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/raid1/www/Hosts/bankrupt/TCR_Public/080624.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, June 24, 2008, Vol. 12, No. 149 Headlines ABITIBIBOWATER INC: SVP Thor Thornsteinson to Retire August 1 ACE HOLDING: Receiver Wants 5% Commission from Foreclosure Action AEI: Moody's Assigns B2 Rating to Planned $250MM Unsec. Notes AIRTRAN HOLDINGS: Reveals Second Quarter Outlook, Capacity Plans ALANCO TECH: Grosses $1 Mil. in Private Offering of 100,000 Shares ALOHA AIRLINES: Latham OK'd as Special Counsel in Mesa Air Suit ALOHA AIRLINES: Watanabe OK'd as Special Counsel in Mesa Air Suit AMEREX GROUP: Amends Convertible, Credit Notes Deal with CAMOFI AMERICAN HOME: Moody's Cuts Ratings of 95 Tranches from ARM Deals AMERICAN COMMERCE: Pender Newkirk Expresses Going Concern Doubt AMERICAN SURGICAL: Posts $1,375,393 Net Loss in 2008 First Quarter AMERISTOCK CORP:Reports Final Results of ETF Trust Liquidation AMP'D MOBILE: Can Sell Remaining $170,000 Assets to Great American AMP'D MOBILE: Can Hire Cypress LLP as Special Litigation Counsel ANCHOR GLASS: Seeks Final Decree to Close Chapter 11 Case ASCALADE COMMUNICATIONS: Posts Default Status Statements ATSI COMMUNICATIONS: Auditors Withdraw Going Concern Warning AURIGA LABORATORIES: Issues Promissory Note to Prospector Capital AURIGA LABS: March 31 Balance Sheet Upside-Down by $7,920,246 AXIA INC: S&P Withdraws Ratings After Credit Refinancing BAXL HOLDINGS: March 31 Balance Sheet UpsideDown by $3,540,151 BAYOU GROUP: Convicted Ex-Official Flees with Aid of Girlfriend BEAR STEARNS: Moody's Cuts Ratings of 108 Tranches from ARM Deals BHM TECHNOLOGIES: Proposes Two Restructuring Options Under Plan BHM TECHNOLOGIES: Alters Terms of $45 Mil. DIP Fund from Lehman BIOFORCE NANOSCIENCES: Posts $746,162 Net Loss in 2008 1st Quarter BOOZ ALLEN: Moody's Assigns B3 Rating to Proposed $550MM Loan CARE LEVEL: Gets OK to Access Steve Goldman's Cash Collateral CARE LEVEL: Selects Levene Neale as Bankruptcy Counsel CHAMPION BILLIARD: Case Summary & 40 Largest Unsecured Creditors CHARTERHOUSE BOISE: Judge Pappas Decides to Liquidate Property CHINA RECYCLING: Zhong Yi Expresses Going Concern Doubt CHRYSLER FINANCIAL: Moody's Changes Outlook to Neg.; Holds B1 CFR CHRYSLER LLC: Moody's Holds B3 CF & PD Ratings; Outlook is Neg. CHRYSLER LLC: S&P Places Corporate Credit Rating Under Neg Watch CHRYSLER LLC: DBRS Places 'B' Issuer Rating Under Negative Review CLEARPOINT BUSINESS: Secures $12MM Financing from ComVest Capital CMC TELECOM: Final Hearing on Disclosure Statement Set Today COMM 2006-FL: Moody's Cuts Rating of Class MSH4 Cert. to Ba2 CORD BLOOD: To Pay Interest Only Under Amended Deal with Corcell COUNTRYWIDE: Moody's Cuts Ratings of 435 Tranches from ARM Deals CSFB MORTGAGE: Moody's Cuts Ratings of Seven Classes of 2007-TFL-2 CRICKET COMMUNICATIONS: S&P Holds 'B-' Rating on $300MM Sr. Notes CYGNE DESIGNS: Posts $3.8MM Net Loss in First Qtr. Ended April 30 DAIMLERCHRYSLER FINANCIAL: S&P Puts Ratings Under Negative Watch DAWAHARES LEXINGTON: Obtains Interim OK to Use Cash Collateral DENNY'S CORPORATION: Discloses New Organizational Structure DESIGN BUILDERS: Case Summary & 20 Largest Unsecured Creditors DLJ COMMERCIAL: Moody's Affirms Ba2, Ca, & C Ratings on 3 Classes DOWNEY SAVINGS: Moody's Cuts Ratings of 45 Tranches; 14 on Review DRIFTWOOD MOTEL: Case Summary & Six Largest Unsecured Creditors DRIGGS FARMS: Case Summary & 20 Largest Unsecured Creditors DUKE FUNDING: Moody's Junks Ratings of 6 Classes of Notes EMPIRE REFRIGERATION: Case Summary & 20 Largest Unsec. Creditors EQUIPOINT FINANCIAL: Case Summary & 20 Largest Unsecured Creditors EQUIVEST ST. THOMAS: Court Confirms Chapter 11 Reorganization Plan ETERNAL ENERGY: Posts $358,712 Net Loss in 2008 First Quarter FIRST FINANCIAL: Voluntary Chapter 11 Case Summary FORD MOTOR: Vehicle Demand Fall Cues Moody's Negative Outlook FORD MOTOR: S&P Places Corporate Credit Rating Under Neg Watch FORD MOTOR: DBRS Reviews Ratings on Decline of Operations FREMONT GENERAL: Court Sets Trading Limitations to Equityholders FTD INC: Moody's to Raise B1 CFR Upon United Online's Acquisition GENERAL MOTORS: S&P Places Corporate Credit Rating Under Neg Watch GENERAL MOTORS: DBRS Places Ratings Under Negative Review GENERAL MOTORS: Details Plant Production Schedule Adjustments GLOBE RE: Moody's Gives Baa3, Ba2, and B2 Ratings to Securities GMAC LLC: DBRS Cuts Rating to B on High Exposure to ResCap GMAC LLC: S&P Puts 'B' Rating Under Negative Watch GREENPOINT MORTGAGE: Moody's Cuts Ratings of 149 Tranches HABANA CUBA: Case Summary & 5 Largest Unsecured Creditors HAIGHTS CROSS: Working Capital Deficit Cues Moody's Junk Ratings HERBST GAMING: Payment Failures Cue Moody's Ca/LD Rating HUKILL OIL: Voluntary Chapter 11 Case Summary HUNTSMAN CORP: Sues Apollo in Relation to Terminated Basell Merger HUNTSMAN CORP: Moody's Reviews Ba3 CF Rating for Possible Cut IAP WORLDWIDE: S&P Lifts Ratings on Completed Debt Restructuring IMPAC MORTGAGE: Unit's CEO and President Execute Employment Pacts INDEVUS PHARMA: CEO Defers Retirement Due to NEBIDO Approval Delay INNOPHOS HOLDINGS: Earns $9.3 Million in 2008 First Quarter INSMED INC: To Appeal Nasdaq's Decision to Delist Securities INVERNESS MEDICAL: Moody's Confirms B2 Corporate Family Rating LEAP WIRELESS: Moody's Gives Caa1 Rating to $200MM Notes LEAP WIRELESS: Unsecured Credit Limit Raised to $1.65BB LEAP WIRELESS: Prices $220MM Offering of Convertible Senior Notes LEHMAN XS: Moody's Cuts Ratings of 181 Tranches, Reviews 58 LINENS N THINGS: Wants to Employ Citigroup Global as Banker LINENS N THINGS: Committee Wants to Retain Cole Schotz as Counsel LODGENET INTERACTIVE: March 31 Balance Sheet Upside-Down by $83MM MAGNOLIA FINANCE IV: Moody's Cuts Rating of $3MM Notes to Ba2 MAGNOLIA FINANCE II: Moody's Cuts Rating of $2MM Notes to B3 MAGNOLIA FINANCE V: Moody's Cuts Rating of $3MM Notes to Ba2 MDWERKS INC: Posts $2,644,388 Net Loss in 2008 First Quarter MEADE INSTRUMENTS: Moss Adams Expresses Going Concern Doubt MERGE HEALTHCARE: Board OKs Redemption of Share Purchase Rights MERRILL LYNCH: Moody's Holds Ratings of 10 Cert. Classes MERRILL LYNCH: Moody's Holds Ba3, B2, and B3 Ratings on Certs. METRO ONE: Posts $631,632 Net Loss in Third Quarter Ended April 30 METROPCS WIRELESS: Moody's Changes Outlook; Affirms B2 CF Rating MIDDLETOWN ESTATE: Voluntary Chapter 11 Case Summary MODAVOX INC: Malone & Bailey, PC Expresses Going Concern Doubt MODERN CONTINENTAL: Tunnel Collapse Suit Cues Bankruptcy Filing MODERN CONTINENTAL: Case Summary & 19 Largest Unsecured Creditors MORGAN STANLEY: Fitch Cuts US$6.844MM Notes Rating to BB+ from AAA MORGAN STANLEY: Fitch Cuts Two Notes Ratings; Removes Neg. Watch MORGAN STANLEY: Fitch Slashes US$69.9MM Notes Rating to B from AA MOVIE GALLERY: Board of Directors Adopts Incentive Equity Plan MOVIE GALLERY: Names Sherif Mityas as Retail Operation CEO MTR GAMING: S&P Revises Outlook to Negative from Stable NARROWSTEP INC: Rothstein Kass Expresses Going Concern Doubt NLRC: Files Creditor Protection under BIA, Might Sell Assets NITRO PETROLEUM: April 30 Balance Sheet Upside-Down by $1,508,782 ORAGENICS INC: Closes $2.6 Mil. Equity Financing OWENS CORNING: Reports NYSE Listing of Series B Warrants PATIENT SAFETY: Chief Executive William Adams Named Board Member PRC LLC: Court Confirms Chapter 11 Joint Plan of Reorganization PROBE MFG: March 31 Balance Sheet Upside-Down by $144,004 QUEBECOR WORLD: Seeks to Assume Dex Media Printing Deal QUEBECOR WORLD: Incurs $190 Mil. Net Loss in First Quarter 2008 REATA PETROLEUM: Voluntary Chapter 11 Case Summary REMGRIT REALTY: Case Summary & 13 Largest Unsecured Creditors RESIDENTIAL CAPITAL: DBRS Assigns 'CCC' Rating on 8.500% Sr. Notes REVE SPC: Moody's to Review 11 Classes of Notes for Possible Cut RHODE ISLAND HEALTH: S&P Chips Rating on $10.6MM 1994 Bonds to BB- RIVIERA HOLDINGS: S&P Holds Rating; Changes Outlook to Developing ROGERS COMMS: Fitch Lifts Sr. Sub. Notes Rating to BBB- from BB+ SAINT MICHAEL MOTOR: Files Schedules of Assets and Liabilities SAINT MICHAEL MOTOR: Taps Adams and Reese as Counsel SAINT MICHAEL MOTOR: Creditors 341(a) Meeting Set June 25 SAINT MICHAEL MOTOR: Gets Interim OK to Use DIP Financing SCO GROUP: Exclusive Plan Filing Period Extended Through Aug. 11 SILVA BOWLING: Case Summary & 34 Largest Unsecured Creditors SORIN CDO: Moody's Cuts Rating on $402MM Notes from Baa3 to Ba2 SPANISH BROADCASTING: Fails to Sustain Moody's B2 Ratings STRIKEFORCE TECH: March 31 Balance Sheet Upside-Down by $5,235,404 STRUCTURED ASSET: Moody's Cuts Ratings of 148 Tranches STUDIO THEATRE: Case Summary & 20 Largest Unsecured Creditors TALECRIS BIOTHERAPEUTICS: Moody's Confirms Caa1 CFR, Outlook Pos TRINITY CARPET: Case Summary & 20 Largest Unsecured Creditors VALLEY HEALTH: Fitch Assigns 'CC' Rating to $79.5 Million Bonds VANTAGE LOFTS: Case Summary & 20 Largest Unsecured Creditors VIASPACE INC: Posts $2,326,000 Net Loss in 2008 First Quarter WACHOVIA BANK: Moody's Affirms Ratings of Class P Trust at B3 WAVE SYSTEMS: Pays Shares to Agent as Part of $1.7MM Financing WAVE SYSTEMS: Regains Compliance with Nasdaq Marketplace Rules WHITEHALL JEWELERS: Files for Ch.11 Protection; Selling All Assets WHITEHALL JEWELERS: Case Summary & 30 Largest Unsecured Creditors WHX CORP: Board Approves Executives' Performance Cash Bonuses WMALT: Moody's Cuts Ratings on 169 Tranches; Reviews 61 WORLDSPACE INC: Inks Amendment & Exchange Pact with Four Lenders * A.M. Best Takes Rating Actions on Various Canadian Companies * Magazine Names Skadden Arps America's Best Corporate Law Firm * Large Companies with Insolvent Balance Sheets ********* ABITIBIBOWATER INC: SVP Thor Thornsteinson to Retire August 1 ------------------------------------------------------------- Thor Thorsteinson disclosed his intention to retire as AbitibiBowater Inc.'s Senior Vice President, International Business Division, effective as of Aug. 1, 2008. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/ -- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. AbitibiBowater is also among the world's largest recyclers of newspapers and magazines. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange. * * * As reported in the Troubled Company Reporter on April 16, 2008, Standard & Poor's Ratings Services assigned recovery ratings to the senior unsecured debt issues of AbitibiBowater Inc., Abitibi- Consolidated Inc., and Bowater Inc. At the same time, S&P lowered the issue-level rating on these debts to 'CCC+' from 'B-'. ACE HOLDING: Receiver Wants 5% Commission from Foreclosure Action ----------------------------------------------------------------- David L. Ganje, Esq., appointed receiver in the bankruptcy case of Ace Holding LLC, requested the U.S. Bankruptcy Court for the Northern District of New York to fix his commission at 5% of the monies collected and disbursed, or $2,282, relating to a foreclosure action filed with the Supreme Court for the State of New York, County of Albany. The foreclosure case is entitled The Comptroller of the State of New York as Trustee for the New York State Common Retirement Fund v. Ace Holding LLC, The Community Preservation Corporation, Historic Pastures Homeowners Association Inc., Andrea M. Wilkinson, et al. Mr. Ganje also asked the Court to authorize the payment of the commission from the receivership estate. Mr. Ganje related that since the beginning of the receivership, he has received gross funds or revenues in the amount of $45,648 from the rents collected from the receivership premises at 160 South Pearl Street through 176 South Pearl Street of the City of Albany in New York. The receiver reported that these are the only remaining vendors with unpaid bills due from the receivership: a. Jack Gundrum Invoice dated April 12, 2008, for $485; b. Jack Gundrum Invoice dated April 15, 2008, for $436; and c. Lightning Legal Invoice number 65403 dated April 21, 2008, for $163. The receiver reported that a real property homeowner's association, Highlander Associates, has an unliquidated claim for homeowner association fees based on its activities on behalf of the real property. The Court will hear the receiver's request for payment on June 25, 2008, at 10:30 a.m. 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. AEI: Moody's Assigns B2 Rating to Planned $250MM Unsec. Notes ------------------------------------------------------------- Moody's Investors Service has affirmed the B1 Corporate Family Rating for AEI and assigned a B2 rating to AEI's proposed issuance of $250MM senior unsecured notes due in 2018. In addition, Moody's has affirmed AEI's senior secured credit facilities rating of Ba3. The outlook remains stable. The rating affirmations reflect Moody's expectation that AEI will use the proceeds from the proposed offering for debt repayment and to fund new investment opportunities. The notes are expected to be issued in late June 2008. The B2 rating for the notes reflect their low tier standing as the new unsecured notes are contractually subordinated to a much larger issue of $968MM senior secured bank term loans due in March of 2014 and $500MM of senior secured bank revolving facilities due in March 2012. The rating for the senior unsecured notes was determined using Moody's Loss Given Default model. Based on AEI's B1 Corporate Family Rating and Probability of Default Ratings of B1, and as a result of the small size of the proposed offering relative to the existing senior secured facilities, the LGD model would suggest a rating of B3. The B2 rating assigned reflects Moody's understanding that over time, the company intends to shift its parent company debt more toward senior unsecured notes and to reduce the percentage of secured credit facilities in its capital structure. The rating also reflects Moody's view, based on the diversity of AEI's portfolio and the moderate amount of leverage currently employed at the operating companies, that in a default scenario and possible sale of individual operating companies that there would likely be excess collateral available to the senior unsecured note holders. AEI's B1 CFR also reflects its moderately leveraged consolidated capital structure and the structural subordination of its parent level recourse debt to a significant amount of non-recourse debt at its operating companies. Moody's views the structural subordination constraints as somewhat mitigated by the diversification provided by AEI's operating subsidiaries and by the stable and predictable cash flows provided by operations in various other countries, including Colombia, Guatemala, Dominican Republic, Poland, Turkey and the Philippines, in addition to Brazil. We note, however, the company is still in the early stages of its formation and is considering making additional investments in countries such as China and Peru, in which they have recently entered and have a limited operating history. Over the forecast horizon, we expect AEI to generate positive free cash flow and to maintain consolidated FFO to debt coverage of approximately 20%. The company's ratio of consolidated debt to total capitalization is currently about 59% and is projected to increase slightly as we expect the company will begin some greenfield construction projects. A number of the company's key projects are also currently lightly levered at the operating company level. Under reasonable scenarios the company could withstand the nationalization of other projects without a materially adverse effect on the parent's credit profile, as long as they are not a primary source of cash reliance for AEI's debt service requirements and investment needs and the company is able to at least recover its costs. We also note that approximately 45% of the AEI's 2007 cash received from subsidiaries were supported by businesses with revenues that are either US dollar denominated or US dollar- linked, which mitigates to some degree the volatility of currency risk. Additionally, the liquidity position at both the group and parent level is adequate, sustained by strong operating cash flows at the operating company level, the aggregate $500 million revolving credit facility, and cash on hand. Ratings/Assessments assigned: AEI Senior Unsecured Notes due in 2018B2 (LGD5, 75%) Ratings affirmed/Assessments revised: AEI -- Corporate Family Rating -- B1 -- Probability of Default Rating -- B1 -- Senior secured credit facilities -- Ba3 (LGD3, 34%) Incorporated in the Cayman Islands, AEI is an international holding company of investment interests in a globally diversified portfolio of 37 companies that engage in natural gas distribution, transportation, and services; power generation and distribution, and retail fuel. AEI's businesses are located within 19 countries, which are primarily speculative grade emerging market economies. In aggregate, the group's power infrastructure serves the power needs of approximately 6 million customers worldwide. A wholly owned subsidiary of AEI, AEI Services LLC has offices in Houston, TX. AIRTRAN HOLDINGS: Reveals Second Quarter Outlook, Capacity Plans ---------------------------------------------------------------- AirTran Holdings, Inc., the parent company of AirTran Airways, Inc., provides updated guidance for its second quarter outlook and the company's fleet and capacity plans for 2008 and 2009. Fuel Prices and Hedging Activity Initial fuel guidance for the second quarter was given in April 2008 and prices were based upon an underlying price of $127 per barrel of jet fuel before taxes, transportation, and into-plane fees. At that time, the company expected fuel prices to average $3.20 to $3.25 per gallon net of fuel hedging gains. Since that time, jet fuel prices have risen to over $165 per barrel before taxes, transportation, and into-plane fees. Airtran currently anticipates that its GAAP basis all-in fuel costs for the second quarter will be between $3.75 to $3.80 per gallon. When the company includes the realized gains related to its fuel related derivatives that do not qualify for hedge accounting, Airtran currently anticipates that its economic all-in cost per gallon will be between $3.65 to $3.70 per gallon. The airline company expects that its fuel hedges and fuel related derivatives that do not qualify for hedge accounting, will provide cash savings of approximately $15 million versus market prices in the second quarter. As of April 2008, the company had fuel hedge and derivative contracts covering 48% of estimated fuel needs for the second quarter and approximately 50% of its fuel needs for the remainder of 2008 based on anticipated capacity at that time. The company's fuel hedge and derivative portfolio contains compound derivatives with sold out of the money options which act to limit the benefit of collars to the extent that the current market price level exceeds the sold call option prices. Approximately two-thirds of Airtran hedged quantities for the remainder of 2008 involve sold calls. The company has increased its fuel hedge and derivative positions during the second quarter in an effort to further manage rising fuel prices through a combination of collars and fixed price options on crude oil and gulf coast jet fuel. Based on an underlying crude oil price of $130 per barrel and a $30 per barrel refinery spread ($160 per barrel of jet fuel, before taxes, transportation, and into-plane fees), the company's percentage of fuel hedged and estimated all-in price per gallon hedged are, as of June 15, 2008: Estimated All-in Period % Hedged Price/Gallon ------ -------- ------------ Q208 55 - 60% $3.55-3.60 Q308 70 - 75% $3.65-3.70 Q408 50 - 55% $3.55-3.60 2009 20 - 25% $3.65-3.70 The amounts include the benefits of anticipated future realized gains on fuel related derivatives which do not qualify for hedge accounting. Additionally the percentage hedged is based on the company's latest capacity projections and hedge portfolio as of June 15, 2008. Revenue Outlook Initial revenue guidance for the second quarter was given in April 2008 and at that time the company expected passenger unit revenues to increase 5 to 6% year over year. During the quarter the company has experienced strong traffic growth, but yield growth has been slower than the company's expectations despite numerous fare increases. The current outlook for unit revenues is for a year over year improvement of 1.5 to 2%. The company believes that in some of its markets fares were increased too rapidly which limited the company's ability to effectively manage close-in demand (inside the month). This has resulted in an increased mix of lower-yielding, connecting traffic. The company recently made changes to its pricing and revenue management strategies that in the near-term has produced more favorable yield results. Advanced bookings and revenues for the third quarter remain well ahead of last year at higher fares. The combination of strong advance bookings and recent changes to the company's pricing and revenue management strategies are currently expected to exceed the unit revenue growth in the first half of this year. Cost Outlook Initial unit cost guidance for the second quarter was given in April 2008, and at that time the company expected non-fuel unit costs to decline 1 to 1.5% year over year. The decline in non- fuel unit costs excludes the beneficial impact of realized gains on the sale of aircraft in each period. As a result of improved efficiencies and solid operating performance, the company now expects non-fuel unit costs to decline 2 to 2.5% year over year in the second quarter, excluding the impact of gains on sale of aircraft in each period. Capacity Outlook In April 2008, the company announced that it was suspending its growth plans beginning in September 2008 and extending through 2009. The result of this action was that capacity, as measured by ASMs, would be no more than flat year over year, which represents a 10% reduction from the Company's original plans for late 2008 and 2009. In response to the continued rise in fuel prices and concerns about potential economic weakness this fall, the company intends to reduce capacity by an additional 5% beginning in September 2008. This will result in a 5% reduction in ASMs year over year and represents, at a minimum, a 15% reduction from the company's initial plans for late 2008 and more than a 10% reduction in ASMs from planned 2009 levels. In the last several weeks, several domestic competitors have disclosed capacity reductions similar to those the company announced in April. To effect capacity reductions, so far in the second quarter, the company has sold two new 737-700 aircraft and arranged the deferral of 18 new aircraft deliveries from 2009-2011 to 2013- 2014. The company has written agreements for the sale/disposition of an additional five aircraft in 2008. Capacity may be reduced further pending market conditions and aircraft negotiations. In conjunction with such capacity reductions, the company expects to terminate service to Stewart-Newburgh, New York in September 2008, and eliminate seasonal service to Daytona Beach, Florida. The company currently expects its fleet size to be between 135-140 aircraft at the end of 2008, down from an original plan of 147 aircraft. Should the price of fuel or economic conditions warrant the need for additional capacity cuts, the Company is prepared to further reduce its fleet size. Headquartered in Orlando Florida, AirTran Holdings Inc. (NYSE: AAI) -- http://www.airtran.com/-- a Fortune 1000 company, is the parent company of AirTran Airways Inc., which offers more than 700 daily flights to 56 U.S. destinations. * * * To date, AirTran Holdings Inc. carries Moody's Investors Service 'B3' long-term corporate family and 'Caa2' senior unsecured debt ratings. The outlook is stable. ALANCO TECH: Grosses $1 Mil. in Private Offering of 100,000 Shares ------------------------------------------------------------------ Alanco Technologies Inc. completed a private offering of 100,000 non-convertible shares of Series D Preferred Stock at a price of $10.00 per share. The accredited investors included a director of the company who purchased 50,000 shares. The gross proceeds received by the company from the offering was $1,000,000. A full-text copy of the Powers, Preferences, Rights and Limitations of the Series D Preferred Stock is available for free at http://ResearchArchives.com/t/s?2e7a Headquartered in Scottsdale, Ariz., Alanco Technologies Inc. (Nasdaq: ALAN) -- http://www.alanco.com/-- is a provider of wireless tracking and asset management solutions through its StarTrak Systems and Alanco/TSI PRISM subsidiaries. At March 31, 2008, the company's consolidated balance sheet showed $29,715,600 in total assets, $11,034,300 in total liabilities, $878,300 in preferred stock, and $17,803,000 in total stockholders' equity. As reported in the Troubled Company Reporter on Oct. 4, 2007, Semple, Marchal & Cooper LLP, in Phoenix, Arizona, expressed substantial doubt about Alanco Technologies Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended June 30, 2007, and 2006. The auditing firm reported that the company incurred significant losses from operations, anticipates additional losses in fiscal 2008, and has insufficient working capital as of June 30, 2007, to fund the anticipated losses. ALOHA AIRLINES: Latham OK'd as Special Counsel in Mesa Air Suit --------------------------------------------------------------- The Hon. Lloyd King of the U.S. Bankruptcy Court for the District of Hawaii approved the retention of Latham & Watkins LLP as special litigation counsel to Dane S. Field, interim chapter 7 trustee in the case of Aloha Airlines Inc. and its debtor- affiliates. Compensation of the firm will be paid by Yucaipa Corporate Initiative Fund I LP, and not by the estate. The firm does not need to file fee applications for the payment so long as it presents its bills to the case trustee and to the Office of the U.S. Trustee. Objection to the payment of the fees by the case trustee and the U.S. Trustee may be resolved through petitioning the Court for a hearing. Latham & Watkins LLP will represent the case trustee as co-counsel with Watanabe Ing & Komeiji LLP in a litigation entitled Aloha Airlines Inc., et al., v. Mesa Air Group Inc., et al. pending in the U.S. District Court for the District of Hawaii, case number 07-00007, nunc pro tunc to May 22, 2008. Creditors asserting a security interest in the Mesa Litigation include GMAC Commerical Finance LLC and Yucaipa. The case trustee maintained that Latham does not represent or hold any interest adverse to the Debtors or the estate. Mesa Litigation On Dec. 30, 2004, Airgroup and Aloha filed petitions for relief under chapter 11 in the Bankruptcy Court of Hawaii and their cases were jointly administered before the Hon. Robert J. Faris. On Nov. 27, 2005, the Bankruptcy Court entered an order confirming the joint plan of reorganization proposed by Airgroup and Aloha, and Yucaipa. The effective date of the plan occurred on Feb. 20, 2006. On Jan. 9, 2007, the Debtors commenced the Mesa Litigation. On March 20, 2008, the Debtors again filed petitions for relief under chapter 11, and that case was converted to chapter 7 liquidation proceeding on April 29, 2008. The firm can be reached at: Robert D. Crockett, Esq. (robert.crockett@lw.com) Robert A. Klyman, Esq. (robert.klyman@lw.com) Latham & Watkins LLP 633 West Fifth Street, Suite 4000 Los Angeles, CA 90071 Tel: (213) 485-1234 Fax: (213) 891-8763 http://www.lw.com/ About Aloha Airlines Based in Honolulu, Hawaii, Aloha Airgroup Inc., Aloha Airlines Inc. -- http://www.alohaairlines.com/-- and its affiliates are carriers that fly passengers and freight to Hawaii's five major airports, as well as to half a dozen destinations in the western U.S. They operate a fleet of about 20 aircraft, all Boeing 737s, including three configured as freighters. This is the airline's second bankruptcy filing. Aloha filed for Chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No. 04-03063), and emerged from Chapter 11 bankruptcy protection in Feb. 20, 2006. The company and its affiliates filed again for Chapter 11 protection on March 18, 2008 (Bankr. D. Hawaii Lead Case No. 08- 00337). Brian G. Rich, Esq., Jordi Guso, Esq., and Paul Steven Singerman, Esq., at Berger Singerman P.A., and David C. Farmer, Esq., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $100 million to $500 million. On April 29, the Bankruptcy Court converted the Debtors' cases into chapter 7 liquidation proceedings. The next day, the United States Trustee appointed Dane S. Field to serve as chapter 7 trustee for the cases. ALOHA AIRLINES: Watanabe OK'd as Special Counsel in Mesa Air Suit ----------------------------------------------------------------- The Hon. Lloyd King of the U.S. Bankruptcy Court for the District of Hawaii approved the retention of Watanabe Ing & Komeiji LLP as special litigation counsel to Dane S. Field, interim chapter 7 trustee in the case of Aloha Airlines Inc. and its debtor- affiliates. Compensation of the firm will be paid by Yucaipa Corporate Initiative Fund I LP, and not by the estate. The firm does not need to file fee applications for the payment so long as it presents its bills to the case trustee and to the Office of the U.S. Trustee. Objection to the payment of the fees by the case trustee and the U.S. Trustee may be resolved through petitioning the Court for a hearing. Watanabe will represent the case trustee as co-counsel with Latham & Watkins LLP in a litigation entitled Aloha Airlines Inc., et al., v. Mesa Air Group Inc., et al. pending in the U.S. District Court for the District of Hawaii, case number 07-00007, nunc pro tunc to May 22, 2008. Creditors asserting a security interest in the Mesa Litigation include GMAC Commerical Finance LLC and Yucaipa. The case trustee maintained that Watanabe does not represent or hold any interest adverse to the Debtors or the estate. Mesa Litigation On Dec. 30, 2004, Airgroup and Aloha filed petitions for relief under chapter 11 in the Bankruptcy Court of Hawaii and their cases were jointly administered before the Hon. Robert J. Faris. On Nov. 27, 2005, the Bankruptcy Court entered an order confirming the joint plan of reorganization proposed by Airgroup and Aloha, and Yucaipa. The effective date of the plan occurred on Feb. 20, 2006. On Jan. 9, 2007, the Debtors commenced the Mesa Litigation. On March 20, 2008, the Debtors again filed petitions for relief under chapter 11, and that case was converted to chapter 7 liquidation proceeding on April 29, 2008. The firm can be reached at: John. T. Komeiji, Esq. Brian A. Kang, Esq. (bkang@wik.com) Watanabe Ing & Komeiji LLP 999 Bishop Street, 23rd Floor Honolulu, HI 96813 Tel: (808) 544-8300 Fax: (808) 544-8399 http://www.wik.com/ About Aloha Airlines Based in Honolulu, Hawaii, Aloha Airgroup Inc., Aloha Airlines Inc. -- http://www.alohaairlines.com/-- and its affiliates are carriers that fly passengers and freight to Hawaii's five major airports, as well as to half a dozen destinations in the western U.S. They operate a fleet of about 20 aircraft, all Boeing 737s, including three configured as freighters. This is the airline's second bankruptcy filing. Aloha filed for Chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No. 04-03063), and emerged from Chapter 11 bankruptcy protection in Feb. 20, 2006. The company and its affiliates filed again for Chapter 11 protection on March 18, 2008 (Bankr. D. Hawaii Lead Case No. 08- 00337). Brian G. Rich, Esq., Jordi Guso, Esq., and Paul Steven Singerman, Esq., at Berger Singerman P.A., and David C. Farmer, Esq., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $100 million to $500 million. On April 29, the Bankruptcy Court converted the Debtors' cases into chapter 7 liquidation proceedings. The next day, the United States Trustee appointed Dane S. Field to serve as chapter 7 trustee for the cases. AMEREX GROUP: Amends Convertible, Credit Notes Deal with CAMOFI --------------------------------------------------------------- Amerex Group, Inc., entered into a letter of agreement with CAMOFI Master LDC, pursuant to which the parties agreed to amend: (i) the Senior Secured Convertible Note due Nov. 21, 2010, in the aggregate principal amount of $6,131,235.47 made by the company in favor of CAMOFI, and the additional transaction documents, as the same have been amended by those certain letter agreements between the company and CAMOFI dated Dec. 19, 2007, May 9, 2008, May 16, 2008, May 22, 2008, May 27, 2008, and June 4, 2008, and (ii) the Revolving Credit Note dated Aug. 31, 2006, in the original principal amount of $1,500,000, and the additional transaction documents. Pursuant to the agreement, (a) the payment dates for interest under the Note were amended, (b) the aggregate principal amount of the New Note referred to in paragraph 4 of the Dec. 19, 2007 letter agreement was increased by $3,114,525, (c) the Revolver was amended to increase the amount of the obligations thereunder by $425,301, (d) the definition of Monthly Redemption Date under the Note was amended to mean the first day of each month, commencing on the first day of September 2008, or sooner as provided in the Letter Agreement, (e) the parties agreed that Kaiser facility and other excess real estate assets shall be sold by Sept. 1, 2008, and other terms regarding the sale of those assets and the disposition of the proceeds from those sales, (f) The company's affirmative covenant in the Dec. 19, 2007 letter agreement to raise at least $2.5 million in equity on terms satisfactory to CAMOFI by March 31, 2008, was amended to require such sale of equity by no later than Sept. 1, 2008, (g) certain dates under the Registration Rights Agreement between the parties were extended and certain terms were amended, (h) the term of the Revolver was extended until Sept. 1, 2008, and (i) the company agreed to retain a restructuring advisor satisfactory to CAMOFI upon terms and conditions satisfactory to the Company and CAMOFI, and to continue the engagement of such restructuring advisor until any and all amounts due and owing by the Company to CAMOFI have been repaid in full. Based on the provisions of the Letter Agreement, the company and CAMOFI acknowledged and agreed that, after giving effect to the terms of the Letter Agreement, and the execution of documents evidencing the same, each party will be in good standing under the Note, the Revolver and the transaction documents related to each, and that there will be no defaults under the Note, the Revolver or any such transaction documents by either party. About Amerex Group Inc. Headquartered in New York City, Amerex Group Inc. (OTC BB: AEXG.OB) -- http://www.amerexgroup.com/-- is a hazardous waste transportation and logistics firm with capabilities to provide emergency response to environmental emergencies. The company has multiple facilities including a hazardous waste treatment, storage and disposal facility licensed under the Resource Conservation and Recovery Act Part B and a trucking fleet to transport hazardous waste throughout the USA. Amerex has administrative headquarters in Tulsa, Oklahoma. Going Concern Doubt Sartain Fischbein & Co., in Tulsa, Oklahoma, expressed substantial doubt about Amerex Group 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 incurred a net loss of $7,114,098 during the year ended Dec. 31, 2007, and, as of that date, had a working capital deficiency of $3,537,914 and stockholders' deficit of $7,688,449. Additionally, the company has experienced significant cash flow difficulties and is currently in default on its note agreements. AMERICAN HOME: Moody's Cuts Ratings of 95 Tranches from ARM Deals ----------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 95 tranches from 14 Option ARM transactions issued by American Home. Thirty three tranches remain on review for possible further downgrade. Additionally, 12 tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, adjustable-rate, negatively amortizing Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described are a result of Moody's on-going review process. Complete rating actions are: Issuer: American Home Mortgage Assets Trust 2006-1 -- Cl. X-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to Aa3 from Aa1 -- Cl. M-2, Downgraded to Baa1 from Aa2 -- Cl. M-3, Downgraded to Baa3 from Aa3 -- Cl. M-4, Downgraded to Ba2 from A1 -- Cl. M-5, Downgraded to Ba3 from A2 -- Cl. M-6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade Issuer: American Home Mortgage Assets Trust 2006-2 -- Cl. M-1, Downgraded to A3 from Aa1 -- Cl. M-2, Downgraded to Ba2 from Aa2 -- Cl. M-3, Downgraded to Ba3 from Aa3 -- Cl. M-4, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Ca from Baa3 Issuer: American Home Mortgage Assets Trust 2006-3 -- Cl. I-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. III-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to Baa2 from Aa1 -- Cl. M-2, Downgraded to Ba1 from Aa2 -- Cl. M-3, Downgraded to Ba2 from Aa3 -- Cl. M-4, Downgraded to Ba3 from A1 -- Cl. M-5, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Ca from Baa3 Issuer: American Home Mortgage Assets Trust 2006-4 -- Cl. I-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to Baa3 from Aa1 -- Cl. M-2, Downgraded to Ba2 from Aa1 -- Cl. M-3, Downgraded to Ba3 from Aa3 -- Cl. M-4, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Ca from Baa2 Issuer: American Home Mortgage Assets Trust 2006-5 -- Cl. A-3-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-3-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to Ba3 from Aa1 -- Cl. M-2, Downgraded to B1 from Aa1 -- Cl. M-3, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Ca from Baa2 Issuer: American Home Mortgage Assets Trust 2006-6 -- Cl. M-1, Downgraded to Baa3 from Aa1 -- Cl. M-2, Downgraded to Ba1 from Aa2 -- Cl. M-3, Downgraded to Ba2 from Aa3 -- Cl. M-4, Downgraded to Ba3 from A1 -- Cl. M-5, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Ca from Ba1 -- Cl. M-9, Downgraded to Ca from Ba2 Issuer: American Home Mortgage Assets Trust 2007-1 -- Cl. M-1, Downgraded to A1 from Aa1 -- Cl. M-2, Downgraded to Baa2 from Aa1 -- Cl. M-3, Downgraded to Ba3 from Aa1 -- Cl. M-4, Downgraded to B1 from Aa2 -- Cl. M-5, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Ca from Ba1 Issuer: American Home Mortgage Assets Trust 2007-2 -- Cl. M-2, Downgraded to Aa3 from Aa1 -- Cl. M-3, Downgraded to A1 from Aa1 -- Cl. M-4, Downgraded to Baa3 from Aa2 -- Cl. M-5, Downgraded to Ba1 from Aa3 -- Cl. M-6, Downgraded to Ba3 from A1 -- Cl. M-7, Downgraded to B1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade Issuer: American Home Mortgage Asset Trust 2007-4 -- Cl. M-1, Downgraded to Baa2 from Aa1 -- Cl. M-2, Downgraded to Baa3 from Aa2 -- Cl. M-3, Downgraded to Ba3 from Aa3 -- Cl. M-4, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Ca from Ba3 Issuer: American Home Mortgage Assets Trust 2007-5 -- Cl. M-2, Downgraded to A2 from Aa1 -- Cl. M-3, Downgraded to Baa3 from Aa2 -- Cl. M-4, Downgraded to Ba2 from Aa3 -- Cl. M-5, Downgraded to Ba3 from A2 -- Cl. M-6, Downgraded to B1 from A3 -- Cl. M-7, Downgraded to B3 from Baa2 -- Cl. M-8, Downgraded to Caa1 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Ca from Ba3 Issuer: American Home Mortgage Investment Trust 2005-4 -- Cl. I-M-2, Downgraded to A2 from Aa3 Issuer: American Home Mortgage Investment Trust 2006-2 -- Cl. I-M-1, Downgraded to Baa1 from Aa2 Issuer: American Home Mortgage Investment Tr 2006-3 -- Cl. I-M-1, Downgraded to A3 from Aa1 -- Cl. I-M-2, Downgraded to Ba3 from Aa2 -- Cl. I-M-3, Downgraded to B1 from Aa3 -- Cl. I-M-4, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. I-M-5, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade Issuer: American Home Mortgage Investment Trust 2007-1 -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. IO-P, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to A2 from Aaa -- Cl. M-2, Downgraded to Baa3 from Aa1 -- Cl. M-3, Downgraded to Ba1 from Aa1 -- Cl. M-4, Downgraded to Ba2 from Aa2 -- Cl. M-5, Downgraded to Ba3 from Aa3 -- Cl. M-6, Downgraded to B1 from A2 -- Cl. M-7, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Ca from Ba1 -- Cl. B-1, Downgraded to Ca from B3 -- Cl. B-2, Downgraded to Ca from Caa2 AMERICAN COMMERCE: Pender Newkirk Expresses Going Concern Doubt --------------------------------------------------------------- Pender Newkirk & Company LLP in Tampa, Fla., raised substantial doubt about the ability of American Commerce Solutions, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Feb. 29, 2008. The auditor pointed to the company's net loss during the year ended Feb. 29, 2008, accumulated deficit of $18,250,936 and negative working capital at Feb. 29, 2008. In addition, the company is in default on several notes payable at Feb. 29, 2008. The company has incurred substantial operating losses since inception and has used about $381,185 of cash in operations for the year ended February 29, 2008. The Company recorded losses from continuing operations of $1,036,246 and $1,450,388 for the years ended Feb. 29, 2008, and Feb. 28, 2007, respectively. Current liabilities exceed current assets by $2,561,319 at Feb. 29, 2008. The notes payable as of Feb. 29, 2008, include notes with a total amount of $654,436, which are currently in default. Notes payable to related parties amount to $591,336, which are not necessarily indicative of the terms and amounts that would have been incurred had comparable agreements been made with independent parties. The company posted a net loss of $1,036,246 on net sales of $2,850,768 for the year ended Feb. 29, 2008, as compared with a net loss of $1,450,388 on net sales of $2,351,288 in the prior year. At Feb. 29, 2008, the company's balance sheet showed $5,122,213 in total assets, $4,078,039 in total liabilities, and $1,044,174 in total stockholders' equity. The company's consolidated balance sheet at Feb. 29, 2008, showed strained liquidity with $396,743 in total current assets available to pay $2,958,062 in total current liabilities. A full-text copy of the company's 2008 annual report is available for free at http://ResearchArchives.com/t/s?2e54 About American Commerce Headquartered in Bartow, Fla., American Commerce Solutions Inc. (OTCBB: AACS) -- http://www.aacssymbol.com/-- is primarily a holding company with two wholly owned subsidiaries; International Machine and Welding Inc. is engaged in the machining and fabrication of parts used in industry, and parts sales and service for heavy construction equipment; Chariot Manufacturing Company, Inc., which was acquired on Oct. 11, 2003, from a related party, manufactures motorcycle trailers with fiberglass bodies. AMERICAN SURGICAL: Posts $1,375,393 Net Loss in 2008 First Quarter ------------------------------------------------------------------ American Surgical Holdings Inc. reported a net loss of $1,357,393 on net revenues of $2,030,455 for the first quarter ended March 31, 2008, compared with a net loss of $138,183 on net revenues of $2,571,275 in the same period last year. At March 31, 2008, the company's consolidated balance sheet showed $3,604,220 in total assets, $3,328,070 in total liabilities, and $276,150 in total stockholders' equity. The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $2,808,346 in total current assets available to pay $3,828,070 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?2e63 Going Concern Doubt As reported in the Troubled Company Reporter on May 19, 2008, Webb & Company, P.A., in Boynton Beach, Fla., expressed substantial doubt about American Surgical 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 the company incurred a net operating loss in 2007, used cash in operating activities, and had an accumulated deficit in retained earnings at year end. Webb & Company added, "in June and July 2008, the company has about $3.129 million in notes payable and accrued interest coming due for repayment. At the present time, the company does not have the necessary funds to repay this amount." About American Surgical Headquartered in Houston, American Surgical Holdings Inc. (OTC BB: ASRG) -- http://www.asainc.us/-- through its subsidiary, American Surgical Assistants Inc., provides surgical assistant services to patients, surgeons, and healthcare institutions. The company's services include identification of anatomical landmarks, securing blood vessels, recognizing pathological situations, providing and securing proper assistance in exposure of the operative field, closure of the surgical wound, and the application of casts and dressings. These surgical assistants offer services in the general surgery, obstetrics and gynecology, orthopedic surgery, plastic surgery, urology, cardiovascular surgery, neurosurgery, and other surgical areas. In addition, it offers primary claim billing services to insurance companies and patients. The company was formerly known as ASAH Corp. AMERISTOCK CORP:Reports Final Results of ETF Trust Liquidation -------------------------------------------------------------- Ameristock Corporation, the investment adviser for each of the five Funds of the Ameristock ETF Trust, disclosed the final proceeds payable as a result of the liquidation of such Funds. As reported by the Troubled Company Reporter on May 30, 2008, Ameristock Corporation, intended to liquidate each of the five series of the Trust. The Funds ceased trading on the American Stock Exchange on June 11, 2008, and the Funds' assets was set to be distributed for payment to shareholders on June 20, 2008. All shareholders remaining on June 19, 2008, will receive the value of their shares as of that date. These summarizes the breakdown of the proceeds at liquidation for each Fund. Details of Final Fund Proceeds as of June 20, 2008 a) Symbol: GKA Fund Name: Ameristock/Ryan 1 Year Treasury ETF Record Date: June 19, 202008 Payable Date: June 20, 202008 Income Dividend per Share: 0.13301 Short Term Capital Gains per Share: 0.32929 Return of Investment: 24.86505 Final Net Assest Value per Share: 25.32734 b) Symbol: GKB Fund Name: Ameristock/Ryan 2 Year Treasury ETF Record Date: June 19, 2008 Payable Date: June 20, 2008 Income Dividend per Share: 0.10727 Short Term Capital Gains per Share: 0.83147 Return of Investment: 24.62883 Final Net Assest Value per Share: 25.56757 c) Symbol: GKC Fund Name: Ameristock/Ryan 5 Year Treasury ETF Record Date: June 19, 2008 Payable Date: June 20, 2008 Income Dividend per Share: 0.14944 Short Term Capital Gains per Share: 1.33302 Return of Investment: 24.20050 Final Net Assest Value per Share: 25.68296 d) Symbol: GKD Fund Name: Ameristock/Ryan 10 Year Treasury ETF Record Date: June 19, 2008 Payable Date: June 20, 2008 Income Dividend per Share: 0.23904 Short Term Capital Gains per Share: 1.54480 Return of Investment: 24.02869 Final Net Assest Value per Share: 25.81253 e) Symbol: GKE Fund Name: Ameristock/Ryan 20 Year Treasury ETF Record Date: June 19, 2008 Payable Date: June 20, 2008 Income Dividend per Share: 0.24415 Short Term Capital Gains per Share: 1.56916 Return of Investment: 23.91634 Final Net Assest Value per Share: 25.72965 For additional information, shareholders in these Funds may call Ameristock