/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080530.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, May 30, 2008, Vol. 12, No. 128 Headlines 3KB TRANSPORTATION: Case Summary & 31 Largest Unsecured Creditors 82A DEVELOPMENTS: Case Summary & Largest Unsecured Creditor ACE HOLDING: Claims Bar Date Scheduled for August 18 ACE HOLDING: Wants to Use Mortgage Lenders' Cash Collateral ACTIVITIES INC: Case Summary & 11 Largest Unsecured Creditors AEGIS NET: Fitch Chips Rating on $8.8MM Class N2 Note to 'C/DR6' ALLEN-VANGUARD: S&P Assigns 'BB-' Long-Term Corp. Credit Rating ALLIED SECURITY: March 31 Balance Sheet Upside-Down by $20,554,742 ALLSTATE PROPERTY: Case Summary & 12 Largest Unsecured Creditors AMERICAN AXLE: Appoints David Dauch as President and COO AMERICAN UNDERWRITERS: A.M. Best Lifts IC Rating to bb+ from bb- AMERISTOCK CORP: To Terminate Five Ameristock/Ryan Treasury ETF AMY SIMCIK: Case Summary & Four Largest Unsecured Creditors ARCHER ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors ASARCO LLC: Court Approves $1.27MM Settlement with El Paso ASARCO LLC: Court OKs Environ. Claims Deal with U.S. Gov't, et al. ASARCO LLC: Asarco Inc. Balks at 26 Asbestos Claims ASSET-BACKED: Fitch Chips Ratings to 'C/DR6' on Five NIM Notes AVIATION TECHNOLOGY: Files Chapter 7 Liquidation in Colorado BEAR STEARNS: Stockholders Approves $1.4 Billion JPMorgan Buyout BON-TON STORES: Posts $34.1 Million Net Loss in Qtr. Ended May 3 BRAD-CART: Case Summary & 20 Largest Unsecured Creditors CA INC: S&P Lifts Corporate Credit Rating to BB+ from BB CALIFORNIA OIL: Appoints John McLeod as Chief Financial Officer CAMPBELL RESOURCES: Meston Unit Gets Plan of Arrangement Extension CENTURY INDEMNITY: Fitch Holds 'B-' Insurer Fin'l Strength Rating CENTURY REINSURANCE: Fitch Affirms 'CCC+' IFS Rating CHARMING SHOPPES: Posts $34.5 Million Net Loss in Qtr. Ended May 5 CHERRY CREEK: Case Summary & Largest Unsecured Creditors CJC CATERING: Case Summary & Largest Unsecured Creditors C LANIER RANDALL: Voluntary Chapter 11 Case Summary COUNTRYWIDE FINANCIAL: BofA Drops Mr. Sambol Out of Mortgage Biz CSC HOLDINGS: S&P Puts 'BB' Rating on Proposed $500MM Sr. Notes CSFB NIMS: Fitch Takes Rating Actions on Six NIM Notes CUSTOM HOMES: Case Summary & 20 Largest Unsecured Creditors DAN RIVER: U.S. Trustee Appoints 5-Member Creditors' Panel DAN RIVER: Committee, Danville Protest GMAC's $32 Million DIP Loan DELTA AIR: Merger with Northwest Likely to be Approved DELTA AIR: Pilots Overwhelmingly Ratify Modified Pilot Agreement DELTA AIR: Closing Nine Airport VIP Lounges to Reduce Costs DENNY'S CORP: Stockholders Approve 2008 Omnibus Incentive Plan DIAMOND EXECUTIVE: Case Summary & 17 Largest Unsecured Creditors DRYLANDS PACIFIC: Case Summary & 10 Largest Unsecured Creditors DURA AUTOMOTIVE: Discloses Plan Provisions in SEC Filing DURA AUTOMOTIVE: J.W. Korth Opposes Confirmation of Plan DYNAMIC LEISURE: March 31 Balance Sheet Upside-Down by $21,495,703 EAST CANYON: Involuntary Chapter 11 Case Summary EDGAR MUNTZ: Case Summary & 20 Largest Unsecured Creditors EDGEN MURRAY: S&P 'B' Rating Remains Unchanged After Review EDMETT CONSULTING: Case Summary & 20 Largest Unsecured Creditors EL DORADO: Case Summary & 20 Largest Unsecured Creditors EXAERIS INC: Court Confirms Chapter 11 Plan FEDERAL-MOGUL: Professionals Seek Payment of $16,066,139 in Fees FIFTH WORLD: Voluntary Chapter 11 Case Summary FINANCE AMERICA: Notes Paydown Performance Cues Fitch Rating Cuts FREMONT NET: Fitch Junks Ratings on Two Classes of NIM Notes GENERAL MOTORS: 19,000 Hourly Workers Accept Attrition Program GREATNESS ENTERPRISES: Voluntary Chapter 11 Case Summary GROUP 1: S&P Downgrades Corporate Credit Rating to BB- from BB GSAMP TRUST: S&P Puts Ratings on Default on Poor Collateral Pools GOLF DIAGNOSTIC: Voluntary Chapter 11 Case Summary GREGORY GRIFFIN: Voluntary Chapter 11 Case Summary HARBOUR WALK: Frustrates Foreclosure Attempt by Filing Bankruptcy HARWOOD PRODUCTS: Voluntary Chapter 11 Case Summary GUARDIAN ENTERTAINMENT: Case Summary & Largest Unsecured Creditor HANOVER CAPITAL: Posts $23.3 Million Net Loss in 2008 1st Quarter HOLOGIC INC: S&P Lifts Rating to B+ from B After Debt Repayment IMAGEWARE SYSTEMS: Posts $1,904,000 Net Loss in 2008 First Quarter IMPAC MORTGAGE: Mulls Preferred Stocks Offering to Save Cash ITREX INTERNATIONAL: Involuntary Chapter 11 Case Summary JETBLUE AIRWAYS: Amends Deutsche Lufthansa Stock Purchase Pact JOHN O'SULLIVAN: Case Summary & 6 Largest Unsecured Creditors KANSAS CITY SOUTHERN: S&P Rates $275MM Sr. Unsecured Debt 'BB-' LA CORTINA: Case Summary & 19 Largest Unsecured Creditors LANDING DEVELOPMENT: Case Summary & 51 Largest Unsecured Creditors LEVITZ FURNITURE: May Continue HSBC Sales Tax Deal Until Dec. 2009 LEVITZ FURNITURE: Court Extends Lease Period Under Raymours Pact LEVITZ FURNITURE: YA Global Requests Rule 2004 Examination LEXINGTON PRECISION: W.Y. Campbell Approved as Financial Advisor LEXINGTON PRECISION: Can File Schedules & Statements Until June 30 MCDERMOTT INT'L: S&P Lifts Rating to BB+ on Strong Performance MERITAGE NET: Fitch Trims Ratings on Two Note Classes to 'C/DR6' MERIT SECURITIES: Fitch Affirms 'B' Rating on $20MM Cl. B-3 Certs. MESA AIR: Wins Injunction Against Delta's Plan to End Contract MESA AIR: Noteholders Won't Demand Notes Buyback by June MESA AIR: To File 10-Q on June 2 in Compliance with Nasdaq Rules NEW CENTURY ENERGY: March 31 Balance Sheet Upside-Down by $23.4MM NEW CENTURY: Want Until June 24 to Solicit Plan Acceptances NORTHWEST AIRLINES: Delta Merger Likely to be Approved NPC INTERNATIONAL: S&P Chips Corp. Credit Rating to B from B+ NUCO2 FUNDING: Fitch Assigns 'BB' Rating on $75MM Class B-1 Notes OPTION ONE: Fitch Slashes Ratings on Two Note Classes to 'C/DR6' PACIFIC LUMBER: Scopac Says Ch. 11 Trustee Adds Burden to Estate PACIFIC LUMBER: Says Sierra Pacific's Bid Irrelevant in Case PACIFICNET INC: Terminates Deal to Acquire Octavian International PATRON SYSTEMS: Judge Brown Dismisses Chapter 11 Case PEOPLE'S CHOICE: Panel Wants Solicitation Period Moved to July 31 PEOPLES COMMUNITY: Posts $1.1 Million Net Loss in 2008 1st Quarter PERFORMANCE TRANS: Plan Committee Won't Usurp Powers, BDCF Says PERFORMANCE TRANS: Yucaipa Says DE Shaw Conflict Bars Discovery PLASTECH ENGINEERED: Court OKs Auction of Business & Other Assets PLASTECH ENGINEERED: Wants to Add Tax Services to PwC's Work POLAR MOLECULAR: Bad Faith Filing Cues Court to Dismiss Case QUEBECOR WORLD: Incurs $190 Million Net Loss in First Quarter 2008 REDENVELOPE INC: Provide Commerce Purchases Assets at Auction REPUBLIC WESTERN: A.M. Best Holds B(Fair) Fin'l Strength Rating ROBERT HOULE: Case Summary & 20 Largest Unsecured Creditors RODNEY HOLDINGS: Case Summary & One Largest Unsecured Creditor ROGER BENCKE: Case Summary & Two Largest Unsecured Creditors ROSS AIR: Case Summary & 20 Largest Unsecured Creditors SHAPES/ARCH HOLDINGS: 3rd Amended Disclosure Statement Approved SHAPES/ARCH HOLDINGS: Court Approves $30-Mil. DIP Loan from Arch SHAPES/ARCH HOLDINGS: Arch Declared Lead Bidder in Equity Sale SHAPES/ARCH: Court OKs J.H. Cohn as Committee's Financial Advisor SMART-TEK SOLUTIONS: March 31 Balance Sheet Upside-Down by $1.2MM SOCIETE GENERALE: Paydown Performance Cues Fitch to Junk Ratings SPECTRUM BRANDS: Harbert Management et al. Own 9.9% Equity SPRINT NEXTEL: Fitch Says Merger Issues Led to Revenue Decline STANDARD PACIFIC: S&P's Rtng. Unmoved by Recapitalization STRUCTURE ASSET: Fitch Takes Rating Actions on 29 Classes of Notes TOUSA INC: Citicorp Says JH Cohn Retention is Unnecessary TOUSA INC: Amick Seeks to Name Debtor in Foreclosure Action TOUSA INC: Option One Wants to Pursue Foreclosure Action TOUSA INC: Court Approves Stipulation to Resolve GMAC Controversy TOY K WARDEN: Case Summary & 20 Largest Unsecured Creditors TRUMP ENT: Inks $316 Million Sale Deal for Atlantic City Casino UAL CORP: Abandons Merger Talks with US Airways, Tribune Says UBS MORTGAGE: Fitch Cuts Rating on $11.6MM Class M-4 Certs. to B UNI-MARTS LLC: Files for Chapter 11 Protection in Wilmington UNI-MARTS: Case Summary & 30 Largest Unsecured Creditors UNIVERSAL PROPERTY: March 31 Balance Sheet Upside-Down by $3.9MM US AIRWAYS: Abandons Merger Talks with United, Tribune Says VCA ANTECH: Animal Hospital Acquisition Cues S&P to Lift Rating WALDEN RESERVE: Case Summary & 18 Largest Unsecured Creditors WILLAMETTE VALLEY: Files Reports, Expects Nasdaq Rule Compliance WIMPFEIMER & BRO: Case Summary & 20 Largest Unsecured Creditors * Fitch Withdraws Q-IFS Ratings on 11 Health Insurance Companies * S&P Lowers Ratings on 1,326 Classes of US RMBS Certificates * Holland & Hart Further Expands in Nevada Thru Hale Lane Merger * BMC Group Expands Bankruptcy Practice with Analytics Acquisition * CRG Names Craig Boucher as Partner in Maryland Practice * BOOK REVIEW: Corporate Players: Designs for Working and Winning Together ********* 3KB TRANSPORTATION: Case Summary & 31 Largest Unsecured Creditors ----------------------------------------------------------------- Lead Debtor: 3KB Transportation, Inc. P.O. Box 8056 Altus, OK 73522 Bankruptcy Case No.: 08-12035 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- 3KB Tractor Leasing, Inc. 08-12055 3KB Trailer Leasing, Inc. 08-12057 Type of Business: The Debtor are refrigerated carriers. See http://www.3kb-transportation.com/ Chapter 11 Petition Date: May 19, 2008 Court: Western District of Oklahoma (Oklahoma City) Judge: Richard L. Bohanon Debtors' Counsel: James H. Bellingham, Esq. Bellingham, Collins & Loyd, P.C. Email: jbellingham@bcllawfirm.com 2050 Oklahoma Tower 210 Park Ave. Ste. 2050 Oklahoma City, OK 73102 Tel: (405) 235-9371 http://www.bcllawfirm.com/ Estimated Assets: $500,000 to $1 million Estimated Debts: $1 million to $10 million A. A copy of 3KB Transportation, Inc's petition is available for free at: http://bankrupt.com/misc/08-12035.pdf B. A copy of 3KB Tractor Leasing, Inc's petition is available for free at: http://bankrupt.com/misc/08-12055.pdf C. A copy of 3KB Trailer Leasing, Inc's petition is available for free at: http://bankrupt.com/misc/08-12057.pdf 82A DEVELOPMENTS: Case Summary & Largest Unsecured Creditor ----------------------------------------------------------- Debtor: 82A Developments, LLC 312 E. First St., Ste. 320 Los Angeles, CA 90012 Bankruptcy Case No.: 08-17460 Type of Business: The Debtor is a subdivider and developer. Chapter 11 Petition Date: May 28, 2008 Court: Central District Of California (Los Angeles) Judge: Barry Russell Debtor's Counsel: Wesley H. Avery, Esq. Email: wavery@rpmlaw.com Roquemore Pringle & Moore 6055 E. Washington Blvd., Ste. 608 Los Angeles, CA 90040-2466 Tel: (323) 724-3117 Fax: (323) 724-5410 http://www.rpmlaw.com/ Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ NL Engineering trade $5,000 790 S. Atlantic Blvd., Ste. 106 Monterey Park, CA 91754 Tel: (626) 757-7258 ACE HOLDING: Claims Bar Date Scheduled for August 18 ---------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of New York set Aug. 18, 2008, as the last day for creditors with claims against Ace Holding LLC to file their proofs of claim. About Ace Holding Rensselaer, New York-based Ace Holding LLC develops and owns real property consisting of a fully renovated mixed-use building at 147 South Pearl Street, and nine contiguous single family townhomes at 160 to 176 South Pearl Street in Albany, New York. The company filed second chapter 11 petition on April 11, 2008 (Bankr. N.D.N.Y. Case No. 08-11084). Judge Robert E. Littlefield Jr. presides over the case. Michael D. Assaf, Esq., at Assaf & Mackenzie represent the Debtor in its restructuring efforts. The Debtor's schedules showed total assets of $11,983,533 and total liabilities of $917,198. The Debtor first filed chapter 11 petition on Aug. 31, 2007 (Bankr. N.D.N.Y. Case No. 07-12342). E. Lisa Tang, Esq., served as counsel to the Debtor in the case presided over by Judge Robert E. Littlefield Jr. ACE HOLDING: Wants to Use Mortgage Lenders' Cash Collateral ----------------------------------------------------------- Ace Holding LLC asked the U.S. Bankruptcy Court for the Northern District of New York for authority to use cash collateral, including rents, securing its obligations to secured mortgage lenders. The Debtor's building at 147 South Pearl Street in Albany, New York consists of a first floor tavern occupied by the Debtor's affiliate, Simply Fish & Jazz Inc. and is operated as a minority woman owned business enterprise, with four affordable housing low income units on the second through fourth floors. Each of the town homes was purchased from the City of Albany in 1999 as a boarded, abandoned shell. Financing for the purchase and renovation was provided as a publicly funded affordable housing project known as Pasture Townhomes sponsored by Albany Local Development Corporation. Townhome renovation was completed in 2002. Construction lending was provided by The Community Preservation Corporation. On Feb. 12, 2003, the Debtor closed its permanent funding which consolidated the CPC construction loan and final funding into a single mortgage in the principal amount by State of New York Mortgage Agency. On March 26, 2003, CPC assigned the mortgage to The Comptroller of the State of New York as Trustee for the New York State Common Retirement Fund. Assignment was recorded on April 19, 2004. CPC continues to service as the comptroller's loan agent. The permanent loan closing, private and public funding of the Pastures Townhomes consists of: $374,000 -- CPC assigned to comptroller - 30 years at 6.6% "Pension Mortgage" 45,000 -- ALDC - revolving loan fund interest only due on sale "2nd Mortgage" 104,464 -- CPC - "CDFI Grant" no payments, reduced 20% annually beginning 2/12/2008 45,000 -- ALDC grant - HUD "CDBG Grant" 136,000 -- ACDA - NYS Housing Trust Fund - "HTF Grant" -------- $704,464 -- Total Funding As a condition for and covenant of the Federal and New York State public funds invested through grants totaling $285,464, the Debtor agreed to maintain the Townhomes as affordable housing. In exchange for the use of cash collateral, the Debtor proposed to provide adequate protection by monthly payment of $4,000 not later than the 15th of each month commencing May 2008. Foreclosure Around March 2007, the comptroller commenced foreclosure proceedings in Albany Supreme Court alleging a principal balance of $360,029, with interest, owed from May 1, 2006 at the default rate of 10.6%. On Aug. 31, 2007, the Debtor filed its first bankruptcy petition under chapter 11. The Debtor and the comptroller entered into negotiations for reinstatement of the Pension Mortgage upon terms to be incorporated into a reorganization plan. Under reinstatement of the Pension Mortgage, CPC issued the Debtor a statement of arrears through the March 1, 2008 mortgage payment. The principal balance due in the reinstatement letter is $358,381. The Debtor is obligated to pay monthly principal and interest of $2,388, plus $108 building reserve, and its property taxes owed to the City of Albany totals $16,068. The Debtor's monthly payment now totals $3,986 pursuant to terms of the Pension Mortgage. About Ace Holding Rensselaer, New York-based Ace Holding LLC develops and owns real property consisting of a fully renovated mixed-use building at 147 South Pearl Street, and nine contiguous single family townhomes at 160 to 176 South Pearl Street in Albany, New York. The company filed second chapter 11 petition on April 11, 2008 (Bankr. N.D.N.Y. Case No. 08-11084). Judge Robert E. Littlefield Jr. presides over the case. Michael D. Assaf, Esq., at Assaf & Mackenzie represent the Debtor in its restructuring efforts. The Debtor's schedules showed total assets of $11,983,533 and total liabilities of $917,198. The Debtor first filed chapter 11 petition on Aug. 31, 2007 (Bankr. N.D.N.Y. Case No. 07-12342). E. Lisa Tang, Esq., served as counsel to the Debtor in the case presided over by Judge Robert E. Littlefield Jr. ACTIVITIES INC: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Activities Inc. 1537 Monrovia Avenue Newport Beach, CA 92663 Bankruptcy Case No.: 08-12846 Chapter 11 Petition Date: May 23, 2008 Court: Central District Of California (Santa Ana) Judge: Robert N. Kwan Debtor's Counsel: Michael R. Lewis, Esq. (mlewis@burkelewisham.com) Burke Lewis & Ham LLP 222 North Mountain Avenue, Suite 204 Upland, CA 91786 Tel: (909) 946-5370 Fax: (909) 946-5380 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its 11 largest unsecured creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Kay Moulton Unsecured $25,000 6 Anchorage Way Newport Beach, CA 92663 Chrysler Financial Unsecured $18,508 P.O. Box 2993 Milwaukee, WI 53201-2993 Washington Mutual/Providian Unsecured $10,513 P.O. Box 10467 Greenville, SC 29601 Dell Financial Services Unsecured $2,525 Bank of America Line of Credit $2,203 HSBC Card Services Unsecured $1,563 Capital One Credit Card $1,457 U.S. Bank Secured $900 Toes on the Nose Unsecured Unknown Toyota Financial Services Unsecured Unknown Aramark Sports and Unknown Entertainment Services AEGIS NET: Fitch Chips Rating on $8.8MM Class N2 Note to 'C/DR6' ---------------------------------------------------------------- Fitch Ratings has taken rating actions on two Aegis Net Interest Margin notes. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are removed. Aegis Asset Backed Securities Trust 2005-3 -- $1.3 million Class N1 Note downgraded to 'C/DR6' from 'BBB- Rating Watch Negative'; -- $8.8 million Class N2 Note downgraded to 'C/DR6' from 'B'; Underlying Transaction: Aegis Asset Backed Securities Trust 2005-3 The rating actions reflect actual pay-down performance of the NIM securities to date compared to initial projections, as well as, changes that Fitch previously made to its subprime loss forecasting assumptions for the underlying transactions. ALLEN-VANGUARD: S&P Assigns 'BB-' Long-Term Corp. Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' long-term corporate credit rating to Ottawa, Ontario-based Allen-Vanguard Corp. The outlook is stable. At the same time, S&P assigned issue and recovery ratings to the company's C$250 million secured bank financing. S&P rated the secured debt, comprising a C$50 million secured revolver and a C$200 million secured term loan, at 'BB+', with a recovery rating of '1', indicating expectations of a very high (90%-100%) recovery in the event of a payment default. "The ratings on AV reflect its material dependence on generating revenue in the next two years from its long-term contracts as well as U.S. government budget allocation to procure counter-improvised explosive devices," said Standard & Poor's credit analyst Greg Pau. The ratings also reflect AV's customer and geographic concentration and the impact of a possible delay in revenue on the company's ability to comply with its financial covenants. These concerns are partially offset by the company's strong product and service range in the niche counter-improvised explosive devices market, a moderate degree of revenue predictability provided by long-term contracts in the electronic systems business and increasing after-sale business, conservative gearing, and adequate liquidity. AV is a defense company specializing in technologies, tools, protective suits, and training to minimize the effects of IEDs. After acquiring Med-Eng Systems in September 2007 and Hazard Management Solutions in June 2007, the company added a strong range of products and services in the niche counter-IED market to its business. Notwithstanding these acquisitions, AV is still relatively small with pro forma revenue of C$432 million for the 12 months ended March 31. The stable outlook reflects AV's strong financial risk profile for the current rating level and good product and service capability in a niche market. These pluses are partially offset by the potential uncertainty over the timing of the company's near-term cash flow generation and the limitation on liquidity resulting from stringent financial covenants and a heavy debt repayment schedule in the near term. S&P could revise the rating upward or the outlook to positive if AV's financial risk profile significantly improves upon meeting its fiscal 2008 financial projections, which in turn hinge upon it executing the Symphony program ramp-up. With AV's relatively low gearing level and adequate liquidity, there is some buffer. Hence, moderately weaker-than-projected fiscal 2008 financial results would not likely lead to a downward adjustment to the rating or outlook. However, Standard & Poor's could revise either if delays in procurement orders from AV's two main product programs materially increase the likelihood of a breach of its financial covenants or the company's inability to meet its scheduled debt repayment. ALLIED SECURITY: March 31 Balance Sheet Upside-Down by $20,554,742 ------------------------------------------------------------------ Allied Security Innovations Inc.'s consolidated balance sheet at March 31, 2008, showed $5,814,577 in total assets and $26,369,319 in total liabilities, resulting in a $20,554,742 total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $1,299,117 in total current assets available to pay $25,667,923 in total current liabilities. The company reported a net loss of $7,550,887, on net sales of $994,054, for the first quarter ended March 31, 2008, compared with a net loss of $193,942, on net sales of $991,857, in the same period last year. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2cd9 Going Concern Disclaimer Bagell, Josephs, Levine & Company, LLC, in Marlton, N.J., expressed substantial doubt about Allied Security Innovations 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 reported that the company did not generate sufficient cash flows from revenues during the year ended Dec. 31, 2007, to fund its operations. The auditing firm added that at Dec. 31, 2007, the company had negative net working capital of $32,087,467. About Allied Security Based in Wall, New Jersey, Allied Security Innovations Inc. (OTC BB: ASVN.OB) fka. Digital Descriptor Systems Inc. -- http://www.ddsi-cpc.com/-- develops and markets integrated enterprise-wide image applications specifically designed for criminal justice organizations. Customers include states, cities, counties, corrections, justice, and public safety agencies. Its subsidiary, CGM Applied Security Technologies Inc., with locations in Wall, N.J. and a factory in Staten Island, N.Y., is a manufacturer and distributor of Homeland Security products, including indicative and barrier security seals, security tapes and related packaging security systems, protective security products for palletized cargo, physical security systems for tractors, trailers and containers, as well as a number of highly specialized authentication products. ALLSTATE PROPERTY: Case Summary & 12 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Allstate Property Management LLC 201 Wheatsworth Road Hamburg, NJ 07419 Bankruptcy Case No.: 08-19818 Type of Business: The Debtor develops real estate property. The Debtor's affiliates, Allstate Blasting Corp. and Allstate Excavating Corp., filed for Chapter 11 protection on Dec. 20, 2007 and Nov. 27, 2007, respectively (Bankr. D. N.J. Case Nos. 07- 28684 and 07-27391). Chapter 11 Petition Date: May 28, 2008 Court: District of New Jersey (Newark) Judge: Novalyn L. Winfield Debtor's Counsel: David L. Bruck, Esq. (bankruptcy@greenbaumlaw.com) Greenbaum, Rowe, Smith, & Davis LLP Metro Corporate Campus One P.O. Box 5600 Woodbridge, NJ 07095 Tel: (732) 549-5600 Fax: (732) 549-1881 Total Assets: $2,021,332 Total Debts: $4,540,411 Debtor's list of its 12 largest unsecured creditors: Entity Claim Amount ------ ------------ Estate of William H. Wurster $3,000,000 Attn: Alfred Rauch III, Esq. c/o Black & Gerngross P.C. 1617 John F. Kennedy Boulevard Suite 1575 Philadelphia, PA 19103 Township of Hardyston $20,000 Municipal Building, Suite A 149 Wheatsworth Road Hamburg, NJ 07419 Speer Air Inc. $6,153 30 Vanderhoof Avenue P.O. Box 844 Denville, NJ 07834 Wayne Tile $4,478 Carista Kulsar & Wade $2,125 627 LLC $2,000 Red Alert Security Systems $1,815 Debra Lynn Nicholson, Esq. $1,573 Elizabethtown Gas $1,282 JCP&L $984 Internal Revenue Service Unknown State of New Jersey Unknown AMERICAN AXLE: Appoints David Dauch as President and COO -------------------------------------------------------- American Axle & Manufacturing, Inc. disclosed the appointment of David C. Dauch as president and chief operating officer, effective June 1, 2008. Mr. Dauch is the son of AAM Co-Founder, Chairman and CEO Richard E. Dauch. Mr. Dauch has 26 years of automotive experience beginning as a manufacturing co-op student at Chrysler Corporation while still attending Miami University (Ohio). Mr. Dauch joined American Axle & Manufacturing in July 1995 as manager, Sales Administration. He was appointed director of Sales, GM Full-Size Truck Programs in May 1996, and was named vice president, Sales & Marketing in August 1997. Mr. Dauch also served as vice president, Manufacturing, Driveline Division; senior vice president, Sales, Marketing & Driveline Division; senior vice president, Commercial; and executive vice president, Commercial & Strategic Development. Mr. Dauch most recently served as executive vice president and chief operating officer. Mr. Dauch obtained a bachelor of science degree with a dual major in production/operations and purchasing management from Miami University (Ohio) and a master of business administration from Michigan State University. "We are extremely pleased to announce David's promotion to president and chief operating officer," AAM Co-Founder, Chairman & CEO Richard E. Dauch said. "This appointment is part of AAM's strategic organizational development that will provide the leadership to guide AAM to its next level of profitable global growth. David's understanding of AAM's core business, strategic global growth plans and the challenges faced by today's global Tier One suppliers, will strengthen AAM as we continue to expand our product portfolio, customer base, served markets and global manufacturing footprint." 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. AMERICAN UNDERWRITERS: A.M. Best Lifts IC Rating to bb+ from bb- ---------------------------------------------------------------- A.M. Best Co. has upgraded the financial strength rating to B(Fair) from B-(Fair) and the issuer credit rating to "bb+" from "bb-" of the American Underwriters Insurance Company. The outlook for both ratings is stable. The upgrades reflect the results of management's initiatives to improve its underwriting performance along with the company's conservative investment portfolio. These initiatives have improved underwriting and operating performance and stabilized risk-adjusted capitalization. While performance and capitalization have improved in recent years, the ratings continue to reflect AUIC's modest capitalization, historically poor underwriting and operating performance and AUIC's limited business profile. The rating outlook is based on A.M. Best's expectation that improved operating results will continue to add to surplus in the medium term. AMERISTOCK CORP: To Terminate Five Ameristock/Ryan Treasury ETF --------------------------------------------------------------- Ameristock Corporation, the investment adviser for the Ameristock ETF Trust, intends to liquidate each of the five series of the Trust. The series include: -- the Ameristock/Ryan 1 Year Treasury ETF (Amex: GKA); -- the Ameristock/Ryan 2 Year Treasury ETF (Amex: GKB); -- the Ameristock/Ryan 5 Year Treasury ETF (Amex: GKC); -- the Ameristock/Ryan 10 Year Treasury ETF (Amex: GKD); and -- the Ameristock/Ryan 20 Year Treasury ETF (Amex:GKE). The Trust's board of trustees determined that closing the Funds was in the best interests of the Funds and their shareholders because the Funds have not gathered sufficient assets to continue their business and operations in an economically viable manner. June 10, 2008 will be the last day of trading in the Funds on the American Stock Exchange, and the last day on which creation unit aggregations of Fund shares may be purchased or redeemed. The American Stock Exchange will halt trading in the Funds before the open of trading on June 11, 2008. >From June 11, 2008 until June 19, 2008, the Funds will be in the process of closing down and liquidating their portfolios. This process will likely result in each Fund not meeting its investment objective of tracking its underlying index during this period. Shareholders may sell their holdings on or prior to June 10, 2008, incurring a transaction fee from their broker-dealer. From June 11, 2008, through June 19, 2008, shareholders may not be able to sell their shares, although it is possible that certain broker- dealers will be willing to purchase them. The transfer agent books of the Funds will close as of the close of business on June 19, 2008, and on June 20, 2008, the Funds' assets will be distributed for payment to shareholders. Shareholders of record remaining on June 19, 2008, will receive cash at the net asset value of their shares as of June 19, 2008, which will include income, including capital gains, if any, recognized by a Fund up to this date. While Fund shareholders remaining on June 19, 2008, will not incur transaction fees to sell their shares, the net asset value of each Fund will reflect the transaction costs incurred by the Fund in liquidating its portfolio. Other costs of closing the Funds will be borne by Ameristock Corporation. Shareholders will generally recognize a short-term capital gain or loss equal to the amount received for their shares over their adjusted basis in such shares. For additional information about the liquidation, shareholders of the Funds may call the Trust at (866) 821-5592. Ameristock Ryan Fixed Income ETFs are ways to invest in US Treasury securities. Ameristock/Ryan Treasury ETFs invest at least 90% of their total assets in US Treasury securities, which are backed by the full faith and credit of the US government. About Ameristock Ameristock (MUTF:AMSTX ) -- http://www.ameristock.com/-- is an investment firm that seeks capital appreciation and current income. The fund normally invests at least 80% of assets in common stock of large capitalization companies headquartered in the United States. It considers a large capitalization company as one with a market capitalization of at least $15 billion. The fund emphasizes a value style of investing. It may also invest in large capitalization stocks experiencing accelerated earnings or revenue growth. AMY SIMCIK: Case Summary & Four Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Amy Lynn Simcik 1935 Green Hills Boulevard Franklin, Tennessee 37067 Bankruptcy Case No.: 08-04464 Chapter 11 Petition Date: May 28, 2008 Court: Middle District of Tennessee (Nashville) Debtors' Counsel: E. Covington Johnston, Esq. (ecjohnston@covad.ne) Johnston & Street 238 Public Square Franklin, Tennessee 37064 Tel: (615) 791-1819 Fax: (615) 791-1418 Total Assets: $1,603,898 Total Debts: $1,681,938 A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/tenmb08-04464.pdf ARCHER ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Archer Associates LLC fka Dollar Store Group Dollar Stop Dollar Store Wholesale Dollar Zone 6590 Shiloh Road East Suite B Alpharetta, Georgia 30005 Bankruptcy Case No.: 08-21292 Chapter 11 Petition Date: May 9, 2008 Court: Northern District of Georgia (Gainesville) Judge: To Be Assigned Debtor's Counsel: David G Bisbee Law Office of David G. Bisbee 2929 Tall Pines Way Atlanta, GA 30345 Tel: (770) 939-4881 Fax: (770) 783-8595 E-mail: bisbeed@bellsouth.net Total Assets: $1,863,368 Total Debts: $1,109,260 A list of the Debtor's petition and list of 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/ganb08-21292.pdf ASARCO LLC: Court Approves $1.27MM Settlement with El Paso ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas approved a compromise and settlement agreement among ASARCO LLC, its debtor-affiliates and the city of El Paso, Texas, regarding the El Paso Particulate Matter Reduction Project. As reported in the Troubled Company Reporter on April 29, 2008, Tony M. Davis, Esq., at Baker Botts L.L.P., in Houston, Texas, related that under a consent decree entered by the U.S. District Court for the Southern District of Texas in Oct. 6, 1999, ASARCO agreed to fund $1,850,000, to pay for the cost of paving certain roads, alleyways, parking lots, and medians in El Paso. El Paso filed Claim No. 9894, alleging that ASARCO breached the terms of the consent decree. The parties commenced negotiations resolving the claim in early December 2007. As a result of the negotiations, the parties entered into the settlement, which provides that: (a) El Paso will have an allowed general unsecured claim for $1,272,800; and (b) both parties will release each other from any claim arising out of the paving contract. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). ASARCO and its debtor affiliates are scheduled to file a plan of reorganization on June 10, 2008. (ASARCO Bankruptcy News, Issue No. 72; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Court OKs Environ. Claims Deal with U.S. Gov't, et al. ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Texas approved the settlement among ASARCO LLC, its debtor-affiliates, the U.S. Government, the state of Texas, and Debtor Encycle/Texas, Inc., resolving environmental claims relating to the Encycle and Nueces Bay Sites; and the settlement among ASARCO LLC, the Government, the state of Missouri, The Doe Run Company, and DR Land Holdings LLC regarding the SEMO Sites. ASARCO Settles UBMC and Hayden Claims ASARCO LLC previously asked the Court to approve separate settlements it entered with: (a) the U.S. Government, the state of Montana, and Atlantic Richfield Company resolving environmental claims related to the Upper Blackfoot Mining Complex Site located in Lewis and Clark County, Montana; and (b) the Government and the Arizona Department of Environmental Quality resolving environmental claims related to the Hayden Plant Site, in Gila County, Arizona. The UBMC Settlement provides that ASARCO will pay $8,000,000 cash to Montana, $8,000,000 to Atlantic Richfield, and $1,000,000 to the Government. The UBMC Settlement also entitles the Government a $228,446 allowed general unsecured claim and Montana a $19,771,554 allowed general unsecured claim. Montana will withdraw Claim Nos. 10526, 10841, 10525, 10527, and 10842. The parties agree that $10,000,000 will be considered an allowed general unsecured claims of each of the Government and Montana for plan voting purposes only. Furthermore, the UBMC Settlement requires ASARCO to construct, operate, and maintain a mechanical water treatment system for water discharged from the Mike Horse and Anaconda mines. The Government and Montana agrees not to sue ASARCO and Atlantic Richfield with respect to the environmental claims at the UBMC Site. The Hayden Settlement provides that ASARCO will undertake removal actions at residential portions of the Site where levels of arsenic, lead or copper are determined to exceed specific levels. ASARCO will be deemed to have satisfied its obligations to conduct work at the Site if the Environmental Protection Agency determines that all required work has been completed or if ASARCO has spent $13,500,000 in direct costs for the remediation work. The Government and the ADEQ agree not to sue ASARCO for the performance of the work and for payment of oversight costs. The Settlement entitles ASARCO to protection from contribution actions. Public Comments on SEMO Sites Settlement The Government informed the Court that it received comments from BP America, Inc., and the Viburnum Trend Haul Roads Claimants, seeking clarification that the settlement relating to the Southeast Missouri Sites is not intended to -- and does not -- affect the contribution claims BP America and the Viburnum Claimants have against ASARCO LLC. After careful consideration of all public comments received, the Government concluded that the SEMO Settlement is fair, reasonable, and lawful. Asarco Incorporated withdrew its objection to the SEMO settlement. Murray & Colorado School Object to Disallowance of PRP Claims Murray City Corporation asserted that its claim is not duplicative of any claim filed by a federal or state agency. Murray said it intends to assert priority for its Claim based on a Consent Decree issued by the U.S. District Court for Utah, Case No. 2.98- cv-140-J, dated April 27, 1998, and an agreement entered into with ASARCO, dated Sept. 9, 1998. The Colorado School of Mines tells the Court that it cannot determine how to respond to the Debtors' "thinly veiled" claims objections until the Debtors disclose the basis of their claims objections and until the Court can determine whether parties besides the Debtors and the School should and will be parties to any estimation of the PRP claims. In a separate filing, the School asks the Court to disallow three claims and exclude them from every aspect of the estimation proceedings related to the Colorado School of Mines Site: Claimant Claim Nos. -------- ---------- Atlantic Richfield Co. 10885, 10886, 10887 and 10888 Cotter Corp. 11064 Elf Aquitaine, Inc. 10504 The School's counsel, Asimakis P. Iatridis, Esq., at Berg Hill Greenleaf & Ruscitti LLP, in Boulder, Colorado, asserted that Atlantic Richfield, Cotter, and Elf Aquitaine had not incurred any costs; does not have valid claims; and should not be allowed to participate in the estimation hearing related to the Site. * * * In a separate order, the Court compels the Debtors, the PRP Claimants, the official committees, the Future Claims Representative, the Government, and the state in which the particular site is located, to participate in mediation sessions regarding the PRP Claims. The Court also disallows in full eight PRP Claims: Claimant Claim No. -------- --------- Elf Aquitaine, Inc. 10504 City of East Helena 10907 El Dorado Apartments 9406 Wernstein Properties, Inc. 9556 City of Omaha 9500 IHC Health Services, Inc. 10996 Oglebay Norton Minerals 9824 Apache Corp. 9278 About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). ASARCO and its debtor affiliates are scheduled to file a plan of reorganization on June 10, 2008. (ASARCO Bankruptcy News, Issue No. 72; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Asarco Inc. Balks at 26 Asbestos Claims --------------------------------------------------- ASARCO LLC and its debtor-affiliates filed a report with the U.S. Bankruptcy Court for the Southern District of Texas, disclosing that 6,191 mesothelioma claims have been filed against their estate and other Debtors. The claims are: -- 3,385 against one or more Debtors, -- 2,511 against ASARCO and potentially other debtors, -- 191 solely against ASARCO, and -- 104 against ASARCO (asserting liability-based and products liability-based claims). Asarco Inc. Objects to Asbestos Claims Asarco Incorporated filed under seal its objections to 26 asbestos-related claims against ASARCO LLC and the Asbestos Subsidiary Debtors, each asserting $1,000,000, or more. Pursuant to Court orders, the claims objections were filed under seal to protect the identities of the asbestos claimants, their social security numbers, and their medical information. >From the Court filings, Asarco Inc. disclosed that the claimants are all males, aged between 45 and 90, and alleged that they have been exposed to asbestos-containing products produced by the Asbestos Debtors due to the nature of their jobs. The exposure ranges for the period from the late 1930s to the early 1980s. Some claimants are deceased. Most claimants live or formerly lived in New York. Other claimants live in California, Oregon, North Carolina, and Arizona. Most of the claimants are represented by the law firm Lipsitz & Ponterio LLC. Charles A. Beckham, Jr., Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Houston, Texas, relates that Asarco Inc.'s review of a sample of asbestos-related claims has uncovered glaring facial deficiencies throughout the Debtors' asbestos claim universe, rebutting any presumption of validity. The Debtors have previously asserted that the asbestos claims should be presumed valid at their face value unless objections to those claims are filed and sustained. Asarco Inc. asserts that the Claims should be expunged, or in the alternative, reduced, for one or more of these reasons: (a) The Claim lacks any evidence that the claimants has any asbestos-related physical impairment, that the claimant was exposed to any asbestos, or that the claimant was exposed to any asbestos as a result of the operations of the Asbestos Debtors; (b) The Claim lacks any supporting evidence and fails to specify any injury that the claimants have suffered; (c) The Claims are barred by the state's statute of limitations; (d) The Claim relies on a report by Ray A. Harron, M.D., of Bridgeport, West Virginia, a known "banned doctor;" and (e) The Claim was not filed by the September 30, 2006 Bar Date. Mr. Beckham says that Dr. Harron's medical reports have been completely discredited and ruled inadmissible in "other proceedings" and Dr. Harron has reportedly surrendered his medical license. Dr. Harron, one of the diagnosing doctors in In re Silica Prods. Liability Litig., 398 F. Supp. 2d 563 (S.D. Tex. 2005), is at the center of an ongoing fraudulent silicosis diagnoses investigation initiated by the U.S. House Energy and Commerce Subcommittee on Oversight and Investigations. Mr. Beckham adds that the Johns-Manville Corporation Asbestos Trust banned all reports submitted by Dr. Harron due to the pending fraudulent silicosis diagnoses investigation. