------------------
W. R. Grace & Co. plans to retain the Medical Program it
established in 2000 to assist local residents with medical needs
resulting from their exposure to asbestos from the former Grace
mine located near the town of Libby, Montana.
"In talking to people in Montana last night, there seemed to be
confusion about our medical program," William M. Corcoran, vice
president, said. "When we saw some of the comments in the press,
we were surprised. We have made it clear for many years that we
intend to sustain the health care program when we emerge from
Chapter 11 just as we did when we went into bankruptcy."
The Libby Medical Program has been in effect since 2000. More
than 800 people are currently enrolled in it and receive health
care and prescription drug coverage. Since 2000, Grace has spent
more than $14 million on the program.
In addition, Grace is making an additional annual contribution of
$250,000 to St. John's Lutheran Hospital in Libby, Montana. Since
2000, Grace has donated more than $2 million to St. John's to
support its work on this important issue.
"St. John's is an outstanding health care institution with top
notch health care staff," Mr. Corcoran said. "We are pleased that
our donations have been used to help purchase state-of-the-art
health care equipment and technology for the people of Libby,
Montana."
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee
of Equity Security Holders.
The Debtors' filed their Chapter 11 Plan and Disclosure Statement
on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan
and Disclosure Statement. The hearing to consider the adequacy of
the Debtors' Disclosure Statement began on Jan. 21, 2005. The
Debtors' exclusive period to file a chapter 11 plan expired on
July 23, 2007.
Estimation of W.R. Grace's asbestos personal injury liabilities
commenced on January 14, 2008.
At Dec. 31, 2006, the W.R. Grace's balance sheet showed total
assets of $3,620,400,000 and total debts of $4,189,100,000.
As of November 30, 2007, W.R. Grace's balance sheet showed total
assets of $3,335,000,000, and total debts of $3,712,000,000.
W.R. GRACE: Wants Court's Approval to Appoint Welsh as Mediator
---------------------------------------------------------------
W.R. Grace Co. and its debtor-affiliates ask the United States
Bankruptcy Court for the District of Delaware to appoint Diane M.
Welsh as the mediator for the asbestos-related property damage
claims filed by Speights & Runyan on behalf of individual
claimants.
James E. O'Neill, Esq., at Pachulski, Stang, Ziehl & Jones LLP,
in Wilmington, Delaware, relates that as of April 7, 2008, about
160 S&R Claims remain pending, all of which have been objected to
by the Debtors on various grounds. He says the Court directed
the Debtors and S&R, in January 2008, to submit to mediation to
see if the remaining claims could be resolved. Thereafter, the
Debtors and S&R exchanged information with respect to potential
mediator candidates. As a result, the Debtors and S&R ultimately
agreed on the selection of the Court as the mediator.
the Court, according to Mr. O'Neill, served as a U.S.
Magistrate Judge in the U.S. District Court for the Eastern
District of Pennsylvania for 12 years. As Magistrate Judge,
the Court conducted nearly 1,800 settlement conferences in
virtually every area of civil litigation. She also served on the
Alternative Dispute Resolution Committee for the Eastern District
of Pennsylvania District Court for 10 years, drafting local
federal court rules for a court-annexed mediation program. Since
her retirement in 2005, the Court has served as a mediation and
arbitrator with JAMS, an alternative dispute resolution
organization.
Pursuant to an engagement letter, the Court will be paid for
her services at a rate of $550 per hour plus an initial non-
refundable case management fee of $275 from each of the Debtors
and S&R, plus out-of-pocket fees. The Mediator's fees and
expenses will be paid equally by the Debtors and S&R.
The Debtors and S&R agree to indemnify the Mediator for any
damages.
To the best of the Debtors' knowledge, the Court is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code, and does not have any interest adverse to
the Debtors or their estates or S&R and its clients.
Mr. O'Neill says the Court indicated that she can conduct the
mediation on April 24 and 25, 2008.
About W.R. Grace
Headquartered in Columbia, Md., W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee
of Equity Security Holders.
The Debtors' filed their Chapter 11 Plan and Disclosure Statement
on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan
and Disclosure Statement. The hearing to consider the adequacy of
the Debtors' Disclosure Statement began on Jan. 21, 2005. The
Debtors' exclusive period to file a chapter 11 plan expired on
July 23, 2007.
Estimation of W.R. Grace's asbestos personal injury liabilities
commenced on January 14, 2008.
At Dec. 31, 2006, the W.R. Grace's balance sheet showed total
assets of $3,620,400,000 and total debts of $4,189,100,000.
As of November 30, 2007, W.R. Grace's balance sheet showed total
assets of $3,335,000,000, and total debts of $3,712,000,000.
(W.R. Grace Bankruptcy News, Issue No. 156; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
ZIFF DAVIS: Committee Objects to Payment of Critical Vendor Claims
------------------------------------------------------------------
The Official Committee of Unsecured Creditors of Ziff Davis Media
Inc. and its debtor-affiliates asks the the U.S. Bankruptcy Court
for the Southern District of New York to deny the Debtors' request
to pay pay pre-bankruptcy amounts owed to the Critical Vendors.
The Debtors seek to provide a select group of creditors with a
100 cents-on-the-dollar recovery in respect of their prepetition
unsecured claims, while all other general unsecured vendors would
be forced under the Debtors' proposed Plan of Reorganization to
share from a $500,000 pot, which will provide an estimated 2% to
3% recovery.