at 866-821-5592. For information on investment objectives and policies, risks, charges and expenses of any investment product, investors may call Tel (800) 394-5064. Ameristock funds are distributed by ALPS Distributors Inc. ALPS Distributors, Inc. is headquartered at 1290 Broadway, Suite 1100, Denver, Colorado 80203. AMP'D MOBILE: Can Sell Remaining $170,000 Assets to Great American ------------------------------------------------------------------ Amp'd Mobile Inc. obtained authority from the U.S. Bankruptcy Court for the District of Delaware to sell its remaining hard assets to Great American Group LLC for $170,000, free and clear of all liens, claims, encumbrances, and interests. As reported in the Troubled Company Reporter on May 15, 2008, Amp'd Mobile Inc. sought permission from the Court to sell certain of its furniture and studio equipment to Great American. Steven M. Yoder, Esq., at Potter Anderson & Corroon LLP in Wilmington Delaware, related that since late July 2007, the Debtor's management has continued to market and solicit interest in the Debtor's remaining assets. The Debtor has sold furniture, equipment, and computers; completed a sale of its handset and handset accessories inventory; assigned its assets and rights related to certain intellectual property rights; sold its accounts receivable portfolio; marketed its remaining intellectual property assets; and commenced a large volume of avoidance actions all in an effort to maximize value for all its creditors. "[The latest proposed] sale [to Great American] represents the last remaining of the remaining 'hard' assets of the Debtor," Mr. Yoder told the Court. Mr. Yoder noted that after eight months of marketing the Remaining Assets, the Debtor's management have concluded that the bid submitted by Great American is the highest and best bid the Debtor has received for the remaining assets. The Debtor also asserted that the proposed sale will maximize recovery into its estate and prevent further deterioration of the value of the Assets. The Remaining Hard Assets will be sold on an "as is, where is" basis. About Amp'd Mobile Headquartered in Los Angeles, California, Amp'd Mobile Inc. aka Amp'D Mobile LLC -- http://www.ampd.com/-- is a mobile virtual network operator that provides voice, text and entertainment content to subscribers who contract for cellular telephone service. The company filed for chapter 11 protection on June 1, 2007 (Bankr. D. Del. Case No. 07-10739). Steven M. Yoder, Esq., Eric M. Sutty, Esq. and Mary E. Augustine, Esq. at The Bayard Firm, represent the Debtor in its restructuring efforts. Attorneys at Otterbourg, Steindler, Houston & Rosen, P.C. and Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, represent the Official Committee of Unsecured Creditors. In its schedules filed with the Court, the Debtor listed total assets of $47,603,629 and total debts of $164, 569,842. The Debtor's exclusive period to file a plan expired on Sept. 29, 2007. The Debtor is in the process of selling various assets. (Amp'd Mobile Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). AMP'D MOBILE: Can Hire Cypress LLP as Special Litigation Counsel ---------------------------------------------------------------- Amp'd Mobile Inc. sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ Cypress LLP as special litigation counsel, to review, analyze and prosecute claims related to the improper use and conversion of certain intellectual property it owns and certain intellectual property actions, on a contingency fee basis. The Debtor believed that Cypress is both well-qualified and uniquely able to represent it in its bankruptcy case in light of the firm's recognized expertise in evaluating, litigating and negotiating IP actions. The managing partners of Cypress, Nabil Abu-Nassal, has 20 years of experience and was, prior to forming Cypress, the head of the Intellectual Property Litigation Group at Christensen, Glaser, Fink, Jacobs, Weil & Shapiro LLP in Los Angeles, California. The Debtor asserted that it requires Cypress' services to enable it to recover funds for its estate. Cypress is expected to: a) investigate and evaluate all potential IP action claims; b) commence IP actions in the United States Bankruptcy Court for the District of Delaware; c) prepare all pleadings, correspondence, discovery, and necessary documents related to the IP actions; d) litigate all IP actions to their conclusions; e) prepare all required documentation for the settlement of the IP actions; f) seek court approval, if necessary, of any resolution of the IP Actions; g) provide legal advice to the Debtor with respect to the IP Actions; h) appear in Court to protect the interest of the Debtor in the IP actions; and i) perform all other legal services in connection with the IP actions as may reasonably be required. For each IP Action, Cypress will be entitled receive Contingency Payments: * Investigation - In conducting the investigation to determine the viability of the IP Actions, the total fees, including expenses, payable to Cypress and all experts engaged by Cypress will not exceed $150,000. Partner hourly billing rates will not exceed $550 and associate and of-counsel hourly billing rates will not exceed $375. Paralegal assistance will be billed at an hourly rate of $150. * For cases settled prior to the filing of a complaint, Cypress will be paid 23% of any recovery. * For cases resolved after a complaint is filed, Cypress will be paid 30% of any recovery. * For cases resolved after a trial, Cypress will be paid 36% of any recovery. The Contingency Payment will be: (i) reduced on a dollar for dollar basis in the amount of the Investigative Fee; and (ii) used to pay all expenses incurred by the Debtor or Cypress related to and incurred during the litigation of the IP Actions. Cypress will submit monthly statements to the Debtor showing any professional services rendered and itemized expenses it incurred. If Cypress requires the assistance of financial advisors, investigators, or other experts, Cypress will seek the Debtor's approval. Cypress is also entitled to a $25,000 initial retainer. Nabil L. Abu-Assal, Esq. , managing partner at Cypress LLP, assured the Court that his firm does not hold or represent any interest or connection adverse to the Debtor, its estate, its creditors, any other party-in-interest, or the Debtor's attorneys or accountants. About Amp'd Mobile Headquartered in Los Angeles, California, Amp'd Mobile Inc. aka Amp'D Mobile LLC -- http://www.ampd.com/-- is a mobile virtual network operator that provides voice, text and entertainment content to subscribers who contract for cellular telephone service. The company filed for chapter 11 protection on June 1, 2007 (Bankr. D. Del. Case No. 07-10739). Steven M. Yoder, Esq., Eric M. Sutty, Esq. and Mary E. Augustine, Esq. at The Bayard Firm, represent the Debtor in its restructuring efforts. Attorneys at Otterbourg, Steindler, Houston & Rosen, P.C. and Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, represent the Official Committee of Unsecured Creditors. In its schedules filed with the Court, the Debtor listed total assets of $47,603,629 and total debts of $164, 569,842. The Debtor's exclusive period to file a plan expired on Sept. 29, 2007. The Debtor is in the process of selling various assets. (Amp'd Mobile Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). ANCHOR GLASS: Seeks Final Decree to Close Chapter 11 Case --------------------------------------------------------- Anchor Glass Container Corporation asks the U.S. Bankruptcy Court for the Middle District of Florida to enter a final decree closing its Chapter 11 case. Robert A. Soriano, Esq., at Greenberg Traurig, P.A., in Tampa, Florida, tells the Court that, as of May 29, 2008, the Reorganized Debtor has fully administered its estate and its Second Amended Plan of Reorganization is substantially consummated. Mr. Soriano contends that the Reorganized Debtor has met the requirements of "substantial consummation" as defined under Section 1101(2) by: * transferring all or substantially all of the property proposed to be transferred under the Plan; * assuming the business and management of all or substantially all of the property dealt with by the Plan; and * commencing distribution under the Plan. Moreover, Mr. Soriano says, either the Court or the Reorganized Debtor has disposed all adversary proceedings, contested matters, and objections to claims. Alpha Trustee Objects Samuel M. Stricklin, the Alpha Resolution Trustee, tells the Court that he has completed the process of resolving all of the unsecured claims and has distributed approximately 98% of the assets in the Alpha Resolution Trust. He adds that he is in the process of making final distributions and expect those distributions to be completed on or before June 23, 2008. The Alpha Resolution Trust was created under the Plan to, among other things, resolve any objections to General Unsecured Claims and make appropriate distributions to holders of Allowed General Unsecured Claims. Upon the establishment of the Alpha Resolution Trust, the Reorganized Debtor delivered: -- $8,000,000 in cash; and -- those funds aggregating $685,000, held in escrow by counsel for the Official Committee of Unsecured Creditors, which funds have been deposited by certain utilities under Court- approved compromises to resolve the Creditors Committee's objection to those utilities' entitlement to retain funds paid postpetition for prepetition obligations. The Alpha Trustee contends that although he will be able to make the final distributions on or before June 23, it is anticipated that some checks may become stale pursuant to the terms of the Alpha Trust Agreement because the checks will not be deposited within 90 days of issuance. Under those circumstances, the stale checks will revert back to the Trust. The Alpha Trustee anticipates that the amounts will be nominal -- probably less than $10,000. Accordingly, the Alpha Trustee asks the Court to effect any final decree order until June 30, 2008. Additionally, the Alpha Trustee asks the Court to dissolve the Alpha Resolution Trust and discharge him of his responsibilities as Alpha Resolution Trustee, effective November 1, 2008. He also asks for injunctive relief with respect to the unsecured claims against the Reorganized Debtor. He further seeks permission to distribute the nominal amounts that revert back from stale checks in the manner he deems fit, after consultation with and approval by the Oversight Committee, which is composed of members of the Official Committee of Unsecured Creditors and which monitors the Trustee's disposition and disbursement of the Trust Assets. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents Anchor Glass in its restructuring efforts. Edward J. Peterson, III, Esq., at Bracewell & Guiliani, represents the Official Committee of Unsecured Creditors. When Anchor Glass filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. The Court confirmed Anchor Glass' second Amended Plan of Reorganization on April 18, 2006. Anchor Glass emerged from Chapter 11 protection on May 3, 2006. (Anchor Glass Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASCALADE COMMUNICATIONS: Posts Default Status Statements -------------------------------------------------------- In accordance with the Ontario Security Commission Policy 57-603 Defaults by Reporting Issuers in Complying with Financial Statement Filing Requirements, Ascalade Communications Inc. -- except as disclosed in press statements dated April 2, 2008, April 9, 2008, April 29, 2008, May 14, 2008 and May 21, 2008 -- confirms: 1. there is no material change to the information set out in its initial default announcement filed pursuant to the OSC Policy on March 31, 2008. 2. there has been no failure by the company to adhere to the "Alternative Information Guidelines" set out in the OSC Policy with respect to the financial statement filing default, and 3. there is no other material information concerning the affairs of the company that has not been generally disclosed. On April 29, 2008, the company reported that the Monitor, on behalf of Ascalade and Ascalade Technologies Inc., had filed a case under Chapter 15 of the U.S. Bankruptcy Code to seek a stay of proceedings with respect to any actions which have or might be brought against the two companies in the United States. With respect to this filing, on June 10 2008, Judge Susan Pierson Sonderby of the United State Bankruptcy Court for the Northern District of Illinois, Eastern Division, issued an Order of Recognition and an Order for Joint Administration with respect to filings made by the Monitor on behalf of the companies to have the U.S. Court recognize the companies' Creditors Arrangement Act proceedings under Chapter 15 of the U.S. Bankruptcy Code. Any recovery in the CCAA for creditors and other stakeholders of the companies, including shareholders, is uncertain and is highly dependent upon a number of factors, including the recovery from the sale of the factory, equipment and inventory in the PRC and the outcome of the Scheme in Hong Kong. About Ascalade Communications Inc. Headquartered in Richmond, British Columbia, Ascalade Communications Inc. (TSE:ACG) -- http://www.ascalade.com/-- is an innovative product company that designs, develops and manufactures digital wireless and communication products. The company delivers products by offering its partners and customers complete vertical integration, from product design and development to final production. The company's products include digital cordless phones, Voice over Internet Protocol phones, digital wireless baby monitors and digital wireless conference phones. Ascalade products have been distributed in more than 35 countries and under 80 regional brands. Ascalade has facilities in Qingyuan, China, Hong Kong and a sales office in Hertfordshire, United Kingdom. On April 29, 2008, Jervis Rodrigues, senior vice-president of Deloitte & Touche Inc., filed separate petitions for protection under Chapter 15 of the U.S. Bankruptcy Code on behalf of Ascalade Communications Inc. and its debtor-affiliate (Bankr. N.D. Ill. Case Nos. 08-10612 and 08-10616). Jeffrey G. Close, Esq. at Chapman and Cutler LLP represents the Petitioner in the Chapter 15 case. Ascalade's financial condition as of Sept. 2007 showed total assets of $99,630,000 and total debts of $40,410,000. ATSI COMMUNICATIONS: Auditors Withdraw Going Concern Warning ------------------------------------------------------------ ATSI Communications Inc.'s financial report in SEC Form 10QSB filed June 13, 2008 no longer has its auditor's "going concern" opinion. As reported in the Troubled Company Reporter on Oct. 22, 2007, Malone & Bailey PC in Houston, Texas, raised substantial doubt about ATSI Communications Inc.'s ability to continue as a going concern after it audited the company's financial statements for the year ended July 31, 2007. The auditing firm stated that ATSI has a working capital deficit, has suffered recurring losses from operations and has a stockholders' deficit. In a statement announcing the removal of the "going concern opinion, Arthur L. Smith, president and CEO, stated stated, "Achieving this goal is extremely important and serves as recognition to our entire team for consistently meeting performance objectives that led to a dramatic improvement in our financial condition." "We also appreciate the support of our customers, partners, vendors, and stockholders in meeting this significant milestone." "We are extremely pleased that our improved financial condition and available cash from operations enabled us to meet this objective that validates the successful execution of our business plan," Antonio Estrada, senior VP of finance and corporate controller, added. The auditors had included an advisory regarding the "going concern" opinion since the company's re-incorporation in fiscal year 2004. A going concern opinion indicates that there is uncertainty in the ability of the company to continue operations. About ATSI Communications Headquartered in San Antonio, Texas, ATSI Communications Inc. (OTC BB: ATSX) -- http://www.atsi.net/-- operates through two wholly owned subsidiaries, Digerati Networks Inc. and Telefamilia Communications Inc. Digerati is a VoIP carrier serving markets in Asia, Europe, the Middle East, Latin America and Mexico. Telefamilia provides retail communication services to the Hispanic market in the United States. ATSI also owns a minority interest of a subsidiary in Mexico, ATSI Comunicaciones S.A. de C.V., which operates under a 30-year government issued telecommunications license. As reported in the Troubled Company Reporter on June 17, 2008, ATSI Communications Inc.'s consolidated balance sheet at April 30, 2008, showed $2,602,000 in total assets and $2,623,000 in total liabilities, resulting in a $21,000 total stockholders' deficit. AURIGA LABORATORIES: Issues Promissory Note to Prospector Capital ----------------------------------------------------------------- Auriga Laboratories, Inc. issued to Prospector Capital Partners II, LLC, a Senior Secured Convertible Promissory Note in the principal amount of $287,500. In accordance with the Senior Secured Convertible Promissory Note Purchase Agreement, the company may receive up to an additional $462,000, for an aggregate maximum of $750,000. The Note bears interest at the rate of 1.5% per month, payable monthly. The Note is the first in a series of three convertible promissory notes through which Prospector may loan the company the aforesaid funds. As additional consideration for the loan, the company entered into a Royalty Participation Agreement with Prospector to pay 5% of the Company's "Gross Sales," net of actual returns and other defined deductions, as set forth in the Royalty Agreement. A full-text copy of the Senior Secured Convertible Promissory Note is available for free at http://ResearchArchives.com/t/s?2e6a A full-text copy of the Royalty participation Agreement is available for free at http://ResearchArchives.com/t/s?2e6b A full-text copy of the Senior Secured Convertible Promissory Note Purchase Agreement is available for free at http://ResearchArchives.com/t/s?2e6c Based in Norcross, Georgia, Auriga Laboratories Inc. (OTC BB: ARGA) -- http://www.aurigalabs.com/-- is a specialty pharmaceutical company building an industry changing commission- based sales model targeting over 2000 filled territories by 2009. The company's high-growth business model combines driving revenues through a variable cost commission-based sales structure, acquisition and development of FDA approved products, all of which are designed to enhance its growing direct relationships with physicians nationwide. Auriga's current product portfolio includes 27 marketed products and 6 products in development covering various therapeutic categories. Going Concern Doubt As reported in the Troubled Company Reporter on April 3, 2007, Williams & Webster P.S., in Spokane, Wash., raised substantial doubt about Auriga Laboratories Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditor pointed to the company's substantial operating losses since inception, negative working capital, and limited cash resources. AURIGA LABS: March 31 Balance Sheet Upside-Down by $7,920,246 ------------------------------------------------------------- Auriga Laboratories Inc.'s consolidated balance sheet at March 31, 2008, showed $4,603,493 in total assets and $12,523,739 in total liabilities, resulting in a $7,920,246 total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $2,820,665 in total current assets available to pay $12,523,739 in total current liabilities. The company reported a net loss of $1,265,267 on total net revenue of $787,554 for the first quarter ended March 31, 2008, compared with a net loss of $976,410 on total net revenue of $6,766,025 in the same period last year. The increased net loss primarily reflects decreased gross revenues and the increase in sales return reserve as a percentage of revenues, which decreased net revenue, partially offset by decreases in operating expenses for the three months ended March 31, 2008. 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?2e6e Going Concern Doubt PMB Helin Donovan, LLP, in San Francisco, expressed substantial doubt about Auriga Laboratories Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's significant recurring operating losses and negative working capital at Dec. 31, 2007. The company has incurred operating losses each year since its inception and had an accumulated deficit of $37,802,283 as of March 31, 2008. About Auriga Laboratories Based in Camarillo, Calif., Auriga Laboratories Inc. (OTC BB: ARGA) -- http://www.aurigalabs.com/-- is a specialty pharmaceutical company which was founded in 2005. The company is engaged in the commercialization and licensing of pharmaceutical products. The company is building an extensive portfolio of prescription brands targeting high growth therapeutic categories in the respiratory, dermatology and psychiatry markets. The company's current product portfolio includes 26 marketed products and 5 products in development covering various therapeutic categories. AXIA INC: S&P Withdraws Ratings After Credit Refinancing -------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings, including its 'CCC+' corporate credit rating, on Duluth, Georgia-based Axia Inc. following the refinancing of the company's credit facilities in May 2008. BAXL HOLDINGS: March 31 Balance Sheet UpsideDown by $3,540,151 -------------------------------------------------------------- BAXL Holdings Inc.'s consolidated balance sheet at March 31, 2008, showed $2,259,075 in total assets and $5,799,226 in total liabilities, resulting in a $3,540,151 total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $2,101,689 in total current assets available to pay $5,750,709 in total current liabilities. The company reported a net loss of $1,482,543 on sales of $542,847 for the first quarter ended March 31, 2008, compared with a net loss of $1,284,754 on sales of $388,161 in the corresponding period in 2007. The increased net loss for the three month period ended March 31, 2008, is primarily due to increased gross profit and decreased interest expense, offset by increased operating expenses. 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?2e79 Going Concern Doubt WithumSmith+Brown, P.C., in New Brunswick, N.J., expressed substantial doubt about BAXL 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 reported that the company has incurred net losses and negative operating cash flows and has a stockholders' deficit of $2,072,560 as of Dec. 31, 2007. The company's stockholders deficit increased to $3,540,151 as of March 31, 2008. About BAXL Holdings Based in Bethel, Conn., BAXL Holdings Inc. -- http://www.baxl.net/ -- through its sole operating entity, BAXL Technologies Inc., is a solutions provider enabling the reliable delivery of wired and wireless broadband applications including voice, video and data, over any existing wiring. BAYOU GROUP: Convicted Ex-Official Flees with Aid of Girlfriend --------------------------------------------------------------- Debra Ryan, girlfriend of Bayou Group LLC's ex-executive, Samuel Israel, III, faces charges of helping Mr. Israel evade imprisonment, various reports say. Ms. Ryan, who was arrested on June 19, 2008, could be sentenced with up to 10 years in prison, the reports relate. The Troubled Company Reporter said on April 16, 2008, that the Hon. Colleen McMahon of the U.S. District Court for the Southern District of New York sentenced Mr. Israel to 20 years in prison. Mr. Israel, who was also ordered to pay restitution for $300 million, was found to be primarily responsible for duping investors of more than $450 million through misrepresentation of the company's financial condition. Mr. Israel was supposed to turn himself to prison on June 9, 2008, but never did, according to the reports. He allegedly orchestrated a suicide by abandoning his vehicle on a 150-foot high bridge in Hudson River, New York, and leaving a "suicide note" traced in the dust, the reports continue. Mr. Israel's body was never recovered, making authorities speculate it was just a scheme, reports add. Co-Conspirators Sentenced The TCR said on April 16 that Judge McMahon had already sentenced Mr. Israel's co-conspirators, Daniel Marino and James G. Marquez, in January. On Feb. 18, 2008, the TCR reported that Judge McMahon denied Mr. Marquez's request to spend spring break with his children in Florida. The District Court sentenced Mr. Marquez to a term of 51 months in prison. Bayou Group Sues Executives for Fraud On March 7, 2008, the TCR related that Bayou Group and its debtor- affiliates delivered 47 adversary complaints to the Hon. Adlai S. Hardin, Jr., of the U.S. Bankruptcy Court for the Southern District of New York, seeking to recover certain fraudulent transfers made by investors against the Debtors. Bayou Fund expects to recover at least $8 million. The Debtors related that these proceedings arose from a massive fraudulent investment scheme committed by the Bayou entities, which controlled private pooled investment hedge funds. The Debtors said that the Bayou entities have attracted at least $450 million in investments for their hedge funds before suffering millions of dollars in trading losses. The Bayou entities attempted to stay afloat and prolonged the scheme by disclosing false investment performance and creating false financial statements. In addition, the entities attempted to conceal their losses through a series of fraudulent transfers to certain of their investor creditors. The Bayou entities' fraudulent investment scheme collapsed, with at least $250 million in principal unpaid to hundreds of creditors. About Bayou Group Based in Chicago, Illinois, Bayou Group LLC operates and manages hedge funds. The company and its affiliates filed for chapter 11 protection on May 30, 2006 (Bankr. S.D.N.Y. Case No. 06-22306) in order to pursue recoveries for the benefit of defrauded investors. The Bayou entities are Bayou Management LLC, Bayou Advisors LLC, Bayou Equities LLC, Bayou Fund LLC, Bayou Superfund, Bayou No Leverage Fund LLC, Bayou Affiliates Fund LLC, and Bayou Accredited Fund LLC. Bayou also filed lawsuits against former investors who allegedly received fictitious profits and an inequitably large return of their principal investments. Jeff J. Marwil, Esq. at Jenner & Block was appointed on April 28, 2006 as the federal equity receiver and sole managing member of the Debtors. The Hon. Adlai S. Hardin, Jr., presides over the bankruptcy case. Elise Scherr Frejka, Esq., at Dechert LLP, represents the Debtors in their restructuring efforts. Wells Fargo Trumbull is the Debtors' claims agent. Joseph A. Gershman, Esq., and Robert M. Novick, Esq., at Kasowitz, Benson, Torres & Friedman, LLP, represents the Official Committee of Unsecured Creditors. Kasowitz, Benson, Torres & Friedman LLP is counsel to the Unofficial Committee of the Bayou Onshore Funds. Sonnenschein Nath & Rosenthal LLP represents the Sonnenschein Investors. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. BEAR STEARNS: Moody's Cuts Ratings of 108 Tranches from ARM Deals ----------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 108 tranches from 10 Option ARM transactions issued by Bear Stearns. Forty eight tranches remain on review for possible further downgrade. Additionally, 24 tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, adjustable-rate, negatively amortizing Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going review process. Complete rating actions are: Issuer: Bear Stearns Mortgage Funding Trust 2006-AR1 -- Cl. I-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-B-1, Downgraded to Ba3 from Aaa -- Cl. I-B-2, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. I-B-3, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. I-B-4, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. I-B-5, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. I-B-6, Downgraded to Ca from Baa3 -- Cl. I-B-7, Downgraded to Ca from Ba1 -- Cl. II-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-B-1, Downgraded to Ba3 from Aa1 -- Cl. II-B-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. II-B-3, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. II-B-4, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. II-B-5, Downgraded to Ca from B1 Issuer: Bear Stearns Mortgage Funding Trust 2006-AR2 -- Cl. I-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-B-1, Downgraded to Baa3 from Aaa -- Cl. I-B-2, Downgraded to Ba2 from Aa1 -- Cl. I-B-3, Downgraded to Ba3 from Aa1 -- Cl. I-B-4, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. I-B-5, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. I-B-6, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. I-B-7, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. I-B-8, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. I-B-9, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. II-B-1, Downgraded to Ba3 from Aaa -- Cl. II-B-2, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. II-B-3, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. II-B-4, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. II-B-5, Downgraded to Ca from B1 Issuer: Bear Stearns Mortgage Funding Trust 2006-AR3 -- Cl. I-A-2A, Placed on Review for Possible Downgrade, currently Aaa -- Underlying I-A-2B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-B-1, Downgraded to Baa1 from Aaa -- Cl. I-B-2, Downgraded to Ba2 from Aa1 -- Cl. I-B-3, Downgraded to Ba3 from Aa1 -- Cl. I-B-4, Downgraded to Ba3 from Aa2 -- Cl. I-B-5, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. I-B-6, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. I-B-7, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. I-B-8, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. I-B-9, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. II-A-2A, Placed on Review for Possible Downgrade, currently Aaa -- Underlying II-A-2B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-B-1, Downgraded to Ba3 from Aaa -- Cl. II-B-2, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. II-B-3, Downgraded to Ca from Ba1 -- Cl. II-B-4, Downgraded to Ca from Ba3 -- Cl. II-B-5, Downgraded to Ca from Caa2 Issuer: Bear Stearns Mortgage Funding Trust 2006-AR4 -- Cl. B-1, Downgraded to Ba3 from Aaa -- Cl. B-2, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-4, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-5, Downgraded to Ca from B1 Issuer: Bear Stearns Mortgage Funding Trust 2006-AR5 -- Cl. I-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-B-1, Downgraded to Baa3 from Aaa -- Cl. I-B-2, Downgraded to Ba2 from Aa1 -- Cl. I-B-3, Downgraded to Ba3 from Aa1 -- Cl. I-B-4, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. I-B-5, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. I-B-6, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. I-B-7, Downgraded to Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl. I-B-8, Downgraded to Ca from Baa2 -- Cl. I-B-9, Downgraded to Ca from Baa3 -- Cl. II-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-B-1, Downgraded to Ba3 from Aaa -- Cl. II-B-2, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. II-B-3, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. II-B-4, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. II-B-5, Downgraded to Ca from B1 Issuer: Bear Stearns Mortgage Funding Trust 2007-AR1 -- Cl. I-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-B-2, Downgraded to Baa1 from Aa1 -- Cl. I-B-3, Downgraded to Baa3 from Aa1 -- Cl. I-B-4, Downgraded to Ba2 from Aa2 -- Cl. I-B-5, Downgraded to Ba3 from Aa3 -- Cl. I-B-6, Downgraded to B2 from A1 -- Cl. I-B-7, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. I-B-8, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. I-B-9, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. II-A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-B-1, Downgraded to Ba3 from Aa1 -- Cl. II-B-2, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. II-B-3, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. II-B-4, Downgraded to Ca from Ba1 -- Cl. II-B-5, Downgraded to Ca from B3 Issuer: Bear Stearns Mortgage Funding Trust 2007-AR2, Mortgage Pass-Through Certificates, Series 2007-AR2 -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Ba2 from Aa1 -- Cl. B-2, Downgraded to Ba3 from Aa3 -- Cl. B-3, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-4, Downgraded to Ca from Ba1 -- Cl. B-5, Downgraded to Ca from B3 Issuer: Bear Stearns Mortgage Funding Trust 2007-AR3 -- Cl. I-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-B-1, Downgraded to Aa1 from Aaa -- Cl. I-B-2, Downgraded to Baa2 from Aa1 -- Cl. I-B-3, Downgraded to Baa3 from Aa1 -- Cl. I-B-4, Downgraded to Ba2 from Aa2 -- Cl. I-B-5, Downgraded to Ba3 from Aa3 -- Cl. I-B-6, Downgraded to B1 from A1; Placed Under Review for further Possible Downgrade -- Cl. I-B-7, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. I-B-8, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. I-B-9, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. II-1A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-B-1, Downgraded to Ba2 from Aa1 -- Cl. II-B-2, Downgraded to Ba3 from Aa3 -- Cl. II-B-3, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. II-B-4, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. II-B-5, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. II-B-6, Downgraded to Ca from B1 Issuer: Bear Stearns Mortgage Funding Trust 2007-AR4 -- Cl. I-X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-B-6, Downgraded to A3 from A1 -- Cl. I-B-7, Downgraded to Ba1 from A2 -- Cl. I-B-8, Downgraded to B3 from Baa1 -- Cl. I-B-9, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. II-B-1, Downgraded to Aa3 from Aa1 -- Cl. II-B-2, Downgraded to Baa3 from Aa3 -- Cl. II-B-3, Downgraded to Ba2 from Baa1 -- Cl. II-B-4, Downgraded to B1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. II-B-5, Downgraded to Ca from Ba1 -- Cl. II-B-6, Downgraded to Ca from B3 Issuer: Bear Stearns Mortgage Funding Trust 2007-AR5 -- Cl. I-X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-B-8, Downgraded to Baa3 from Baa1 -- Cl. I-B-9, Downgraded to Ba3 from Baa3 -- Cl. II-B-3, Downgraded to A2 from Aa3 -- Cl. II-B-4, Downgraded to Baa3 from Baa2 -- Cl. II-B-5, Downgraded to Ba3 from Baa3 -- Cl. II-B-6, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade BHM TECHNOLOGIES: Proposes Two Restructuring Options Under Plan --------------------------------------------------------------- BHM Technologies Holdings, Inc., and its debtor-subsidiaries delivered their Joint Plan of Reorganization to the U.S. Bankruptcy Court for the Western District of Michigan, on June 18, 2008. BHM Technologies negotiated the economic terms of the Plan with its majority shareholder Atlantic Equity Partners IV, L.P.; Lehman Commercial Paper, Inc., administrative agent for the prepetition first lien lenders owed $255,700,000 and the lenders who funded the $45,000,000 postpetition loan; and S.A.C. Domestic Investments, administrative agent for the prepetition second lien lenders owed $72,000,000. Treatment of Claims Under the plan, Class S-3 Prepetition First Lien Secured Debt Claims are impaired and will get a pro-rata share of exit term loan and equity distribution. Class U-3 Intercompany Claims will continue or be discharged. Class U-4 General Unsecured Claims are impaired. If Class U-4 votes to accept the Plan, holders of Allowed General Unsecured Claims will receive their pro-rata share of the equity distribution. Otherwise, that Class will not receive any distribution and the Debtors will seek confirmation of the Plan notwithstanding the rejection. Class E-1 Parent Equity Interests will not get any recovery and Class E-2 Subsidiary Debtor Equity Interests will be canceled under the plan. All the other claims will be paid in full. Two Alternatives The Plan provides for two alternatives for the Debtors' balance sheet restructuring, a "New Money" alternative which is the preferred alternative, and a "No New Money" alternative which is the "fallback option." Both alternatives provide for the cancellation of existing stock of BHM, and the recovery by unsecured creditors in the form of shares of new stock of reorganized BHM, as long as they vote in favor of the Plan. In the "No New Money" alternative, the First Lien Lenders will obtain 89% of the common stock of Reorganized BHM, and the unsecured creditors 11%. In the "New Money" alternative, Atlantic Equity Partners will invest $12,500,000 to purchase 27% of the primary common stock of reorganized BHM, with the First Lien Lenders getting 65% of the common stock, and the general unsecured creditors receiving 8% of the common stock, in exchange for their claims. The Plan contemplates restructuring transactions, which may result in substantially all of the Debtors' assets, properties, rights, liabilities, duties and obligations vesting in one or more surviving, resulting or acquiring corporations. As of the Effective Date of the Plan, each of the Debtors will continue to exist as a separate legal entity and all property of the Debtor's estate will vest in the Debtor free and clear of all claims, liens, charges, encumbrances and equity interests. A draft of Reorganized BHM Holdings' Certificate of Incorporation and By-Laws are available at no charge at: http://bankrupt.com/misc/BHM_CertOfIncorporation&By-LawsDraft.pdf Board Composition Under Restructuring Alternatives All stockholders, other than holders of limited voting common stock, will agree to vote their shares of New Common Stock, pursuant to restructuring alternatives. Under the new money alternative, the initial board of directors will consist of seven members including (i) the chief executive officer of BHM Technologies Holdings, Inc., (ii) four individuals designated by the majority first lien lenders, and (iii) two directors of AEP; provided that AEP beneficially owns at least 20% of the shares of New Common Stock outstanding. The Board will be divided into Class I, consisting of BHM's CEO; Class II, composed a director designated by the Majority First Lien enders and an AEP director; and Class III, consisting of the remaining directors. Under the No New Money Alternative, the initial board will be made up of five members, including BHM's CEO and four individuals designated prior to hearing to consider confirmation of the Plan. Class I will be composed of BHM's CEO; Class II will consist of two Designated Individuals, and Class III will be composed of the remaining directors. All members in each Class will serve a term that will initially expire at the first post-Effective Date annual stockholders' meeting. Confirmation of the Plan under the New Money Alternative is conditioned upon AEP Investment in the escrow account, pursuant to the Escrow Agreement. The No New Money Alternative will only be confirmed under the Plan if the the New Money Alternative (i) has not been confirmed; (ii) has not been consummated; or (iii) abandoned or withdrawn. Exit Facility Cash payments required under the Plan may be funded from existing cash balances, which include, among other things, the AEP Investment and the proceeds of the Exit Facility. The Exit Facility is a secured revolving commitment, of up to $35,000,000, with a $5,000,000 letter of credit sub-limit, which matures on the third anniversary of the Effective Date of the Plan. A full text copy of the terms of the Exit Facility is available for free at http://bankrupt.com/misc/BHM_ExitFacility.pdf Under the Exit Facility, collateral and guarantees include (i) first lien on all accounts receivables, inventory and related tangibles of the Debtors and all Guarantors; (ii) second lien on capital stock of the Debtors, 65% capital stock of any foreign subsidiaries, property of the Debtors and all Guarantors; and (iii) the intercreditor agreement between the Debtors, LCPI, and the collateral agent, under the exit term loan. Under the Exit Term Loan, the term debt to be issued by BHM Technologies Holdings, as borrower, and the other Reorganized Debtors, as guarantors to the First Lien Lenders, as of the Effective Date, will be in the principal amount of $92,500,000. A full-text copy of the Exit Term Loan is available for free at: http://bankrupt.com/misc/BHM_ExitTermLoan.pdf The Exit Facility will be entered by the Reorganized Debtors, as borrowers and guarantors, without the need for further action by claimholders or holders of Equity Interests. In compromise and settlement of any claims that the Second Lien Lenders and S.A.C. Domestic Investment, as successor administrative agent under the Second Lien Agreement, may make against the First Lien Lenders and LCPI under the intercreditor agreement, LCPI will deliver and assign to S.A.C.: -- $284,405 plus an additional amount equal to the lesser of (i) $100,000 and (ii) the legal fees and expenses incurred by SAC; and -- the Secured Creditors' options under the No New Money Alternative; or under the New Money Alternative, (i) shares representing $3,750,000 on issue price of Parent Preferred Stock, and (ii) the shares of New Common Stock. If the New Money Alternative is confirmed by the Court, AEP will assign and deliver to S.A.C. shares of the New Common Stock equal to the Stock received by holders of general unsecured claims, provided that the assignment will exceed 24,098 shares of New Common Stock. Upon confirmation of the Plan, LCPI will have received an exit term loan guarantee and collateral agreement, executed by the Debtors. Plan Support Agreements The Debtors, S.A.C., AEP and various lenders entered into the plan support agreement as of May 16, 2008, which covenants, among other things, that (i) the AEP Investment will support the confirmation of the Plan under the Restructuring Alternatives; and (ii) after the Petition Date, AEP will no longer receive payments pursuant to a management agreement dated as of July 2006, which foregoing of payment is contingent on BHM Holdings' Board of Directors. Full-text copies of the Plan Support Agreements are available for free at: * http://bankrupt.com/misc/BHM_PlanSupportAgreement.pdf * http://bankrupt.com/misc/BHM_AEPSupportAgreement.pdf Plan Securities and Other Agreements The plan securities -- consisting of the New Common Stock, and (i) the AEP Warrants and parent preferred stock under the New Money Alternative, and (ii) the secured creditors options under the No New Money Alternative, which are options to acquire 108,422 shares of New Common Stock -- will be exempt from registration under the Securities Act of 1933, in accordance with Section 1145 of the Bankruptcy Code. Full-text copies of the Agreements are available for free at: * http://bankrupt.com/misc/BHM_StockholdersAgreement.pdf * http://bankrupt.com/misc/BHM_RegistrationRightsAgreement.pdf * http://bankrupt.com/misc/BHM_WarrantsAgreement.pdf * http://bankrupt.com/misc/BHM_OptionsAgreement.pdf Compensation and Benefit Programs As of the Effective Date, the Reorganized Debtors will be authorized to maintain, or otherwise enter into new agreements with respect to their employees. The Debtors do not maintain retiree benefit plans, funds or programs as defined in Section 1114 of the Bankruptcy Code. All pre-confirmation health care plans, savings plans, performance-based incentive plans, workers' compensation programs and life, disability, directors' and officers' liability and other insurance plans will be deemed assumed by the Debtors as of the Effective Date of the Plan, but will not include the assumption of equity interests, stock options and warrants. Executory Contracts and Unexpired Leases Upon confirmation of the Plan, the Debtors will assume all executory contracts and unexpired leases, except those (i) that have been rejected pursuant to a Court order, (ii) prior to the Plan Confirmation, are pending approval of Lease or Contract rejection. The Debtors will file with the Court, 20 days prior to the Confirmation hearing, a list of the cure amounts of executory contracts and unexpired leases to be assumed, to which parties- in-interest may object within 15 days from the date the the List is filed. The Debtors contemplate that the Plan will be confirmed by Oct. 1, 2008. The Effective Date of the Plan is expected to occur on or before Nov. 1, 2008. A full-text copy of BHM's Joint Plan of Reorganization is available for free at: http://bankrupt.com/misc/BHM_JointPlanofReorganization.pdf About BHM Technologies Headquartered in Ionia, Michigan, BHM Technologies Holdings Inc.-- http://www.browncorp.com/--manufactures and sells automobile parts including air bags and electrical systems. It has manufacturing facilites in Mexico and operates under Brown Corp. BHM Technologies Holdings, Inc. and 14 affiliates filed separate voluntary petitions under Chapter 11 on May 19, 2008 (Bankr. W.D. Mich. Lead Case No. 08-04413). Hannah Mufson McCollum, Esq., Kay Standridge Kress, Esq., Robert S. Hertzberg, Esq., and Leon R. Barson, Esq. of Pepper Hamilton LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, it listed estimated assets and debts to be both between $100 million and $500 million. The Debtors have until Sept. 16, 2008, to exclusively file their bankruptcy plan. (BHM Technologies Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000) BHM TECHNOLOGIES: Alters Terms of $45 Mil. DIP Fund from Lehman --------------------------------------------------------------- BHM Technologies, LLC, and debtor affiliates, on June 6, 2008, modified their agreement with their lenders, led by Lehman Commercial Paper, Inc., the administrative agent, in connection with the $45,000,000 postpetition loan package. The DIP Facility offered by LCPI consists of a term loan and a revolving loan in an aggregate of up to $45,000,000, subject to reductions. The Debtors have won interim approval of the loan facility and have been allowed by the U.S. Bankruptcy Court for the Western District of Michigan to access up to $30,000,000 in borrowings. The Credit and Guarantee Agreement dated June 6, 2008, provides for some changes, including: 1. The closing date of the Agreement was changed from May 20, 2008, to June 6, 2008, to reflect the actual date of closing; 2. Maturity Date was changed to Dec. 6, 2008; 3. The DIP Lenders agree to make term loans to BHM Technologies "on the Closing Date, or in the case of any increase in Term Loan Commitments pursuant to the definition thereof, on the date of the increase in a principal amount not to exceed the amount of its Term Loan Commitment or the amount of the increase, as applicable," rather than within one week of the Closing Date at a set amount; and 4. Liens created under the Michigan Special Tools Lien Act, Mich. Comp. Laws Section 570.541 et seq. and the Michigan Ownership Rights in Dies, Molds and Forms Act, Mich. Comp. Laws Section 445.611 et seq., whether arising prior to or after the Petition Date, were added as exceptions in the section providing for Limitation on Liens. A copy of the June 6 DIP Credit Agreement is available free of charge at: http://bankrupt.com/misc/BHM_June2008_DIP_Agreement.pdf Trustee Objects to DIP Financing Order As reported by the Troubled Company Reporter on June 12, 2008, Habbo Fokkena, United States Trustee for the Michigan/Ohio Region IX, objects to the entry of a final order authorizing BHM Technologies Holdings, Inc., and its debtor-subsidiaries to obtain postpetition financing and use cash collateral, citing, among other things, that a committee or committees of unsecured creditors has not yet been appointed in the case. On June 18, 2008, the TCR said that U.S. Trustee has appointed seven members to the official Committee of Unsecured Creditors of BHM Technologies Holdings, Inc., and its debtor- subsidiaries. The U.S. Trustee also told the Court that granting liens to the DIP Lenders from proceeds of avoidance actions should be prohibited. Granting extensive adequate protection to the prepetition lenders should be denied, Mr. Fokkena said. There is no proof that the Second Lien Lenders have any value to their liens, nor that they are in fact secured and perfected creditors. The Second Lien lenders are not in fact secured at all. If the First Lien lenders are the same lenders as the DIP Lenders, and will benefit from the case, then extensive adequate protections are not necessary. The U.S. Trustee added that the provision providing that the DIP order will survive conversion of the Chapter 11 cases to Chapter 7 may work a great hardship upon the unsecured creditors and any subsequent trustee, and should be stricken. While there have been representations that there will be a 100% distribution to unsecured creditors, that intention has not yet been an accomplished fact. The provision will bind any Chapter 11 or Chapter 7 trustee to every provision of the DIP Order, even though the a trustee will have never received notice of the entry of this order and will have no opportunity to contest the entry of the order. About BHM Technologies Headquartered in Ionia, Michigan, BHM Technologies Holdings Inc.