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). ASARCO and its debtor affiliates are scheduled to file a plan of reorganization on June 10, 2008. (ASARCO Bankruptcy News, Issue No. 72; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASSET-BACKED: Fitch Chips Ratings to 'C/DR6' on Five NIM Notes -------------------------------------------------------------- Fitch Ratings has taken these rating actions on five Asset-Backed Securities Corporation Net Interest Margin notes: ABSC NIM 2005-KS4 -- $1.5 million class notes downgraded to 'C/DR6' from 'CCC/DR1'; Underlying Transaction: Residential Asset Backed Securities Corporation 2005-KS4 Cayman ABSC NIM 2006-HE3 -- $4.6 million class A1 notes downgraded to 'C/DR6' from 'BBB'; Underlying Transaction: ABSC 2006-HE3 Cayman ABSC NIM 2006-HE5 -- $5.0 million class A1 notes downgraded to 'C/DR6' from 'A-', removed from Rating Watch Negative; -- $8.9 million class A2 notes downgraded to 'C/DR6' from 'BB'; -- $5.8 million class A3 notes remains at 'C/DR6'. Underlying Transaction: ABSC 2006-HE5 The rating actions reflect actual pay-down performance of the NIM securities to date compared to initial projections, as well as, changes that Fitch previously made to its subprime loss forecasting assumptions for the underlying transactions. AVIATION TECHNOLOGY: Files Chapter 7 Liquidation in Colorado ------------------------------------------------------------ Aviation Technology Group Inc. commenced liquidation proceedings under chapter 7 of the Bankruptcy Code following failed attempts to rescue the company from financial demise, Chris Walsh of Rocky Mountain News reports. Aviation Technology, which shut its operations down in 2007, attempted and failed to sell itself or obtain additional liquidity, the report indicates. The Debtor had planned to cater the upper class market with its advanced, lightweight sports jets. However, it experienced liquidity problems and had to cease operations and terminate most of its 100-plus workers. According to Rocky Mountain News, the Debtor intends to pursue the sale of its business through the help of a United States Trustee. ". . . [T]here's value in [the Debtor's] assets", hence the chapter 7 filing, the report quotes Aviation Technology counsel, Caroline Fuller, Esq., at Fairfield and Woods, as stating. The report, citing Ms. Fuller, relates that an undisclosed lender withdrew from its promise to help the Debtor pool funds and sell its business. A. Javelin Program Update The company disclosed on Nov. 5, 2007, that despite keeping a low public profile this summer, it has been diligently working behind the scenes to secure funding to sustain the Javelin development program through FAA certification. Earlier in 2007, Aviation Technology said it formally engaged with Citigroup, one of the largest and most respected investment banking organizations in the world, to help secure private equity financing requirements. For several months, the company said its management team met with numerous prospective institutional investors and continues to generate considerable investor interest. The company plans to certify the Javelin 36 months after the Wall Street-driven funding event closes, which is expected within the next few months. While awaiting full funding, the company assured that its staff has been far from idle. B. Javelin Jet Development Halted On Dec. 18, 2007, Aviation Technology said that with the help from a Wall Street banking institution, it has been seeking funding to continue its Javelin high performance business jet and military trainer for the past 12 months. However, it said that due to circumstances beyond its control, it is unlikely that adequately funding can be secured in a timely manner. The company said it has decided to halt development of the Javelin at this time. C. Marketing the Company On March 3, 2008, the company said, since suspending the development of its Javelin in late December 2007, its board of directors has continued to engage in negotiations with its strategic partner and various financial institutions. These discussions include developing alternatives to continue operations in the short-term as well as long-term options. According to the company, much of the focus of the negotiations has been in renegotiating both credit and teaming agreements. At that time, the company said this task has been accomplished and that its board was negotiating with interested parties on a possible sale or a majority buyout of Aviation Technology. About Aviation Technology Aviation Technology Group Inc. -- http://www.avtechgroup.com/-- was founded by George Bye in June 2000. It has grown into a company of over 100 employees that design, develop, and produce Javelin executive jet and its derivatives for government markets. One of its clients is the Front Range Airport. The company filed chapter 7 petition (Bankr. D. Col.) and listed assets of $10 million to $50 million and debts of $50 million to $100 million owed to about 200 creditors. BEAR STEARNS: Stockholders Approves $1.4 Billion JPMorgan Buyout ---------------------------------------------------------------- Stockholders of The Bear Stearns Companies Inc. approved the investment bank's merger with JPMorgan Chase & Co. at a Special Meeting of Stockholders held May 29, 2008. Approximately 84% of shares voted were in favor of the merger, representing a substantial majority of Bear Stearns' outstanding common stock. The Wall Street Journal reports that the value of the transaction is about $1.4 billion, a large difference from the $25 billion market capitalization value in early 2007 before its defeat. The Journal says the meeting lasted for 11 minutes. JPMorgan Chase and Bear Stearns have scheduled the merger to close at the end of the day today, May 30, 2008. Upon completion of the merger, each outstanding share of common stock of Bear Stearns will be converted into the right to receive 0.21753 shares of JPMorgan Chase common stock and Bear Stearns will become a direct subsidiary of JPMorgan Chase. Also, the Federal Reserve Bank of New York and JPMorgan Chase agreed that they will complete the sale of $30 billion of assets by subsidiaries of Bear Stearns and the related financing on or about June 26 rather than concurrently with the closing of the merger. The additional time will help ensure the smooth transfer of this large portfolio. As disclosed in the Troubled Company Reporter on March 25, 2008, JPMorgan and Bear Stearns amended the terms of the merger agreement, increasing the bid from $2 per share to $10 per share. A week before the amended pact, JPMorgan agreed to buy Bear Stearns for $2 per share totaling $236.0 million based on the number of shares outstanding as of Feb. 16, 2008. At March 14's close, Bear Stearns' stock-market value was about $3.5 billion, and the company finished at $30 a share in 4 p.m. New York Stock Exchange composite trading March 14, 2008. Between April 11 and April 14, JPMorgan acquired 3,298,600 shares of Bear Stearns common stock in the open market for an aggregate purchase price of $33,154,017. As of April 14, 2008, JPMorgan Chase beneficially owned 119,855,914 shares of common stock, or approximately 49.78% of the outstanding shares of common stock of Bear Stearns. About JPMorgan JPMorgan Chase & Co. (NYSE: JPM) -- http://www.jpmorganchase.com/ -- is a global financial services firm with assets of $1.6 trillion and operations in more than 60 countries. The firm focuses in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management, and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its JPMorgan and Chase brands. About Bear Stearns New York City-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- is a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The company's core business lines include institutional equities, fixed income, investment banking, global clearing services, asset management, and private client services. The company has approximately 14,000 employees worldwide. * * * As reported in the Troubled Company Reporter on Dec. 28, 2007, Fitch Ratings' affirmed its Negative Outlook for The Bear Stearns Companies Inc. following the announcement of the company's fiscal year earnings for 2007. On Nov. 14, 2007, Fitch affirmed Bear Stearns' long-term credit ratings, along with its subsidiaries. Fitch also downgraded the short-term rating to 'F1' from 'F1+', and Individual rating to 'B/C' from 'B'. BON-TON STORES: Posts $34.1 Million Net Loss in Qtr. Ended May 3 ---------------------------------------------------------------- The Bon-Ton Stores Inc. reported a net loss of $34.1 million for the thirteen-week period ended May 3, 2008, compared to a net loss of $29.3 million for the thirteen-week period ended May 5, 2007. Bud Bergren, president and chief executive officer, commented, "Our financial results continue to be impacted by the macro economic environment. Despite the softer retail environment, I'm proud of how our management team executed in the first quarter. We successfully reduced our comparable store inventories by 8.7% as compared to the prior period, which resulted in an improvement in our gross margin rate. "We continue to review our expenses and are pleased that during the first quarter we realized a net reduction of $4.6 million in our selling, general and administrative expenses. Lastly, we reduced our debt levels and increased our excess borrowing capacity under our credit facility, as compared to the first quarter of fiscal 2007." Mr. Bergren continued, "Looking ahead to the remainder of 2008, we will manage our business under the assumption that the difficult macro economic environment will continue. While we are prepared to implement the necessary measures to deal with the current environment, we remain confident that we have a solid strategic plan in place and we will benefit from our efforts as the macro environment improves." Sales For the first quarter of fiscal 2008, comparable store sales decreased 4.6%. Total sales for the first quarter of fiscal 2008 decreased 5.1% to $700.2 million compared to $737.6 million for the same period last year. Other Income Other income in the first quarter of fiscal 2008 decreased slightly to $22.8 million compared to $22.9 million in the first quarter of fiscal 2007. Gross Margin In the first quarter, gross margin dollars decreased $9.1 million compared to the first quarter of fiscal 2007, reflecting the decrease in sales volume in fiscal 2008. The gross margin rate for the first quarter of fiscal 2008 increased 0.5 percentage point to 34.0% of net sales, compared to 33.5% reported in the first quarter of fiscal 2007, primarily reflecting the company's inventory management efforts and resultant reduced markdowns. Selling, General and Administrative Expenses Selling, general and administrative (SG&A) expenses in the first quarter of fiscal 2008 decreased $4.6 million to $255.8 million as compared to $260.3 million in the first quarter of fiscal 2007. The SG&A expense rate for the first quarter of fiscal 2008 was 36.5% compared to 35.3% for the first quarter of fiscal 2007, reflecting the reduced sales volume in fiscal 2008. EBITDA EBITDA, defined as net loss before interest, income taxes and depreciation and amortization, decreased $4.7 million in the first quarter of fiscal 2008 to $4.7 million as compared to $9.4 million in the first quarter of fiscal 2007. Depreciation and Amortization Depreciation and amortization expense, including amortization of lease-related interests, increased $2.0 million to $30.2 million in the first quarter of fiscal 2008 as compared to $28.2 million in the first quarter of fiscal 2007, primarily reflecting the increased expense associated with the prior year capital expenditures. Interest Expense, Net Interest expense, net, decreased $3.1 million to $24.4 million in the first quarter of fiscal 2008 as compared to $27.5 million in the first quarter of fiscal 2007. The decrease reflects reduced borrowings and reduced interest rates. Guidance Keith Plowman, executive vice president and chief financial officer, commented, "As previously stated in our April sales press release, our excess borrowing capacity under our credit facility at the end of the first quarter of fiscal 2008 was $274.0 million, an increase compared to $191.0 million at the end of the first quarter of fiscal 2007, reflecting the strength of our balance sheet and reductions in our debt and letters of credit. We will continue to closely manage our excess borrowing capacity in this difficult environment." Mr. Plowman continued, "We are operating under the assumption that the retail environment will remain challenging for the remainder of fiscal 2008 and our focus is on strengthening our company through additional operating efficiencies. We are confident that we are well-positioned to take advantage of opportunities when the economy shows signs of recovery. Our revised guidance for fiscal 2008 diluted earnings per share is a range of $0.00 to $0.30 and EBITDA is a range of $224.0 to $232.0 million. Assumptions reflected in this guidance include: -- Comparable store sales decrease in the range of 2.5% to 3.5%; -- Gross margin rate flat to the fiscal 2007 rate of 36.1%; -- SG&A dollars decrease to prior year; -- Capital expenditures of $80 million (net of landlord contributions); and -- Estimated diluted weighted average shares outstanding of 17.3 million to 17.5 million." Balance Sheet At May 3, 2008, the company's consolidated balance sheet showed $2.08 billion in total assets, $1.75 billion in total liabilities, and $330.7 million in total stockholders' equity. About The Bon-Ton Stores York, Pennsylvania-based The Bon Ton Stores Inc. (Nasdaq: BONT) -- http://www.bonton.com/-- operates 280 department stores, which includes 11 furniture galleries, in 23 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger's and Younkers nameplates and, under the Parisian nameplate, three stores in the Detroit, Michigan area. The stores offer a broad assortment of brand-name fashion apparel and accessories for women, men and children, as well as cosmetics and home furnishings. * * * As reported in the Troubled Company Reporter on March 17, 2008, Fitch Ratings affirmed The Bon-Ton Stores, Inc.'s 'B' issuer default rating. The rating outlook has been revised to negative from stable. As reported in the Troubled Company Reporter on Feb. 13, 2008, Moody's Investors Service downgraded the corporate family rating of Bon-Ton Stores Inc. to B2 from B1, downgraded the probability of default rating to B2 from B1, and downgraded the rating on the $510.0 million senior unsecured notes to Caa1 (LGD 5, 78%) from B3 (LGD 5, 83%). The company's speculative grade liquidity rating of SGL-3 was affirmed. The outlook on all ratings is stable. BRAD-CART: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Brad-Cart Enterprises, Inc. dba Shuckum's Oyster Pub and Grill 15614 Front Beach Road Panama City Beach, Florida 32413 Bankruptcy Case No.: 08-50207 Chapter 11 Petition Date: May 8, 2008 Court: Northern District of Florida (Panama City) Judge: To Be Assigned Debtor's Counsel: Charles M. Wynn Charles M. Wynn Law Offices, P.A. P.O. Box 146 Marianna, FL 32447 Tel: (850) 526-3520 Fax: (850) 526-5210 E-mail: wynnlawbnk@earthlink.net Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Debtor's petition and list of 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/flnb08-50207.pdf CA INC: S&P Lifts Corporate Credit Rating to BB+ from BB -------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit and senior unsecured debt ratings on Islandia, New York-based CA Inc. to 'BB+' from 'BB'. At the same time, S&P removed the ratings from CreditWatch, where they had been placed with positive implications on March 19, 2008. The outlook is positive. "The upgrade reflects the company's prospects for sustaining good profitability and cash flow, coupled with our expectation that CA will maintain a moderate capital structure," said Standard & Poor's credit analyst Molly Toll-Reed. CA is a leading information technology management software provider. The rating on CA is supported by the company's stable revenue base, favorable business prospects, and strong cash flow. These factors are tempered by a historically aggressive financial policy, which included large debt-financed acquisitions and share buybacks. CALIFORNIA OIL: Appoints John McLeod as Chief Financial Officer --------------------------------------------------------------- Norman Johnson resigned as Chief Financial Officer of California Oil & Gas Corp. At the same time, the company appointed John McLeod as its Chief Financial Officer. Mr. McLeod is currently President, Secretary, Treasurer and a director of the company. Mr. McLeod has over 37 years experience in varied resource extraction projects with particular emphasis on international oil and gas management, exploration and development and establishing and maintaining relations with investors and the financial community. From 2005 through March 2007, Mr. McLeod was the president and chief executive officer of ONCO Petroleum Inc., a private Ontario company. From 2001 to 2005, he was president, chief executive officer, vice president, operations and a director of Rally Energy Corp., a company listed on the TSX Venture Exchange. Mr. McLeod is a member of the board of directors of these public companies: Heritage Oil Corporation (TSX: HOC); Paris Energy Inc., (TSX-V: PI); Diaz Resources Ltd. (TSX-V: DZR); Tuscany Energy Ltd., (TSX-V: TUS);Consolidate Beacon Resources Ltd.(TSX-V: KBC) and Keeper Resources Inc. (TSX-V: KEE). Mr. McLeod is a Professional Engineer (currently the elected president of the Association of Professional Engineers, Geologists and Geophysicists of Alberta) who has previously held various senior management positions with a number of public exploration companies including the positions of president and chief executive officer with Arakis Energy Corporation, Rally Energy Corp. and Canoro Resources Inc. About California Oil Headquartered in Calgary, Alberta, California Oil & Gas Corp. (OTC BB: COGC) -- http://www.caloilandgas.com/-- is a publicly traded oil and gas company with assets in the San Joaquin Basin of California and in Louisiana. The company is focussed on exploring high yield oil and gas prospects both domestically and internationally. The company is a gas producer and is targeting the acquisition of late stage exploration or early stage development projects around the globe. Going Concern Disclaimer LBB & Associates Ltd., LLP in Houston, Texas, expressed substantial doubt about California Oil & Gas Corp.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Nov. 30, 2007. The auditing firm pointed to the company's absence of significant revenues, recurring losses from operations, and its need for additional financing in order to fund its projected loss in 2008. Through Feb. 29, 2008, the company has incurred losses of $3,800,558 since inception. The company believes that it will require approximately $5,719,000 to fund its continued operations and working capital deficiency for the 12 month period ending April 30, 2009. As the company cannot assure a lender that it will be able to successfully acquire, explore and develop oil and gas properties, it may have difficulty raising debt financing from traditional lending sources. CAMPBELL RESOURCES: Meston Unit Gets Plan of Arrangement Extension ------------------------------------------------------------------ Campbell Resources Inc. disclosed that the Quebec Superior Court has granted Meston Resources Inc.'s request for an additional extension to Sept. 30, 2008, of the initial order granted June 30, 2005, under the Companies' Creditors Arrangement Act to allow the subsidiary of the company, to fulfill its obligations under its Plan of Arrangement. During this extension period, Meston will work with the Monitor in doing an inventory of all of its assets and will initiate a process of solicitation of interest in those assets, which consist of the Joe Mann mine. Headquartered in Montreal, Quebec, Campbell Resources Inc. (TSX: CCH, OTC BB: CBLRF) -- http://www.ressourcescampbell.com/-- is a mining company focusing mainly in the Chibougamau region of Quebec, holding interests in gold and gold-copper exploration and mining properties. The Superior Court of Quebec (Commercial District) granted the company protection under the CCAA on June 30, 2005. The plans of arrangement presented to the creditors of Campbell Resources Inc., Meston Resources Inc. and MSV Resources Inc., under the Companies' Creditors Arrangement Act, received the required approvals on June 27, 2006, in Chibougamau. The main assets of the company are the Joe Mann Mine, an underground gold mine owned by Meston Resources Inc., a wholly owned subsidiary of the company, the Copper Rand Mine, an underground gold and copper mine owned by MSV Resources Inc., a wholly owned subsidiary of the company, and the Corner Bay Property, located near the Chibougamau Lake in the townships of Lemoine and Obalski, a total of 16 claims, which are held by MSV. The company's properties include Pitt Gold, Berthiaume Syndicate, Chevrier, Gwillim, Joe Mann Mine, Cedar Bay, Copper Rand Mine, Corner Bay, Eastmain and Lac Harbour. The activities of GeoNova Explorations Inc. consist mainly in the acquisition, exploration and development of mining properties. It focuses on exploration in the Province of Quebec and more specifically, in the Abitibi region. CENTURY INDEMNITY: Fitch Holds 'B-' Insurer Fin'l Strength Rating ----------------------------------------------------------------- Fitch Ratings has affirmed the ratings of ACE Limited and its subsidiaries. The Rating Outlook is Stable. These rating actions reflect ACE's recent strong operating performance, solid balance sheet and financial flexibility, and ACE's diverse sources of revenues and earnings. Partially offsetting these positives is Fitch's expectation of contracting underwriting margins related to heightened competition and reduced rates in many of ACE's lines of business. Fitch views ACE's recent operating performance as strong characterized by low combined ratios, modest reserve development, and comparatively light catastrophe losses. ACE reported net income of $366 million at March 31, 2008 and record net income of $2.6 billion for the year ended Dec. 31, 2007 in the midst of a soft property/casualty market. ACE has steadily grown its ordinary shareholders' equity through the first quarter of 2008 with solid earnings. As the result, ordinary shareholders' equity increased by 17% since year-end 2006 to $16.7 billion at March 31, 2008. Tangible equity has grown in conjunction with the growth in shareholders' equity and has more than tripled since 2001. Additionally, total reinsurance recoverable continues to decrease and financial leverage has declined steadily in recent years. ACE INA Holdings Inc. recently issued $450 million of unsecured senior debt. Fitch expects that the net proceeds will help redeem the existing $575 million of perpetual preferred shares in June 2008. Fitch believes that, following the completion of ACE's financing plans, ACE's pro forma March 31, 2008 total debt to capital ratio of approximately 19% is well within an acceptable level for ACE's current rating category. ACE's indirect subsidiaries, Century Indemnity Co. and Century Reinsurance Co. are inactive operations largely consisting of asbestos and environmental reserves that are in run-off. Fitch believes that the inactive companies are very thinly capitalized and are exposed to A&E claims, which are long-tailed and notoriously difficult to quantify. Fitch views Century's potential A&E exposure as an increasingly smaller component of ACE's overall exposures and believes that ACE would likely provide the support required to maintain the companies' current capital levels. As a result, Fitch has revised the rating outlook of Century to Stable from Negative. Fitch has affirmed these ratings with a Stable Outlook: ACE Limited -- IDR at 'A+'; -- $575 million preferred stock at 'A-'. ACE INA Holdings Inc. -- IDR at 'A+'; -- $100 million senior debentures due 2029 at 'A'; -- $500 million senior notes due 2014 at 'A'; -- $450 million senior notes due 2015 at 'A'; -- $500 million senior notes due 2017 at 'A'; -- $300 million senior notes due 2018 at 'A'; -- $300 million senior notes due 2036 at 'A'. ACE Capital Trust II -- $300 Capital Securities due 2030 at 'A-'. ACE American Insurance Company ACE Bermuda Insurance Limited ACE Fire Underwriters Ins. Company ACE Indemnity Insurance Company ACE Insurance Company of the Midwest ACE Property and Casualty Insurance Company ACE Tempest Reinsurance Limited Atlantic Employers Insurance Company Bankers Standard Fire & Marine Company Bankers Standard Insurance Company Combined Insurance Company of America Combined Life Insurance Company of New York Illinois Union Insurance Company Indemnity Insurance Company of North America Insurance Company of North America Pacific Employers Insurance Company Westchester Fire Insurance Company Westchester Surplus Lines Insurance Company -- Insurer Financial Strength Ratings at 'AA-'. Century Indemnity Company -- IFS at 'B-'. Century Reinsurance Company -- IFS at 'CCC+'. CENTURY REINSURANCE: Fitch Affirms 'CCC+' IFS Rating ---------------------------------------------------- Fitch Ratings has affirmed the ratings of ACE Limited and its subsidiaries. The Rating Outlook is Stable. These rating actions reflect ACE's recent strong operating performance, solid balance sheet and financial flexibility, and ACE's diverse sources of revenues and earnings. Partially offsetting these positives is Fitch's expectation of contracting underwriting margins related to heightened competition and reduced rates in many of ACE's lines of business. Fitch views ACE's recent operating performance as strong characterized by low combined ratios, modest reserve development, and comparatively light catastrophe losses. ACE reported net income of $366 million at March 31, 2008 and record net income of $2.6 billion for the year ended Dec. 31, 2007 in the midst of a soft property/casualty market. ACE has steadily grown its ordinary shareholders' equity through the first quarter of 2008 with solid earnings. As the result, ordinary shareholders' equity increased by 17% since year-end 2006 to $16.7 billion at March 31, 2008. Tangible equity has grown in conjunction with the growth in shareholders' equity and has more than tripled since 2001. Additionally, total reinsurance recoverable continues to decrease and financial leverage has declined steadily in recent years. ACE INA Holdings Inc. recently issued $450 million of unsecured senior debt. Fitch expects that the net proceeds will help redeem the existing $575 million of perpetual preferred shares in June 2008. Fitch believes that, following the completion of ACE's financing plans, ACE's pro forma March 31, 2008 total debt to capital ratio of approximately 19% is well within an acceptable level for ACE's current rating category. ACE's indirect subsidiaries, Century Indemnity Co. and Century Reinsurance Co. are inactive operations largely consisting of asbestos and environmental reserves that are in run-off. Fitch believes that the inactive companies are very thinly capitalized and are exposed to A&E claims, which are long-tailed and notoriously difficult to quantify. Fitch views Century's potential A&E exposure as an increasingly smaller component of ACE's overall exposures and believes that ACE would likely provide the support required to maintain the companies' current capital levels. As a result, Fitch has revised the rating outlook of Century to Stable from Negative. Fitch has affirmed these ratings with a Stable Outlook: ACE Limited -- IDR at 'A+'; -- $575 million preferred stock at 'A-'. ACE INA Holdings Inc. -- IDR at 'A+'; -- $100 million senior debentures due 2029 at 'A'; -- $500 million senior notes due 2014 at 'A'; -- $450 million senior notes due 2015 at 'A'; -- $500 million senior notes due 2017 at 'A'; -- $300 million senior notes due 2018 at 'A'; -- $300 million senior notes due 2036 at 'A'. ACE Capital Trust II -- $300 Capital Securities due 2030 at 'A-'. ACE American Insurance Company ACE Bermuda Insurance Limited ACE Fire Underwriters Ins. Company ACE Indemnity Insurance Company ACE Insurance Company of the Midwest ACE Property and Casualty Insurance Company ACE Tempest Reinsurance Limited Atlantic Employers Insurance Company Bankers Standard Fire & Marine Company Bankers Standard Insurance Company Combined Insurance Company of America Combined Life Insurance Company of New York Illinois Union Insurance Company Indemnity Insurance Company of North America Insurance Company of North America Pacific Employers Insurance Company Westchester Fire Insurance Company Westchester Surplus Lines Insurance Company -- Insurer Financial Strength Ratings at 'AA-'. Century Indemnity Company -- IFS at 'B-'. Century Reinsurance Company -- IFS at 'CCC+'. CHARMING SHOPPES: Posts $34.5 Million Net Loss in Qtr. Ended May 5 ------------------------------------------------------------------ Charming Shoppes Inc. reported a net loss of $34.5 million for the first quarter ended May 3, 2008, compared with net income of $26.3 million in the corresponding period ended May 5, 2007. Results for the thirteen weeks ended May 3, 2008, included a loss from operations of discontinued component of $35.1 million. The loss from operations of discontinued component includes a loss on results of operations of approximately $6.7 million, and an estimated loss on disposal of approximately $28.4 million, related to the planned sale of the non-core misses catalog businesses. For the thirteen weeks ended May 3, 2008, the company reported income from continuing operations of $657,000. This compares to income from continuing operations of $26.5 million for the thirteen weeks ended May 5, 2007. The company's income from continuing operations for the first quarter ended May 3, 2008, includes after-tax charges of $2.2 million related to previously announced consolidation and streamlining initiatives, and $2.4 million for advisory and legal fees arising out of the proxy contest which was settled on May 8, 2008. Net sales from continuing operations for the thirteen weeks ended May 3, 2008, decreased 8.0% to $641.3 million, compared to net sales from continuing operations of $696.6 million for the thirteen weeks ended May 5, 2007. Net sales for the company's Retail Stores segment were $614.9 million during the thirteen weeks ended May 3, 2008, a decrease of 10.0% compared to $686.7 million during the thirteen weeks ended May 5, 2007. Consolidated comparable store sales for the company's Retail Stores segment decreased 13.0% during the thirteen weeks ended May 3, 2008, compared to flat comparable store sales during the thirteen weeks ended May 5, 2007. Net sales from continuing operations for the company's Direct-to- Consumer segment were $26.9 million during the thirteen weeks ended May 3, 2008, compared to $10.3 million during the thirteen weeks ended May 5, 2007. Commenting on sales and operating results for the quarter, Dorrit J. Bern, chairman, chief executive officer and president of Charming Shoppes Inc. stated, "We continue to be disappointed with our overall sales performance, which has been impacted by downward traffic trends to our stores. "As we manage through this challenging environment, it has been our strategy to operate with much leaner inventories in order to protect and improve our merchandise margins. Our same store inventories were 13.0% lower at the end of the quarter, compared to a year ago, and as a result, our merchandise margins improved compared to our first quarter ended May 5, 2007. "Our promotional strategy during the first quarter was less aggressive as compared to a year ago, and as a result, we experienced increases in our average dollar sale. We continue to see strong positive customer response to our Right Fit pant programs, which are being rolled out in both denim and wear-to- work offerings at our Lane Bryant and Catherines brands, and are planned to be expanded to the Fashion Bug brand during August. "We have also seen solid improvement in the performance of our intimate apparel departments, particularly at our Lane Bryant and Fashion Bug brands. However, the positive response to our spring merchandise offerings, as outlined above, has been more than offset by the reduced demand for our core merchandise offerings. We are working diligently to mitigate our same store sales decreases, and will continue to address the balance of our fashion apparel offerings in order to better meet our customers' needs." Bern continued, "We have executed on a number of initiatives that have allowed us to generate significant free cash flow. The relocation of our Catherines' home office operations to Bensalem was completed on schedule on March 31, 2008. During the quarter, we closed 23 of the 150 underperforming stores identified for closure during this fiscal year. Additionally, as previously announced, we have identified additional reductions that we have implemented in our fiscal year 2009 capital budget, resulting in a decrease of approximately $63.0 million, or nearly 50% compared to our expenditures for fiscal year 2008." Balance Sheet At May 3, 2008, the company's consolidated balance sheet showed $1.6 billion in total assets, $925.3 million in total liabilities, and $677.3 million in total stockholders' equity. About Charming Shoppes Headquartered in Bensalem, Pennsylvania, Charming Shoppes Inc. (Nasdaq: CHRS) -- http://www.charmingshoppes.com/ -- is a multi- brand, multi-channel specialty apparel retailer specializing in women's plus-size apparel. At May 3, 2008, the company operated 2,408 retail stores in 48 states under the names LANE BRYANT(R), FASHION BUG(R), FASHION BUG PLUS(R), CATHERINES PLUS SIZES(R), LANE BRYANT OUTLET(R), and PETITE SOPHISTICATE OUTLET(R). * * * As reported in the Troubled Company Reporter on March 25, 2008, Standard & Poor's Ratings Services lowered the corporate credit rating on Charming Shoppes Inc. to 'B+' from 'BB-.' The outlook remains negative. CHERRY CREEK: Case Summary & Largest Unsecured Creditors -------------------------------------------------------- Debtor: Cherry Creek Restaurant Group, Ltd. 121 Clayton Lane Denver, CO 80206 Bankruptcy Case No.: 08-16267 Chapter 11 Petition Date: May 7, 2008 Court: District of Colorado (Denver) Judge: Elizabeth E. Brown Debtor's Counsel: Lee M. Kutner 303 E. 17th Ave. Ste. 500 Denver, CO 80203 Phone: 303-832-2400 E-mail: lmk@kutnerlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $50,001 to $100,000 Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ AMCAP Realty $95,516 1281 East Main St. Stamford, CT 06902 CJC CATERING: Case Summary & Largest Unsecured Creditors -------------------------------------------------------- Debtor: CJC Catering, LLC P.O. Box C Grand Ledge, MI 48837 dba Detroit Princess Riverboat Boblo Boats Bob-lo Boat Detroit River Boat Company Bankruptcy Case No.: 08-04034 Chapter 11 Petition Date: May 5, 2008 Court: Western District of Michigan (Grand Rapids) Judge: Scott W. Dales Debtor's Counsel: Robert W. Dietrich, Esq. Dietrich Law Firm 831 N Washington Ave Suite LLW Lansing, MI 48906 Phone: (517) 487-8791 Fax: (517) 268-0855 E-mail: RWD@Dietrich-Law.net Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10 million A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/mwd-804034.pdf C LANIER RANDALL: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: C. Lanier Randall, III c/o Doug Martinson, II, Conservator 115 Northside Square Huntsville, Alabama 35801 Bankruptcy Case No.: 08-81496 Chapter 11 Petition Date: May 15, 2008 Court: Northern District of Alabama (Decatur) Judge: The Hon. Jack Caddell Debtor's Counsel: Stuart M Maples Maples & Ray, PC 401 Holmes Ave., Suite H Huntsville, Al 35801 Tel: (256) 489-9779 Fax: 256-489-9720 E-mail: smaples@maplesandray.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 Debtor did not file a list of its largest unsecured creditors who are not insiders. COUNTRYWIDE FINANCIAL: BofA Drops Mr. Sambol Out of Mortgage Biz ---------------------------------------------------------------- David Sambol, current Countrywide Financial Corp. president and chief operating officer, will not be heading the combined business of the mortgage lender and Bank of America Corp., various reports say. Bank of America executives instead chose Barbara Desoer, its chief technology and operations officer, to lead the consumer mortgage business of the merger. Mr. Sambol himself has decided to leave after the completion of the $4 billion acquisition of Countrywide, Bloomberg News reports. He declined to return any comment. As reported in the Troubled Company Reporter on Feb. 26, 2008, the company duo already drew skepticism as they placed Mr. Sambol at the helm of the new mortgage business soon to be created by the merger. According to The Wall Street Journal, Mr. Sambol was a "lightning rod" and a "headache" for both officials of the bank and Countrywide. He advocated Countrywide's push to include in its portfolio almost all types of mortgage products in the market, including loans made to people with questionable credit histories. The mortgage lender originated a large number of subprime loan applications during the U.S. housing boom, exposing the company to rising defaults and falling home prices. "Bank of America has done the right thing in deciding not to make Mr. Sambol part of its future plans," Bloomberg quotes U.S. Senator Charles Schumer in an e-mail statement. Sen. Schumer had earlier complained of the decision to put Mr. Sambol in-charge. "You cannot divorce Countrywide, the company, from the executives who pioneered Countrywide's predatory practices," he continued. Alan Fisher of the California Reinvestment Coalition told Reuters that it's a "positive" thing that Mr. Sambol is out, since he had contributed so much to the housing crisis during his tenure at Countrywide. According to David Lykken of Mortgage Banking Solutions, the change in authority came, not from outside pressure, but from a shift in entrepreneurial and business philosophies, relates Bloomberg. "I don't think there was any doubt that Bank of America wanted him, but there's a philosophical shift there that David may not want to have been part of," he said, adding that the bank wants to "reign in" the lender's aggressive marketing stance. Bank of America representative Robert Stickler had similar views. "We felt it was very, very important that we have someone who is rooted in our culture and the way we do business and who has relationships throughout the company. . . [T]hat's why we are sending one of our most senior executives to California," he said. The acquisition is expected to close in July, Bloomberg noted. About Bank of America Based in Charlotte, North Carolina, Bank of America Corp. (NYSE:BAC) -- http://www.bankofamerica.com-- is a bank holding company. Bank of America provides banking and non-banking financial services and products through three business segments: global consumer and small business banking, global corporate and investment banking, and global wealth and investment management. In December 2006, the company sold its retail and commercial business in Hong Kong and Macau to China Construction Bank. In October 2006, BentleyForbes, a commercial real estate investment and operations company, acquired Bank of America plaza in Atlanta from CSC Associates, a partnership of Cousins Properties Incorporated and the company. In June 2007, the company acquired the reverse mortgage business of Seattle Mortgage Company, an indirect subsidiary of Seattle Financial Group Inc. In October 2007, ABN AMRO Holding N.V. completed the sale of its United States subsidiary, LaSalle Bank Corporation, to Bank of America. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider and a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. * * * As reported in the Troubled Company Reporter on Jan. 15, 2008, Moody's placed the ratings of Countrywide Financial Corporation and its subsidiaries under review for upgrade. CFC and Countrywide Home Loans senior debt is rated Baa3 and short-term debt is rated Prime-3. Countrywide Bank FSB's bank financial strength rating is C-, deposits are rated Baa1 and short-term debt Prime-2. All long and short-term ratings are placed under review for possible upgrade. The company is continuing to face a barrage of lawsuits coming from disgruntled homeowners that filed for bankruptcy protection. Countrywide has been accused by these homeowners and various federal agencies of dubious and questionable lending practices, and for abusing the bankruptcy system. CSC HOLDINGS: S&P Puts 'BB' Rating on Proposed $500MM Sr. Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB' rating on CSC Holdings Inc.'s proposed $500 million senior unsecured notes. CSC Holdings is a subsidiary of Bethpage, New York-based Cablevision Systems Corp., a major cable operator in the New York metropolitan area. Cablevision had about $11.6 billion of reported consolidated debt outstanding on March 31, 2008. CSC Holdings' proposed $500 million senior unsecured notes are rated 'BB', with a recovery rating of '3', indicating the expectation for meaningful (50% to 70%) recovery in the event of a payment default. The notes, which will be issued under Rule 144A with registration rights, will be used to refinance CSC Holdings notes that mature this July. Standard & Poor's also affirmed all ratings on Cablevision and its subsidiaries. The outlook is negative. The rating actions incorporate the impact of the pending Sundance Channel acquisition, as well as the proposed acquisition of Newsday. "The ratings on Cablevision reflect our expectation that the company will continue to pursue an aggressive financial policy, a factor that overshadows the company's investment-grade business risk profile," said Standard & Poor's credit analyst Richard Siderman. CSFB NIMS: Fitch Takes Rating Actions on Six NIM Notes ------------------------------------------------------ Fitch Ratings has taken these rating actions on 6 CSFB NIMS Trust HEAT Net Interest Margin Notes: CSFB NIMS Trust HEAT 2006-3 NIM 45 -- $11.4 million Class A notes downgraded to 'C/DR6' from 'A-'; -- $4.6 million Class B notes downgraded to 'C/DR6' from 'BBB-'; -- $5.9 million Class C notes downgraded to 'C/DR6' from 'BB'; -- $2.0 million Class D notes downgraded to 'C/DR6' from 'BB'; Underlying Transaction: CSFB HEAT 2006-3 CSFB NIMS Trust HEAT 2006-5 NIM 47 -- $5.8 million Class A notes downgraded to 'C/DR6' from 'BB', removed from Rating Watch Negative; -- $6.0 million Class B notes downgraded to 'C/DR6' from 'B', removed from Rating Watch Negative; -- $5.8 million Class C Notes remains at 'C/DR6' Underlying Transaction: CSFB HEAT 2006-5 The rating actions reflect actual pay-down performance of the NIM securities to date compared to initial projections, as well as changes that Fitch previously made to its subprime loss forecasting assumptions for the underlying transactions. CUSTOM HOMES: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Custom Homes by Anthony, Inc. 1044 Soyer Circle Forest, VA 24551 Bankruptcy Case No.: 08-61239 Type of Business: The Debtor operates a construction company. Chapter 11 Petition Date: May 28, 2008 Court: Western District of Virginia (Lynchburg) Judge: William E Anderson Debtor's Counsel: Stephen E. Dunn, Esq. (stephen@stephendunn-pllc.com) 201 Enterprise Drive Suite A Forest, VA 24551 Telephone (434) 385-4850 Fax (434) 385-8868 Estimated Assets: $1,000,001 to $10 Million Estimated Debts: $1,000,001 to $10 Million A copy of the Debtor's petition and list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/vawb08-61239.pdf DAN RIVER: U.S. Trustee Appoints 5-Member Creditors' Panel ---------------------------------------------------------- Roberta A. DeAngelis, the Acting United States Trustee, Region 3, appointed five members to the Official Committee of Unsecured Creditors in the chapter 11 cases of Dan River Holdings, LLC, and its debtor-affiliates, pursuant to Section 1102(a)(1) of the Bankruptcy Code: 1. JS Royal Home DBA Jiangyin Bedsheet Company Attn: Harry C. Linton 11121 Carmel Commons Blvd. #110 Charlotte, North Carolina 28226 Tel: (704) 905-1741 Fax: (704) 542-2378 2. Sajid Textile (Pvt) Ltd. Attn: Rehan Sayeed 2865 North Berkeley Lake Rd., Suite 10 Duluth, Georgia 30096 Tel: (770) 418-1833 x 102 Fax: (770) 717-9894 3. Kam International Attn: Junaid Arif Motiwalla 495 Deh Landh, Main National Highway, Karachi, Pakistan Tel: (0092) 21-5015592 Fax: (0092) 21-5018298 4. Nantong Yiteng Textile Co. Ltd. Attn: Shi Yunhua Jintong Road, Technological & Dev. Zone Tonszhou City, China Tel: 86 513-8656-0561 Fax: 86 513-8656-0560 5. Be Be Jan (Pvt) Limited Attn: Ali Raza Abad 5.5-KM Raiwind Road Lahore, Pakistan E-mail: asim@bbjan.com Headquartered in Danville, Virginia, Dan River Inc. -- http://www.www.danriver.com/-- manufactures and markets textile products for the home fashions, apparel fabrics and industrial markets. The company first filed for chapter 11 protection on March 31, 2004 (Bankr. N.D. Ga. Case No. 04-10990). James A. Pardo, Jr., Esq., at King & Spalding, represented them in their restructuring efforts. The Debtor listed $441,800,000 in total assets and $371,800,000 in total debts. The Court confirmed the Debtors' Plan of Reorganization on Jan. 18, 2005, and the plan took effect on Feb. 14, 2005. Dan River's operations was acquired by GHCL Ltd. in January 2006 for approximately $93 million consisting of $17 million in cash plus the assumption of $76 million in short- and long-term debt. On March 24, 2008, GHCL announced plans to close its home textiles sourcing and manufacturing segment, affecting Dan River as well as GHCL's HW Baker and Best Textiles divisions. Dan River Holdings, LLC, Dan River, Inc. and three other affiliates filed for Chapter 11 protection on April 20, 2008 (Bankr. D. Del. Lead Case No. 08-10727). Margaret M. Manning, Esq., at Whiteford Taylor & Preston, represents the Debtors in their restructuring efforts. As of April 20, the Debtors listed assets between $50 million to $100 million and debts between $100 million to $500 million. DAN RIVER: Committee, Danville Protest GMAC's $32 Million DIP Loan ------------------------------------------------------------------ The Official Committee of Unsecured Creditors opposes to the request of Dan River Holdings LLC and its debtor-affiliates to obtain up to $32,000,000 in postpetition financing from a consortium of lenders led by GMAC Commercial Finance LLC under a revolving loan. The Committee tells the Hon. Brendan L. Shannon of the United States Bankruptcy Court for the District of Delaware that the DIP facility is nothing more than use of cash collateral to liquidate the collateral of the lenders at the expense of the estate, unsecured creditors and other parties-in-interest. The DIP lenders are also the prepetiton lenders of approximately $25,000,000 as of the Debtors' bankruptcy filing. The Debtors find that one of the lenders, GHCL International Inc., does not have a perfected security interest in any of the Debtors' assets as it failed to file any uniform commercial code financing statements against the Debtors in connection with its $41,000,000 secured loan to the Debtors in July 2006. GHCL International's claim is secured by substantially all assets of the Debtors but junior to the liens in favor of GMAC Commercial. City of Danville Objection Separately, city of Danville in Virginia also objects to the Debtors' request to obtain financing from the lenders. The Debtors owe the City at least $2,251,122 in claims, which arises from a "Wastewater Treatment Contract" entered into by the Debtors and the City on Dec. 30, 1977, as amended. The agreement provides for the payment on bonds used to expand the City's wastewater treatment facility for proper disposal of the Debtor's industrial waste. The Committee and the City ask the Court to deny final approval of the Debtors' request. DIP Financing As reported in the Troubled Company Reporter on April 25, 2008, the Court authorized the Debtors to access, on an interim basis, of up to $30,000,000 in DIP financing from the lenders. According to the DIP request, the Debtors asked the Court for authority to obtain up to $32,000,000 in DIP financing, which will be used to finance the operation of their businesses and preserve the value of their assets. The facility will bear interest at per annum rate equal to the Base Rate -- the rate of interest declared by Bank of America, N.A. -- in effect from time to time plus 4%. The DIP liens are subject to a $250,000 carve-out for payment of statutory fees to the U.S. Trustee, fee payable to the clerk of the court, and allowed fees and expenses of professional advisors retained by the Debtors or Committee. The Debtors agree to pay a $500,000 DIP fee pursuant to the financing agreement, as amended. To secure their DIP obligations, the lenders are entitled to a first and senior priority to all other interest and liens. The DIP agreement contains appropriate and conditional events of default. Indebtedness As of April 18, 2008, in respect of all prepetition obligations, the Debtors owe GMAC Commercial of at least $24,868,719, which comprised of: i) $24,568,719 in revolving loans made pursuant to certain existing financing agreements in the aggregate and ii) $300,000 in letters of credit plus interest accrued, costs, expenses, fees and other charges. A full-text copy of the DIP Agreement is available for free at http://ResearchArchives.com/t/s?2cf0 About Dan River Inc. Headquartered in Danville, Virginia, Dan River Inc. -- http://www.www.danriver.com/-- manufactures and markets textile products for the home fashions, apparel fabrics and industrial markets. The company first filed for chapter 11 protection on March 31, 2004 (Bankr. N.D. Ga. Case No. 04-10990). James A. Pardo, Jr., Esq., at King & Spalding, represented them in their restructuring efforts. The Debtor listed $441,800,000 in total assets and $371,800,000 in total debts. The Court confirmed the Debtors' Plan of Reorganization on Jan. 18, 2005, and the plan took effect on Feb. 14, 2005. Dan River's operations was acquired by GHCL Ltd. in January 2006 for approximately $93 million consisting of $17 million in cash plus the assumption of $76 million in short- and long-term debt. On March 24, 2008, GHCL announced plans to close its home textiles sourcing and manufacturing segment, affecting Dan River as well as GHCL's HW Baker and Best Textiles divisions. Dan River Holdings LLC, Dan River Inc. and three other affiliates filed for Chapter 11 protection on April 20, 2008, (Bankr. D. Del. Lead Case No. 08-10727). Margaret M. Manning, Esq., at Whiteford Taylor & Preston, represents the Debtors in their restructuring efforts. The U.S. Trustee for Region 3 appointed creditors serve on an Official Committee of Unsecured Creditors. As of April 20, the Debtors listed assets between $50 million to $100 million and debts between $100 million to $500 million. DELTA AIR: Merger with Northwest Likely to be Approved ------------------------------------------------------ The Delta Air Lines Inc. and Northwest Airlines Corp. consolidation is likely to be approved by the U.S. government, Rep. John Mica, a Florida Republican, told Reuters. Rep. Mica, former chairman of the House of Representatives aviation subcommittee, said in a congressional hearing to consider approval of the merger that the transaction to create the world's biggest airline didn't seem to be anti-competitive, Reuters said. Antitrust and industry experts have previously said the Northwest-Delta proposal stood a good chance of winning regulatory approval. According to the paper, the merger proposal has met little or no resistance in Congress, which cannot block a consolidation, anyway. However, Reuters pointed out that lawmakers can "disrupt the timing of the regulatory review, influence policymakers and rally consumers and workers." In his opening statement at the hearing, current Aviation Committee Chairman Rep. James Oberstar said that the tie-up is expected to have wide ramifications in the airline industry in general, CNNMoney.com reported. "This should not be and must not be considered as a standalone, individual transaction but rather as the trigger of what will surely be a cascade of subsequent mergers that will consolidate aviation in the United States and around the world into global, mega carriers," CNNMoney.com quoted Rep. Oberstar, as saying. Rep. Oberstar is of the opinion that the Northwest-Delta merger would deter competition at major hubs, which would result in increased fares, CNNMoney.com stated. Meanwhile, Northwest CEO Doug Steenland and Delta CEO Richard Anderson testified that the merger would in fact, encourage competition because the airlines focus on serving different regions. Northwest's forte are in the Midwest, and internationally, in Asia; while, Delta's strengths are in the East and the "mountain" West; and internationally, Europe and Latin America. "We think it's pro-competitive," Mr. Anderson told CNNMoney.com. "It's good for small communities and it will be good for our employees." Combined, Delta and Northwest expect to have an aggregate of more than $35,000,000 in annual revenues, operate a mainline fleet of nearly 800 aircraft, hire approximately 75,000 employees worldwide, and with expected liquidity of nearly $7,000,000 at closing, the CEOs disclosed, according to The Associated Press. Under Delta's agreement with Northwest to combine in an all-stock transaction, the new Company will be named Delta and headquartered in Atlanta, Georgia. It will offer expanded customer access to more than 390 destinations in 67 countries, Messrs. Steenland and Anderson disclosed. Both CEOs also assured that they will not be closing any hubs after the merger, nor eliminate any frontline positions, CNNMoney.com said. Nevertheless, Messrs. Steenland and Anderson told lawmakers that under the merged company, no more than an estimated 1,000 corporate positions will be eliminated. The CEOs said they would provide legislators "a formal estimate" within 60 days, according to various reports. The planned Delta and Northwest merger is expected to be completed later this year, subject to the approval of Delta and Northwest shareholders and state regulators, news reports say. The Detroit News, however, notes that a final ruling -- most likely an approval of the merger from federal regulators -- is expected within six months. Seniority Issues Remain Afloat Northwest's pilot union leaders told its members in an internal memo that negotiators from Delta and Northwest were scheduled to meet this week in Washington "to begin a renewed effort to achieve a joint contract," according to The Associated Press. However, the meeting was not expected to address seniority list integration, the AP said. Seniority is critical for pilots in determining choices on vacations, the best routes, and bigger planes to fly. It also sets pilots' compensation. About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News, Issue No. 97; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). About Northwest Airlines Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents, including Italy, Spain, Japan, China, Venezuela and Argentina. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On Jan. 12, 2007 the Debtors filed with the Court their Chapter 11 Plan. On Feb. 15, 2007, they Debtors filed an Amended Plan & Disclosure Statement. The Court approved the adequacy of the Debtors' Disclosure Statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' Plan. The Plan took effect May 31, 2007. (Northwest Airlines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on April 17, 2008, Moody's Investors Service placed the debt ratings of Delta Air Lines, Inc. ("Delta", corporate family at B2) and Northwest Airlines Corporation ("Northwest", corporate family rating at B1) on review for possible downgrade. The review was prompted by the announcement that the two airlines have agreed to combine in an all-stock transaction with a combined enterprise value of approximately $18 billion. Fitch Ratings has affirmed the debt ratings of Delta Air Lines, Inc. following the announcement that Delta has agreed to merge with Northwest Airlines Corp., subject to approval by the two airlines' shareholders and the U.S. Department of Justice. Delta's ratings were affirmed as: Issuer Default Rating at 'B'; First-lien senior secured credit facilities at 'BB/RR1'; Second- lien secured credit facility (Term Loan B) at 'B/RR4'. The issue ratings apply to $2.5 billion of committed credit facilities. The Rating Outlook for Delta has been revised to Negative from Stable. Standard & Poor's Ratings Services placed its ratings, including the 'B+' long-term corporate credit rating, on Northwest Airlines Corp. on CreditWatch with negative implications, following announcement of a merger agreement with Delta Air Lines Inc. (B/Watch Pos/--). The CreditWatch listing affects enhanced equipment trust certificates with various ratings, excepting those that are insured by a bond insurer. S&P's listing of Northwest ratings on CreditWatch with negative implications and those of Delta on CreditWatch with positive implications implies that S&P foresee a corporate credit rating of either 'B' or 'B+' for the combined entity. DELTA AIR: Pilots Overwhelmingly Ratify Modified Pilot Agreement ---------------------------------------------------------------- The Air Line Pilots Association informed Delta Air Lines, Inc., that Delta pilots overwhelmingly approved Letter of Agreement 19, which provides certain modifications to Delta's current Pilot Working Agreement. The modified Agreement "facilitates the realization of revenue synergies" from the combination of Delta and Northwest Airlines Corp., at the closing of the carriers' planned merger. Delta pilots voted from May 1 until May 14, 2008. Under the modified Agreement, more than 7,000 pilots at Delta will receive, among others, a 3.5% equity stake in the Combined company; and annual pay raises of 5% in 2009, and 4% in 2010 to 2012, under Delta's extended collective bargaining agreement with the pilots, according to reports from Bloomberg News and The Associated Press. The voter turnout was 4,590 out of 6,073 eligible Delta pilots, of whom 3,580 or 78% voted in favor of ratifying the agreement, the union's executive committee chairman Lee Moak said in a letter to pilots, reports say. The Agreement does not cover Northwest's 5,000 pilots. In a statement on the company's Web site, Delta's chief executive officer Richard Anderson said that Delta is pleased with the Delta pilots' decision, "which [marks] an important step towards combining our two great airlines." "We remain committed to working with the ALPA leadership of both the Delta and Northwest pilots to reach a joint pilot agreement before the closing of the merger," Mr. Anderson stated. Seniority Issues Remain Afloat Mr. Moak disclosed that the Delta pilots union aims for the joint contract and an integrated seniority list prior to the closing of the Delta-Northwest combination. This is seen to speed the integration of booth carriers. Northwest's pilot union leaders told its members in an internal memo that negotiators from Delta and Northwest were scheduled to meet this week in Washington "to begin a renewed effort to achieve a joint contract," according to AP. However, the meeting was not expected to address seniority list integration. Delta's pilot leaders believe that having an arbitrator to facilitate issues looming over seniority lists ". . . is an abdication of leadership," Mr. Moak said, according to the report. "The best solution involves pilots negotiating with pilots to achieve a fair and equitable list," added Mr. Moak. Seniority is critical for pilots in determining choices on vacations, the best routes, and bigger planes to fly. It also sets pilots' compensation. Delta and Northwest Execs Testify On Merger In congressional hearings held, Mr. Anderson and Northwest CEO Doug Steenland told lawmakers that the under the merged Company, no more than an estimated 1,000 corporate positions will be eliminated. Messrs. Anderson and Steenland said they would provide legislators "a formal estimate" within 60 days, according to various reports. Combined, Delta and Northwest expect to have an aggregate of more than $35,000,000 in annual revenues, operate a mainline fleet of nearly 800 aircraft, hire approximately 75,000 employees worldwide, and with expected liquidity of nearly $7,000,000 at closing, the Executives disclosed, according to AP. Under Delta's agreement with Northwest to combine in an all-stock transaction, the new company will be named Delta and headquartered in Atlanta, Georgia. It will offer expanded customer access to more than 390 destinations in 67 countries, the Executives have disclosed. The planned Delta and Northwest merger is expected to be completed later this year, subject to the approval of Delta and Northwest shareholders and state regulators, news reports said. The Detroit News, however, noted that a final ruling -- most likely an approval of the merger from federal regulators -- is expected within six months. About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News, Issue No. 98; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on Jan. 17, 2008, Standard and Poor's said that media reports that Delta Air Lines Inc. (B/Positive/--) entered into merger talks with UAL Corp. (B/Stable/--) and Northwest Airlines Corp. (B+/Stable/--) will have no effect on the ratings or outlook on Delta, but that confirmed merger negotiations would result in S&P's placing ratings of Delta and other airlines involved on CreditWatch, most likely with developing or negative implications. DELTA AIR: Closing Nine Airport VIP Lounges to Reduce Costs ----------------------------------------------------------- Delta Air Lines, Inc., is planning to shut down eight Crown Room Club locations and one BusinessElite Lounge in its airport "to manage costs due to hefty fuel prices," The Associated Press reports. The decision is also aimed at aligning the carrier's worldwide offering of clubs to its flight schedules, a Delta spokeswoman told AP. The locations slated for closure are at airports serving Boston, Cincinnati, Ohio, Kansas City, Seattle, San Juan Puerto Rico, Phoenix, Denver, Honolulu and London. Delta's Crown Room Clubs are still accessible in more than two dozen cities, according to the report. About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News, Issue No. 98; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on Jan. 17, 2008, Standard and Poor's said that media reports that Delta Air Lines Inc. (B/Positive/--) entered into merger talks with UAL Corp. (B/Stable/--) and Northwest Airlines Corp. (B+/Stable/--) will have no effect on the ratings or outlook on Delta, but that confirmed merger negotiations would result in S&P's placing ratings of Delta and other airlines involved on CreditWatch, most likely with developing or negative implications. DENNY'S CORP: Stockholders Approve 2008 Omnibus Incentive Plan -------------------------------------------------------------- The stockholders of Denny�s Corp. approved the company's 2008 Omnibus Incentive Plan. A total of 4,500,000 shares of the company�s common stock are reserved and available for issuance pursuant to awards granted under the 2008 Omnibus Plan. In addition, the Compensation and Incentives Committee of the company�s Board of Directors approved changes to the company�s Paradigm Shift Incentive Program. As originally adopted, the Paradigm Shift Incentive Program provided executive officer participants with an opportunity to earn cumulative cash awards ranging from $180,000 to $245,000, depending on level of participation, over a three year period (from 2007 to 2009) upon the completion of certain defined milestones which were set for three "paradigm shift" projects associated with the company�s implementation of certain planned concept, facility and process initiatives. The Committee amended the Program with respect to two of these initiatives to shorten the performance period, adjust certain milestone targets, and reduce the potential payouts (while retaining discretion to reward extraordinary performance in achievement of these initiatives). A full-text copy of the 2008 Omnibus Plan is available for free at http://ResearchArchives.com/t/s?2ce0 Headquartered in Spartanburg, South Carolina, Denny's Corporation (Nasdaq: DENN) -- http://www.dennys.com/-- is a full-service family restaurant chain, consisting of 373 company- owned units and 1,177 franchised and licensed units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. At March 26, 2008, the company's consolidated balance sheet showed $384.8 million in total assets and $557.0 million in total liabilities, resulting in a $172.2 total stockholders' deficit. DIAMOND EXECUTIVE: Case Summary & 17 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: Diamond Executive Office Suites & Virtual Offices, LLC 3175 "E" Sedona Ct. Ontario, CA 91764 Tel: (909) 481-2400 Bankruptcy Case No.: 08-15577 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Diamondcard International Corp. 08-15578 Type of Business: The Debtor provides office spaces. Chapter 11 Petition Date: May 14, 2008 Court: Central District Of California (Riverside) Debtor's Counsel: Franklin C. Adams, Esq. Email: franklin.adams@bbklaw.com Best Best & Krieger, LLP 3750 University Ave. 4th Fl. Riverside, CA 92501 Tel: (951) 686-1450 Fax: (951) 686-3083 Diamond Executive Office Suites & Virtual Offices, LLC's Financial Condition: Total Assets: $2,200,000 Total Debts: $2,355,841 A. A copy of Diamond Executive Office Suites & Virtual Offices, LLC's is available for free at: http://bankrupt.com/misc/cacb08-15577.pdf B. A copy of Diamondcard International Corp's is available for free at: http://bankrupt.com/misc/cacb08-15578.pdf DRYLANDS PACIFIC: Case Summary & 10 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Drylands Pacific, LLC 655 Deerfield Road, Suite 100 Deerfield, Illinois 60015 Bankruptcy Case No.: 08-17313 Chapter 11 Petition Date: May 28, 2008 Court: District of Colorado (Denver) Judge: Elizabeth E. Brown Debtor's Counsel: Joel Laufer 5290 DTC Pkwy, Ste. 150 Englewood, CO 80111 Tel: (303) 830-3172 E-mail: jl@jlrplaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Debtor's petition and list of 10 largest unsecured creditors is available for free at http://bankrupt.com/misc/cob08-17313.pdf DURA AUTOMOTIVE: Discloses Plan Provisions in SEC Filing -------------------------------------------------------- In a regulatory filing with the U.S. Securities and Exchange Commission, DURA Automotive Systems, Inc., and its affiliates disclose a summary of the material matters contemplated to occur either pursuant to or in connection with the confirmation and implementation of the Revised Joint Plan of Reorganization. Under the Confirmed Plan, New Dura will emerge as a publicly reporting company under the Securities Exchange Act of 1934, as amended. The Confirmed Plan contemplates these restructuring transactions: * The Debtors will enter into the Exit Credit Facility and New Money Second Lien Loan. * All DIP Facility Claims, administrative expenses and certain priority claims will be paid in full in Cash. * Holders of Class 2 Second Lien Facility Claims will receive new Convertible Preferred Stock on account of their claims. * Class 3 Senior Notes Claims and Class 5A U.S. Other General Unsecured Claims will receive 100% of New Common Stock. * Holders in Class 5B Canadian General Unsecured Claims will be paid, in Cash, on a pro rata basis, in full and final satisfaction of their claims. * Class 4 Subordinated Notes Claims and the Class 6 Convertible Subordinated Debentures Claims, which are subordinated to the Class 3 Senior Notes Claims, will be discharged without recovery. * Class 7 Section 510(b) Subordinated Claims will be discharged without recovery. * Class 8 Equity Interests will be canceled and will not receive any distributions or retain any property interests. On the Effective Date, all notes, stock, instruments, certificates, and other documents evidencing the Senior Notes Claims, Subordinated Notes Claims, Convertible Subordinated Debentures Claims, Convertible Trust Guarantees, and Equity Interests will be canceled, and the obligations of the Debtors under the Notes, Guaranties and Interests will be discharged. Conditions Precedent to the Effectiveness of the Confirmed Plan DURA discloses that it and its subsidiaries need to satisfy several conditions before an effective date can occur: 1. The New Organizational Documents will have been, as applicable, delivered or tendered for delivery, executed, consummated, and filed. 2. The New Board of Directors will have been appointed in accordance with Article IV.G.2(a) of the Confirmed Plan. 3. The New Money Second Lien Loan will have been consummated. 4. The Exit Credit Facility will have been consummated. 5. The Ontario Superior Court of Justice overseeing the reorganization proceedings of DURA's Canadian affiliates will issued an order recognizing that the U.S. Debtors' Plan has been confirmed. Entry of the Canadian Recognition Order will only be a condition to the Effective Date with regard to those Debtors incorporated, formed or otherwise organized under Canadian law. DURA may, at any time, with the consent of the Official Committee of Unsecured Creditors and the Second Lien Group, which consent will not be unreasonably withheld, waive any of the conditions to the Effective Date set forth in Article VIII.A of the Confirmed Plan without notice to or order of the Court. DURA currently expects the Effective Date to occur in the second quarter of 2008. Treatment of Executory Contracts & Unexpired Leases Any executory contract and unexpired lease listed in the Plan Supplement as contracts or leases to be assumed will be deemed assumed by DURA immediately before the Effective Date. Entry of the Confirmation Order constitutes approval of any assumptions pursuant to Sections 365(a) and 1123 of the Bankruptcy Code. Any contract and lease that have not expired by their own terms on or before the Effective Date will be deemed rejected by the Debtors immediately before the effective date if (i) the Debtors have not assumed or rejected the contracts or leases during the pendency of their Chapter 11 cases; (ii) the contracts and leases are not listed in the Plan Supplement as contracts or leases to be assumed; (iii) the contracts and leases are not to be assumed pursuant to the terms hereof, and (iv) the contracts and leases are not the subject of an assumption motion. All proofs of claim arising from the rejection of contracts or leases must be filed within 30 days after the earlier of (i) the date of entry of a Court order approving any rejection, and (ii) the Effective Date. Any rejection damages claims that are not timely filed will be forever barred from assertion against the Debtors, their estates and their successors. All Claims will, as of the Effective Date, be subject to the discharge and permanent injunction. The Debtors will pay any monetary amounts by which any contract and lease to be assumed is in default immediately after the Effective Date. In the event of a dispute regarding the Cure payment amount, "adequate assurance of future performance," or any other matter pertaining to assumption, (i) the Debtors have the right to reject the contract or lease at any time prior to the resolution of the dispute, and (ii) cure payments will only be made after entry of a Final Order resolving the dispute. Release, Exculpation, Injunction and Indemnification The Plan contemplates releases, exculpation, injunction and indemnification of several parties from claims, causes of actions, and other obligations related to the Debtors, their Chapter 11 cases, the negotiation of the Plan, the Plan documents, including the Commitment Letter, the Exit Facility, the New Money Second Lien Loan, and the New Organizational Documents. The Plan, however, contemplates that certain claims, causes of action and other obligations will not be released, including: * any causes of action accrued by the Debtors in the ordinary course of business against holders of Other General Unsecured Claims; and * any Allowed Claims of Releasing Parties treated under the Plan. The Plan will deem to release any non-debtor, including any current and former officer and director of the Debtors and any other non-debtor included in the Exculpated Parties, from liability to the SEC, in connection with any legal action or claim brought by a governmental unit against a person. All Parties and Entities are permanently enjoined, on and after the Effective Date, on account of any Claim or Equity Interest satisfied and released from: (a) commencing or continuing in any manner any action or other proceeding of any kind against any Debtor or any Reorganized Debtor, their successors, and their assets and properties; (b) enforcing, attaching, collecting or recovering by any manner or means any judgment, award, decree or order against any Debtor or any Reorganized Debtor, their successors and assigns, and their assets and properties; (c) creating, perfecting, or enforcing any encumbrance of any kind against any Debtor or any Reorganized Debtor or the property or estate of any Debtor or any Reorganized Debtor; (d) asserting any right of set off, subrogation or recoupment of any kind against any obligation due from any Debtor or any Reorganized Debtor or against the property or estate of any the Debtors or any of Reorganized Debtors, except to the extent a right to set off, recoupment or subrogation is asserted with respect to a timely filed proof of claim or as an affirmative defense to a Cause of Action or claim asserted by a Debtor or Reorganized Debtor against a party; or (e) commencing or continuing in any manner any action or other proceeding of any kind in respect of any Claim or Equity Interest or Cause of Action released or settled under the Plan. As of the Effective Date, all indemnification provisions currently in place for the current and former directors, managers, members, officers, employees, attorneys, financial advisors, other professionals and agents of the Debtors and their affiliates will be deemed to have been assumed by the Reorganized Debtors and will survive effectiveness of the Plan. Securities to Be Issued Under Confirmed Plan On the Effective Date, New Dura will (i) issue the New Common Stock to holders of the Class 3 Senior Notes Claims and the Class 5A U.S. Other General Unsecured Claims; and (ii) reserve for issuance an appropriate number of shares of New Common Stock pursuant to the terms of the certificate of designations of the Convertible Preferred Stock and a post-Effective Date Management Equity Incentive Plan. New Dura will also (i) issue the Convertible Preferred Stock to the holders of the Second Lien Facility Claims as well as the parties providing financing under New Money Second Lien Loan, and (ii) reserve for issuance an appropriate number of shares of New Common Stock pursuant to the terms of the post-Effective Date Management Equity Incentive Plan. The Equity Incentive Plan provides for up to 10% of the capital stock of New Dura, on a fully-diluted basis, to be reserved for issuance as grants of equity, restricted stock, or options. The New Common Stock will be subject to dilution by conversion of the Convertible Preferred Stock and by any grants of New Common Stock pursuant to the Management Equity Incentive Plan. About DURA Rochester Hills, Michigan-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006, (Bankr. D. Del. Case No. 06-11202). Marc Kieselstein, P.C., Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., at Kirkland & Ellis LLP are lead counsels for the Debtors' bankruptcy proceedings. Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., at Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsels. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of Jan. 31, 2008, the Debtor had $1,503,682,000 in total assets and $1,623,632,000 in total liabilities. On April 3, 2008, the Court approved the Debtors' revised Disclosure Statement explaining their revised Chapter 11 plan of reorganization. (Dura Automotive Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: J.W. Korth Opposes Confirmation of Plan -------------------------------------------------------- James W. Korth, managing partner of J.W. Korth & Company, on behalf of an ad hoc committee of holders of more than $100,000,000, of 8-5/8% Senior Bonds and 9% Subordinated Bonds issued by DURA Automotive Systems, Inc., appealed to the U.S. District Court for the District of Delaware an order by U.S. Bankruptcy Court Judge Kevin Carey confirming the Debtors' Revised Joint Plan of Reorganization. Mr. Korth wants the District Court to determine whether: 1. the U.S. Bankruptcy Court for the District of Delaware erred in not giving him sufficient notice to attend physically and then barring him from telephonically cross-examining witnesses at the Confirmation Hearing; 2. the Bankruptcy Court erred in that he received the responses to his confirmation objection only a day before the Confirmation Hearing and thus had no reasonable time to prepare for the confirmation hearing and call or cross examine witnesses; and 3. the Bankruptcy Court erred in that he received new expert reports only two days before the Confirmation Hearing along with 3,000 pages of new material and had no reasonable time to prepare for to cross-examine the witnesses put on by the Debtors. In a separate filing, Mr. Korth asks the Bankruptcy Court to stay the proceedings pending judgment on the appeal. He says a stay on Judge Carey's confirmation order is proper since he and other bondholders may be irreparably harmed if the Debtors exit bankruptcy without an investigation of his confirmation objections. He notes that his confirmation objections are salient and deserve proper discovery, which the Bankruptcy Court has improperly denied. Rochester Hills, Michigan-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006, (Bankr. D. Del. Case No. 06-11202). Marc Kieselstein, P.C., Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., at Kirkland & Ellis LLP are lead counsels for the Debtors' bankruptcy proceedings. Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., at Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsels. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of Jan. 31, 2008, the Debtor had $1,503,682,000 in total assets and $1,623,632,000 in total liabilities. On April 3, 2008, the Court approved the Debtors' revised Disclosure Statement explaining their revised Chapter 11 plan of reorganization. (Dura Automotive Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DYNAMIC LEISURE: March 31 Balance Sheet Upside-Down by $21,495,703 ------------------------------------------------------------------ Dynamic Leisure Corp.'s consolidated balance sheet at March 31, 2008, showed $8,736,132 in total assets and $30,231,835 in total liabilities, resulting in a $21,495,703 total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $1,236,768 in total current assets available to pay $28,718,660 in total current liabilities. The company reported a net loss of $12,260,817, on total revenues of $2,248,336, for the first quarter ended March 31, 2008, compared with net income of $804,353, on total revenues of $1,971,393, in the same period last year. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2cda Going Concern Disclaimer Salberg & Company, P.A., in Boca Raton, Fla., expressed substantial doubt about Dynamic Leisure 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 had a net loss of $5,674,960 and net cash used in operations of $1,658,698 for the year ended Dec. 31, 2007, and a working capital deficiency and stockholders' deficit of $15,888,284 and $9,330,508, respectively, at Dec. 31, 2007. In addition, the company was in default on convertible promissory notes totaling $4,155,792 and unsecured promissory notes of $156,434 as of March 31, 2008. About Dynamic Leisure Corporation Headquartered in Tampa, Fla., Dynamic Leisure Corporation (OTC BB: DYLI) -- http://www.dylicorp.com/-- with offices in New York City and London, England, is a wholesaler and online international technology-based leisure travel packager. The company provides worldwide vacation travel packages directly to the consumer, travel agencies and other travel resellers. EAST CANYON: Involuntary Chapter 11 Case Summary ------------------------------------------------ Alleged Debtor: East Canyon Inc. 1943 N Campus Ave Suite 404B Upland, CA 91784 Case Number: 08-16218 Involuntary Petition Date: May 28, 2008 Court: Central District Of California (Riverside) Judge: Meredith A. Jury Petitioner's Counsel: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Leon Draper Unpaid note $285,000 8300 Utica Ave 155 Rancho Cucamonga, CA 91730 Aramondo Portallo Unpaid loan 48,200 27479 Bahama Ave Hayward, CA 94545 Cathy Draper Services 22,100 8300 Utica Ave Rancho Cucamonga, CA 91730 EDGAR MUNTZ: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Edgar R. Muntz, Jr. dba Muntz Realty Trust 30 Floral Street Shrewsbury, MA 01545 Bankruptcy Case No.: 08-41591 Chapter 11 Petition Date: May 16, 2008 Court: District of Massachusetts (Worcester) Judge: Joel B. Rosenthal Debtor's Counsel: Stephan M. Rodolakis Pojani, Hurley, Ritter & Salvidio, LLP 446 Main Street Worcester, MA 01608 Tel (508) 798-2480 Email phrsbankruptcy@yahoo.com Total Assets: 1,921,989 Total Debts: 2,140,095 A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/mab08-41591.pdf EDGEN MURRAY: S&P 'B' Rating Remains Unchanged After Review ----------------------------------------------------------- Standard & Poor's Ratings Services concluded a review of the bank loan and recovery ratings on Baton Rouge, Louisiana-based Edgen Murray LP (B/Stable/--) and its subsidiaries and those ratings are unchanged. The $425 million first-lien term loan is rated 'B', the same as the corporate credit rating, with a recovery rating of '3', indicating S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default. The $75 million second-lien term loan is rated 'CCC+', two notches below the corporate credit rating, with a recovery rating of '6', indicating S&P's expectation for negligible (0-10%) recovery in the event of a payment default. Ratings on specialty metals distributor Edgen Murray LP reflect its niche position in the highly cyclical, competitive, and volatile specialty steel pipe industry; the modest size and limited scope of its operations; thin margins; inventory risk; and very aggressive debt leverage. Still, current end markets remain solid, and the company benefits from nominal capital expenditures and countercyclical cash flow. Ratings List Edgen Murray LP Corporate credit rating B/Stable/-- Ratings Maintained $425 million first-lien term loan B Recovery rating 3 $75 million second-lien term loan. CCC+ Recovery rating 6 EDMETT CONSULTING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Edmett Consulting Inc. dba Solutions Consulting Group 5405 Morehouse Drive, Suite 300 San Diego, CA 92121 Bankruptcy Case No.: 08-03933 Type of Business: The Debtor is into computer consulting business. Chapter 11 Petition Date: May 8, 2008 Court: Southern District of California (San Diego) Judge: Peter W. Bowie Debtor's Counsel: Craig E. Dwyer 8745 Aero Drive, Suite 301 San Diego, CA 92123 Tel (858) 268-9909 Fax (858) 268-4230 Email craigedwyer@aol.com Total Assets: $150,000 Total Debts: $1,306,614 A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/cafb08-03933.pdf EL DORADO: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: El Dorado Hills Self-Storage LLC 4980 Golden Foothill Pkwy. El Dorado Hills, CA 95762 Bankruptcy Case No.: 08-26468 Type of Business: The Debtor is into self-storage business. Chapter 11 Petition Date: May 16, 2008 Court: Eastern District of California (Sacramento) Judge: Christopher M. Klein Debtor's Counsel: Donald W. Fitzgerald 400 Capitol Mall #1450 Sacramento, CA 95814-4434 Tel (916) 329-7400 Estimated Assets: $10,000,001 to $50 million Estimated Debts: $10,000,001 to $50 million Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ AT&T Yellow Pages Trade Debt $22,801 P.O. Box 989046 West Sacramento, CA 95798-9046 Tel (807) 869-5091 Miguel Garcia Trade Debt $11,615 2838 Poplar Lane Placerville, CA 95667 Tel (530) 642-9557 De Lage Landen Trade Debt $7,078 c/o Flamm Boroff & Bacine 794 Penllyn Pike Blue, PA 19422 Tel (267) 419-1572 Diversified/Marine Products Trade Debt $6,710 B. West Marketing Group Trade Debt $6,316 Blue Ribbon Personnel Service Trade Debt $5,094 Supply side Trade Debt $4,999 Golden State Directory Corp. Trade Debt $4,960 Holt of California Trade Debt $4,719 ThyssenKrupp Elevator Corp. Trade Debt $3,380 Sonitrol Trade Debt $3,331 AT&T Trade Debt $3,278 Premium Financing Specialists Trade Debt $2,421 GE Capital Trade Debt $2,192 PG&E Trade Debt $2,026 FedEx Trade Debt $1,796 Grapevine Apparel Trade Debt $1,166 Becker Runkle & Laurie Trade Debt $1,145 El Dorado Irrigation District Trade Debt $1,030 Centershift Trade Debt $1,007 EXAERIS INC: Court Confirms Chapter 11 Plan -------------------------------------------- The U.S. Bankruptcy Court in Wilmington, Delaware, confirmed the Chapter 11 plan of Exaeris Inc., Bill Rochelle of Bloomberg News reports. As reported in the Troubled Company Reporter on March 7, 2008, under the proposed plan, the Debtor's assets will be sold to Jack Kachkar in exchange for a waiver of the $2.1 million postpetition financing the Debtor's owe him. The plan, however, proposes that an auction for the Debtor's assets be held to see whether a higher offer than that of Mr. Kachkar will surface. Mr. Kachkar, pursuant to the plan, will also pay the Debtor $420,000. Unsecured creditors with $5.5 million in claims will divide what cash is left. The disclosure statement doesn't say how much creditors can expect to receive. The Court rejected Mr. Kachkar's offer to buy the Debtor's assets for $337,500 and to forgive any claims against him and parent company Inyx Inc., which Mr. Kachkar controls. The Court determined that the sale might not benefit the creditors and might not be in good faith. The Court noted the lack of evidence about the value of the assets being sold and the claims being waived. The Chapter 11 trustee for debtor-affiliate Inyx USA Ltd. determined that Inyx Inc. and Mr. Kachkar cheated secured lender Westernbank Puerto Rico out of $142.8 million. Westernbank said that Inyx Inc. obtained loans through false and fraudulent invoices. About Inyx USA and Exaeris Headquartered in Exton, Pennsylvania, Exaeris Inc. -- http://www.exaeris.com/-- focuses on the strategic commercialization of niche or enhanced pharmaceutical products, marketing and promotion activities. Inyx USA Ltd. and Exaeris are wholly owned subsidiaries of Inyx, Inc. (OTC:IYXI) -- http://www.inyxinc.com/-- a specialty pharmaceutical company. Exaeris Inc. filed for chapter 11 protection on July 2, 2007 (Bankr. D. Del. Case Nos. 07-10887). Anthony M. Saccullo, Esq., at Fox Rothschild, L.L.P., in Wilmington, Delaware, represents the Debtor. When Exaeris filed for protection from its creditors, Exaeris estimated its assets were less than $10,000 but debts were between $1 million and $100 million. In Court documents filed by Jack Kachkar, CEO of Inyx, Inc., Inyx USA is indebted to Westernbank Puerto Rico in the approximate amount of $35 million and secured by a first-priority lien in substantially all of Inyx USA's assets. Exaeris has in excess of $5 million in prepetition unsecured obligations outstanding to various creditors. Ashton Pharmaceuticals and Inyx Pharma, the Debtors' UK affiliates, were placed into an involuntary administration on June 29, 2007. Ernst & Young was appointed by the UK court as administrators. FEDERAL-MOGUL: Professionals Seek Payment of $16,066,139 in Fees ---------------------------------------------------------------- Warren H. Smith & Associates seeks payment of $1,702,757 in fees and reimbursement of $32,947 in expenses for services it rendered as the auditor for Federal-Mogul Corp. and its debtor-affiliates for the period from March 1, 2002, through Dec. 27, 2007. In separate filings, two professionals filed amended final fee applications: Final Professional Fee Period Fees Expenses ------------ ---------- ---- -------- 10/01/01 - Gilbert Randolph LLP 12/27/07 $9,127,333 $522,394 10/01/01 - Hanly & Conroy 12/27/07 5,236,049 281,966 Gilbert Randolph previously requested payments of $9,134,237 in fees and $504,449 in expenses. The amended final fee application reflects all reductions approved by the U.S. Bankruptcy Court for the District of Delaware. Hanly & Conroy previously requested payments of $5,149,916 in fees and $307,992 in expenses. The amended final fee application addresses the discrepancies from the Fee Auditor's records of Hanly & Conroy's total allowed fees and expenses. The Debtors' counsel, James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, filed certificates of no objections to the final fee applications of FTI Consulting, Inc., The Kenesis Group LLC, Warren H. Smith, AND Gilbert Randolph. 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 Dec. 27, 2007. (Federal-Mogul Bankruptcy News, Issue No. 168; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * 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. FIFTH WORLD: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Fifth World, LLC 215 Disney Lane Sedona, AZ 86336 Bankruptcy Case No.: 08-06221 Chapter 11 Petition Date: May 28, 2008 Court: District of Arizona (Phoenix) Judge: Redfield T. Baum PCT Sr. Debtor's Counsel: Donald W. Powell, Esq. Email: d.powell@cplawfirm.com Carmichael & Powell, P.C. 7301 N. 16th St., Ste. 103 Phoenix, AZ 85020 Tel: (602) 861-0777 Fax: (602) 870-0296 http://www.cplawfirm.com/ Estimated Assets: $19,043,750 Estimated Debts: $7,866,465 The Debtor does not have any creditors who are not insiders. FINANCE AMERICA: Notes Paydown Performance Cues Fitch Rating Cuts ----------------------------------------------------------------- Fitch Ratings has taken rating actions on one Finance America Net Interest Margin notes. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are now removed. Finance America CI-2 NIM Trust 2004-2 -- $96,380 class N3 note downgraded to 'C/DR6' from 'BBB'; -- $2.2 million class N4 note downgraded to 'C/DR6' from 'CC/DR4'; -- $1.5 million class N5 note remains at 'C/DR6'. Underlying Transaction: Finance America Mortgage Loan Trust, series 2004-2 The rating actions reflect actual pay-down performance of the NIM securities to date compared to initial projections, as well as, changes that Fitch previously made to its subprime loss forecasting assumptions for the underlying transactions. FREMONT NET: Fitch Junks Ratings on Two Classes of NIM Notes ------------------------------------------------------------ Fitch Ratings has taken rating actions on two Fremont Net Interest Margin notes. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are now removed. Fremont CI-5 NIM, series 2005-2 -- $3.3 million class N1 note downgraded to 'C/DR6' from 'B'; Underlying Transaction: Fremont Home Loan Trust 2005-2 Fremont NIM 2006-A -- $5.2 million class N1 note downgraded to 'C/DR6' from 'B'; -- $4.3 million class N2 note remains at 'C/DR6'; -- $5.3 million class N3 note remains at 'C/DR6'; Underlying Transaction: Fremont Home Loan Trust 2006-A The rating actions reflect actual pay-down performance of the NIM securities to date compared to initial projections, as well as, changes that Fitch previously made to its subprime loss forecasting assumptions for the underlying transactions. GENERAL MOTORS: 19,000 Hourly Workers Accept Attrition Program -------------------------------------------------------------- General Motors Corp. said roughly 19,000 of its U.S. hourly employees have decided to take advantage of the company's attrition program. Most of the employees participating in the program will leave the company no later than July 1, 2008. GM will fill job openings with current employees whenever possible, as spelled out in the provisions of the GM-UAW national labor agreement. In facilities where GM needs new employees, those individuals would be hired in at the entry-level wage and benefit structure. The extent of the new hiring at each facility will be determined on a plant-by-plant basis. "Despite significant challenges in the U.S. market, we continue to reshape our business for long-term success," Troy Clarke, Group Vice President and President, GM North America, said. "This attrition program gives us an opportunity to restructure our U.S. workforce through the entry-level wage and benefit structure for new hourly employees." Mr. Clarke recognized UAW leadership's role in negotiating the 2008 attrition program. "We appreciate the UAW's support in making business improvements that provide a more secure future for General Motors and its employees," he said. He also recognized employees' role in the continued transformation of GM's business. "Participation in the attrition program was an important, personal choice for employees and their families," Mr. Clarke said. "I want to personally thank those who decided to participate for their many contributions to General Motors. For those who chose to stay, we must continue to work together to build the world's best products for our customers." 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. At March 31, 2008, GM's balance sheet showed total assets of $145,741,000,000 and total debts of $186,784,000,000, resulting in a stockholders' deficit of $41,043,000,000. Deficit, at Dec. 31, 2007, and March 31, 2007, was $37,094,000,000 and $4,558,000,000, respectively. * * * As reported in the Troubled Company Reporter on April 28, 2008, Standard & Poor's Ratings Services said that its 'B' long-term and 'B-3' short-term corporate credit ratings on General Motors Corp. remain on CreditWatch with negative implications, where they were placed March 17, 2008. The CreditWatch update follows downgrades of 49%-owned subsidiaries GMAC LLC (B/Negative/C) and Residential Capital LLC (CCC+/Watch Neg/C). The rating actions on Residential Capital LLC and GMAC were triggered by the resignation of the only independent directors at Residential Capital LLC. GREATNESS ENTERPRISES: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Greatness Enterprises, LLC 1870 Harding Boulevard Baton Rouge, LA 70807 Bankruptcy Case No.: 08-10770 Chapter 11 Petition Date: May 27, 2008 Court: Middle District of Louisiana (Baton Rouge) Debtor's Counsel: J. David Andress, Esq. (bankruptcy@grandtitle.com) Grand Law Firm 10537 Kentshire Court, Suite A Baton Rouge, LA 70810 Tel: (225) 769-1414 Fax: (225) 769-2300 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. GROUP 1: S&P Downgrades Corporate Credit Rating to BB- from BB -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Group 1 Automotive Inc. to 'BB-' from 'BB'. The outlook has been revised to stable from negative. "The downgrade reflects our expectation that in light of a very difficult sales environment for the North American auto retailers, the company's high leverage will not decline to levels consistent with the previous rating," said Standard & Poor's credit analyst Nancy Messer. S&P do not expect Group 1 to generate sufficient free cash flow during the year ahead to reduce debt significantly. S&P's opinion is based on its expectation that revenue and profitability will be soft in 2008, while the company's infrastructure investments and acquisitions to support business expansion will continue. The ratings on Group 1 reflect the company's high leverage resulting from an aggressive acquisition strategy combined with the competitive and cyclical challenges of the automotive retail industry. The majority of Group 1's 105 automotive dealerships are in the Eastern and Central regions of the U.S., with the remainder in California. Group 1 also has a small international exposure, with three dealerships in the U.K. The stable outlook reflects our opinion that Group 1's diverse revenue sources, brand strength, and focus on operating efficiencies should support the company's continued profitability. In the year ahead, S&P expect Group 1's high leverage to continue as a result of large projected capital expenditures and acquisitions. S&P expect the company to be conservative with regard to cash usage for dividend payouts and share repurchase activity in 2008, given the potential for downside market surprises. Group 1's good returns on its used vehicle business, aided by growth in its P&S and F&I businesses, should support the company's credit measures in 2008, although the business' new vehicle segments will remain under pressure. S&P could revise the outlook to negative or lower the rating if industry conditions weaken further or if greater use of cash flow weakens the company's ability to manage its leverage position during the next year. S&P do not expect to revise the outlook to positive in the next year, given market conditions. GSAMP TRUST: S&P Puts Ratings on Default on Poor Collateral Pools ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on two classes of mortgage pass-through certificates issued by GSAMP Trust 2006-S5 and three classes of asset-backed certificates issued by Long Beach Mortgage Loan Trust 2006-A to 'D' from 'CCC'. The downgrades reflect the deterioration of the collateral pools as these transactions have continued to realize monthly net losses at an unprecedented pace. During the May 2008 distribution period, net losses completely eroded the remaining subordination for the downgraded classes, causing the transactions to be undercollateralized. The GSAMP transaction realized losses during the current distribution of $6,501,753, approximately $3.25 million more than the available subordination, while the Long Beach transaction incurred losses of $15,845,786, roughly $2.9 million above the subordination amount. Therefore, the collateral pools are undercollateralized by the amount by which losses have exceeded the subordination amounts. S&P do not expect the mortgage pools to become fully collateralized due to the transactions' performance and the percentage of loans in the pools that are currently delinquent. As of the May 27, 2008, distribution date, cumulative realized losses for GSAMP Trust 2006-S5 amounted to 36% of the original pool balance, and total delinquencies were 32.34% of the current pool balance. During the past 12 months, monthly net losses have averaged roughly $6.9 million. This transaction is 21 months seasoned and has an outstanding pool balance of 41.32%. For Long Beach Mortgage Loan Trust 2006-A, cumulative realized losses were 40.07% of the original balance, and total delinquencies were 32.78% of the current balance. During the past 12 months, monthly net losses have averaged roughly $12.20 million. This transaction is 24 months seasoned and has an outstanding pool balance of 37.54%. These classes were originally rated 'AAA'. S&P first lowered the ratings on the GSAMP transaction on July 19, 2007, to 'AA', and on the Long Beach transaction on Sept. 25, 2007, to 'A+'. S&P subsequently lowered the ratings on all of these classes to 'CCC' on Dec. 20, 2007. The collateral for the GSAMP transaction consists of closed-end, primarily fixed-rate mortgage loans secured by second-lien mortgages or deeds of trust on residential real properties. The mortgage loans were purchased from Fremont Investment & Loan, Impac Funding Corp., NC Capital Corp., Meritage Mortgage Corp., Residential Funding Corp., and various mortgage loan sellers through Goldman Sachs Mortgage Co.'s mortgage conduit program. The collateral for the Long Beach transaction consists of closed- end, primarily fixed-rate mortgage loans secured by second-lien mortgages or deeds of trust on residential real properties. Long Beach originated all of these mortgage loans. Long Beach also originated the first-lien mortgages, which are not part of this securitization. Ratings Lowered GSAMP Trust 2006-S5 Mortgage pass-through certificates Rating ------ Class To From ----- -- ---- A-1, A-2 D CCC Long Beach Mortgage Loan Trust 2006-A Asset-backed certificates Rating ------ Class To From ----- -- ---- A-1, A-2, A-3 D CCC GOLF DIAGNOSTIC: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Golf Diagnostic Imaging Center L.P. dba Diagnostic Imaging Center dba Premier Radiology Institute dba Woodridge Imaging Center 9680 Golf Road Des Plaines, IL 60016 Bankruptcy Case No.: 08-12908 Description: Parvez Shirazi, president of Golf Imaging Service Corp., filed the petition on behalf of the Debtor. Chapter 11 Petition Date: May 20, 2008 Court: Northern District