As reported by the Troubled Company Reporter on March 27, 2008,
the Debtors ask the Court for authority to pay pre-bankruptcy
amounts owed to the Critical Vendors:
Vendor Amount owed
------ -----------
Access Direct $26,325
Access Media $20,000
Advanced Postal Concepts $8,381
Audit Bureau of Circulation $12,587
Comsys $41,490
Ingram Periodicals $22,000
Insys Consulting $130,172
Loricom $19,928
MediaMark $48,125
NPS/National Publisher Services $26,168
Omail $60,197
Pillar Data Systems $27,388
Professional Interactive Entertainment $28,550
QSP $29,000
RPM Associates $39,381
Terracotta $30,000
Volt Delta Resources $37,363
Yahoo Search Marketing $12,135
Yesmail Canada $93,994
-----------
Total $713,184
Creditors Committee Objects
The Creditors Committee's proposed counsel, Michael J. Sage,
Esq., at O'Melveny & Myers LLP, in New York, states the Debtors
failed to identify or establish sufficient grounds to entitle
them to the extraordinary relief.
The Debtors designate 19 vendors as "critical vendors" but then
fail to substantiate any of their bold assertions regarding the
necessity of the payments and benefits to the estates and
creditors in making the payments, Mr. Sage relates.
Furthermore, the Debtors provide no detail as to why the subject
agreements must be assumed only two weeks into the Chapter 11
cases, and completely fails to provide any detail with respect to
the agreements themselves, he asserts.
Accordingly, the Creditors Committee asks the Court to deny the
Debtors' request.
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. The Plan confirmation hearing
is scheduled for June 25, 2008 at 10:00 a.m., prevailing Eastern
time. (Ziff Davis Bankruptcy News, Issue No. 6, Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstandor
215/945-7000)
ZIFF DAVIS: Adjourns Hearing on Management Incentive Program
------------------------------------------------------------
Ziff Davis Media, Inc. and its debtor-affiliates have agreed to
adjourn the March 27, 2008 hearing on a Management Incentive
Program until after the Debtors and the members of the Official
Committee of Unsecured Creditors have had a chance to meet with
respect to the matter.
As reported by the Troubled Company Reporter on March 18, 2008,
the U.S. Bankruptcy Court for the Southern District of New York
authorized the Debtors to honor and pay its pre-bankruptcy wages,
salaries, and employee benefits, on an interim basis. The Court
authorized the Debtors' payments under the Management Incentive
Program to all employees except three members of senior
management, Jason Young, Neil Glass and Shirin Malkani.
The Official Committee of Unsecured Creditors is currently
analyzing the MIP framework and may request certain
modifications. The Debtors have agreed to adjourn the March 27,
2008 hearing on the MIP until after the Debtors and the members
of the Creditors Committee have had a chance to meet with respect
to the matter. However, a meeting has yet to occur.
Out of an abundance of caution, the Creditors Committee preserves
all objections relating to the payment of prepetition wages,
bonuses, reimbursable employee expenses, medical and similar
benefits, as well as the Officers.
* * *
In accordance with the Debtors' stated policies and prepetition
practices, the Court authorizes the Debtors to honor and pay its
prepetition wages, salaries, and employee benefits, on a final
basis.
The Debtors are also authorized to (i) continue to allocate and
distribute the deductions and the payroll taxes, (ii) pay the
reimbursable expenses, and the prepetition amounts owed in
connection with the incentive programs, and (ii) honor the
employee benefit programs and make any necessary contributions to
the programs and pay any unpaid premium, claim, or amount owed as
of the Petition Date.
The banks and financial institutions on which checks were drawn
are authorized and directed to receive, process, honor, and pay
all checks and electronic payment requests in all matter related
to the payment of the prepetition amounts.
* * *
The Troubled Company Reporter reported on March 12, 2008 that as
of the bankruptcy filing date, the Debtors and their non-debtor
affiliates employ roughly 266 employees, of whom 258 are full-time
employees, and roughly eight are part-time employees.
Approximately 20 employees are paid on an hourly basis, and 246
employees are paid salary.
Carey D. Schreiber, Esq., at Winston & Strawn LLP, in New York,
the Debtors' proposed counsel, told the Court the Debtors incur
payroll obligations to the Employees, which are generally
comprised of wages and salaries, but may also include incentive
bonuses awarded for sales productivity and goal attainment.
Approximately 95% of the Debtors' payroll is made by direct
deposit through electronic transfer of funds directly to
Employees, with the other 5% of Employees receiving checks. On
average, Mr. Schreiber told the Court, the Debtors have gross
payroll expenses of approximately $2,500,000 per month.
The Debtors outsource their payroll to a payroll services
company, ProBusiness Services Inc., which is also responsible for
paying all the withholdings and payroll taxes to the applicable
third parties.
The Debtors estimate that, as of the Petition Date, roughly
$290,000 in prepetition accrued wages, salaries, and other
compensation earned prior to the Petition Date remains unpaid.
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. The Plan confirmation hearing
is scheduled for June 25, 2008 at 10:00 a.m., prevailing Eastern
time. (Ziff Davis Bankruptcy News, Issue No. 6, Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstandor
215/945-7000)
ZIFF DAVIS: Allowed to Hire Winston & Strawn as Counsel
-------------------------------------------------------
The U.S. Bankruptcy Court for the Southern of District of New York
authorized Ziff Davis Media Inc. and its debtor-affiliates 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.
* * *
As reported by the TCR on April 2, Mark K. Thomas, Esq., at
Winston & Strawn LLP, in Chicago, Illinois, disclosed 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 the Debtors.
Mr. Thomas informed 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 told the
Court.
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. The Plan confirmation hearing
is scheduled for June 25, 2008 at 10:00 a.m., prevailing Eastern
time. (Ziff Davis Bankruptcy News, Issue No. 6, Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstandor
215/945-7000)
ZIFF DAVIS: Can Assume 80 Executory Contracts with Freelancers
--------------------------------------------------------------
Judge Burton R. Lifland authorizes Ziff Davis Media Inc. and its
debtor-affiliates to assume 80 executory contracts with
freelancers who provide the Debtors with editorial content.
The Debtors have demonstrated adequate assurance of future
performance and, by payment of the cure amounts, will have
satisfied the requirements of section 365(b)(1) of the Bankruptcy
Code.