-- http://www.browncorp.com/--manufactures and sells automobile parts including air bags and electrical systems. It has manufacturing facilites in Mexico and operates under Brown Corp. BHM Technologies Holdings, Inc. and 14 affiliates filed separate voluntary petitions under Chapter 11 on May 19, 2008 (Bankr. W.D. Mich. Lead Case No. 08-04413). Hannah Mufson McCollum, Esq., Kay Standridge Kress, Esq., Robert S. Hertzberg, Esq., and Leon R. Barson, Esq. of Pepper Hamilton LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, it listed estimated assets and debts to be both between $100 million and $500 million. The Debtors have until Sept. 16, 2008, to exclusively file their bankruptcy plan. (BHM Technologies Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000) BIOFORCE NANOSCIENCES: Posts $746,162 Net Loss in 2008 1st Quarter ------------------------------------------------------------------ BioForce Nanosciences Holdings Inc. reported a net loss of $746,162 on revenues of $403,567 for the first quarter ended March 31, 2008, compared with a net loss of $923,317 on revenues of $358,755 in the same period last year. The increase in revenues was primarily attributable to the sale of five Nano eNabler(TM) systems during the three month period ended March 31, 2008, as compared to three Nano eNabler(TM) systems having been sold during the three month period ended March 31, 2007, and increases in the services and warranty revenues. At March 31, 2008, the company's consolidated balance sheet showed $2,578,556 in total assets, $917,251 in total liabilities, and $1,661,305 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?2e75 Going Concern Doubt Chisholm, Bierwolf & Nilson, LLC, in Bountiful, Utah, expressed substantial doubt about BioForce Nanosciences 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 pointed to the company's substantial losses from operations and limited sales of its products. About BioForce Nanosciences Headquartered in Ames, Iowa, BioForce Nanosciences Holdings Inc. (OTC BB: BFNH) -- http://www.bioforcenano.com/-- creates products and solutions for the life sciences by integrating biological and mechanical systems at the micro and nano scales. BioForce's flagship product, the Nano eNabler(TM) molecular printer, gives the company and its customers a platform for development and discovery by printing tiny domains of biological materials on surfaces with nanometer spatial precision. BioForce technology is being used in areas such as biosensor functionalization; pattering and cell adhesion; and the printing of proteins to guide neural cell growth. BOOZ ALLEN: Moody's Assigns B3 Rating to Proposed $550MM Loan ------------------------------------------------------------- Moody's Investors Service assigned to Booz Allen Hamilton Inc. a B1 Corporate Family Rating, a B1 Probability of Default Rating, a Ba2 on a proposed $810 million senior secured credit facility and a B3 on a proposed $550 million senior unsecured mezzanine loan. The ratings outlook is stable. This is the first time Moody's has rated the debt of this privately-held company. "The B1 CFR reflects Booz Allen's market position and long- established relationships with government agencies, relatively high margins within the industry, an impressive track record of double-digit organic revenue growth, and visibility into near-term revenues based on funded and unfunded backlog levels," stated Suzanne Wingo, Analyst at Moody's. "The ratings are constrained by high leverage post-transaction and the company's need to respond to shifts in government spending priorities." The stable outlook anticipates that Booz Allen will continue to achieve strong organic revenue growth while maintaining margins. Moody's further expects that the company will use free cash flow to make meaningful voluntary debt reductions over the intermediate term. Booz Allen announced on May 16, 2008 that it will separate its U.S. government and global commercial businesses, selling a majority stake in the U.S. government business to The Carlyle Group for $2.54 billion plus fees and expenses. The transaction will be financed with $710 million in senior secured term loans, a $550 million senior unsecured term loan, $158 million of deferred payment obligations to Booz Allen management, and about $1.2 billion in management roll-over and Carlyle equity. A $100 million senior secured revolver is expected to be undrawn at closing. The transaction is estimated to close in mid-2008, subject to a favorable tax ruling and other customary closing conditions. The following ratings were assigned to Booz Allen Hamilton Inc.: -- $100 million senior secured revolver due 2014, Ba2 (LGD2, 22%) -- $125 million senior secured term loan A due 2014, Ba2 (LGD2, 22%) -- $585 million senior secured term loan B due 2015, Ba2 (LGD2, 22%) -- $550 million senior unsecured mezzanine loan due 2016, B3 (LGD5, 78%) -- Corporate Family Rating, B1 -- Probability of Default Rating, B1 The ratings are subject to the conclusion of the proposed transaction and Moody's review of final documentation. Booz Allen Hamilton Inc. is a leading provider of management consulting, engineering, information technology, and systems development and integration services supporting mission-critical programs for the U.S. government. Headquartered in McLean, Virginia, Booz Allen generated net revenues of approximately $2.7 billion in the fiscal year ended March 31, 2008. CARE LEVEL: Gets OK to Access Steve Goldman's Cash Collateral ------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California approved a cash collateral stipulation between Care Level Management Group LLC and its debtor-affiliates and their sole secured creditor with an interest in the cash collateral, Steve Goldman. The Debtors suffered financially after a significant demonstration project was canceled in December 2007. The Debtors were unable to meet their obligations and sustain their ongoing business operations on a long-term basis. The Debtors retained FocalPoint Securities LLC as their financial advisor to assist in them in locating additional financing, a merger partner or buyer. On May 4, 2008, a prospective lender withdraw from a new financing deal. On May 5, 2008, the Debtors terminated all of their workers other than those who were absolutely essential to enable them to operate for at least a few weeks while they seek an alternative lender or buyer. The Debtors currently have 16 workers left. First Century Bank NA which is owed $7 million, that matured in April 2008, exercised its rights against Mr. Goldman, one of the Debtors' principals. The bank loan was personally guaranteed by several of the Debtors' principals. The bank was paid in full by Mr. Goldman's personal assets. As a result, Mr. Goldman currently holds the bank's claims and liens against the Debtors' assets. Mr. Goldman has agreed to stipulate to the Debtors' use of of his cash collateral and to subordinate his clams to a number of other claims, including payroll and certain professional fees. One of the Debtors' principals, Raouf Khalil, has agreed to lend the Debtors $250,000 of his personal funds on an unsecured basis to assist the Debtors to pay their payroll due May 9, 2008. Mr. Khalil funded $170,000 of this loan prior to the bankruptcy filing. As a result, the Debtors also asked the Court to authorize them to borrow the additional $80,000 from Mr. Khalil. About Care Level Woodland Hills, California-based Care Level Management Group LLC, fdba Care Level Management LLC and Care Level Associates LLC, -- http://www.carelevel.com/-- and its affiliates provide 24-hour house calls by physicians to patients. The Debtors' business was founded in 2001 and are established in California, Texas, Pennsylvania, Arizona, Florida and New York. The Debtors' revenue are in the form of monthly membership fee. It earned $22 million in 2005 and $50 million in 2006 and 2007. The cancellation of a significant demonstration project with the Centers for Medicare Services caused its revenues to plummet. It filed its chapter 11 petition on May 7, 2008 (Bankr. C.D. Calif. Case No. 08-12913). Five affiliates filed separate Chapter 11 petitions on May 19, 2008, and another four affiliates filed separate chapter 11 petitions. Judge Maureen Tighe presides over the case. Juliet Y. Oh, Esq., and Ron Bender, Esq., at Levene, Neale, Bender, Rankin & Brill represent the Debtors in their restructuring efforts. Care Level Management Group LLC listed assets of $1 million to $10 million and debts of $10 million to $50 million when it filed for bankruptcy. The Debtors' primary debt is a $7 million loan from First Century Bank NA that matured in April 2008 and was personally guaranteed by a number of the Debtors' principals. First Century's claims and liens was transferred to Steve Goldman, one of the Debtors' principals, when he paid the bank loan in full from his personal property. CARE LEVEL: Selects Levene Neale as Bankruptcy Counsel ------------------------------------------------------ Care Level Management Group LLC and its debtor-affiliates asked the U.S. Bankruptcy Court for the Central District of California for permission to employ Levene, Neale, Bender, Rankin & Brill LLP as their bankruptcy counsel. The firm will, among others, advise the Debtors with regard to the requirements of the Bankruptcy Court, Bankruptcy Code and Rules and the Office of the U.S. Trustee and advise the Debtors with regard to certain rights and remedies of their bankruptcy estates and the rights and claims of creditors. The firm will also assist the Debtors in the preparation of reports, applications, and orders. During the one-year period prior to the bankruptcy filing, the Debtors paid the firm $75,000 prepetition retainer in contemplation of the Debtor's chapter 11 cases. As part of a cash collateral stipulation entered into between the Debtors and Steve Goldman, one of the Debtors' principal, Mr. Goldman has agreed to subordinate his claims and liens to the prepetition retainer plus an additional $100,000 of fees to be incurred by the firm. The hourly billing rates of the firm's professionals are: Attorneys Rate --------- ---- David W. Levene, Esq. $575 Martin J. Brill, Esq. $575 David L. Neale, Esq. $550 Ron Bender, Esq. $550 Craig M. Rankin, Esq. $550 Daniel H. Reiss, Esq. $495 Monica Y. Kim, Esq. $495 David B. Golubchik, Esq. $495 Beth Ann R. Young, Esq. $495 Jacqueline L. Rodriguez, Esq. $425 Juliet Y. Oh, Esq. $405 Michelle S. Grimberg, Esq. $385 Todd M. Arnold, Esq. $385 Gil Hopenstand, Esq. $375 Ovsanna Takvoryan, Esq. $350 Holly Roark, Esq. $295 Tania M. Moyron, Esq. $395 Paraprofessionals $195 The firm can be reached at: Levene, Neale, Bender, Rankin & Brill 10250 Constellation Blvd., Suite 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 Fax: (310) 229-1244 Woodland Hills, California-based Care Level Management Group LLC, fdba Care Level Management LLC and Care Level Associates LLC, -- http://www.carelevel.com/-- and its affiliates provide 24-hour house calls by physicians to patients. The Debtors' business was founded in 2001 and are established in California, Texas, Pennsylvania, Arizona, Florida and New York. The Debtors' revenue are in the form of monthly membership fee. It earned $22 million in 2005 and $50 million in 2006 and 2007. The cancellation of a significant demonstration project with the Centers for Medicare Services caused its revenues to plummet. It filed its chapter 11 petition on May 7, 2008 (Bankr. C.D. Calif. Case No. 08-12913). Five affiliates filed separate Chapter 11 petitions on May 19, 2008, and another four affiliates filed separate chapter 11 petitions. Judge Maureen Tighe presides over the case. Juliet Y. Oh, Esq., and Ron Bender, Esq., at Levene, Neale, Bender, Rankin & Brill represent the Debtors in their restructuring efforts. Care Level Management Group LLC listed assets of $1 million to $10 million and debts of $10 million to $50 million when it filed for bankruptcy. The Debtors' primary debt is a $7 million loan from First Century Bank NA that matured in April 2008 and was personally guaranteed by a number of the Debtors' principals. First Century's claims and liens was transferred to Steve Goldman, one of the Debtors' principals, when he paid the bank loan in full from his personal property. CHAMPION BILLIARD: Case Summary & 40 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: Champion Billiard Supply, Inc. 10700 Hanna Street Beltsville, MD 20705 Bankruptcy Case No.08-18178 Debtor-affiliate filing a separate Chapter 11 petition: Entity Case No. ------ -------- Champion Billiards & Bar Stools, Inc. 08-18184 Type of Business: The Debtors provide sporting and recreational goods, especially in billiard, shuffleboard, pinball, air hockey, table tennis, and foosball games. Chapter 11 Petition Date: June 20, 2008 Court: District of Maryland (Greenbelt) Judge: Thomas J. Catliota Debtors' Counsel: Richard B. Rosenblatt, Esq. Email: rrosenblatt@rosenblattlaw.com 30 Courthouse Square Ste. 302 Rockville, MD 20850 Tel: (301) 838-0098 Champion Billiard Supply, Inc.'s Financial Condition: Estimated Assets: Less than $50,000 Estimated Debts: $1 million to $10 million A. A copy of Champion Billiard Supply, Inc.'s petition is available for free at: http://bankrupt.com/misc/mdb08-18178.pdf B. A copy of Champion Billiards & Bar Stools, Inc.'s petition is available for free at: http://bankrupt.com/misc/mdb08-18184.pdf CHARTERHOUSE BOISE: Judge Pappas Decides to Liquidate Property -------------------------------------------------------------- The Honorable James D. Pappas of the U.S. Bankruptcy Court for the District of Idaho converted Charterhouse Boise Downtown Properties LLC's bankruptcy case into a Chapter 7 liquidation proceeding, frustrating Gary Rogers' development of the office complex Boise Place, the Idaho Statesman reported. The Court's decision came after holding a June 16 hearing on whether to liquidate the business or dismiss the bankruptcy case. Counsel for the U.S. Trustee for Region 18, Gary McClendon, Esq., requested the hearing earlier. As reported in the Troubled Company Reporter on June 12, 2008, Mr. McClendon filed the hearing request after the Debtor failed to provide the Court by June 4 with additional financial information about an outside investor it would only identify as Robert E. Plummer. The Debtor had claimed that Mr. Plummer was prepared to purchase a one-third interest in the Boise Place project, an injection of capital that would have gotten the project on its feet. The Court said the case could not proceed because Mr. Plummer's identity remains unrevealed. About Charterhouse Boise Based in Boise, Idaho, Charterhouse Boise Downtown Properties LLC develops real estate. The company filed for Chapter 11 protection on Aug. 1, 2007 (Bankr. D. Idaho Case No. 07-01199). Thomas James Angstman, Esq. at Angstman, Johnson & Associates, represents the Debtor in its restructuring efforts. The Debtor also chose John E. Woodbery, Esq., at Woodbery Law Group, P.S., as its local counsel. The Debtor's schedules of assets and liabilities showed total assets of $10,735,293, and $12,369,052 in total debts. CHINA RECYCLING: Zhong Yi Expresses Going Concern Doubt ------------------------------------------------------- China Recycling Energy Corporation, known as China Digital Wireless, Inc., prior to March 8, 2007, filed with the U.S. Securities and Exchange Commission on June 12, 2008, Amendment No. 4 to its Form 10KSB/A for the year ended Dec. 31, 2006, which was previously filed on March 17, 2008. In a letter dated March 5, 2008, as to the effects of the restatement, Zhong Yi (Hong Kong) C.P.A. Company Limited raised substantial doubt about the ability of China Recycling Energy Corporation to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2006. The auditor pointed the company's substantial losses. As of Dec. 31, 2006, the company had a negative operating cash flow of $4,079,333 and accumulated deficits of $2,512,696. Subsequent Events Share Purchase Agreement On Jan. 24, 2007, a group of individuals entered a share purchase agreement with a group of shareholders of the company to purchase 12,911,835 shares of the company's common stocks with $0.001 par value for an aggregate consideration of $490,000. Purchasers are Guohua Ku, Hanqiao Zheng, Ping Sun, Qianping Huang, Xiaohong Zhang and Lixia Zhang. Among them, Guohua Ku and Hanqiao Zheng acquired 9,073,700 shares and 2,406,365 shares respectively. As a result, they became the beneficial owners of the majority voting shares of the company and gained control of the company. Change of Name On March 8, 2007, the name of the company was changed to "China Recycling Energy Corporation" and engages in recycling energy business, providing energy saving and recycling products and services. Joint-Operation Agreement On April 8, 2007, the company's Board of Directors approves and makes effective a TRT Project Joint-Operation Agreement, which is conditionally entered on Feb. 1, 2007, between Shanghai TCH Data Technology Co., Ltd., (TCH) and Xi'an Yingfeng Science and Technology Co., Ltd., (Yingfeng). Yingfeng is a Chinese company that is located in Xi'an, Shaanxi Province, China, and is engaging in the business of designing, selling, installing, and operating TRT systems and other renewable energy products. Under the Joint-Operation Agreement, TCH and Yingfeng will jointly pursue a top gas recovery turbine project, which is to design, construct, install and operate a TRT system in Xingtai Iron and Steel Company, Ltd. This project was originally initiated by a Contract to Design and Construct TRT System entered by Yingfeng and Xingtai on Sept 26, 2006. TCH provides various forms of investments and properties into the Project including cash, hardware, software, equipments, major components and devices. In return, TCH becomes entitled to all the rights, titles, benefits and interests that Yingfeng originally had under the Project Contract, including but not limited to the cash payment made by Xingtai on regular basis and other property rights and interests. Yingfeng remains liable for providing all the manpower, expertise and skills to design, construct, install, maintain and operate the TRT system under the terms of the Project Contract and also takes responsibility to manage the properties that TCH possesses in this Project. As for consideration, TCH will make monthly payment of RMB30,000 (about $3,900) to Yingfeng as compensation for their effort in managing TCH's properties. Financials The company posted a net loss of $10,577,418 on total revenues of $2,889,436 for the year ended Dec. 31, 2006, as compared with a net income of $1,811,107 on total revenues of $20,419,022 in the prior year. At Dec. 31, 2006, the company's balance sheet showed $4,464,612 in total assets, $1,117,975 in total liabilities, and $3,346,637 in total stockholders' equity. A full-text copy of Amendment No. 4 of the company's 2006 annual report is available for free at http://ResearchArchives.com/t/s?2e56 About China Recycling China Recycling Energy Corporation (OTC BB: CREG) currently provides information services, cellular phone distribution and advertising services through its Chinese operating subsidiaries. In 2006 and in the first quarter of 2007, the company also began to engage in recycling energy business, providing energy saving and recycling products and services. On March 8, 2007, China Digital Wireless Inc. changed its name to China Recycling Energy Corporation. Its subsidiaries are Sifang Holdings Co., Ltd., Sifang Holdings Co., and Shanghai TCH Data Technology Co., Ltd. CHRYSLER FINANCIAL: Moody's Changes Outlook to Neg.; Holds B1 CFR ----------------------------------------------------------------- Moody's Investors Service revised the rating outlook of DaimlerChrysler Financial Services Americas LLC to negative from stable, while affirming the firm's B1 corporate family rating. The change in outlook is in connection with Moody's revision of Chrysler LLC's rating outlook to negative from stable. The negative outlook on Chrysler Financial's rating reflects operating concerns at auto manufacturing affiliate Chrysler. Chrysler Financial's ratings and outlook are linked to Chrysler's, reflecting the common ownership of the two companies, as well as Chrysler Financial's significant business connections with Chrysler and its dealers. Moody's believes Chrysler's response to its operating challenges influences Chrysler Financial's operating performance, liquidity, and financial condition. The change in outlook also incorporates increasing stresses on Chrysler Financial's asset quality and profitability. Significant declines in used vehicle auction values, particularly among trucks and large SUV's, is expected to lead to higher credit losses on auto loans and increased depreciation expense on auto leases, pressuring earnings. Chrysler Financial's loan and lease portfolios are concentrated in trucks and SUV's, consistent with Chrysler's sales mix. Moody's anticipates that higher funding costs will also likely contribute to narrower operating margins at the firm. Chrysler Financial's ratings are supported by its preferential position as the sole provider of incentive-based financing of Chrysler manufactured vehicles. Ratings also reflect the firm's organizational and operational achievements after its sale by Daimler to the Cerberus-led investor group, as well as its further transition-related operational risks. Moody's believes the firm has adequate liquidity resources to accommodate its short-term operating needs. DaimlerChrysler Financial Services Americas LLC, is headquartered in Farmington Hills, Michigan. CHRYSLER LLC: Moody's Holds B3 CF & PD Ratings; Outlook is Neg. --------------------------------------------------------------- Moody's Investors Service affirmed the B3 Corporate Family Rating and Probability of Default Rating of Chrysler LLC, but changed the outlook to negative from stable. The change in outlook reflects the increasingly challenging environment faced by Chrysler as the outlook for US vehicle demand falls, and as high fuel costs drive US consumers away from light trucks and SUVs, and toward more fuel efficient vehicles. During the month of May this shift in consumer demand highlighted the competitive challenges facing Chrysler: the company's overall share of the light vehicle market fell to 10.7% from 12.7% on a year-over-year basis, largely due to the erosion in the position of its car portfolio and declines in fleet shipments. As consumer demand shifted from trucks and SUVs, and toward cars, Chrysler's share of the car segment fell to 5.7% from 8.8%. In contrast, the company's share of the contracting light truck and SUV market increased modestly to 17.6% from 16.9%. While the overall US market demonstrated a car/truck mix of approximately 60/40, Chrysler's car/truck mix was about 32/68. Moreover, given the 2008 release of the new Dodge Ram pickup -- a relatively high-volume and traditionally high-profit vehicle for Chrysler - the company's ability to contend with the ongoing shift in consumer demand will prove challenging. This erosion in market fundamentals could stress Chrysler's liquidity profile by late 2009 or early 2010. Prior to the recent shift in market demand and the likelihood that US light vehicle shipments for 2008 would approximate 15 million units (down from 16.1 million in 2007), Chrysler's liquidity position would likely have been adequate to cover all cash requirements into 2010, when the benefits of the health care savings in the new UAW contract would be realized. During 2008, the company would likely have had a moderate operating cash outflow, followed by a notable improvement in cash generation during 2009, and a more robust performance in 2010. However, as a result of the challenges that Chrysler may face in contending with the ongoing shift in demand away from trucks and SUVs, the company will likely face large cash requirements during 2008 and 2009 that will considerably narrow its liquidity position relative to earlier expectations. In the absence of any material near-term source of additional liquidity that can help the company better address growing cash requirements its B3 rating could be placed on review for possible downgrade or lowered. While Chrysler has been working to increase its sales outside of the US, its ongoing concentration in the North American market represents a key weakness in the current market environment. This lack of geographic diversification limits the company's ability to participate in the robust long-term growth in demand taking place in Asian, Easter European and Latin American markets. It also reflects the company's inability to tap into a product portfolio designed for markets that have long been geared toward small- and mid-size cars. Chrysler Automotive LLC is headquartered in Auburn Hills, Michigan. CHRYSLER LLC: S&P Places Corporate Credit Rating Under Neg Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services is placing its corporate credit ratings on the three U.S. automakers, General Motors Corp., Ford Motor Co., and Chrysler LLC, on CreditWatch with negative implications, citing the need to evaluate the financial damage being inflicted by deteriorating U.S. industry conditions--largely as a result of high gasoline prices. Included in the CreditWatch placement are the finance units Ford Motor Credit Co. and DaimlerChrysler Financial Services Americas LLC, as well as GM's 49%-owned finance affiliate GMAC LLC. "We have renewed concerns about all three automakers' future cash outflows in light of the prospects for U.S. sales for the rest of 2008 and into 2009," said Standard & Poor's credit analyst Robert Schulz. The erosion of demand for SUVs and pickups has been particularly troubling. Although these segments have been weak for some time, the exodus of demand that began in April, caused by escalating gas prices and consumer preferences for smaller vehicles, is gathering speed. Despite concerted, and in some cases successful, efforts to bolster their line-ups of smaller vehicles and reduce costs, all three Michigan-based automakers still rely on light trucks for a disproportionate share of profitability and cash flow. The companies' difficulty in anticipating the pace of market deterioration was reflected in Ford's announcement that it expects to use an even larger amount of cash this year and next than it announced previously, its second negative guidance revision in a month. Ford plans to use more than $16 billion of cash between 2007 and 2009 in its automotive operations, including the cost of employee separation programs, unless the economy rebounds next year. The company also said this year's pretax results will be worse than last year's, announced further light-truck production cuts and shift reductions, and delayed this fall's launch of the F-150 pickup by two months to clear existing inventory. Also worrisome is the dire state of the vehicle finance market. Ford said it expects Ford Motor Credit to report a pretax loss for the year (before any infusion from Ford) caused by weak used (residual) values, primarily for light trucks. Although GM and Chrysler have not publicly detailed their expectations for cash use, all of the factors behind Ford's weaker guidance also apply to the other U.S.-based automakers. In addition to weak sales and adverse product mix shifts, the list of challenges also includes less receptive capital markets, higher costs for steel and other raw materials, lower residual values that hurt profitability at the finance units and reduce consumers' trade-in power, and increasing cash needs for restructuring efforts. S&P believe all three companies currently have ample liquidity for at least the rest of 2008 as measured by cash balances, available bank facilities, and in some cases unencumbered assets. But S&P now also believe deteriorating industry fundamentals could reduce liquidity to undesirable levels by the second half of 2009. As part of its reviews, S&P will assess all three companies' strategies for addressing the weak sales and shifts in demand away from light trucks and maintaining liquidity at satisfactory levels through 2009. CHRYSLER LLC: DBRS Places 'B' Issuer Rating Under Negative Review ----------------------------------------------------------------- DBRS has placed the ratings of Chrysler LLC Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. economy. Negative developments include these: (1) A slowing U.S. economy precipitated by the collapse in the housing market has contributed to a sharp decline in the demand for automobiles. (2) Persistent high oil prices have accelerated the change in consumer preference to more fuel-efficient vehicles, which is the strength of the Asian manufacturers. This has added to the Company's challenge of stabilizing its market share. (3) The sharp deterioration in residential construction has further dampened the demand for pickup trucks, one of the Company's more profitable products. Worsening market conditions in North America, especially for large sports utility vehicles and pickup trucks, has added headwinds to Chrysler's turnaround efforts. Chrysler LLC Issuer Rating Under Review - Negative B First Lien Secured Credit Under Review - Negative B(high) Facility Second Lien Secured Credit Under Review - Negative B(low) Facility CLEARPOINT BUSINESS: Secures $12MM Financing from ComVest Capital ----------------------------------------------------------------- ClearPoint Business Resources Inc. obtained new capital of $12 million from ComVest Capital LLC in the form of a $9 million term loan, before an original issue discount of $1 million, and a $3 million revolving credit facility. In addition, ClearPoint's existing lenders have agreed to remain as financial partners with ClearPoint in a subordinated position to ComVest. "We are very pleased with the endorsement by ComVest of our iLabor business model," Mike Traina commented. "This is a significant step forward in providing the necessary working capital to accelerate the growth in iLabor and a key milestone in our transition from our legacy staffing business to our iLabor technology platform." "We believe the iLabor business model coupled with our new capital clearly positions us as the primary alternative to the vendor management industry," Mr. Traina added. "The new capital provides us with the financial stability to expand our supplier network and attract new customers to solidify our position as a leader in helping companies manage their usage of temporary labor." About ClearPoint Business Resources Inc. Based in Chalfont, Pennsylvania, ClearPoint Business Resources Inc., through its proprietary, technology-based iLabor network platform, provides its clients a comprehensive web-based portal to streamline the process involved in procurement and management of temporary labor through a network of ClearPoint-approved staffing vendors. Clearpoint Business Resources Inc.'s consolidated balance sheet at March 31, 2008, showed $10,264,003 in total assets and $26,251,109 in total liabilities, resulting in a $15,987,106 total stockholders' deficit. M&T Credit Pact Default As disclosed in the Troubled Company Reporter on June 12, 2008, ClearPoint Business is in default under a credit agreement, dated Feb. 23, 2007, with Manufacturers and Traders Trust Company and several lenders. As a consequence of the default, M&T declared all ClearPoint's outstanding obligations under the Credit Agreement to be immediately due and payable and terminated the lenders' obligation to make any additional loans or issue additional letters of credit to ClearPoint. ClearPoint is in the process of negotiating a financing arrangement with a potential lender. However, there is no assurance that ClearPoint's capital raising efforts will be able to attract the additional capital or other funds it needs to sustain its operations. Due to ClearPoint's financial position and results of operations, on May 30, 2008, ClearPoint scaled back various aspects of its operations. If ClearPoint is unable to obtain additional funding, or such funding is not available on acceptable terms, this will materially adversely impact ClearPoint's ability to continue operations. CMC TELECOM: Final Hearing on Disclosure Statement Set Today ------------------------------------------------------------ The Hon. Marci B. McIvor of the U.S. Bankruptcy Court for the Eastern District of Michigan summoned CMC Telecom Inc. and its creditors and parties-in-interest to a hearing today, June 24, 2008, to resolve disputes among them, Terry Brennan of The Deal says, citing Kenneth Misken, at McGuire Woods LLP, counsel to creditors. At today's hearing, the Court will decide on the adequacy of the Debtor's disclosure statement explaining its amended bankruptcy plan, The Deal relates. The Deal reveals that parties continue to argue over the provisions of the plan. The Debtor had settled dispute with lender JP Morgan Chase NA and Chase Equipment Leasing Inc., but continues to face opposition from the Official Committee of Unsecured Creditors and AT&T Inc., The Deal reports. According to the report, the Debtor expects AT&T, which asserts $3.8 million lien, to reject the plan. However, the Debtor strives to persuade creditors that it can provide $1.1 million on the plans effective date and additional $5.7 million at a later date, The Deal says, citing court filings. The Committee maintains that the Debtor lacks funds for its daily operations and cannot pay its obligations under the plan, The Deal notes. The Committee is proposing for a disposal of the Debtor's assets, expected to raise about $400,000 to $500,000, The Deal quotes Mr. Misken as stating. Another creditors' committee was appointed on June 16, 2008, when a member of the first committee said it wants to buy the Debtor's assets. The first committee was dissolved, The Deal reports. Under the plan, the Debtor intends to pay AT&T $26,000 each month 90 days following the plan's effectivity and the remaining obligation to be paid after five years, The Deal notes. Other unsecured creditors owed about $643,204 will be paid in full plus interest over the five years following 90 days after the plan's effectivity, The Deal adds. Convenience claim holders of $5,000 or less will also be paid in full, under the plan, the report notes. About CMC Telecom Wixom, Michigan-based C.M.C. Telecom Inc. -- http://www.cmctel.com/-- offers full-service telecommunications including local and long distance telephone, calling cards, voicemail, Internet (DSL. T1, T3), ATM, frame relay, and video conferencing. It filed its chapter 11 petition on Aug. 15, 2007 (Bankr. E.D. Mich. Case No. 07-56001). Judge Marci B. McIvor presides over the case. Karin F. Avery, Esq., at Silverman & Morris PLLC, represents the Debtor in its restructuring efforts. The Debtor listed total assets of $4,647,296 and total debts of $6,630,502 when it filed for bankruptcy. COMM 2006-FL: Moody's Cuts Rating of Class MSH4 Cert. to Ba2 ------------------------------------------------------------ Moody's Investors Service upgraded the ratings of 10 rake classes, downgraded the ratings of three rake classes, placed on review for possible downgrade five rake classes and affirmed the ratings of 11 pooled classes and 28 rake classes of COMM 2006-FL 12 Commercial Mortgage Pass-Through Certificates as: -- Class A-2, $884,452,155, Floating, affirmed at Aaa -- Class X-1, Notional, affirmed at Aaa -- Class X-2, Notional, affirmed at Aaa -- Class X-4, Notional, affirmed at Aaa -- Class X-3-BC, Notional, affirmed at Aaa -- Class X-3-DB, Notional, affirmed at Aaa -- Class X-3-SG, Notional, affirmed at Aaa -- Class X-5-BC, Notional, affirmed at Aaa -- Class X-5-DB, Notional, affirmed at Aaa -- Class X-5-SG, Notional, affirmed at Aaa -- Class A-J, $507,000,000, Floating, affirmed at Aaa -- Class B, $96,048,825, Floating, affirmed at Aa1 -- Class C, $67,493,769, Floating, affirmed at Aa2 -- Class D, $74,416,207, Floating, affirmed at Aa3 -- Class E, $55,379,502, Floating, affirmed at A1 -- Class F, $55,379,503, Floating, affirmed at A2 -- Class G, $52,783,589, Floating, affirmed at A3 -- Class CN1, $12,806,766, Floating, upgraded to A1 from Baa1 -- Class CN2, $8,746,085, Floating, upgraded to A2 from Baa2 -- Class CN3, $8,669,314, Floating, upgraded to Baa1 from Baa3 -- Class KR1, $74,379,363, Floating, affirmed at Baa2 -- Class KR3, $65,512,949, Floating, affirmed at Baa3 -- Class IP1, $6,800,000, Floating, affirmed at Baa1 -- Class IP2, $11,200,000, Floating, affirmed at Baa2 -- Class IP3, $11,000,000, Floating, affirmed at Baa3 -- Class HDC1, $5,000,000, Floating, affirmed at Baa1 -- Class FSH1, $6,499,107, Floating, upgraded to A3 from Baa1 -- Class FSH2, $8,666,064, Floating, upgraded to Baa1 from Baa2 -- Class FSH3, $9,099,456, Floating, upgraded to Baa2 from Baa3 -- Class CA1, $710,904, Floating, upgraded to Aa3 from A3 -- Class CA2, $1,105,850, Floating, upgraded to A1 from Baa1 -- Class CA3, $1,263,829, Floating, upgraded to A2 from Baa2 -- Class CA4, $1,395,478, Floating, upgraded to A3 from Baa3 -- Class AN3, $6,300,000. Floating, affirmed at Baa3 -- Class MSH1, $3,300,000, Floating, downgraded to Baa2 from Baa1 -- Class MSH2, $2,900,000, Floating, downgraded to Baa3 from Baa2 -- Class MSH4, $4,000,000, Floating, downgraded to Ba2 from Ba1 -- Class FG1, $5,900,000, Floating, affirmed at Aa2 -- Class FG2, $6,100,000, Floating, affirmed at A1 -- Class FG3, $4,300,000, Floating, affirmed at A3 -- Class FG4, $5,500,000, Floating, affirmed at Baa1 -- Class FG5, $7,200,000, Floating, affirmed at Baa3 -- Class LS1, $2,500,000, Floating, affirmed at Baa1 -- Class LS2, $2,700,000, Floating, affirmed at Baa2 -- Class LS3, $2,600,000, Floating, affirmed at Baa3 -- Class TC1, $2,900,000, Floating, currently rated Baa2, on review for possible downgrade -- Class TC2, $2,400,000. Floating, currently rated Baa3, on review for possible downgrade -- Class LB1, $2,300,000, Floating, affirmed at Baa1 -- Class LB2, $1,600,000, Floating, affirmed at Baa2 -- Class LB3, $1,600,000, Floating, affirmed at Baa3 -- Class ES1, $1,800,000, Floating, currently rated Baa1, on review for possible downgrade -- Class ES2, $1,700,000, Floating, currently rated Baa2, on review for possible downgrade -- Class ES3, $1,500,000, Floating, currently rated Baa3, on review for possible downgrade -- Class AH1, $1,300,000, Floating, affirmed at Baa1 -- Class AH2, $1,300,000, Floating, affirmed at Baa2 -- Class AH3, $1,500,000, Floating, affirmed at Baa3 -- Class AH4, $1,900,000, Floating, affirmed at Ba1 Moody's is upgrading rake classes CN1, CN2, CN3, CA1, CA2, CA3 and CA4 due to decreased leverage from property release payments associated with the Blackstone CarrAmerica National Portfolio Loan and the Blackstone/CarrAmerica CAR Portfolio Loan. Moody's is upgrading Classes FSH1, FSH2 and FSH3 due to the improved performance of the Four Seasons Hualalai Loan. Moody's is downgrading Classes MSH1, MSH2 and MSH4 due to performance issues with the MSREF Hotel Portfolio Loan, and placing on review for possible downgrade Classes TC1, TC2, ES1, ES2 and ES3 due to performance issues with The Avenue at Tower City Loan and the Embassy Suites Lake Buena Vista Loan. The Certificates are collateralized by two whole loans and 14 senior participation interests secured by 94 properties. The loans range in size from 0.6% to 31.8%. As of the June 16, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 26.4% from $3.0 billion to $2.2 billion. Moody's current weighted average loan to value ratio is 65.5%, compared to 69.5% at securitization. The loan structure is modified pro-rata for the pooled certificates and sequential for the non-pooled certificates. Kerzner International Portfolio Loan ($704.4 million -- 31.8% of the trust balance), a 50% portion of a pari passu split loan structure, is the largest loan in the pool. There is also a $1.3 billion non-trust junior secured loan component. The loan is collateralized by substantially all of the Kerzner Family's real estate assets located on Paradise Island, Bahamas, including the Atlantis Resort, a 2,317-key resort and casino hotel featuring the largest casino and ballroom in the Caribbean and water-themed attractions, including the world's largest open-air marine habitat. The Phase III expansion of the Atlantis Resort was completed in the Second Quarter of 2007 adding a 600-unit all-suite hotel tower. Loan collateral also includes retail land parcels, an 18-hole championship golf course as well as 50% joint venture interests in revenue streams and sale proceeds from condominium and time share units and various construction projects, and the lender's rights to receive capital proceeds and other amounts relating to Kerzner's 50% interest in One & Only Palmilla, Los Cabos, Mexico. The loan sponsor is a private equity consortium consisting of Istihmar PJSC, Whitehall Funds, Kerzner Family, Colony Capital, Baron Funds and The Related Companies. The loan is performing as expected. Moody's LTV ratio is 63.4%, compared to 64.3% at securitization. Moody's underlying rating is A3, the same as at securitization. The Blackstone/CarrAmerica National Portfolio Loan ($257.4 million - 11.6%) is the 52.5% portion of a pari passu split loan structure. There is also a $201.9 million non-trust junior secured loan component and a $217.2 million mezzanine loan. The loan is secured by 37 office properties located in eight office markets in six states. The portfolio contains approximately 12.4 million square feet, of which 7.1 million square feet represents the loan sponsor's wholly-owned interests and its percentage ownership interests in joint venture properties. Of the 7.1 million square feet, approximately 5.0 million square feet (23 properties) is secured by first mortgage liens and 2.1 million square feet (14 properties) is secured by a pledge of refinance and sale proceeds on 13 joint ventures and one wholly- owned property in which the sponsor owns a fee interest. The pledged properties represent approximately 15.2% of the total allocated trust balance. At securitization, the portfolio contained 19.4 million square feet, of which 13.9 million square feet was collateral for the loan. The outstanding trust balance has decreased by 68.7% since securitization due to the payment of property release premiums. The portfolio has geographic concentration in the San Jose, California metro area. As of March 2008, the loan collateral secured by first mortgage liens had a weighted average occupancy rate of 84.8%, compared to 86.6% for the current portfolio at securitization. At securitization, the Blackstone Group, the loan sponsor, provided a guaranty to spend $88.5 million on capital improvements, tenant improvements and leasing commissions. Moody's LTV is 68.6%, based on mortgage collateral only, compared to 79.7% at securitization. Moody's underlying rating is Aa3, compared to A3 at securitization. The Four Seasons Hualalai Loan ($177.0 million -- 8.0%) is secured by a luxury resort located on the Kona-Kohala Coast on Hawaii's Big Island. Loan collateral includes a 243-key luxury hotel operated by Four Seasons Hotel Limited that has amenities typical of luxury resort hotels, including two golf courses designed by Jack Nicklaus and Tom Weiskopf. Loan collateral also includes a residential land component with the potential to build more than 510 units. The sale of residential lots, at prices in excess of Moody's original estimates, has resulted in an approximate 12.8% reduction in the outstanding trust balance. For the trailing 12-month period ending March 2008, the hotel achieved RevPAR of $648.39, compared to Moody's RevPAR of $616.64 at securitization. Moody's LTV is 60.2%, compared to 63.1% at securitization. Moody's underlying rating is A2, compared to A3 at securitization. The MSREF Hotel Portfolio Loan ($68.0 million -- 3.1%) is secured by three full-service hotels consisting of the Westin Embassy Row (207 keys) located in Washington, D.C., the Sheraton Hotel Framingham (373 keys) located in Framingham, Massachusetts and the Sheraton Suites San Diego (264 keys) located in San Diego, California. At securitization, a $21.0 million letter of credit was posted to ensure completion of the PIP with the repair budget allocated as follows: Westin Embassy Row ($31,912 per key), Sheraton Hotel Framingham ($21,386 per key) and the Sheraton Suites San Diego ($24,306 per key). Renovations at all three hotels are behind schedule and the on-going repair work has affected the hotels' occupancy. A softening District of Columbia hotel market is expected to negatively impact the performance of the Westin Embassy Row, which is now expected to have repairs completed by the Second Quarter of 2008. Moody's expects that new hotel competition in close proximity to the Sheraton Suites San Diego will negatively impact that hotel's performance. RevPAR for the portfolio in 2007 averaged $100.58, compared to Moody's RevPAR at securitization of $117.86. The loan sponsor is Pyramid Hotel Opportunity Venture II LLC (MSREF/CalSTRS/Pyramid Associates, Inc.). Moody's LTV is 74.6%, compared to 71.9% at securitization. Moody's underlying rating is Baa1, compared