of Illinois (Chicago) Debtor's Counsel: Gregory K. Stern, Esq. (gstern1@flash.net) Gregory K. Stern, P.C. 53 West Jackson Blvd., Suite 1442 Chicago, IL 60604 Tel: (312) 427-1558 Fax: (312) 427-1289 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full copy of the Debtor's petition and list of 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/ilnb08-12908.pdf GREGORY GRIFFIN: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Gregory F. Griffin aka Greg Griffin 203 Hawk Court Alamo, CA 94507 Bankruptcy Case No.: 08-42426 Chapter 11 Petition Date: May 15, 2008 Court: Northern District of California (Oakland) Judge: Leslie J. Tchaikovsky Debtor's Counsel: C. Randall Bupp, Esq. (randy@bsclaw.com) Bardellini, Straw and Cavin 2000 Crow Canyon Pl. #330 San Ramon, CA 94583 Tel: (925) 277-3580 Fax: (925) 277-3591 Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A full copy of the Debtor's petition and list of 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/canb08-42426.pdf HARBOUR WALK: Frustrates Foreclosure Attempt by Filing Bankruptcy ----------------------------------------------------------------- A foreclosure move on Harbour Walk Preserve LLC's $16.5 million commercial complex was halted after it filed for Chapter 11 protection with the U.S. Bankruptcy Court for the Southern District of Florida, the PalmBeachPost.com reports. Seacoast National Bank of Stuart, the Debtor's primary lender, filed a foreclosure lawsuit to recover $14 million out of the Debtor's $22 million credit line, the Post says. In documents submitted to the Court, the Debtor claims that the bank's move was a "bad faith" attempt to "steal" the property. Palm Beach Gardens, Florida-based Harbour Walk Preserve LLC filed for Chapter 11 protection on May 23, 2008 (Bankr. S.D. Fla. Case No. 08-16789). Bradley S. Shraiberg, Esq., John E. Page, Esq., at Kluger Peretz Kaplan & Berlin P.L., and Eyal Berger, Esq., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million. HARWOOD PRODUCTS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Harwood Products Inc. P.O. Box 224 Branscomb, CA 95417 (707) 984-6181 Bankruptcy Case No.: 08-10998 Description: Arthur C. Harwood, the Debtor's president, filed the petition on behalf of Harwood Products. Chapter 11 Petition Date: May 23, 2008 Court: Northern District of California (Santa Rosa) Judge: Alan Jaroslovsky Debtor's Counsel: Thomas A. Willoughby, Esq. (TWilloughby@ffwplaw.com) Felderstein, Fitzgerald et al. 400 Capitol Mall #1450 Sacramento, CA 95814-4434 Tel: (916) 329-7400 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A full copy of the Debtor's list of 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/canb08-10998-cred.pdf GUARDIAN ENTERTAINMENT: Case Summary & Largest Unsecured Creditor ----------------------------------------------------------------- Debtor: Guardian Entertainment, Ltd. 71 Fifth Avenue New York, NY 10003 Bankruptcy Case No.: 07-13372 Debtor-affiliates filing separate Chapter 11 petitions filing on May 7, 2008: Entity Case No. ------ -------- Bottlecap, LLC 08-11716 Guardian Technology Services, Inc. 08-11717 Type of Business: The Debtor produces feature films, commercials and television properties for domestic and foreign release in all markets. See http://www.guardianltd.com/ Chapter 11 Petition Date: October 25, 2007 Court: Southern District of New York (Manhattan) Judge: Robert D. Drain Debtor's Counsel: Clem G. Turner, Esq. 71 Fifth Avenue, 5th Floor New York, NY 10003 Tel: (212) 727-4729 Guardian Entertainment's Financial Condition: Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million A. Guardian Entertainment, Ltd's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ John K. Fulweiler legal fees $4,700 Deorchis Wiener & Partners 61 Broadway, 26th Floor New York, NY 10006-2802 B. Bottlecap, LLC did not file a list of its largest unsecured creditors. C. Guardian Technology Services, Inc. did not file a list of its largest unsecured creditors. HANOVER CAPITAL: Posts $23.3 Million Net Loss in 2008 1st Quarter ----------------------------------------------------------------- Hanover Capital Mortgage Holdings Inc.'s consolidated balance sheet at March 31, 2008, showed $83.5 million in total assets, and $132.5 million in total liabilities, resulting in a $49.0 million total stockholders' deficit. The company reported a net loss of $23.3 million for the first quarter ended March 31, 2008, compared to net income of $863,000 in the same period of 2007. This decrease is primarily due to impairment expense of $21.2 million for other-than-temporary declines in fair value of the company's subordinate mortgage-backed securities portfolio, an increase in interest expense in connection with the entry into a repurchase agreement in August 2007, with Ramius Capital Group LLC, and an increase in deferred financing fees charged to expense in connection with the termination of the company's two committed lines of credit, partially off-set by the reversal of a $1.6 million reserve for the estimated costs of closing its warehouse facility. Net interest income was a loss of $857,000 for the three months ended March 31, 2008, compared to net interest income of $2.8 million in the same period of 2007 due to the increased interest expense associated with the new fixed-term financing facility the company established in August 2007. The company had no gains on sales of securities for the three months ended March 31, 2008, compared to gains of $191,000 for the three months ended March 31, 2007. As of March 31, 2008, seriously delinquent loans, for the subordinate mortgage-backed securites portfolio, are 0.83% of collateral loan balances as compared to 0.55% as of Dec. 31, 2007. The company said that although delinquencies are rising, they are still significantly below those of Alt-A and Subprime collateral. The company had losses of approximately $2.3 million allocated to its subordinate mortgage-backed securities for the three months ended March 31, 2008. As of March 31, 2008, the overall estimated fair value of the company's subordinate mortgage-backed securities portfolio pledged under the repurchase agreement with Ramius Capital Group is below the contractual repayment amount by approximately $22.5 million. According to Hanover Capital, Generally Accepted Accounting Principles preclude it from considering the contractual repayment amount of the repurchase agreement with Ramius Capital, and its recourse limitation, in determining either a fair value or a realizable value for the company's subordinate mortgage-backed securities. As a result, the company recorded an other-than- temporary impairment of $21.2 million during the three months ended March 31, 2008. This loss may be offset by a gain on settlement of debt in August of 2008 if the company surrenders its subordinate mortgage-backed securities portfolio under the repurchase agreement with Ramius Capital. John A. Burchett, the company's president and chief executive officer, commented, "While we continue to operate during difficult times in the mortgage industry, we are also continuing with our efforts to raise capital sufficient to enable the company to return to profitability and to provide a positive return for our shareholders." Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2cde Going Concern Disclaimer As reported in the Troubled Company Reporter on April 10, 2008, Grant Thornton LLP, in New York, expressed substantial doubt about Hanover Capital Mortgage Holdings 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 lost $80.0 million for the year ended Dec. 31, 2007, which included $76.0 million in impairment losses on mortgage-backed securities and the company has terminated certain loan facilities because of covenant violations and, as a result, these facilities are no longer available to the company. About Hanover Capital Based in Edison, N.J., Hanover Capital Mortgage Holdings Inc. (AMEX: HCM) -- http://www.hanovercapitalholdings.com/-- is a mortgage real estate investment trust. The company invests in prime mortgage loans and mortgage securities backed by prime mortgage loans. HOLOGIC INC: S&P Lifts Rating to B+ from B After Debt Repayment --------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on Hologic Inc.'s convertible subordinated debt to 'B+' from 'B'. S&P revised the recovery rating on this unsecured instrument to '5', indicating the expectation for modest (10% to 30%) recovery in the unlikely event of a bankruptcy, from '6'. At the same time, S&P affirmed the 'BB-' corporate credit and 'BB+' senior secured ratings. The outlook is positive. "The upgrade reflects the rapid repayment of senior secured acquisition debt," said Standard & Poor's credit analyst David Lugg. In October 2007, Hologic purchased unrated Cytyc Corp. in a $6 billion transaction. Hologic funded a portion of this purchase with a secured credit facility, which was significantly reduced with the proceeds of a $1.7 billion convertible issue in December. Since then, the company has repaid another $570 million of term loans, reducing the facility balance to $89.6 million as of March 31, 2008. In aggregate, Hologic has reduced its debt by 24% from the October peak, far exceeding Standard & Poor's more modest expectations. The rapid reduction in secured bank loans disproportionally benefits the unsecured convertible issue, providing improved recovery prospects in the unlikely event of default. The 'BB-' rating reflects Hologic's initially high leverage, short track record of success, challenge to integrate the acquisition of Cytyc, and strong positions in attractive specialty medical markets. This transforming transaction almost doubled the size of Hologic, adding product and geographic breadth. The combined company's specialty surgical and diagnostic products focus on the medical needs of women--a market characterized by limited competition from a few, but very large, firms and some exposure to reimbursement challenges. Technological innovation that produces more accurate, easier-to-use products is a key to success in this market. The outlook is positive. Continued successful integration of the Cytyc business, combined with additional debt repayment could create the conditions needed for a higher rating within two years. Although moderating somewhat, the continued strong double-digit growth of Hologic products should provide the cash flow needed for rapid debt repayment. S&P expect the company to continue to make smaller acquisitions that bolster its market presence. If the company were to encounter an unusually difficult integration or make additional large debt-financed acquisitions, there would be little rationale for an upgrade. IMAGEWARE SYSTEMS: Posts $1,904,000 Net Loss in 2008 First Quarter ------------------------------------------------------------------ Imageware Systems Inc. reported a net loss of $1,904,000, on revenues of $1,383,000, for the first quarter ended March 31, 2008, compared with a net loss of $2,432,000, on revenues of $1,336,000, in the same period last year. At March 31, 2008, the company's consolidated balance sheet showed $8,397,000 in total assets, $6,961,000 in total liabilities, and $1,436,000 in total stockholders' equity. The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $1,652,000 in total current assets available to pay $5,760,000 in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2cdb Going Concern Disclaimer Stonefield Josephson Inc., in Los Angeles, expressed substantial doubt about ImageWare Systems 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 auditng firm pointed to the company's substantial net losses since inception and substantial monetary liabilities as of Dec. 31, 2007. About ImageWare Systems Headquartered in San Diego, ImageWare Systems Inc. (AMEX: IW) -- http://www.iwsinc.com/-- is a developer and provider of identity management solutions, providing biometric, secure credential, law enforcement and digital imaging technologies. ImageWare's identification products are used to manage and issue secure credentials including national IDs, passports, driver licenses, smart cards and access control credentials. ImageWare's digital booking products provide law enforcement with integrated mug shot, fingerprint Livescan and investigative capabilities. ImageWare also maintains offices in Washington, D.C. and Canada. IMPAC MORTGAGE: Mulls Preferred Stocks Offering to Save Cash ------------------------------------------------------------ Impac Mortgage Holdings Inc. is considering making an offer to the holders of its Series B and Series C Preferred Stock, to exchange those shares for common stock of the company. The company has included within its preliminary proxy statement a request for common stockholders to approve the issuance of common stock in excess of 20% of the outstanding shares in connection with the possibility of such an exchange. If approved, and if completed, it would reduce the company's continuing obligation to pay or accrue quarterly preferred dividends, thereby allowing the company to use or preserve the cash for other purposes. Further, if completed on favorable terms it may have the effect of increasing common stockholders' equity. Additionally, the company disclosed that the company's motion to dismiss the 2006 class action that was originally filed in January 2006 was granted by the court with prejudice on May 19, 2008, so the matter cannot be refiled. "The granting of the motion to dismiss the class action lawsuit is a huge win for the company," Joseph R. Tomkinson, chairman and chief executive officer of Impac Mortgage Holdings Inc. stated. "Additionally the possible exchange offer to swap preferred for common stock could have a very positive effect on the liquidity of the company. If successful, not only will it reduce our fixed dividend expense it will also strengthen the company's capital structure. Ultimately a successful exchange offering will help management in its attempt to rebuild shareholder value." About Impac Mortgage Headquartered in Irvine, California, Impac Mortgage Holdings Inc. (NYSE: IMH) -- http://www.impaccompanies.com/-- is a mortgage REIT, which through its Long Term Investment Operations is primarily invested in non-conforming Alt A mortgage loans (Alt-A) and to a lesser extent small balance commercial and multi-family loans. The company also operates a significantly reduced Mortgage Operations, which acquires, originates and sells conforming loans that are eligible for sale to government sponsored agencies. The company is organized as a REIT for tax purposes, which generally allows it to pass through earnings to stockholders without federal income tax at the corporate level. * * * At Dec. 31, 2007, the company's balance sheet showed total assets of $17.3 billion and total liabilities $18.4 billion, resulting in a total stockholders' deficit of roughly $1.1 billion. ITREX INTERNATIONAL: Involuntary Chapter 11 Case Summary -------------------------------------------------------- Alleged Debtor: Itrex International Corporation 17716 Castellammare Drive Pacific Palisades, CA 90272 Involuntary Petition Date: May 22, 2008 Case Number: 08-17071 Chapter: 11 Court: Central District of California (Los Angeles) Judge: Sheri Bluebond Pat Shuster's Counsel: Simon J. Dunstan, Esq. Hughes & Dunstan, LLP 21650 Oxnard Street, #1960 Woodland Hills, CA 91367 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Pat Shuster Promissory Note $500,000 6424 Big A Road Douglasville, GA 30135 Patrick Doran Promissory Note $365,000 885 Woodstock Road, #430-342 Roswell, GA 30075-2274 William Wagner Promissory Note $250,000 3879 Flowerland Drive Atlanta, GA 30319 JETBLUE AIRWAYS: Amends Deutsche Lufthansa Stock Purchase Pact -------------------------------------------------------------- JetBlue Airways Corporation entered into a supplement agreement with Deutsche Lufthansa AG, an aktiengesellschaft organized under the laws of the Federal Republic of Germany, amending the Stock Purchase Agreement dated Dec. 13, 2007 between the Investor and the company. Under the terms of the Supplement, the company agreed to limit its issuance of common stock of the company to 45.1 million shares in connection with the share lending facility of the recently announced convertible debt offering. The parties also agreed to amend the Stock Purchase Agreement to remove the twelve month waiting period for the right to nominate an additional director, remove the references to an additional director class designation and reduce the common stockholding threshold for the Investor to have to the ability to nominate an additional director from 15% to 12%, in the event of a vacancy on the company�s Board of Directors. The Supplement additionally provides that it will be of no force and effect if the convertible debt offering is not consummated. A full-text copy of the Supplement Agreement is available for free at http://ResearchArchives.com/t/s?2ce6 Based in Forest Hills, New York, JetBlue Airways Corporation (Nasdaq: JBLU) -- http://www.jetblue.com/-- is a passenger airline that provides customer service primarily on point-to-point routes. As of Dec. 31, 2007, the company served 53 destinations in 21 states, Puerto Rico, Mexico and the Caribbean. At Dec. 31, 2007, the company's consolidated balance sheeet showed $5.598 billion in total assets, $4.562 billion in total liabilities, and $1.036 billion in total stockholders' equity. * * * As reported in the Troubled Company Reporter on May 23, 2008, Moody's Investors Service downgraded the corporate family rating of JetBlue Airways Corporation to Caa1 from B3, well as the ratings of its outstanding corporate debt instruments and selected classes of JetBlue's Enhanced Equipment Trust Certificates. The rating outlook is negative. JOHN O'SULLIVAN: Case Summary & 6 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: John Michael O'Sullivan P.O. Box 162 Drytown, CA 95699 Bankruptcy Case No.: 08-26388 Chapter 11 Petition Date: May 15, 2008 Court: Eastern District of California (Sacramento) Judge: Hon. Thomas Holman Debtor's Counsel: W. Austin Cooper 2151 River Plaza Dr #195 Sacramento, CA 95833 Telephone (916) 927-2525 Estimated Assets: $1,000,001 to $10 Million Estimated Debts: $1,000,001 to $10 Million The Debtor's petition and list of its 6 largest unsecured creditors is available for free at: http://bankrupt.com/misc/caeb08-26388.pdf KANSAS CITY SOUTHERN: S&P Rates $275MM Sr. Unsecured Debt 'BB-' --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' rating to Kansas City Southern Railway Co.'s $275 million senior unsecured debt due 2015, one notch higher than the corporate credit rating on parent company Kansas City Southern. S&P also assigned a recovery rating of '2' to the notes, indicating that lenders can expect substantial (70%-90%) recovery in the event of a payment default. The notes are guaranteed by Kansas City Southern. S&P have affirmed its 'B+' long-term corporate credit on Kansas City Southern. Proceeds from the new debt issuance will be used to repurchase $200 million aggregate principal amount of 9.5% notes due 2008 and related fees, to reduce drawings under KCSR's revolving credit facility, and for general corporate purposes. The ratings on Kansas City Southern reflect its highly leveraged capital structure, substantial capital spending requirements, and challenges associated with its integration of Kansas City Southern de Mexico S. de R.L. de C.V., the Mexican railroad company it acquired in April 2005. Offsetting these risks to some extent are the favorable characteristics of the U.S. freight railroad industry and the company's strategically located rail network. Kansas City Southern has strengthened its financial profile and liquidity somewhat over the past year as a result of generally favorable industry conditions and improved operating efficiency. The proposed refinancing will further enhance liquidity as will the expected redemption of the 4.25% series C preferred stock which the company has stated is likely to occur around June 1, 2008. Funds from operations to debt is now in the upper-teens percentage area (versus 8% in 2005), and adjusted debt to capital is in the mid-50% area (compared with the low-60% area in 2005). Although debt levels are likely to remain relatively unchanged because of ongoing investments in infrastructure and equipment, S&P expect further improvement in operating metrics over time as the company benefits from some new revenue opportunities, a continuing favorable pricing environment, and further efficiency gains, although the slowing U.S. economy could temper volume gains over the short term. If Kansas City Southern continues to bolster its liquidity position and improve its operating performance, S&P are likely to raise ratings within the next 12 months. If liquidity deteriorates--either as a result of operating pressures, investment requirements, or early termination of the credit facility (which could happen if upcoming debt maturities are not refinanced at least 90 days before their maturity)--S&P would likely lower ratings. LA CORTINA: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------- Debtor: La Cortina, Inc. P.O. Box 711 Litchfield, CT 06759 dba Cortina Inn & Resort Bankruptcy Case No.: 08-31691 Type of Business: The Debtor operates an inn. See: http://www.cortinainn.com Chapter 11 Petition Date: May 27, 2008 Court: District of Connecticut (New Haven) Judge: Honorable Lorraine Murphy Weil Debtor's Counsel: Edward P. Jurkiewicz, Esq. Lawrence & Jurkiewicz LLC 30 East Main Street Avon, CT 06001 Phone: 860-677-6416 Fax: 860-677-5005 E-mail: edwardjurkiewicz@sbcglobal.net Estimated Assets: $10,000,001 Estimated Debts: $1,000,001 Debtor's XX Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ WSI Environmental Service trade debt 50,500 140 White Rocks Picnic Wallingford, VT 05773 Ultramar trade debt 47,355 399 innovation Dr. North Clarendon, VT 05759 Central Vermont Public tax debt 29,077 Service P.O. Box 819 442 Casella Lane Rutland, VT 05701 City of Rutland tax debt 27,004 Appalachian Trail trade debt 21,938 US Food Service trade debt 21,079 Alpine Pipeline Co. trade debt 17,492 Burlington Reinhart trade debt 16,213 Sysco Food Service trade debt 12,443 Guard Insurance trade debt 9,250 Irving Oil Corp. trade debt 7,908 People's Laundry Inc. trade debt 7,477 Casella Waste Management trade debt 6,049 Sterling Valley Systems Inc. trade debt 5,894 Travelclick trade debt 5,563 New England Air Systems trade debt 5,080 VACE Health Insurance trade debt 4,769 AI's Sewer & Drain trade debt 4,512 Adventures Springer-Miller Systems trade debt 4,484 LANDING DEVELOPMENT: Case Summary & 51 Largest Unsecured Creditors ------------------------------------------------------------------ Lead Debtor: Landing Development, LLC aka Volare at Eagle Landings aka Marnella Homes 18318 Southeast Abernethy Lane Milwaukee, OR 97267-6657 Bankruptcy Case No.: 08-31686 Debtor-affiliate filing separate Chapter 11 petitions on May 20, 2008: Entity Case No. ------ -------- Marnella Homes, LLC 08-32350 Debtor-affiliates that filed separate Chapter 11 petitions on April 14, 2008: Entity Case No. ------ -------- Tony Marnella Inc. 08-31685 Anthony Lawrence Marnella 08-31688 Type of Business: The Debtors ae home builders. See http://www.marnellahomes.com/ Chapter 11 Petition Date: April 14, 2008 Court: District of Oregon Judge: Elizabeth L. Perris Debtors' Counsel: Susan S. Ford, esq. Sussman Shank, LLP 1000 S.W. Broadway, Ste. 1400 Portland, OR 97205 Tel: (503) 227-1111 Fax: (503) 248-0130 (susanf@sussmanshank.com) http://www.sussmanshank.com/ Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million A. Marnella Homes, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Moorer Excavation Inc. Subcontractor $180,617 P.O. Box 30569 Portland, OR 97294-3569 SuperFloors Subcontractor $109,573 6911 South 196th Street Kent, WA 98032 Turn Key Building Subcontractor $61,295 Products LLC 235 Beavercreek Road C-141 Oregon City, OR 97045 P R Drywall LLC Subcontractor $36,046 Crystal Springs Subcontractor $31,080 AK Painting LLC Subcontractor $28,427 Whirlpool Subcontractor $26,519 5-J's Construction Subcontractor $26,128 Services LLC Frame Tech Group Subcontractor $24,531 Richard Smith Concrete Subcontractor $24,228 B&G Plumbing Subcontractor $24,037 Valley Line Cabinets Subcontractor $19,197 Builders Masonry Contractors Subcontractor $16,548 DMS Electric & Lighting Inc. Subcontractor $15,653 ESP Supply Co. Subcontractor $13,498 Oregon Comfort Heating Inc. Subcontractor $13,477 Room by Room Subcontractor $9,971 E&L Cabinets Subcontractor $9,883 Northwest Surveying Inc. Subcontractor $7,116 Kyllo Insurance Services Services $6,825 Northwest Inc. B. Landing Development, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Moore Excavation, Inc. Sub-Contractor $180,617 P.O. Box 30569 Portland, OR 97294-3569 Tel: (503) 252-1180 Veritas Investment Co. Services $91,950 Attn: Adrian Huetner, CFO 10220 S.E. Causey Ave. Happy Valley, OR 97086 Tel: (503) 936-1400 SuperFloors Sub-Contractor $80,429 6911 S. 196th Street Kent, WA 98032 Tel: (971) 249-1400 Marnella Communities $76,762 Turn Key Building Products, Sub-Contractor $56,786 LLC P.R. Drywall, LLC Sub-Contractor $35,394 AK Painting, LLC Sub-Contractor $28,428 5-J's Construction Services, Sub-Contractor $26,254 LLC Whirlpool Sub-Contractor $24,281 Richard Smith Concrete Sub-Contractor $24,228 B&G Plumbing Sub-Contractor $22,339 Frame Tech Group Sub-Contractor $21,489 Crystal Springs Sub-Contractor $21,039 Marnella Homes $18,674 Valley Line Cabinets Sub-Contractor $12,512 Oregon Comfort Heating, Inc. Sub-Contractor $11,602 DMS Electric & Lighting, Inc. Sub-Contractor $11,029 E&L Cabinets Sub-Contractor $9,883 ESP Supply Co. Sub-Contractor $9,680 Room by Room Sub-Contractor $6,887 C. Tony Marnella, Inc's Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Family Insurance vendor unknown Attn: Bankruptcy P.O. Box 9462 Minneapolis, MN 55440-9462 AT&T vendor unknown Attn: Bankruptcy P.O. Box 30459 Los Angeles, CA 90030 Tel: 1-800-331-0500 Marnella Homes, LLC vendor $1,019 Attn: Liz Cantu 18318 S.E. Abernethy Lane Portland, OR 97267 Tel: (503) 654-6642 Providenza & Boekelheide, Inc. vendor $487 Verizon Northwest vendor $65 D. Anthony Lawrence Marnella's Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ IRS Insolvency III Income Tax $1,250,000 Attn: Jeffrey Werstler Bkcy. Dept. MS O240 1220 S.W. 3rd Ave. Portland, OR 97204 Tel: (503) 326-3292 ODR-Bkcy Income Tax $300,000 Attn: Melissa Jungling 955 Center N.E., Ste. 353 Salem, OR 97301-2555 Tel: (503) 945-8145 Sterling Savings Bank Credit Card $50,575 FIA Card Services P.O. Box 37271 Baltimore, MD 21297 Attn: Heidi B. Stanley, President & CEO 2550 North Loop West Houston, TX 77092 Tel: (713) 466-8300 Citi Cards Credit Card $36,927 P.O. Box 6414 The Lakes, NV 88901 Attn: Vikram Pandit, President & CEO 111 Sylvan Ave. Englewood Cliffs, NJ 07632 Tel: (605) 335-2222 Key Bank Credit Line $18,700 P.O. Box 94932 Cleveland, OH 44101 Attn: Henry L. Meyer III, CEO 127 Public Square Cleveland, OH 44114 Tel: (716) 838-7200 Laurel P. Hook Personal Debt $15,000 Attn: Stahancyk Kent Johnson & Hook 808 S.W. 15th Ave. Portland, OR 97205 Tel: (503) 222-9115 LEVITZ FURNITURE: May Continue HSBC Sales Tax Deal Until Dec. 2009 ------------------------------------------------------------------ PLVTZ Inc., aka Levitz Furniture Inc., and HSBC Bank Nevada, N.A., won approval from the U.S. Bankruptcy Court for the Southern District of New York to continue their business transaction in accordance with the merchant agreement until Feb. 11, 2008, and the sales tax agreement until Dec. 31, 2009. The merchant agreement dated Dec. 20, 2002, was inked by the Debtor and HSBC for the implementation of a private label revolving credit card program for the Debtor's customers. In connection to this, the parties reached the sales tax agreement permitting them to pursue sales tax refunds, deductions, amended returns, credits and audit offsets, in case a customer fails to pay off the purchased goods. In its order, the Court permitted the parties to recoup or set off the $911,380, owing to HSBC against the $1,464,650, which the bank owes to the Debtor. It also authorized the increase of the cash reserve fund from $130,000 to $800,000, with HSBC retaining the fund to secure the Debtor's obligations under the two contracts. HSBC was directed to pay the Debtor the remaining balance of $423,269 as well as $36,149 for all the claims asserted by the Debtor in connection with the "return of discount" for the fourth quarter of 2007. Meanwhile, the Debtor was directed to provide an employee until Sept. 30, 2008, to assist HSBC in resolving disputes with the cardholders. The Debtor was also required to: (i) execute an assignment or election, designating HSBC or its affiliate as the party eligible to file and collect sales tax refunds from the State of California effective as of Jan. 1, 2008; and (ii) claim the sales tax refunds as well as deductions, amended returns, credits and audit offsets, due and owing from the State of New York starting from January 1, 2007, and remit to HSBC the amounts due. About 60% of the refunds, deductions, amended returns, credits and audit offsets, that are due the Debtor starting Oct. 1, 2007, from the States of California and New York, will be allocated to HSBC while the remaining 40% will be allocated to the Debtor. HSBC has the option to extend the date for terminating the Sales Tax Agreement. HSBC Amends Request to Lift Automatic Stay The Troubled Company Reporter, on Jan 2, 2008, related that HSBC had amended its request asking the Court to modify the automatic stay so that it may set off any amounts it owed to PLVTZ under a merchant agreement by the amounts owed by the Debtor under the sales tax agreement. Michael L. Molinaro, Esq., at Loeb & Loeb, in Chicago, Illinois, disclosed that after HSBC filed its original request on Dec. 3, 2007, it discovered that the Debtor owes more than $245,000 for refunds that it received from the State of California. HSBC already notified the Debtor's counsel its intent to set off the refunds against amounts it owes to the Debtor under the merchant agreement and to freeze the funding under the agreement in an amount equal to what is owed to HSBC under the sales tax agreement. About Levitz Furniture/PVLTZ Based in New York City, Levitz Furniture Inc., nka PVLTZ Inc. -- http://www.levitz.com/-- is a specialty retailer of furniture, bedding and home furnishings in the United States. It has 76 locations in major metropolitan areas, principally in the Northeast and on the West Coast of the United States. Levitz Furniture Inc. and 11 affiliates filed for chapter 11 on Sept. 5, 1997. In December 2000, the Court confirmed the Debtors' Plan and Levitz emerged from chapter 11 on February 2001. Levitz Home Furnishings Inc. was created as the new holding company as a result of the emergence. Levitz Home Furnishings and 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 45189). In their second filing, the Debtors disclosed about $245 million in total assets and $456 million in total debts. Nicholas M. Miller, Esq., and Richard H. Engman, Esq., at Jones Day represented the Debtors. Jeffrey L. Cohen, Esq., Jay R. Indyke, Esq., and Cathy Hershcopf, Esq., at Cooley Godward Kronish LLP served as counsel to the Official Committee of Unsecured Creditors. During this period, the Debtors closed around 35 stores in the Northeast, California, Minnesota and Arizona. PLVTZ Inc., a company created by Prentice Capital Management LP, and Great American Group purchased substantially all the assets of Levitz Home Furnishings in December 2005. Initially, Prentice owned all of the equity interests in PLVTZ. On July 6, 2007, PLVTZ was converted into a Delaware corporation, and Harbinger Capital Partners Special Situations Fund, LP, Harbinger Capital Partners Master Fund I, Ltd., and their affiliates became minority shareholders. Great American's stake in the acquisition was in running the going-out-of-business sales for some 27 Levitz units. PLVTZ, dba Levitz Furniture, continued to face decline in financial performance since December 2005. Liquidity issues and the inability to obtain additional capital prompted PLVTZ to seek protection under chapter 11 on Nov. 8, 2007 (Bankr. S.D.N.Y. Lead Case No. 07-13532). Paul D. Leake, Esq., and Brad B. Erens, Esq., at Jones Day represents the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. The Debtor's schedules show total assets of $123,842,190 and total liabilities of $76,421,661. The Debtors' exclusive period to file a chapter 11 plan expired on March 7, 2008. On March 28, 2008, the Court dismissed the chapter 11 cases of Levitz II (Levitz Home Furnishings Inc., and its remaining six debtor-affiliates). (Levitz Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). LEVITZ FURNITURE: Court Extends Lease Period Under Raymours Pact ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York, at the behest of PLVTZ Inc., aka Levitz Furniture Inc., Raymours Furniture Company, Inc., Vertical Industrial Park Associates and Hilco Merchant Resources LLC, approved a stipulation extending time for the assumption and assignment of the Debtor's lease for its store and warehouse located at 6626 Metropolitan Avenue, Middle Village in Queens, New York. Pursuant to the stipulation, the parties agreed that: (i) the time for assuming and assigning the Debtor's lease in Middle Village be extended by one day for each day that elapses starting April 17, 2008, until the Clerk of the Court enters on the docket a court order approving or denying the proposed assumption and assignment of that lease; and (ii) the date for the assumption and assignment of the lease should not be extended past July 25, 2008. In connection to this, Vertical withdrew its prior objection to the proposed assumption and assignment of the lease in Middle Village. Debtors' Motion PLVTZ had sought the Court's authority to assume and assign to Raymours the lease for its store and warehouse located in Middle Village. The assumption and assignment of the Lease is part of PLVTZ's obligation under an agreement for a joint venture led by Hilco, which the Court approved on Dec. 4, 2007. The Lease was first entered into in 1993 by Levitz Furniture Corporation and Vertical Industrial Park Associates. Levitz' interest in the Lease has ultimately vested in PLVTZ by virtue of an order issued by Judge Burton R. Lifland, assuming and assigning the Lease to PLVTZ. Paul D. Leake, Esq., at Jones Day, in New York, contends that the request is warranted since PLVTZ has satisfied the standards for a valid assumption and assignment of lease. Raymours Response to Court's Questioning The Court held a hearing on Jan. 11, 2008, to consider the assignment motion filed by the Debtors, and Vertical's objection to the motion. At the hearing, the Court questioned whether Raymours had standing to appear in support of the Debtors' Motion, stating that the "there is a lot of law in this district that makes the bidders debatable." According to Joshua I. Divack, Esq., at Hahn & Hessen LLP, in New York, Raymours does not disagree with the Court's general statement of law at the Jan. 11, 2008 hearing. However, the Court's statement does not properly describe Raymours' interest with respect to the Assignment Motion and the Middle Village Lease, he said. "It is well-settled in the Second Circuit of the Court of Appeals that an unsuccessful bidder generally lacks standing to challenge a bankruptcy court's approval of a sale transaction," Mr. Divack said citing Kabro Assoc. of West Islip, LLC v. Colony Hill Assoc. However, Raymours is not an "unsuccessful bidder" for the Middle Village Lease, he added. Raymours paid more than $12,300,000 of consideration to Hilco and five other joint venture partners, for the right to control designation rights for a substantial portion of the Leases and for the direct assumption of the Middle Village Lease from the Debtor. According to Mr. Divack, Raymours holds a direct pecuniary interest in the Middle Village Lease, which is adversely threatened by Vertical, and which will be adversely and directly affected if the Court denies the Assignment Motion or delay its disposition until after the passing of the June 5, 2008 deadline for the Debtor to assume, assume and assign, or reject all of its nonresidential real property leases, including the lease for its store in Middle Village. "This Court should grant the Assignment Motion," Mr. Divack asserted. Vertical has not raised any issues truly cognizable under Section 365 of the Bankruptcy Code in its objections to the Assignment Motion, which are now the sole issues before the Court, he says. Mr. Devick related that if Vertical is permitted to allow its allegations of bad faith to result in the Debtor's rejection of the Middle Village Lease on equitable grounds, then Vertical will have used the Court's jurisdiction to conduct plenary appellate review of the State Court and overturn the State Court's determination that Vertical is not entitled to an equitable remedy. "Vertical's attempt to obtain an impermissible result, violative of so many established legal doctrines, is naked forum shopping at its worst and should not be countenanced by the Court," Mr. Divack said. Vertical has argued that the Debtor's estate will be best served if it reneges on its agreement to assign the Middle Village Lease to Raymours and the Court authorizes rejection of the Middle Village Lease, because it is now offering to pay $500,000 and to release its prepetition claims. Mr. Devick pointed out that the Debtor reasonably exercised its business judgment at the Auction and agreed to assign the Middle Village Lease to Raymours as an integral part of the Auction and the Sale Motion. Accordingly, Raymours asked the Court to enter the Assignment Order as expeditiously as possible, given the upcoming Deemed Rejection Date of June 5. In the interim, Raymours continues to expend out-of-pocket funds to reimburse the Debtor's rent and other payments to Vertical under the Middle Village Lease but has no practical ability to use and enjoy the premises for which it is paying these expenses, Mr. Devick said. About Raymours Furniture Raymours Furniture Company, Inc., which opened its first store in 1947, is currently listed as the 11th largest conventional furniture and bedding retailer in the United States. It has more than 72 retail stores in six states and employs about 3,900 associates. About Levitz Furniture/PVLTZ Based in New York City, Levitz Furniture Inc., nka PVLTZ Inc. -- http://www.levitz.com/-- is a specialty retailer of furniture, bedding and home furnishings in the United States. It has 76 locations in major metropolitan areas, principally in the Northeast and on the West Coast of the United States. Levitz Furniture Inc. and 11 affiliates filed for chapter 11 on Sept. 5, 1997. In December 2000, the Court confirmed the Debtors' Plan and Levitz emerged from chapter 11 on February 2001. Levitz Home Furnishings Inc. was created as the new holding company as a result of the emergence. Levitz Home Furnishings and 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 45189). In their second filing, the Debtors disclosed about $245 million in total assets and $456 million in total debts. Nicholas M. Miller, Esq., and Richard H. Engman, Esq., at Jones Day represented the Debtors. Jeffrey L. Cohen, Esq., Jay R. Indyke, Esq., and Cathy Hershcopf, Esq., at Cooley Godward Kronish LLP served as counsel to the Official Committee of Unsecured Creditors. During this period, the Debtors closed around 35 stores in the Northeast, California, Minnesota and Arizona. PLVTZ Inc., a company created by Prentice Capital Management LP, and Great American Group purchased substantially all the assets of Levitz Home Furnishings in December 2005. Initially, Prentice owned all of the equity interests in PLVTZ. On July 6, 2007, PLVTZ was converted into a Delaware corporation, and Harbinger Capital Partners Special Situations Fund, LP, Harbinger Capital Partners Master Fund I, Ltd., and their affiliates became minority shareholders. Great American's stake in the acquisition was in running the going-out-of-business sales for some 27 Levitz units. PLVTZ, dba Levitz Furniture, continued to face decline in financial performance since December 2005. Liquidity issues and the inability to obtain additional capital prompted PLVTZ to seek protection under chapter 11 on Nov. 8, 2007 (Bankr. S.D.N.Y. Lead Case No. 07-13532). Paul D. Leake, Esq., and Brad B. Erens, Esq., at Jones Day represents the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. The Debtor's schedules show total assets of $123,842,190 and total liabilities of $76,421,661. The Debtors' exclusive period to file a chapter 11 plan expired on March 7, 2008. On March 28, 2008, the Court dismissed the chapter 11 cases of Levitz II (Levitz Home Furnishings Inc., and its remaining six debtor-affiliates). (Levitz Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). LEVITZ FURNITURE: YA Global Requests Rule 2004 Examination ---------------------------------------------------------- YA Global Investments, L.P., creditor and party-in-interest and transferee of certain potential claims and causes of action of the estate in the case of PLVTZ Inc., aka Levitz Furniture Inc. and PLVTZ LLC, asked the U.S. Bankruptcy Court for the Southern District of New York, pursuant to Section 105 of the Bankruptcy Code and Rule 2004 of the Federal Rules of Bankruptcy Procedure, to issue an order: (a) authorizing the examination of certain witnesses; and (b) compelling the production of documents in connection with YA Global's investigation of potential claims and causes of action. Richard L. Mattiaccio, Esq., at Squire, Sanders & Dempsey LLP in New York, informed the Court that estate insiders may have engaged in certain misconduct -- giving rise to estate insider claims -- including: -- the grossly negligent or reckless supervision of the preparation of financial reports; -- the grossly negligent or reckless supervision, monitoring or managing of the accounting, financial and operating departments and affairs of the Debtor; -- causing waste of assets and erosion of the value of the Debtor; -- failing to conduct the affairs of the Debtor as an entity separate and apart from Prentice Capital Management, an affiliate of the Debtor's majority shareholder, and Prentice's affiliated entities; -- allowing particular creditors or equity holders to be favored at the expense of the Debtor or its estate; -- appointing or maintaining members of the Debtor's management who abdicated their fiduciary responsibilities; -- authorizing the Debtor to incur financial obligations at a time when the Debtor would not be able to meet those obligations; -- allowing the interests of others to take precedence over the best interests of the Debtor, its shareholders, and its creditors; -- acting on both sides of transactions or receiving a benefit not received by the shareholders; and -- failing to supervise the officers or managers who were directly responsible for failures and errors. YA Global asked the Court to compel production of documents related to the items disclosed, and for authorization to conduct examinations through the deposition of persons with knowledge, so that YA Global can evaluate its potential claims and rights of recovery that constitute Estate Insider Claims. In particular, Mr. Mattiaccio said, YA Global seeks to obtain the production of documents from the Debtor and to examine and obtain the production of documents from Warren Bishop, Jonathan Duskin, Jane Gilmartin, Kathleen M. Guinnessey, Ronald Kaplan, Chas Phillips, Don Platt, David Scharf, Mark Scott, Sam Scruggs, Robert Webber, Lawrence Zigerelli, and Michael Zimmerman. YA Global expressly reserves the right to examine other witnesses after its review of the production of documents and examination of the witnesses, including but not limited to the examination of: (a) any person who was a member of the Debtor's Board of Directors or was an officer or was an employee at any time between Jan. 1, 2007, and the bankruptcy filing; or (b) was a third-party investor, counterparty, or other entity or individual with reason to have relevant information concerning the Debtor's business decisions and other events and circumstances that precipitated the Debtor's Chapter 11 filing; or (c) was an accountant or attorney for the Debtor at the relevant time. Mr. Mattiaccio further noted that YA Global seeks information with respect to its potential claims and rights of recovery on the Estate Insider Claims which, if established, may lessen its claim against other assets of the estate, and provide for payment to the GUC Trust and to the Debtor's estate in accordance with the provisions of the stipulation and final order authorizing the use of cash collateral and granting adequate protection. About Levitz Furniture/PVLTZ Based in New York City, Levitz Furniture Inc., nka PVLTZ Inc. -- http://www.levitz.com/-- is a specialty retailer of furniture, bedding and home furnishings in the United States. It has 76 locations in major metropolitan areas, principally in the Northeast and on the West Coast of the United States. Levitz Furniture Inc. and 11 affiliates filed for chapter 11 on Sept. 5, 1997. In December 2000, the Court confirmed the Debtors' Plan and Levitz emerged from chapter 11 on February 2001. Levitz Home Furnishings Inc. was created as the new holding company as a result of the emergence. Levitz Home Furnishings and 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 45189). In their second filing, the Debtors disclosed about $245 million in total assets and $456 million in total debts. Nicholas M. Miller, Esq., and Richard H. Engman, Esq., at Jones Day represented the Debtors. Jeffrey L. Cohen, Esq., Jay R. Indyke, Esq., and Cathy Hershcopf, Esq., at Cooley Godward Kronish LLP served as counsel to the Official Committee of Unsecured Creditors. During this period, the Debtors closed around 35 stores in the Northeast, California, Minnesota and Arizona. PLVTZ Inc., a company created by Prentice Capital Management LP, and Great American Group purchased substantially all the assets of Levitz Home Furnishings in December 2005. Initially, Prentice owned all of the equity interests in PLVTZ. On July 6, 2007, PLVTZ was converted into a Delaware corporation, and Harbinger Capital Partners Special Situations Fund, LP, Harbinger Capital Partners Master Fund I, Ltd., and their affiliates became minority shareholders. Great American's stake in the acquisition was in running the going-out-of-business sales for some 27 Levitz units. PLVTZ, dba Levitz Furniture, continued to face decline in financial performance since December 2005. Liquidity issues and the inability to obtain additional capital prompted PLVTZ to seek protection under chapter 11 on Nov. 8, 2007 (Bankr. S.D.N.Y. Lead Case No. 07-13532). Paul D. Leake, Esq., and Brad B. Erens, Esq., at Jones Day represents the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. The Debtor's schedules show total assets of $123,842,190 and total liabilities of $76,421,661. The Debtors' exclusive period to file a chapter 11 plan expired on March 7, 2008. On March 28, 2008, the Court dismissed the chapter 11 cases of Levitz II (Levitz Home Furnishings Inc., and its remaining six debtor-affiliates). (Levitz Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). LEXINGTON PRECISION: W.Y. Campbell Approved as Financial Advisor ---------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York