A further hearing to consider the Debtors' proposed assumption of
the 22 executory contracts with vendors that provide services to
the Debtors, will be held on April 29, 2008, at 10:00 a.m.
As reported by the Troubled Company Reporter on March 27, 2008,
the Debtors sought authority from the U.S. Bankruptcy Court for
the Southern District of New York to assume 22 vendor executory
contracts and 80 freelancer contracts.
A list of the 22 executory contracts with vendors that provide
services to the Debtors is available for free at:
http://bankrupt.com/misc/Ziff_VendorExecutoryContracts.pdf
A list of the 80 executory contracts with freelancers who provide
the Debtors with editorial content is available for free at:
http://bankrupt.com/misc/Ziff_FreelancerExecutoryContracts.pdf
The Debtors have evaluated each of the Executory Contracts and
have determined that the Executory Contracts are useful and
beneficial to the Debtors' ongoing operations. Furthermore, the
Debtors' assumption of the Executory Contracts will eliminate the
uncertainty of counterparties to the Executory Contracts
regarding whether the Debtors intend to continue their business
relationships with the counterparties, the Debtors' proposed
counsel, Carey D. Schreiber, Esq., at Winston & Strawn LLP, in
New York, related.
Mr. Schreiber told the Court that assumption of the Executory
Contracts is a central component of the Debtors' strategy of
minimizing the impact on the Debtors' operations while seeking to
exit chapter 11 on an expedited basis. Mr. Schreiber further
stated that the Debtors have sufficient cash from operations and
other cash collateral to make all payments due under the
Executory Contracts. "The Debtors fully intend to make all the
payments to the counterparties to the Executory Contracts in the
ordinary course of business," Mr. Schreiber said.
The Debtors intend to pay the Vendors' cure claims, which exceed
$1,000,000; and the Freelancers' cure claims, which total
$184,339.
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. The Plan confirmation hearing
is scheduled for June 25, 2008 at 10:00 a.m., prevailing Eastern
time. (Ziff Davis Bankruptcy News, Issue No. 6, Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstandor
215/945-7000)
ZIFF DAVIS: Can Hire Alvarez & Marsal as Restructuring Advisor
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorizes Ziff Davis Media Inc. and its debtor-affiliates to
employ Alvarez & Marsal North America, LLC, as their restructuring
advisor and financial advisor, nunc pro tunc to the Petition Date.
A&M's restructuring transaction fee will be payable on the
effective date of a confirmed Plan of Reorganization, and will be
equal to $1,500,000 less 50% of the aggregate amount of the
monthly fees earned by A&M under the letter agreement.
Parties in interests had until April 10, 2008, to file an
objection to the application. If a party in interest files an
objection within the Objection Period, the Debtors will schedule
the Objection for hearing on April 29, 2008 at 10:00 a.m. Any
Objection must (i) be filed by 5:00 p.m. Eastern Time, on the
last day of the Objection Period, and (ii) specify the basis for
the Objection.
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. The Plan confirmation hearing
is scheduled for June 25, 2008 at 10:00 a.m., prevailing Eastern
time. (Ziff Davis Bankruptcy News, Issue No. 6, Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstandor
215/945-7000)
* Fitch Performs Vintage Analysis on 2000 and 2001 US CMBS
----------------------------------------------------------
In its continuing effort to measure all characteristics of U.S.
CMBS loans, Fitch Ratings performed a vintage analysis of the 2000
and 2001 vintages in U.S. CMBS, in addition to its regular
SMARTView surveillance. The analysis included 46 transactions and
yielded these results:
Downgrades:
Office Portfolio Trust 2001-HRPT
-- Class H to 'BB' from 'BB+'.
Bear Stearns 2001-TOP2
-- Class K to 'B' from 'B+';
-- Class L to 'B-' from 'B';
-- Class M to CC/DR4 from 'B-/DR4'.
CSFB 2001-CP4
-- Class M to 'B-' from 'B';
-- Class N to 'CCC/DR2' from 'B-/DR1'.
Distressed Recovery Rating:
JP Moran Chase 2001-C1
-- Class N to 'B-/DR1' from 'B-'.
Rating Watch:
Office Portfolio Trust 2001-HRPT
-- Class G, rated 'BBB-', placed on Rating Watch Negative.
Upgrades:
Chase 2000-1
-- Class F to 'AA+' from 'AA'.
Annapolis Mall 2000-C1B
-- Class B-2 to 'AAA' from 'AA+';
-- Class B-3 to 'AA+' from 'AA';
-- Class B-4 to 'AA-' from 'A+'.
LB-UBS 2000-C3
-- Class G to 'AAA' from 'AA+';
-- Class H to 'AA-' from 'A+'.
GMAC 2000-C2
-- Class E to 'AA+' from 'AA';
-- Class F to 'AA-' from 'A+'.
Morgan Stanley 2000-LIFE1
-- Class E to 'AA' from 'AA-';
-- Class F to 'A+' from 'A'.
Morgan Stanley 2000-LIFE2
-- Class D to 'AAA' from 'AA+'.
First Union 2000-C2
-- Class G to 'AAA' from 'AA'.
GE 2001-1
-- Class G to 'AA+' from 'AA'.
Morgan Stanley 2001-IQ
-- Class J to 'BBB' from 'BBB-'.
JP Morgan 2001-KP
-- Class B to 'AAA' from 'AA+';
-- Class C to 'AA' from 'A+';
-- Class D to 'AA-' from 'A';
-- Class E to 'A' from 'BBB';
-- Class F to 'BBB+ from 'BBB-'.
Fitch continues to comprehensively review its U.S. CMBS portfolio
based on Fitch's existing criteria, including the analysis of
sustainable property level income rather than prospective income,
as well as analysis of credit risk in every transaction.