to A3 at securitization. The Avenue at Tower City Loan ($42.3 million -- 1.9%) is secured by an urban retail mall containing 364,824 square feet, located in the Cleveland, Ohio CBD. The mall is part of the greater Tower City Center containing approximately 1.5 million square feet of office space, two hotels and tunnel access to Cleveland's professional sports stadiums. As of March 2008, the property was 85.7% leased, compared to 91.9% at securitization. Tenants on month-to-month leases accounted for approximately 24% of the leased in-line space. Property performance in calendar years 2006 and 2007, and the borrower's budget for 2008, indicate a significant decline in performance from securitization. The loan sponsor is Forest City Enterprises, Inc. which developed the property and has its headquarters in the Tower City Center development. Moody's LTV is 78.6%, compared to 65.7% at securitization. Moody's underlying rating is Ba1, compared to A3 at securitization. The Blackstone/CarrAmerica CAR Portfolio Loan ($31.1 million -- 1.4%) is the 52.5% portion of a pari passu split loan structure. There is also a $22.8 million non-trust junior secured loan component and a $21.6 million mezzanine loan. The loan is secured by four office properties located in San Mateo, California, Mountain View, California and two properties located in Austin, Texas. The portfolio currently contains 719,027 square feet, compared to 2.1 million square feet in 11 properties at securitization. The outstanding trust balance has decreased by approximately 73.7% since securitization due to the payment of property release premiums. As of March 2008, the portfolio had a weighted average occupancy of 81.4%, compared to 95.4% at securitization for the current portfolio. At securitization, the Blackstone Group, the loan sponsor, provided a guaranty to spend $9.8 million on capital improvements, tenant improvements and leasing commissions. Moody's LTV is 55.1%, compared to 70.8% at securitization. Moody's underlying rating is Aa3, compared to A3 at securitization. The Embassy Suites Lake Buena Vista Loan ($29.0 million -- 1.3%) is secured by a 333-room all-suite, full-service hotel located in Orlando, Florida in the Lake Buena Vista submarket approximately 1-mile northeast of Walt Disney World. A $4.8 million ($14,414 per room) PIP renovation was completed in 2006. The majority of the PIP, $3.5 million, was spent on guestroom upgrades. RevPAR in calendar year 2007 was $109.03, compared to $113.86 at securitization. RevPaR for the trailing-four month period ending April, 2008 was $131.54, compared to $134.20 for the same period in 2007. The loan sponsor is HEI Hospitality Fund, L.P. Moody's LTV is 75.1%, compared to 64.6% at securitization. Moody's underlying rating is Baa3, compared to A3 at securitization. CORD BLOOD: To Pay Interest Only Under Amended Deal with Corcell ---------------------------------------------------------------- Cord Blood America, Inc., entered into a Fourth Amendment to the Securities Purchase Agreement among CorCell, Ltd., Career Channel, Inc., dba Rainmakers International and Shelter Island Opportunity Fund, LLC. Pursuant to the Fourth Amendment, the parties wish to amend the Securities Purchase Agreement and the Debenture. Section 2(b) of the Debenture has been amended such that each Periodic Payment of $75,000, that was to be payable on May 30, June 30 and July 31 was reduced so that the only payment due from the company to Shelter Island on these dates will consist of accrued interest on the outstanding aggregate principal amount of the Debenture on each such date. The balance of each such Periodic Payment shall be paid on the Maturity Date. The Fourth Amendment shall be effective in accordance with the terms of Section 5.5 of the Securities Purchase Agreement upon: (i) the payment of legal fees and expenses in connection with the preparation and negotiation of the Fourth Amendment and the documents referred to herein in an amount not to exceed $4,000 and (ii) Shelter Island's exercise of Warrants for 2,837,838 shares of Common Stock at a price of $.0086 per share on a cashless basis. On May 22, 2008, the company obtained a waiver from Enable Growth Partners LP, Enable Opportunity Partners LP and Pierce Diversified Strategy Master Fund LLC, releasing it from obligations that may require the company to issue stock pursuant to certain sections in the Securities Purchase Agreement, the Warrants and the Senior Convertible Notes, all dated as of Nov. 26, 2007, by and among the company and Enable. As consideration for the Waiver, the company will issue Enable warrants, equal to 20% of the November 2007 Warrants, under the same terms and conditions as that of the Shelter Island Warrants. A full-text copy of the Fourth Amendment to the Securities Purchase Agreement and Amendment to Debenture is available for free at http://ResearchArchives.com/t/s?2e60 About Cord Blood Headquartered in West Hollywood, Calif., Cord Blood America Inc. (OTC BB: CBAI) -- http://www.cordblood-america.com/-- is the parent company of CorCell, which facilitates umbilical cord blood stem cell preservation for expectant parents and their children. Collected through a safe and non-invasive process, cord blood stem cells offer a potentially life-saving resource for treating a growing number of ailments, including cancer, leukemia, blood, and immune disorders. Cord Blood America Inc.'s consolidated balance sheet at March 31, 2008, showed $6,244,317 in total assets and $10,220,878 in total liabilities, resulting in a $3,976,561 total stockholders' deficit. Going Concern Doubt Rose, Snyder & Jacobs, in Encino, California, expressed substantial doubt about Cord Blood America 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 has sustained recurring operating losses, continues to consume cash in operating activities, and has insufficient working capital and an accumulated deficit at Dec. 31, 2007. COUNTRYWIDE: Moody's Cuts Ratings of 435 Tranches from ARM Deals ---------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 435 tranches from 67 Option ARM transactions issued by Countrywide. One hundred seventy four tranches remain on review for possible further downgrade. Additionally, 179 tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, adjustable-rate, negatively amortizing Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going review process. The complete rating actions are: Issuer: CHL Mortgage Pass-Through Trust 2004-12 -- Cl. I-M, Downgraded to Aa3 from Aa2 -- Cl. I-B-1, Downgraded to Baa2 from A2 -- Cl. I-B-2, Downgraded to B3 from Baa2 Issuer: CHL Mortgage Pass-Through Trust 2004-16 -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-3, Downgraded to B1 from Ba2 Issuer: CHL Mortgage Pass-Through Trust 2004-20 -- Cl. B-1, Downgraded to A3 from A2 -- Cl. B-2a, Downgraded to Ba1 from Baa2 -- Cl. B-2b, Downgraded to Ba1 from Baa2 -- Cl. B-3, Downgraded to B3 from Ba2 Issuer: CHL Mortgage Pass-Through Trust 2004-25 -- Cl. M-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-7, Downgraded to Baa2 from Baa1 -- Cl. M-8, Downgraded to Baa3 from Baa2 -- Cl. B-1, Downgraded to Ba2 from Baa3 Issuer: CHL Mortgage Pass-Through Trust 2004-HYB5 -- Cl. I-B-1, Downgraded to Aa3 from Aa2 -- Cl. I-B-2, Downgraded to Baa2 from A2 -- Cl. I-B-3, Downgraded to Ba3 from Baa2 -- Cl. I-B-4, Downgraded to Caa1 from Ba2 -- Cl. I-B-5, Downgraded to Ca from B2 -- Cl. II-B-2, Downgraded to A3 from A2 -- Cl. II-B-3, Downgraded to Ba1 from Baa2 -- Cl. II-B-4, Downgraded to Ba3 from Ba2 -- Cl. II-B-5, Downgraded to Ca from B2 Issuer: CHL Mortgage Pass-Through Trust 2005-11 -- Cl. I-M-1, Downgraded to A2 from Aa2 -- Cl. II-M-1, Downgraded to Aa3 from Aa2 -- Cl. I-B-1, Downgraded to Ba1 from A2 -- Cl. I-B-2, Downgraded to B2 from Baa2 -- Cl. II-B-1, Downgraded to Baa1 from A2 -- Cl. II-B-2, Downgraded to Ba3 from Baa2 Issuer: CHL Mortgage Pass-Through Trust 2005-2 -- Cl. M-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-4, Downgraded to A2 from A1 -- Cl. M-5, Downgraded to A3 from A2 -- Cl. M-6, Downgraded to Baa1 from A3 -- Cl. M-7, Downgraded to Baa3 from Baa1 -- Cl. M-8, Downgraded to Ba1 from Baa2 -- Cl. B-1, Downgraded to Ba3 from Baa3 Issuer: CHL Mortgage Pass-Through Trust 2005-3 -- Cl. M-7, Downgraded to Ba1 from Baa3 -- Cl. B-1, Downgraded to Ba2 from Baa3 Issuer: CHL Mortgage Pass-Through Trust 2005-4 -- Cl. M-X, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. B-2, Downgraded to Ba1 from Baa2 Issuer: CHL Mortgage Pass-Through Trust 2005-7 -- Cl. 1-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-B-1, Downgraded to Ba2 from A2 Issuer: CHL Mortgage Pass-Through Trust 2005-9 -- Cl. M-5, Downgraded to Baa1 from A3 -- Cl. B-1, Downgraded to Ba1 from Baa3 Issuer: CHL Mortgage Pass-Through Trust 2005-HYB1 -- Cl. I-B-2, Downgraded to Ba1 from Baa2 -- Cl. II-B-1, Downgraded to A3 from A2 -- Cl. II-B-2, Downgraded to Ba1 from Baa2 Issuer: CHL Mortgage Pass-Through Trust 2006-3 -- Cl. 1-M-1, Downgraded to Ba3 from Aa2 -- Cl. 1-M-2, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. 1-M-3, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. 1-M-4, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. 1-M-5, Downgraded to Ca from Ba1 -- Cl. 1-M-6, Downgraded to Ca from B1 -- Cl. 2-M-1, Downgraded to Baa3 from Aa1 -- Cl. 2-M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. 2-M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. 2-M-4, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. 2-M-5, Downgraded to Ca from Ba1 -- Cl. 2-M-6, Downgraded to Ca from B1 -- Cl. 2-M-7, Downgraded to Ca from Caa2 -- Cl. 3-M-1, Downgraded to Ba1 from Aa2 -- Cl. 3-M-2, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. 3-M-3, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. 3-M-4, Downgraded to Ca from Ba3 -- Cl. 3-M-5, Downgraded to Ca from Caa2 Issuer: CHL Mortgage Pass-Through Trust 2006-OA1 -- Cl. 1-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to Ba1 from Aa1 -- Cl. M-2, Downgraded to B1 from Aa2 -- Cl. M-3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Ca from Ba2 -- Cl. M-8, Downgraded to Ca from Ba3 -- Cl. M-9, Downgraded to Ca from B3 -- Cl. B-1, Downgraded to Ca from Caa2 Issuer: CHL Mortgage Pass-Through Trust 2006-OA4 -- Cl. M-1, Downgraded to Ba1 from Aa1 -- Cl. M-2, Downgraded to B1 from Aa1 -- Cl. M-3, Downgraded to B2 from Aa2 -- Cl. M-4, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Ca from Ba1 -- Cl. M-8, Downgraded to Ca from Ba2 -- Cl. M-9, Downgraded to Ca from Caa1 Issuer: CHL Mortgage Pass-Through Trust, Series 2006-OA5 -- Cl. 1-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-M-1, Downgraded to Ba1 from Aa1 -- Cl. I-M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. I-M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. I-M-4, Downgraded to Ca from Ba1 -- Cl. I-M-5, Downgraded to Ca from Ba2 -- Cl. I-M-6, Downgraded to Ca from Caa1 -- Cl. II-M-1, Downgraded to Aa3 from Aa1 -- Cl. II-M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. II-M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. II-M-4, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. II-M-5, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. II-M-6, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. II-M-7, Downgraded to Ca from B1 Issuer: CWALT, INC.Mortgage Pass-Through Certificates, Series 2007-OA2 -- Cl. 1-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B3 from Aa1 -- Cl. M-2, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to Caa1 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Ca from Aa2 -- Cl. M-5, Downgraded to Ca from Aa3 -- Cl. M-6, Downgraded to Ca from Ba2 -- Cl. M-7, Downgraded to Ca from Caa1 Issuer: CWALT, Inc. Alternative Loan Trust, Series 2005-44 -- Cl. 1-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M, Downgraded to Baa3 from Aa2 -- Cl. B-1, Downgraded to B2 from A2 -- Cl. B-2, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from Ba2 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-14 -- Cl. 2-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-M-1, Downgraded to A2 from Aa2 -- Cl. II-B-1, Downgraded to Baa3 from A2 -- Cl. II-B-2, Downgraded to B3 from Baa2 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-16 -- Cl. X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to Aa2 from Aa1 -- Cl. M-2, Downgraded to A1 from Aa2 -- Cl. M-3, Downgraded to A3 from Aa3 -- Cl. B-1, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-17 -- Cl. 1-X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-M-1, Downgraded to Aa2 from Aa1 -- Cl. 1-M-2, Downgraded to A2 from Aa2 -- Cl. 1-M-3, Downgraded to A3 from Aa3 -- Cl. 1-B-1, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-M-1, Downgraded to Baa1 from Aa3 -- Cl. 2-B-1, Downgraded to B2 from A3 -- Cl. 2-B-2, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-24 -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-X, Placed on Review for Possible Downgrade, currently Aaa Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-27 -- Cl. 1-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-9, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-10, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-6, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-X-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M, Downgraded to Ba1 from Aa3 -- Cl. B-1, Downgraded to B3 from A3 -- Cl. B-2, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-31 -- Cl. 1-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-M, Downgraded to Baa1 from Aa2 -- Cl. 1-B-1, Downgraded to Ba3 from A2 -- Cl. 1-B-2, Downgraded to B3 from Baa2 -- Cl. 2-M, Downgraded to A2 from Aa2 -- Cl. 2-B-1, Downgraded to Baa3 from A2 -- Cl. 2-B-2, Downgraded to B2 from Baa2 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-36 -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-A-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-M, Downgraded to Baa3 from Aa2 -- Cl. I-B-1, Downgraded to B2 from A2 -- Cl. I-B-2, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. 2-A-1B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1C, Placed on Review for Possible Downgrade, currently Aaa Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-38 -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-6, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M, Downgraded to Baa3 from Aa2 -- Cl. B-1, Downgraded to B3 from A2 -- Cl. B-2, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-41 -- Cl. 1-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M, Downgraded to Baa1 from Aa2 -- Cl. B-1, Downgraded to B2 from A2 -- Cl. B-2, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-45 -- Cl. 1-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M, Downgraded to Baa2 from Aa2 -- Cl. B-1, Downgraded to B2 from A1 -- Cl. B-2, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-51 -- Cl. 1-A-3B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-3C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-B1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-B2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-B3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M, Downgraded to Ba3 from Aa2 -- Cl. B-1, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from Ba2 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-56 -- Cl. 1-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5-A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to Baa3 from Aa1 -- Cl. M-2, Downgraded to Ba3 from Aa2 -- Cl. M-3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Ca from Baa3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-58 -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Ca from B3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-59 -- Cl. 1-A-3B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M, Downgraded to B2 from Aa2 -- Cl. B-1, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Ca from Ba2 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-61 -- Cl. 1-M-3, Downgraded to Baa3 from A2 -- Cl. 1-M-4, Downgraded to B3 from Baa2 -- Cl. 1-M-5, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. 2-M-1, Downgraded to A1 from Aa1 -- Cl. 2-M-2, Downgraded to B3 from A1 -- Cl. 2-M-3, Downgraded to Ca from Ba1 -- Cl. 2-M-4, Downgraded to Ca from Ba3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-62 -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to Ba3 from Aa1 -- Cl. M-2, Downgraded to B3 from Aa2 -- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Ca from Ba1 -- Cl. B-1, Downgraded to Ca from B1 -- Cl. B-2, Downgraded to Ca from B3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-69 -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to A3 from Aa1 -- Cl. M-2, Downgraded to Ba1 from Aa2 -- Cl. M-3, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Ca from Ba2 -- Cl. M-6, Downgraded to Ca from B3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-72 -- Cl. M-1, Downgraded to Ba1 from Aa1 -- Cl. M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Ca from Ba1 -- Cl. M-6, Downgraded to Ca from Ba3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-76 -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to Ba1 from Aa1 -- Cl. M-2, Downgraded to B3 from Aa2 -- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Ca from Baa3 -- Cl. M-7, Downgraded to Ca from Ba3 -- Cl. M-8, Downgraded to Ca from B3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-81 -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B1 from Aa1 -- Cl. M-2, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Ca from Ba3 -- Cl. B-2, Downgraded to Ca from B3 -- Cl. B-3, Downgraded to Ca from Caa3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2005-82 -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M, Downgraded to B2 from Aa2 -- Cl. B-1, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Ca from Ba3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OA10 -- Cl. 1-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-AD, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-BI, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-BJ, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-NB, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-PP, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B3 from Aa1 -- Cl. M-2, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to Caa1 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Caa1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Ca from B2 -- Cl. M-6, Downgraded to Ca from Caa2 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OA11 -- Cl. M-1, Downgraded to Ba1 from Aa1 -- Cl. M-2, Downgraded to B3 from Aa1 -- Cl. M-3, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Ca from Baa1 -- Cl. M-8, Downgraded to Ca from Baa2 -- Cl. M-9, Downgraded to Ca from Baa3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OA12 -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-P, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B2 from Aa1 -- Cl. M-2, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Ca from Ba2 -- Cl. M-7, Downgraded to Ca from B1 -- Cl. M-8, Downgraded to Ca from B3 -- Cl. B-1, Downgraded to Ca from Caa2 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OA14 -- Cl. 1-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to A3 from Aa1 -- Cl. M-2, Downgraded to Ba2 from Aa1 -- Cl. M-3, Downgraded to Ba3 from Aa1 -- Cl. M-4, Downgraded to B1 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Ca from Ba1 -- Cl. M-9, Downgraded to Ca from Ba3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OA16 -- Cl. A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to Baa1 from Aa1 -- Cl. M-2, Downgraded to B2 from Aa1 -- Cl. M-3, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Ca from Baa2 -- Cl. M-9, Downgraded to Ca from Baa3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OA17 -- Cl. 1-A3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X-P, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B1 from Aaa -- Cl. M-2, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Ca from Ba1 -- Cl. M-9, Downgraded to Ca from B1 -- Cl. M-10, Downgraded to Ca from B3 -- Cl. M-11, Downgraded to Ca from B3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OA18 -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to Ba3 from Aa1 -- Cl. M-2, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Ca from Baa1 -- Cl. M-9, Downgraded to Ca from Baa3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OA19 -- Cl. A-3B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-P, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B1 from Aa1 -- Cl. M-2, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Caa1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Ca from Baa2 -- Cl. M-9, Downgraded to Ca from Ba2 -- Cl. M-10, Downgraded to Ca from B3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OA2 -- Cl. A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-6, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-7, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1P, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B2 from Aa1 -- Cl. M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Caa1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Ca from Ba1 -- Cl. M-7, Downgraded to Ca from Ba2 -- Cl. M-8, Downgraded to Ca from B2 -- Cl. M-9, Downgraded to Ca from B3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OA21 -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B1 from Aa1 -- Cl. M-2, Downgraded to B1 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Ca from Ba1 -- Cl. M-10, Downgraded to Ca from B3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OA22 -- Cl. M-1, Downgraded to A1 from Aaa -- Cl. M-2, Downgraded to Ba2 from Aa1 -- Cl. M-3, Downgraded to Ba3 from Aa1 -- Cl. M-4, Downgraded to B3 from Aa2 -- Cl. M-5, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Ca from Baa3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OA3 -- Cl. 1-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B1 from Aa1 -- Cl. M-2, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Caa1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Ca from Baa2 -- Cl. M-6, Downgraded to Ca from Ba2 -- Cl. M-7, Downgraded to Ca from B3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OA6 -- Cl. 1A-1B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1A-4A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1A-4B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1A-4C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1A-4D, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B1 from Aa1 -- Cl. M-2, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Caa1 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Ca from A3 -- Cl. M-6, Downgraded to Ca from Baa3 -- Cl. M-7, Downgraded to Ca from Ba1 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OA7 -- Cl. 1-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B3 from Aa1 -- Cl. M-2, Downgraded to Caa1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to Caa1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Ca from Baa2 -- Cl. M-5, Downgraded to Ca from Ba3 -- Cl. M-6, Downgraded to Ca from Caa2 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OA8 -- Cl. 1-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B1 from Aa1 -- Cl. M-2, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to Caa1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Ca from Ba1 -- Cl. M-5, Downgraded to Ca from Ba3 -- Cl. M-6, Downgraded to Ca from Caa1 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OA9 -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1P, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B3 from Aa1 -- Cl. M-2, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Caa1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Ca from Ba3 -- Cl. M-8, Downgraded to Ca from B3 -- Cl. M-9, Downgraded to Ca from B3 -- Cl. M-10, Downgraded to Ca from Caa3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2007-AL1 -- Cl. M-1, Downgraded to Ba3 from Aa1 -- Cl. M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Ca from Ba2 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2007-OA10 -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to A2 from Aa1 -- Cl. M-2, Downgraded to Baa2 from Aa1 -- Cl. M-3, Downgraded to Ba2 from Aa1 -- Cl. M-4, Downgraded to B1 from Aa1 -- Cl. M-5, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-10, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2007-OA11 -- Cl. X-P, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-2, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. M-3, Placed on Review for Possible Downgrade, currently Aa3 -- Cl. M-4, Placed on Review for Possible Downgrade, currently A1 -- Cl. M-5, Placed on Review for Possible Downgrade, currently A2 -- Cl. M-6, Placed on Review for Possible Downgrade, currently A3 -- Cl. M-7, Placed on Review for Possible Downgrade, currently Baa1 -- Cl. M-8, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. M-9, Placed on Review for Possible Downgrade, currently Baa3 -- Cl. B-1, Placed on Review for Possible Downgrade, currently Ba1 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2007-OA3 -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to Aa3 from Aa1 -- Cl. M-2, Downgraded to Ba1 from Aa1 -- Cl. M-3, Downgraded to Ba3 from Aa1 -- Cl. M-4, Downgraded to B1 from Aa1 -- Cl. M-5, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-10, Downgraded to Ca from Ba3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2007-OA4 -- Cl. M-3, Downgraded to A1 from Aa1 -- Cl. M-4, Downgraded to Baa3 from Aa1 -- Cl. M-5, Downgraded to Ba1 from Aa2 -- Cl. M-6, Downgraded to B1 from Aa3 -- Cl. M-7, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Ca from Ba1 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2007-OA6 -- Cl. M-2, Downgraded to A3 from Aa1 -- Cl. M-3, Downgraded to Baa3 from Aa1 -- Cl. M-4, Downgraded to Ba2 from Aa2 -- Cl. M-5, Downgraded to B2 from Aa3 -- Cl. M-6, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Ca from Ba1 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2007-OA7 -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to A3 from Aaa -- Cl. M-2, Downgraded to Ba1 from Aa1 -- Cl. M-3, Downgraded to Ba2 from Aa1 -- Cl. M-4, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Caa1 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Ca from Ba1 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2007-OA8 -- Cl. 1-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to Baa3 from Aa1 -- Cl. M-2, Downgraded to Ba1 from Aa1 -- Cl. M-3, Downgraded to Ba2 from Aa1 -- Cl. M-4, Downgraded to Ba3 from Aa1 -- Cl. M-5, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-10, Downgraded to Ca from B1 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2007-OA9 -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-P, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to A2 from Aaa -- Cl. M-2, Downgraded to Baa3 from Aa1 -- Cl. M-3, Downgraded to Ba1 from Aa1 -- Cl. M-4, Downgraded to Ba2 from Aa1 -- Cl. M-5, Downgraded to B1 from Aa1 -- Cl. M-6, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Ca from Ba1 -- Cl. B-2, Downgraded to Ca from B2 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2007-OH1 -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-P, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to Baa3 from Aa1 -- Cl. M-2, Downgraded to Ba2 from Aa2 -- Cl. M-3, Downgraded to Ba3 from Aa3 -- Cl. M-4, Downgraded to B1 from A1 -- Cl. M-5, Downgraded to B1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Ca from Ba2 -- Cl. B-1, Downgraded to Ca from B3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2007-OH2 -- Cl. M-1, Downgraded to Aa2 from Aa1 -- Cl. M-2, Downgraded to A1 from Aa1 -- Cl. M-3, Downgraded to Baa1 from Aa2 -- Cl. M-4, Downgraded to Ba1 from Aa3 -- Cl. M-5, Downgraded to Ba3 from A1 -- Cl. M-6, Downgraded to B1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Ca from Ba1 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2007-OH3 -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to Baa1 from Aa1 -- Cl. M-2, Downgraded to Ba1 from Aa1 -- Cl. M-3, Downgraded to Ba3 from Aa2 -- Cl. M-4, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B1 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade CSFB MORTGAGE: Moody's Cuts Ratings of Seven Classes of 2007-TFL-2 ------------------------------------------------------------------ Moody's Investors Service downgrades seven classes and affirms 23 classes of CSFB 2007-TFL-2 of Credit Suisse First Boston Mortgage Securities Corp., Series 2007-TFL2: -- Class A-1, $521,300,000, affirmed at Aaa -- Class A-2, $100,000,000, affirmed at Aaa -- Class A-3, $207,000,000, affirmed at Aaa -- Class B, $45,700,000, affirmed at Aa1 -- Class C, $42,600,000, affirmed at Aa2 -- Class D, $33,500,000, affirmed at Aa3 -- Class E, $36,600,000, affirmed at A1 -- Class F, $36,500,000, affirmed at A2 -- Class G, $33,500,000, affirmed at A3 -- Class H, $39,600,000, affirmed at Baa1 -- Class J, $36,600,000, affirmed at Baa2 -- Class K, $39,600,000, affirmed at Baa3 -- Class L, $33,467,897, downgraded to Ba3 from Ba1 -- Class BSL-A, $8,900,000, downgraded to Ba1 from Aa3 -- Class BSL-B, $9,000,000, downgraded to Ba2 from A1 -- Class BSL-C, $8,900,000, downgraded to Ba3 from A2 -- Class BSL-D, $8,900,000, downgraded to B1 from A3 -- Class BSL-E, $7,900,000, downgraded to B2 from Baa1 -- Class BSL-F, $9,900,000, downgraded to B3 from Baa2 -- Class CSP-A1, $92,271,049, affirmed at Aaa -- Class CSP-A2, $33,600,000, affirmed at Aaa -- Class CSP-B, $10,600,000, affirmed at Aa1 -- Class CSP-C, $11,500,000, affirmed at Aa2 -- Class CSP-D, $9,900,000, affirmed at Aa3 -- Class CSP-E, $10,000,000, affirmed at A1 -- Class CSP-F, $9,700,000, affirmed at A2 -- Class CSP-G, $19,900,000, affirmed at Baa1 -- Class CSP-H, $9,900,000, affirmed at Baa2 -- Class CSP-J, $15,900,000, affirmed at Baa3 -- Class CSP-K, $18,000,000, affirmed at Ba1 Moody's is downgrading non-pooled Classes BSL-A, BSL-B, BSL-C, BSL-D, BSL-E, and BSL-F, secured by the trust junior portion of the Biscayne Landing Loan, due to market credit deterioration and monetary default of the loan. The senior pooled trust balance is $110.0 million while the trust junior component is $53.5 million. Moody's is downgrading pooled Class L due to the poor 2007 and First Quarter 2008 performance of the Resorts Atlantic City loan combined with the performance of the Biscayne Landing Loan. The pooled Classes are secured by seven senior participation interests of whole loans totaling $1.2 billion. The loans range in size from 3.3% to 30.7% of the pool based on current principal balances. As of the June 15, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 0.6% to $1.50 billion from $1.51 billion at securitization. The largest loan, Planet Hollywood Resort and Casino ($460.0 million -- 30.7% of the pooled trust balance) is secured by 40-story hotel/casino property, totaling 2,567 rooms and located on the Las Vegas Strip in Las Vegas, Nevada. The property was constructed in 2000 and was formerly known as the Aladdin Hotel and Casino. The current sponsors (Robert Earl, Bay Harbor, and Starwood) are 99% complete with a $178.4 million renovation and transformation project to re-brand the property as the Planet Hollywood Hotel & Casino. Due to the 2007 hotel and casino renovations, financials from a full operational year are not yet available. Moody's will be closely monitoring this loan as post renovation financial performance information becomes available. Moody's pooled loan to value ratio remains at 65.9%, the same as securitization. Moody's current underlying rating is Baa3, the same as securitization. The Whitehall Seattle Portfolio Loan ($292.5 million -- 19.5% of the pooled trust balance) is secured by a mixture of Class-A office buildings consisting of a total of 13 properties with 2.9 million rentable square feet. The properties are located in three key office submarkets within the Seattle metropolitan area: Seattle CBD, Bellevue CBD, and Suburban Bellevue. Portfolio occupancy as of December 2007 was 90% down from 92% at securitization. Moody's pooled LTV remains at 65.4%, the same as securitization. Moody's current underlying rating is Baa3, the same as securitization. The Resorts Atlantic City Loan ($175.0 million -- 11.78% of the pooled trust balance) is secured by a hotel casino with 310 feet of Boardwalk frontage at the northern end of the Atlantic City Boardwalk. Due to impact from Pennsylvania legalizing slot gambling and the recent Atlantic City smoking ban at casinos, there has been a market wide decrease in casino revenue. At the Resorts Atlantic City, the full year 2007 net cash flow decreased 22.3% from 2006 and 17.3% from the trailing twelve months ending March 2007. Moody's expects cash flow decreases to stabilize at this reduced level and does not anticipate a rebound to 2006 levels. Moody's pooled LTV has increased to 77.2% from 59.4% at securitization. Additionally, Moody's current underlying rating has dropped to Ba3 from Baa3 at securitization. The Biscayne Landing Loan ($110.0 million -- 7.3% of the pooled trust balance) is secured by a 188-acre site located in North Miami, Florida and was intended to fund pre-development of the site to accommodate a mixed-use project encompassing condominiums, multifamily, hotel, office, and retail development. In December 2007, the borrower, Boca Developers, failed to make a $20.0 million amortization payment which was required if release proceed targets weren't met. In March of 2008, the loan was moved to special servicing. Since the monetary default, the borrower has been in negotiations for a forbearance period with the lender while attempting to obtain approval for revised development plans with the municipality. The original plan called for a heavy residential component with completion prior to a smaller commercial component. Given the dramatic decline in the residential market, the borrower has proposed a revised plan calling for a much larger commercial development followed by a smaller residential component when market conditions improve. Moody's has altered our current analysis to reflect the additional credit risk associated with the current market conditions and deviation from the original development plan. Moody's pooled LTV has increased to 63.4% from 41.1% at securitization. Additionally, Moody's current underlying rating of the pooled debt associated with the collateral has dropped to Baa3 from Aa2 at securitization. Additionally, there are junior trust loans secured by the asset including rake classes BSL-A, BSL-B, BSL-C, BSL-D, BSL-E and BSL- F. Moody's is downgrading the following BSL-A to Ba1 from Aa3, BSL-B to Ba2 from A1, BSL-C to Ba3 from A2, BSL-D to B1 from A3, BSL-E to B2 from Baa1 and BSL-F to B3 from Baa2. The CapitalSource Portfolio Loan ($240.9 million 0% of the pooled trust balance) is a non-pooled mortgage loan secured by 63 skilled nursing, 1 assisted living, and 1 long-term acute care facility. The assets are located in 20 states with concentrations in Indiana, Florida, North Carolina and Texas. The sponsor of the loan is CapitalSource. There are currently 23 different third party operators leasing the assets under NNN leases. The deal is structured via a master lease to CapitalSource. Per year end 2007, the current DSCR on the loan based on the master lease payment was approximately 1.50x. The rake bonds in the trust associated with the collateral include CSP-A1, CSP-A2, CSP- B, CSP-C, CSP-D, CSP-E, CSP-F, CSP-G, CSP-H, CSP-J, CSP-K. Due to the absence of updated information on the underlying assets, Moody's rating of each bond remains unchanged from securitization. CRICKET COMMUNICATIONS: S&P Holds 'B-' Rating on $300MM Sr. Notes ----------------------------------------------------------------- Standard & Poor's affirmed its 'B-' issue-level and '4' recovery ratings on Cricket Communications Inc.'s $300 million of senior notes due 2015, upsized from the previously proposed $200 million. S&P also affirmed its rating of 'CCC' and recovery rating of '6' on parent Leap Wireless International Inc.'s $220 million of convertible senior notes due 2014, upsized from the previously proposed $200 million. All of the other ratings on Leap and its subsidiaries, including its 'B-' corporate credit rating, remain unchanged. CYGNE DESIGNS: Posts $3.8MM Net Loss in First Qtr. Ended April 30 ----------------------------------------------------------------- Cygne Designs Inc. reported on Thursday results of operations for the first quarter ended April 30, 2008. Cygne Designs Inc. reported a net loss of $3.8 million on net sales of $15.3 million for the first quarter ended April 30, 2008, compared with a net loss of $1.4 million on net sales of $20.9 million in the same period ended April 30, 2007. The net loss of $3,800,000 for the three months ended April 30, 2008 included severance expenses of $1.0 million attributable to the company's former chief executive officer and $273,000 for non- cash stock compensation issued to the company's current chief executive officer. The decrease in sales is comprised of a $1.6 million decrease in sales from branded garments, and a decrease of $10.4 million from the loss of business of two major customers, partially offset by an increase in sales of the company's private label business of $5.5 million and an increase in the company's non-denim products of $906,000. Gross profit for the first quarter of 2008 was $547,000, a decrease of $3.6 million, or 86.9%, from the gross profit of $4.2 million for the first quarter of 2007. Gross margins decreased to 3.6% compared to 20% in the prior year period as a result of the product categories sold and the fact that the company no longer has a guaranteed margin agreement in place with its former supplier. Additionally, the company's initial gross margins with its new suppliers were lower overall compared to the prior year period and, due to late deliveries during the period, the company incurred significant chargebacks and late delivery fees, which negatively impacted gross margins during the period. Covenant Defaults On Aug. 3, 2007, the company entered into a $15 million secured revolving credit facility with Comerica Bank. The credit facility replaced the company's expired Factoring Agreement with Milberg Factors Inc.. The short-term borrowings under the revolving credit facility were $12.5 million at April 30, 2008. As security for the company's obligations under the credit facility, the company granted to Comerica Bank a continuing security interest in substantially all of its property. As of April 30, 2008, the company was in default with the working capital, net worth, EBITDA and debt to net equity ratio requirements. Comerica Bank issued a notice of no action to the company regarding the default on the covenants at April 30, 2008. The bank's decision to not take action to enforce its rights under the agreement does not constitute a waiver of any of the bank's rights, powers and remedies with respect to the defaults. Balance Sheet At April 30, 2008, the company's consolidated balance sheet showed $33.9 million in total assets, $25.8 million in total liabilities, and $8.1 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended April 30, 2008, are available for free at http://researcharchives.com/t/s?2e6d Going Concern Doubt Cygne Designs Inc. believes that existing conditions cast substantial doubt about the company's ability to continue as a going concern. The company had losses of $3,800,000 for three months ended April 30, 2008. The company said its ability to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due and upon profitable operations "cannot be nnot be predicted with any certainty at this time." About Cygne Designs Inc. Based in New York, Cygne Designs Inc. (Nasdaq: CYDS) is a designer, merchandiser, manufacturer and distributor of branded and private label women's denim, casual and career apparel with sales to retailers located in the United States. DAIMLERCHRYSLER FINANCIAL: S&P Puts Ratings Under Negative Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services is placing its 'B' long-term counterparty credit rating and 'BB-' senior unsecured debt rating on DaimlerChrysler Financial Services Americas LLC on CreditWatch with negative implications. The CreditWatch reflects S&P's decision to review DaimlerChrysler's ratings in light of the increased challenges at its parent, Chrysler LLC. "High gasoline prices are the primary cause of the increasingly challenging operating conditions for Chrysler LLC, and hence DaimlerChrysler Financial Services," said Standard & Poor's credit analyst John Bartko. The review, which S&P are also undertaking on other rated U.S. automakers, was prompted by renewed concerns about Chrysler's prospective cash outflows in light of the prospects for U.S. sales for the rest of 2008 and into 2009. The erosion of demand for SUVs and pickups has been particularly troubling. Although these segments have been weak for some time, the exodus of demand that began in April, caused by escalating gas prices and consumer preferences for smaller vehicles, is gathering speed. Despite concerted efforts to change the mix of product offerings and reduce costs, Chrysler still relies on light trucks for a disproportionate share of profitability and cash flow. S&P had assigned a negative outlook to Chrysler on Nov. 8, 2007, but the demand prospects for light trucks, and lower sales more broadly, over the rest of 2008 could undermine its financial prospects more than it previously expected, even in light of ongoing cost reductions. S&P will review Chrysler's financial and liquidity outlook, as well as general U.S. and global automotive industry conditions, to resolve the CreditWatch review. DAWAHARES LEXINGTON: Obtains Interim OK to Use Cash Collateral -------------------------------------------------------------- The Hon. Joseph M. Scott, Jr., of the U.S. Bankruptcy Court for the Eastern District of Kentucky gave Dawahare's of Lexington LLC interim approval to access its lender's cash collateral, Jamie Mason of The Deal reports. There were no objections filed against the motion, the report adds. The Court is set to give a final decision on the matter on June 27, 2008, The Deal relates. The Debtor, according to The Deal, was permitted by the Court to access cash collateral on an emergency basis on June 5. The Troubled Company Reporter said on June 3, 2008, that Dawahares will close nine of its 31 retail outlets after commencing a reorganization proceedings under chapter 11. The company will also scrap seven positions at its headquarters. About 100 jobs will be affected by the store closings. Dawahares will have about 400 employees after the closings. The 101-year-old chain of clothing stores blamed the national economic downturn and competition from other retailers for its woes. According to The Deal, the sale of the Debtor's assets will be held through Aug. 31, 2008. About Dawahare's of Lexington Lexington, Kentucky-based Dawahare's of Lexington LLC, dba Dawahares and Catbird Seat, -- http://www.dawahares.com/-- sells family clothing in retail. It filed its chapter 11 petition on May 30, 2008 (Bankr. E.D. Ky. Case No. 08-51381). Judge Joseph M. Scott, Jr., presides over the case. Thomas Bunch, II, Esq., and W. Thomas Bunch, Sr., Esq., at Bunch & Brock represent the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed total assets of $10,023,124 and total debts of $9,280,821. DENNY'S CORPORATION: Discloses New Organizational Structure ----------------------------------------------------------- Denny's Corporation redesigned its organizational structure to support its ongoing transition to a franchise-focused business model. The company has completed an extensive review of its organizational structure in comparison with many prominent franchise systems. In April, the company realigned its senior leadership with three executive officers reporting to the Chief Executive Officer. The company has restructured the organization under this leadership to effectively execute its new strategic direction with primary emphasis on sales, brand and franchise. Additionally, the company has created four Regional Vice Presidents of Operations positions that will have accountability for the performance of both company and franchise restaurants within a geographic region. The RVP's and their support teams will manage an integrated effort to drive guest counts, sales and profitability while ensuring operational excellence. The company is also strengthening its marketing focus with resources dedicated to sales, consumer insights, innovation and an enhanced local marketing effort through a strategic collaboration with Denny's operational leadership. "Through the success of Denny's Franchise Growth Initiative, the mix of franchised restaurants in the Denny's system is now up to 76%," Nelson Marchioli, President and Chief Executive Officer, stated. "In our quest to become a franchisor-of-choice in the restaurant industry, we must continue to evolve our corporate structure and mission to focus on driving sales, expanding the brand and providing valuable support to our franchisees. We have determined that to be competitive in today's challenging operating environment it is necessary to reallocate resources and streamline our structure. We see many opportunities ahead for the Denny's brand and look forward to working with our franchisees to capitalize on our growth prospects." The new organizational structure increases brand and franchisee support, but also allows for consolidation of certain departments and job functions resulting in the near-term elimination of approximately 50 positions. As a result of these staff reductions, the company expects to incur a restructuring charge attributable to severance and other expense of approximately $5 million in the second quarter of 2008, which will be paid out over the next 12 months. Additionally, the company expects to realize annualized savings of approximately $6 to $8 million in core general and administrative expense (which excludes share- based compensation and annual incentive compensation). This expense reduction will phase in during the second half of 2008. 