authorized Lexington Precision Corp. and its debtor- affiliates to employ W.Y. Campbell & Company as their financial advisor. As reported in the Troubled Company Reporter on May 21, 2008, as the Debtors' financial advisor, W.Y. Campbell is expected to: a) identify, review, evaluate and initiate potential financing transactions or other transactions to the extent deemed desirable by the Debtors; b) review and analyze the assets and the operating and financial strategies of the Debtors to the extent the firm deems necessary, appropriate and feasible, or as the Debtors may request; c) assist in the definition of objectives related to value and terms of a financing or transaction; d) assist in identification of the Debtors' proprietary attributes; e) identify and solicit appropriate financing or transaction parties; f) prepare and distribute confidentiality agreements and appropriate materials -- to include placement or offering memorandums, management presentations, and other documentation as may be required or appropriate; g) the initiation of discussions and negotiations with prospective financing or transaction parties; h) assist the Debtors and its other professionals in reviewing and evaluating the terms of any proposed transaction, financing or other transaction, in responding thereto and, if directed, in developing and evaluating alternative proposals for a financing, transaction or other transaction; i) review and analyze any proposals the Debtors receives from third parties in connection with a transaction, financing or other transaction; j) assist and participate in negotiations with the parties in interest in connection with a transaction, financing or other transaction; k) advise and attend meetings of the Debtors' Board of Directors, creditor groups, official constituencies and other interested parties, as the Debtors determines to be necessary or desirable; l) participate, if requested, in hearings before this Court or any other court as the Debtors may request and provide relevant testimony with respect to the matters described herein and issues arising with respect thereto in connection with any proposed chapter 11 plan; m) assist the Debtors' internal and external counsel to enable such counsel to provide legal advice to the Debtors, as contemplated under the engagement letter, dated April 1, 2008; and n) render such other financial advisory and investment banking services as may be reasonably requested by the Debtors in connection with any of the foregoing. The Debtors will pay a host of fees to the firm -- including a $50,000 monthly cash advisory fee and a $650,000 exit fee upon the Debtors' successful exit from Chapter 11. Andre A. Augier, a managing director of the firm, assured the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Lexington Precision Based in New York, Lexington Precision Corp. -- http://www.lexingtonprecision.com/-- manufacture tight-tolerance rubber and metal components for use in medical, automotive, and industrial applications. As of Feb. 29, 2008, the companies employed about 651 regular and 22 temporary personel. The company and its affiliate, Lexington Rubber Group Inc., filed for Chapter 11 protection on April 1, 2008 (Bankr. S.D.N.Y. Lead Case No.08-11153). Richard P. Krasnow, Esq., at Weil, Gotshal & Manges, represents the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims agent. The U.S. Trustee for Region 2 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. When the Debtors filed for protection against their creditors, they listed total assets of $52,730,000 and total debts of $88,705,000. LEXINGTON PRECISION: Can File Schedules & Statements Until June 30 ------------------------------------------------------------------ The United States Bankruptcy Court for the Southern District of New York extended until June 30, 2008, the deadline for Lexington Precision Corp. and its debtor-affiliates to file schedules of assets and liabilities, and statement of financial affairs. The Debtors' finance department is presently in the process of preparing the Debtors' annual and quarterly reports -- including proxy statement regarding with their annual shareholders meeting -- to be filed with the Securities and Exchange Commission. The Debtors say they need additional time to review the prepared schedules and statements, which they intent to file with the Court by May 31, 2008, on Saturday. About Lexington Precision Based in New York, Lexington Precision Corp. -- http://www.lexingtonprecision.com/-- manufacture tight-tolerance rubber and metal components for use in medical, automotive, and industrial applications. As of Feb. 29, 2008, the companies employed about 651 regular and 22 temporary personel. The company and its affiliate, Lexington Rubber Group Inc., filed for Chapter 11 protection on April 1, 2008 (Bankr. S.D.N.Y. Lead Case No.08-11153). Richard P. Krasnow, Esq., at Weil, Gotshal & Manges, represents the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims agent. The U.S. Trustee for Region 2 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. When the Debtors filed for protection against their creditors, they listed total assets of $52,730,000 and total debts of $88,705,000. MCDERMOTT INT'L: S&P Lifts Rating to BB+ on Strong Performance -------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on engineering and construction company McDermott International Inc. and its subsidiaries J. Ray McDermott S.A. and The Babcock & Wilcox Companies to 'BB+' from 'BB'. The outlook is positive. At the same time, S&P affirmed the '1' recovery rating on B&W's $400 million senior secured credit facilities, indicating its expectation for very high (90% to 100%) recovery in the event of a payment default. S&P also affirmed the '3' recovery rating on J. Ray's $800 million senior secured credit facilities, indicating its expectation for meaningful (50% to 70%) recovery in the event of a payment default. S&P raised the issue rating on B&W's bank debt to 'BBB' and on J. Ray's bank debt to 'BB+'. "The ratings upgrades were driven by McDermott's strong operating performance in 2007, impressive backlog across all three of its business units, and conservative financial leverage," said Standard & Poor's credit analyst David Lundberg. "In addition, we have increased confidence in the company's ability to manage the risk inherent in its fixed-price contract bids." The rating on Houston-based McDermott reflects a consolidated rating methodology for McDermott and its subsidiaries. McDermott's business risk profile is considered weak. The highly cyclical and competitive marine construction business at J. Ray is partially offset by the more stable businesses at B&W and BWXT. B&W primarily constructs boilers and environmental equipment for coal-fired power plants. BWXT provides nuclear components for the U.S. government and manages several sites for the U.S. Department of Energy. MERITAGE NET: Fitch Trims Ratings on Two Note Classes to 'C/DR6' ---------------------------------------------------------------- Fitch Ratings has downgraded these classes of Meritage Net Interest Margin Notes: Meritage CI-4 NIM Notes, Series 2005-2 -- $1.9 million class N1 to 'C/DR6' from 'BB'; -- $3.3 million class N2 to 'C/DR6' from 'B'. Underlying Transaction: Meritage Mortgage Loan Trust 2005-2 The rating actions reflect actual pay-down performance of the NIM securities to date compared to initial projections, as well as changes that Fitch previously made to its subprime loss forecasting assumptions for the underlying transactions. MERIT SECURITIES: Fitch Affirms 'B' Rating on $20MM Cl. B-3 Certs. ------------------------------------------------------------------ Fitch has taken these rating actions on three Merit Securities Corp. mortgage pass-through certificates: Series 11 -- $98.3 million class 3-A1 affirmed at 'AA'; -- $11.1 million class B-2 affirmed at 'BBB'; -- $20 million class B-3 affirmed at 'B'. Deal Summary -- Originators: Dynex Financial, various others; -- 60+ day Delinquency: 1.82%; -- Realized Losses to date (% of Original Balance): 3.68%. MESA AIR: Wins Injunction Against Delta's Plan to End Contract -------------------------------------------------------------- Mesa Air Group, Inc. won on May 29 a preliminary injunction from the United States District Court for the Northern District of Georgia in Atlanta, enjoining Delta Air Lines from terminating its Connection Agreement with the Company, and the Company's wholly- owned subsidiary, Freedom Airlines, Inc. On March 28, 2008, Delta notified the Company of its intent to terminate the Connection Agreement. The Connection Agreement includes, among other arrangements, the Company's agreement to operate 34 model ERJ-145 regional jets leased by the Company utilizing Delta's name. In fiscal 2007, the Connection Agreement accounted for approximately 20% of the Company's 2007 total revenues. Delta sought to terminate the Connection Agreement as a result of Freedom's alleged failure to maintain a specified completion rate with respect to its ERJ-145 Delta Connection flights during three months of the six-month period ended February 2008. On April 7, 2008, the Company filed a lawsuit against Delta alleging breach of the Connection Agreement and seeking specific performance by Delta of its obligations thereunder. On May 9, 2008, the Company filed a motion for a preliminary injunction in the District Court against Delta to prevent its wrongful termination of the Delta Connection Agreement. The hearing for this matter commenced on May 27, 2008 and ended on May 29 following the District Court's ruling in favor of the Company. Mesa Air Group had warned in a regulatory filing it may have to seek bankruptcy protection if Delta Air successfully terminated their Connection Agreement. As reported by the Troubled Company Reporter on May 23, 2008, Mesa warned that if Delta is successful in terminating the Connection Agreement, the Company believes it will be unable to redeploy the 34 ERJ-145 aircraft in a timely manner, or at the lease rates the Company receives under the Connection Agreement in the event of any redeployment of such aircraft. In addition to losing approximately $20 million per month in revenue (or approximately $960 million over the next four years), the Company estimated that leasing costs, labor and other costs totaling approximately $250 to $300 million over the next four years would be incurred by the Company. As a result, the Company warned, its cash flows from operations and its available working capital would be insufficient to meet these cash requirements, including its obligations under the Lease Agreements, which will result in defaults thereunder. In the absence of obtaining additional capital through equity or debt financings, asset sales, consensual restructuring of debt and lease terms or similar measures, the Company had warned it will be unable to remedy such defaults and will experience additional defaults in the future. Any such defaults would then trigger other defaults under other existing agreements, which would be material to the operational cash flows of the Company. On May 14, 2008, Air Midwest, Inc., a wholly owned subsidiary of Mesa Air, unveiled plans to discontinue all operations by June 30 including its current scheduled services, citing record-high fuel prices, insufficient demand and a difficult operating environment as the main factors in its decision. About Mesa Air Mesa Air -- http://www.mesa-air.com-- operates 182 aircraft with over 1,000 daily system departures to 157 cities, 42 states, the District of Columbia, Canada, the Bahamas and Mexico. Mesa operates as Delta Connection, US Airways Express and United Express under contractual agreements with Delta Air Lines, US Airways and United Airlines, and independently as Mesa Airlines and go!. In June 2006 Mesa launched inter-island Hawaiian service as go! This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company, founded by Larry and Janie Risley in New Mexico in 1982, has approximately 5,000 employees and was awarded Regional Airline of the Year by Air Transport World magazine in 1992 and 2005. Mesa is a member of the Regional Airline Association and Regional Aviation Partners. Mesa has 5,000 employees overall. Freedom Airlines currently operates 34 50-seat ERJ-145 and 7 76- seat CRJ-900 aircraft for Delta Connection. MESA AIR: Noteholders Won't Demand Notes Buyback by June -------------------------------------------------------- Holders of approximately $23.2 million of notes issued by Mesa Air Group Inc. have agreed to forbear from exercising their right to require the Company to repurchase their notes on June 16, 2008. On May 22, 2008, Mesa Air received a notice of default from U.S. Bank National Association indicating that the Company is in default under the terms of its Indenture dated as of June 16, 2003, with US Bank, as trustee, relating to the Company's Senior Convertible Notes due 2023, for failure to deliver certain notices and related materials to US Bank and holders of the notes. Under the terms of the Indenture, the Company's failure to give the Required Notice is not an event of default until the Company receives notice from the Trustee regarding the default and the Company fails to cure such default within 60 days after actual receipt of the Notice (i.e., by July 21, 2008). The Company intends to cure the default within such cure period. Accordingly, as of May 29, there has not been can an increase or acceleration of a direct financial obligation and the Company does not expect that any direct financial obligation will increase or accelerate as a result of the failure to deliver the Required Notice. Approximately $30.1 million in aggregate principal amount of notes are currently outstanding. As of May 29, the holders agreed to forbear from exercising their right to require the Company to repurchase the notes. About Mesa Air Mesa Air -- http://www.mesa-air.com-- operates 182 aircraft with over 1,000 daily system departures to 157 cities, 42 states, the District of Columbia, Canada, the Bahamas and Mexico. Mesa operates as Delta Connection, US Airways Express and United Express under contractual agreements with Delta Air Lines, US Airways and United Airlines, and independently as Mesa Airlines and go!. In June 2006 Mesa launched inter-island Hawaiian service as go! This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company, founded by Larry and Janie Risley in New Mexico in 1982, has approximately 5,000 employees and was awarded Regional Airline of the Year by Air Transport World magazine in 1992 and 2005. Mesa is a member of the Regional Airline Association and Regional Aviation Partners. Mesa has 5,000 employees overall. Freedom Airlines currently operates 34 50-seat ERJ-145 and 7 76- seat CRJ-900 aircraft for Delta Connection. MESA AIR: To File 10-Q on June 2 in Compliance with Nasdaq Rules ---------------------------------------------------------------- Mesa Air Group Inc. intends to file its Form 10-Q by June 2, 2008, which is before a hearing to determine whether the company's stock will continue to be listed in Nasdaq. On May 22, 2008, the Company received a Nasdaq Staff Determination letter indicating that the Company fails to comply with the filing requirements for continued listing set forth in Marketplace Rule 4310(c)(14), and that its securities are, therefore, subject to delisting from The Nasdaq Global Select Market. The Company intends to request a hearing before a Nasdaq Listing Qualifications Panel to review the Staff Determination. There can be no assurance the Panel will grant the Company's request for continued listing. The Notice arises as a result of the Company's failure to timely file its Form 10-Q for the quarter ended March 31, 2008. On May 13, 2008, the Company filed a notice with the Securities and Exchange Commission indicating that it was delaying the filing of its Form 10-Q until on or about May 20, 2008. The Company intends to file its Form 10-Q on or about June 2, 2008, which will precede its hearing before a Nasdaq Listing Qualifications Panel. About Mesa Air Mesa Air -- http://www.mesa-air.com-- operates 182 aircraft with over 1,000 daily system departures to 157 cities, 42 states, the District of Columbia, Canada, the Bahamas and Mexico. Mesa operates as Delta Connection, US Airways Express and United Express under contractual agreements with Delta Air Lines, US Airways and United Airlines, and independently as Mesa Airlines and go!. In June 2006 Mesa launched inter-island Hawaiian service as go! This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company, founded by Larry and Janie Risley in New Mexico in 1982, has approximately 5,000 employees and was awarded Regional Airline of the Year by Air Transport World magazine in 1992 and 2005. Mesa is a member of the Regional Airline Association and Regional Aviation Partners. Mesa has 5,000 employees overall. Freedom Airlines currently operates 34 50-seat ERJ-145 and 7 76- seat CRJ-900 aircraft for Delta Connection. NEW CENTURY ENERGY: March 31 Balance Sheet Upside-Down by $23.4MM ----------------------------------------------------------------- New Century Energy Corp.'s consolidated balance sheet at March 31, 2008, showed $51,901,717 in total assets and $75,326,678 in total liabilities, resulting in a $23,424,961 total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $10,339,496 in total current assets available to pay $32,379,636 in total current liabilities. The company reported a net loss of $562,701, on total revenues of $5,954,762, for the first quarter ended March 31, 2008, compared with a net loss of $2,156,065, on total revenues of $2,976,617, in the same period last year. Oil sales increased to $4,917,883 for the first quarter of 2008 compared to $1,999,835 in the same quarter of 2007 due to significant increases in production and average selling prices of oil. Gas sales increased to $1,030,579 for the first quarter of 2008 compared to $967,265 in the same quarter of 2007. The most significant component of the improved financial results was the increase in both the production and the sales price of oil from the Mustang Creek Field area in McMullen County, Texas, for the first three months of 2008 compared with the first three months of 2007. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2cdf Going Concern Disclaimer PMB Helin Donovan, LLP, in Houston, expressed substantial doubt about New Century Energy 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 pointed to the company's recurring operating losses, accumulated deficit and working capital deficit at Dec. 31, 2007. The company disclosed in its Form 10-Q for the quarter ended March 31, 2008, that it is uncertain that it will be successful in meeting its working capital requirements through the end of 2008, including the successful negotiation of a refinancing of both its $11,050,000 balloon payment under the $15,000,000 Secured Convertible Term Note, due June 30, 2008, and the $6,400,000 balloon payment under the $9,500,000 Secured Term Note, due July 1, 2008. About New Century Energy Headquartered in Houston, New Century Energy Corp. (OTC BB : NCEY) -- http://www.newcenturyenergy.com/-- is an independent energy company engaged in oil and gas exploration, development and production. New Century Energy Corp. currently owns oil and gas leases on over 20,000 gross acres throughout the State of Texas; including oil producing acreage in McMullen, Wharton, and Jim Hogg Counties, Texas. The company also owns natural gas producing fields which include the operated South Sargent Field in Matagorda County, and non-operated interests in the Wishbone Field in McMullen County, Texas. NEW CENTURY: Want Until June 24 to Solicit Plan Acceptances ----------------------------------------------------------- The New Century Financial Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend the period during which they have the exclusive right to solicit acceptances of their Chapter 11 plan, through and including June 24, 2008. As previously reported in the Troubled Company Reporter, the Debtors and the Official Committee of Unsecured Creditors filed a Joint Chapter 11 Plan of Liquidation for the Debtors. They have solicited votes on the Plan and have presented the Plan to the Court for confirmation. Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, tells the Court that the Debtors ask for an extension out of an abundance of caution, as they are hopeful that the Plan will be confirmed prior to June 24, the hearing date of the request, and thereby rendering the extension request as moot. Mr. Collins notes the proposed 34-day extension, if granted, will result in an extension of a total of not more than nine months, less than the extension granted by courts in large reorganization cases. He adds that although the Debtors' cases were filed prior to the amendments under the Bankruptcy Code Abuse Prevention and Consumer Protection Act, the extension requested is within the respective 18 and 20 months exclusive period limits now set forth in Sections 1121(d)(1)(2)(A) and (B) of the Bankruptcy Code. About New Century Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Debtors' exclusive period to file a plan expired on Jan. 28, 2008. (New Century Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). NORTHWEST AIRLINES: Delta Merger Likely to be Approved ------------------------------------------------------ The Delta Air Lines Inc. and Northwest Airlines Corp. consolidation is likely to be approved by the U.S. government, Rep. John Mica, a Florida Republican, told Reuters. Rep. Mica, former chairman of the House of Representatives aviation subcommittee, said in a congressional hearing to consider approval of the merger that the transaction to create the world's biggest airline didn't seem to be anti-competitive, Reuters said. Antitrust and industry experts have previously said the Northwest-Delta proposal stood a good chance of winning regulatory approval. According to the paper, the merger proposal has met little or no resistance in Congress, which cannot block a consolidation, anyway. However, Reuters pointed out that lawmakers can "disrupt the timing of the regulatory review, influence policymakers and rally consumers and workers." In his opening statement at the hearing, current Aviation Committee Chairman Rep. James Oberstar said that the tie-up is expected to have wide ramifications in the airline industry in general, CNNMoney.com reported. "This should not be and must not be considered as a standalone, individual transaction but rather as the trigger of what will surely be a cascade of subsequent mergers that will consolidate aviation in the United States and around the world into global, mega carriers," CNNMoney.com quoted Rep. Oberstar, as saying. Rep. Oberstar is of the opinion that the Northwest-Delta merger would deter competition at major hubs, which would result in increased fares, CNNMoney.com stated. Meanwhile, Northwest CEO Doug Steenland and Delta CEO Richard Anderson testified that the merger would in fact, encourage competition because the airlines focus on serving different regions. Northwest's forte are in the Midwest, and internationally, in Asia; while, Delta's strengths are in the East and the "mountain" West; and internationally, Europe and Latin America. "We think it's procompetitive," Mr. Anderson told CNNMoney.com. "It's good for small communities and it will be good for our employees." Combined, Delta and Northwest expect to have an aggregate of more than $35,000,000 in annual revenues, operate a mainline fleet of nearly 800 aircraft, hire approximately 75,000 employees worldwide, and with expected liquidity of nearly $7,000,000 at closing, the CEOs disclosed, according to The Associated Press. Under Delta's agreement with Northwest to combine in an all-stock transaction, the new Company will be named Delta and headquartered in Atlanta, Georgia. It will offer expanded customer access to more than 390 destinations in 67 countries, Messrs. Steenland and Anderson disclosed. Both CEOs also assured that they will not be closing any hubs after the merger, nor eliminate any frontline positions, CNNMoney.com said. Nevertheless, Messrs. Steenland and Anderson told lawmakers that under the merged company, no more than an estimated 1,000 corporate positions will be eliminated. The CEOs said they would provide legislators "a formal estimate" within 60 days, according to various reports. The planned Delta and Northwest merger is expected to be completed later this year, subject to the approval of Delta and Northwest shareholders and state regulators, news reports say. The Detroit News, however, notes that a final ruling -- most likely an approval of the merger from federal regulators -- is expected within six months. Seniority Issues Remain Afloat Northwest's pilot union leaders told its members in an internal memo that negotiators from Delta and Northwest were scheduled to meet this week in Washington "to begin a renewed effort to achieve a joint contract," according to The Associated Press. However, the meeting was not expected to address seniority list integration, the AP said. Seniority is critical for pilots in determining choices on vacations, the best routes, and bigger planes to fly. It also sets pilots' compensation. About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News, Issue No. 97; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). About Northwest Airlines Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents, including Italy, Spain, Japan, China, Venezuela and Argentina. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On Jan. 12, 2007 the Debtors filed with the Court their Chapter 11 Plan. On Feb. 15, 2007, they Debtors filed an Amended Plan & Disclosure Statement. The Court approved the adequacy of the Debtors' Disclosure Statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' Plan. The Plan took effect May 31, 2007. (Northwest Airlines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on April 17, 2008, Moody's Investors Service placed the debt ratings of Delta Air Lines, Inc. ("Delta", corporate family at B2) and Northwest Airlines Corporation ("Northwest", corporate family rating at B1) on review for possible downgrade. The review was prompted by the announcement that the two airlines have agreed to combine in an all-stock transaction with a combined enterprise value of approximately $18 billion. Fitch Ratings has affirmed the debt ratings of Delta Air Lines, Inc. following the announcement that Delta has agreed to merge with Northwest Airlines Corp., subject to approval by the two airlines' shareholders and the U.S. Department of Justice. Delta's ratings were affirmed as: Issuer Default Rating at 'B'; First-lien senior secured credit facilities at 'BB/RR1'; Second- lien secured credit facility (Term Loan B) at 'B/RR4'. The issue ratings apply to $2.5 billion of committed credit facilities. The Rating Outlook for Delta has been revised to Negative from Stable. Standard & Poor's Ratings Services placed its ratings, including the 'B+' long-term corporate credit rating, on Northwest Airlines Corp. on CreditWatch with negative implications, following announcement of a merger agreement with Delta Air Lines Inc. (B/Watch Pos/--). The CreditWatch listing affects enhanced equipment trust certificates with various ratings, excepting those that are insured by a bond insurer. S&P's listing of Northwest ratings on CreditWatch with negative implications and those of Delta on CreditWatch with positive implications implies that S&P foresee a corporate credit rating of either 'B' or 'B+' for the combined entity. NPC INTERNATIONAL: S&P Chips Corp. Credit Rating to B from B+ ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on NPC International Inc., including the corporate credit rating to 'B' from 'B+'. S&P also lowered the rating on the Pittsburgh, Kansas- based company's senior secured credit facility one notch to 'B+' from 'BB-' and the rating on its subordinated notes one notch to 'CCC+' from 'B-'. "The downgrade reflects the impact of higher costs and a difficult consumer environment on the company's credit metrics in the future," said Standard & Poor's credit analyst Charles Pinson- Rose. Over the past two years, NPC has largely maintained steady profitability and credit metrics. However, sales have increased considerably as a result of acquired restaurants and higher comparable-store sales, while operating margins have contracted. In the next few quarters, the company may have meaningful sales increases from restaurants purchased last year. "However, Standard & Poor's expects that margin declines from higher commodity and labor costs will negate any sales gains from acquired stores' profitability," added Mr. Pinson-Rose, "and credit metrics, already weak for the 'B+' rating category, will likely worsen." NUCO2 FUNDING: Fitch Assigns 'BB' Rating on $75MM Class B-1 Notes ----------------------------------------------------------------- Fitch Ratings has assigned these rating to the NuCO2 Funding LLC, Series 2008-1 notes: -- $75,000,000 Class B-1 'BB'. The notes will be repaid by cash flows generated by substantially all of NuCO2, Inc.'s business activities, which are primarily the leasing of bulk carbon dioxide systems and the distribution of carbon dioxide to quick service restaurants and other retailers of fountain beverages in the United States. The preliminary rating on the class B-1 notes addresses the ultimate payment of interest and the ultimate payment of principal by the legal final maturity. Proceeds from the notes issuance are expected to be used by an affiliate of Aurora Capital Group to partially finance its acquisition of NuCO. OPTION ONE: Fitch Slashes Ratings on Two Note Classes to 'C/DR6' ---------------------------------------------------------------- Fitch Ratings has taken rating actions on 4 Option One Net Interest Margin Notes: Option One Mortgage Securities Corp. NIM Trust 2005-1 -- $2.5 million Class notes affirmed at 'AAA'; Underlying Transaction: Option One 2005-1 Option One CI 4 NIM Notes, Series 2005-3 -- $3.4 million Class N-1 notes downgraded to 'C/DR6' from 'BBB+'; -- $4.0 million Class N-2 notes downgraded to 'C/DR6' from 'BBB-'; Underlying Transaction: Option One 2005-3 Option One Mortgage Securities Corp. NIM Trust 2006-1 -- $34.2 million Class notes affirmed at 'AAA'; Underlying Transaction: Option One 2005-4 Option One Mortgage Securities Corp. NIM Trust 2007-FXD1 Notes -- $5.0 million Class notes affirmed at 'AAA'; Underlying Transaction: Option One Mortgage Loan Trust 2007- FXD1 The rating actions reflect actual pay-down performance of the NIM securities to date compared to initial projections, as well as, changes that Fitch previously made to its subprime loss forecasting assumptions for the underlying transactions. PACIFIC LUMBER: Scopac Says Ch. 11 Trustee Adds Burden to Estate ---------------------------------------------------------------- Scotia Pacific Company LLC tells the U.S. Bankrutpcy Court for the Southern District of Texas that the request made by The Bank of New York, as Indenture Trustee for the Timber Notes, to appoint a Chapter 11 trustee is reserved for extreme circumstances and would only impose undue burdens and expenses on Scopac's estate. Scopac asks the Court to deny BoNY's request. There is no cause justifying the appointment of a Chapter 11 trustee for Scopac, Kathryn A. Coleman, Esq., at Gibson, Dunn & Crutcher LLP, in New York, Scopac's counsel, argues. Such an extraordinary action would not be in the best interests of creditors, other parties-in-interest or its estate, she states. The mere possibility of inter-debtor disputes or other conflicts is not evidence of gross mismanagement, breach of fiduciary duties, undue influence or manipulation, Ms. Coleman tells Judge Richard Schmidt. On the contrary, she notes, Scopac has gone to great lengths to formalize its separate and independent operations, by, among other things, implementing procedural safeguards in order to protect against conflicts of interest. "The effectiveness of those safeguards was highlighted recently, when Scopac discharged its fiduciary duty to its creditors by refusing to support a Chapter 11 Plan of Reorganization that benefited The Pacific Lumber Company but undervalued Scopac's assets." Moreover, some of BoNY's complaints have been mooted by the recent resignations of Scopac's chief executive officer, chief financial officer and vice president of finance, and sole non-independent member of its board of managers, Ms. Coleman notes. The suggestion that a trustee's appointment would benefit Scopac's estate at a time when the Confirmation Hearing regarding competing Chapter 11 Plans is nearing completion is disingenuous as well as unfounded, Ms. Coleman contends. As reported in the Troubled Company Reporter on Jan. 17, 2008, Toby L. Gerber, Esq., at Fulbright and Jaworski L.L.P., in Houston, Texas, on the Indenture Trustee's behalf, contended that that the persons entrusted with managing the business and financial affairs of Scopac have abdicated their independent control of Scopac, have failed to preserve the corporate independence of Scopac, and have engaged in financial and business activities which have caused substantial harm to the Scopac estate and its creditors. In a TCR report on Feb. 1, Scopac pointed out that the Indenture Trustee's request for the appointment of a Chapter 11 trustee was merely the latest salvo in the Timber Noteholders' campaign to take over Scopac's timberlands. Scopac said the timing of the Trustee Motion at that time was impracticable as the hearing for the request was only one week before the beginning of the joint disclosure statement hearing on all competing plans of reorganization, and five weeks before the scheduled beginning of the confirmation hearing. Ms. Coleman argued at that time the appointment of a trustee for Scopac would give the Noteholders an advantage, because having to respond to "the lengthy Motion" will, in itself, skew the process and significantly disadvantage Scopac. She also pointed out the Trustee Motion merely attempts to re-litigate half a dozen issues the Noteholders lost in the Debtors' Chapter 11 cases in the closing months of 2007. About Pacific Lumber Based in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. Kyung S. Lee, Esq., Esq., at Diamond McCarthy LLP is Scotia Pacific's co-counsel, replacing Porter & Hedges LLP. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors filed their Joint Plan of Reorganization on Sept. 30, 2007, which was amended on Dec. 20, 2007. Four other parties-in- interest have filed competing plans for the Debtors -- The Bank of New York Trust Company, N.A., as Indenture Trustee for the Timber Notes; the Official Committee of Unsecured Creditors; Marathon Structured Finance Fund L.P, the Debtors' DIP Lender and Agent under the DIP Credit Facility; and the Heartlands Commission, which represents the tribal members of the Bear River Band of Rohnerville Rancheria and PALCO employees. The Debtors' exclusive plan filing period expired on Feb. 29, 2008. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 60; http://bankrupt.com/newsstand/or 215/945-7000). PACIFIC LUMBER: Says Sierra Pacific's Bid Irrelevant in Case ------------------------------------------------------------ The Pacific Lumber Company; Marathon Structured Finance Fund L.P., the Debtors' DIP Agent; Mendocino Redwood Company, LLC; and the Official Committee of Unsecured Creditors contend that Sierra Pacific Industries' offer to purchase the Debtors' operating mill assets is not relevant to any issue before the U.S. Bankruptcy Court for the Southern District of Texas. The Parties note that PALCO does not have a Plan on file, and even assuming that PALCO desired to accept the offer, obvious obstacles are involved, including: (i) any attempt to accept an offer would require either a new plan or a re-solicitation; (ii) the consent of Marathon is needed, which is not likely to be obtained; and (iii) Marathon would be required to finance sale of the PALCO mill by reduction of the purchase price for all losses occurring prior to the sale. A.A. Emmerson, president of Sierra Pacific Industries, has made a written offer to purchase the operating mill assets. According to Mr. Emmerson, Sierra Pacific expects to invest more than $70 million to purchase, remodel, construct and transform the Scotia mill into a regional milling operation. Under the terms of the Sierra Pacific Term Sheet, the new milling facility will feature separate small log and large log mills designed to cut redwood, Douglas fir, and whitewoods with increased cutting accuracy, increased volume per minute, and more versatility. Sierra Pacific's investment includes a purchase price of $27.5 million for designated assets of PALCO, plus payment for its raw material, in-process and finished inventories and existing accounts receivable, plus the cost of remodeling PALCO's existing facilities. "Sierra Pacific's proposal is not conditioned on any financing," Mr. Emmerson clarified. Contingencies will be limited to title and environmental due diligence, execution of a mutually acceptable log supply agreement with a designated plan agent under the Plan of Reorganization proposed by The Bank of New York Trust Company, N.A., for Scotia Pacific Company. Mr. Emmerson told the Court that the Term Sheet was negotiated at arm's-length with BoNY, and that Sierra Pacific is a willing buyer acting under no compulsion to purchase. As reported by the Troubled Company Reporter on May 16, Bank of New York, as Indenture Trustee for the Timber Notes, informed the Court of Sierra Pacific's offer. Representing BoNY, Zack A. Clement, Esq., at Fulbright & Jaworski LLP, in Houston, Texas, Marathon Structured Finance Fund L.P's security interest in the town of Scotia, which was proposed to be abandoned to Marathon under the Marathon/Mendocino Plan, will be enhanced in value by the increased mill operations and employment in Scotia that will result from the consummation of the transactions contemplated by the Sierra Pacific Term Sheet. About Pacific Lumber Based in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. Kyung S. Lee, Esq., Esq., at Diamond McCarthy LLP is Scotia Pacific's co-counsel, replacing Porter & Hedges LLP. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors filed their Joint Plan of Reorganization on Sept. 30, 2007, which was amended on Dec. 20, 2007. Four other parties-in- interest have filed competing plans for the Debtors -- The Bank of New York Trust Company, N.A., as Indenture Trustee for the Timber Notes; the Official Committee of Unsecured Creditors; Marathon Structured Finance Fund L.P, the Debtors' DIP Lender and Agent under the DIP Credit Facility; and the Heartlands Commission, which represents the tribal members of the Bear River Band of Rohnerville Rancheria and PALCO employees. The Debtors' exclusive plan filing period expired on Feb. 29, 2008. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 60; http://bankrupt.com/newsstand/or 215/945-7000). PACIFICNET INC: Terminates Deal to Acquire Octavian International ----------------------------------------------------------------- PacificNet Inc. terminated the agreement to acquire Octavian International Limited as a result of Ziria Enterprises Limited's failure to deliver the share certificates of Emperor Holdings Limited, the legal owner of Octavian International Limited, which was a condition to closing the acquisition of Octavian. The deal was entered among Ziria, PacificNet Games International Corporation, Octavian and Emperor Holdings Limited. Under the acquisition agreement, if the transaction had been consummated, PacificNet was obligated to issue, in the aggregate, 2,330,000 restricted shares of PACT representing approximately 19.5% of PacificNet's outstanding shares and cash of up to $18,900,000, which would have been paid upon the completion of certain net profit performance targets. All parties involved have agreed not to complete the merger but will remain distribution partners of complimentary products in each others respective markets. As a result of the failure of the Octavian acquisition to be consummated and the termination of the acquisition agreement, on May 21, 2008, Harmen Brenninkmeijer, chief executive officer of Octavian, resigned as a member of the board of directors of PacificNet. It was a condition to the closing of the acquisition of Octavian that Mr. Brenninkmeijer be appointed to the board of directors. There was no disagreement between Mr. Brenninkmeijer and PacificNet on any matter relating to PacificNet's operations, policies or practices. Earnings Results The company will release its un-audited fourth quarter and audited full year 2007 earnings results on or before June 9, 2008. The company intends to release its 2008 first quarter earnings on or before June 23, 2008. Securities Delisting On May 21, 2008, the company received a letter from The NASDAQ Stock Market that it has not received the company's Form 10-Q for the period ended March 31, 2008, as required by Marketplace Rule 4310(c)(14). This serves as an additional basis for delisting the company's securities from The NASDAQ Stock Market and will be considered by the NASDAQ Listing Qualifications Panel in rendering a determination regarding the Company's continued listing on The NASDAQ Global Market. NASDAQ Marketplace Rule 4310(c)(14) requires the company to file all required reports with NASDAQ on or before the date they are required to be filed with the Securities and Exchange Commission. The company may present its views with respect to this additional deficiency at its Panel hearing scheduled for June 12, 2008. In the event the company fails to address the deficiency reflected in the Deficiency Letter, the Panel will consider the record as presented at the hearing and will make its determination with respect to continued listing of the company's securities based upon that information. There can be no assurance that the Panel will grant the company's request for continued listing. About PacificNet Inc. Headquartered in Beijing, China, PacificNet Inc., (NasdaqGM: PACT) -- http://www.pacificnet.com-- provides gaming and mobile game technology worldwide. The company, through its subsidiaries, offers solutions in casino equipment supply; and the development, installation, and support of systems and game content for the casino, lottery, and amusement with prizes (AWP) markets. The company was founded in 1987 and has additional offices in Hong Kong, Shanghai, Shenzhen, Guangzhou, Macau, and Zhuhai, China; the United States; and the Philippines. Iroquois Master Fund Ltd., Whalehaven Capital Fund Ltd. and Alpha Capital AG filed for involuntary Chapter 11 petition against the Debtor on March 22, 2008, (Bank. D. Del. Case No. 08-10528.) Adam Friedman, Esq. at Olshan Grundman, et al. and Robert S. Brady, Esq. and Ian S. Fredericks, Esq. at Young Conaway, et al. represent the petitioners in this case. * * * As reported in the Troubled Company Reporter on March 19, 2008, Los Angeles-based Kabani & Company Inc., raised substantial doubt about the ability of PacificNet Inc., to continue as a going concern after it audited the company's financial statements, as restated, for the year ended Dec. 31, 2006. The auditor pointed out that the company incurred net losses, had a negative cash flow in operating activities amounting to negative $8,190,000 in the year ended Dec. 31, 2006, and the company's accumulated deficit was $51,090,000 as of Dec. 31, 2006. In addition, the company is in default on its convertible debenture obligation. PATRON SYSTEMS: Judge Brown Dismisses Chapter 11 Case ----------------------------------------------------- The Hon. Elizabeth E. Brown of the United States Bankruptcy Court for the District of Colorado dismissed the Chapter 11 bankruptcy case of Patron Systems Inc. The Debtor said it has no ongoing business to reorganize and no funds available to distribute to unsecured creditors or shareholders. Any further administration of this case will increase administrative expenses, the Debtor said. The Debtor pointed out that the amount of administrative and priority claims surpassed the $49,992 fund received from the closing of the sale in January 2008. Priority claim alone totaled at least $142,217. Headquartered in Boulder, Colorado, Patron Systems Inc. offers integrated enterprises email and data security and enforceable compliances. The company filed for Chapter 11 protection Nov. 14, 2007 (Bankr. D. Col. Case No.07-23228). Jeffrey S. Brinen, Esq., at Kutner Miller Brinen P.C., represents the Debtor. When the Debtor filed for protection against its creditors, it listed assets and debts between $1 million to $100 million. PEOPLE'S CHOICE: Panel Wants Solicitation Period Moved to July 31 ----------------------------------------------------------------- The Official Committee of Unsecured Creditors asks the United States Bankruptcy Court for the Central District of California to extend to July 31, 2008, the period during which the Committee and the Debtors have the exclusive rights to solicit and obtain votes with respect to a Chapter 11 plan. The Court previously extended the Debtors' exclusive solicitation period under Section 1121(c)(3) of the Bankruptcy Code to May 31, except as to the Creditors Committee. The Debtors on March 3, 2008, filed a Liquidating Plan of Reorganization and disclosure statement to the Plan. On May 2, the Creditors Committee obtained approval to become proponent of the Plan after the Debtors' board of directors said they did not provide corporate authority to the Debtors to file the Plan. The hearing to consider confirmation of the Plan is scheduled to commence on July 23, 2008. If the Creditors Committee's request is granted, the extended period would allow for up to a week on trial of the Plan before the exclusivity period would lapse, David L. Wilson, Esq., at Winston & Strawn LLP, in Los Angeles, California, notes. Given the September 15, 2008 deadline for People's Choice Financial Corporation to make a dividend in order to preserve its real estate investment trust status, it is of the utmost importance that the parties focus on confirmation of the Plan -- which would allow PCFC to make the dividend, Mr. Wilson tells the Court. It would be a great distraction from accomplishing this goal if a third party were to file and seek approval of a plan and disclosure statement at this point in the Debtors' proceedings, Mr. Wilson asserts. It is highly unlikely that another plan proponent could meet the September 15, 2008 deadline given the time it would take to formulate an alternative plan, obtain approval of the required disclosure statement, solicit votes, complete a plan confirmation hearing, and allow the effective date to occur under the plan, he adds. The Creditors Committee is not seeking an extension of the Exclusive Solicitation Period in order to extract any improper concessions from creditors, Mr. Wilson assured the Court. The Creditors Committee reserves the right to seek further extensions of the Exclusive Solicitation Period. Mr. Wilson notes the requested extension is within the statutory limits required by the Bankruptcy Code. Section 1121(d)(2)(B) provides that extensions of the Debtors' exclusivity period may only be granted up to 20 months after the Petition Date. A hearing on this matter is set for July 1, 2008. About People's Choice Headquartered in Irvine, California, People's Choice Financial Corp. -- http://www.pchl.com/-- is a residential mortgage banking company, through its subsidiaries, originates, sells, securitizes and services primarily single-family, non-prime, residential mortgage loans. The company and two of its affiliates, People's Choice Home Loan, Inc., and People's Choice Funding, Inc., filed for chapter 11 protection on March 20, 2007 (Bankr. C.D. Calif. Case No. 07-10772). J. Rudy Freeman, Esq., at Pachulski, Stang, Ziehl & Jones, L.L.P., represents the Debtors. Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. In its schedules filed with the Court, People's Choice disclosed total assets of $806,776,901 and total liabilities of $105,772,386. (People's Choice Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). PEOPLES COMMUNITY: Posts $1.1 Million Net Loss in 2008 1st Quarter ------------------------------------------------------------------ Peoples Community Bancorp Inc. reported a net loss of $1.1 million for the first quarter ended March 31, 2008, compared with a net loss of $126,000 in the same period last year. The increase in net loss was primarily due to a $2.9 million, or 42.0%, decrease in net interest income, partially offset by a $521,000, or 66.7%, increase in other income, a decrease in provision for losses on loans of $300,000, a decrease of $515,000, or 9.0%, in general, administrative and other expense and a $520,000 increase in federal income tax benefits. Net Interest Income Net interest income decreased $2.9 million, or 42.0%, to a total of $3.9 million for the three months ended March 31, 2008, compared to $6.8 million in the same period in 2007. The interest rate spread decreased to 1.81% for the three months ended March 31, 2008, from 2.77% for the comparable 2007 period, while the net interest margin decreased to 1.92% for the three months ended March 31, 2008, compared to 2.93% for the same period in 2007. Total interest income decreased to $11.9 million during the three- months ended March 31, 2008, compared to $16.1 million in the same period last year. Interest income on loans decreased $4.4 million, or 29.9%, to $10.3 million during the three-month period ended March 31, 2008, compared to $14.7 million in the 2007 period, due primarily to a $161.6 million, or 19.7%, decrease in the average portfolio balance outstanding, coupled with a 92 basis point decrease in the weighted-average yield, to 6.29% for the 2008 period. The decrease in the average balance was primarily due to loan repayments of $238.9 during the twelve-months, partially offset by loan originations of $130.3 million. The decrease in yield reflects a downward shift in market rates and the corresponding impact on adjustable-rate loans, as well as an increase in non- performing loans during the period. Provision for Losses on Loans Management recorded a provision for losses on loans totaling $1.8 million and $2.1 million for the three-month periods ended March 31, 2008, and 2007, respectively. The company said that the provision recorded during the three-month period ended March 31, 2008, was predicated primarily upon the level of charge-offs in 2008, and the relative credit risk of the loan portfolio. Other Income Other income totaled $1.3 million for the three months ended March 31, 2008, an increase of $521,000, or 66.7%, compared to the $781,000 recorded for the same period in 2007. The increase was primarily due to an increase of $482,000 in gains on sale of securities, an increase of $7,000, or 1.2%, in other operating income, and a $7,000, or 3.9%, increase in income on bank owned life insurance. General, Administrative and Other Expense General, administrative and other expense totaled $5.2 million for the three months ended March 31, 2008, a decrease of $515,000, or 9.0%, compared to the same period in 2007. This decrease resulted primarily from a decrease of $313,000, or 11.4%, in employee compensation and benefits, a decrease of $27,000, or 3.0%, in occupancy and equipment, a decrease of $68,000, or 26.7%, in franchise taxes, a decrease of $69,000, or 15.8%, in amortization of intangibles, and a decrease of $55,000, or 4.9%, in other operating expense, partially offset by an increase of $17,000, or 5.8%, in data processing expense. Federal Income Taxes The company recorded a credit for federal income taxes totaling $657,000 for the three months ended March 31, 2008, compared to a credit of $137,000 for the same period in 2007, primarily due to the fluctuation in losses between the periods. Discussion of Financial Condition Changes from Dec. 31, 2007, to March 31, 2008 At March 31, 2008, the company's assets totaled $871.8 million, a decrease of $15.6 million, or 1.8%, compared to total assets at Dec. 31, 2007. The decrease in assets was primarily due to a decrease in loans receivable of $30.4 million and a decrease of $28.1 million in mortgage-backed securities and other investment securities, which was partially offset by an increase in cash and cash equivalents of $39.4 million. Cash and cash equivalents increased by $39.4 million, or 45.5%, from the Dec. 31, 2007 level, to a total of $126.0 million at March 31, 2008. The increase in liquid assets as of March 31, 2008, was primarily due to curtailed lending and the low yield on alternative investments. At March 31, 2008, $107.0 million was invested in federal funds, an increase of $40.0 million from Dec. 31, 2007. The allowance for loan losses totaled $33.7 million at March 31, 2008, compared to $34.5 million at Dec. 31, 2007. Approximately $1.8 million was added to the allowance through the provision for losses on loans during the three months ended March 31, 2008. Approximately $2.6 million of loans were charged-off during the three-month period ended March 31, 2008, compared to $8.4 million for the same period in 2007. The charged-off loans were comprised of $1.1 million in loans secured by one-to-four-family residential real estate, $1.4 million in loans secured by commercial real estate and land, and $98,000 in commercial and consumer loans. Nonperforming loans increased from $25.9 million, or 4.09% of net loans at Dec. 31, 2007, to $37.4 million, or 6.2% of net loans at March 31, 2008. Deposits totaled $721.6 million at March 31, 2008, a decrease of $13.6 million, or 1.9%, over Dec. 31, 2007 levels. Checking and savings deposits decreased by $10.3 million, or 4.6%, compared to balances at Dec. 31, 2007, while certificate of deposit balances decreased by $2.9 million, or 0.6%, during the same time period. Advances from the Federal Home Loan Bank and other borrowings totaled $76.6 million at March 31, 2008, a decrease of $1.0 million, or 1.3%, compared to Dec. 31, 2007 totals. Proceeds from repayments of investment securities were partially utilized to make scheduled payments on the advances during the period. Stockholders' equity totaled $52.4 million, or 6.0% of total assets, at March 31, 2008, a decrease of $1.2 million, or 2.2%, from Dec. 31, 2007 levels. The decrease resulted primarily from the net loss of $1.1 million for the quarter ended March 31, 2008, and a $118,000 change, net of taxes, in unrealized losses on available for sale securities, which was partially offset by the amortization effects of stock benefit plans totaling $60,000. Balance Sheet At March 31, 2008, the company's consolidated balance sheet showed $871.8 million in total assets, $819.4 million in total liabilities, and $52.4 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2ce3 Going Concern Disclaimer As reported in the Troubled Company Reporter on May 9, 2008, Cincinnati-based BKD, LLP, expressed substantial doubt about Peoples Community Bancorp 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 report of the company's independent registered public accounting firm contained an explanatory paragraph as to the company's ability to continue as a going concern primarily due to the company's current lack of liquidity to repay its $17.5 million obligation under an outstanding line of credit due June 30, 2008. On April 2, 2008, the company and Peoples Community Bank each consented to the terms of Cease and Desist Orders issued by the Office of Thrift Supervision (OTS). The Orders prohibit Peoples Community Bank from paying cash dividends to the company without the prior consent of the OTS and the company will only be able to rely upon existing cash and cash equivalents as sources of its liquidity. Without the ability to rely on dividends from Peoples Community Bank, the company will require funds from other capital sources to meet its obligations such as restructuring the current line of credit or replacing the current line of credit. The company was not in compliance with one of the loan covenants at Dec. 31, 2007, and at March 31, 2008, and the lender has the ability to accelerate all outstanding amounts upon notice and the passage of 30 days. The company said it is currently negotiating resolution of these issues with the current lender and other parties. About Peoples Community Bancorp Headquartered in West Chester, Ohio, Peoples Community Bancorp Inc. (NasdaqGM: PCBI) -- http://www.pcbionline.com/-- is the holding company for Peoples Community Bank, a federally chartered savings bank with 19 full service offices in Butler, Warren and Hamilton counties in southwestern Ohio and Dearborn and Ohio counties in southeastern Indiana. PERFORMANCE TRANS: Plan Committee Won't Usurp Powers, BDCF Says --------------------------------------------------------------- Black Diamond Commercial Finance, L.L.C. -- agent for the postpetition secured lenders and first priority prepetition secured lenders of Performance Transportation Services, Inc., and its affiliated debtors -- clarifies with the U.S. Bankruptcy Court for the Western District of New York it neither seeks replacement of the members of the Board nor a "transfer of power" away form the Debtors, nor seeks a relief the same as the appointment of a trustee. As reported by the Troubled Company Reporter on May 19, Black Diamond filed a request to require the board of directors of Performance Logistics Group, Inc., to appoint a committee of independent directors for all matters relative to the formulation and development of a plan in the Debtors' Chapter 11 cases. The motion, however, was met with objections from the Debtors; the Teamsters National Automobile Transporters Industry Negotiating Committee; Yucaipa American Alliance Fund I, LP and Yucaipa Alliance (Parallel) Fund I, LP; and D.E. Shaw Laminar Portfolios, L.L.C. Black Diamond notes it merely seeks the appointment of a Plan Committee comprised of independent members of the existing board who can be vested with the sole decision-making power and authority for the Debtors in connection with plan matters. William J. Brown, Esq., at Phillips Lytle LLP, in Buffalo, New York, asserts that Black Diamond seeks the establishment of the Plan Committee of independent directors of the -- current -- Board. Mr. Brown contends that the request will not usurp functions reserved for the Debtor or a trustee, nor will it permit a non- fiduciary to exercise the Debtors' exclusivity virtually without limitation or review by the Court. The concerns which led to the establishment of the sale committee likewise mandate the establishment of a plan committee, Mr. Brown says. The Debtors have previously established a committee to oversee the process of the sale of all their assets. According to Mr. Brown the the Debtors would still be the entity negotiating and developing a plan of reorganization, but they would be under the direction and supervision of the Plan Committee. Court Allows Parties to Participate Board Meeting The Court has partly approved Black Diamond's request. The Court directed the PLG Board to promptly hold a meeting to consider and make decisions, if appropriate, with respect to all matters related to the formulation, development and pursuit of a plan of reorganization for the Debtors and other appropriate emergent strategy, including the status and direction of the Debtors' labor negotiations and any other matters raised by board observers. Judge Kaplan ordered the Debtors to allow certain parties to attend and participate in all non-privileged portions of the Board Meeting. The Court held that, except the International Brotherhood of Teamsters and the Teamsters National Automobile Transporters Industry Negotiating Committee, counsel and representatives for each of the parties that was present in court at the May 19 omnibus hearing will be entitled to attend the Board Meeting. IBT, however, will be entitled to submit questions for presentation to the PLG Board through a designated Board Observer. A Board Observer will excuse itself from portions of the Board Meeting wherein the PLG Board considers matters (i) directly relating to the unique interest of the Board Observer; or (ii) is privileged. About Performance Transportation Performance Transportation Services Inc. is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America, and operates under three key transportation business lines including: E. and L. Transport, Hadley Auto Transport and Leaseway Motorcar Transport. The company and 13 of its affiliates previously filed for Chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06- 00107). The U.S. Bankruptcy Court for the Western District of New York confirmed the Debtors' plan on Dec. 21, 2006, and that plan became effective on Jan. 29, 2007. Garry M. Graber, Esq. of Hodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Day represented the Debtors in their restructuring efforts. When the Debtor filed for protection from their creditors it reported more than $100,000,000 in total assets. It also disclosed owing more than $100,000,000 to at most 10,000 creditors, including $708,679 to Broadspire and $282,949 to General Motors of Canada Limited. The company and its debtor-affiliates filed their second Chapter 11 bankruptcy on Nov. 19, 2007 (Bankr. W.D.N.Y. Case Nos: 07-04746 thru 07-04760). Tobias S. Keller, Esq., at Jones Day, represents the Debtors. Garry M. Graber, Esq., at Hodgson, Russ LLP, serve as the Debtors' local counsel. The Debtors' claims and balloting agent is Kutzman Carson Consultants LLC. The Debtors have until March 18, 2008, to file a plan of reorganization. (Performance Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000). PERFORMANCE TRANS: Yucaipa Says DE Shaw Conflict Bars Discovery --------------------------------------------------------------- Yucaipa American Alliance Fund, I LP, and Yucaipa Alliance (Parallel) Fund I, LP, ask the U.S. Bankruptcy Court for the Western District of New York to deny D.E. Shaw Laminar Portfolios, L.L.C. and Quadrangle Debt Recovery Advisors, LP's request for the examination and production of documents and quash the proposed discovery because the Discovery Request has been superseded by D.E. Shaw's request for an appointment of a trustee or an examiner, and termination of exclusivity. Representing the Yucaipa entities, Robert A. Klyman, Esq., at Latham & Watkins LLP, in Los Angeles, California, asserts there is substantial overlap between the substance of and discovery arising from the Discovery Request and the Trustee Request. The focus of the discovery in connection with the Discovery Motion and the Trustee Motion will be the alleged conflicts of interest in the Debtors' Bankruptcy Cases. Earlier this month, D.E. Shaw Laminar Portfolios, L.L.C. and Monarch Alternative Capital LP proposed to conduct discovery as soon as possible because some of the parties from which documents are to be obtained may seek release under a forthcoming plan. The period during which the Debtors have the exclusive right to file a plan of reorganization will expire on June 30, 2008. DE Shaw, et al., in their capacities as second lien lenders, pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, asked the Court to direct the examination and production of documents by certain directors of the Debtors, the controlling shareholders Yucaipa Companies, and Goldman Sachs Credit Partners, L.P., to obtain information concerning, among others, the Debtors' financial condition, administration of the Debtors' Bankruptcy Cases. The Debtors, Yucaipa and Allied Systems Holdings, Inc., have asked the Court to quash the Discovery Request. They contend the Discovery Request is outside the bounds of Bankruptcy Rule 2004. On behalf of D.E. Shaw, Joseph Minias, Esq., at Quinn Emanuel Urquhart Oliver & Hedges LLP, in New York, said the Discovery may take many weeks to complete. DE Shaw, et al., expect the plan process -- one way or another -- to be at an advanced stage during the discovery period. Regardless of whether the Court permits DE Shaw, et al. to file their own plan or the key creditor constituencies to do so, all creditors have a compelling interest in identifying assets and causes of action. Creditors must be afforded an opportunity to assess whether the Discovery Parties may be appropriately released and, if so, at what price, Mr. Minias asserted. Mr. Minias said that DE Shaw, et al. excluded the Debtors' management from the discovery so that the discovery will not disturb their business operations. The requested investigation will be conducted at DE Shaw, et al.'s expense with the fruits of their labor to be shared with the Debtors and the Official Committee of Unsecured Creditors. Mr. Minias also noted the Objecting Parties attempted, without basis, to force DE Shaw, et al, to file a complaint on partial information in lieu of the Discovery Request. As reported by the Troubled Company Reporter on May 19, DE Shaw informed the Court it is interested in operating reorganized PTS II. The Second Lien Lenders have taken concrete and affirmative steps to advance their ability to own and successfully operate reorganized PTS, including: * Teaming up with an experienced industry executive, who would be a senior manager in the reorganized company; * Spending thousands of hours developing a comprehensive business plan for the reorganized company; and * Meeting with the Debtors' key original-equipment- manufacturer customers, i.e., the auto makers, to demonstrate their commitment to PTS, and to gain the customers' support. According to the Yucaipa entities, the Discovery Request is moot and unfounded. Mr. Klyman asserts the Discovery Request was filed six months ago as part of an ill-disguised attempt by D.E. Shaw who is a bidder for the PTS assets to harass Allied Holdings Inc., another bidder which is backed by Yucaipa; and uncover the confidential negotiations and other documents related to the Allied Holdings' potential bid. Nearly all of the document requests proposed by D.E. Shaw seek information related to Allied Holdings' potential bid, he notes. Allied Holdings is no longer a bidder for the Debtors' assets; therefore, the need for the discovery with respect to the potential bid has been mooted with the passage of time, Mr. Klyman further says. Mr. Klyman adds D.E. Shaw's belated decision to prosecute its discovery request after the six months of dormancy is an unwarranted pressure tactic and a baseless sideshow at this critical juncture of the Debtors' Bankruptcy Cases. The discovery is overbroad and burdensome to the subject directors, he maintains. About Performance Transportation Performance Transportation Services Inc. is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America, and operates under three key transportation business lines including: E. and L. Transport, Hadley Auto Transport and Leaseway Motorcar Transport. The company and 13 of its affiliates previously filed for Chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06- 00107). The U.S. Bankruptcy Court for the Western District of New York confirmed the Debtors' plan on Dec. 21, 2006, and that plan became effective on Jan. 29, 2007. Garry M. Graber, Esq. of Hodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Day represented the Debtors in their restructuring efforts. When the Debtor filed for protection from their creditors it reported more than $100,000,000 in total assets. It also disclosed owing more than $100,000,000 to at most 10,000 creditors, including $708,679 to Broadspire and $282,949 to General Motors of Canada Limited. The company and its debtor-affiliates filed their second Chapter 11 bankruptcy on Nov. 19, 2007 (Bankr. W.D.N.Y. Case Nos: 07-04746 thru 07-04760). Tobias S. Keller, Esq., at Jones Day, represents the Debtors. Garry M. Graber, Esq., at Hodgson, Russ LLP, serve as the Debtors' local counsel. The Debtors' claims and balloting agent is Kutzman Carson Consultants LLC. The Debtors have until March 18, 2008, to file a plan of reorganization. (Performance Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000). PLASTECH ENGINEERED: Court OKs Auction of Business & Other Assets ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan granted Plastech Engineered Products Inc. and debtor-affiliates permission to proceed with the bidding process on some or all of their business units and miscellaneous assets. The Court also authorized the Debtors to select stalking horse bidders. According to Greg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Wilmington, Delaware, Plastech will be able to select stalking horse bidders for its interior and exterior component businesses during the next two weeks, according to a May 24 report by Detroit Free Press. The Debtors, who have set an auction on June 16, are also permitted to pay a break-up fee and to reimburse expenses to the stalking horse bidders in connection with the potential sale. "Even though this is a very short timeframe, I think it's proper to move forward with the timeframe," Judge Shefferly said at the hearing, according to Automotive World. "The bidding procedures are satisfactory." The Debtors' business units, which all are open for bidding, include (i) their interior and underhood business; (ii) the manufacture of plastic-based automotive exteriors components; (iii) automotive stamping manufacturing; and (iv) carpet installation business. Miscellaneous assets included in the sale plan are: * 51% equity interest in TrimQuest LLC, a Michigan limited liability company; * stock or equity interest in any or all of Plastech's direct or indirect subsidiaries; * any of their plants or facilities; and * any or all of their miscellaneous capital assets. Johnson Controls, Inc., the Debtors' largest customer, has made an offer to purchase the Debtors' interiors and underhood business. Representatives of Plastech said, at the hearing, the company solicited "half a dozen" potential bidders for some of its units and remained confident it would receive multiple bids by the 13 June deadline to submit offers, Automotive World reported. The Court will convene a hearing on June 18, 2008, at 9:30 a.m., to consider approval of the results of the auction. The Debtors' major customers General Motors Corp., Chrysler, LLC, Johnson Controls, and Ford Motor Company, which provided the Debtors with $87,000,000 of DIP financing, have required the Debtors to (i) auction off their assets by July 12, if they are pursuing a sale of their business, or (ii) file a Chapter 11 plan by May 31, if pursuing a restructuring of their business. Detroit Free Press, however, notes that a standalone plan would require financing, something the company has had difficulty obtaining. Plastech's DIP Financing has been provided by customers, not from traditional sources like banks and financial institutions. According to the same report, Plastech wants to have its future determined before the start of the industry's July shutdown, when automakers and suppliers retool their plants for new models, a period that can be costly for a company that is in bankruptcy. Lessors Object, GE Capital Proposes Revised Bid Procedures General Electric Capital Corporation, a party to equipment leases with the Debtors, wants the proposed bid procedures revised to include a framework for the potential assumption and assignment of the Debtors' executory contracts and unexpired leases. "Most, if not all, of the equipment leased by the Debtors are critical to the continued operations of the business units the Debtors seek to sell," Daniel G. Kielczewski, Esq., at Abbot Nicholson Quilter Esshaki & Youngblood, P.C., in Detroit, Michigan, asserts. Mr. Kielczewski says the failure to account in the Bid Procedure for the almost certain assignment and assumption of leases will cause unnecessary delay and confusion to the sale process, specifically that Section 365 of the Bankruptcy Code provides: ". . If there has been a default in an executory contract or unexpired leases of the debtor, the trustee may not assume such contract or lease unless, at the time of assumption of such contract or lease, the trustee (a) cures, or provides adequate assurance that the trustee will promptly cure such default..(c) provides adequate assurance of future performance under such contract or lease." Mr. Kielczewski further asserts failure to address the assumption and assignment of the leases is prejudicial to the non-debtor contract parties. He notes that the proposed protocol fails to provide appropriate notice and access to information that would allow GE Capital and other parties to determine whether the Debtors or any bidders will be able to satisfy the requirements of Section 365. GE Capital thus proposes a revised set of Bid Procedures, which provides, among other things: (i) The asset purchase agreement between the Debtors and the bidders will include a list of contracts and unexpired leases the bidders propose to take assignment. The Debtors will notify counterparties to the contracts if their contracts are identified by the qualified bidders. (ii) Bidders must provide written evidence of commitment to consummate the sale transaction, including the ability to provide adequate assurance of future performance. (iii) On or before June 13, the Debtors will serve on each non- debtor party to the contracts to be included in the sale a notice of the cure amount that the Debtors believe would be due to be paid in full in cash upon the assumption and assignment of a contract. A copy of the proposed Revised Bid Procedures is available for free at: http://researcharchives.com/t/s?2ce1 These lessors concur and join in GE Capital's objection and request to approve the revised Bid Procedures: (i) M&I Equipment Finance Company, (ii) US Bancorp Equipment Finance, Inc., (iii) Wells Fargo Equipment Finance, Inc., and (iv) Huntington National Bank. (v) American Financial Leasing, Inc. The Court has yet to issue a written order approving the Bidding Procedures. 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. 22; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000) PLASTECH ENGINEERED: Wants to Add Tax Services to PwC's Work ------------------------------------------------------------ Plastech Engineered Products Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Eastern District of Michigan to expand the scope of Pricewaterhouse Coopers LLP's services to include tax planning services, nunc pro tunc to May 1, 2008. On May 1, 2008, the Debtors entered into an engagement letter related to the tax planning services associated with the Debtors' emergence from bankruptcy. Pursuant to the Tax Planning letter, PwC will: * obtain an understanding of the Debtors' corporate structure; * review three potential bankruptcy plans -- sale, standalone restructurings or liquidation (full or partial) -- including, assessing the level of debt forgiveness for each plan, assessing the amount of stock to be issued to (1) existing shareholders, (2) creditors and (3) new investors as part of each plan, and gain an understanding of the subsidiaries included as part of the bankruptcy filing and their effect on attribute reduction, etc; * review the Debtors' net operating losses; * review the Debtors' creditor claims and determine the tax consequences and tax implications of debt forgiveness of those claims; and * model structuring options, including preparing a matrix of the effect on future cash taxes for each of the alternative plans. "The Tax Planning Services are necessary to maximize the value of the company and their estates," Peter Smidt, executive vice president for Finance and chief executive officer of Plastech Engineered Products, Inc., says. The Tax Planning Services are unique and PwC will coordinate with other professionals employed in these Chapter 11 cases to ensure that there will be no duplication of work," Mr. Smidt assures the Court . PwC estimates that fees relating to the Tax Planning Services will reach between $150,000 and $200,000 computed on these rates: Professional Hourly Rate ------------ ------------ Partner $715 Director 500 Manager 425 Senior Associate 295 PwC will also seek reimbursement for reasonable expenses. The Debtors agree to indemnify and release PwC and its personnel under certain circumstances pursuant to the Tax Planning Letter, a copy of which is available for free at: http://researcharchives.com/t/s?2ce2 PwC is a "disinterested person" within the meaning of Section 101(14) of the U.S. Bankruptcy Code, and holds no adverse interests to those of the Debtors and their estate. 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. 22; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000) POLAR MOLECULAR: Bad Faith Filing Cues Court to Dismiss Case ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Colorado dismissed the Chapter 11 bankruptcy case of Polar Molecular Corp., Bloomberg News reports. As reported in the Troubled Company Reporter on Feb. 21, 2008, Petroleum Enhancer LLC, which has a security interest in patents and trademarks against the Debtor, said that the bankruptcy petition was filed the day before a foreclosure date. Therefore, the Chapter 11 filing was in bad faith, Petroleum Enhancer said. Headquartered in Denver, Polar Molecular Corp. develops and sells fuel additives. The company also sells marketing rights to others to sell the same fuel additives. The company filed for Chapter 11 protection on Jan. 11, 2008 (Bank. D. Colo. Case No. 08-10346). D. Bruce Coles, Esq., at Quinn & Coles, represents the Debtor in its restructuring efforts. The Debtor reported $400,001,522 in total assets, including $400,000,000 in patents and other intellectual properties, and $5,123,574 in total debts, in its schedules of assets and liabilities filed with the Court. QUEBECOR WORLD: Incurs $190 Million Net Loss in First Quarter 2008 ------------------------------------------------------------------ Quebecor World Inc. and its affiliates generated operating revenues of $1.2 billion and incurred a net loss of $190 million for the first quarter ended March 31, 2008. As of March 31, 2008, the Debtors had total assets of $4.2 billion, total liabilities of $4.7 billion, and total stockholders' deficit of $508.7 million. Cash at the end of the first quarter was $215.2 million. Updates Since Bankruptcy Filing On Jan. 21, 2008, Quebecor World filed for creditor protection in the United States and Canada due to the inability of the company to raise new capital in the difficult financial market and to complete the sale of its European operations. The filing was necessary to ensure the long-term sustainable profitability of the company within a process that ensures fair and equitable treatment for all stakeholders. Since the initial filing, the company received the final order for its $1 billion DIP (debtor-in-possession) financing from the U.S. and Canadian courts. The company also received an extended stay of proceedings under CCAA in Canada to July 25, 2008. The stay of proceeding under the Chapter 11 process is through to July of 2009. As stated in the Monitor's report of May 6, 2008, the company had an unrestricted cash balance of $123 million at April 27, 2008 and, as a result of the granting of the Final DIP Order on April 1, 2008, has access to the $400 million. Revolving Loan Facility Quebecor World has made substantial progress on the advancement of the Chapter 11 and CCAA processes with assistance of the restructuring committee of the Board, its advisors, the Chief Restructuring Officer and input from the Monitor. The company is developing a business plan which will reflect the company's expectation of future operating performance both during and after the CCAA and Chapter 11 processes and expects to discuss those shortly with its stakeholders committee's. Quebecor World announces that for first quarter 2008 it generated revenues of $1.3 billion compared to $1.4 billion in 2007. Operating loss before impairment of assets, restructuring, and other charges (IAROC) and business disposals in the first quarter was $2.8 million compared to operating income of $22.2 million in the first quarter of 2007. On the same basis, adjusted EBITDA was $73.4 million in first quarter 2008 compared to $103.0 million in the first quarter 2007. First quarter results included impairment of assets, restructuring and other charges (IAROC) net of income taxes of $38.0 million compared to $23.1 million in the first quarter last year. In the first quarter of 2008, the Company incurred a non-cash loss of $32 million related to its former UK facility as well as reorganization charges of $14.2 million. The lower adjusted EBITDA in 2008 is attributed to reduced volume, customer losses realized last year in the U.S. book and catalog segments, lower prices related to excess capacity, a weaker world- wide economy and the impact of the creditor protection process. "We continue to implement the final phases of our three-year retooling and restructuring plan which is being completed in 2008," said Jacques Mallette, President and CEO Quebecor World. "Our refinancing efforts at the end of 2007 and our filing for creditor protection in the U.S. and Canada created uncertainty with selected customers. This resulted in spot volume reductions which contributed to our reduced profitability. However, the overwhelming majority of our customers have been very supportive and we continue to work toward the objective of exiting creditor protection as soon as possible as a strong player in our industry. Our adjusted EBITDA results in the first quarter are also slightly ahead of projections for our DIP financing." In the last three months Quebecor World has renewed business with major publishers and retailers including, McGraw Hill, Simon and Schuster, Bauer, Wenner Media, Rona, Carrefour Group and many others. The company is serving all its global customers with superior products and services. This includes enhanced before and after print value-added services as exemplified by Quebecor World's Integrated Multi-Channel Solutions offering to increase the efficiency of customers advertising campaigns. In the coming weeks and months, Quebecor World intends to further expand this and other programs to create additional customer value. First Quarter Per Share Information and Restructuring Charges In the first quarter Quebecor World reported a net loss of $190.0 million or $1.29 per share compared to a net loss of $38.1 million or $0.34 per share in the first quarter of last year. First quarter results included impairment of assets, restructuring and other charges (IAROC) net of income taxes of $38.0 million or $0.26 per share, compared to $23.1 million or $0.17 per share in the same period in 2007. Excluding IAROC, the adjusted net loss was $152 million or $1.03 per share in the first quarter 2008 compared to adjusted net loss of $15 million or $0.17 per share for the first quarter last year. A full-text copy of Quebecor World's 2008 First Quarterly Financial Results is available for free at: http://ResearchArchives.com/t/s?2c0a About Quebecor Inc. Quebecor Inc. (TSX: QBR.A, QBR.B) is a communications company with operations in North America, Europe, Latin America and Asia. It has two operating subsidiaries, Quebecor World Inc. and Quebecor Media Inc. Quebecor World is one of the largest commercial print media services companies in the world. Quebecor Media owns operating companies in numerous media related businesses: Videotron Ltd., the largest cable operator in Quebec and a major Internet Service Provider and provider of telephone and business telecommunications services; Sun Media Corporation, Canada's largest national chain of tabloids and community newspapers; TVA Group Inc., operator of the largest French language over the air television network in Quebec, a number of specialty channels, and the English language over the air station Sun TV; Canoe Inc., operator of a network of English and French language Internet properties in Canada; Nurun Inc., a major interactive technologies and communications agency with offices in Canada, the United States, Europe and Asia; companies engaged in book publishing and magazine publishing; and companies engaged in the production, distribution and retailing of cultural products, namely Archambault Group Inc., the largest chain of music stores in eastern Canada, TVA Films, and Le SuperClub Videotron Ltd., a chain of video and video game rental and retail stores. Quebecor Inc. has operations in 18 countries. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the British Virgin Islands. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08- 10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of $5,554,900,000, total liabilities of $3,964,800,000, preferred shares of $175,900,000, and total shareholders' equity of $1,414,200,000. The company has until May 20, 2008, to file a plan of reorganization in the Chapter 11 case. The Debtors' CCAA stay has been extended to July 25, 2008. (Quebecor World Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter-Europe on Feb. 13, 2008 Moody's Investors Service assigned a Ba2 rating to the $400 million super priority senior secured revolving term loan facility of Quebecor World Inc. as a Debtor-in-Possession. The related $600 million super priority senior secured term loan was rated Ba3 (together, the DIP facilities). The RTL's better asset value coverage relative to the TL accounts for the ratings' differential. REDENVELOPE INC: Provide Commerce Purchases Assets at Auction ------------------------------------------------------------- Provide Commerce Inc. acquired the assets of RedEnvelope Inc. in a bankruptcy auction on Tuesday before the Hon. Dennis Montali of the United States Bankruptcy Court for the Northern District of California. Provide Commerce will assume full ownership of the Debtor on June 23, 2008. "We are thrilled to add Red Envelope under the Provide Commerce family of brands �- they have a great brand, solid customer base and an attractive line of merchandise," said Bill Strauss, Provide Commerce chief executive officer. "By combining the assets of both companies, we believe we can strengthen all of our brands while providing our customers with even more exciting products to choose from." Creative Catalog Corporation, the initial "stalking-horse" bidder, was entitled a $256,500 break-up fee, which is 4.5% of the initial purchase price of $5,700,000, in the event the Debtor consummates the sale to Provide Commerce. The Debtors estimate at closing of the sale that (i) the outstanding balances on the DIP facility will be $2,788,000, (ii) cure amounts owning on the assumed contract will sit at $275,000, and (iii) operational administrative claims will total at least $976,000. The Debtors further estimate that (i) priority tax claims will total $414,000, (ii) priority wage claims will be $386,000 and (iii) general unsecured claims will sum to $11,000,000. Pursuant to court documents, the Debtors show a list of affected lienholders in the transaction including, among other things: Medina Paper Recycling, Winmark Capital Corporation, Granite Creek Partners Agent LLC, CitiCapital Technology Finance and Hirsch International Corporation. About RedEnvelope Based in San Francisco, California, RedEnvelope Inc. (OTC:REDE) -- http://www.redenvelope.com-- is an online retailer of upscale gifts. RedEnvelope offers a collection of gifts through its catalog, web store and phone store. Its in-house design team creates products and its merchants source products domestically and from various parts of the world, often commissioning artists and vendors to create gifts. It offers an assortment of products in 12 categories with core product categories that include jewelry, home, men's and women's accessories and new baby gifts. RedEnvelope has an internal database of approximately 3.4 million customer names, with approximately 514,000 new customers added during the fiscal year ended April 2, 2007. The company filed for Chapter 11 protection on April 17, 2008 (N.D. Ca. Case No. 08-30659). Doris A. Kaelin, Esq., Janice M. Murray, Esq., John Walshe Murray, Esq., Robert A. Franklin, Esq. at Murray & Murray, represents the Debtor. The U.S. Trustee for Region 17 appointed creditors to serve on an Official Committee of Unsecured Creditors. Brian Y. Lee, Esq., and John D. Fredericks, Esq., at Winston and Strawn, represent the Committee in these cases. When the Debtor filed for protection from its creditors, it listed assets of $21,781,415 and debts of $15,302,142. REPUBLIC WESTERN: A.M. Best Holds B(Fair) Fin'l Strength Rating --------------------------------------------------------------- A.M. Best Co. has affirmed the financial strength ratings of B(Fair) and the issuer credit ratings of "bb" of the Republic Western Insurance Group, which consists of Republic Western Insurance Company and its wholly owned subsidiary North American Fire & Casualty Insurance Company. The outlook for all ratings is stable. The ratings reflect the group's improved risk-adjusted capitalization and underwriting performance in recent years, primarily driven by management's corrective actions. In addition, the ratings also consider the improved financial condition of its parent, AMERCO [NASDAQ: UHAL]. While performance and capitalization have improved in recent years, the ratings continue to reflect Republic Western's historically poor underwriting and operating performance, as well as Republic Western's limited business profile. The rating outlook is based on A.M. Best's expectation that improved operating results will continue to offset the historical earnings drag generated from the group's run-off operations, and thus add to surplus in the medium term. ROBERT HOULE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Robert T. Houle P.O. Box 86 Mendon, New York 14506 Bankruptcy Case No.: 08-21155 Chapter 11 Petition Date: May 12, 2008 Court: Western District of New York (Rochester) Debtors' Counsel: Carl J. Schwartz, Jr., Esq. (carlschwartz@fingerlakeslawgroup.com) Finger Lakes Law Group 131 Main Street P.O. Box 681 Penn Yan, New York 14527 Tel: (315) 536-4223 Estimated Assets: $2,705,500 Estimated Debts: $2,540,708 A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/nywb08-21155.pdf RODNEY HOLDINGS: Case Summary & One Largest Unsecured Creditor -------------------------------------------------------------- Debtor: Rodney Holdings, LLC 706 Wilderness Acres East Stroudsburg, Pennsylvania 18301 Bankruptcy Case No.: 08-43230 Chapter 11 Petition Date: May 23, 2008 Court: Eastern District of New York (Brooklyn) Judge: Dennis E. Milton Debtors' Counsel: Daniel W. Nieroda, Jr., Esq. (nycounsl@optonline.ne) 260 West Main Street Bay Shore, New York 11706 Tel: (631) 968-4500 Fax: (631) 968-6523 Total Assets: $3,949,500 Total Debts: $2,694,583 A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/nyeb08-43230.pdf ROGER BENCKE: Case Summary & Two Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Roger E. Bencke 23 Myrtle Street Redwood City, California 94062 Bankruptcy Case No.: 08-30903 Chapter 11 Petition Date: May 23, 2008 Court: Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtors' Counsel: James F. Beiden, Esq. (attyjfb@yahoo.com) Law Offices of James F. Beiden 840 Hinckley Road #245 Burlingame, California 94010 Tel: (650) 697-6100 Total Assets: $2,423,300 Total Debts: $1,742,750 A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/califnb08-30903.pdfr ROSS AIR: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Ross Air Systems, Inc. P.O. Box 310 Somerville, NJ 08876 Bankruptcy Case No.: 08-19847 Type of Business: The Debtor provides an extensive line of air-drying equipment and complete processing lines for coating, saturating, drying, baking, curing, and treating of continuous rolled products. See http://www.rossairsystems.com/ Chapter 11 Petition Date: May 28, 2008 Court: District of New Jersey (Trenton) Debtor's Counsel: John F. Bracaglia, Jr., Esq. Cohn, Bracaglia & Gropper, PC 275 East Main Street P.O. Box 1094 Somerville, NJ 08876 Tel: (908) 526-1131 Fax: (908) 526-1275 Total Assets: $332,000 Total Debts: $2,359,194 A copy of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/njb08-19847.pdf SHAPES/ARCH HOLDINGS: 3rd Amended Disclosure Statement Approved --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey approved an amended disclosure statement explaining a third amended joint plan of reorganization Shapes/Arch Holdings LLC and its debtor- affiliates filed on May 22, 2008. The Court held that the third amended disclosure statement contains adequate information within the meaning of Section 1125 of the Bankruptcy Code. The Court also approved procedures the Debtors proposed for the solication and tabulation of Plan votes. Deadline for voting on the Plan is June 27. The Court will hold a hearing July 8 to consider confirmation of the plan in Camden. Confirmation objections, if any, are due June 30. Several parties filed objections to the earlier versions of the disclosure statement and plan, including Arch Acquisition I, LLC, which has offered to sponsor the Debtors' plan; and the official committee of unsecured creditors appointed in the Debtors' cases. Arch Acquisition pointed out that the earlier plan versions violate the absolute priority rule provided in the Bankruptcy Code. Arch Acquisition argued that the earlier plan versions allow a party having voting control over the equity of the Debtors to receive 100% of the equity of the reorganized debtors while the creditors are left with virtually nothing. Arch Acquisition and the Committee argued that the earlier versions were an implementation of prepetition, private deals between the Debtors; Versa Capital Management, Inc., a private equity firm; and Arcus ASI Funding, LLC. In mid-January, 2008, the Debtors began a dialogue with Versa to discuss Versa's interest in a possible transaction. Versa expressed interest and conducted extensive due diligence on an expedited basis with respect to the Debtors' businesses in late January. In February 2008, Versa, the Debtors and representatives of the owners of Ben LLC, which holds 100% of the membership interest in the Debtors, engaged in arm's-length negotiations which culminated in an agreement whereby Arcus ASI Funding, LLC would commit to lend up to $25,000,000 during the Debtors' Chapter 11 proceedings and provide additional funding and an equity infusion to help reorganize the Debtors. As part of that deal, Arcus ASI, Inc. would become a manager of -- but not a member of -- Shapes/Arch with 79.9% of the voting rights, and Ben LLC would retain 100% of the ownership rights and 20.1% of the voting rights. The earlier plan versions provide for Arcus as the Plan Funder, and for the Debtors' lender group to provide the Debtors with revolving loans throughout the chapter 11 proceedings and upon exiting bankruptcy in the amount of up to $60,000,000. To address the objections, the Debtors and their professionals worked with the Committee