Fitch uses SMARTView monthly to monitor significant movements in
U.S. CMBS transactions. Transactions which evidence a potential
material change are placed 'Under Analysis' and a detailed review
is completed within 30 days. Within the 'Under Analysis' period,
Fitch either affirms the current ratings or takes a rating action.
* Moody's Reports Continued Rise in Credit Card Charge-off Rates
----------------------------------------------------------------
January performance of the U.S. credit card sector continued to
weaken across several of the performance measures tracked by
Moody's Credit Card Indices. In the first month of 2008, charge-
off and delinquency rates continued to rise on both a sequential
and year-over-year basis.
With the charge-off and delinquency rates headed upwards, Moody's
has a negative Outlook for the US credit card sector. Even so,
Moody's sees no immediate rating implications for credit card
asset-backed securities due to deteriorating collateral
performance. Moody's believes that fundamental differences in
credit underwriting standards, risk management, issuer credit
strength, and macroeconomic drivers explain why the credit card
sector does not appear to be following the downturn in the sub-
prime mortgage sector at this time.
In January, charge-off rates reached the highest level since
December 2006 when a change in the consumer bankruptcy law caused
charge-off rates to temporarily spike. Bankruptcy filings, an
important component of the reported charge-off rate, are expected
to rise throughout 2008. For some issuers, charge-offs may rise
to the upper bound of Moody's performance expectations by year
end, if not sooner.
The delinquency rate, a measure of card balances more than 30 days
past due, also rose in January. The delinquency rate, often a
harbinger of future charge-off rates, rose to its highest level in
three and a half years.
The monthly payment rate--a measure of cardholders' willingness
and ability to repay their credit card debt--decreased compared to
the year-earlier rate, but at 19% remained within its historically
high range of 18% - 20%. This rate typically rises in March due
to tax refunds, and it may rise again when, starting in May, the
I.R.S. mails its economic stimulus payments to more than 130
million households.
The average yield on credit cards for January rose slightly from
its year-earlier rate. Despite several cuts in the Prime Rate
over the past several months, the average yield on credit cards
has remained quite stable. This stability is perhaps reflective
of the discretion that many card issuers have in the rates they
charge cardholders as well as the presumed increase in late fees
collected on the increasing proportion of delinquent borrowers.
Nevertheless, Moody's expects that a portion of the drop in the
Prime Rate will be passed through to variable rate cardholders on
a lagged and muted basis (and will reduce the average yield on
card portfolios).
Excess spread (i.e. portfolio revenues less deal expenses such as
coupon interest, the cost of servicing and charge-offs) remains
robust by historical standards. For January, the one-month excess
spread margin was almost 7% - well above the long-term historical
average of 5.8%. In recent months, the pronounced drop in one-
month LIBOR, the rate to which nearly all variable rate card deals
are indexed, has mitigated the impact on excess spread of the
aforementioned rise in the charge-off rate.
Moody's Credit Card Credit Indices track the monthly performance
of over $450 billion of U.S. Bank credit card loans backing
securities rated by Moody's.
January 2008 Charge-off Rate Rose to 5.48%
The January charge-off rate rose to 5.48%, the highest level since
the change in bankruptcy law in late 2006 and slightly over the
long-term average of 5.42%. The charge-off rate measures those
credit card account balances written off as uncollectible as an
annualized percent of total loans outstanding. The rise in
January marks the thirteenth consecutive month of year-over-year
increase.
January 2008 Delinquency Rate Rose to 4.51%
The January 2008 delinquency rate, which measures the proportion
of account balances for which a monthly payment is more than 30
days late as a percent of total balances, rose to 4.51% from 3.91%
a year ago. The delinquency rate, which had been relatively
stable in the first half of year 2007, has risen month-over-month
for the past seven consecutive months. The January delinquency
rate of 4.51% was the highest this rate has been since April 2004.
The delinquency rate last peaked in February 2002 at 5.52%.
January 2008 Payment Rate Fell to 19.06%
In January 2008, cardholders paid back, on average, 19.06% of
their credit card debts -- about 4.85% lower than last year's
January rate of 20.03%. Compared to last year, the payment rate
has fallen slightly in recent months. After more than four years
of year-over-year increases, this drop was not entirely unexpected
and was likely caused by a cooling off of the real estate market
and, by extension, mortgage refinancing activity. Even so, the
payment rate, which now averages between 18% - 20%, is high by
historical standards.
January 2008 Yield Rose Slightly To 18.54%
Yield (the annualized percentage of income, primarily finance
charges and fees, collected during the month as a percent of total
loans) rose to 18.54% from 18.34% a year ago. The yield has
continued to rise despite the recent drop in the Prime Rate -- the
rate to which many variable rate card terms are tied.
January 2008 Excess Spread Dropped To 6.94%
The one-month excess spread, which is the yield less the expenses
of the related credit card asset-backed transactions (e.g. coupon,
servicing fee and charge-offs), remains high by historical
standards. The excess spread in January was 6.94%, down from
7.19% this time last year. The long-term average excess spread
margin is 5.79%.
* Moody's Says U.S. Commercial Real Estate Largely Stable
---------------------------------------------------------
Six of the seven commercial property types measured in Moody's
Investors Service's Red-Yellow-Green(TM) report posted scores for
the first quarter of 2008 similar to those of the previous
quarter, indicating that the real estate markets that support
commercial mortgage backed securities are generally stable or
weakening only moderately.
For the fourth consecutive quarter, Los Angeles and New York, the
two markets where CMBS collateral most frequently is found, had
the strongest composite scores of any market across all property
types.
Moody's Red-Yellow-Green(TM) scores assess the well being of
individual property markets based on the supply-and-demand balance
within the market, among other variables. The only sector to show
significant deterioration was limited service hotels, where the
score dropped from a solid green 77 to 64, just inside moderate or
"yellow" territory.