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. DESIGN BUILDERS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Design Builders, Inc. 120 Creasy Court Lafayette, IN 47905 Bankruptcy Case No.: 08-40434 Type of Business: The Debtor is engaged in the construction business. Chapter 11 Petition Date: June 20, 2008 Court: Northern District of Indiana (Hammond Division at Lafayette) Judge: Robert E. Grant Debtor's Counsel: Edward B. Hopper, II, Esq. Email: ehopper@ebhopper-legal.com 202 Marott Center 342 Massachusetts Ave. Indianapolis, IN 46204 Tel: (317) 822-9085 Fax: (317) 822-9086 Total Assets: $534,142 Total Debts: $1,659,991 A copy of Design Builders, Inc.'s list of 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/innb08-40434.pdf DLJ COMMERCIAL: Moody's Affirms Ba2, Ca, & C Ratings on 3 Classes ----------------------------------------------------------------- Moody's Investors Service upgraded the ratings of two classes and affirmed 10 classes of DLJ Commercial Mortgage Corp., Commercial Mortgage Pass-Through Certificates, Series 1999-CG3: -- Class A-1B, $483,321,987, affirmed at Aaa -- Class S, Notional, affirmed at Aaa -- Class A-1C, $17,716,000, affirmed at Aaa -- Class A-2, $25,000,000, affirmed at Aaa -- Class A-3, $49,461,000, affirmed at Aaa -- Class A-4, $13,489,000, affirmed at Aaa -- Class A-5, $15,738,000, affirmed at Aaa -- Class B-1, $17,986,000, upgraded to Aaa from Aa1 -- Class B-2, $15,737,000, upgraded to Aa3 from A3 -- Class B-4, $13,489,000, affirmed at Ba2 -- Class B-7, $8,993,000, affirmed at Ca -- Class B-8, $2,009,839, affirmed at C Moody's upgraded Classes B-1 and B-2 due to increased defeasance and credit support and overall improved pool performance. As of the June 10, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 21.0% to $710.2 million from $899.3 million at securitization. The Certificates are collateralized by 138 mortgage loans ranging in size from less than 1.0% to 6.3% of the pool with the 10 largest loans representing 41.1% of the pool. The pool contains one loan with an investment grade underlying rating that represents 5.5% of the outstanding balance. Forty- seven loans, representing 53.7% of the pool, have defeased and are collateralized with U.S. Government securities. Thirteen loans have been liquidated from the pool, resulting in an aggregate realized loss of approximately $23.0 million. One loan, representing less than 1.0% of the pool, is currently in special servicing. Moody's has estimated a $1.0 million loss for this loan. Thirty-three loans, representing 12.7% of the pool, are on the master servicer's watchlist. The watchlist includes loans which meet certain portfolio review guidelines established as part of the Commercial Mortgage Securities Association monthly reporting package. As part of the ongoing monitoring of a transaction, Moody's reviews the watchlist to assess which loans have material issues that could impact performance. Not all loans on the watchlist are delinquent or have significant issues. Moody's was provided with full and partial year 2007 operating results for 56.8% and 26.1% of the pool, respectively. Moody's loan to value ratio for the conduit component is 86.1% compared to 89.3% at Moody's last full review in January 2007 and 87.7% at securitization. The loan with an underlying rating is the LaSalle Hotel Portfolio Loan ($39.1 million - 5.5%), which consists of two cross collateralized loans secured by two hotel properties. The largest property is the Sheraton Bloomington Hotel, a 565-room convention hotel located in Bloomington, Minnesota. The second property is the Westin City Center Hotel, a 407-room full service hotel located in Dallas, Texas. The performance of both hotels has improved since last review, especially the Westin City Center. The portfolio's overall RevPAR for 2007 was $85.18 compared to $74.68 at last review. The loans also benefit from a 25-year amortization schedule and have amortized by approximately 15.8% since securitization. Moody's current underlying rating is A3 compared to Baa3 at last review. The top three non-defeased conduit loans represent 5.8% of the pool. The largest conduit loan is the West End Court Loan ($14.0 million -- 2.0%), which is secured by a 101,000 square foot Class B office building located in Washington, D.C. Major tenants include The Congressional Quarterly (60.0% NRA; lease expiration December 2012), U.S. Department of Agriculture (23.7%; lease expiration March 2011) and Combined Properties, Inc. (16.0%; lease expiration February 2009). The property is 100.0% occupied, the same as at last review. Moody's LTV is 70.0% compared to 70.9% at last review. The second largest conduit loan is the Ameriserve Loan ($13.9 million -- 2.0%), which is secured by two food distribution facilities totaling 362,000 square feet. The properties are 100.0% leased to The Retail Distribution Group and are located in New Jersey (lease expiration September 2009) and Michigan (lease expiration November 2015). Moody's LTV is 74.8% compared to 76.5% at last review. The third largest conduit loan is the Rancho Verde Mobile Home Park Loan ($13.4 million -- 1.9%), which is secured by a 302-unit mobile home park located approximately 40 miles north of San Francisco in Rohnert Park, California. The property was 99.0% leased as of December 2007. Moody's LTV is 75.6% compared to 76.7% at last review. DOWNEY SAVINGS: Moody's Cuts Ratings of 45 Tranches; 14 on Review ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 45 tranches from 12 Option ARM transactions backed by Downey Savings and Loan Association originated loans. Twelve tranches remain on review for possible further downgrade. Additionally, 14 tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, adjustable-rate, negatively amortizing Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going review process. Complete rating actions are: Issuer: DSLA Mortgage Loan Trust 2004-AR1 -- Cl. B-2, Downgraded to A3 from A2 -- Cl. B-3, Downgraded to Ba1 from Baa2 -- Cl. B-4, Downgraded to B3 from Ba2 Issuer: DSLA Mortgage Loan Trust 2004-AR2 -- Cl. B-1, Downgraded to A1 from Aa2 -- Cl. B-2, Downgraded to Baa3 from A2 -- Cl. B-3, Downgraded to B3 from Baa2 -- Cl. B-4, Downgraded to Ca from Ba2 Issuer: DSLA Mortgage Loan Trust 2004-AR4 -- Cl. B-1, Downgraded to A3 from Aa2 -- Cl. B-2, Downgraded to Ba2 from A2 -- Cl. B-3, Downgraded to Caa1 from Baa2 -- Cl. B-4, Downgraded to Ca from Ba2 Issuer: DSLA Mortgage Loan Trust 2005-AR1 -- Cl. X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to A2 from Aa2 -- Cl. B-2, Downgraded to Ba1 from A2 -- Cl. B-3, Downgraded to B3 from Baa2 Issuer: DSLA Mortgage Loan Trust 2005-AR2 -- Cl. 2 A1B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Baa1 from Aa2 -- Cl. B-2, Downgraded to B1 from A2 -- Cl. B-3, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade Issuer: DSLA Mortgage Loan Trust 2005-AR3 -- Cl. PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A1C, Placed on Review for Possible Downgrade, currently Aaa Issuer: DSLA Mortgage Loan Trust 2005-AR5 -- Cl. PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Baa2 from Aa2 -- Cl. B-2, Downgraded to B3 from A2 -- Cl. B-3, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-4, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade Issuer: DSLA Mortgage Loan Trust 2005-AR6 -- Cl. M-1, Downgraded to Baa1 from Aa2 -- Cl. M-2, Downgraded to B3 from A2 -- Cl. M-3, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Ca from Ba1 -- Cl. M-6, Downgraded to Ca from Ba2 Issuer: DSLA Mortgage Loan Trust 2006-AR1 -- Cl. M-2, Downgraded to Aa3 from Aa2 -- Cl. M-3, Downgraded to Baa1 from Aa3 -- Cl. M-4, Downgraded to Ba2 from A1 -- Cl. M-5, Downgraded to B3 from A2 -- Cl. M-6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-10, Downgraded to Ca from Ba1 Issuer: DSLA Mortgage Loan Trust 2006-AR2 -- Cl. M-2, Downgraded to Aa3 from Aa2 -- Cl. M-3, Downgraded to A3 from Aa3 -- Cl. M-4, Downgraded to Baa3 from A1 -- Cl. M-5, Downgraded to Ba3 from A3 -- Cl. M-6, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade Issuer: DSLA Mortgage Loan Trust 2007-AR1 -- Cl. M-7, Downgraded to Baa1 from A2 -- Cl. M-8, Downgraded to Ba1 from A3 -- Cl. M-9, Downgraded to B1 from Baa3; Placed Under Review for further Possible Downgrade DRIFTWOOD MOTEL: Case Summary & Six Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Driftwood Motel, Inc. P.O. Box 2102 Newport, OR 97365 Bankruptcy Case No.: 08-62159 Type of Business: The Debtor owns and operates Driftwood Village Motel. See http://www.driftwoodvillagemotel.com/ Chapter 11 Petition Date: June 20, 2008 Court: District of Oregon Judge: Albert E. Radcliffe Debtor's Counsel: John Putman Pries, Esq. Email: pries_law@qwest.net 860 Olive St. Eugene, OR 97401 Tel: (541) 343-0684 Estimated Assets: $1 million to $10 million Estimated Debts: $500,000 to $1 million A copy of Driftwood Motel, Inc.'s petition is available for free at: http://bankrupt.com/misc/orb08-62159.pdf DRIGGS FARMS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Driggs Farms of Indiana, Inc. P.O. Box 820 Decatur, IN 46733 Bankruptcy Case No.: 08-11955 Chapter 11 Petition Date: June 20, 2008 Court: Northern District of Indiana (Fort Wayne Division) Judge: Robert E. Grant Debtor's Counsel: Daniel J. Skekloff, Esq. Email: djs@sak-law.com Skekloff, Adelsperger & Kleven, LLP 927 South Harrison St. Fort Wayne, IN 46802 Tel: (260) 407-7000 Fax: (260) 407-7137 http://www.sak-law.com Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ All American Foods materials-trade $1,196,200 P.O. Box 8242 Mankato, MN 56002-8242 ConAgra Food Ingredients, Inc. materials-trade $1,583,167 P.O. Box 93462 Chicaao IL 60673 Berkshire Dairy materials-trade $916,803 1258 Penn Ave. Wyomissing, PA 19610-2130 T.C. Jacoby & Co., Inc. materials-trade $907,019 1716 Hidden Creek Ct. Saint Louis MO 63131 Denali Ingredients (Value materials-trade $643,844 America) Dept. 4004 Lansing, MI 48909 Sweetener Supply Corp. materials-trade $638,251 P.O. Box 848 Aurora IL 60507-0848 Berry Plastics Technical packaging-trade $621,731 Services 1371 S. Chillicothe Rd. Aurora OH 44202 Pullman Sugars, LLC materials-trade $454,409 700 E. 107th St. ChicaQo IL 60628 Norse Dairy Systems materials-trade $433,322 P.O. Box 1869 Columbus OH 43216 Malnove Inc. of Nebraska packaging-trade $303,668 13434 F. St. Omaha NE 68137 PS International, Ltd. materials-trade $237,391 Zimmer Custom-Made packaging-trade $204,943 Huhtamaki Packaging, Inc. packaging-trade $191,337 Weyerhaeuser Co. packaging-trade $178,114 Green Bay Packaging packaging-trade $172,336 Reindel Transport, Inc. freight-trade $164,463 Burd & Fletcher packaging-trade $148,480 Schaefer Trucking freight-trade $129,031 Continental Express, Inc. freight-trade $126,798 South West Nut Co. materials-trade $126,725 DUKE FUNDING: Moody's Junks Ratings of 6 Classes of Notes --------------------------------------------------------- Moody's Investors Service has downgraded the ratings of eight classes of notes issued by Duke Funding XIII, Ltd., and left on review for possible further downgrade the rating of one of these classes of notes. The notes affected by today's rating action are: Class Description: $50,400,000 Class X Senior Secured Fixed Rate Notes due 2015 -- Prior Rating: Aaa -- Current Rating: Baa3, on review for possible downgrade Class Description: Up to $944,000,000 Class A1SVF Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: Ca Class Description: $321,000,000 Class A1J Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Ca -- Current Rating: C Class Description: $185,000,000 Class A2S Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Ca -- Current Rating: C Class Description: $55,000,000 Class A2J Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Ca -- Current Rating: C Class Description: $125,000,000 Class A3 Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Ca -- Current Rating: C Class Description: $50,000,000 Class B1 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Ca -- Current Rating: C Class Description: $55,000,000 Class B2 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Ca -- Current Rating: C The transaction experienced, as reported by the Trustee on May 5, 2008, an event of default caused by a failure of the Senior Credit Test to be satisfied, as described in Section 5.1(h) of the Indenture dated June 27, 2007. This event of default is still continuing. Duke Funding XIII, Ltd. is a hybrid collateralized debt obligation backed primarily by a portfolio of RMBS securities and synthetic securities in the form of credit default swaps. Reference obligations for the credit default swaps are RMBS securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, certain parties to the transaction may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. In this regard the Trustee reports that a majority of the Controlling Class directed the Trustee to declare the outstanding Class A1SVF Funded Amount and also the principal of all of the Secured Notes to be immediately due and payable. Furthermore, according to the Trustee, a majority of the Class A1SFV Notes and the Credit Default Swap Counterparty have directed the Trustee to proceed with the disposition of the Collateral in accordance with relevant provisions of the transaction documents. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of loss experienced by certain tranches may be different depending on the timing and outcome of the liquidation of the collateral. Because of this uncertainty, the rating assigned by Moody's to the Class X Notes remains on review for possible further rating action. EMPIRE REFRIGERATION: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Empire Refrigeration, Inc. 1130 Center Street Pahrump, Nevada 89048 Bankruptcy Case No.: 08-16531 Type of Business: The Debtor repairs refrigerators and air- conditioning units. Chapter 11 Petition Date: June 19, 2008 Court: District of Nevada (Las Vegas) Debtors' Counsel: Charles T. Wright, Esq. (ctw@ctwlegal.com) 509 S. 7th Street Las Vegas, Nevada 89101 Tel: (702) 566-1212 Fax: (702) 566-4833 Estimated Assets: Less than $50,000 Estimated Debts: $1 million to $10 million A copy of the Debtor's list of largest unsecured creditors is available for free at: http://bankrupt.com/misc/nevb08-16531.pdf EQUIPOINT FINANCIAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: EquiPoint Financial Network, Inc. fdba Mortgage Solutions Network fdba Sunny Valley Mortgage fdba EquiPoint Financial Network fdba RTK Financial fdba Harborside Financial Network, Inc. fdba Citadel Financial fdba Greater Valley Mortgage, Inc. fdba Sacramento Valley Mortgage, Inc. fdba ATech Mortgage fdba Taylor Mortgage Group fdba Foundation Mortgage Grp fdba Organic Mortgage fdba On Realty Financial 334 Via Vera Cruz, Ste. 251 San Marcos, CA 92078 Bankruptcy Case No.: 08-05555 Type of Business: The Debtor is a mortgage banker. Chapter 11 Petition Date: June 20, 2008 Court: Southern District of California (San Diego) Judge: James W. Meyers Debtor's Counsel: John L. Smaha, Esq. Email: jsmaha@smaha.com Smaha Law Group, APC 7860 Mission Center Ct., Ste. 100 San Diego, CA 92108 Tel: (619) 688-1557 Fax: (619) 688-1558 http://www.smaha.com/ Total Assets: $479,316 Total Debts: $4,678,344 A copy of 's petition is available for free at: http://bankrupt.com/misc/casb08-05555.pdf EQUIVEST ST. THOMAS: Court Confirms Chapter 11 Reorganization Plan ------------------------------------------------------------------ The Hon. Judith Fitzgerald of the U.S. Bankruptcy Court for the Virgin Islands confirmed Equivest St. Thomas Inc.'s chapter 11 plan of reorganization Wednesday, June 18, 2008, Jamie Mason of The Deal reports, citing Debtor's counsel Daniel Eliades, Esq., at Forman Holt Eliades & Ravin LLC. There were no objections to the plan, The Deal relates. Wyndham Vacation Ownership Inc. offered to extend a $5 million exit financing to the Debtor, The Deal says. That exit financing matures a year following the plan's effectivity date and has an interest rate of prime rate, plus 100 basis points, that increases to 300 basis points upon default, The Deal notes. Wyndham's $13.5 million claim will be satisfied in full and in cash, The Deal quotes court filings as stating. The plan, The Deal reports, contemplates on paying in cash and in full the secured claims of the U.S. and Virgin Islands governments, as well as other creditors, within 30 days of the effectivity date. According to the report, the Debtor owns 4,800 timeshare units in Bluebeard's Castle, Bluebeard's Beach Club & Villas and the Elysian Beach Club and Resort. Bluebeard's Castle Association claims were resolved on Feb. 14, 2008, through a settlement agreement under which 20% of the Debtor's equity stake will be given to Bluebeard's, The Deal notes. Bluebeard's will also be paid $17.5 million to fund for hotel renovation and professional fees, the report continues. Under the plan, the Debtor intends to liquidate 80% of its 29% equity stake in Bluebeard's Beach Club & Villas, based on the report. The plan, The Deal says, also contemplates on transferring all common areas to Bluebeard's Beach Club & Villas, which won't receive any cash payment. The Elysian Association claims will be paid with 80% of the Debtor's timeshare units in Elysian Beach Club and Resort, The Deal says. The Debtor, according to the report, plans to keep the remaining timeshares in Elysian resort, but will transfer common areas like pools and tennis courts to the Association. The Debtor owns 51% of Elysian resort' timeshares, The Deal notes court filings as stating. Unsecured creditors, under the plan, will be paid in cash within 30 days to 180 days after the effectivity date, The Deal reports. Equivest Finance Inc. will keep its equity stake in the Debtor, under the plan, The Deal relates. About Equivest St. Thomas Equivest St. Thomas Inc. is headquartered in Orlando, Florida. The Debtor operates, rents and leases resorts namely Bluebeard's Castle, Bluebeard's Beach Club Resort and Elysian Beach Resort, each located in St. Thomas, Virgin Islands. The Debtor filed for Chapter 11 bankruptcy protection on July 2, 2007 (Bankr. D. Virgin Islands Case No. 07-30011). Daniel M. Eliades, Esq. at Forman Holt Eliades & Ravin LLC and Gregory H. Hodges, Esq. at Dudley, Topper & Feuerzeig LLP represent the Debtor in its restructuring efforts. The Debtor's amended schedule disclosed $12,702,117 in assets and $13,808,691 in liabilities. ETERNAL ENERGY: Posts $358,712 Net Loss in 2008 First Quarter ------------------------------------------------------------- Eternal Energy Corp. reported a net loss of $358,712 on total revenue of $330,257 for the first quarter ended March 31, 2008, compared with a net loss of $148,234 on zero revenue for the same period last year. In June 2007, the company sold its interest in Pebble Petroleum Inc. The company received $877,353 for its interest in this prospect, which it had acquired earlier in 2007 at a cost of $259,482. In addition to the initial payment, the company will receive $250,000 for each of the first eight wells drilled on the property. Drilling of the first five wells commenced during the year ended Dec. 31, 2007. Drilling on one additional well commenced in January 2008. Revenue for the first quarter of 2008 consisted of spud fee revenue of $250,000, and oil and gas sales of $80,257 from the West Ranch property located in Texas. The company had no revenue in the corresponding period in 2007. Spud fee revenue is recorded when drilling commences. Balance Sheet At March 31, 2008, the company's balance sheet showed $7,008,630 in total assets, $835,425 in total liabilities, and $6,173,205 in total stockholders' equity. The company's balance sheet at March 31, 2008, also showed strained liquidity with $312,180 in total current assets available to pay $585,425 in total current liabilities. Full-text copies of the company's financial statements for the quarter ended March 31, 2008, are available for free at: http://researcharchives.com/t/s?2e71 Going Concern Doubt Kelly & Company, in Costa Mesa, California, expressed substantial doubt about Eternal Energy Corp.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2007. The auditing firm reported that the company has incurred net losses exclusive of the net effect of the change in accounting principal and gain on warrant derivatives for the years ended Dec. 31, 2007, and 2006 of $819,897 and $877,005, respectively and must rely on the sale of its common stock and borrowing until it is able to successfully implement its business plan and generate sufficient revenues in the future to sustain its ongoing operations. Net cash used in operating activities was $391,853 for the three- month period ended March 31, 2008. The company has minimum drilling costs associated with its oil and gas exploration participations of $2 million, and it expects to spend $2,850,000 in improvement costs in its West Ranch property. The company said that while it has been able to obtain additional operating capital through private equity funding sources since inception, as of March 31, 2008, the company did not have the financial resources to meet these obligations. About Eternal Energy Based in Littleton, Colo., Eternal Energy Copr. (OTC BB: EERG) -- http://www.eternalenergy.com/-- was incorporated in the state of Nevada in March 2003. The company engages in the acquisition, exploration, development and producing of oil and gas properties. At March 31, 2008, the company has entered into participation agreements related to oil and gas exploration projects in the Big Sand Spring Valley Prospect and the Cherry Creek Project, both located in Nye County, Nevada. The company has also acquired a 75% working interest in West Ranch Field in Jackson County, Texas. FIRST FINANCIAL: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: First Financial, LLC 6038 Tampa Ave., Ste. 411 Tarzana, CA 91356 Bankruptcy Case No.: 08-14153 Chapter 11 Petition Date: June 19, 2008 Court: Central District Of California (San Fernando Valley) Judge: Maureen Tighe Debtor's Counsel: Moises S. Bardavid, Esq. Email: mbardavid@hotmail.com 16133 Ventura Blvd. 7th Fl. Encino, CA 91436 Tel: (213) 252-0630 Fax: (213) 252-0631 Total Assets: $2,500,000 Total Debts: $3,027,760 The Debtor does not have any unsecured creditors who are not insiders. FORD MOTOR: Vehicle Demand Fall Cues Moody's Negative Outlook ------------------------------------------------------------- Moody's Investors Service affirmed the B3 Corporate Family Rating and Probability of Default Rating of Ford Motor Company, but changed the rating outlook to negative from stable. The company's Speculative Grade Liquidity rating remains SGL-1. The rating outlook for Ford Credit has also been changed to negative from stable, reflecting parent level concerns and deteriorating asset quality. The negative outlook for Ford reflects the increasingly challenging environment faced by its and the other domestic auto manufacturers as the outlook for US vehicle demand falls, and as high fuel costs drive US consumers away from light trucks and SUVs and toward more fuel efficient vehicles. As a result of these eroding market fundamentals Ford announced that: 1) its automotive performance for 2008 will be worse than that of 2007 in which it had a pre-tax loss of $1.8 billion excluding Jaguar and Land Rover, and special items; 2) Ford Credit will incur a pre-tax operating loss for 2008; 3) the company is unlikely to achieve break even performance during 2009; and 4) the two-year pace of automotive operating cash burn for 2008 and 2009 will exceed the previously estimated level of $12 to $14 billion. The negative outlook for Ford Credit reflects the business and ownership connections with Ford and the impact of declining used vehicle values on the firm's asset quality. These declining used vehicle values are expected to result in higher credit costs and additional depreciation expense at Ford Credit, pressuring operating results. Ford Credit expects to report a pre-tax loss in 2008, excluding any potential payment related to Ford's profit maintenance agreement. Ford Credit is the beneficiary of a profit support agreement from Ford, who has indicated that it will take no distributions from Ford Credit during 2008, in contrast to previous expectations. This, in combination with Ford Credit's committed borrowing facilities, cash flow from short-duration assets, cash balances, and access to the secured debt markets, should provide the firm adequate resources to meet short-term demands on cash. Ford's operational response to the US shift in consumer demand includes: reducing production of trucks and SUVs while increasing the production of cars and crossover vehicles; extending further buyout offers to hourly workers in order to reduce manned capacity; delaying the launch of the F-150 truck; and, introducing many of its successful European small cars and crossovers to the US market. Despite the prudence of these initiatives, the massive shift in the production and product profile being contemplated by Ford is a complex, long-term undertaking. Consequently, the future pace and degree of success of these initiatives remain highly uncertain. An additional area of uncertainty is the company's ability to build a reasonable level of profitability for mid-size and small cars in the US -- classes of vehicles that have historically generated losses for Ford, and that have had to be priced at significant discounts relative to comparably equipped vehicles made by Japanese manufacturers. "Maintaining adequate liquidity will be one of the most critical challenges Ford faces as it attempts to reshape its US product profile and manufacturing base during the next two years," Bruce Clark, senior vice president, said with Moody's. "Ford is going to burn a considerable amount of cash until it adequately expands its fleet of fuel efficient cars and convinces consumers that these vehicles offer competitive value relative to Japanese product. The pace of cash consumption will also remain high until Ford begins to harvest the health care cost savings of its new UAW contract in 2010," Mr. Clark noted. At March 31, Ford had a sizable $40.6 billion liquidity position that consisted of $28.7 billion in cash and $11.9 billion in availability under committed credit facilities. This liquidity position was further enhanced by approximately $2.3 billion in proceeds from the sale of Land Rover and Jaguar. During 2008 and 2009, Ford's key liquidity requirements will include the following: operating losses and restructuring expenditures that could exceed $14 billion; ongoing minimum levels of cash required to fund intra-month working capital requirements that can approximate 5%-6% of revenues in the automotive OEM sector; debt repayments of approximately $1.5 billion; UAW-related VEBA contributions of $2.8 billion; pension contributions; over $4 billion in payments to Ford Motor Credit Company that will bring Ford's subvention payment terms with its finance operation more in line with industry norms; and the possibility that the pace of cash outflow could increase depending on delays in implementing the company's repositioning efforts and further erosion in the demand characteristics in the US market. A key factor supporting Ford's B3 corporate family rating and SGL- 1 liquidity rating is the ample size of the company's liquidity position relative to the cash requirements it will likely face during the coming twelve months. However, Ford will continue to face a sizable cash burn through 2009. Consequently the current liquidity cushion will continue to narrow, and the SGL-1 is unlikely to be sustainable absent any substantial source of new liquidity. Over the coming quarters, this narrowing of Ford's liquidity position will likely contribute to reductions in the Speculative Grade Liquidity rating and may also contribute to a review for possible downgrade of the B3 long- term rating. Moreover, any acceleration in the company's pace of cash consumption would accelerate downward pressure on both the SGL and long-term ratings. Ford Motor Company, headquartered in Dearborn, Mich., is a leading global automotive manufacturer. FORD MOTOR: S&P Places Corporate Credit Rating Under Neg Watch -------------------------------------------------------------- Standard & Poor's Ratings Services is placing its corporate credit ratings on the three U.S. automakers, General Motors Corp., Ford Motor Co., and Chrysler LLC, on CreditWatch with negative implications, citing the need to evaluate the financial damage being inflicted by deteriorating U.S. industry conditions--largely as a result of high gasoline prices. Included in the CreditWatch placement are the finance units Ford Motor Credit Co. and DaimlerChrysler Financial Services Americas LLC, as well as GM's 49%-owned finance affiliate GMAC LLC. "We have renewed concerns about all three automakers' future cash outflows in light of the prospects for U.S. sales for the rest of 2008 and into 2009," said Standard & Poor's credit analyst Robert Schulz. The erosion of demand for SUVs and pickups has been particularly troubling. Although these segments have been weak for some time, the exodus of demand that began in April, caused by escalating gas prices and consumer preferences for smaller vehicles, is gathering speed. Despite concerted, and in some cases successful, efforts to bolster their line-ups of smaller vehicles and reduce costs, all three Michigan-based automakers still rely on light trucks for a disproportionate share of profitability and cash flow. The companies' difficulty in anticipating the pace of market deterioration was reflected in Ford's announcement that it expects to use an even larger amount of cash this year and next than it announced previously, its second negative guidance revision in a month. Ford plans to use more than $16 billion of cash between 2007 and 2009 in its automotive operations, including the cost of employee separation programs, unless the economy rebounds next year. The company also said this year's pretax results will be worse than last year's, announced further light-truck production cuts and shift reductions, and delayed this fall's launch of the F-150 pickup by two months to clear existing inventory. Also worrisome is the dire state of the vehicle finance market. Ford said it expects Ford Motor Credit to report a pretax loss for the year (before any infusion from Ford) caused by weak used (residual) values, primarily for light trucks. Although GM and Chrysler have not publicly detailed their expectations for cash use, all of the factors behind Ford's weaker guidance also apply to the other U.S.-based automakers. In addition to weak sales and adverse product mix shifts, the list of challenges also includes less receptive capital markets, higher costs for steel and other raw materials, lower residual values that hurt profitability at the finance units and reduce consumers' trade-in power, and increasing cash needs for restructuring efforts. S&P believe all three companies currently have ample liquidity for at least the rest of 2008 as measured by cash balances, available bank facilities, and in some cases unencumbered assets. But S&P now also believe deteriorating industry fundamentals could reduce liquidity to undesirable levels by the second half of 2009. As part of its reviews, S&P will assess all three companies' strategies for addressing the weak sales and shifts in demand away from light trucks and maintaining liquidity at satisfactory levels through 2009. FORD MOTOR: DBRS Reviews Ratings on Decline of Operations --------------------------------------------------------- DBRS has placed the ratings of Ford Motor Company, Ford Motor Credit Company LLC and Ford Credit Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. economy. Negative developments include these: (1) A slowing U.S. economy precipitated by the collapse in the housing market has contributed to a sharp decline in the demand for automobiles. (2) Persistent high oil prices have accelerated the change in consumer preference to more fuel-efficient vehicles, which is the strength of the Asian manufacturers. This has added to the Company's challenge to stabilize its market share. (3) The sharp deterioration in residential construction has further dampened the demand for pickup trucks, one of the Company's more profitable products. Worsening market conditions in North America, especially for large sports utility vehicles and pickup trucks, has added headwinds to Ford's turnaround efforts. Ford Motor Company Issuer Rating Under Review - Negative B(low) Long-Term Debt Under Review - Negative CCC(high) Senior Secured Credit Facilities Under Review - Negative B(high) Ford Motor Credit Company LLC Issuer & Long-Term Debt Under Review - Negative B Short-Term Debt Under Review - Negative R-4 Ford Credit Canada Limited Long-Term Debt Under Review - Negative B Ford Credit Canada Limited Commercial Paper Under Review - Negative R-4 FREMONT GENERAL: Court Sets Trading Limitations to Equityholders ---------------------------------------------------------------- Fremont General Corporation disclosed that the U.S. Bankruptcy Court for the Central District of California, Santa Ana Division entered a court order that imposes substantial restrictions on the trading of the company's common stock, par value $0.01 per share, for those holders who are substantial equityholders, effective as of June 18, 2008. A "substantial equityholder" is a person or entity that beneficially owns at least 3,904,160 shares of common stock, or 5% or more of the outstanding shares of common stock or who at anytime was a 5% shareholder of the company within the meaning of the Treasury Regulations section 1.382-2T. The Order was sought by the company in an effort to preserve its consolidated net operating loss carryovers or NOLs, which are available to offset the company's future taxable income, if any, and reduce the company's federal income tax liability. The benefit of the NOLs may be substantially reduced if the company undergoes an ownership change within the meaning of the Internal Revenue Code of 1986, as amended. Generally, there is an ownership change if, at any time, one or more 5% shareholders or persons or entities holding less than 5% but who are deemed under treasury regulations to be 5% shareholders have aggregate increases in their ownership in a corporation of more than 50 percentage points when considered over the prior three year period. Once all or part of a NOL is disallowed under the Code on account of an ownership change, that NOL's use is permanently limited. The Order provides the company with a mechanism to monitor the transfers of common stock and the ability to obtain substantive relief from the Bankruptcy Court to protect the NOLs from the possible loss due to an ownership change. The company's NOLs, as reported on its 2007 consolidated tax return, were approximately $695 million and potentially may provide a tax benefit in excess of $200 million, if preserved. The trading restrictions established by this Order apply to substantial equityholders who purchase or dispose of common stock. Pursuant to this Order, each existing substantial equityholder must serve on the company and its counsel within thirty 30 days of June 18, 2008, a written notice in the form set forth in the Order, which sets forth the amount of common stock it beneficially owns. After June 18, 2008, any person or entity that: (i) is not a substantial equityholder and wishes to purchase or otherwise acquire ownership of an amount of common stock that would cause such person or entity to become a substantial equityholder; or (ii) is a substantial equityholder and wishes to purchase or otherwise acquire ownership of any additional common stock; or (iii) is a substantial equityholder and wishes to sell or otherwise dispose of common stock, must, prior to the consummation of any such transaction, serve on the company and its counsel a written notice in the form set forth in the Order. If no written objection to a proposed transaction by a substantial equityholder, to which proper notice is received, is filed with the Bankruptcy Court by the company within twenty 20 calendar days after the receipt of such notice, then the transaction may proceed. If a written objection to the proposed transaction is filed by the company with the Court within such period, then the transaction may not be consummated unless and until it is approved by a final and nonappealable order of the Bankruptcy Court. Any subsequent transactions within the scope of this Order must be the subject of separate notices and with additional waiting periods. Any acquisition or disposition of common stock made in violation of the Order will be void and the Bankruptcy Court may consider sanctions or other measures as the Bankruptcy Court considers appropriate. About Fremont General Headquartered in Brea, California, Fremont General (OTC: FMNT) -- http://www.fremontgeneral.com/-- is a financial services holding company. The company is engaged in deposit gathering through a retail branch network located in the coastal and Central Valley regions of Southern California through Fremont Investment & Loan. Fremont Investment & Loan funds its operations through deposit accounts sourced through its 22 retail banking branches which are insured up to the maximum legal limit by the FDIC. The Retail Banking Division of the Bank continues to offer a variety of savings and money market products well as certificates of deposits across its 22 branch network. Customer deposits remain fully insured by the FDIC up to at least $100,000 and retirement accounts remain insured separately up to an additional $250,000. Fremont General Corp. filed for Chapter 11 protection on June 18, 2008, (Bankr. C.D. Calif. Case No.: 08-13421) Scott H. Yun, Esq. and Whitman L. Holt, Esq. represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, its listed total assets of $643,197,000 and total debts of $320,630,000. FTD INC: Moody's to Raise B1 CFR Upon United Online's Acquisition ----------------------------------------------------------------- Moody's Investors Service stated that the B1 corporate family rating of FTD, Inc., which is presently under review for possible upgrade as a result of the company's acquisition by United Online, Inc., will likely be increased one notch to Ba3 upon closing of the transaction. The current B3 rating on the subordinated debt, if any remains following the close, would likely be upgraded to B2. Ratings on any debt repaid as part of the transactions will be withdrawn upon closing. The likely upgrades would be the result of continued improvements in FTD's fundamental operating performance, as well as the potential for increased revenues as FTD begins to benefit from its relationship with United Online and its informational resources. The likely upgrade also assumes that the post acquisition capital structure and financial policy would be consistent with a higher rating. FTD, Inc., headquartered in Downers Grove, Illinois, is a provider of floral and specialty gift products primarily in the U.S., Canada, the U.K. and the Republic of Ireland, with revenues of $613 million for the fiscal year ended June 30, 2007. It has agreed to be acquired by United Online, Inc. in a transaction valued at approximately $800 million. GENERAL MOTORS: S&P Places Corporate Credit Rating Under Neg Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services is placing its corporate credit ratings on the three U.S. automakers, General Motors Corp., Ford Motor Co., and Chrysler LLC, on CreditWatch with negative implications, citing the need to evaluate the financial damage being inflicted by deteriorating U.S. industry conditions--largely as a result of high gasoline prices. Included in the CreditWatch placement are the finance units Ford Motor Credit Co. and DaimlerChrysler Financial Services Americas LLC, as well as GM's 49%-owned finance affiliate GMAC LLC. "We have renewed concerns about all three automakers' future cash outflows in light of the prospects for U.S. sales for the rest of 2008 and into 2009," said Standard & Poor's credit analyst Robert Schulz. The erosion of demand for SUVs and pickups has been particularly troubling. Although these segments have been weak for some time, the exodus of demand that began in April, caused by escalating gas prices and consumer preferences for smaller vehicles, is gathering speed. Despite concerted, and in some cases successful, efforts to bolster their line-ups of smaller vehicles and reduce costs, all three Michigan-based automakers still rely on light trucks for a disproportionate share of profitability and cash flow. The companies' difficulty in anticipating the pace of market deterioration was reflected in Ford's announcement that it expects to use an even larger amount of cash this year and next than it announced previously, its second negative guidance revision in a month. Ford plans to use more than $16 billion of cash between 2007 and 2009 in its automotive operations, including the cost of employee separation programs, unless the economy rebounds next year. The company also said this year's pretax results will be worse than last year's, announced further light-truck production cuts and shift reductions, and delayed this fall's launch of the F-150 pickup by two months to clear existing inventory. Also worrisome is the dire state of the vehicle finance market. Ford said it expects Ford Motor Credit to report a pretax loss for the year (before any infusion from Ford) caused by weak used (residual) values, primarily for light trucks. Although GM and Chrysler have not publicly detailed their expectations for cash use, all of the factors behind Ford's weaker guidance also apply to the other U.S.-based automakers. In addition to weak sales and adverse product mix shifts, the list of challenges also includes less receptive capital markets, higher costs for steel and other raw materials, lower residual values that hurt profitability at the finance units and reduce consumers' trade-in power, and increasing cash needs for restructuring efforts. S&P believe all three companies currently have ample liquidity for at least the rest of 2008 as measured by cash balances, available bank facilities, and in some cases unencumbered assets. But S&P now also believe deteriorating industry fundamentals could reduce liquidity to undesirable levels by the second half of 2009. As part of its reviews, S&P will assess all three companies' strategies for addressing the weak sales and shifts in demand away from light trucks and maintaining liquidity at satisfactory levels through 2009. GENERAL MOTORS: DBRS Places Ratings Under Negative Review --------------------------------------------------------- DBRS has placed the ratings of General Motors Corporation and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. economy. Negative developments include these: (1) A slowing U.S. economy precipitated by the collapse in the housing market has contributed to a sharp decline in the demand for automobiles. (2) Persistent high oil prices have accelerated the change in consumer preference to more fuel-efficient vehicles, which are the strength of the Asian manufacturers. This has added to the Company's challenge of stabilizing its market share. (3) The sharp deterioration in residential construction has further dampened the demand for pickup trucks, one of the Company's more profitable products. Worsening market conditions in North America, especially for large sports utility vehicles and pickup trucks, has added headwinds to GM's turnaround efforts. General Motors Corporation Issuer Rating Under Review - Negative B (high) General Motors Corporation Commercial Paper Under Review - Negative R-5 General Motors Corporation Long-Term Debt Under Review - Negative B General Motors Corporation Ind. Dev. Empower. Zone Rev. Bds., S2004 Under Review - Negative B General Motors Corporation Convertible Debentures Under Review - Negative B -- General Motors of Canada Limited Commercial Paper Under Review - Negative R-5 General Motors of Canada Limited Long-Term Debt Under Review - Negative GENERAL MOTORS: Details Plant Production Schedule Adjustments ------------------------------------------------------------- General Motors Corp. released a statement regarding production schedule adjustments. With the continuing shift of consumer demand moving from trucks and sport-utility vehicles to cars and crossovers, GM needs to balance its production to meet the shift in demand. Accordingly, GM told employees at impacted plant facilities, as of June 23, 2008, that GM will experience down weeks and remove overtime at several of its truck plants, and add overtime to its car plants. Specifically, these car, crossover and van plants will add Saturdays and overtime to their schedules: * Fairfax (Chevy Malibu and Saturn Aura) * Orion (Chevy Malibu and Pontiac G6) * Wentzville (Chevy Express and GMC Savanna) * Lansing Delta Township (Buick Enclave, GMC Acadia, Saturn Outlook) Separately, Lordstown will increase their line-speed from three shifts at 55 jobs-per-hour to three shifts at 62 jobs-per-hour. (Chevy Cobalt, Pontiac G5) These pick-up truck plants will take these scheduled down weeks: * Fort Wayne July 7 * Oshawa Truck July 14 * Silao July 14 *�Shreveport July 14 These sport utility vehicle plants will take these scheduled down weeks: * Arlington July 14 and July 21 * Janesville July 14 and July 21 * Moraine July 14 (one shift only) Additionally, several pick-up and sport utility plants will decrease their line-speed and remove scheduled overtime. Finally, several pick-up truck and sport utility vehicle assembly plants will experience additional down weeks that will be scheduled between now and the end of 2008. * Fort Wayne Down 2 additional weeks *�Oshawa Truck Down 7 additional weeks *�Silao Down 2 additional weeks *�Arlington Down 3 additional weeks *�Janesville Down 10 additional weeks 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 related in the Troubled Company Reporter on June 5, 2008, Standard & Poor's Ratings Services said that its ratings on General Motors Corp. (B/Negative/B-3) are not immediately affected by the company's announcement that it will cease production at four North American truck plants over the next two years. These closures are in response to the re-energized shift in consumer demand away from light trucks. GM previously said only one shift was being eliminated at each of the four truck plants. Production is being increased at plants producing small and midsize cars, but the cash contribution margin from these smaller vehicles is far less than that of light trucks. GLOBE RE: Moody's Gives Baa3, Ba2, and B2 Ratings to Securities --------------------------------------------------------------- Moody's Investors Service has assigned the following definitive ratings to the debt securities of Globe Re Limited: -- Baa3 to the $21.5 million Tranche A Principal-at-Risk Variable Rate Notes due July 1, 2010 -- Baa3 to the $23.5 million Tranche A Term Loans due July 1, 2010 -- Ba2 to the $18 million Tranche B Principal-at-Risk Variable Rate Notes due July 1, 2010 -- Ba2 to the $22 million Tranche B Term Loans due July 1, 2010 -- B2 to the $6.5 million Tranche C Principal-at-Risk Variable Rate Notes due July 1, 2010 -- B2 to the $8.5 million Tranche C Term Loans due July 1, 2010 These ratings are consistent with the provisional ratings assigned on May 29, 2008. The rating rationale remains unchanged. Globe Re is a limited-life reinsurance vehicle -- a 'sidecar' -- that covers a pre-defined portfolio of contracts. Hannover Ruckversicherung AG is the sponsor of the vehicle. "Globe Re will assume from Hannover Re a majority share of the premiums and losses on a handful of U.S. property catastrophe reinsurance contracts that Hannover Re will underwrite on behalf of certain clients for the purpose of passing those risks onto Globe Re and the capital markets," notes senior analyst Kevin Lee. Globe Re will be capitalized with $33 million of equity and $100 million of debt securities, offered in both loan and note format, to collateralize potential claim obligations to Hannover Re over the one-year risk period. The debt securities will be arrayed in tranches, each having a different probability of attachment, expected loss, and priority with respect to interest and principal payments, hence the difference in ratings. The ratings for the debt securities are supported by Moody's probabilistic analysis to determine both the probability of default and expected loss to debt holders, relative to promised interest and principal. The most important inputs into the financial modeling exercise are the exceedance probability curves of gross losses to Globe Re derived by Benfield Advisory. Moody's loaded the Base Curves to reflect non-modeled elements as well as Moody's judgment about the inherent uncertainty in peril modeling. The PDs and ELs from this exercise were then compared to Moody's idealized default rates and expected loss rates over a duration of 1 year. The financial modeling also contemplated uncertainty in loss estimates at the time of commutation and counterparty risk to the asset swap provider. Key rating factors include: 1) MODEL RISK: Catastrophe modeling error is the most important risk factor. Moody's recognizes the inherent uncertainty in peril modeling especially as it relates to certain perils and regions like New Madrid earthquake where little historical data is available for model calibration. The quality of input data also has a significant influence on peril modeling results. Moody's loaded the Base Curves to account for several items: 1) non-modeled coverage elements such as loss adjustment expenses and extra-contractual obligations; 2) missing property characteristics in the exposure data particularly as it relates to year of construction, number of stories, and square footage for certain contracts; and 3) inherent uncertainty in modeling natural catastrophes as evidenced by differences in model results produced by RMS 7.0 models versus AIR 9.5 models for this transaction. We view positively however that the majority of the risks are residential exposures which tend to be more homogeneous than commercial or industrial exposures with respect to property and insurance coverage characteristics, making them more amenable to modeling. We also view positively that detailed level models were used to model each contract with the exception of one large contract where tractability dictated the use of aggregate level models. 