and Arch Acquisition to develop a Third Amended Plan and Disclosure Statement, which were circulated prior to the disclosure statement hearing last Friday and posted on the Court's docket on Tuesday. All other objections to the disclosure statement that have not been resolved, waived or withdrawn were overruled by the Court. Third Amended Plan Arch Acquisition LLC, an affiliate of Signature Aluminum and H.I.G. Capital Partners, provided $30,000,000 in postpetition financing to the Debtors. On the effective date of the Third Amended Plan, Arch Acquisition or its designee will either: (a) amend and restate the DIP Agreement; or (b) enter into a exit loan as part of its commitment to fund up to $91,500,000 for distributions under the Plan. The principal amount of the Exit Facility outstanding on the Effective Date will be approximately $26,700,000. The Third Amended Plan classifies claims against and interests in the Debtors in 12 classes. The classification and treatment of claims and interests are: Treatment of Claims and Interest Type of Estimated Estimated Class Claim Amount Recovery ----- ------- --------- --------- Unclassified Administrative $2,513,606 100% Claims Unclassified Fee Claims $800,000 100% Unclassified Priority Tax $84,667 100% Claims 1 Other Priority $1,514,113 100% Claims 2 Secured Real $747,939 100% Estate Claims 3 Arch DIP Claim $26,700,000 100% 4 CIT DIP Claims $54,600,000 100% 5 Secured Claims $TBD 100% Purchase Money Security Interest 6 Secured Claims of $200,000 100% Warehousemen and Shippers 7 Collateralized TBD 100% Insurance Program Claims 8 Miscellaneous $75,000 100% Secured Claims 9 Environmental Unknown TBD Claims 10 General Unsecured $38,121,413 TBD Claims 11 Ben Interest NA 0% 12 Class 12 Interest NA 100% Classes 5, 6, 7, 8, 9, 10 and 11 are impaired under the Plan and the holders of claims in these classes are entitled to vote on the Plan. Any holder in Class 5 of a purchase money security interest in equipment or a lessor of equipment who has not properly perfected its interest under the Uniform Commercial Code will be treated as a Class 10 unsecured creditor. The Reorganized Debtors will have the right to prepay the Class 5 Claims in whole or in part without penalty. If the Reorganized Debtors pre-pay, in part, they will remain responsible for the balance of any Allowed Claim. Holders of Class 6 Shippers and Warehousemen Claims may be paid in full or in 24 equal monthly installments of principal, plus interest at 6% per annum. Allowed Secured Claims in Class 7 of those entities holding cash deposits or letters of credit which are acting as collateral security for the workers' compensation insurance policies of the Debtors, will retain on account of the Allowed Secured Claim the cash deposit or Letter of Credit. However, the claimants are to return to the Reorganized Debtors all collateral being held in excess of the Allowed Secured Claims. The Environmental Protection Agency will receive $300,000 and the New Jersey Department of Environmental Protection will receive $25,000 on account of their Class 9 Environmental Claims under the Plan. Funding for these distributions and other distributions to holders of Environmental Claims will be made solely from proceeds of applicable insurance policies. The Debtors have noted that numerous claims have been filed asserting Environmental Claims of several billion dollars. The Debtors believe those claims are grossly overstated and objectionable. Holders of Class 10 General Unsecured Claims will be paid through the liquidation trust. The Reorganized Debtors will transfer certain assets to the trust including avoidance actions and certain other actions under Chapter 5 of the Bankruptcy Code. The Troubled Company Reporter related May 15 that earlier Plan versions provide for a 10% to 14% recovery to Class 10 claimants. The Debtors believe class 10 claimants could get a 7% to 14% recovery, given an expected $5,000,000 to be infused into the trust. A full-text copy of the Debtors' Third Amended Plan is available at no charge at: http://ResearchArchives.com/t/s?2ce4 A full-text copy of the Debtors' Third Amended Disclosure Statement is available at no charge at: http://ResearchArchives.com/t/s?2ce5 About Shapes/Arch Headquartered in Delair, New Jersey, Shapes/Arch Holdings, LLC, produces custom aluminum extrusions for road and rail transportation and commercial and residential construction. The company also manufactures maintenance aluminum fence systems, for residential and commercial use, and above-ground pools. The company and four of its affiliates filed for Chapter 11 protection on March 16, 2008 (Bankr. D. N.J. Lead Case No. 08-14631). Jerrold N. Poslusny, Jr., Esq., at Cozen O'Connor, represents the Debtors in their restructuring efforts. The U.S. Trustee for Region 3 appointed Alcan, Inc.; RUSAL America Corp.; PSE&G; Glencore Ltd.; Coil Plus PA, Inc.; Perfect Trade Development Co./Kotech Industry and Co. Ltd.; UPS; Acme Corrugated Box Co.; and Colorworks Graphic Services, Inc., to the Official Committee of Unsecured Creditors. Halperin Battaglia Raich LLP represents the Committee in this cases. When the Debtors filed for protection against their creditors, they listed assets between $10 million to $50 million and debts between $50 million to $100 million. SHAPES/ARCH HOLDINGS: Court Approves $30-Mil. DIP Loan from Arch ---------------------------------------------------------------- Shapes/Arch Holdings LLC and its debtor-affiliates sought and obtained authority, on a final basis, from the U.S. Bankruptcy Court for the District of New Jersey to borrow up to: 1. $30,000,000 under a DIP Loan and Security Agreement with Arch Acquisition I, LLC; and 2. $60,000,000 under a DIP Revolving Credit Agreement with The CIT Group/Business Credit, Inc., in its individual capacity and as agent for JP Morgan Chase Bank, N.A. and Textron Financial Corporation. The Bankruptcy Court approved last week an amended disclosure statement explaining a third amended joint plan of reorganization filed by the Debtors. The Court will hold a hearing July 8 to consider confirmation of the plan in Camden. A story on the disclosure statement approval and plan summary is in today's Troubled Company Reporter. The Debtors estimate that they will have drawn approximately $26,700,000 under the Arch term loan through the Confirmation Hearing. The Debtors will use funds under the DIP Revolver Agreement with the CIT Lenders to fund operations pending Plan confirmation. The Debtors expect the balance due under the DIP Revolving Agreement as of the anticipated date of the Confirmation Hearing to be roughly $54,600,000, including outstanding letters of credit. The Debtors' DIP obligations are secured by valid and perfected priming liens and security interests granted to Arcus ASI Funding, LLC -- and now assigned to Arch Acquisition -- on all of the Debtors' assets and properties, subject to a first lien in favor of the CIT Lenders on the Debtors' inventory and accounts receivable and other property. As reported by the Troubled Company Reporter on March 31, the Debtors obtained permission on an interim basis to obtain DIP financing from the CIT Lenders and Arcus. The proceeds of Arcus' facility was to be used to provide funding in excess of what is available based upon the Debtors' eligible inventory and accounts in light of the cyclical nature of the Debtors' businesses -- PP&E Equity Borrowing Base Component -- and pay-off a prepetition term loan owing to CIT. The Interim Order granted the Debtors' access to the credit facilities until April 3, 2008. The interim financing was subsequently extended on an interim basis through the issuance of the Final DIP Order. On the effective date of the Third Amended Plan, Arch Acquisition or its designee will either: (a) amend and restate the DIP Agreement; or (b) enter into a exit loan as part of its commitment to fund up to $91,500,000 for distributions under the Plan. The principal amount of the Exit Facility outstanding on the Effective Date will be approximately $26,700,000. Pursuant to the Final DIP Order, Arcus became entitled to: -- a $600,000 fee payable by the Debtors as a result of the Debtors' entry into the DIP loan agreement with Arch; and -- a $50,000 assignment fee payable by Arch. Blank Rome LLP, counsel to Arcus, will be paid $675,000 for its services rendered. CIT, as Revolving Credit Agent, is represented in the Debtors' cases by: Stradley Ronen Stevens & Young, LLP 2600 One Commerce Square Philadelphia, Pennsylvania 19103 Attn: Paul A. Patterson, Esq. Arch is represented in the Debtors' cases by: Greenberg Traurig, LLP Met Life Building 200 Park Avenue New York, New York 10186 Attn: Nancy A. Mitchell, Esq. About Shapes/Arch Headquartered in Delair, New Jersey, Shapes/Arch Holdings, LLC, produces custom aluminum extrusions for road and rail transportation and commercial and residential construction. The company also manufactures maintenance aluminum fence systems, for residential and commercial use, and above-ground pools. The company and four of its affiliates filed for Chapter 11 protection on March 16, 2008 (Bankr. D. N.J. Lead Case No. 08-14631). Jerrold N. Poslusny, Jr., Esq., at Cozen O'Connor, represents the Debtors in their restructuring efforts. The U.S. Trustee for Region 3 appointed Alcan, Inc.; RUSAL America Corp.; PSE&G; Glencore Ltd.; Coil Plus PA, Inc.; Perfect Trade Development Co./Kotech Industry and Co. Ltd.; UPS; Acme Corrugated Box Co.; and Colorworks Graphic Services, Inc., to the Official Committee of Unsecured Creditors. Halperin Battaglia Raich LLP represents the Committee in this cases. When the Debtors filed for protection against their creditors, they listed assets between $10 million to $50 million and debts between $50 million to $100 million. SHAPES/ARCH HOLDINGS: Arch Declared Lead Bidder in Equity Sale -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey declared Arch Acquisition I, LLC, as stalking horse bidder in connection with the planned sale of the equity of reorganized Shapes/Arch Holdings LLC under the terms and condition of the Third Amended Chapter 11 plan of reorganization filed by Shapes/Arch Holdings LLC and its debtor-affiliates. The Court approved also bidding procedures proposed by the Debtors. The Competitive Process will be conducted through a sales consultant who will solicit higher and better offers for the equity of Reorganized Shapes/Arch. If one or more Qualified Bids are received, an auction will be held June 27, 2008 at 10:00 a.m. (Eastern Time). Bids are due June 25. Arch Acquisition, an affiliate of Signature Aluminum and H.I.G. Capital Partners, provided $30,000,000 in postpetition financing to the Debtors. On the effective date of the Third Amended Plan, Arch Acquisition or its designee will either: (a) amend and restate the DIP Agreement; or (b) enter into a exit loan as part of its commitment to fund up to $91,500,000 for distributions under the Plan. The principal amount of the Exit Facility outstanding on the Effective Date will be approximately $26,700,000. A Qualified Bid must exceed Arch's plan funding commitment by at least $1,950,000, which accounts for the breakup fee payable to Arch; its expense reimbursement; fees payable to Arcus ASI Funding, LLC, pursuant to Arcus' agreement to assign its rights under a DIP term loan agreement to Arch; and a minimum $150,000 increase the $5,000,000 Arch proposed to fund a trust for general unsecured claims. The only material modifications to the Amended Plan may be to: (i) replace Arch as the Plan Funder, (ii) provide for the payment in full on the Effective Date of the Class 3 Arch Acquisition DIP Claim; (iii) increase or eliminate the caps on the amount of the Allowed Claims in Class 1, Class 2 or Priority Tax Claims and otherwise, including the Plan Funding Commitment; and (iv) increase the Class 10 distribution to general unsecured creditors by at least $150,000 over and above the distribution proposed under the Amended Plan. The effective date of the Amended Plan or the Alternative Plan will be no later than July 31, 2008. The reorganized Debtors' equity will be sold to a single bidder, in a single sale. The Auction will be held at the offices of Cozen O'Connor, 1900 Market Street, in Philadelphia, Pennsylvania. The Debtors and their professionals worked with the Committee and Arch Acquisition to develop the Third Amended Plan and accompanying Disclosure Statement. The Third Amended Plan classifies claims against and interests in the Debtors in 12 classes. The classification and treatment of claims and interests are: Treatment of Claims and Interest Type of Estimated Estimated Class Claim Amount Recovery ----- ------- --------- --------- Unclassified Administrative $2,513,606 100% Claims Unclassified Fee Claims $800,000 100% Unclassified Priority Tax $84,667 100% Claims 1 Other Priority $1,514,113 100% Claims 2 Secured Real $747,939 100% Estate Claims 3 Arch DIP Claim $26,700,000 100% 4 CIT DIP Claims $54,600,000 100% 5 Secured Claims $TBD 100% Purchase Money Security Interest 6 Secured Claims of $200,000 100% Warehousemen and Shippers 7 Collateralized TBD 100% Insurance Program Claims 8 Miscellaneous $75,000 100% Secured Claims 9 Environmental Unknown TBD Claims 10 General Unsecured $38,121,413 TBD Claims 11 Ben Interest NA 0% 12 Class 12 Interest NA 100% Classes 5, 6, 7, 8, 9, 10 and 11 are impaired under the Plan and the holders of claims in these classes are entitled to vote on the Plan. Holders of Class 10 General Unsecured Claims will be paid through a liquidation trust. The Reorganized Debtors will transfer certain assets to the trust including avoidance actions and certain other actions under Chapter 5 of the Bankruptcy Code. The Troubled Company Reporter related May 15 that earlier Plan versions provide for a 10% to 14% recovery to Class 10 claimants. The Debtors believe class 10 claimants could get a 7% to 14% recovery, given the $5,000,000 Arch has proposed to be infused into the trust. The Alternative Plan may also include non-economic, non-material modifications provided that the modifications do not cause the Alternative Plan -- in the Debtors' discretion after consultation with the Official Committee of Unsecured Creditors appointed in their cases -- to require re-solicitation under Section 1127 of the Bankruptcy Code. Competing bidders must provide a good faith deposit of $4,500,000 in the form of a certified check or wire transfer to be held in escrow by the Debtors' counsel. U.S. Trustee Questions Arch's Fees Roberta A. DeAngelis, the acting United States Trustee for Region 3, balked at the bidding procedures and suggested that Arch's break-up fee and expense reimbursement should be scrutinized. Ms. DeAngelis pointed out Arch is seeking a $1,000,000 break-up fee, which is not tied in any way to its actual expenses. She pointed out that a $500,000 component of the fee is tied to Arch's actual costs in becoming the stalking horse bidder. Ms. DeAngelis said the Court must guard against any bidding procedure or break-up fee that will chill bidding, because the goal is to obtain the highest possible price for the Debtors' assets. Ms. DeAngelis also argued that Arch is not the initial bidder, and that the Debtors contemplated a transaction with Arcus, pursuant to which Arcus was the original plan proponent. Ms. DeAngelis said after concerns were raised by the Committee, the U.S. Trustee, Arch and at least one other potential purchaser about whether the Arcus transaction was open to competitive bidding, Arch effectively was substituted for Arcus with, among other things, an improved dividend to unsecured creditors and with the sale being subject to higher and better offers. As a result of the failed transaction with Arcus, Ms. DeAngelis pointed out, Arcus received roughly $790,000 from the Debtors' estates to compensate Arcus' professionals, as well as a termination fee for not going forward with the Arcus transaction. Because the Debtors have already paid one potential purchaser such a significant expense reimbursement, the Debtors' estates should not be required to bear those expenses a second time, she said. In its sale order, the Court authorized the Debtors to pay the Break-Up Fee and Expense Reimbursement to Arch, in full, on the Effective Date if it is not the Successful Bidder. About Shapes/Arch Headquartered in Delair, New Jersey, Shapes/Arch Holdings, LLC, produces custom aluminum extrusions for road and rail transportation and commercial and residential construction. The company also manufactures maintenance aluminum fence systems, for residential and commercial use, and above-ground pools. The company and four of its affiliates filed for Chapter 11 protection on March 16, 2008 (Bankr. D. N.J. Lead Case No. 08-14631). Jerrold N. Poslusny, Jr., Esq., at Cozen O'Connor, represents the Debtors in their restructuring efforts. The U.S. Trustee for Region 3 appointed Alcan, Inc.; RUSAL America Corp.; PSE&G; Glencore Ltd.; Coil Plus PA, Inc.; Perfect Trade Development Co./Kotech Industry and Co. Ltd.; UPS; Acme Corrugated Box Co.; and Colorworks Graphic Services, Inc., to the Official Committee of Unsecured Creditors. Halperin Battaglia Raich LLP represents the Committee in this cases. When the Debtors filed for protection against their creditors, they listed assets between $10 million to $50 million and debts between $50 million to $100 million. SHAPES/ARCH: Court OKs J.H. Cohn as Committee's Financial Advisor ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in Shapes/Arch Holdings LLC and its debtor-affiliates' Chapter 11 cases obtained authority from the U.S. Bankruptcy Court for the District of New Jersey to employ J.H. Cohn LLP as Financial Advisor and Forensic Accountant. J.H. Cohn is expected to: a) review reasonableness of the DIP facilities as to their cost to the Debtors and the likelihood that Debtors will be able to comply with the terms thereof; b) review the DIP facilities as to whether they provides sufficient liquidity; c) analyze and review key motions as to financial issues; d) gain an understanding of Debtors' corporate structure, including non-debtor entities; e) perform a preliminary assessment of the Debtors' 13-week budget; f) establish reporting procedures that will allow for the monitoring of the Debtors' bankruptcy operations; g) develop and evaluate alternative sale and restructuring strategies; h) gain an understanding of Debtors' accounting systems; i) scrutinize proposed transactions, including the assumption or rejection of executory contracts; j) review the reasonableness and necessity of any proposed key employee retention plan; k) identify, analyze and investigate transactions with non- debtor entities and other related parties; l) monitor Debtors' weekly operating results, availability and borrowing base certificates, if applicable; m) participate in the establishment and monitoring of any proposed sales process and supplement list of potential buyers; n) communicate findings to the Committee; o) identify and quantify any recoverable assets which are not in the Debtors' estates; p) assist the Committee in negotiating the key terms of a Plan of Reorganization; q) review the nature and origin of other significant claims asserted against the Debtors; r) prepare dividend analysis; s) validate the Debtors' business plan projections and liquidation analysis; and t) render other assistance as the Committee and its counsel may deem necessary. Bernard A. Katz, Esq., a partner at J.H. Cohn LLP, told the Court that the Debtors will pay according to the firm's standard rates for professionals. The professional rates are: Designation Hourly Rate ----------- ----------- Senior Partner/Partners $515 - $650 Director/Senior Manager $430 - $500 Other Professional Staff $170 - $425 Paraprofessional $115 - $155 Mr. Katz assured the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the bankruptcy Code. About Shapes/Arch Headquartered in Delair, New Jersey, Shapes/Arch Holdings, LLC, produces custom aluminum extrusions for road and rail transportation and commercial and residential construction. The company also manufactures maintenance aluminum fence systems, for residential and commercial use, and above-ground pools. The company and four of its affiliates filed for Chapter 11 protection on March 16, 2008 (Bankr. D. N.J. Lead Case No. 08-14631). Jerrold N. Poslusny, Jr., Esq., at Cozen O'Connor, represents the Debtors in their restructuring efforts. The U.S. Trustee for Region 3 appointed six creditors to serve on an Official Committee of Unsecured Creditors. Halperin Battaglia Raich LLP represents the Committee in this cases. When the Debtors filed for protection against their creditors, they listed assets between $10 million to $50 million and debts between $50 million to $100 million. SMART-TEK SOLUTIONS: March 31 Balance Sheet Upside-Down by $1.2MM ----------------------------------------------------------------- Smart-tek Solutions Inc.'s consolidated balance sheet at March 31, 2008, showed $1,599,736 in total assets and $2,837,981 in total liabilities, resulting in a $1,238,245 total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $1,144,577 in total current assets available to pay $2,837,981 in total current liabilities. The company reported a net loss of $78,416, on total revenue of $1,128,340, for the third quarter ended March 31, 2008, compared with a net loss of $14,913, on total revenue of $549,579, in the same period last year. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2cdc Going Concern Disclaimer John Kinross-Kennedy, in Irvine, Calif., expressed substantial doubt about Smart-tek Solutions 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 auditor pointed to the company's net loss, negative cash flow from operations during the year ended June 30, 2007, and working capital deficiency and shareholders' deficiency at June 30, 2007. About Smart-tek Solutions Based in Reno, Nev., Smart-tek Solutions, Inc. (OTC BB: STTK) -- http://www.smart-teksolutions.com/-- through its subsidiary, Smart-tek Communications Inc., engages in the design, sale, installation, and service of electronic hardware and software products in Canada. SOCIETE GENERALE: Paydown Performance Cues Fitch to Junk Ratings ---------------------------------------------------------------- Fitch Ratings has downgraded these two classes of Societe Generale Mortgage Securities Net Interest Margin notes: SGMS NIM 2005-OPT1 notes: -- $1 million Class IN to 'C/DR6' from 'BB'; -- $1.5 million Class IIN3 to 'C/DR6' from 'B'. Underlying Transaction: SG Mortgage Securities Trust 2005-OPT1. The rating actions reflect actual pay-down performance of the NIM securities to date compared to initial projections, as well as, changes that Fitch previously made to its subprime loss forecasting assumptions for the underlying transactions. SPECTRUM BRANDS: Harbert Management et al. Own 9.9% Equity ---------------------------------------------------------- Harbert Management Corporation, Philip Falcone, Raymond J. Harbert and Michael D. Luce declare beneficial ownership of 5,200,000 shares in Spectrum's common stock or 9.9% of the company's outstanding shares. Harbinger Capital Partners Master Fund I., Ltd., Harbinger Capital Partners Offshore Manager, LLC, and HMC Investors, LLC, declare beneficial ownership of 3,500,000 shares in Spectrum Brands Inc.'s common stock or 6.6.% of the company's total outstanding shares. Harbinger Capital Partners Special Situations Fund, LP, Harbinger Capital Partners Special Situations GP, LLC, and HMC - New York, Inc. declare beneficial ownership of 1,700,000 shares in Spectrum Brands Inc.'s common stock or 3.2% of the company's outstanding shares. Headquartered in Atlanta, Georgia, Spectrum Brands Inc. (NYSE: SPC) -- http://www.spectrumbrands.com/-- is a supplier of consumer batteries, lawn and garden care products, specialty pet supplies, shaving and grooming products, household insect control products, personal care products and portable lighting. * * * As disclosed in the Troubled Company Reporter on May 26, 2008, Moody's Investors Service placed the Caa1 corporate family rating and Caa1 probability of default rating of Spectrum Brands under review following the announcement that Spectrum has entered into a definitive agreement to sell its Global Pet business to Applica Pet Products, a subsidiary of Salton, Inc., for over $900 million. As reported in the TCR on May 23, 2008, following the announcement that Spectrum Brands has signed a definitive agreement with Salton, Inc. for the sale of its Global Pet Business for approximately $692.5 million in cash and an aggregate principal amount of Spectrum's subordinated debt securities equal to $222.5 million, Fitch affirms Spectrum Brands, Inc. ratings as: -- Issuer Default Rating at 'CCC'; -- $1 billion term loan B at 'B/RR1'; -- $225 million ABL at 'B/RR1'; -- EUR350 million term loan at 'B/RR1'; -- $700 million 7.4% senior sub note at 'CCC-/RR5'; -- $2.9 million 8.5% senior sub note at 'CCC-/RR5'; -- $347 million 11.25% variable rate toggle senior sub note at 'CCC-/RR5' The Rating Outlook is Negative. Standard & Poor's Ratings Services placed its ratings on Atlanta- based Spectrum Brands Inc., including the 'CCC+' long-term corporate credit rating, on CreditWatch with positive implications. The CreditWatch status indicates that S&P could either raise or affirm the ratings following the completion of its review. Approximately $2.6 billion of debt was outstanding as of March 30, 2008. SPRINT NEXTEL: Fitch Says Merger Issues Led to Revenue Decline -------------------------------------------------------------- In the past 18 months since Fitch Ratings first revised the Rating Outlook on Sprint Nextel Corp. to Negative, the company has experienced rapid credit deterioration due to numerous operational and merger integration issues. These issues have greatly affected the customer experience, which has led to higher churn, declining average revenue per user and significant postpaid subscriber losses resulting in material pressure on the company's financial performance. Consequently, Sprint Nextel's credit ratings have fallen three notches, with the last downgrade on Feb. 28, 2008 placing the ratings below investment grade at 'BB+'. The company expects no material improvement in the negative operating trends at least through the first half of 2008 with expectations for subscriber losses in the range of approximately two million postpaid subscribers for the first two quarters. Despite expectations for Sprint Nextel to improve its customer experience, Fitch believes the company will face continued difficulties in regaining market share and increasing its mix of prime subscribers, given the high industry penetration rates, the low postpaid churn rates of its national competitors, the slowing economy, and its competitive position. In light of the past negative trends, limited operational visibility and the potential for further negative rating actions, Fitch has issued a special report focusing on Sprint Nextel's capital structure, the guarantees, a summary of its covenants and the rating implications of a potential secured credit facility. STANDARD PACIFIC: S&P's Rtng. Unmoved by Recapitalization --------------------------------------------------------- Standard & Poor's Ratings Services said its ratings on Standard Pacific Corp. (B-/Watch Neg/--) are not immediately affected by the recent announcement that a private equity firm has agreed to significantly recapitalize this homebuilder. Irvine, California-based Standard Pacific announced a large equity infusion that, if completed, should satisfactorily address the capital-constrained homebuilder's near-term liquidity needs. Affiliates of MatlinPatterson Global Advisors LLC have agreed to purchase $381 million of newly issued convertible preferred stock, and they have also agreed to backstop a $153 million rights offering. Additionally, the private equity firm will exchange $129 million of various Standard Pacific notes that it holds for warrants to acquire additional preferred stock. S&P estimate that pro forma leverage would drop from a high 68% of capital on a book value basis at March 31, 2008, to a more appropriate 52% of capital. More importantly, the company's estimated cash holdings would rise to $863 million from $329 million (assuming operations are cash flow neutral this year). This balance would be more than adequate to pay down the company's bank debt and repay a $104 million note maturity in October. While the new equity proceeds will materially enhance the company's financial flexibility, they are highly dilutive to existing shareholders, and, in S&P's view, the company may be ceding considerable operational control. Upon the transactions' closing, MatlinPatterson will add three members to Standard Pacific's board of directors, and it may ultimately own a majority of the company's shares when its securities are converted (although its voting rights will be limited to 49%). It should be noted that the proposed transactions are subject to certain conditions, including shareholder approval and a successfully amended credit facility. The transactions are slated to close on or before the July 31, 2008, termination date, and S&P will reconsider the CreditWatch placements and its ratings on Standard Pacific at that time. STRUCTURE ASSET: Fitch Takes Rating Actions on 29 Classes of Notes ------------------------------------------------------------------ Fitch Ratings has taken rating actions on 29 Structure Asset Investment Loan, Structured Asset Securities Corporation and BNC Net Interest Margin Notes: SAIL NIM Notes 2003-BC1 -- $9.0 million Class B revised to 'CC/DR5' from 'CC/DR4'; Underlying Transaction: SAIL 2003-BC1 SAIL NIM Notes 2003-BC3 -- $1.7 million Class A revised to 'CC/DR2' from 'CCC/DR2'; -- $5.3 million Class B revised to 'C/DR6' from 'CCC/DR4'; Underlying Transaction: SAIL 2003-BC3 SAIL NIM Notes 2003-BC6 -- $759,319 Class A revised to 'C/DR6' from 'B-/DR2'; -- $2.4 million Class B remains at 'C/DR6': Underlying Transaction: SAIL 2003-BC6 SAIL NIM Notes 2003-BC7 -- $2.2 million Class A remains at 'C/DR6'; -- $8.1 million Class B remains at 'C/DR6'; Underlying Transaction: SAIL 2003-BC7 SAIL NIM Notes 2003-BC8 -- $2.7 million Class A remains at 'C/DR6'; -- $8.6 million Class B remains at 'C/DR6'; Underlying Transaction: SAIL 2003-BC8 SAIL NIM Notes 2003-BC9 -- $1.6 million Class A remains at 'C/DR6'; -- $8.4 million Class B remains at 'C/DR6'; Underlying Transaction: SAIL 2003-BC9 SAIL NIM Notes 2003-11 -- $11.6 million Class B remains at 'C/DR6'; Underlying Transaction: SAIL 2003-11 SAIL NIM Notes 2003-12 -- $588,216 Class A remains at 'C/DR6'; -- $7.5 million Class B remains at 'C/DR6'; Underlying Transaction: SAIL 2003-12 SAIL NIM Notes 2004-2 -- $4.1 million Class A remains at 'C/DR6'; -- $6.4 million Class B remains at 'C/DR6'; Underlying Transaction: SAIL 2004-2 SAIL NIM Notes 2004-4 -- $6.0 million Class B remains at 'C/DR6'; Underlying Transaction: SAIL 2004-4 SAIL NIM Notes 2005-2 -- $5.4 million Class B remains at 'C/DR6'; -- $10.5 million Class C remains at 'C/DR6'; Underlying Transaction: SAIL 2005-2 SAIL NIM Notes 2005-3 -- $4.8 million Class A remains at 'C/DR6'; -- $16.5 million Class B remains at 'C/DR6'; -- $14.0 million Class C remains at 'C/DR6'; Underlying Transaction: SAIL 2005-3 SAIL NIM Notes 2005-4 -- $5.7 million Class A remains at 'C/DR6'; -- $11.2 million Class B remains at 'C/DR6'; -- $11.2 million Class C remains at 'C/DR6'; Underlying Transaction: SAIL 2005-4 SAIL NIM Notes 2005-HE1 -- $110,865 Class A revised to 'C/DR6' from 'A-', and is removed from Rating Watch Negative; -- $9.4 million Class B remains at 'C/DR6'; -- $2.8 million Class C remains at 'C/DR6'; Underlying Transaction: SAIL 2005-HE1 SASCO ARC NIM Notes 2002-BC1 -- $424,099 Class B remains at 'C/DR6'; Underlying Transaction: SASCO ARC 2002-BC1 SASCO ARC NIM Notes 2003-BC1 -- $1.1 million Class A remains at 'C/DR6'; -- $5.1 million Class B remains at 'C/DR6'; Underlying Transaction: SASCO ARC 2003-BC1 SASCO NIM 2005-NC1 -- $2.5 million Class B remains at 'C/DR6'; Underlying Transaction: SASCO 2005-NC1 SASCO NIM 2005-NC2 -- $391,047 Class A downgraded to 'C/DR6' from 'B'; -- $2.6 million Class B remains at 'C/DR6'; Underlying Transaction: SASCO 2005-NC2 SASCO NIM 2005-S6 -- $17.4 million Class A remains at 'C/DR6'; -- $510,000 Class B remains at 'C/DR6'; Underlying Transaction: SASCO 2005-S6 SASCO NIM 2005-WF2 -- $320,607 Class B downgraded to 'C/DR6' from 'B'; Underlying Transaction: SASCO 2005-WF2 SASCO NIM 2005-WF4 -- $11.4 million Class A downgraded to 'CC/DR3' from 'BBB-'; -- $5.8 million Class B downgraded to 'C/DR6' from 'BB-'; Underlying Transaction: SASCO 2005-WF4 SASCO NIM 2006-BC3 -- $26.3 million Class A downgraded to 'C/DR6' from 'BB', and removed from Rating Watch Negative; -- $6.1 million Class B revised to 'C/DR6' from 'C/DR5'; Underlying Transaction: SASCO 2006-BC3 SASCO NIM 2006-BC4 -- $21.7 million Class A downgraded to 'C/DR4' from 'BBB-', and removed from Rating Watch Negative; -- $7.5 million Class B downgraded to 'C/DR6' from 'B'; Underlying Transaction: SASCO 2006-BC4 SASCO NIM 2006-BC5 -- $9.3 million Class A downgraded to 'B' from 'BBB-', and placed on Rating Watch Negative; -- $3.8 million Class B downgraded to 'C/DR6' from 'B'; Underlying Transaction: SASCO 2006-BC5 SASCO NIM 2006-WF3 -- $16.9 million Class A downgraded to 'C/DR5' from 'BBB-'; -- $4.8 million Class B downgraded to 'C/DR6' from 'BB'; Underlying Transaction: SASCO 2006-WF3 SASCO NIM 2007-BC1 -- $5.1 million Class A downgraded to 'CCC/DR2' from 'A-'; -- $8.7 million Class B downgraded 'C/DR5' from 'BBB-'; -- $5.1 million Class C downgraded to 'C/DR6' from 'BB'; Underlying Transaction: SASCO 2007-BC1 SASCO NIM 2007-WF2 -- $2.7 million Class A downgraded to 'BBB-' from 'A-'; -- $1.9 million Class B downgraded to 'B' from 'BBB-'; Underlying Transaction: SASCO 2007-WF2 BNC NIM 2006-2 -- $13.8 million Class A downgraded to 'C/DR6' from 'BBB-'; -- $3.4 million Class B downgraded to 'C/DR6' from 'BB'; Underlying Transaction: BNC Mortgage Loan Trust 2006-2 BNC NIM 2007-2 -- $6.1 million Class A downgraded to 'BB' from 'A-'; -- $9.2 million Class B downgraded to 'C/DR4' from 'BBB-'; -- $5.8 million Class C downgraded to 'C/DR6' from 'BB'; Underlying Transaction: BNC Mortgage Loan Trust 2007-2 The rating actions reflect actual pay-down performance of the NIM securities to date compared to initial projections, as well as changes that Fitch previously made to its subprime loss forecasting assumptions for the underlying transactions. TOUSA INC: Citicorp Says JH Cohn Retention is Unnecessary --------------------------------------------------------- Citicorp North America, Inc., as administrative agent for certain prepetition lenders of TOUSA Inc. and its debtor-affiliates, complains that there is no justification for the Official Committee of Unsecured Creditors' request to retain J.H. Cohn LLP, as its forensics accountants and financial consultants. Allan E. Wulbern, Esq., at Smith Hulsey & Busey, in Jacksonville, Florida, representing Citicorp, says that the Creditors Committee has not considered the economic realities of the Debtors' Chapter 11 cases and is attempting to burden the estates with additional unnecessary and unreasonable expenses. He notes that the Debtors are operating in a "very precarious and uncertain market place," and in fact, the Debtors' projections demonstrate a continuing diminution in estate value through the end of 2008. The Creditors Committee has already filed three applications for the retention of different professionals to provide financial services -- (1) Jefferies & Company, Inc., as financial advisor; (2) JHC; and (3) Robert Charles Lesser & Co., as real estate advisors. Citicorp and the Prepetition Lenders did not object to the Jefferies Application and its sizeable fee because they were led to believe that Jefferies would perform all of the Creditors Committee's necessary financial services in furtherance of its fiduciary duties, Mr. Wulbern tells the U.S. Bankruptcy Court for the Southern District of Florida. Certain Jefferies professionals, who were assigned to the Creditors Committee engagement, have transferred to another investment banking firm, Moelis & Company, Mr. Wulbern relates. He asserts that rather than burdening the Debtors' estates with substantial costs associated with the retention of additional professionals, who are not as familiar with the Debtors, the Creditors Committee should assign any new tasks to Jefferies and Moelis. Moreover, the Debtors' Case Manager KZC Services, LLC, has been instructed to perform the same analysis services the Creditors Committee proposes to retain JHC, Mr. Wulbern points out. The Debtors have also offered to share KZC's report with the Creditors Committee and Citicorp, he notes. "It would be wasteful and place an undue burden on the Debtors' estates simply to cooperate with multiple overlapping analyses," Mr. Wulbern emphasizes. Committee Talks Back The Creditors Committee maintains that in careful exercise of its judgment after interviewing several firms, it has concluded that it needed the services of: * an investment banking firm with significant capital markets experience -- Jefferies/Moelis; * a sophisticated forensic accounting firm -- JHC; and * a national firm with a substantial background in real estate valuations -- RCLCO. Patricia A. Redmond, Esq., at Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., in Miami, Florida, assures the Court that the services to be provided by the firms are discrete and independent from each other. Each firm's responsibilities have been carefully negotiated and tailored to avoid duplication, appropriately make use of each firm's expertise, and ultimately will be complementary in assisting the Creditors Committee in, among other things, analyzing the Debtors' business operations, financial results and reorganization efforts, she says. The Creditors Committee explains that it cannot -- and should not -- abdicate its fiduciary responsibilities to certain of the Debtors' professionals. Citicorp cannot hold the Creditors Committee hostage in its attempts to insulate itself from the committee's pursuit of avoidance actions and other claims against the Prepetition Lenders, Ms. Redmond contends. The fees and expenses incurred by each firm, Ms. Redmond maintains, are subject to Court approval and will be borne by unsecured creditors -- and that very constituency's fiduciary representative is entitled to the professional representation it deems necessary to acquit its responsibilities. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. Its consolidated detailed balance sheet as of Feb. 29, 2008 showed total assets of $1,961,669,000 and total liabilities of $2,278,106,000. TOUSA's Exclusive Plan Filing Period expires October 25, 2008. (TOUSA Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). TOUSA INC: Amick Seeks to Name Debtor in Foreclosure Action ----------------------------------------------------------- Amick Construction, Inc., asks the U.S. Bankruptcy Court for the Southern District of Florida to lift the automatic stay to allow it to name TOUSA Homes, Inc., if necessary, as party in its foreclosure action against Pacific One Land Holdings L.P. Amick notes that TOUSA Homes may claim some interest in the real estate because of its business transactions with Pacific One Land and a July 30, 2007 Memorandum of Option Agreement recorded in the Public records of Osceola County, Florida. As a result, Amick is likely to add the Debtor to any lien foreclosure, but only for the purpose of foreclosing Amick's claim of lien, Jerry M. Markowitz, Esq., at Markowitz, Davis, Ringel & Trusty, P.A., in Miami, Florida, tells the Court. On February 1, 2007, Amick entered into a contract with the Debtor for Amick to improve land so as to permit the construction of homes. Amick was contracted to perform grading, paving, clearing, drainage, sanitary sewer, water and reuse facilities to real property known as North Point Ph 1A and 1B, in Osceola County, Florida, based on a price of $797,498. The Contract has a provision for additions and includes other items, which could increase the Contract amounts stated. On January 14, 2008, the Debtor instructed Amick to cease performing work under the Contract. As a result of the early termination, Amick's work was not completed and the property is otherwise in a condition that homes cannot be built. According to an Amended Claim of Lien recorded on the Public Records of Osceola County, Florida, on January 22, 2008, a balance of $838,660 is due to Amick, Mr. Markowitz informs the Court. Notwithstanding the Debtors' instruction to cease work and its default on the Contract, Osceola County is requiring Amick to, and Amick will be required to, perform contract work. Amick estimates the required off-site work to cost $100,000 to complete. Once completed, Amick intends to file an additional claim of lien, according to Mr. Markowitz. Mr. Markowitz asserts that cause exists for the automatic stay to be lifted because the real property, which is not owned by the Debtor, is Amick's security for its debt. Amick is incurring additional out-of-pocket costs for the labor, materials and services necessary to complete the work required by Osceola County. Moreover, he notes, there is the likelihood of deterioration to Amick's work, which can impair Amick's security. Thus, in order to fully protect its rights and enforce its Amended Claim of Lien, it is necessary to include the Debtor as a defendant in Amick's construction claim of lien foreclosure against Pacific One Land's real property, Mr. Markowitz maintains. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. Its consolidated detailed balance sheet as of Feb. 29, 2008 showed total assets of $1,961,669,000 and total liabilities of $2,278,106,000. TOUSA's Exclusive Plan Filing Period expires October 25, 2008. (TOUSA Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). TOUSA INC: Option One Wants to Pursue Foreclosure Action -------------------------------------------------------- Option One Mortgage Corporation asks the U.S. Bankruptcy Court for the Southern District of Florida to lift the automatic stay to allow it to include TOUSA Inc. as a junior lien holder defendant in a foreclosure action against the mortgagor. Option One also asks the Court to award it $800 in bankruptcy fees and costs for the prosecution of its lift stay request. Option One owns and holds a promissory note and mortgage securing certain real property owned by TOUSA, Inc., in Volusia County, Florida, recorded in Volusia's public records as Lot 260, Venetian Bay Phase 1A. The Property is also known as 463 Venetian Villa Drive, in New Smyrna Beach, Florida 32168. Payments under the Note and Mortgage are due on the first day of each month until the maturity of the Note. As of May 5, 2008, the Debtors were in default on 12 monthly mortgage payments from May 1, 2007, through May 1, 2008, of $3,316 each, plus accrued late charges of $995, according to , Scott Weiss, Esq., at Law Offices of Marshall C. Watson, P.A., in Fort Lauderdale, Florida. As of May 16, 2008, Option One is owed the principal $414,000, he adds. According to the Volusia County property appraiser, the market value of the Property is $335,332, Mr. Weiss relates. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. Its consolidated detailed balance sheet as of Feb. 29, 2008 showed total assets of $1,961,669,000 and total liabilities of $2,278,106,000. TOUSA's Exclusive Plan Filing Period expires October 25, 2008. (TOUSA Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). TOUSA INC: Court Approves Stipulation to Resolve GMAC Controversy ----------------------------------------------------------------- Judge John K. Olson of the U.S. Bankruptcy Court for the Southern District of Florida has approved an amended Stipulation to settle a dispute that arose from a Master Purchase Construction Management and Rental Agreement that TOUSA, Inc., and GMAC Model Home Finance, LLC entered into in September 2003. The new Stipulation does not supersede the court-approved Sunbelt Homes Stipulation. The Debtors are authorized to undertake and consummate the transactions contemplated by the Stipulation. The 30-day period contained in Section 362(e) of the Bankruptcy Code is further tolled with respect to GMAC Model Home Finance, LLC's Lift Stay Motion, through and including: (i) May 27, 2008, as to the Sunbelt Homes; and (ii) June 11, 2008, as to the Vacated Homes and the Remaining Homes, other than the Sunbelt Homes, without prejudice to the rights of the Debtors or any party-in- interest to seek additional extensions of the time period. Parties Modify Settlement TOUSA, Inc., and GMAC have entered into a new stipulation, dated May 21, 2008, that supersedes the Original Stipulation and the Master Agreement. Superseding the Master Agreement will not impair in any manner the ability of GMAC Party to assert any claim under the Master Agreement that is not released by it pursuant to the Stipulation. At the Parties' behest, Judge Olson has approved the Stipulation, the salient terms of which are: * The 30-day period contained in Section 362(e) is further and immediately tolled with respect to all of the relief requested in GMAC's Lift Stay Motion other than as to the Sunbelt Homes through and including 15 days from the first occurrence of certain events, and will be forever waived upon the Effective Date. * TOUSA will pay GMAC in cash by wire transfer the Monthly Rent Payment for the period from January 29, 2008, through May 31, 2008, less any amounts paid by the Debtor to GMAC before the Effective Date in respect of TOUSA's occupancy of the Remaining Homes for the period. TOUSA will provide GMAC with proof that all Real Property Taxes, Personal Property Taxes, sales, intangibles, privilege or lease taxes, liability and hazard insurance premiums, maintenance and utilities costs, homeowners association dues and other fees related to and payable during the period January 29, 2008, through the Effective Date either have been paid by TOUSA or have been reimbursed by TOUSA to the extent GMAC has paid those amounts. In addition, TOUSA will continue to pay the applicable third parties, on a current basis, all Property Costs related to the period January 29, 2008, through the end of the Term, as those costs become due and payable during that period. * Monthly Rent Payment will equal the aggregate amount of rent for each Remaining Home TOUSA continues to occupy as of the applicable payment date, which will be payable on the first day of each month. * TOUSA may, in writing and after consultation with the Official Committee of Unsecured Creditors, extend the Term through September 30, 2008, if: (i) TOUSA pays GMAC in cash an aggregate amount equal to the Monthly Rent Payment plus an amount equal to 1% of the agreed-upon purchase price of the Remaining Homes, and (ii) TOUSA continues to pay the Property Costs for each Remaining Homes that it continues to occupy as of the applicable payment date. The Term may be further extended only by a written agreement between TOUSA and GMAC. * Upon expiration of the Term, TOUSA will immediately vacate and return sole possession of any Remaining Homes that it continues to occupy and which it did not purchase to GMAC. * Within three days after the Effective Date, TOUSA will convey the Colorado Homes to GMAC. GMAC will pay all Sale Closing Costs in connection with the conveyances. Pursuant to the new Stipulation, GMAC is granted claims with administrative expense priority in accordance with Sections 503 and 507 of the Bankruptcy Code for any TOUSA's obligations. Except as provided, the payments ratified, authorized and directed pursuant to the new Stipulation will not be subject to any disgorgement, repayment or avoidance under any law, statute or contract upon or by the termination of the Stipulation, any conversion of the Debtors' Chapter 11 cases to Chapter 7, or dismissal of any of the Debtors' bankruptcy cases. The releases, waivers and discharges provided in the new Stipulation will survive and not be affected or modified by any conversion or dismissal of any of the Debtors' Chapter 11 cases. The automatic stay is modified to permit GMAC to provide any notice required or take any other action permitted. Upon any requirement that TOUSA vacate or cause to be vacated any Remaining Home, GMAC may take any action, including removal or disposal of any personal property in or on any Remaining Home or Vacated Home or commencement of any action to regain sole possession of any Remaining Home or Vacated Home. GMAC will have no obligation to return any personal property or proceeds to any TOUSA party. A full-text copy of the May 21, 2008 Stipulation is available for free at http://bankrupt.com/misc/Tousa_May21,2008Stipulation.pdf GMAC's Lift Stay Motion to permit the commencement of eviction proceedings and take other actions to regain possession of certain Properties is denied as moot. The new Stipulation, however, does not supersede the Sunbelt Homes Stipulation. According to the Debtors, as of May 21, the effective date of the Sunbelt Homes Stipulation, which resolves certain issues relating to the Vacated Homes and the Remaining Homes, has not yet occurred. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. Its consolidated detailed balance sheet as of Feb. 29, 2008 showed total assets of $1,961,669,000 and total liabilities of $2,278,106,000. TOUSA's Exclusive Plan Filing Period expires October 25, 2008. (TOUSA Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). TOY K WARDEN: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Toy K Warden 4400 Sully Trace Virginia Beach, VA 23456 Bankruptcy Case No.: 08-71736 Chapter 11 Petition Date: May 27, 2008 Court: Eastern District of Virginia (Norfolk) Trustee: W. Clarkson McDow, Jr. Debtor's Counsel: Harry W. Jernigan, III Harry Jernigan CPA Attorney, P.C. 258 N. Witchduck Road, Suite C Virginia Beach, VA 23462 Tel (757) 490-2200 Email hj@hjlaw.com Estimated Assets: $500,001 - $1 million Estimated Debts: $1,000,001 - $10 million A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/vaedb08-71736.pdf TRUMP ENT: Inks $316 Million Sale Deal for Atlantic City Casino --------------------------------------------------------------- Trump Entertainment Resorts Inc. agreed to sell the Trump Marina Hotel Casino in Atlantic City to an affiliate of Coastal Development LLC for $316 million, The Wall Street Journal relates. In a press statement, Trump stated that Coastal Marina LLC, an affiliate of Coastal Development LLC, has entered into an agreement to purchase the Trump Marina in Atlantic City, New Jersey. As part of the transaction, the parties have also agreed to end prior, unrelated litigation, with prejudice, upon the closing of the transaction. Upon successful acquisition of the property, Coastal Marina will re-brand and refurbish the property into a new destination resort under the "Margaritaville(TM)" brand. "Together with Jimmy Buffett's team at Margaritaville(TM), our plans are to create an exciting new property that we believe will tap its full potential and make it one of the most successful destination gaming resorts in Atlantic City, Richard T. Fields, chairman of Coastal Marina, said. "In the weeks and months ahead, there will be additional announcements and more details about the transition of ownership and our new resort concept." "They are buying a wonderful building in a great location," Donald J. Trump, the chairman of Trump Entertainment Resorts, remarked. "It has been an important part of our company with a loyal customer base and a dedicated team." "The execution of this transaction will provide us with additional financial flexibility to effectively master plan the future path of our company in the midst of an overall transformation which has already been marked by many successes," Mark Juliano, chief executive officer of Trump Entertainment Resorts, said. "As we look forward to the opening of the new 782 room hotel tower and Il Mulino restaurant at the Taj Mahal later this year, we are encouraged by the success of the projects we have already introduced, including the refurbished casino floors, upgraded room products and brand new penthouse suites at the Taj Mahal and Plaza, Mr. Juliano added. Now we are closely evaluating the variety of options before us to create value for our shareholders, including additional development in Atlantic City, reducing the company's debt, and potential projects to diversify our interests outside of Atlantic City." The agreement is subject to certain regulatory approvals and customary closing conditions. The Trump Marina Hotel Casino covers approximately 14 acres and includes a 27-story hotel with 728 guest rooms, including 153 suites. The casino offers approximately 79,000 square feet of gaming space and approximately 58,000 square feet of convention, ballroom and meeting space. Trump Marina also features an approximately 540-seat cabaret-style theater, a nightclub, three players clubs, four retail outlets, six restaurants, a cocktail lounge, a recreation deck complete with a health spa, outdoor pool, tennis courts, basketball courts and jogging track. The hotel and casino also has an 11 bay bus terminal and a roof-top helipad, as well as a nine story parking garage capable of accommodating approximately 3,000 cars. The Trump Marina Hotel Casino includes the lease for the Senator Frank S. Farley State Marina. Latham & Watkins, led by partner Raymond Lin, and Bear Stearns & Co. Inc., led by Senior Managing Director Kenneth Shea, provided legal counsel and financial advisory services to Mr. Fields and Coastal Marina in connection with the transaction. Weil Gotshal & Manges LLP, led by partners J. Philip Rosen and Malcolm Landau, and Merrill Lynch & Co., Inc, led by managing director Ragavan Bala, repectively, provided legal counsel and financial advisory services to Trump Entertainment Resorts in connection with the transaction. About Coastal Development LLC Headquartered in New York City, Coastal Development LLC is a privately held company that specializes in financing and developing resort destinations, luxury hotels and gaming facilities. An affiliate of Coastal Development LLC is also the largest shareholder of Suffolk Downs racetrack in Boston, Massachusetts. About Trump Entertainment Resorts Inc. Based in Atlantic City, New Jersey, Trump Entertainment Resorts Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and operates three casino hotel properties in Atlantic City, New Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino. The company conducts gaming activities and provides customers with casino resort and entertainment. * * * Trump Entertainment Resorts Inc.'s 8-1/2% senior secured notes due 2015 carry Moody's Investors Service's Caa1 rating which was placed in April 2008 and Standard & Poor's CCC+ rating which was placed in May 2008. UAL CORP: Abandons Merger Talks with US Airways, Tribune Says ------------------------------------------------------------- Merger talks between United Airlines and US Airways have come to an end, Micheline Maynard and Andrew Ross Sorkin of the International Herald Tribune said, citing people with direct knowledge of the situation. According to the Tribune, United informed USAir of its decision not to pursue the talks at a meeting of the carriers' chief executives held Thursday. A formal announcement will be made on Friday citing difficulty and the expense of combining various labor contracts, particularly agreements covering pilots. The chief executive officers at UAL and US Airways were scheduled to meet Thursday to continue merger talks and exchange information on potential stumbling blocks raised by UAL directors, The Troubled Company Reporter said yesterday. According to The Wall Street Journal, issues raised by UAL directors include how both carriers would raise capital to fund the consolidation; how to resolve labor contract issues; and how much flexibility they would have to take airplane seats out of their combined system. Unnamed sources told the Journal, if the CEOs find a way to resolve the outstanding issues, both could approach their boards in mid-June for approval to pursue the deal. The carriers also have to agree on an exchange ratio for a share swap or on who might run a combined company. The New York Times said there has been little to no contact between United and USAir in recent days and the internal teams of senior executives at both companies have put the talks on "permanent hold." USAir officials were growing impatient, the Times added. To win federal approval for the carriers' planned merger transaction, an agreement from both parties should have occurred by about Memorial Day to allow time for regulatory scrutiny, the Times said. "We don't comment on rumors or speculation," United spokeswoman Jean Medina said, according to the Times. USAir Spokesman Philip Gee also declined to comment. The United-USAir talks picked up speed in April after Continental Airlines decided not to consolidate with United. United and USAir reportedly hoped to reach an agreement within a month, so it could be considered by the Justice Department before a new president takes office. The New York Times said although United's board met two weeks ago for an update on the discussions, the board took no formal vote on the situation since there was no agreement to consider. About US Airways Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) - http://www.usairways.com/-- primary business activity is the ownership of the common stock of US Airways, Inc., Allegheny Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc., MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc., Material Services Company, Inc., and Airways Assurance Limited, LLC. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. The Debtors' Chapter 11 plan for its second bankruptcy filing became effective on Sept. 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News, Issue No. 158; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on March 26, 2008, Standard & Poor's Ratings Services revised its outlook on US Airways Group Inc. to stable from positive. S&P has affirmed all ratings, including the 'B-' long-term corporate credit rating. The TCR reported on April 17, 2008, that Fitch Ratings has affirmed the debt ratings of US Airways Group, Inc. as: Issuer Default Rating at 'B-'; Secured term loan rating at 'BB-/RR1'; and Senior unsecured rating at 'CCC/RR6'. Fitch's ratings apply to approximately $1.7 billion in outstanding debt. The Rating Outlook has been revised to Stable from Positive. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on May 3, 2007, Fitch Ratings has affirmed the Issuer Default Ratings of UAL Corp. and its principal operating subsidiary United Airlines Inc. at B-. UBS MORTGAGE: Fitch Cuts Rating on $11.6MM Class M-4 Certs. to B ---------------------------------------------------------------- Fitch Ratings has taken rating actions on UBS Mortgage Asset Securitization Transaction Asset Backed Securities mortgage pass- through certificates. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are removed. Series 2002-NC1 -- $7.9 million class M-2 affirmed at 'AAA'; -- $35.4 million class M-3 affirmed at 'A+'; -- $11.6 million class M-4 downgraded to 'B' from 'BB-'. Deal Summary -- Originators: New Century; -- 60+ day Delinquency: 34.31%; -- Realized Losses to date (% of Original Balance): 2.58%. Series Trust 2002-OPT1 -- $8.0 million class M-2 affirmed at 'AAA'; -- $10.5 million class M-3 affirmed at 'AA'; -- $6.0 million class M-4 affirmed at 'A+'; -- $4.5 million class M-5 downgraded to 'BB' from 'BBB'; -- $4.5 million class M-6 downgraded to 'C/DR5' from 'CCC/DR3'. Deal Summary -- Originators: Option One; -- 60+ day Delinquency: 25.31%; -- Realized Losses to date (% of Original Balance): 1.43%. UNI-MARTS LLC: Files for Chapter 11 Protection in Wilmington ------------------------------------------------------------ Uni-Marts LLC and six of its affiliates filed for Chapter 11 protection with the U.S. Bankruptcy Court for the District of Delaware. The Debtors are in negotiations with a potential buyer, WNEP-TV reports. The Debtors' 1,200 employees are fretting over their jobs since 280 of the Debtors' stores will be up for sale, and some of those stores are likely to be closed, relates WNEP-TV. Information on store closures will be available by next week, WNEP-TV says, citing a representative from the store chain. The Debtors sell more than 3,000 consumer merchandise, grocery and other convenience items. In addition, they offer products aimed at increasing store traffic, such as lottery tickets, ATMs, money orders, pre-paid calling cards, and car washes. More than two-thirds of their locations sell gasoline, with the majority offering the Uni-Mart brand name. Branded gasoline for the other sites is purchased from BP/Amoco, E30on/Mobil and Sunoco. On the Net: http://www.uni-mart.com/ UNI-MARTS: Case Summary & 30 Largest Unsecured Creditors -------------------------------------------------------- Lead Debtor: Uni-Marts, LLC 477 E. Beaver St. State College, PA 16801 Bankruptcy Case No.: 08-11037 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Uni Realty of Wilkes-Barre, Inc. 08-11033 Uni-Marts Ohio, LLC 08-11034 Uni Realty of Wilkes-Barre, LP 08-11035 Uni Realty of Luzerne, Inc. 08-11036 Uni Realty of Luzerne, LP 08-11038 Green Valley National Accounts, LLC 08-11039 Chapter 11 Petition Date: May 29, 2008 Court: District of Delaware (Delaware) Judge: Mary F. Walrath Debtors' Counsel: Michael Gregory Wilson, Esq. Email: mwilson@hunton.com Hunton & Williams 951 E. Byrd St. Richmond, VA 23219 Tel: (804) 788-8200 Fax: (804) 788-8218 http://www.hunton.com/ Estimated Assets: $50 million to $100 million Estimated Debts: $50 million to $100 million Debtors' Consolidated List of 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ BP Products North America, trade creditor $8,536,221 Inc. Attn: Greg Levine 28100 Torch Pkwy. Warrenville, IL 60555 Tel: (630) 836-6504 Fax: (216) 292-0212 E30onmobil Oil Corp. trade creditor $5,345,722 Attn: Mike Mullhern 3325 Gallows Rd. Tel: (724) 942-4427 Fax: (724) 942-4428 Fairfax, VA 22037 Petroleum Products Corp. trade creditor $5,096,583 Attn: John Arnold P.O. Box 2621 Harrisburg, PA 17105 Tel: (717) 939-0466 Fax: (717) 939-0294 Mclane trade creditor $4,621,888 Attn: Kirk Leff 2828 Mclane Dr. Baldwinsville, NY 13027 Tel: (315) 638-7223 Fax: (315) 638-4702 Saul Ewing Remick & Saul, LLP legal services $1,253,429 Attn: David Antzis 1200 Liberty Ridge Dr. Tel: (610) 251-5055 Fax: (610) 408-4401 Wayne, PA 19087 Pepsi Cola Co. trade creditor $540,000 Attn: Tony Recchia P.O. Box 75901 Chicago, IL 60675-5901 Tel: (412) 778-4557 Fax: (412) 778-4719 Goetz trade creditor $414,630 Attn: Steve Jackson P.O. Box A Buffalo, NY 14217-0305 Tel: (716) 876-4324 Fax: (716) 876-7942 Jarrett Service ATM, LLC trade creditor $364,406 Attn: Eric Johnston 210 North Center Dr. North Brunswick, NJ 08902 Tel: (800) 935-0107 Fax: (732) 545-8671 Schneider-Valley Farms trade creditor $330,000 Attn: Ed Schneider 1860 E. Third St. Williamsport, PA 17701 Tel: (570) 419-4071, (800) 332-8563, 104 (ext.) Fax: (570) 326-2736 Heath, Michael insurance claim $239,689 Williams & Connolly, LLP legal services $218,859 Suburban Oil trade creditor $211,776 Degarmo, Jenny insurance claim $200,000 Farm & Home Oil Co. trade creditor $124,325 Grimes, Carlene insurance claim $113,803 Long, Frederick insurance claim $111,005 United Refining Co. trade creditor $94,767 Green Mountain Coffee Roasters trade creditor $80,000 Sabach, John insurance claim $77,995 Peechia, Patricia F. insurance claim $73,949 Frito-Lay trade creditor $70,000 Coca-Cola Bottling Co. trade creditor $53,000 Jack & Jill Ice Cream trade creditor $53,000 Khala, LLC dealer security $50,000 deposit JNA-1 Corp. dealer security $50,000 deposit Good Business Services II, LLC dealer security $50,000 deposit Charan Trading Co. dealer security $50,000 deposit Tasty Baking Co. trade creditor $47,000 Butterkrust Baking Co. trade creditor $46,000 Morgan Lewis & Bockius, LLP legal services $45,520 UNIVERSAL PROPERTY: March 31 Balance Sheet Upside-Down by $3.9MM ---------------------------------------------------------------- Universal Property Development and Acquisition Corp.'s balance sheet at March 31, 2008, showed $24,693,574 in total assets, $28,341,079 in total liabilities, and $237,563 in total minority interest, resulting in a $3,885,068 total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $10,476,068 in total current assets available to pay $23,904,888 in total current liabilities. The company reported a net loss of $4,183,612, on total revenue of $15,188,920, for the first quarter ended March 31, 2008, compared with a net loss of $726,881, on total revenue of $1,307,909, in the same period last year. For the three months ended March 31, 2008, natural gas sales revenue was $588,932 compared to $195,084 for the same period during 2007. The revenues were the result of production in the Heartland subsidiary. For the three months ended March 31, 2008, petroleum products sales revenue was $14,574,696 compared to $1,112,825 for the same period during 2007. The increase in revenue was primarily the result of the sale of petroleum products in the Continental subsidiary that as of the three months ended March 31, 2007, was not yet acquired. The increase in net loss primarily reflects increased production in the three months ended March 31, 2008, partially offset by increased costs and operating expenses related to the increased production, increase in payroll and related benefits and an increase in general and administrative expenses in the three months ended March 31, 2008 as Continental, Heartland and Aztec were not yet acquired in the same period of 2007. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2cd8 Going Concern Disclaimer KBL, LLP, in New York, expressed substantial doubt about Universal Property Development and Acquisition 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 suffered recurring losses from operations, and is dependent upon the sale of equity securities to provide sufficient working capital to maintain continuity. About Universal Property Headquartered in Juno Beach, Fla., Universal Property Development and Acquisition Corporation (OTC BB: UPDA.OB) is engaged in the oil and natural gas acquisition, production, and development industry. UPDA currently has operations in the State of Texas. US AIRWAYS: Abandons Merger Talks with United, Tribune Says ----------------------------------------------------------- Merger talks between United Airlines and US Airways have come to an end, Micheline Maynard and Andrew Ross Sorkin of the International Herald Tribune said, citing people with direct knowledge of the situation. According to the Tribune, United informed USAir of its decision not to pursue the talks at a meeting of the carriers' chief executives held Thursday. A formal announcement will be made on Friday citing difficulty and the expense of combining various labor contracts, particularly agreements covering pilots. The chief executive officers at UAL and US Airways were scheduled to meet Thursday to continue merger talks and exchange information on potential stumbling blocks raised by UAL directors, The Troubled Company Reporter said yesterday. According to The Wall Street Journal, issues raised by UAL directors include how both carriers would raise capital to fund the consolidation; how to resolve labor contract issues; and how much flexibility they would have to take airplane seats out of their combined system. Unnamed sources told the Journal, if the CEOs find a way to resolve the outstanding issues, both could approach their boards in mid-June for approval to pursue the deal. The carriers also have to agree on an exchange ratio for a share swap or on who might run a combined company. The New York Times said there has been little to no contact between United and USAir in recent days and the internal teams of senior executives at both companies have put the talks on "permanent hold." USAir officials were growing impatient, the Times added. To win federal approval for the carriers' planned merger transaction, an agreement from both parties should have occurred by about Memorial Day to allow time for regulatory scrutiny, the Times said. "We don't comment on rumors or speculation," United spokeswoman Jean Medina said, according to the Times. USAir Spokesman Philip Gee also declined to comment. The United-USAir talks picked up speed in April after Continental Airlines decided not to consolidate with United. United and USAir reportedly hoped to reach an agreement within a month, so it could be considered by the Justice Department before a new president takes office. The New York Times said although United's board met two weeks ago for an update on the discussions, the board took no formal vote on the situation since there was no agreement to consider. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on May 3, 2007, Fitch Ratings has affirmed the Issuer Default Ratings of UAL Corp. and its principal operating subsidiary United Airlines Inc. at B-. About US Airways Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) - http://www.usairways.com/-- primary business activity is the ownership of the common stock of US Airways, Inc., Allegheny Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc., MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc., Material Services Company, Inc., and Airways Assurance Limited, LLC. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. The Debtors' Chapter 11 plan for its second bankruptcy filing became effective on Sept. 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News, Issue No. 158; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on March 26, 2008, Standard & Poor's Ratings Services revised its outlook on US Airways Group Inc. to stable from positive. S&P has affirmed all ratings, including the 'B-' long-term corporate credit rating. The TCR reported on April 17, 2008, that Fitch Ratings has affirmed the debt ratings of US Airways Group, Inc. as: Issuer Default Rating at 'B-'; Secured term loan rating at 'BB-/RR1'; and Senior unsecured rating at 'CCC/RR6'. Fitch's ratings apply to approximately $1.7 billion in outstanding debt. The Rating Outlook has been revised to Stable from Positive. VCA ANTECH: Animal Hospital Acquisition Cues S&P to Lift Rating --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Los Angeles-based VCA Antech Inc. to 'BB' from 'BB-'. The outlook is stable. "The upgrade reflects the company's continued success in acquiring and integrating animal hospitals, and, consequently, our increased confidence that VCA can sustain cash flow and credit metrics consistent with the higher rating," said Standard & Poor's credit analyst Alain Pelanne. The rating reflects VCA's narrow operating focus in the highly competitive animal health industry, risks inherent in its acquisitive strategy, and its uncertain ability to institute ongoing price increases. In addition, there remains risk to the rating as a result of any reduction in demand growth that may stem from a prolonged macroeconomic downturn. These risks are offset only partially by the company's expanding footprint and revenue diversity, its established laboratory platform, and its demonstrated willingness to use a portion of free operating cash flow to pay down debt. VCA operates more than 450 animal hospitals throughout the U.S. WALDEN RESERVE: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Walden Reserve, LLC fdba Renegade Mountain Partners, LLC 10901 Lowell Ave., Ste. 100 Overland Park, KS 66210 Bankruptcy Case No.: 08-21230 Type of Business: The Debtor owns and manages residential real estate. Chapter 11 Petition Date: May 28, 2008 Court: District of Kansas (Kansas City) Judge: Dale L. Somers Debtor's Counsel: Colin N. Gotham, Esq. Email: colin@evans-mullinix.com Evans & Mullinix, P.A. 7225 Renner Rd., Ste. 200 Shawnee, KS 66217 Tel: (913) 962-8700 Fax: (913) 962-8701 http://www.evans-mullinix.com Total Assets: $14,637,288 Total Debts: $7,085,320 Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bedford Falls Development Unpaid consulting $673,870 50 Ford Way fees Richmond Hill, GA 31324 Berkebile Nelson Immenschuh Unpaid consulting $277,455 106 West 14th St., Ste. 200 fees Kansas City, MO 64105 Design Works LC Unpaid consulting $141,835 50 George St. fees Charleston, SC 29401 James R. Schemmel Loan $118,500 Dawson Wissmach Architects, PC Unpaid services $64,344 TechKnow Engineering, LLC Unpaid consulting $60,904 fees Billy Casper Golf,LLC Unpaid consulting $53,032 fees Legacy Wealth Partners, LLC Unpaid services $51,357 Lynn Garrison Loan $50,000 Radtke Tomberlin Unpaid consulting $41,940 fees AKD Land Planning & Design Unpaid consulting $28,551 fees StoneCreek Studio Unpaid consulting $25,000 fees Joseph Decosoimo & Co. Unpaid accounting $24,500 fees Tennessee Dept. of Revenue Franchise, Excise $21,240 Tax Carolyn Turner, Trustee Unpaid Taxes $20,395 Heartland Capital Investments Unpaid services $19,625 JW Associates, Inc. Unpaid services $19,029 Chapman & Cutler LLP Unpaid legal fees $17,616 WILLAMETTE VALLEY: Files Reports, Expects Nasdaq Rule Compliance ---------------------------------------------------------------- Willamette Valley Vineyards Inc. filed its Form 10-KSB for the year ended Dec. 31, 2007, with the Securities and Exchange Commission on May 19, 2008, and believes it is now in compliance with the Nasdaq rule. The company received a Nasdaq Staff Determination Letter from the Nasdaq Listing Qualifications Department on April 18, 2008, with respect to the company not filing its Form 10-KSB for the year ended Dec. 31, 2007, in a timely manner. On May 21, 2008, the company received an additional Nasdaq Staff Determination letter from the Nasdaq Listing Qualifications Department providing that the company does not comply with the requirement for continued listing set forth in Marketplace Rule 4310(c)(14) because it did not file its Interim Report on Form 10- Q for the period ended March 31, 2008, on a timely basis, and that its securities are, therefore, subject to delisting from The Nasdaq Capital Market. The company expects to file its Form 10-Q within the week and at the time of filing expects to be in compliance with the requirements for continued listing on The Nasdaq Capital Market. If the Form 10-Q is not filed before June 5, 2008, or if it is filed but Nasdaq still determines an appeal hearing is necessary, the company will present its views at an appeal hearing before a Nasdaq Listing Qualifications Panel on June 5, 2008. About Willamette Valley Vineyards Inc. Headquartered in Turner, Oregon, Willamette Valley Vineyards Inc. (NASDAQ:WVVI) -- http://www.WillametteValleyVineyards.com/-- produces approximately 130,000 cases annually that are distributed throughout the United States, Canada, and the Pacific Rim. The winery was founded in 1983 by James Bernau and manages approximately 300 acres of vines, which are all certified sustainable, LIVE and Salmon Safe. WIMPFEIMER & BRO: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: A. Wimpfheimer & Bro., Inc. 300 Church Street Blackstone, VA 23924 Bankruptcy Case No.: 08-32291 Type of Business: The Debtor manufactures fine velvet, velveteens, corduroys, and related fabrics since 1845. See http://www.wimpvel.com/ Chapter 11 Petition Date: May 19, 2008 Court: Eastern District of Virginia (Richmond) Judge: Douglas O. Tice Jr. Debtor's Counsel: Sarah Beckett Boehm, Esq. (sboehm@mcguirewoods.com) McGuireWoods LLP One James Center 901 East Cary Street Richmond, VA 23219 Tel: (804) 775-1000 Fax: (804) 775-1061 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its 20 largest unsecured creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Pension Benefit Guaranty Corp. Estimated $4,500,000 c/o Ralph Landy, Esq. Underfunded 1200 K. Street, Northwest Pension Liability Washington, DC 20005 Internal Revenue Service Penalty $65,000 P.O. Box 21126 Philadelphia, PA 19114 D.W. Link Trade Debt $64,984 226 West 37th Street 2nd Floor New York, NY 10018 Pinnacle Int'l Frt., Inc. Trade Debt $55,824 Luks Kadife TIC ve SAN. A.S. Trade Debt $27,352 Young Do Textile Inc. Trade Debt $23,540 Amerada Hess Corp. Trade Debt $18,537 Rainbow Textiles Inc. Trade Debt $11,707 Fur-Textiles Nederland b.v. Trade Debt $11,000 Arthur R. Johnson Co. Inc. Trade Debt $9,278 MNC Stribbons Trade Debt $9,129 Constellation Newenergy Trade Debt $8,218 United Parcel Service Trade Debt $7,467 Palisades Capital Advisors Professional Fees $5,000 C L & P Northeast Utilities Trade Debt $2,554 Odile Trade Debt $2,368 Otis Elevator Company Trade Debt $2,113 Shenzen Aude International Co. Trade Debt $1,720 MSL Express Inc. Trade Debt $1,500 Automatic Data Processing Inc. Trade Debt $1,442 * Fitch Withdraws Q-IFS Ratings on 11 Health Insurance Companies ---------------------------------------------------------------- Fitch Ratings has withdrawn its quantitative insurer financial strength ratings on 11 health insurance companies that no longer meet Fitch's criteria to be eligible to receive a Q-IFS rating. These ratings are withdrawn by Fitch: Central Oregon Independent Health Services, Inc. (NAIC Code 47087) -- Q-IFS 'BBBq'. Care Choices HMO (NAIC Code 95452) -- Q-IFS 'BBBq'. FirstCarolinaCare, Inc. (NAIC Code 69752) -- Q-IFS 'BBq'. Firstguard Health Plan, Inc. (NAIC Code 95364) -- Q-IFS 'Bq'. Firstguard Health Plan Kansas, Inc. (NAIC Code 95620) -- Q-IFS 'BBq'. Bluechoice Healthplan of South Carolina, Inc. (NAIC Code 95741) -- Q-IFS 'BBBq'. Vista Healthplan, Inc. (NAIC Code 95114) -- Q-IFS 'CCCq'. Vista Healthplan of South Florida, Inc. (NAIC Code 95266) -- Q-IFS 'CCCq'. GHI HMO Select, Inc. (NAIC Code 95835) -- Q-IFS 'Bq'. Group Health, Inc. (NAIC Code 55239) -- Q-IFS 'BBBq'. Wellmark Health Plan of Iowa, Inc. (NAIC Code 95531) -- Q-IFS 'BBBq'. * S&P Lowers Ratings on 1,326 Classes of US RMBS Certificates ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 1,326 classes of U.S. residential mortgage-backed securities certificates issued in the first half of 2007 backed by Alternative-A mortgage collateral. S&P also removed its ratings on 722 Alt-A classes from CreditWatch. In addition, S&P placed its ratings on 567 other Alt-A classes on CreditWatch with negative implications. Finally, S&P affirmed its ratings on 293 Alt-A classes and removed them from CreditWatch negative. All of the ratings that are being removed from CreditWatch were placed there on Feb. 29, 2008. This action resolves all of the CreditWatch actions taken that day. The classes affected by the negative rating actions represent an issuance amount of approximately $33.95 billion, or about 13.92% of the par amount of U.S. RMBS transactions backed by Alt-A mortgage loans rated by Standard & Poor's in the first half of 2007. 2007 Alt-A Rating Actions The downgrades and CreditWatch placements reflect S&P's opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings, given its current projected losses. Current projected losses were calculated using the 2006 Alt-A default curves described in Standard & Poor's Revised Default And Loss Curves for U.S. Alt-A RMBS, which S&P published Dec. 19, 2007, on RatingsDirect. Due to current market conditions, S&P are assuming that it will take approximately 15 months to liquidate loans in foreclosure and approximately eight months to liquidate loans categorized as real estate owned. In addition, S&P are assuming a loss severity of 34% for U.S. Alt-A RMBS transactions backed by fixed-rate and long-rest hybrid (fixed-rate period of at least five years) loan collateral issued in 2007. S&P are assuming a loss severity of 35% for transactions issued in 2007 that are backed by mortgage loans that have a negative amortization feature. S&P are also assuming a loss severity of 35% for transactions backed by adjustable-rate and short-rest hybrid loan collateral (fixed-rate period of less than five years). The lowered ratings reflect our assessment of credit support under a constant prepayment rate that is equal to the lower of the lifetime CPR or the last 12-month CPR. To assess the creditworthiness of each class, S&P reviewed the individual delinquency and loss trends of each transaction for changes, if any, in risk characteristics, and the classes' ability to withstand additional credit deterioration. Each class that has an affirmed 'AAA' rating generally can withstand approximately 150% of S&P's projected loss assumptions under its analysis, subject to individual caps assumed on specific transactions. S&P determined the caps by limiting the amount of remaining defaults to 85% of the current pool balances. The classes with ratings being placed on CreditWatch are all rated 'AAA'. Standard & Poor's will analyze the cash flow for these certificates to assess whether the current ratings are appropriate by comparing available credit enhancement with the projected losses for the timeframe the certificates are expected to be outstanding. Standard & Poor's will continue to monitor the RMBS transactions it rates and take rating actions, including CreditWatch placements, when appropriate. Factors Driving U.S. RMBS Rating Actions Mortgage Pool Performance Monthly performance data reveal that delinquencies and foreclosures continue to accumulate for the 2007-vintage U.S. Alt- A RMBS transactions. As of the April 2008 distribution date, serious delinquencies among all U.S. Alt-A RMBS transactions issued during 2007 were 6.64%, up 64.76% since January 2008. During this same time, cumulative realized losses for 2007-vintage Alt-A deals increased to 0.08% from 0.02%. The analysis performed during this review has allowed Standard & Poor's to project losses for each of the three types of Alt-A transactions issued during the first half of 2007. S&P project aggregate lifetime losses of 8.15%-8.65% of the original balance for the transactions with negative amortizing collateral. S&P project aggregate lifetime losses of 6.40%-6.90% for the transactions backed by fixed-rate and long-reset hybrid collateral. Finally, S&P project aggregate lifetime losses of 7.00%-7.50% for the transactions backed by adjustable-rate and short-rest hybrid collateral. A list of deal-specific projected losses can be found in "Projected Losses For U.S. Alternative-A RMBS Issued In First-Half 2007," published May 28, 2008, on RatingsDirect. In reviewing the 2007-vintage Alt-A transactions, S&P used the assumptions S&P announced on Jan. 15, 2008, and described in "U.S. RMBS Surveillance, CDO Of ABS Assumptions Revised Amid Defaults, Negative Housing Outlook." S&P believe that the application of expected lifetime losses has become appropriate as the depth and duration of the housing downturn continues to increase. S&P lowered its ratings to 'CCC' on the classes that have expected lifetime losses greater than their existing credit enhancement. In addition, S&P lowered the ratings on many of the 2007 certificates previously rated 'B' and 'CCC', and on various classes from pools with extraordinarily high levels of severely delinquent loans, to 'CC' because its analysis revealed that these classes have a greater likelihood of default in the nearer term. S&P based its rating adjustments on its view of each class' ability to withstand losses in excess of our projections. Table 1 shows the classes with ratings lowered and ratings placed on CreditWatch negative as a percentage of the original balance of the total amount affected ($33.95 billion). Table 1 First Half Of 2007 Actions Total % actions by dollars Rating Downgrades CreditWatch negative ------ ---------- -------------------- AAA 0.00 78.21 AA+ 2.86 0.00 AA 4.72 0.00 AA- 1.33 0.00 A+ 1.53 0.00 A 1.68 0.00 A- 0.94 0.00 BBB+ 1.12 0.00 BBB 1.21 0.00 BBB- 1.24 0.00 BB+ 1.00 0.00 BB 1.21 0.00 BB- 1.00 0.00 B+ 0.56 0.00 B 0.44 0.00 B- 0.88 0.00 CCC 0.06 0.00 Total 21.79 78.21 Unless S&P observe a significant change in the macroeconomic environment, Standard & Poor's considers the actions, except for the CreditWatch placements, to be the last major changes to the ratings on the U.S. Alt-A RMBS classes issued during the first half of 2007. S&P anticipate reviewing and resolving the CreditWatch actions taken on both the 2006 and the 2007 Alt-A vintages over the next few weeks. * Holland & Hart Further Expands in Nevada Thru Hale Lane Merger ---------------------------------------------------------------- Holland & Hart LLP and Hale Lane Peek Dennison and Howard said that the firms will combine forces. Hale Lane is one of the largest and most highly regarded Nevada law firms, and Holland & Hart, based in the Mountain West, expanded into Nevada in 2006. This combination brings together many of the leading lawyers in Nevada and the Mountain West to provide enhanced legal services across the region. "With our common traditions of excellence, our shared focus on serving clients, and our complementary experience we believe this combination is a natural partnership that will benefit our present and future clients," said John Husband, Chairman of Holland & Hart's Management Committee. "The combination with Hale Lane allows both firms to more effectively and completely assist our clients in Nevada. Hale Lane has a strong reputation and outstanding attorneys. We are very excited about joining our firms." This combination allows both firms to maintain strong connections to our communities throughout the region while adding significant scope and depth of skilled professionals to serve our clients' evolving needs. "Hale Lane has a long and proud history in Nevada. We're fortunate to have many successful clients whose legal needs are expanding and becoming more complex as their business grows," said Tim Lukas, Hale Lane's Managing Shareholder. "Teaming up with Holland & Hart will increase the legal services we provide and our geographic reach to meet those needs." The combined firm will result in a total of 63 attorneys in Nevada, making it one of the four largest law firms in Nevada, and a total of 415 attorneys firm-wide. The firm will maintain the name Holland & Hart LLP and will have offices in Reno, Carson City, and Las Vegas. About Holland & Hart Holland & Hart LLP -- http://www.hollandhart.com/-- has 365 attorneys in 14 offices in seven western states including Nevada, Colorado, Wyoming, Idaho, Montana, New Mexico, Utah, and Washington D.C. The firm provides legal counsel to companies of all sizes, from emerging businesses to large public corporations located throughout the country and internationally. The firm is nationally recognized by several peer-review publications for its experience and capability in litigation, corporate law, and natural resources law. The Holland & Hart Foundation recently won the coveted InnovAction Award for innovative thinking in law firms. Holland & Hart's in-house trial consultancy, Persuasion Strategies, recently won top honors at the Law Technology News Awards for the use of technology in the courtroom. About Hale Lane Hale Lane Peek Dennison and Howard -- http://www.halelane.com/-- was founded in Nevada in 1971 and is one of the largest Nevada firms. The firm represents the entire spectrum of business organizations from lenders, developers, and publicly traded companies to entrepreneurs and closely-held corporations. Hale Lane also represents many individuals with regard to estate planning, tax issues, and other personal matters. The firm has a strong litigation and natural resources practice, with clients throughout Nevada and the west. The firm has offices in Reno, Carson City and Las Vegas. * BMC Group Expands Bankruptcy Practice with Analytics Acquisition ------------------------------------------------------------------ BMC Group Inc. acquired Analytics Incorporated. The Analytics acquisition strengthens BMC Group's class action and bankruptcy service offerings with proven large-scale class action and mass tort settlement administration capabilities. "The acquisition of Analytics is representative of our continuing strategy of combining BMC Group's advanced technology with best- of-breed service to provide superior information management solutions," BMC Group CEO Sean Allen, said. "This builds upon our proven experience and success in implementing complex class action and mass tort settlements." "Analytics will immediately benefit from BMC Group's worldwide presence, advanced technologies and strategic partnerships," added Richard W. Simmons, president of Analytics. "The acquisition of Analytics expands our capacity to provide one- stop information management and consulting solutions to the legal community," Tinamarie Feil, president of BMC Group, said. About BMC Group Inc. BMC Group Inc. -- http://www.bmcgroup.com/-- is an information management and professional services company serving law firms, financial institutions and Fortune 1000 corporations. The company collects, manages and delivers information through its professionals who combine transactional experience and sector knowledge to ensure relevant compliance and business requirements. The company's use of proprietary tools and processes reduces costs and decreases turnaround time for production and maintenance of critical information. BMC Group has multiple offices in North American cities, well as in London and Hong Kong. About Analytics Incorporated Headquartered in Minneapolis, Analytics Incorporated -- http://www.analytics-inc.com/-- is a class action consulting firm with over thirty-five years of experience consulting on complex class action litigation for major law firms, governmental agencies, and Fortune 1000 corporations. Analytics specializes in providing electronic discovery and analysis, notice program design, and settlement consulting services in class action and mass tort litigation. Analytics' experience includes settlements involving antitrust, civil rights, consumer fraud, insurance, medical devices, product liability, racial and sexual discrimination, and securities fraud allegations. Analytics has regional offices across the country. * CRG Names Craig Boucher as Partner in Maryland Practice --------------------------------------------------------- Craig M. Boucher, Esq. has joined CRG Partners Group LLC as a partner in the firm's Bethesda, Maryland office. Mr. Boucher is an accomplished financial advisor and interim executive, and has more than 20 years of experience in corporate restructuring and crisis management. "We are extremely pleased to have Craig join our team, he is a proven leader who brings a demonstrated record of maximizing value to a wide range of clients," said Scott Avila, Managing Partner. During his career, Mr. Boucher has developed and implemented numerous operational restructuring programs that have substantially increased enterprise value for his clients. He has also served as a trusted advisor to management teams in restructuring debt and equity. Additionally, he possesses experience in a wide range of industries, with particular expertise in retail and consumer products industries. About CRG Partners New York-based CRG Partners -- http://www.crgpartners.com/-- provides operational and financial restructuring services, specializing in creating value for the stakeholders of underperforming companies. CRG Partners has offices in Atlanta, Bethesda, Boston, Charlotte, Chicago, Dallas, Los Angeles, New York, and Vienna, Austria. * BOOK REVIEW: Corporate Players: Designs for Working and Winning Together ----------------------------------------------------------------- Author: Robert W. Keidel Publisher: Beard Books Paperback: 276 pages List Price: US$34.95 Order your personal copy at http://amazon.com/exec/obidos/ASIN/1587982587/internetbankrupt In American business, the metaphor of the sports team is commonly used for business groups of all sizes -- from ad hoc teams of a few members that deal with temporary problems to groups of executive managers who are responsible for long-term corporate survival and the profitability of an entire organization. The sports team is a favored metaphor because sports bring individuals with different talents and different responsibilities together to perform a particular activity and pursue a common objective. Within its framework, sports also allow for the outstanding performance of particular individuals and recognition of that performance. The sports team metaphor has become so common in business and so routinely applied to business teams of all sorts and sizes that little thought is usually given to its specifics. Corporate Players -- Designs for Working and Winning Together takes a close look at what makes a sports team function effectively and win. The author then applies these observations to develop a plan for those in the corporate world to be as successful as those in the sports world. While a reprint of a 1988 book, the lessons in this book are timeless. Keidel identifies three main types of teams found in business: autonomy, control and cooperation. The author relates each to a particular type of sports team: autonomy for baseball, control for football and cooperation for basketball. A chart compares differences among the three with respect to organizational strategy, organizational structure, and organizational style. For instance, the organizational strategy for autonomy in base ball is "adding value through star performers"; while the organizational strategy for cooperation in basketball is "innovating by combining resources in novel ways." With a sharp analytic eye and decades of experience in different aspects of business, including academic and government positions, Keidel delves into the specifics of business groups as sports teams. A fundamental point often overlooked by businesspersons is that teams in different sports are different in significant ways. An understanding of these differences is crucial for executives, managers, and consultants who are responsible for conceptualizing a team in relation to a particular business matter and then bringing together a team of individuals. As such, executives, managers and consultants have roles similar to a general manager and coach of a sports team. In some case, they may also have the role of a player on the team. This chart and other aids, together with the author's engaging commentary and enlightening analyses, will help business leaders select the right personnel, assemble a team capable of performing the task at hand, and then coordinate all of the players to accomplish the desired objective. Robert W. Keidel has a Ph.D. from Wharton, and has also been a Senior Fellow at this top business school. An author of three other books and many articles, he teaches courses in business strategy, technology, and organization at Drexel University's Lebow College of Business. Robert Keidel Associates is his business consulting firm. ********* 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, 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 ***