"As economic growth forecasts continue to deteriorate, corporate
downsizing coupled with waning consumer confidence will
increasingly affect hotel demand growth," says Moody's Senior Vice
President Sally Gordon. "While previously, economic weakness was
thought to most significantly curb full-service demand, the
slowdown is beginning to spill over into the limited-service
sector as well."
Full service hotels slid slightly deeper into yellow territory
during the quarter, dropping two points to 59. Moody's says the
basic supply and demand metrics for the sector continued to
deteriorate as the near-term economic outlook has worsened.
One sector, central business district offices, showed a slight
improvement in supply versus demand, while two sectors,
multifamily and industrial, declined marginally. Scores in two
sectors, retail and suburban office, were unchanged from last
quarter.
In all, three sectors -- multifamily housing, retail, and CBD
office -- continue to have green or strong scores, while four
sectors -- uburban office, industrial, and the two hotel sectors
-- have yellow scores.
Moody's Red-Yellow-Green(TM) report scores markets on a scale of 0
(weak) to 100 (strong) and describes them in traffic light colors,
with scores of 0-33 identified as red, 34-66 as yellow, and 67 --
100 as green.
Sector by Sector Analysis
During the first quarter, the multifamily housing sector slipped
three points, reversing a trend of improving scores over the
previous three quarters, but remaining in solid green territory at
81. Overall, 50 of the 60 multifamily markets that Moody's
follows are green, with the remaining 10 in yellow territory and
no red markets.
Moody's says retail properties, comprised of both neighborhood and
community shopping centers, upheld their position as the strongest
and most stable property type, with a composite score of 82 for
the third quarter in a row. The sector's score has now been in
the 81-84 point range for seventeen consecutive quarters. Of the
53 retail markets Moody's reports on, 43 have green scores, 10
have yellow scores, and none have red scores.
The CBD office market inched up last quarter as it gained two
points to post a score of 69. Although demand for downtown office
space is expected to decline slightly over the next one-year
horizon, Moody's says that supply has also slowed to barely a
trickle -- down to 0.6%, its lowest level since 2005. As a
result, the relatively small supply-demand imbalance should not
undermine market stability too profoundly. In all, of the 46
markets in the study, 17 are green, 23 are yellow, and 6 are red.
The suburban office supply-demand relationship remains weak, says
Moody's. Unlike the CBD office segment, suburban markets continue
to experience a very hearty pace of new supply, 2.9%, notably
ahead the rate of expected growth in demand, to leave a negative
supply-demand imbalance of -2.6%. For the quarter the sector's
score was unchanged at a yellow 42, the lowest of any sector by a
significant margin. Moody's says suburban office supply shows no
signs of dropping off, while demand wanes. In all, four of 52
markets are green, 31 are yellow, and 17 are red.
Moody's composite score on the industrial market dropped two
points to 68, just into yellow. Of 51 markets, 22 have green
scores, 23 have yellow scores, and six have red scores.
Six of 49 full-service hotel markets have green scores, 26 have
yellow scores, and 17 have red scores. In the limited-service
hotel sector, 18 of 48 markets have green scores, 27 have yellow
scores, and three have red scores.
Scores For Top 10 Cities in CMBS
The overall commercial real estate composite score for the U.S. is
69, a drop of one point from last quarter. The scores of the top
10 cities found most frequently in CMBS, based on dollar volume,
are as follows, with the previous quarter's score in parenthesis:
Los Angeles 80 (84), New York 78 (80), Houston 71 (75),
Philadelphia 70 (72), San Francisco 72 (69), Washington DC 60
(62), Atlanta 59 (61), Chicago 56 (57), Dallas 54 (57), and Miami
59 (59).
The five worst markets in the U.S., with the previous scores in
parenthesis, are: Jacksonville 27 (37), Phoenix 37 (45), Trenton
43 (38), San Antonio 44 (50), and Dayton 44 (60).
The five best markets in the U.S. are: Los Angeles 80 (84), New
York 78 (80), Long Island NY 77 (75), Honolulu 77 (78), and Salt
Lake City 75 (72).
* S&P Downgrades 31 Tranches' Ratings From Eight Cash Flows & CDOs
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 31
tranches from eight U.S. cash flow and hybrid collateralized debt
obligation transactions. S&P removed 13 of the lowered ratings
from CreditWatch with negative implications. Additionally, S&P
affirmed its 'AAA' rating on one tranche and removed it from
CreditWatch negative. At the same, time S&P withdrew its rating
on one tranche following its complete paydown on the March 7,
2008, payment date. The downgraded tranches have a total issuance
amount of $3.387 billion.
Two of the eight transactions are high-grade structured finance
CDOs of asset-backed securities, which are CDOs collateralized at
origination primarily by 'AAA' through 'A' rated tranches of
residential mortgage-backed securities and other SF securities.
The other eight transactions are mezzanine SF CDOs of ABS, which
are collateralized in large part by mezzanine tranches of RMBS and
other SF securities.
This CDO downgrades reflect a number of factors, including credit
deterioration and recent negative rating actions on U.S. subprime
RMBS securities, as well as changes Standard & Poor's has made to
the recovery rate and correlation assumptions it uses to assess
U.S. RMBS held within CDO collateral pools.
To date, including the CDO tranches listed below and including
actions on both publicly and confidentially rated tranches, S&P
has lowered its ratings on 3,185 tranches from 737 U.S. cash flow,
hybrid, and synthetic CDO transactions as a result of stress in
the U.S. residential mortgage market and credit deterioration of
U.S. RMBS. In addition, 358 ratings from 97 transactions are
currently on CreditWatch negative for the same reasons. In all,
S&P has downgraded $336.396 billion of CDO issuance.
Additionally, S&P's ratings on $18.130 billion in securities have
not been lowered but are currently on CreditWatch negative,
indicating a high likelihood of downgrades.