2) PORTFOLIO LARGELY KNOWN UPFRONT: Moody's views this as a significant positive relative to many sidecars in that it will cover a pre-defined group of contracts for only one year. This precludes the need to project future premiums and exposures beyond these contracts which will incept in June 2008. Furthermore, the underlying contracts have already been priced, suggesting only modest uncertainty in actual versus projected premiums. Premium levels will have the greatest impact on equity investors and the most junior debt holders, because these investors rely more heavily on premiums as a claims-paying cushion. 3) CONCENTRATION IN FLORIDA BUT CONTRACT ASSEMBLY MITIGATES OVERLAP: More than three-quarters of total limits ceded to Globe Re have some exposure to Florida hurricanes and about half of total limits are specific to and only cover Florida. Of those Florida-specific limits, about half are exposed to losses from first events and the balance is exposed to second events. Those second event limits can only attach if a second Florida hurricane event occurs during the risk period and the client's coverage from the Florida Hurricane Catastrophe Fund has been exhausted. Further, the largest contract ceded to Globe Re specifically excludes Florida. The maximum limit of liability to Globe Re on any one contract is limited to $60 million or less to mitigate lumpy exposures. Lastly, there is a fair amount of diversity with respect to the modeled attachment probabilities for each underlying contract. 4) ORIGINATE-TO-DISTRIBUTE MODEL HIGHLIGHTS IMPORTANCE OF ADEQUATE ALIGNMENT OF INTERESTS: The motivation for this transaction differs from that of many sidecar transactions that Moody's has rated in that the sponsor is originating certain reinsurance contracts largely for the express purpose of passing those risks onto the capital markets. To demonstrate some 'skin in the game', Hannover Re is: (a) taking a modest equity interest in Globe Re, (b) assuming the tail risk should Globe Re exhaust its capital, and (c) Hannover Re and its affiliates will retain a minimum amount (equal to 20% of the aggregate limit of liability to Globe Re) on the underlying contracts and/or the broader reinsurance programs that encompass these underlying contracts. Moody's could lower its ratings should the alignment of interests fall materially short of what is currently contemplated (by way of amendment for example). 5) COMMUTATION MECHANISM: In the financial analysis, Moody's has reflected some possibility for over-estimation of loss reserves at the time of commutation. 6) RESTRICTIONS ON INVESTED ASSETS AND ASSET SWAP: Our expectation is that investment allocation will favor highly-rated fixed securities, given that capital preservation and liquidity are critical to debt holders and because Globe Re may become liable for substantial claim payments on short notice, as is typical of the property catastrophe reinsurance business. Investment guidelines preclude investments in structured finance products, among other restrictions. Further, Globe Re will enter into an asset swap agreement with a highly rated swap counterparty who will make quarterly payments to the collateral trust of LIBOR minus a spread and deliver par against the sale of collateral assets in exchange for receiving all investment income generated from the collateral assets. There will also be a monthly true-up of the asset portfolio such that if the portfolio value falls below 95% of outstanding par, the swap counterparty will collateralize the difference. Asset swaps are a common feature of catastrophe bonds but less common in sidecar vehicles. Hannover Reinsurance Company, based in Hannover, Germany, is among the top 5 reinsurance providers worldwide in terms of premium volume. The company maintains business relations with more than 5,000 insurance companies in about 150 countries. It generates the major part of its revenues in Europe (54% of gross premiums written in 2007, with 17% from Germany), North America (27%), Asia (7%), Australia (6%), Africa (3%) and Latin America (3%). As of 31 December 2007, the company reported shareholders' equity of EUR 3.3 billion and net income of EUR 734 million in its consolidated financial statements under IFRS. GMAC LLC: DBRS Cuts Rating to B on High Exposure to ResCap ---------------------------------------------------------- DBRS has downgraded the long-term ratings of GMAC, LLC and its related entities, including its Issuer and Long-Term Debt rating to B from BB(low). The trend on the ratings remains Negative. This rating action considers GMAC's increased exposure to Residential Capital LLC, its increasingly encumbered balance sheet and the overall earnings pressures facing its core automotive business. Through a series of recent transactions which were designed to address the short-term liquidity needs of ResCap, GMAC has significantly increased its exposure to its weaker subsidiary, ResCap. In addition to the $3.5 billion secured credit facility it provided to ResCap, GMAC has increased the MSR facility that was entered into during the first quarter of 2008 from $750 million to $1.2 billion and significantly increased the advance rate from 50% to 85%. Additionally, GMAC Commercial Finance has agreed to provide ResCap a receivables factoring facility which will purchase from ResCap $600 million of servicing advances on a non- recourse basis. GMAC also contributed $250 million of ResCap debt for preferred units of IB Finance Holdings, LLC, the owner of GMAC Bank. Furthermore GMAC has agreed to acquire 100% of ResCap's resort finance business for an initial cash purchase price equal to 90% of the net book value of the business. In DBRS's opinion, these transactions continue the trend of ResCap drawing capital from GMAC at a time when GMAC's core automotive finance business is being pressured. Given the current level of exposure to ResCap, DBRS has increased the rating linkage between the two companies. Further, DBRS would consider additional financial support of ResCap, to the extent that it impairs GMAC's ability to support or fund its core automotive financing segment, as a significant negative rating factor. DBRS has lowered ResCap's Issuer rating to CCC. DBRS acknowledges the significant debt refinancing GMAC has recently achieved. Notably, GMAC has obtained a new, globally syndicated $11.4 billion senior secured revolving credit facility with a three-year maturity (the size of the facility decreases to $7.9 billion at the conclusion of the second year). In DBRS' opinion, this refinancing along with the renewal of the $10 billion syndicated commercial paper back-up facility, New Center Asset Trust, significantly improves GMAC's near-term liquidity position. However, a notable consequence of these transactions is a more encumbered balance sheet, thereby reducing future funding flexibility and decreasing the credit protection of the unsecured creditor. Further, this rating action reflects the escalating pressures to GMAC's core automotive financing business. Profitability measures have been negatively impacted by increased credit costs, elevated funding costs, the reduced industry wide liquidity and the overall weakened economic environment. Moreover, the declines in GM automotive sales will likely lead to a reduction in new auto loan originations volume and may also add stress to the wholesale portfolio, both of which will likely reduce GMAC's core auto business profitability. The Negative trend reflects DBRS's expectations that, given the aforementioned factors, including continued losses at ResCap, GMAC' s earning and balance sheet will be under intensified pressure in the near term. GMAC LLC: S&P Puts 'B' Rating Under Negative Watch -------------------------------------------------- Standard & Poor's Ratings Services is placing its 'B' long-term counterparty credit rating on GMAC LLC on CreditWatch with negative implications. The CreditWatch reflects S&P's decision to review GMAC's rating in light of the increased challenges at its parent, General Motors Corp. (GM, 49% owner). "High gasoline prices are the primary cause of the increasingly challenging operating conditions for GM, and hence GMAC," said Standard & Poor's credit analyst John Bartko. The review, which S&P are also undertaking on other rated U.S. automakers, was prompted by renewed concerns about GM's prospective cash outflows in light of the prospects for U.S. sales for the rest of 2008 and into 2009. The erosion of demand for SUVs and pickups has been particularly troubling. Although these segments have been weak for some time, the exodus in demand that began in April, caused by escalating gas prices and consumer preferences for smaller vehicles, is gathering speed. Despite concerted efforts to change the mix of product offerings and reduce costs, GM still relies on light trucks for a disproportionate share of profitability and cash flow. S&P had assigned a negative outlook to GM on May 22, 2008, but the demand prospects for light trucks, and lower sales more broadly over the rest of 2008, could undermine financial prospects more than S&P previously expected, even in light of successful and substantial cost reductions. In addition to the mounting macroeconomic challenges facing its parent, and thus GMAC's, auto finance business, GMAC also must contend with the continuing challenges of its mortgage affiliate Residential Capital LLC, which recently executed what S&P consider to be a distressed debt exchange resulting in its rating being lowered temporarily to 'SD' (selective default; not a legal default, but rather a default as defined by its criteria). S&P will review GM's financial and liquidity outlook, as well as general U.S. and global automotive industry conditions, to resolve the CreditWatch review. GREENPOINT MORTGAGE: Moody's Cuts Ratings of 149 Tranches --------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 149 tranches from 17 Option ARM transactions issued by Greenpoint Mortgage Funding Trust. Sixty tranches remain on review for possible further downgrade. Additionally, 26 tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, adjustable-rate, negatively amortizing Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described are a result of Moody's on-going review process. Complete rating actions are: Issuer: GreenPoint Mortgage Funding Trust 2006-AR4 -- Cl. M1, Downgraded to Aa3 from Aaa -- Cl. M2, Downgraded to Baa3 from Aa1 -- Cl. M3, Downgraded to Ba3 from Aa1 -- Cl. M4, Downgraded to B1 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M9, Downgraded to Ca from Baa2 -- Cl. M10, Downgraded to Ca from Ba1 Issuer: GreenPoint Mortgage Funding Trust 2006-AR5 -- Cl. M1, Downgraded to A1 from Aaa -- Cl. M2, Downgraded to Baa3 from Aaa -- Cl. M3, Downgraded to B2 from Aa1 -- Cl. M4, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to Caa1 from A2; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M9, Downgraded to Ca from Baa1 -- Cl. M10, Downgraded to Ca from Baa3 Issuer: GreenPoint Mortgage Funding Trust 2006-AR6 -- Cl. M1, Downgraded to A1 from Aaa -- Cl. M2, Downgraded to Baa3 from Aa1 -- Cl. M3, Downgraded to Ba3 from Aa1 -- Cl. M4, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to Ca from Baa1 -- Cl. M9, Downgraded to Ca from Baa3 Issuer: GreenPoint Mortgage Funding Trust 2006-AR7 -- Cl. M1, Downgraded to A1 from Aaa -- Cl. M2, Downgraded to Baa3 from Aa1 -- Cl. M3, Downgraded to Ba3 from Aa1 -- Cl. M4, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to Ca from Baa1 -- Cl. M9, Downgraded to Ca from Baa2 Issuer: GreenPoint Mortgage Funding Trust 2006-AR8 -- Cl. M2, Downgraded to Baa1 from Aa1 -- Cl. M3, Downgraded to Ba3 from Aa1 -- Cl. M4, Downgraded to B1 from Aa2 -- Cl. M5, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M9, Downgraded to Ca from Baa2 Issuer: GreenPoint Mortgage Funding Trust 2006-OH1 -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to Baa3 from Aa1 -- Cl. M-2, Downgraded to Ba2 from Aa2 -- Cl. M-3, Downgraded to Ba3 from Aa3 -- Cl. M-4, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Ca from Baa3 Issuer: Greenpoint MTA Trust 2005-AR1 -- Cl. M-X, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. M-4, Downgraded to A3 from A1 -- Cl. M-5, Downgraded to Baa1 from A2 -- Cl. M-6, Downgraded to Baa2 from A3 -- Cl. M-7A, Downgraded to Ba1 from Baa1 -- Cl. B-1A, Downgraded to Ba2 from Baa2 -- Cl. B-2, Downgraded to Ba3 from Baa3 Issuer: Greenpoint MTA Trust 2005-AR2 -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-X, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. M-1, Downgraded to Aa3 from Aa1 -- Cl. M-2, Downgraded to A3 from Aa2 -- Cl. M-3, Downgraded to Baa2 from Aa3 -- Cl. M-4, Downgraded to Ba2 from A1 Issuer: Greenpoint MTA Trust 2005-AR3 -- Cl. I-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-X, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. M-1, Downgraded to A3 from Aa1 -- Cl. M-2, Downgraded to Baa3 from Aa2 -- Cl. M-3, Downgraded to Ba3 from Aa3 -- Cl. M-4, Downgraded to B1 from A1 -- Cl. M-5, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from Baa3 Issuer: Greenpoint Mortgage Funding Trust 2005-AR4 -- Cl. I-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. IV-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. III-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-X, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. M-1, Downgraded to A3 from Aa1 -- Cl. M-2, Downgraded to Ba1 from Aa2 -- Cl. M-3, Downgraded to B1 from Aa3 -- Cl. M-4, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Ca from Baa2 -- Cl. B-3, Downgraded to Ca from Baa3 Issuer: Greenpoint Mortgage Funding Trust 2005-AR5 -- Cl. I-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-X-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. III-X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. IV-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. IV-X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-X, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. M-1, Downgraded to A3 from Aa1 -- Cl. M-2, Downgraded to Ba2 from Aa2 -- Cl. M-3, Downgraded to B1 from Aa3 -- Cl. M-4, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-4, Downgraded to Ca from B3 Issuer: Greenpoint Mortgage Funding Trust 2006-AR1 -- Cl. M-2, Downgraded to Baa2 from Aa2 -- Cl. M-3, Downgraded to Ba3 from Aa3 -- Cl. B-1, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from Baa2 Issuer: Greenpoint Mortgage Funding Trust 2006-AR2 -- Cl. M-1, Downgraded to Baa3 from Aa1 -- Cl. M-2, Downgraded to Ba3 from Aa2 -- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Caa1 from A2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Caa2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from Ba1 Issuer: Greenpoint Mortgage Funding Trust 2006-AR3 -- Cl. B-1, Downgraded to Aa3 from Aa1 -- Cl. B-2, Downgraded to Baa2 from Aa2 -- Cl. B-3, Downgraded to Ba2 from Aa2 -- Cl. B-4, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-5, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to Ca from A2 -- Cl. B-7, Downgraded to Ca from Baa1 Issuer: Greenpoint Mortgage Funding Trust 2007-AR1 -- Cl. M1-I, Downgraded to Aa1 from Aaa -- Cl. M2-I, Downgraded to A3 from Aa1 -- Cl. M2-II, Downgraded to A2 from Aa2 -- Cl. M3-I, Downgraded to Ba2 from Aa1 -- Cl. M3-II, Downgraded to Baa1 from Aa2 -- Cl. M4-I, Downgraded to Ba3 from Aa2 -- Cl. M4-II, Downgraded to Baa3 from Aa3 -- Cl. M5-I, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. M5-II, Downgraded to Ba2 from A1 -- Cl. M6-I, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M6-II, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade -- Cl. M7-I, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M7-II, Downgraded to B1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M8-I, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M8-II, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M9-I, Downgraded to Ca from Baa3 -- Cl. M9-II, Downgraded to Ca from Ba1 Issuer: Greenpoint Mortgage Funding Trust 2007-AR2 -- Cl. 1-M3, Downgraded to A3 from Aa1 -- Cl. 1-M4, Downgraded to Baa3 from Aa2 -- Cl. 1-M5, Downgraded to Ba2 from A2 -- Cl. 1-M6, Downgraded to Ba3 from Baa1 -- Cl. 1-M7, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. 1-M8, Downgraded to B2 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. 1-M9, Downgraded to Ca from Ba1 -- Cl. 2-M3, Downgraded to Aa3 from Aa2 -- Cl. 2-M4, Downgraded to A2 from Aa3 -- Cl. 2-M5, Downgraded to Baa2 from A1 -- Cl. 2-M6, Downgraded to Ba3 from A2 -- Cl. 2-M7, Downgraded to B1 from A3; Placed Under Review for further Possible Downgrade -- Cl. 2-M8, Downgraded to B1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. 2-M9, Downgraded to Ca from Ba1 Issuer: Greenpoint Mortgage Funding Trust 2007-AR3 -- Cl. M1, Downgraded to Aa3 from Aa1 -- Cl. M2, Downgraded to Baa1 from Aa2 -- Cl. M3, Downgraded to Baa2 from Aa3 -- Cl. M4, Downgraded to Baa3 from A1 -- Cl. M5, Downgraded to Ba3 from A2 -- Cl. M6, Downgraded to B1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to B1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to Ca from Ba1 HABANA CUBA: Case Summary & 5 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Habana Cuba, LLC 71 Bartholomew Avenue Hartford, CT 06106 Bankruptcy Case No.: 08-21152 Chapter 11 Petition Date: June 18, 2008 Court: District of Connecticut (Hartford) Judge: Robert L. Krechevsky Debtor's Counsel: John J. O'Neil, Jr. Francis O'Neil Del Piano (fodlaw@yahoo.com) 255 Main Street Hartford, CT 06106 Telephone (860) 527-3271 Total Assets: $1,451,100 Total Debts: $1,170,875 A copy of Debtor's petition and a list of its 5 largest unsecured creditors is available for free at: http://bankrupt.com/misc/ctb08-21152.pdf HAIGHTS CROSS: Working Capital Deficit Cues Moody's Junk Ratings ---------------------------------------------------------------- Moody's Investors Service has downgraded Haights Cross Communications, Inc.'s Corporate Family rating to Caa3 from Caa1 and its Probability of Default rating to Ca from Caa2, largely reflecting Moody's heightened concern that the company will be unable to operate as a going concern in the face of a substantial working capital deficit and that it may suffer a default under its debt obligations in the near term. Details of the rating action are: Ratings downgraded: Haights Cross Operating Company -- Senior secured term loan due August, 2008 -- to B2, LGD1, 4% from B1, LGD1, 4% -- Senior unsecured notes due August, 2011 -- to Caa3, LGD3, 32% from Caa1, LGD3, 31% Haights Cross Communications, Inc. -- Senior discount notes due August, 2011 -- to C, LGD5, 72% from Caa3, LGD5, 73% -- Corporate Family Rating -- to Caa3 from Caa1 -- Probability of Default Rating - to Ca from Caa2 -- The rating outlook is changed to negative from developing. The downgrade of Haights Cross' Corporate Family rating reflects Moody's heightened concern that the company may default on the scheduled payment of its $124 million term loan at maturity on Aug. 15, 2008, absent an amendment. Moody's notes that a payment default under Haights Cross's term loan would trigger cross defaults under the terms of the company's note indentures. In January 2008, Haights Cross initiated a sale process for all or part of its business. The prior developing outlook had contemplated that Haights Cross would conclude a sale of assets generating sufficient proceeds for the company to repay its $124 million term loan at maturity on Aug. 15, 2008. However, to date the company has not announced a successful conclusion to the sale process, causing Moody's to consider that a near term payment default is increasingly likely. Moreover, even if Haights Cross succeeds in announcing a sale of assets prior to the August maturity date, Moody's questions whether the company will realize an amount of net proceeds to provide the company with sufficient liquidity to repay the maturing debt in full. The change in rating outlook to negative reflects the company's illiquid credit profile and increasingly limited prospects to continue as a going concern without a wholesale restructuring of its balance sheet, even if it receives lender consent to an extension of the scheduled maturity of its term loan prior to maturity. The Caa3 Corporate Family rating reflects Haights Cross' continuing high leverage, weak liquidity, soft market conditions and the possible negative impact on Haights Cross' test prep business if the "No Child Left Behind" Act is significantly modified or repealed. Ratings are supported by dependability of Haights Cross' library/recorded books sales, the diversification provided by its test-prep and medical education divisions, the company's highly diversified customer base, and the long standing reputation of its educational, professional and library products. Headquartered in White Plains, New York, Haights Cross develops and publishes print and audio products for the K-12 education, library and medical education markets. The company recorded approximately $231 million in revenue for the twelve month period ended March 30, 2008. HERBST GAMING: Payment Failures Cue Moody's Ca/LD Rating -------------------------------------------------------- Moody's Investors Service revised the probability of default rating for Herbst Gaming, Inc. to Ca/LD from Ca. All other ratings have been affirmed and the rating outlook remains negative. The downgrade of the PDR to Ca/LD for Herbst follows the company's failure to make the May 15, 2008 interest payment on its 7% senior subordinated notes and the expiration of the 30-day grace period. We note that Herbst also missed the June 1, 2008 interest payment under its 8.125% subordinated notes and Moody's believes that there is a high likelihood that the company will be unable to make the required payment within the 30-day grace period allowed under those notes. As a result of events of defaults under the company's bank credit agreement, Herbst received payment blockage notices from the Administrative Agent that no payments were to be made with respect to the subordinated notes pursuant to the subordination provisions of the indentures. The lenders under the senior secured credit facilities have agreed to forbear from exercising certain rights and remedies under those facilities through Sept. 30, 2008. The negative outlook recognizes that while Herbst is actively working towards financial and strategic alternatives designed to address the deterioration in its operating results and capital structure, there is no assurance that it will successfully achieve any such alternative in the near term. These rating has been revised: -- Probability of default rating to Ca/LD from Ca These ratings have been affirmed: -- Corporate family rating at Ca -- $100 million senior secured revolving credit facility at Caa3 (LGD 3, 34%) -- $325 million senior secured term loan at Caa3 (LGD 3, 34%) -- $375 million senior secured term loan B at Caa3 (LGD 3, 34%) -- $60 million senior secured term loan rated Caa3 (LGD 3, 34%) -- $160 million 8.125% senior subordinated notes due 2012 rated C (LGD 5, 89%) -- $170 million 7.0% senior subordinated notes due 2014 rated C (LGD 5, 89%) Herbst Gaming, Inc. is an established slot route operator in Nevada with over 7,400 slot machines and currently owns and operates casinos in Nevada, Missouri and Iowa. HUKILL OIL: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Hukill Oil Company, Inc. dba Mr. Lubie P.O. Box 466 Seymour, IN 47274 Bankruptcy Case No. 08-91573 Description: Marlin E. Hukill, president, filed the petition on the Debtor's behalf. Chapter 11 Petition Date: June 18, 2008 Court: Southern District of Indiana (New Albany) Judge: Basil H. Lorch, III Debtor's Counsel: Edward R Cardoza (ecardoza@rubin-levin.net) John C. Hoard, Esq. (johnh@rubin-levin.net) Vincent A Gorski, Esq. (vgorski@rubin-levin.net) Rubin & Levin, P.C. 342 Massachusetts Ave., Ste 500 Indianapolis, IN 46204 Tel: (317) 860-2931 (317) 634-0300 Fax: (317) 263-9411 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 million to $10 million A copy of the Debtor's chapter 11 petition with a list of unsecured creditors is available for free at: http://bankrupt.com/misc/insb08-91573.pdf HUNTSMAN CORP: Sues Apollo in Relation to Terminated Basell Merger ------------------------------------------------------------------ Huntsman Corporation filed a suit against Apollo Management L.P. and partners Leon Black and Joshua Harris in Conroe, Texas, for fraud and tortuous interference in connection with inducing Huntsman to terminate its merger agreement with Basell AF, a Dutch manufacturer, to enter into a merger agreement with Apollo affiliate Hexion Specialty Chemicals instead. As reported in the Troubled Company Reporter on June 20, 2008, Hexion Specialty and related entities filed a suit in the Delaware Court of Chancery to declare its contractual rights with respect to a $10.6 billion merger agreement with Huntsman. As reported in the Troubled Company Reporter on July 13, 2007, the agreement includes assumption of debt. In the petition filed, Huntsman seeks a jury trial to determine the defendants' liability to Huntsman for actual damages exceeding $3 billion, plus exemplary damages. "It is now clear that, to get Huntsman to terminate its contract with Basell, Apollo falsely represented to Huntsman its commitment to closing a merger with Hexion at $28 per share, when it really intended all along to then delay the process and create enough problems with the transaction to bring us back to the table at a lower price," Messrs. Black and Harris, Peter Huntsman, president and CEO, stated. "We intend to pursue every available legal action required to hold Apollo, Black and Harris responsible for their ruinous actions." "I am outraged that Apollo's founders, [Mr.] Black and [Mr.] Harris, while personally and repeatedly assuring our board of directors, our senior officers, our financial advisors and me of their earnestness, instead pursued a strategy designed to cause us to terminate with Basell to accept promises they never intended to keep - all calculated to contrive a nonexistent 'purchase option' we specifically refused to grant Hexion during our negotiations, awaiting the day when they would try to force us to concede a price reduction," Jon M. Huntsman, founder and chairman of Huntsman Corporation, added. "We will do everything in our power to hold Apollo and its founders accountable for the multi-billion dollar harm their actions have caused our company." Huntsman also intends to vigorously contest the false and misleading allegations made in the Delaware suit filed by Apollo and Hexion last week. "While the impression created by Apollo's recent statements about Huntsman's financial performance and strength almost seems designed to inflict damage to our company and its relationships with its employees, suppliers and customers, in fact Huntsman is a strong and profitable company, with ample financial resources to continue operating our business." Mr. Huntsman stated. "We expect that our Adjusted EBITDA in the second quarter of 2008 will be in line with that achieved in the first quarter, reflecting the actions we are taking to increase our pricing to offset higher raw material and record high energy costs," he added. "Our results in May were stronger than those achieved in April and we expect this trend to continue." About Hexion Specialty Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://www.hexionchem.com/-- is a producer of thermosetting resins, or thermosets. Thermosets are a critical ingredient in virtually all paints, coatings, glues and other adhesives produced for consumer or industrial uses. Hexion Specialty Chemicals is controlled by an affiliate of Apollo Management L.P. About Huntsman Corporation Headquartered in Salt Lake City, Utah, Huntsman Corporation (NYSE:HUN) -- http://www.huntsman.com/-- is a manufacturer of differentiated chemical products and inorganic chemical products. The company operates in four segments: Polyurethanes, Materials and Effects, Performance Products and Pigments. Its products are used in a range of applications, including those in the adhesives, aerospace, automotive, construction products, durable and non- durable consumer products, electronics, medical, packaging, paints and coatings, power generation, refining, synthetic fiber, textile chemicals and dye industries. * * * Moody's Investor Service placed Huntsman Corporation's corporate family rating at Ba3 in June 2007. The rating still holds to date. HUNTSMAN CORP: Moody's Reviews Ba3 CF Rating for Possible Cut ------------------------------------------------------------- Moody's Investors Service reiterated that the debt ratings and the corporate family ratings (CFR -- Ba3) for Huntsman Corporation and Huntsman International LLC, a subsidiary of Huntsman remain under review for possible downgrade. This follows the announcement by Hexion Specialty Chemicals and Apollo in which Hexion/Apollo claim they would not be required to consummate the previously announced merger agreement between the two companies. Moody's ongoing review for possible downgrade will also focus on a number of new factors including; 1) the length of time the litigation may take, and 2) the potential cash inflows from settlements, if any, of the litigation and the use of those proceeds to bolster the capital structure. Moody's believes that the magnitudes of any such inflows are subject to great variability due to the presence of the initial lawsuit. However the possible settlements might be in the range of at least $325 million (a termination fee in the original merger agreement) or even more if Huntsman can successfully establish with the court that damages have been incurred. Moody's will also begin a reassessment of Huntsman's credit profile on a stand alone basis in light of current market conditions and management's future plans to improve pricing, cash flows and the company's credit measures. Moody's notes that many issuers in the chemical industry, including Huntsman, have seen sustained increases in costs for energy, commodity and intermediate feedstocks, and transportation. In specific response to these pressures Huntsman has initiated plans to raise prices for all products, some by as much as 25%, and also impose an energy surcharges across a wide range of products. Moody's reassessment will also focus on the success of these price increases and energy surcharges which will vary by product, in accordance with costs attributed to each product. Huntsman Corporation is a global manufacturer of differentiated and commodity chemical products. Huntsman's products are used in a wide range of applications, including those in the adhesives, aerospace, automotive, construction products, durable and non- durable consumer products, electronics, medical, packaging, paints and coatings, power generation, refining and synthetic fiber industries. Huntsman had revenues of $9.9 billion for the last twelve months ending March 31, 2008. IAP WORLDWIDE: S&P Lifts Ratings on Completed Debt Restructuring ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on IAP Worldwide Services Inc., including raising the corporate credit rating to 'CCC+' from 'CC', and removed all ratings from CreditWatch with negative implications. Ratings were originally placed on CreditWatch on Aug. 10, 2007, and subsequently lowered and maintained on CreditWatch on Jan. 8, 2008. At the same time, S&P have revised the recovery rating on IAP's first-lien facilities to '3', indicating expectations of meaningful recovery (50%-70%) in the event of a payment default, from '2'. As a result, the company's first-lien facilities are rated in line with the corporate credit rating at 'CCC+'. The outlook is developing. "The upgrade reflects the company's successful completion of a debt restructuring, which mitigates the risk of a default in the near term," said Standard & Poor's credit analyst Dan Picciotto. The resolution included an equity contribution by owner Cerberus Capital L.P. that was used to pay down debt. The company will benefit from lower cash interest obligations. However, IAP remains highly leveraged and weakness in operating performance could pressure covenants or affect its ability to meet financial obligations. The ratings on IAP reflect the company's highly leveraged financial risk profile and vulnerable business risk profile, marked by revenue concentration from large contracts and the less- predictable nature of contingency operations, which significantly contribute to revenue and profit. These weaknesses are partially mitigated by the company's good rebid record on contracts and the low fixed-capital intensiveness of operations. IAP is a provider of contingency operations, facilities management, and technical services to the U.S. military and civilian government agencies. The company's largest operating segment is global operations and logistics, which provides about 60% of revenues. This segment includes power generation, emergency disaster relief, transport operations, and other services in the U.S. and overseas. The facilities management segment, meanwhile, contributes roughly one-quarter of the company's revenues. Through this segment, the company maintains domestic and overseas U.S. military bases. The professional and technical services segment provides temporary staff support services to the federal civilian agencies and accounts for the remainder of the company's revenue base. If operating performance stabilizes and the company demonstrates it can maintain adequate liquidity, S&P could raise the ratings. S&P could lower the ratings if the company breaches a financial covenant or if its operating performance and financial leverage fail to improve. IMPAC MORTGAGE: Unit's CEO and President Execute Employment Pacts ----------------------------------------------------------------- Joseph R. Tomkinson, Chief Executive Officer, and William S. Ashmore, President, executed new employment agreements with Impac Funding Corporation, a wholly owned subsidiary of Impac Mortgage Holdings, Inc. The agreements are effective as of April 1, 2008, and have a term from Jan. 1, 2008 through Dec. 31, 2009, unless terminated earlier, and automatically renew for an additional two years unless the Company provides notice of non-renewal between July 15 and Aug. 15, 2009. Base Salary, Discretionary Bonus and Other Compensation Mr. Tomkinson's and Mr. Ashmore's base salary is $600,000 and $500,000 per year, respectively, with no automatic adjustments, and each officer is eligible to receive cash or stock bonuses in the sole discretion of the Board of Directors. Messrs. Tomkinson and Ashmore are also eligible to receive paid vacation, an annual car allowance of $12,000, and participate in health and other benefit plans and will be reimbursed for reasonable and necessary business and entertainment expenses. Each officer is prohibited, without approval from the Board of Directors, from receiving compensation, directly or indirectly, from any companies with whom the Company or any of its affiliates has any financial, business, or affiliated relationship. Severance Compensation If Mr. Tomkinson's or Mr. Ashmore's employment is terminated for any reason, other than without cause or good reason, each will be entitled to receive his base salary prorated through the termination date, any expense reimbursement due and owing for reasonable and necessary business and entertainment expenses, and accrued vacation benefits. If termination is due to death or the executive officer is declared legally incompetent, then such officer will also receive six additional months of his base salary. If either officer is terminated without cause or resigns with good reason, he will also receive 18 months of his base salary, along with health benefits, to be paid out over an 18 month period. Termination with cause includes conviction of a crime of dishonesty or a felony with certain penalties, substantial failure to perform duties after notice, willful misconduct or gross negligence, or material breach of the employment agreement. Good reason includes material changes to employee's duties, relocation, without his prior written consent, of the place of principal performance of such executive's responsibilities and duties to a location more than 65 miles away, the company's material breach of the employment agreement and failure by the company to obtain from any acquirer of the company an agreement to assume the employment agreement. Each executive officer has agreed not to compete with the company during the 18 months that severance payments are made, provided that the agreement not to compete will be waived if the executive officer foregoes the severance compensation. Change of Control The employment agreements will not be terminated by merger, an acquisition by another entity, or by transferring of all or substantially all of the company's assets. In the event of any such change of control, the surviving entity or transferee would be bound by the employment agreements. A full-text copy of the Executive Employment Agreement between Impac Funding Corp. and Mr. Tomkinson is available for free at: http://ResearchArchives.com/t/s?2e82 A full-text copy of the Executive Employment Agreement between Impac Funding Corp. and Mr. Ashmore is available for free at: http://ResearchArchives.com/t/s?2e83 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. INDEVUS PHARMA: CEO Defers Retirement Due to NEBIDO Approval Delay ------------------------------------------------------------------ Glenn L. Cooper, MD, Indevus Pharmaceuticals, Inc.'s chairman and chief executive officer is postponing his retirement to lead the company through the challenges it faces as a result of the recent delay in the approval of NEBIDO(R). "While it was my intention to retire in September following the FDA approval of NEBIDO, it now appears the company will have to readjust to the recent news," Dr. Cooper stated. "I feel a profound responsibility to all our stakeholders to improve the prospects of the company as rapidly as possible and it is not an optimal time to bring a new CEO on board. I will be working closely with the Board of Directors and management as we move quickly toward a revised operating plan. Fortunately, our key products, SANCTURA XR(TM), VANTAS(R) and SUPPRELIN(R) LA are performing extremely well in the marketplace and we are awaiting FDA approval for VALSTAR(TM), another important urology product which our field force is preparing to launch. We intend to further increase our focus on growing these brands." The Indevus Board believes that Dr. Cooper is best positioned to deal with the current situation and is grateful that Dr. Cooper has agreed to lead this effort. His retirement agreement has been amended to provide for a new retirement date to be determined by mutual agreement between Dr. Cooper and the Board. The search for a new CEO has been placed on hold and will be reactivated at the appropriate time. Given the delay of NEBIDO, the company has begun a thorough review of its operating expenses and its R&D programs with the objective of rapidly aligning its cost structure to its revenue projections and R & D opportunities. When the Board has approved a revised operating plan, the company will update its guidance for revenues and expenses. Other key Company priorities include non-dilutive finance options which include product out-license transactions and the monetization of its SANCTURA(R) and SANCTURA XR royalty streams and the retirement or restructuring of the company's convertible debt which matures in July 2009. As part of the realignment, the company also disclosed that Thomas F. Farb, its president and chief operating officer and Kurt Lewis, its senior vice president, sales and marketing are leaving the company to pursue other opportunities. Mr. Lewis' position has been filled by Nancy Bryan, vice president, global marketing, who becomes senior vice president, sales and marketing. Before joining Indevus, Ms. Bryan was senior vice president, head of commercial at Elan for the autoimmune franchise, vice president of marketing for men's health at Bayer Pharmaceuticals and held various positions at Merck and Glaxo Wellcome. "I would like to thank Tom Farb and Kurt Lewis for their service to the company," Dr. Cooper added. "Tom was instrumental in our acquisition of Valera Pharmaceuticals and has provided excellent leadership as president. He played a key role in preparing the Company for the launch of NEBIDO which is now delayed and will assist us with the development of a revised operating plan during the next month. Kurt has led the successful launch of SUPPRELIN LA, increased market share for VANTAS, and has been instrumental in the pre-launch planning for VALSTAR and NEBIDO. We wish Tom and Kurt all the best in their new endeavors." About Indevus Pharmaceuticals Based in Lexington, Massachusetts, Indevus Pharmaceuticals Inc. (Nasdaq: IDEV) -- http://www.indevus.com/-- is a specialty pharmaceutical company engaged in the acquisition, development and commercialization of products to treat conditions in urology and endocrinology. At March 31, 2008, the company's consolidated balance sheet showed $180.1 million in total assets and $281.4 million in total liabilities, resulting in a $101.3 million total stockholders' deficit. INNOPHOS HOLDINGS: Earns $9.3 Million in 2008 First Quarter ----------------------------------------------------------- Innophos Holdings Inc. reported net income of $9.3 million for the first quarter ended March 31, 2008, compared to a net loss of $2.1 million for the same period in 2007. Net sales for the first quarter 2008 were $162.5 million, an increase of $25.8 million, or 18.9%, as compared to $136.7 million for the same period in 2007. Operating income for the first quarter 2008 was $23.4 million, an increase of $13.4 million, or 134%, compared to $10.0 million for the comparable period in 2007. The first quarter of 2008 did not reflect approximately $3.6 million of gross profit from a GTSP (fertilizer co-product) export shipment delayed from March into April due to a customer's ocean shipping logistics issues and included $2.1 million in legal fees to comply with a STPP document request subpoena from the U.S. Department of Justice. The first quarter 2007 was negatively affected by a $1.4 million charge for Mexican workforce reorganization costs. Depreciation and amortization for the first quarter of 2008, excluding deferred financing amortization expense, was $12.5 million, an increase of $900,000 compared to $11.6 million for the first quarter of 2007. Net interest expense for the first quarter 2008, including deferred financing amortization expense, was $8.6 million, a decrease of $1.3 million, compared to $9.9 million for the comparable period in 2007. Tax expense for the first quarter 2008 was $5.3 million, an increase of $3.1 million compared to $2.2 million for the comparable period in 2007. As of March 31, 2008, Innophos had $11.7 million of cash and cash equivalents. Net debt at the end of the first quarter 2008 was $386.3 million, an increase of $17.5 million from $368.8 million at Dec. 31, 2007. This increase was due to a $14.0 million borrowing on the company's revolving debt needed to fund a $32.1 million increase in working capital. Capital expenditures for the first quarter 2008 were $4.1 million versus $4.6 million in the same quarter of 2007. Randy Gress, chief executive officer of Innophos said, "We are extremely pleased that our operating and net income, at $23.4 million and $9.3 million respectively, were the best results that we have had in our history as a public company. In order to achieve these results we have continued to focus on providing excellent customer service, assuring product supply, and improving efficiency and the strength of our supply chain. We are also anticipating and rapidly responding to the dynamic rate of change in our markets and successfully increasing prices." 2008 Market Outlook The company disclosed that market prices of phosphate rock and sulfur, two primary raw materials used in the production of specialty phosphates, have increased substantially over the last several quarters. If current raw material market price levels for phosphate rock and sulfur are sustained throughout 2008 into early 2009, the company currently estimates that annual raw material costs will increase by an amount equivalent to approximately 50- 60% of 2007 annual sales by the second quarter 2009, as compared to the Innophos cost structure at the end of 2007. Approximately half of this cost increase is expected to occur during 2008, the balance is expected to occur in the first quarter of 2009. Historically, Innophos has successfully recovered raw material, energy, and other cost increases through price increases. During the fourth quarter of 2007, the company implemented price increases in all its product lines, most of which became effective Jan. 1, 2008. Innophos also implemented price increases in February and April 2008. The company has also recently announced additional price increases to be implemented through June 2008. These price increases are for the most part expected to be realized by July 2008 and are expected to allow Innophos to meet or exceed the near term increases in raw material costs. During 2008 management therefore expects price increases will be achieved ahead of realized cost increases by a material amount. Randy Gress commented, "We benefit from a flexible production infrastructure that allows us to adjust to customer demand shifts in the current environment. Innophos' infrastructure and staff are equipped to respond to these conditions. Nonetheless, our overall mission remains the same: to deliver quality products and lead in specialty phosphate production and customer service. Through price actions and operating improvements, we expect to again expand operating profit and margins in 2008, in addition to what we accomplished in 2007." Balance Sheet At March 31, 2008, the company's consolidated balance sheet showed $553.5 million in total assets, $502.6 million in total liabilities, and $50.9 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?2e87 About Innophos Holdings Headquartered in Cranbury, N.J., Innophos Holdings Inc. (Nasdaq: IPHS) -- http://www.innophos.com/-- the holding company for a leading North American manufacturer of specialty phosphates, serves a diverse range of customers across multiple applications, geographies and channels. Innophos offers a broad suite of products used in a wide variety of food and beverage, consumer products, pharmaceutical and industrial applications. Innophos has manufacturing operations in Nashville, Tenn.; Chicago Heights, Ill.; Chicago (Waterway), Ill.; Geismar, Los Angeles; Port Maitland, Ontario (Canada); and Coatzacoalcos, Veracruz and Mission Hills, Guanajuato (Mexico). * * * As reported by the Troubled Company Reporter on April 17, 2007, Standard & Poor's Ratings Services assigned its 'CCC+' rating to $66 million of senior unsecured notes due 2012 to be issued by Innophos Holdings, parent company of Innophos Inc. The rating still holds to date. S&P also affirmed the 'B' corporate credit rating and other ratings on Innophos Inc. The TCR reported on April 18, 2008 that Moody's Investors Service assigned a B1 corporate family rating to Innophos Holdings Inc. and a B3 rating to the company's new $66 million senior unsecured notes due 2012. The ratings still hold to date. The new notes are being issued by Innophos Holdings to refinance $61 million of debt of its subsidiary, Innophos Investments Holdings Inc. INSMED INC: To Appeal Nasdaq's Decision to Delist Securities ------------------------------------------------------------ Insmed Inc. intends to request a hearing before The NASDAQ Listing Qualifications Panel to appeal an earlier Staff Determination to delist the company's common stock from The NASDAQ Capital Market. Insmed received a letter from The NASDAQ Stock Market on June 17, 2008, indicating that the company had not regained compliance with NASDAQ's minimum bid price requirement of $1.00 per share for continued listing of Insmed's common stock on The NASDAQ Capital Market as set forth in Marketplace Rule 4310(c)(4). As a result, the company's common stock would be subject to delisting unless Insmed requests a hearing before the Panel. Following procedures set forth in The NASDAQ Marketplace Rule 4800 series; the company intends to request a hearing before the Panel to review the Staff Determination. The hearing request will stay the delisting of Insmed's common stock, pending the decision of the Panel after the hearing, allowing the company's common stock to continue to trade on The NASDAQ Capital Market. There can be no assurance, however, that the Panel will grant Insmed's request for continued listing of its common stock on The NASDAQ Capital Market. In the event that the Panel determines not to grant the company's request for continued listing of its common stock on The NASDAQ Capital Market, Insmed's common stock may become eligible for quotation and trading on the OTC Bulletin Board. About Insmed Based in Richmond, Viginia, Insmed Incorporated, (NasdaqCM: INSM) -- http://www.insmed.com -- is a biopharmaceutical company that develops and commercializes drugs to treat metabolic diseases, endocrine disorders, and oncology. Its lead product candidate IPLEX, a recombinant protein product candidate, is in Phase II clinical trials for the treatment of myotonic muscular dystrophy, the common form of adult-onset muscular dystrophy. The company has license and collaborative agreements with Fujisawa Pharmaceutical Co. Ltd. to use IGF-I therapy for the treatment of extreme or severe insulin resistant diabetes; and a license to Pharmacia AB's portfolio of regulatory filings pertaining to rhIGF. Insmed was founded in 1999. Going Concern Doubt As reported in the Troubled Company Reporter on March 28, 2008, Richmond, Virginia-based Ernst & Young LLP raised substantial doubt about the ability of Insmed Incorporated to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed to the company's recurring operating losses and negative cash flows from operations. The company said that its ability to continue as a going concern is dependent upon its ability to take advantage of raising capital through securities offerings, debt financing, and partnerships and use these sources of capital to fund operations. Management is focusing on raising capital through any one or more of these options. INVERNESS MEDICAL: Moody's Confirms B2 Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service confirmed the B2 Corporate Family Rating of Inverness Medical Innovations, Inc. and other instrument ratings. The ratings had been under review since the January announcement of the acquisition of Matria Healthcare, Inc. The transaction was completed in May 2008 for about $1.2 billion, with about $430 million in the form of cash (including assumed Matria debt, which was subsequently repaid) and about $720 million in the form of convertible preferred stock. Matria's principal segments were disease and condition management, maternity management and wellness. The B2 Corporate Family Rating primarily reflects Inverness Medical's acquisitive growth strategy, ongoing integration risk associated with material acquisitions and technological risk inherent in the highly competitive medical diagnostics industry. Although, on an estimated pro forma basis, credit metrics could be in line with a higher rating, leverage remains relatively high in the context of the company's growth strategy and a recent string of transformative acquisitions. In addition, multiple acquisitions and associated capital structure changes in a short period of time give rise to reported financials which do not represent the company's ongoing profitability, leverage or interest coverage. Although the company has published unaudited pro forma adjustments to its income statement and balance sheet, the lack of complete financials and associated historical perspective with respect to a significant portion of the assets of the company constrains the ratings. Although clearly diversifying, Inverness Medical's health management business segment formed in January 2008 consists primarily of recently acquired assets and this presents additional risks associated with the lack of track record of the assets being operated as a single business. The ratings benefit from Inverness Medical's strong competitive position within the diagnostic tools market as well as solid cash flow generation supported by a track record of technological innovation. Although questions remain as to the extent of possible synergies with the diagnostics business, the Matria acquisition adds a leading health solutions provider with a broad offering of health and wellness programs and a diverse customer base which includes private and government sponsored health plans, and pharmaceutical companies. The effect of the formation of the proposed health management joint venture under the terms currently considered would depend on how the proceeds from the transaction are eventually used. The immediate effect of raising $1.2 billion in cash would be a boost to liquidity. These ratings were confirmed: -- B2 Corporate Family Rating; -- B2 Probability of Default Rating; -- B1 (LGD3, 34%) rating on a $150 million Senior Secured Revolver due 2013; -- B1 (LGD3, 34%) rating on a $900 million Senior Secured Term Loan due 2014; and -- Caa1 (LGD5, 81%) rating on a $250 million Second Lien Term Loan due 2015. The outlook for the ratings is stable. Inverness Medical Innovations, headquartered in Waltham, Massachusetts, operates in health management, professional and consumer diagnostics, as well as vitamins and nutritional supplements. The health management business includes disease management, maternity management, and wellness. Through its professional and consumer diagnostics businesses, Inverness Medical develops, manufactures and markets advanced consumer and professional medical diagnostic products. Diagnostic products focus on infectious disease, cardiology, oncology, drugs of abuse and women's health. Pro forma for recent acquisitions, revenues for the twelve months ended March 31, 2008 were about $1.5 billion. LEAP WIRELESS: Moody's Gives Caa1 Rating to $200MM Notes -------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Cricket Communications Inc.'s $200 million notes, due 2015, and a Caa1 rating to its parent, Leap Wireless International, Inc.'s $200 million convertible notes, due 2014. The proceeds of the notes' issuance will be used to accelerate the buildout and launch of the markets acquired in the 2006 spectrum auctions. In conjunction with the issuance of the convertible notes at Leap, Moody's assigned a B2 corporate family rating to Leap and withdrew the CFR from Cricket. In addition, Moody's assigned a stable outlook to Leap's and its subsidiaries' ratings. The effective change in the outlook reflects the passage of time from the September 2007 merger proposal from MetroPCS Communications Inc. to Leap and the rating agency's belief that a potential transaction will take a longer time to play out, leading it to rate the two companies on their own merits. Moody's also affirmed the company's other ratings, including Ba2 rating on the senior secured facilities, the B3 rating on the existing senior unsecured notes and SGL1 liquidity rating. Ratings Assigned: -- Corporate Family Rating for Leap Wireless International Inc. - B2; -- Probability of Default Rating for Leap Wireless International Inc. - B2; -- Leap Wireless International Inc.'s $200 million Convertible Senior Notes due 2014 -Caa1, LGD 6, 95%; -- Cricket Communications Inc.'s $200 million Senior Unsecured Notes due 2015 - B3, LGD4, 69%; -- Speculative Grade Liquidity rating of SGL - 1. Ratings Withdrawn: -- Corporate Family Rating for Cricket Communications Inc. - B2; -- Probability of Default Rating for Cricket Communications Inc. - B2; Rating Affirmed: -- Cricket Communications Inc.'s $200 million Senior Secured Revolving Credit Facility due 2011 - Ba2, LGD2, 16%; -- Cricket Communications Inc.'s $900 million 1st Lien Senior Secured Tern Loan due 2013 - Ba2, LGD2, 16%; -- Cricket Communications Inc.'s $1.1 billion Senior Notes due 2014 - B3, LGD4, 69%. Outlook revised to Stable. The B2 corporate family rating considers Moody's expectations that Leap's rapid growth plans will consume a significant amount of cash over the next few years as it seeks to build-out wireless networks and launch service in several additional markets, reaching up to 90 million potential subscribers by the end of 2009. The company's differentiated service offering, which offers unlimited calling and data plans for a flat fee and requires no signed contract has exceeded Moody's expectations over the past several quarters. The ratings and the outlook also consider Moody's views that Leap faces significant execution risks in building out new markets amid intensifying industry competition, as the national wireless penetration rate rises above 85%. Moody's still believes that the combination of Leap and PCS, should it occur, would likely have positive implications for the company's combined operating prospects and potentially produce meaningful synergies. If the two companies reach a merger agreement, Moody's is likely to revisit the rating outlook at that time. Leap Wireless International, Inc. wholly-owns Cricket Communications Inc., which is a wireless service provider. Both companies are headquartered in San Diego, California. LEAP WIRELESS: Unsecured Credit Limit Raised to $1.65BB ------------------------------------------------------- Leap Wireless International Inc. and its subsidiary, Cricket Communications Inc., have amended the company's senior secured credit agreement. The credit agreement has been amended to resize and amend certain baskets and exclusions to reflect the growth in the company's business and ongoing business expansion activities. The amendment permits the company to incur additional unsecured debt, to issue certain preferred stock, and to make certain other modifications. "We believe that the successful amendment of our credit agreement provides the company with the additional financial flexibility we need to support future business growth," Doug Hutcheson, Leap's president and CEO, said. "We appreciate the support of the company's senior secured lenders to help us achieve our strategic initiatives and improve the strength and the financial position of our company." Key terms of the amendment include: * an increase in the amount of unsecured debt the company is allowed to incur from $1.2 billion to $1.65 billion plus $1.00 for every $1.00 of cash proceeds from the issuance of new common equity of the company, up to $200 million in the aggregate; * an increase in the amount and duration of certain add-backs for new market operating losses in the calculation of the company's consolidated EBITDA and consolidated fixed charge coverage ratio; * an amendment to permit the company to add back certain capital expenditures relating to network expansion activities in calculating its consolidated fixed charge coverage ratio; and * other amendments to facilitate the company's business expansion and financing activities. In addition, the amendment: -- increases the interest rates applicable to the term loans and revolving credit facility by 50 basis points; -- sets a floor for the London Interbank Offered Rate of 3.00% per annum; -- revises the aggregate amount of any new incremental facilities under the Credit Agreement to $400 million; -- reduces the permissible delta between existing loans and incremental loans from 50 bps to zero; and -- requires Cricket to pay a prepayment penalty if the term loans are prepaid within two years of the amendment, in an amount of 2.0% on the principal amount prepaid during the first year, and 1.0% on the principal amount prepaid during the second year. About Leap Wireless International Inc. Based in San Diego, California, Leap Wireless International Inc. (NASDAQ:LEAP) -- http://www.leapwireless.com/-- is a wireless communications carrier that offers digital wireless service in the United States under the Cricket brand. The Cricket services are offered by Cricket, a wholly owned subsidiary of Leap, and is also offered in Oregon by LCW Wireless Operations LLC. Cricket owns an indirect 73.3% non-controlling interest in LCW Operations through a 73.3% non-controlling interest in LCW Wireless LLC. Cricket also owns an 82.5% non-controlling interest in Denali Spectrum LLC. At Dec. 31, 2007, Cricket service was offered in 23 states and had approximately 2.9 million customers. LEAP WIRELESS: Prices $220MM Offering of Convertible Senior Notes ----------------------------------------------------------------- Leap Wireless International Inc. priced its offering of $220 million in aggregate principal amount of its convertible senior notes due 2014 to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. Leap granted the initial purchasers of the notes an option to purchase up to an additional $30 million in aggregate principal amount of the notes to cover overallotments. The closing of the sale of the notes, which is subject to customary conditions, is expected to occur on June 25, 2008. The notes will be Leap's unsecured and unsubordinated obligations, will pay interest semiannually at a rate of 4.50% per annum, and will be convertible into shares of Leap's common stock. Upon conversion, holders of the notes will receive a number of shares of common stock equal to the base conversion rate plus, if the applicable stock price exceeds the base conversion price, additional shares of Leap common stock will be issued based on a formula described in the offering memorandum. The initial base conversion price of the notes is approximately $93.21, based on the initial base conversion rate of 10.7290 shares of common stock per $1,000 principal amount of notes. The base conversion price represents a premium of 77.5% to the closing price of Leap's common stock on June 19, 2008, of $52.51 per share. Leap will not have the right to redeem the notes prior to maturity. Holders of the notes will have the right to require Leap to repurchase for cash all or some of their notes upon the occurrence of certain fundamental change transactions. Net proceeds from the offering will be used for working capital and other general corporate purposes, including the build-out of new markets, the expansion of Leap's footprint in its existing markets and the development of its broadband initiative. About Leap Wireless International Inc. Based in San Diego, California, Leap Wireless International Inc. (NASDAQ:LEAP) -- http://www.leapwireless.com/-- is a wireless communications carrier that offers digital wireless service in the United States under the Cricket brand. The Cricket services are offered by Cricket, a wholly owned subsidiary of Leap, and is also offered in Oregon by LCW Wireless Operations LLC. Cricket owns an indirect 73.3% non-controlling interest in LCW Operations through a 73.3% non-controlling interest in LCW Wireless LLC. Cricket also owns an 82.5% non-controlling interest in Denali Spectrum LLC. At Dec. 31, 2007, Cricket service was offered in 23 states and had approximately 2.9 million customers. LEHMAN XS: Moody's Cuts Ratings of 181 Tranches, Reviews 58 ----------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 181 tranches from 20 Option ARM transactions issued by Lehman XS Trust. Fifty eight tranches remain on review for possible further downgrade. The collateral backing these transactions consists primarily of first-lien, adjustable-rate, negatively amortizing Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described are a result of Moody's on-going review process. Complete rating actions are: Issuer: Lehman XS Trust Series 2005-5N -- Cl. M2, Downgraded to A1 from Aa2 -- Cl. M3, Downgraded to Ba2 from A2 -- Cl. M4, Downgraded to Caa3 from Baa3 Issuer: Lehman XS Trust Series 2005-7N -- Cl. M1-I, Downgraded to Aa2 from Aa1 -- Cl. M2-I, Downgraded to A1 from Aa2 -- Cl. M3-I, Downgraded to A2 from Aa3 -- Cl. M4-I, Downgraded to Baa2 from A2 -- Cl. M5-I, Downgraded to Ba2 from A3 -- Cl. M6-I, Downgraded to B2 from Baa1 -- Cl. M7-I, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M1-II, Downgraded to A3 from Aa1 -- Cl. M2-II, Downgraded to Baa2 from Aa2 -- Cl. M3-II, Downgraded to B3 from A2 -- Cl. M4-II, Downgraded to Caa2 from Baa2 -- Cl. M5-II, Downgraded to Ca from Ba1 -- Cl. M6-II, Downgraded to Ca from Ba3 Issuer: Lehman XS Trust Series 2005-9N -- Cl. M1, Downgraded to Aa2 from Aa1 -- Cl. M2, Downgraded to A2 from Aa2 -- Cl. M3, Downgraded to Baa1 from Aa3 -- Cl. M4, Downgraded to Ba1 from A2 -- Cl. M5, Downgraded to B2 from A3 -- Cl. M6, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade Issuer: Lehman XS Trust Series 2006-10N -- Cl. 1-M2, Downgraded to A2 from Aa2 -- Cl. 1-M3, Downgraded to Baa1 from Aa3 -- Cl. 1-M4, Downgraded to Baa3 from A1 -- Cl. 1-M5, Downgraded to Ba3 from A2 -- Cl. 1-M6, Downgraded to B1 from A3; Placed Under Review for further Possible Downgrade -- Cl. 1-M7, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. 1-M8, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. 2-M4, Downgraded to Baa1 from A1 -- Cl. 2-M5, Downgraded to Ba3 from A2 -- Cl. 2-M6, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. 2-M7, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade Issuer: Lehman XS Trust Series 2006-12N -- Cl. M1, Downgraded to Aa2 from Aa1 -- Cl. M2, Downgraded to Baa1 from Aa1 -- Cl. M3, Downgraded to Baa3 from Aa1 -- Cl. M4, Downgraded to B2 from Aa2 -- Cl. M5, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to Ca from Baa3 Issuer: Lehman XS Trust Series 2006-16N -- Cl. M2, Downgraded to Aa2 from Aa1 -- Cl. M3, Downgraded to A2 from Aa2 -- Cl. M4, Downgraded to Baa3 from Aa3 -- Cl. M5, Downgraded to Ba3 from A1 -- Cl. M6, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M9, Downgraded to Ca from Baa2 Issuer: Lehman XS Trust Series 2006-18N -- Cl. M2, Downgraded to Aa2 from Aa1 -- Cl. M3, Downgraded to A1 from Aa1 -- Cl. M4, Downgraded to Baa2 from Aa2 -- Cl. M5, Downgraded to Ba1 from Aa3 -- Cl. M6, Downgraded to B1 from A1 -- Cl. M7, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. M9, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M10, Downgraded to Ca from Ba2 Issuer: Lehman XS Trust Series 2006-2N -- Cl. M4, Downgraded to A3 from A1 -- Cl. M5, Downgraded to Baa3 from A2 -- Cl. M6, Downgraded to B3 from Baa1 -- Cl. M7, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade Issuer: Lehman XS Trust Series 2006-4N -- Cl. M1, Downgraded to A3 from Aa1 -- Cl. M2, Downgraded to Ba1 from Aa1 -- Cl. M3, Downgraded to Ba3 from Aa2 -- Cl. M4, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to Ca from Baa3 Issuer: Lehman XS Trust Series 2006-GP1 -- Cl. M1, Downgraded to Baa2 from Aa1 -- Cl. M2, Downgraded to Ba3 from Aa1 -- Cl. M3, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M4, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to Caa1 from A2; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to Ca from Baa1 -- Cl. M8, Downgraded to Ca from Ba1 Issuer: Lehman XS Trust Series 2006-GP2 -- Cl. M1, Downgraded to Baa1 from Aa1 -- Cl. M2, Downgraded to Ba3 from Aa1 -- Cl. M3, Downgraded to B1 from Aa1 -- Cl. M4, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M9, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M10, Downgraded to Ca from Baa2 -- Cl. M11, Downgraded to Ca from Ba1 Issuer: Lehman XS Trust Series 2006-GP3 -- Cl. M1, Downgraded to Baa3 from Aa1 -- Cl. M2, Downgraded to Ba3 from Aa1 -- Cl. M3, Downgraded to B1 from Aa1 -- Cl. M4, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M9, Downgraded to Ca from Baa1 -- Cl. M10, Downgraded to Ca from Ba1 Issuer: Lehman XS Trust Series 2006-GP4 -- Cl. M1, Downgraded to A3 from Aaa -- Cl. M2, Downgraded to Ba3 from Aa1 -- Cl. M3, Downgraded to B1 from Aa1 -- Cl. M4, Downgraded to B2 from Aa1 -- Cl. M5, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M9, Downgraded to Caa1 from A2; Placed Under Review for further Possible Downgrade -- Cl. M10, Downgraded to Ca from Baa1 -- Cl. M11, Downgraded to Ca from Ba1 Issuer: Lehman XS Trust Series 2007-12N -- Cl. 1-M2, Downgraded to Aa2 from Aa1 -- Cl. 1-M3, Downgraded to Aa3 from Aa1 -- Cl. 1-M4, Downgraded to A2 from Aa2 -- Cl. 1-M5, Downgraded to A3 from Aa3 -- Cl. 1-M6, Downgraded to Baa3 from A1 -- Cl. 1-M7, Downgraded to Ba1 from A2 -- Cl. 1-M8, Downgraded to Ba3 from A3 -- Cl. 1-M9, Downgraded to B1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. 2-M1, Downgraded to Aa3 from Aa2 -- Cl. 2-M2, Downgraded to A3 from Aa3 -- Cl. 2-M3, Downgraded to Baa2 from A1 -- Cl. 2-M4, Downgraded to Baa3 from A2 -- Cl. 2-M5, Downgraded to Ba1 from A3 -- Cl. 2-M6, Downgraded to B1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. 2-M7, Downgraded to Caa1 from Ba1 -- Cl. 2-M8, Downgraded to Ca from B2 -- Cl. 3-M7, Downgraded to Baa2 from Baa1 -- Cl. 3-M8, Downgraded to Ba2 from Baa3 Issuer: Lehman XS Trust Series 2007-15N -- Cl. M7-I, Downgraded to Baa3 from Baa1 -- Cl. M8-I, Downgraded to Ba1 from Baa2 -- Cl. M9-I, Downgraded to B1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M2-II, Downgraded to Aa3 from Aa2 -- Cl. M3-II, Downgraded to A1 from Aa3 -- Cl. M4-II, Downgraded to A3 from A1 -- Cl. M5-II, Downgraded to Baa2 from A2 -- Cl. M6-II, Downgraded to Ba1 from A3 -- Cl. M7-II, Downgraded to Ba3 from Baa1 -- Cl. M8-II, Downgraded to B1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M9-II, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade Issuer: Lehman XS Trust Series 2007-2N -- Cl. M2, Downgraded to Aa2 from Aa1 -- Cl. M3, Downgraded to Aa2 from Aa1 -- Cl. M4, Downgraded to A2 from Aa2 -- Cl. M5, Downgraded to A3 from Aa3 -- Cl. M6, Downgraded to Baa3 from A1 -- Cl. M7, Downgraded to Ba3 from A2 -- Cl. M8, Downgraded to Ba3 from A3 -- Cl. M9, Downgraded to B1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M10, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M11, Downgraded to Ca from Ba1 Issuer: Lehman XS Trust Series 2007-4N -- Cl. M2, Downgraded to A1 from Aa1 -- Cl. M3, Downgraded to A2 from Aa1 -- Cl. M4, Downgraded to Baa3 from Aa2 -- Cl. M5, Downgraded to Ba3 from Aa3 -- Cl. M6, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M9, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M10, Downgraded to Ca from Ba1 -- Cl. M11, Downgraded to Ca from Ba2 Issuer: Lehman XS Trust Series 2007-7N -- Cl. M2, Downgraded to A1 from Aa2 -- Cl. M3, Downgraded to A2 from Aa3 -- Cl. M4, Downgraded to Baa1 from A3 -- Cl. M5, Downgraded to Baa3 from Baa1 -- Cl. M6, Downgraded to Ba2 from Baa2 -- Cl. M7, Downgraded to B1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to Ca from Ba2 -- Cl. M9, Downgraded to Ca from B3 Issuer: Lehman XS Trust, Mortgage Pass Through Certificates, Series 2006-14N -- Cl. M3-I, Downgraded to Aa3 from Aa1 -- Cl. M4-I, Downgraded to Baa3 from Aa3 -- Cl. M5-I, Downgraded to Ba3 from A1 -- Cl. M6-I, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade -- Cl. M7-I, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. M8-I, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M9-I, Downgraded to Ca from Baa3 -- Cl. M5-II, Downgraded to Baa3 from A3 -- Cl. M6-II, Downgraded to B1 from Baa2; Placed Under Review for further Possible Downgrade Issuer: Lehman XS Trust, Series 2007-16N -- Cl. M7-I, Downgraded to Baa3 from Baa2 -- Cl. M8-I, Downgraded to Ba2 from Baa3 -- Cl. M7-II, Downgraded to Baa3 from Baa2 -- Cl. M8-II, Downgraded to Ba2 from Baa3 LINENS N THINGS: Wants to Employ Citigroup Global as Banker ----------------------------------------------------------- Linens 'n Things and its debtor-affiliates ask permission from the United States Bankruptcy Court for the District of Delaware to employ Citigroup Global Markets, Inc., as investment banker pursuant to a letter agreement dated as of May 12, 2008. Under the Engagement Letter, Citigroup will perform certain financial and investment banking services, including advice on structure, negotiation strategy, valuation analyses, financial terms and other financial matters, relates Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware. Linens 'n Things, Inc., Linens 'n Things CanCiti I Co., and Linens 'n Things CanCiti II Co. engaged Citigroup as their investment banker in March 2008 in connection with certain transactions, by which portions of the securities, business or assets of Linens CanCiti are acquired by a U.S. public special purpose acquisition company, or SPAC. A SPAC is formed to perform a transaction defined as to acquire capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination. Mr. Collins discloses that Citigroup has been working to contact SPACs, and prepare confidential information memoranda describing Linens Canada's business, financial condition and financial prospects for distribution to interested parties. Citigroup has also provided advice on structure, negotiation strategy, valuation analyses, financial terms and other financial matters, as well as negotiated confidentiality agreements on Linens 'n Things' behalf. The Debtors have sought to retain Genuity Capital Markets as their investment banker pursuant them in similar transactions with third parties other than SPACs. The Debtors believe that Citigroup has expertise with respect to SPACs, and has extensive knowledge of potential SPAC buyers. However, they do not believe that Citigroup has the requisite knowledge with respect to possible strategic or financial buyers within Canada as compared to Genuity. Citigroup will be paid a $3,000,000 transaction fee, payable upon consummation of the Transaction. Whether or not a Transaction occurs, the Debtors will also reimburse Citigroup for all reasonable deal-related travel and other expenses, other than legal fees and expenses, and exclusive of indemnity, for a maximum amount of $50,000. The Debtors will also pay deal- related disbursements in the ordinary course up to an aggregate maximum amount of $75,000, as administrative expenses of the bankruptcy estates. The Engagement Letter's indemnification and contribution provides that, among other things, Linens 'n Things will indemnify and hold harmless Citigroup, and its affiliates and employees, against any losses, expenses, claims or proceedings related to, or arising out of the contents of information provided by the Debtors, which information either the Debtors or Citigroup provides to any actual or potential buyers, sellers, investors or offerees. Brad Coleman, a managing director at Citigroup, assures the Court that Citigroup is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Linens 'N Things and 11 affiliates filed separate voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on May 2, 2008 (Lead Case No. 08-10832). The Canadian operations are not included in the filings. Linens 'N Things has secured a $700 million debtor-in-possession financing from General Electric Capital Corp. The company plans to be out of chapter 11 by the end of the year, on this timetable: 09/14/2008 DIP Facility Deadline for Filing a Chapter 11 Plan 10/14/2008 DIP Facility Deadline for Disclosure Statement Approval 11/18/2008 DIP Facility Deadline for Soliciting Votes on Plan 11/28/2008 DIP Facility Deadline for Entry of a Confirmation Order Linens 'N Things is represented by Richards, Layton & Finger, P.A., and Morgan, Lewis & Bockius LLP. Conway, Del Genio, Gries & Co., LLC will serve as the retailer's restructuring advisor until substantial consummation of a chapter 11 plan. Conway Del Genio's Michael F. Gries acts as the Debtors' chief restructuring officer and interim CEO. Kurtzman Carson Consultants LLC acts as the Debtors' claims agent. A Noteholder Committee has been formed and is represented by Kasowitz, Benson, Torres & Friedman LLP, and Pachulski Stang Ziehl & Jones. (Linens 'n Things Bankruptcy News, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)ff LINENS N THINGS: Committee Wants to Retain Cole Schotz as Counsel ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of Linen 'N Things, Inc., and its affiliated debtors seeks the authority of the U.S. Bankruptcy Court for the District of Delaware to retain Cole, Schotz, Meisel, Forman & Leonard, P.A., as its Delaware and conflicts counsel in connection with the Debtors' request for postpetition financing. Richard DePaul, executive Committee member, Cole Schotz has been selected by the Committee because the members and associates of the firm possess extensive knowledge and considerable expertise in the fields of bankruptcy, insolvency, reorganizations, debtors' and creditors' rights, debt restructuring and corporate reorganizations, among others. As the Committee's conflicts counsel, Cole Schotz will review the extent, validity, and priority of the liens asserted by the Prepetition Agent, the Prepetition Lenders, and the Indenture Trustee. It will also handle other matters in which the Committee's lead counsel, Otterbourg, Steindler, Houston & Rosen, P.C., may have a conflict of interest. Cole Schotz will be paid at these rates. Professional Hourly Rate ------------ ----------- Members $300 to $625 Special Counsel $320 to $375 Associates $150 to $385 Paralegals $120 to $215 The Committee requests that all legal fees and related costs and expenses incurred by the Committee on account of services rendered by Cole Schotz in the cases be paid as administrative expenses of the Debtors' estates. Norman L. Pernick, Esq., a partner at Cole Schotz, in Wilmington, Delaware, assures the Court that his firm is a "disinterested person," as the term is defined in Section 101(14) of the Bankruptcy Code. Linens 'N Things and 11 affiliates filed separate voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on May 2, 2008 (Lead Case No. 08-10832). The Canadian operations are not included in the filings. Linens 'N Things has secured a $700 million debtor-in-possession financing from General Electric Capital Corp. The company plans to be out of chapter 11 by the end of the year, on this timetable: 09/14/2008 DIP Facility Deadline for Filing a Chapter 11 Plan 10/14/2008 DIP Facility Deadline for Disclosure Statement Approval 11/18/2008 DIP Facility Deadline for Soliciting Votes on Plan 11/28/2008 DIP Facility Deadline for Entry of a Confirmation Order Linens 'N Things is represented by Richards, Layton & Finger, P.A., and Morgan, Lewis & Bockius LLP. Conway, Del Genio, Gries & Co., LLC will serve as the retailer's restructuring advisor until substantial consummation of a chapter 11 plan. Conway Del Genio's Michael F. Gries acts as the Debtors' chief restructuring officer and interim CEO. Kurtzman Carson Consultants LLC acts as the Debtors' claims agent. A Noteholder Committee has been formed and is represented by Kasowitz, Benson, Torres & Friedman LLP, and Pachulski Stang Ziehl & Jones. (Linens 'n Things Bankruptcy News, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) LODGENET INTERACTIVE: March 31 Balance Sheet Upside-Down by $83MM ----------------------------------------------------------------- LodgeNet Interactive Corp.'s consolidated balance sheet at March 31, 2008, showed $675.5 million in total assets and $759.1 million in total liabilities, resulting in a $83.6 million total stockholders' deficit. The company reported a net loss of $13.0 million for the first quarter ended March 31, 2008, compared with a net loss of $28,000 in the same period last year. Results for the first quarter of 2008 included $5.9 million of acquisition related costs for restructuring, integration and amortization of acquired intangibles. Total revenue for the first quarter of 2008 was $139.8 million, an increase of $64.5 million or 85.7%, compared to $75.3 million for the first quarter of 2007. The growth in revenue was primarily driven by the 2007 acquisition of On Command Corp. which contributed $56.2 million to revenue in the first quarter of 2008. Total direct costs increased to $75.9 million in the first quarter of 2008 as compared to $36.5 million in the first quarter of 2007. Total direct costs were 54.3% of revenue for the first quarter of 2008 as compared to 48.4% in the first quarter of 2007. Total operating expenses increased to $65.7 million in the first quarter of 2008 as compared to $32.7 million in the first quarter of 2007. Total operating expenses were 47.0% of revenue for the first quarter of 2008 as compared to 43.4% in the first quarter of 2007. In the first quarter of 2008, the company also incurred restructuring costs of $2.0 million to complete the personnel reduction phases of its post merger activities. Operating loss was $1.8 million in the first quarter of 2008 compared to operating income of $6.1 million in the first quarter of 2007. Interest expense was $11.0 million in the current quarter versus $6.2 million in the first quarter of 2007. The increase resulted from the change in weight average long-term debt, which increased as a result of the On Command acquisition to $626.1 million during the first quarter of 2008 from $269.9 million in the first quarter of 2007. For the first quarter of 2008, the company incurred state franchise taxes of $201,000 versus $101,000 during the first quarter of 2007. Liquidity and Capital Resources During the first quarter of 2008, cash provided by operating activities was $11.9 million while cash used for property and equipment additions, including growth-related investments, was $18.9 million. During the first quarter of 2007, cash provided by operating activities was $18.0 million while cash used for property and equipment additions, including growth-related investments, was $15.9 million. Total cash used for investing activities during the first quarter of 2007, including business acquisition investments of $14.9 million, was $30.8 million. Cash as of March 31, 2008, was $18.8 million versus $25.6 million as of Dec. 31, 2007. Also during the first quarter 2008, the company repurchased 470,000 shares using $4.7 million of cash. The company's principal sources of liquidity are its cash on hand, operating cash flow and the $50 million revolver portion of its Credit Facility, which matures in 2013. As of March 31, 2008, working capital was $9.7 million, compared to $8.1 million at Dec. 31, 2007. The total amount of long-term debt outstanding, including the current portion, as of March 31, 2008, was $630.1 million versus $624.6 million as of Dec. 31, 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?2e88 About LodgeNet Interactive Based in Sioux Falls, S.D., LodgeNet Interactive Corporation (Nasdaq: LNET) -- http://www.lodgenet.com/-- is a provider of media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms representing 9,900 hotel properties worldwide in addition to healthcare facilities throughout the United States. The company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. * * * As reported in the Troubled Company Reporter on June 17, 2008, Standard & Poor's Ratings Services placed its ratings, including the 'B+' corporate credit rating, on LodgeNet Interactive Corp. (formerly LodgeNet Entertainment Corp.) on CreditWatch with negative implications. MAGNOLIA FINANCE IV: Moody's Cuts Rating of $3MM Notes to Ba2 ------------------------------------------------------------- Moody's Investors Service downgraded its rating of these notes issued by Magnolia Finance IV plc: Class Description: Series 2005-1 $3,000,000 Portfolio Credit Linked Notes due 2010 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ba2 Moody's explained that today's rating action reflects deterioration in the credit quality of the transaction's underlying collateral pool, which consists of corporate securities. MAGNOLIA FINANCE II: Moody's Cuts Rating of $2MM Notes to B3 ------------------------------------------------------------ Moody's Investors Service downgraded its rating of this note issued by Magnolia Finance II plc Series 2005-4: Class Description: Series 2005-4 $2,000,000 Portfolio Credit Linked Notes due 2010 -- Pior Rating: Ba3, on review for possible downgrade -- Current Rating: B3 Moody's explained that today's rating action reflects deterioration in the credit quality of the transaction's underlying collateral pool, which consists of corporate securities. MAGNOLIA FINANCE V: Moody's Cuts Rating of $3MM Notes to Ba2 ------------------------------------------------------------ Moody's Investors Service downgraded its rating of this note issued by Magnolia Finance V plc: Class Description: Series 2005-1 $3,000,000 Portfolio Credit Linked Notes due 2010 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ba2 Moody's explained that today's rating action reflects deterioration in the credit quality of the transaction's underlying collateral pool, which consists of corporate securities. MDWERKS INC: Posts $2,644,388 Net Loss in 2008 First Quarter ------------------------------------------------------------ MDWerks Inc. reported a net loss of $2,644,388 on total revenue of $203,461 for the first quarter ended March 31, 2008, compared with a net loss of $2,469,958 on total revenue of $133,885 in the same period last year. For the three months ended March 31, 2008, total operating expenses were $1,423,161 as compared to $2,114,584 for the three months ended March 31, 2007, a decrease of $691,423 or 32.7%. The significant decrease in operating expenses was principally a result of decreased stock option compensation. For the three months ended March 31, 2008, interest expense was $766,639 as compared to $517,498 for the three months ended March 31, 2007, an increase of $249,141. On March 31, 2008, the company received net proceeds of $6,809,794 in connection with a financing provided by Vicis Capital Master Fund, an unaffiliated accredited investor. Along with this financing, the Mandatory Redeemable Convertible Series B Preferred Stock issued in connection with the Sept. 28, 2007 financing of $2,000,000 and the Jan. 18, 2008 financing of $500,000 were returned and considered debt extinguishment and a new Notes Payable to Vicis for $10,000,000 was recorded. The loss on extinguishment of this debt was $660,122. Balance Sheet At March 31, 2008, the company's consolidated balance sheet showed $9,349,006 in total assets, $3,389,116 in total liabilities, and $5,959,890 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?2e74 Going Concern Doubt Sherb & Co., LLP, in Boca Raton, Florida, expressed substantial doubt about MDwerks Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring losses from operations. About Mdwerks Inc. Based in Deerfield Beach, Florida, MDwerks Inc. (OTC BB: MDWK) -- http://www.mdwerks.com/-- provides healthcare professionals with automated electronic insurance claims management solutions and advance funding of medical claims. MEADE INSTRUMENTS: Moss Adams Expresses Going Concern Doubt ----------------------------------------------------------- Moss Adams LLP raised substantial doubt about the ability of Meade Instruments Corp. to continue as a going concern after it audited the company's financial statements for the year ended Feb. 29, 2008. The auditor pointed to the company's declining revenues, recurring losses from operations and accumulated deficit. Recent Developments The company hired a new chief executive officer in May 2006 with extensive experience in turnaround situations in an effort to restructure the company and return it to profitability after two years of financial losses. In the ensuing 12 months, the company replaced a significant number of its executives, including its senior officer over operations and its chief financial officer. The company embarked on a number of initiatives to resolve supply chain constraints, to reduce the company's cost structure, to reduce the number of SKUs and required level of inventory, and to increase investment for new product innovations and introductions. During the fiscal year ended Feb. 28, 2007, the results were negatively impacted by the closure and consolidation of its four U.S. facilities into one, related headcount reductions and severance costs, aggressive reductions in inventory, and legal and accounting fees associated with the company's restatement of historical results due to errors in accounting for stock options and deferred rent. During fiscal 2008, the results have been negatively impacted by further headcount reductions and severance costs and further reductions in inventory. However, the overall turnaround of the company is a continuing effort, and the management will continue to evaluate long-term opportunities to further reduce cost structure; these opportunities, if executed upon, may result in additional short-term costs that must be recognized in the current consolidated financial statements. In August 2007, the company completed a private placement of 3.1 million shares of its common stock for gross proceeds of $5.8 million that improved liquidity. However, due to the seasonality of its business, the company continues to rely on its domestic credit facility to meet much of its liquidity needs. While the company was in compliance with the restrictive covenants in the credit facility agreement as of the end of fiscal 2008, from time to time in recent history the company has not been in compliance with certain of the restrictive covenants. While the company has historically been able to obtain amendments and waivers from its lender, there is no guarantee that the company will be in compliance with the restrictive covenants in the future, and in the event of noncompliance, there is no guarantee that it will be able to obtain an amendment or waiver. If no amendment or waiver is obtained, the company may be in default under the provisions of the credit facility and the company's lender may accelerate repayment. In this event, it may need to raise funds to repay its lender and there can be no assurance that such funds will be available. In addition, during the third quarter of fiscal 2008, the Board of Directors formed a special committee that engaged an investment bank to assist the company in exploring strategic alternatives. During the first quarter of fiscal 2009, the company sold its Simmons, Weaver and Redfield sport optics brands for gross proceeds of $15 million. The exploration of strategic alternatives has been ongoing and may involve a financial restructuring of the company's capital structure or potentially the sale of all or a portion of the company. At this time there can be no assurance that the company will be able to execute on any strategic alternatives. Subsequent Events On April 17, 2008, a subsidiary of Meade Instruments Corp. entered into an agreement and sold its Weaver brand and associated inventory to Ammunition Accessories, Inc., a subsidiary of Alliant Techsystems, Inc., for cash proceeds of $5.0 million. On April 18, 2008, the company and one of its subsidiaries entered into an agreement and sold its Redfield brand to Leupold & Stevens, Inc., for cash proceeds of $3.0 million. In connection with these sales, on April 17, 2008, the company and certain of its subsidiaries entered into the Fourteenth Amendment to the Amended and Restated Credit Agreement dated as of Oct. 25, 2002, with Bank of America, N.A. The Fourteenth Amendment released the Lender's lien on the assets divested and reduced the maximum amount available on the company's credit facility to $20.0 million from $25.0 million. On June 12, 2008, a subsidiary of Meade Instruments Corp. entered into an agreement and sold its Simmons brand and associated inventory to Bushnell for gross cash proceeds of $7.25 million. In connection with this sale, on June 12, 2008, the company and certain of its subsidiaries entered into the Fifteenth Amendment to the Amended and Restated Credit Agreement dated as of Oct. 25, 2002, with Bank of America, N.A. The