Standard & Poor's will continue to monitor the CDO transactions it
rates and take rating actions, including CreditWatch placements,
when appropriate.
Rating and CreditWatch Actions
Rating
------
Transaction Class To From
----------- ----- -- ----
Altius IV Funding Ltd. A-1B A+ AAA
Altius IV Funding Ltd. A-1F AA+ AAA
Altius IV Funding Ltd. A-1V A+ AAA
Altius IV Funding Ltd. A-2a A AAA/Watch Neg
Altius IV Funding Ltd. A-2b BBB+ AAA/Watch Neg
Altius IV Funding Ltd. B BB+ AA/Watch Neg
Altius IV Funding Ltd. C B- A/Watch Neg
Altius IV Funding Ltd. D CCC- BBB/Watch Neg
Altius IV Funding Ltd. E CC BB+/Watch Neg
Collybus CDO I Ltd. B AA AA+
Collybus CDO I Ltd. C A A+
Collybus CDO I Ltd. D BBB- BBB+
Glacier Funding CDO III Ltd. A-2 AA- AAA
Glacier Funding CDO III Ltd. B BB+ AA
Glacier Funding CDO III Ltd. C CC BBB
Glacier Funding CDO III Ltd. D CC BB+
Inman Square Funding I Ltd. IV-FL BB+ BBB
Inman Square Funding I Ltd. IV-FX BB+ BBB
Saturn Ventures I Ltd. A-3 AA+ AAA
Saturn Ventures I Ltd. B BB+ A
Saturn Ventures 2004 -
Fund America Investors III Ltd A3 A+ AA
Saturn Ventures 2004 -
Fund America Investors III Ltd B BBB A-
Saturn Ventures 2004 -
Fund America Investors III Ltd C BB- BBB
Vermeer Funding Ltd. C B BBB
West Coast Funding I Ltd. A-1a AAA AAA/Watch Neg
West Coast Funding I Ltd. A-1b AA AAA/Watch Neg
West Coast Funding I Ltd. A-1v AA AAA/Watch Neg
West Coast Funding I Ltd. A-2 A AAA/Watch Neg
West Coast Funding I Ltd. A-3 BBB AAA/Watch Neg
West Coast Funding I Ltd. B B AA/Watch Neg
West Coast Funding I Ltd. C CCC A/Watch Neg
West Coast Funding I Ltd. D CCC- BBB/Watch Neg
Rating Withdrawn
Rating
------
Transaction Class To From
----------- ----- -- ----
Collybus CDO I Ltd. A-1 NR AAA
Other Outstanding Ratings
Transaction Class Rating
----------- ----- ------
Collybus CDO I Ltd. A-2 AAA
Collybus CDO I Ltd. A-3 AAA
Glacier Funding CDO III Ltd. A-1 AAA
Inman Square Funding I Ltd. I AAA
Inman Square Funding I Ltd. II-FL AA
Inman Square Funding I Ltd. II-FX AA
Inman Square Funding I Ltd. III A-
Saturn Ventures I Ltd. A-1 AAA
Saturn Ventures I Ltd. A-2 AAA
Saturn Ventures 2004 - Fund America A-1 AAA
Investors III Ltd.
Saturn Ventures 2004 - Fund America A-2 AAA
Investors III Ltd.
Vermeer Funding Ltd. A-1 AAA
Vermeer Funding Ltd. A-2 AAA
Vermeer Funding Ltd. B AA
NR -- Not rated.
* S&P Says North American Chemicals Sector Faces Tougher Market
---------------------------------------------------------------
Most of the North American chemicals sector experienced
challenging credit market conditions and a modest weakening of
operating expectations in the first quarter of 2008, according to
an industry credit outlook by Standard and Poors.
A key issue is the deterioration of the domestic economy and its
effect on important end markets for the chemicals sector, such as
autos and housing. This combined with higher costs for raw
materials and energy spells bad news for most chemical producers.
Still, in terms of credit quality, most of Standard & Poor's
concerns are focused on companies at the lower end of the rating
scale, which are more vulnerable to liquidity shortfalls and
default during the impending downturn.
"Credit quality is likely to decline among speculative-grade
issuers throughout 2008, given the continuing credit market
difficulties, the onset of more challenging operating conditions,
and the substantial increase in the number of issuers in the 'B'
category during the past several years," said Standard & Poor's
credit analyst Kyle Loughlin.
However, Mr. Loughlin cautions that "we are not seeing a broad
sector decline in credit quality, but rather, operating
expectations are somewhat more subdued and liquidity concerns for
low-speculative-grade issuers have become an area of increased
focus."
For the first few months of 2008, chemical sector downgrades
outpaced upgrades 7 to 2, accelerating the downward drift in
Standard & Poor's total rated coverage. Prior to 2008, the
majority of rating actions in the sector involved mergers and
acquisitions or financial policy decisions. With the
deterioration in the capital markets, the situation has changed
and an increasing number of rating actions now reflect the
fundamental deterioration of financial profiles in the
speculative-grade category and the implications of diminished
liquidity.
* S&P Reports Possible Negative Outlook on Commercial Lines
-----------------------------------------------------------
The U.S. commercial lines property or casualty insurance pricing
cycle has been the center of growing debate in recent months
according to Standard & Poor's Ratings Services. Standard &
Poor's believes that if price declines continue at their current
pace, it will likely revise the outlooks on some commercial lines
insurers to negative in the second half of 2008, which could lead
to a negative outlook for the commercial lines sector toward the
end of the year. A negative sector outlook signals that S&P
expects downgrades to exceed upgrades in the following 12 months.
Primary commercial lines pricing has been steadily declining since
2005, but until recently, the decrease has been fairly modest, and
it followed a run-up in rates that began in 2001. However, in the
second half of 2007, the rate of decline accelerated, and this
trend has continued into 2008. The negative impact of declining
prices--combined with increasing loss costs--is compressing
economic margins, and this will increasingly show up in reported
earnings. The potential impact of falling rates on earnings in
2008 and, particularly, 2009 would be the main reason for revising
the outlooks on individual companies and, ultimately, the
commercial lines sector. How quickly this occurs will vary by
insurer and depend on the market it serves, the accounts it
writes, and its competitive position relative to other insurers in
those business segments.
Prices in many lines have been dropping very quickly, with some
long-tail casualty lines likely to produce underwriting losses in
2008. Other lines, though suffering price declines, still should
produce results close to historical norms. The position of any
given company will be determined by its target market, its
distribution, and its ability to manage its risks. Although
Standard & Poor's continues to believe that the ERM capabilities
of the industry in aggregate augur a soft landing for this cycle,
there will inevitably be individual companies that are outliers in
their performance.
* Utah's Bankruptcy Filings Increases 44% in First Quarter of 2008
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Utah recorded 1,964
bankruptcy filings in the first quarter of 2008, up 44% from the
same period in the previous year, Jennifer Toomer-Cook of Deseret
Morning News reports.
According to various reports, 26 Chapter 11 bankruptcies in March
surpassed 2007's entry of 24. Books also registered 95% of the
805 March appeals were made by buyers, 27 of which applied for
Chapter 7 while 338 petitioned for Chapter 13.
Mortgage consequences tops the reasons for plea. Other causes
include: rising fuel and food costs, unemployment, divorce,
unexpected medical bills and their inability to oblige to the
terms of debt-payment plans.
* Ex-Senior Execs. Form CrawfordSpalding Advisory & Mgt. Services
-----------------------------------------------------------------
Mac Crawford, Bill Spalding and Drew Crawford, former senior
executives of Caremark have formed CrawfordSpalding Group, a
professional advisory and management services firm.
As chairman and chief executive officer of Caremark, Mr. Crawford
oversaw the company's transformation from a nearly bankrupt entity
in 1998 into a leader in pharmacy benefits management, generating
revenues of $37 billion annually. Working with Mr. Spalding
and Drew Crawford, Mac Crawford led Caremark through the merger
with drug chain CVS in 2007 that valued Caremark at $26.5 billion
and formed CVSCaremark Corp., a Fortune 20 company where all
three executives served before launching CrawfordSpalding.
CrawfordSpalding will apply the extensive operational, financial
and transactional expertise of its principals to help companies
optimize underperforming or distressed assets, maximize
transformational business opportunities, and capitalize on
changing market dynamics to deliver greater value to stakeholders.
CrawfordSpalding will assist companies and sponsors as advisors,
interim management, and strategic investors, and will apply
situation specific, innovative solutions encompassing financial
and crisis management; mergers, acquisitions, and divestitures;
operational effectiveness; strategic planning; and business
development and marketing.
"Bill, Drew and I are excited to come together again to form
CrawfordSpalding," Mac Crawford said. "We believe our new firm
addresses a need in this challenging economy for strategic advice
and management expertise that can help investors and stakeholders
in a range of industries realize full value from their businesses
and assets."
"We have designed CrawfordSpalding to promote close working
relationships with clients," Mr. Spalding said. "Recognizing that
each situation is unique, we will pursue a flexible approach that
allows us to tailor our services to meet individual client's
needs."
"Together we share a common commitment to client service and
building value, Drew Crawford said. "We are excited about the
challenges ahead and believe there will be significant
opportunities for us."
Edwin "Mac" Crawford, co-founder and principal
Throughout his nearly 40-year career, Mac Crawford has led
turnarounds at struggling companies by identifying and
capitalizing on the best growth platforms, driving margin
improvements, eliminating unnecessary costs, and pursuing
strategic transactions. His experience includes serving as
a hands-on operator, CEO of publicly traded companies, and as a
catalyst for financial restructurings and strategy shifts for
businesses in transition.
Recently, Mr. Crawford served as chairman of CVSCaremark Inc., a
company formed by the 2007 merger of CVS and Caremark. In 1998,
he joined the physician practice management company, Med Partners,
later renamed Caremark, which was struggling amid operating
losses, debt obligations of $1.8 billion and major changes in the
healthcare industry.
He made the strategic decision to sell assets and focus on the
small but growing pharmacy benefits management business.
Mr. Crawford oversaw growth of the PBM business, increasing
revenues to $9 billion by 2003, while significantly lowering
Caremark's debt. In 2004, he orchestrated the acquisition of
AdvancePCS, which made Caremark the second-largest PBM, generating
over $23 billion in annual revenue.
By 2007, Caremark had grown to be a $37 billion PBM managing over
600 million prescriptions when Mr. Crawford led the company
through the strategic merger with drug chain CVS amid a hostile
proxy solicitation and rival offer from Express Scripts.
Mr. Crawford was named Institutional Investor's Best CEO in
Healthcare Technology and Distribution for 2005, 2006 and 2007.
Previously, Mr. Crawford was chairman and CEO of Magellan Health
Services. After joining the company's predecessor, Charter
Medical Corporation, as EVP Hospital Operations in 1990, he led
the company through a financial restructuring and Chapter 11
bankruptcy from which it successfully emerged in 1992.
He was appointed president and COO in 1992, and chairman and CEO
in 1993. Under his leadership, Charter sold its psychiatric and
acute-care hospitals and transformed itself into a managed-care
behavioral healthcare company through an acquisition of Green
Spring Health Services. Magellan continued to grow this business
and eventually became the nation's largest managed-care behavioral
healthcare firm.
Before Magellan, Mr. Crawford was CFO of several private firms and
President of Mulberry Street Investment Company, where he managed
real estate, venture capital and oil and gas investments. He began
his career as a CPA with Arthur Young & Company.
Mr. Crawford graduated from Auburn University with a degree in
Accounting.
William R. "Bill" Spalding, co-founder and principal
As both an operator and advisor, Bill Spalding has implemented
growth strategies, orchestrated value-enhancing transactions and
overseen financial and corporate turnarounds. He has experience
in management, corporate governance, strategy development, M&A,
private equity representation, crisis management, internal
investigations, corporate administration and public affairs.
Mr. Spalding was EVP Strategy and Managed Care for CVSCaremark
Inc. An executive management committee member, he was responsible
for strategy, Medicare Part D business unit, Caremark's
Pharmaceutical Services Unit, CVS's Managed Care Operations and
M&A.
Prior to the CVS merger, he was Caremark's EVP, Strategic
Initiatives, responsible for expanding business lines and
developing new opportunities. He also oversaw strategic planning,
M&A, Governmental Affairs and the Pharmaceutical Services
business. He led the strategic review that concluded a merger
with a large pharmacy chain was Caremark's most compelling long-
term alternative and subsequently led the team that negotiated the
CVS merger while defending against an unsolicited offer and proxy
solicitation.
Before 2005, Mr. Spalding was a senior partner in the Atlanta
office of King & Spalding LLP, served on the Management Committee
and led the Private Equity & Investment Funds Practice. He
represented clients in PE transactions ranging from non-control
investments in technology and biotech companies to control
investments and sales of established operating companies.
He also worked on a variety of public and private transactions
involving sports franchises, timber operations, manufacturing,
savings and loans, investment banking, healthcare and software
companies. His clients included Caremark, UPS, Georgia Pacific,
SunTrust, The McLane Group L.P. and SAIC.
He also represented public company boards regarding governance and
SEC compliance and reporting matters.
>From 1995 to 1997, Mr. Spalding was general counsel and chief
administrative officer and EVP, Strategic Planning of Per-Se
Technologies, previously Medaphis Corp. responsible for legal
affairs, corporate administration which includes procurement, HR,
information technology, tax/treasury and corporate/IR, strategic
planning and acquisitions/divestitures.
Mr. Spalding graduated with honors from Dartmouth College, earned
his Juris Doctorate summa cum laude from Washington and Lee
University and then clerked for the Honorable Ellsworth A. Van
Graafeiland, 2nd Circuit, U.S. Court of Appeals. He serves on the
board of counselors of the Carter Presidential Center in Atlanta.
Andrew D. "Drew" Crawford, Co-Founder and Principal
Drew Crawford has extensive executive and general management
experience leading companies as they define and execute strategies
to improve performance and enhance financial returns and investor
value. His experience extends across mergers, acquisitions and
divestitures; crisis management; public and investor relations;
new company formation; capital raising; underwriting; and
financial operations.
Mr. Crawford served as SVP of Underwriting and Analytics for
CVSCaremark Inc. He was responsible for all underwriting and the
analytic and outcomes operations of the company's pharmacy
benefits management specialty and disease management businesses.
He also led development efforts to bring new products to the
marketplace by combining the strengths of Caremark and CVS.
Prior to the merger with CVS, Mr. Crawford spent eight years at
Caremark in executive positions and served on various steering
committees as Caremark sharpened its operating focus, reduced debt
and significantly expanded its PBM business. As SVP, Underwriting
and Industry Analysis, he led the company's underwriting
activities and financial analysis for negotiations with
pharmaceutical manufacturers, retail chains and drug wholesalers.
He also served as SVP, office of the president, VP of corporate
development, VP of finance, assistant treasurer, director of
corporate strategy, and head of communications. In addition, he
was responsible for some of Caremark's largest client
relationships.
Mr. Crawford played key roles in Caremark's acquisition of
AdvancePCS and the merger with CVS. During the CVS merger,
Mr. Crawford was a core member of the transaction team and led the
company's public and investor relations efforts amid a rival offer
and hostile proxy solicitation by Express Scripts.
>From 2000 to 2001, Mr. Crawford was CFO of Emageon Inc., a now
publicly held, Birmingham, AL-based information technology
company. As the company's first CFO, he helped build its client
relationships and secure $13 million of venture capital. Mr.
Crawford began his career with Arthur Andersen in Atlanta, where
he was engaged in audits, M&A and corporate reporting for Fortune
500 and other large and mid-sized clients.
Mr. Crawford earned his Bachelor of Science degree with Special
Attainments in Commerce from Washington and Lee University. He
serves on the board of advisors of the Williams School of Commerce
at Washington and Lee.
About CrawfordSpalding Group
Headquartered in Brentwood, Tennessee, CrawfordSpalding --
http://www.crawfordspalding.com/-- assist companies and sponsors
by enhancing financial returns and stakeholder value as advisors,
interim management and/or strategic investors.
CrawfordSpalding\u2019s approach is situation specific and
encompasses: financial and crisis management; mergers,
acquisitions and divestitures; operational effectiveness;
strategic planning and business development and marketing.
* BOOK REVIEW: Investing in Junk Bonds:
Inside the High Yield Debt Market
----------------------------------------------
Authors: Edward I. Altman and Scott A. Nammacher
Publisher: Beard Books
Paperback: 272 pages
List Price: $34.95
Order your personal copy at
http://amazon.com/exec/obidos/ASIN/1587981556/internetbankrupt
Investing in Junk Bonds: Inside the High Yield Debt Market by
Edward I. Altman and Scott A. Nammacher is an especially
informative book for all new investors, but is just as useful for
the seasoned professional.
This is a reprint of one of the first comprehensive books on the
rise and operation of the high yield debt market as illustrated by
the "junk" bond. This classic volume is still relevant in today's
challenging market.
Among the concepts discussed are: expected yields; realized
returns; default experience; market growth and size; credit
quality trends; related mutual fund results and portfolio
holdings; mergers/acquisitions and takeovers; new issue and issuer
characteristics; underwriter strategies; and developing investment
strategies, particularly using an objective credit model.
*********
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 ***