Fifteenth Amendment released the Lender's lien on the assets divested and reduced the company's credit facility from $20 million to $15 million. Financials The company posted a net loss of $17,721,000 on net sales of $98,539,000 for the year ended Feb. 29, 2008, as compared with a net loss of $19,182,000 on net sales of $101,535,000 in the prior year. At Feb. 29, 2008, the company's balance sheet showed $45,792,000 in total assets, $21,196,000 in total liabilities, and $24,596,000 in total stockholders' equity. A full-text copy of the company's 2008 annual report is available for free at http://ResearchArchives.com/t/s?2e52 About Meade Instruments Headquartered in Irvine, Ca., Meade Instruments (Nasdaq:MEAD) -- http://www.meade.com/-- designs and manufactures optical products including telescopes and accessories for the beginning to serious amateur astronomer. Meade offers a complete line of binoculars that address the needs of everyone from the casual observer to the serious sporting or birding observer. Meade also offers a complete line of rifle scopes under the Simmons(r), Weaver(r) and Redfield(r) brand names. The company distributes its products worldwide through a network of specialty retailers, mass merchandisers and domestic and foreign distributors. MERGE HEALTHCARE: Board OKs Redemption of Share Purchase Rights --------------------------------------------------------------- The Board of Directors of Merge Healthcare Incorporated approved the redemption of all preferred share purchase rights outstanding on each share of the company's common stock and on each exchangeable share issued by Merge Cedara ExchangeCo Limited, an indirect majority-owned subsidiary of the company. The Rights were previously issued pursuant to the terms of a Rights Agreement, dated as of Sept. 6, 2006, as amended, by and between the Company and American Stock Transfer & Trust Co. as rights agent. One Right was outstanding on each outstanding share of the company's common stock and on each exchangeable share of Merge Cedara ExchangeCo Limited. Pursuant to the Rights Agreement, the redemption price is $0.001 per Right. Shareholders of record on June 23, 2008, will receive payment of the Redemption Price on July 7, 2008. However, pursuant to the terms of the Rights Agreement, any potential right to exercise the Rights terminated effective immediately upon the action of the Board of Directors and the only right of the holders of Rights is to receive the Redemption Price. Headquartered in Milwaukee, Wisconsin, Merge Healthcare Inc. (Nasdaq: MRGE; TSX: MRG) -- http://www.mergehealthcare.com/-- is a developer of medical imaging and clinical software applications and developmental tools. The company develops medical imaging software solutions that support end-to-end business and clinical workflow for radiology department and specialty practices, imaging centers and hospitals. Possible Bankruptcy As reported in the Troubled Company Reporter on May 16, 2008, if adequate funds are not available or are not available on acceptable terms, the company will likely not be able to fund its new teleradiology business, take advantage of unanticipated opportunities, develop or enhance services or products, respond to competitive pressures, or continue as a going concern beyond June 30, 2008, and may have to seek bankruptcy protection. Going Concern Doubt As reported in the Troubled Company Reporter on April 29, 2008, KPMG LLP in Chicago expressed substantial doubt about Merge Healthcare Incorporated'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 losses from operations and negative cash flows. The company says it has generated losses from operations over the past nine consecutive quarters and the company currently has no credit facility. As a result, the company is currently completely dependent on available cash and operating cash flow to meet its capital needs. MERRILL LYNCH: Moody's Holds Ratings of 10 Cert. Classes ---------------------------------------------------------- Moody's Investors Service upgraded the rating of one class and affirmed 10 classes of Merrill Lynch Financial Assets Inc., Commercial Mortgage Pass-Through Certificates, Series 2001-Canada 6 as: -- Class A-1, $64,978,569, affirmed at Aaa -- Class A-2, $95,882,000, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $7,301,000, affirmed at Aaa -- Class C, $8,628,000, upgraded to Aa3 from A1 -- Class D, $10,620,000, affirmed at Baa2 -- Class E, $1,991,000, affirmed at Baa3 -- Class F, $5,310,000, affirmed at Ba2 -- Class G, $1,991,000, affirmed at Ba3 -- Class H, $3,319,000, affirmed at B2 -- Class J, $1,328,000, affirmed at B3 Moody's upgraded Class C due to increased defeasance and credit support. As of the June 12, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 22.7% to $205.3 million from $265.5 million at securitization. The Certificates are collateralized by 35 loans ranging in size from less than 1.0% of the pool to 12.1% of the pool, with the top 10 loans representing 60.2% of the pool. Six loans, representing 11.8% of the pool, have defeased and are collateralized with Canadian Government securities. The pool has not experienced any losses since securitization and currently there are no loans in special servicing. Six loans, representing 18.1% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2006 and 2007 operating results for 71.7% and 17.8% of the pool, respectively. Moody's weighted average loan to value (LTV) ratio is 66.8% compared to 69.0% at Moody's last full review in August 2006 and 81.2% at securitization. The top three loans represent 29.1% of the outstanding pool balance. The largest loan is the Westbridge Shopping Center Loan ($24.9 million -- 12.1%), which is secured by a 211,400 square foot retail center located in Vaughan, Ontario, approximately 20 miles north of Toronto. The center is anchored by Linens 'n Things (16.7% NRA; lease expiration January 2017) and Toys"R"Us (14.7%; lease expiration November 2009). The center was 97.3% occupied as of December 2007, essentially the same as at last review. Moody's LTV is 69.0% compared to 72.5% at last review. The second largest loan is the La Rousseli�re Loan ($22.1 million -- 10.7%), which is secured by a 720-unit apartment complex located in Montreal, Quebec. The property was 93.8% occupied as of December 2006 compared to 96.0% at securitization. Moody's LTV is 70.3% compared to 71.5% at last review. The third largest loan is the Zellers Centre Bridgeport Loan ($12.9 million - 6.3%), which is secured by a 210,800 square foot retail center located in Waterloo, Ontario. The center is anchored by Zellers (49.7% NRA; lease expiration October 2018) and Sobeys (22.6%; lease expiration July 2018). The center was 100.0% occupied as of January 2007 compared to 96.0% at securitization. Moody's LTV is 70.8% compared to 72.5% at last review. MERRILL LYNCH: Moody's Holds Ba3, B2, and B3 Ratings on Certs. -------------------------------------------------------------- Moody's Investors Service upgraded the ratings of five classes and affirmed six classes of Merrill Lynch Financial Assets Inc., Commercial Mortgage Pass-Through Certificates, Series 2003-Canada 11: -- Class A, $119,431,593, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $6,100,000, affirmed at Aaa -- Class C, $7,500,000, upgraded to Aaa from Aa2 -- Class D, $6,800,000, upgraded to A2 from Baa1 -- Class E, $2,370,000, upgraded to A3 from Baa2 -- Class F, $2,377,000, upgraded to Baa2 from Ba1 -- Class G, $2,370,000, upgraded to Ba1 from Ba2 -- Class H, $1,355,000, affirmed at Ba3 -- Class J, $2,370,000, affirmed at B2 -- Class K, $1,015,000, affirmed at B3 Moody's upgraded Classes C, D, E, F and G due to increased credit support and defeasance and overall improved pool performance. As of the June 12, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 42.4% to $156.1 million from $270.9 million at securitization. The Certificates are collateralized by 29 loans ranging in size from less than 1.0% to 12.3% of the pool, with the top 10 loans representing 57.1% of the pool. Five loans representing 15.8% of the pool have defeased and are collateralized by Canadian government securities. There have been no realized losses since securitization and currently there are no loans in special servicing. Twelve loans, representing 31.7% of the pool, are on the master servicer's watchlist. The watchlist includes loans which meet certain portfolio review guidelines established as part of the Commercial Mortgage Securities Association monthly reporting package. As part of our ongoing monitoring of a transaction, Moody's reviews the watchlist to assess which loans have material issues that could impact performance. Moody's was provided with full year 2007 operating results for 74.1% of the pool. Moody's loan to value ratio is 72.3% compared to 76.3% at Moody's last full review in January 2007 and 79.5% at securitization. The three largest loans represent 25.9% of the pool. The largest loan is the Poco Place Loan ($19.2 million -- 12.3%), which is secured by a mixed use development located 21 miles east of Vancouver in Port Coquitlam, British Columbia. The property includes 98,000 square feet of retail space and 66,000 square feet of office space. The retail component is anchored by Michael's (21.7% GLA; lease expiration 2011) and Pier 1 Imports (11.4%; lease expiration 2013). The property was 95.3% occupied as of January 2008 compared to 90.0% at last review. The loan matures in November 2008. Moody's LTV is 78.5% compared to 75.6% at last review. The second largest loan is the Greenwin Square Loan ($10.6 million -- 6.8%), which is secured by a 293,000 square foot office building located in Toronto, Ontario. The property was 92.3% occupied as of January 2008 compared to 100.0% at last review. The loan matures in October 2008. Moody's LTV is 60.1% compared to 67.5% at last review. The third largest loan is the Westmount Premier Loan ($10.6 million -- 6.8%), which is secured by a 139,000 square foot office building located in Montreal, Quebec. The largest tenants include BDO Dunwoody LLP (19.2% NRA; lease expiration October 2009), Intelco Canada (10.2% NRA; lease expiration 2013) and Groupe Financier AGA (10.2%; lease expiration 2014). The loan matures in October 2008. Moody's LTV is 74.3% compared to 72.6% at last review. METRO ONE: Posts $631,632 Net Loss in Third Quarter Ended April 30 ------------------------------------------------------------------ Metro One Development Inc., fka. On The Go Healthcare Inc., reported a net loss of $631,632 for the third quarter ended April 30, 2008, compared with a net loss of $898,218 in the same period last year. For the nine months ended April 30, 2008, net loss was $4,678,750, compared with a net loss of $2,742,622 in the same period ended April 30, 2007. The net loss of $4,678,750 for the nine months ended April 30, 2008, was attributed to a net loss of $2,464,658 from continuing operations and a net loss of $3,709,011 from discontinued operations and a gain on the sale of assets from discontinued operations of $1,494,919. The net loss for the nine months ended April 30, 2007, consisted of a net loss of $2,566,743 from continuing operations and a net loss of $175,879 from discontinued operations. The company did not generate any sales from continuing operations in 2008 and 2007. Sale of Reseller Business As reported in the Troubled Company Reporter on March 31, 2008, On The Go Healthcare Inc. sold its Value Added Reseller business unit to FTS Group for $4 million. As a result of the sale of the value-added reseller business, the company changed its business focus to that of a custom builder and property developer in the Greater Toronto Area in Canada and subsequently changed its name from On The Go Healthcare Inc. to Metro One Development Inc. effective April 14, 2008. Balance Sheet At April 30, 2008, the company's consolidated balance sheet showed $3,787,576 in total assets, $1,519,822 in total liabilities, $1,000,000 in conditionally redeemable preferred stock, and $1,267,754 in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended April 30, 2008, are available for free at http://researcharchives.com/t/s?2e7c Going Concern Doubt Metro One Development Inc. has an accumulated deficit of $20,738,346 as of April 30, 2008, and incurred a net loss applicable to common stockholders of $4,678,750 during the nine months ended April 30, 2008. These conditions raise substantial doubt about the company's ability to continue as a going concern. Laurus Master Fund Ltd. has notified the company that it is in default under the Amended and Restated Security Purchase Agreement. In addition, the company's payment obligations under the Secured Revolving Note issued pursuant to such Amended and Restated Security Purchase Agreement are currently in default. The company's Secured Revolving Note with Laurus was the company's primary source of financing until March 17, 2008. Without this source of funding, the company no longer has access to capital to allow it to develop its operations. About Metro One Headquartered in Concord, Ontario, Canada, Metro One Development Inc. (OTC BB: MODI) -- http://www.metro-one.com/-- formerly On The Go Healthcare Inc., is a custom builder and property developer in the greater Toronto area. The company was a value-added reseller of computer and computer-related products, including hardware, peripherals, software and supplies. METROPCS WIRELESS: Moody's Changes Outlook; Affirms B2 CF Rating ---------------------------------------------------------------- Moody's Investors Service changed the rating outlook for MetroPCS Wireless Inc. to stable from developing, reflecting the passage of time from the September 2007 merger proposal from MetroPCS' parent, MetroPCS Communications Inc. (PCS) to Leap Wireless International Inc. and the rating agency's belief that a potential transaction will take a longer time to play out, leading it to rate the two companies on their own merits. In addition, Moody's affirmed all existing ratings of MetroPCS, including its B2 corporate family rating, the Ba3 rating on the senior secured facilities, the Caa1 rating on the 9-1/4% senior unsecured notes, due 2014 and its SGL1 liquidity rating. Outlook Actions: Issuer: MetroPCS Wireless, Inc. -- Outlook, Changed To Stable From Developing The B2 corporate family rating and the stable outlook reflects the balance of the company's rapid growth and the resulting deleveraging with the expectation that heavy cash consumption for expansion markets will continue through at least 2010, as the company builds out its presence to reach over 100 million potential subscribers. The ratings and the outlook also consider Moody's views that MetroPCS faces significant execution risks in building out new markets amid intensifying industry competition, as the national wireless penetration rate rises above 85%. Moody's still believes that the combination of MetroPCS and Leap, should it occur, would likely have positive implications for the company's combined operating prospects and potentially produce meaningful synergies. If the two companies reach a merger agreement, Moody's is likely to revisit the rating outlook at that time. MetroPCS Wireless Inc., a wholly owned subsidiary of MetroPCS Communications Inc., provides unlimited use wireless service for a flat monthly fee with no signed contract in major metropolitan markets of the U.S. The company is based in Dallas, Texas. Leap Wireless International, Inc. wholly-owns Cricket Communications Inc., which is a wireless service provider. Both companies are headquartered in San Diego, California. MIDDLETOWN ESTATE: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Middletown Estate Developers, Inc. 494 Paxon Hollow Road Broomall, PA 19008 Bankruptcy Case No.: 08-13940 Description: Joseph C. Ripp, president, filed the petition on the Debtor's behalf. Chapter 11 Petition Date: June 19, 2008 Court: Eastern District of Pennsylvania (Philadelphia) Debtor's Counsel: Gregory R. Noonan, Esq. (walfishnoonan@aol.com) Walfish & Noonan, LLC 528 DeKalb Street Norristown, PA 19401 Tel: (610) 277-7899 Estimated Assets: $1,475,000 Estimated Debts: $637,600 List of Unsecured Creditors: Creditor Claim Amount -------- ------------ Florida Eurocars Inc. $75,000 Marple Township $2,600 MODAVOX INC: Malone & Bailey, PC Expresses Going Concern Doubt -------------------------------------------------------------- Houston-based Malone & Bailey, PC, raised substantial doubt about the ability of Modavox, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Feb. 29, 2008. The auditor pointed the company's recurring losses. The management stated that Modavox incurred operating losses since inception, which aggregated $12,443,571 at Feb. 29, 2008, including a loss of $3,304,005 in 2008. Management believes that additional losses may be incurred as it develops and executes a sales and distribution strategy for its products and expands the number of sales locations. These potential losses and capital expenditures needed for Modavox to expand its sales locations and fund increases in accounts receivable may require Modavox to raise additional capital. The company posted a net loss of $3,304,005 on total revenues of $2,817,694 for the year ended Feb. 29, 2008, as compared with a net loss of $554,082 on total revenues of $2,659,992 in the prior year. At Feb. 29, 2008, the company's balance sheet showed $5,883,750 in total assets, $1,741,707 in total liabilities, and $4,142,043 in total stockholders' equity. The company's consolidated balance sheet at Feb. 29, 2008, showed strained liquidity with $1,795,649 in total current assets available to pay $1,741,707 in total current liabilities. A full-text copy of the company's 2008 annual report is available for free at http://ResearchArchives.com/t/s?2e55 About Modavox Inc. Modavox Inc. (OTC BB: MDVX.OB) -- http://www.modavox.com/-- offers Internet broadcasting and produces and syndicates online audio and video. It also offers innovative, effective and comprehensive online tools for reaching targeted niche communities worldwide. Through patented Modavox technology, Modavox delivers content straight to desktops and Internet-enabled devices. Modavox provides managed access for live and on-demand Internet Radio Broadcasting, E-learning and Rich Media Advertising. MODERN CONTINENTAL: Tunnel Collapse Suit Cues Bankruptcy Filing --------------------------------------------------------------- Modern Continental Construction Co. filed its chapter 11 petition yesterday, June 23, 2008, with the U.S. Bankruptcy Court for the District of Massachusetts. Reuters says that the Debtor's board of directors elected for the filing on June 11, 2008. According to various reports, State Attorney Michael J. Sullivan charged the Debtor on Friday, June 21, with liability due to a 2006 collapse in the $15 billion "Big Dig" tunnel project. Modern Continental built that part of the tunnel in 1999, reports say. On July 10, 2006, several tons of cemented ceiling panels on Interstate 90 in South Boston, Massachusetts collapsed on Angel Del Valle's vehicle, injuring him and killing his wife, reports say. The collapse was reportedly caused by wrong epoxy applied to hold the bolts from which the ceiling panels were attached, the reports add. Reports relate that when found guilty, the Debtor will be fined $24.5 million, consisting of $500,000 for each of 49 counts of crime that includes falsification of statements and slips, and fraud. Mr. Sullivan alleged that the Debtor knew of the unmet construction standards but claimed they were met, according to the reports. The Debtor said that the charges were "unfounded and without merit," reports say. The National Transportation Safety Board, the Debtor continued, has determined that Modern Construction was unaware of the epoxy in the tunnel as unfit, reports add. About Modern Continental Modern Continental Construction Co. -- http://www.moderncontinental.com/-- of Cambridge, Massachusetts was established in 1967 when its founders, Lelio "Les" Marino and Kenneth Anderson, earned a small contract for the construction of a sidewalk in the town of Peabody. Since then, the company has blossomed into a multi-faceted organization which is highly respected throughout the construction industry, and is ranked among the top contractors in the country. MODERN CONTINENTAL: Case Summary & 19 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Modern Continental Construction Co., Inc. 250 Milton St. Dedham, MA 02026-2913 Bankruptcy Case No.: 08-14558 Type of Business: The Debtor is a heavy-construction company and the original business in the Modern Continental group. See http://www.moderncontinental.com/ Chapter 11 Petition Date: June 23, 2008 Court: District of Massachusetts (Boston) Judge: William C. Hillman Debtor's Counsel: Harold B. Murphy, Esq. Hanify & King, P.C. One Beacon St., 21st Fl. Boston, MA 02108 Tel: (617) 423-0400 Fax: (617) 556-8985 Email: bankruptcy@hanify.com http://www.hanify.com/ Estimated Assets: $100 million to $500 million Estimated Debts: $500 million to $1 billion Debtor's 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ URS Corp. $9,868,863 38 Chauncy St. Boston, MA 02111 Architectural Paving $3,154,556 402 Libbey Pkwy. Weymouth, MA 02189 Lockton Cos., Inc. $2,762,247 P.O. Box 631985 Baltimore, MD 21263 Hilb Rogal & Hobbs $874,790 P.O. Box 415161 Boston, MA 22415 Thomas F. Corbett Association $857,409 144 W. Broadway Salem, NJ 08079 Mass Bay Electrical Cor. $625,399 125 Orleans St. E. Boston, MA 02128 Chenango Contracting $569,321 29 Arbutus Rd. Johnson City, NY 13790 MRP Site Development $509,487 360 Arbutus Rd. Wakefield, MA 01880 The Aulson Co. $481,050 49 Danton Dr. Methuen, MA 01844 L&C Flashing Barricades $446,502 55 Bodwell St. Avon, MA 02322 City Lights Electrical $410,632 290 Pine St. Canton, MA 02021 Fonditek International $313,950 60 Fireworks Circle Bridgewater, MA 02324 Welsbach Electric Corp. $302,114 111-01 14th Ave. College Point, NY 11356 Columbus Construction $239,620 International Surface $232,003 Preparation Schumacher Landscaping $211,035 Tilcon New York, Inc. $204,037 V.I.P. Landscaping $198,397 NEFCO/AGRA $190,009 MORGAN STANLEY: Fitch Cuts US$6.844MM Notes Rating to BB+ from AAA ------------------------------------------------------------------ Fitch Ratings has downgraded the notes issued by Morgan Stanley ACES SPC Series 2007-33 and removed them from Rating Watch Negative, as: -- US$6,844,000 credit-linked notes due February 2013 (ISIN: USG6264BAA47): downgraded to 'BB+' from 'AAA', removed from RWN. The transaction is a funded static single-tranche synthetic corporate CDO that closed in August 2007. Since the transaction was placed on RWN, the portfolio has experienced further negative rating migration mainly due to the downgrade of a number of reference entities in the Building and Materials sector which reflects the challenges afflicting the US homebuilders, including D.R. Horton, Inc., Pulte Homes, Inc. and Lennar Corporation. All three companies remain on Negative Outlook. Other key drivers of this transaction's credit risk include: -- Portfolio credit risk deteriorating to an average portfolio quality of 'BBB'/'BBB-' from 'A-'/'BBB+' at closing. -- 9.9% of the portfolio is rated below investment grade, compared with 2.4% at closing -all of which was rated in the 'BB' category. Of the current non-investment grade constituents, 7.4% of the portfolio is rated in the 'BB' category, 1.7% in the 'B' category and one asset representing 0.8%, Residential Capital LLC, in the 'D' category. -- Portfolio migration risk with 6.6% of the portfolio on RWN and 21.5% of the portfolio on Negative Outlook. -- Industry concentration of 48.8% in the three largest, made up of 33.9% in Banking and Finance, 7.4% in Telecommunications and 7.4% in Retail. -- The portfolio is heavily concentrated in the US, which represents 61.2% of the portfolio. Given Fitch's view of concentration risk and the current credit quality of the portfolio, the current level of credit enhancement of 4.12% is not sufficient to justify the current rating of the notes. Fitch notes that this credit enhancement level is likely to be eroded should there be a credit event called on Residential Capital LLC (rated 'D'). Morgan Stanley ACES SPC is a special purpose vehicle incorporated under the laws of the Cayman Islands. This transaction references a portfolio of 120 corporate obligations. The total reference portfolio notional amount is US$2.42 billion. At close, proceeds from the issuance of the notes were used to collateralise credit default swaps between the issuer and Morgan Stanley Capital Services Inc. (guaranteed by Morgan Stanley, 'AA-' (AA minus)/'F1+'/Negative Outlook). The charged asset in this transaction comprises US$6.844 million in principal amount of BA Credit Card Trust Class A 2007-9 credit-card floating rate notes (rated 'AAA') which is scheduled to mature in June 2012. Fitch released updated criteria on April 30, 2008 for corporate CDOs and, at that time, noted it would be reviewing its ratings accordingly to establish consistency for existing and new transactions. As part of this review, Fitch makes standard adjustments for any names on RWN or Negative Outlook, reducing such ratings for default analysis purposes by two and one notch, respectively. Fitch has previously noted that its review will be focused first on ratings most exposed to risks it has highlighted in its updated criteria. As such, this transaction was placed on RWN on May 21, 2008. As previously indicated, resolution of the Rating Watch status depends on any plans managers/arrangers may choose to modify either the structure or the portfolio. In this case, the arranger has confirmed that it does not intend to make any modifications. MORGAN STANLEY: Fitch Cuts Two Notes Ratings; Removes Neg. Watch ---------------------------------------------------------------- Fitch Ratings has downgraded both classes of notes issued by Morgan Stanley ACES SPC Series 2006-32, due May 2012, and removed them from Rating Watch Negative, as: -- US$10,771,000 Class I notes: downgraded to 'BB-' from 'A+', removed from RWN; and -- US$16,920,000 Class II notes: downgraded to 'BB-' from 'A-', removed from RWN; The transaction is a funded static synthetic corporate CDO referencing a portfolio of primarily investment grade corporate obligations with a total reference portfolio notional amount of USD10bn. Key drivers of the transaction's credit risk are: -- An increase in portfolio credit risk with the average portfolio quality deteriorating to 'BBB-' from 'BBB'/'BBB-' since the last review in October 2007 and 'BBB+'/'BBB' at closing. 44% of the portfolio has been downgraded since October 2007, resulting in an aggregate 88-notch downgrade; 4% of the portfolio was upgraded resulting in an aggregate seven-notch upgrade. -- 24% of the portfolio is rated below investment grade, compared to 11% in October 2007 and 0% at closing. The sub investment grade composition comprises 1% in the 'CCC' rating category, 4% in the 'B' rating category and 19% in the 'BB' rating category. -- Portfolio migration risk with 5% of the portfolio on RWN and 31% of the portfolio on Negative Outlook. -- Industry concentration of 46% in the three largest industries, made up of 25% in Banking & Finance, 11% in Telecommunications and 10% in Building & Material. -- The high country concentration of the portfolio which has 65% exposure to the US. Given Fitch's view of concentration and the current credit quality of the portfolio, the credit enhancement levels of 4.73% and 4.3% for Class I and Class II respectively, are not sufficient to justify the current ratings of these notes. Despite slightly different credit enhancement levels, Fitch's analysis determined that both notes are now able to withstand the same number of defaults. At close, proceeds from the issuance of the notes were used to purchase charged assets to collateralise credit default swaps between the issuer and Morgan Stanley Capital Services Inc. (guaranteed by Morgan Stanley, 'AA-'/ 'F1+'/Outlook Negative). The charged assets are an investment in the Floating-rate MTN issued by MBIA Global Funding Corp LLC, guaranteed by MBIA Insurance Corp. (Insurer Financial Strength rating: 'AA'/Outlook Negative). Fitch released updated criteria on April 30, 2008 for Corporate CDOs and, at that time, noted it would be reviewing its ratings accordingly to establish consistency for existing and new transactions. As part of this review, Fitch makes standard adjustments for any names on RWN or Negative Outlook, reducing such ratings for default analysis purposes by two and one notch, respectively. Fitch has previously noted that its review will be focused first on ratings most exposed to risks it has highlighted in its updated criteria. As such, the transaction was placed on RWN on May 26, 2008. As previously indicated, resolution of the Rating Watch status depends on any plans managers/arrangers may choose to modify either the structure or the portfolio. In this case, the arranger has confirmed that it does not intend to make any modifications. MORGAN STANLEY: Fitch Slashes US$69.9MM Notes Rating to B from AA ----------------------------------------------------------------- Fitch Ratings has downgraded the notes issued by Morgan Stanley ACES Series 2007-26 and removed them from Rating Watch Negative (RWN), as: -- US$69,900,000 notes due 2014: downgraded to 'B' from 'AA', removed from RWN. The transaction is a funded static synthetic corporate CDO referencing a portfolio of primarily investment grade corporate obligations with a total reference portfolio notional amount of US$12.5 billion. Key drivers of this transaction's credit risk include: -- Portfolio credit risk deteriorating to an average portfolio quality of 'BBB-' from 'BBB+'/'BBB' at closing in July 2007. 38.4% of the portfolio has been downgraded since then, resulting in an aggregate 122-notch downgrade; 4.8% of the portfolio was upgraded resulting in an aggregate seven-notch upgrade. -- Currently, 19.2% of the portfolio is rated below investment grade, an increase from 7.2% at closing. The sub investment grade composition comprises 1.6% in the 'CCC+ or below' rating category, 6.4% in the 'B' rating category and 11.2% in the 'BB' rating category. -- Portfolio migration risk with 9.6% of the portfolio on RWN and 22.4% of the portfolio on Negative Outlook. -- Industry concentration of 41.6% in the three largest, made up of 24.8 % in Banking & Finance, 9.6% in Building & Materials and 7.2% in Telecommunications. -- The portfolio is heavily concentrated in the US, which represents 64.8% of the portfolio. Given Fitch's view of concentration risk and the current credit quality of the portfolio, the credit enhancement level of 4.6% is not sufficient to justify the current rating of the notes. Fitch notes that this credit enhancement level is likely to be eroded should there be a credit event called on Residential Capital LLC (rated 'D'). At close, proceeds from the issuance of the notes were used to collateralise credit default swaps between the issuer and Morgan Stanley Capital Services Inc., (guaranteed by Morgan Stanley, 'AA-' (AA minus)/'F1+'/Negative Outlook). The charged asset is an investment of US$69.9 million in principal amounts of class A (2007-10) notes issued by Chase Issuance Trust, rated 'AAA' by Fitch with legal maturity in 2014. Fitch released updated criteria on April 30, 2008 for Corporate CDOs and, at that time, noted it would be reviewing its ratings accordingly to establish consistency for existing and new transactions. As part of this review, Fitch makes standard adjustments for any names on RWN or Negative Outlook, reducing such ratings for default analysis purposes by two and one notch, respectively. Fitch has previously noted that its review will be focused first on ratings most exposed to risks it has highlighted in its updated criteria. As such, this transaction was placed on RWN on May 20, 2008. As previously indicated, resolution of the Rating Watch status depends on any plans managers/arrangers may choose to modify either the structure or the portfolio. In this case, the arranger has confirmed that it does not intend to make any modifications. MOVIE GALLERY: Board of Directors Adopts Incentive Equity Plan -------------------------------------------------------------- In a regulatory filing with the U.S. Securities and Exchange Commission, Movie Gallery Inc. and its debtor-affiliates disclosed that their board of directors adopted the 2008 Omnibus Equity Incentive Plan on June 11, 2008, as approved by the holders of a majority of the outstanding shares of the company's common stock, according to S. Page Todd, executive vice president, secretary and general counsel of the Debtors. Mr. Todd explained that the Equity Incentive Plan authorizes the issuance of an aggregate of 2,828,226 shares of Movie Gallery common stock in connection with the grant of non-statutory stock options, incentive stock options, stock appreciation rights, restricted shares, performance units, performance shares, dividend equivalents or other stock-based awards. Under the Equity Incentive Plan, any employee, officer, non- employee director or non-employee consultant of Movie Gallery or its subsidiaries are eligible for awards. No person may be granted awards in excess of 1,131,290 shares in any calendar year, subject to adjustment for certain transactions, Mr. Todd added. The Compensation Committee, who will administer the Equity Incentive Plan, has the authority to determine and designate the persons to whom awards will be made, as well as the terms, conditions and restrictions applicable to each award, including, but not limited to, the option price, restriction or limitation, vesting schedule or acceleration, forfeiture restrictions and performance goals and criteria, Mr. Todd disclosed. The Equity Incentive Plan will remain in effect until the earlier of: i) May 20, 2018; or ii) the date that all shares of common stock will have been purchased or acquired and the restrictions of all restricted shares granted under the Equity Incentive Plan will have lapsed. A full-text copy of Movie Gallery's 2008 Omnibus Equity Incentive Plan is available for free at: http://researcharchives.com/t/s?2e7d About Movie Gallery Based in Dothan, Alabama, Movie Gallery Inc. -- http://www.moviegallery.com/-- is a home entertainment specialty retailer. The company owns and operates 4,600 retail stores that rent and sell DVDs, videocassettes and video games. The company has operations in Mexico. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853). Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak Rock LLP, is the Debtors' local counsel. The Debtors' claims & balloting agent is Kurtzman Carson Consultants LLC. When the Debtors' filed for protection from their creditors, they listed total assets of US$891,993,000 and total liabilities of US$1,419,215,000. The Official Committee of Unsecured Creditors has selected Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B. Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at Miles & Stockbridge PC, as its local counsel. The U.S. Bankruptcy Court for the Eastern District of Virginia confirmed the Debtors' Second Amended Chapter 11 Plan of Reorganization on April 9, 2008. (Movie Gallery Bankruptcy News Issue No. 30; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) MOVIE GALLERY: Names Sherif Mityas as Retail Operation CEO ---------------------------------------------------------- Movie Gallery Inc. and its debtor-affiliates appointed Sherif J. Mityas as chief operating officer and president of retail operations of the Debtors effective June 16, 2008, according to a disclosure filed with the U.S. Securities and Exchange Commission dated June 11. Jeffrey S. Stubbs, who formerly served as President of Retail Operations, has resigned from Movie Gallery. According to S. Page Todd, Movie Gallery executive vice president, secretary, general counsel and chief compliance officer, Mr. Mityas has been employed by A.T. Kearney, Inc. in a variety of positions, most recently as a partner and North America Practice Leader. Mr. Mityas also served as senior manager at Deloitte & Touche Consulting Group and as an associate at A.T. Kearney, Inc, but began his career in 1989 at Pratt &Whitney - United Technologies Corp. as a senior aerodynamic engineer. Mr. Mityas received a B.S. in Aerospace Engineering from Boston University, a M.S. in Mechanical Engineering from Rensselaer Polytechnic Institute, and a M.B.A. from the J.L. Kellogg Graduate School of Management at Northwestern University, Mr. Todd disclosed. "[Mr. Mityas] is a strong and capable leader with an extensive background in retail operations, store merchandising and supply chain management," said C.J. "Gabe" Gabriel, chief executive officer of Movie Gallery. "His knowledge and understanding of the retail industry will be invaluable as we continue to build on the strength of our store operations, merchandising and supply chain management to improve our operating metrics. I look forward to working closely with Sherif to enhance store operations and better integrate our brands and businesses." In connection with Mr. Mityas' appointment as COO, Movie Gallery and Mr. Mityas entered into an Employment Agreement dated June 9, 2008. Under the Employment Agreement, Mr. Mityas will receive: * an annual base salary of $450,000; * a signing bonus equal to $450,000, subject to pro rata reduction if his employment with the Company terminates prior to December 31, 2009; * a performance bonus of up to 100% of his base salary beginning in 2009, based on his achievement of targets established by the Company's Board of Directors; * an option to purchase 233,665 shares of Movie Gallery common stock, which will vest in three equal annual installments; and * an additional option to purchase between 58,416 and 350,497 shares of common stock, depending on the Company's performance, upon the Company's achievement of certain performance goals for 2009. Pursuant to the Employment Agreement, either the Debtors or Mr. Mityas may terminate his employment at any time by reason of death or permanent disability, termination by the Company for cause or by resignation. Mr. Mityas or his estate will receive his accrued base salary through the termination date, Mr. Todd notes. If the Debtors terminate Mr. Mityas without Cause, he will receive his accrued base salary, as well as severance equal to two times his base salary, and his options will fully vest. Additionally, the Employment Agreement provides that Mr. Mityas agrees not to disclose confidential information of the Debtors during the term of his employment or after his termination. For two years after his termination, Mr. Mityas also agrees not to (i) compete with the Debtors, (ii) to be employed by or perform services for a competitor of the Debtors, (iii) to invest in any of its competitor, (iv) to interfere with the Debtors' business relationships with its customers and suppliers, or (v) to solicit employees of the Debtors for two years following his termination. A full-text copy of the Employment Agreement is available for free at http://researcharchives.com/t/s?2e7e About Movie Gallery Based in Dothan, Alabama, Movie Gallery Inc. -- http://www.moviegallery.com/-- is a home entertainment specialty retailer. The company owns and operates 4,600 retail stores that rent and sell DVDs, videocassettes and video games. The company has operations in Mexico. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853). Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak Rock LLP, is the Debtors' local counsel. The Debtors' claims & balloting agent is Kurtzman Carson Consultants LLC. When the Debtors' filed for protection from their creditors, they listed total assets of US$891,993,000 and total liabilities of US$1,419,215,000. The Official Committee of Unsecured Creditors has selected Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B. Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at Miles & Stockbridge PC, as its local counsel. The U.S. Bankruptcy Court for the Eastern District of Virginia confirmed the Debtors' Second Amended Chapter 11 Plan of Reorganization on April 9, 2008. (Movie Gallery Bankruptcy News Issue No. 30; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) MTR GAMING: S&P Revises Outlook to Negative from Stable ------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on MTR Gaming Group Inc. to negative from stable. Ratings on the company, including the 'B+' issuer credit rating, were affirmed. "The outlook revision reflects our concern about MTR's tight cushion relative to its credit agreement financial covenants, as the thresholds tighten substantially over the next few quarters," explained Standard & Poor's credit analyst Michael Listner. "Steady EBITDA growth will be necessary in order to avoid a covenant violation." With operating conditions across the gaming industry challenged by a weak economy, S&P are concerned about the company's growth prospects, even with the introduction of table games at its Mountaineer Park facility at the end of 2007. Moreover, Mountaineer Park, which contributes more than half of MTR Gaming's EBITDA, is expected to face additional competition from Majestic Star Pittsburgh when its facility opens in the second half of 2009. The 'B+' rating reflects MTR's high levels of debt leverage and the competitive threat posed by the Pennsylvania gaming market to the company's largest gaming property--The Mountaineer Casino, Racetrack & Resort in Chester, West Virginia. These concerns are somewhat tempered by the solid operating performance at the company's newest property, Presque Isle Downs in Erie, Pennsylvania. NARROWSTEP INC: Rothstein Kass Expresses Going Concern Doubt ------------------------------------------------------------ Rothstein, Kass & Company raised substantial doubt about the ability of Narrowstep, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Feb. 29, 2008. The auditor pointed to the company's reported losses from operations, accumulated deficit, its significant amount of utilized cash from operations, and its need of additional financing to fund future operations. Currently, the company has no commitments in place for additional financing, nor can assurances be given that the financing will be available. The company has a working capital surplus of about $3,771,000 and has utilized cash from operations over the past two fiscal years of about $14,124,000. Merger with Onstream Media On May 29, 2008, the company entered into an Agreement and Plan of Merger with Onstream Media Corporation, a Florida corporation, Onstream Merger Corp., a newly formed Delaware corporation and a wholly owned subsidiary of Onstream (Merger Sub) and W. Austin Lewis IV, as stockholder representative for the company's stockholders. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Onstream will acquire the company by means of a merger of Merger Sub with and into the company, with the company continuing as the surviving corporation and a wholly owned subsidiary of Onstream after the Merger. At the effectiveness of the Merger, each outstanding share of the company's common stock, other than shares held by stockholders who have perfected their appraisal rights under Delaware law, shares held by Onstream and shares held by any subsidiary of the company, will be converted into shares of Onstream common stock, par value $0.0001 per share based on an exchange ratio. In connection with the conditions to closing set forth in the Merger Agreement, the company has entered into subscription agreements with three of its major stockholders, including Mr. Lewis and David C. McCourt, the company's chairman and interim chief executive officer. Under the Subscription Agreements, the three stockholders agreed to purchase immediately prior to the Merger shares of a to-be-established Series A Preferred Stock at a purchase price of $100,000 per stockholder. Each stockholder is expected to receive 10,000 shares of Series A Preferred Stock. Holders of the Series A Preferred Stock will be entitled to the dividends, if any, as may be declared by the Board of Directors out of funds legally available therefore (no dividends are expected to be paid under the terms of the Restructuring Plan), will not have any voting rights (except to the extent required by applicable law), will have no right to convert the Series A Preferred Stock into shares of the company's common stock or any other of its securities and will have no right to force the company's redemption or repurchase of the Series A Preferred Stock. It is expected that the company will file a certificate of designations establishing the terms of the Series A Preferred Stock with the Secretary of State of Delaware shortly prior to the closing of the Merger. The Merger is subject to customary closing conditions, including obtaining the approval of the company's and Onstream's stockholders. The Merger Agreement may be terminated under certain specified events, including by either Onstream or the company if the Effective Time has not occurred on or prior to Oct. 31, 2008. If the Merger Agreement is terminated under certain circumstances specified in the Merger Agreement, the company may be required to pay a termination fee of $377,000 to Onstream. Both the company and Onstream have entered into voting agreements pursuant to which several significant stockholders have agreed to vote their shares in favor of the adoption of the Merger Agreement. Pursuant to the Voting Agreements, the holders of about 35% of the company's common stock presently outstanding and about 42% of the Onstream Common Stock presently outstanding have agreed to vote their shares in favor of the adoption of the Merger Agreement. Financials The company posted a net loss of $14,640,942 on total revenues of $5,559,042 for the year ended Feb. 29, 2008, as compared with a net loss of $7,061,474 on total revenues of $4,369,117 in the prior year. At Feb. 29, 2008, the company's balance sheet showed $8,465,164 in total assets, $1,878,256 in total liabilities, and $6,586,908 in total stockholders' equity. A full-text copy of the company's 2008 annual report is available for free at http://ResearchArchives.com/t/s?2e53 About Narrowstep Inc. Headquartered in London, England, Narrowstep Inc. -- (OTC BB: NRWS) -- http://www.narrowstep.com/-- provides broadband television services. Narrowstep's proprietary technologies and customer-focused services enable TV channels to be delivered over the Internet. The company's telvOS(TM) and nBed(TM) technologies enable the most comprehensive delivery of video to mobile, wireless, Internet, broadband, VOIP and entirely new IP-delivered broadcast services. NLRC: Files Creditor Protection under BIA, Might Sell Assets ------------------------------------------------------------ Newfoundland and Labrador Refining Corporation filed a Notice of Intention to Make a Proposal pursuant to the Bankruptcy and Insolvency Act. This will provide NLRC with a stay of proceedings against actions by creditors while it formulates a proposal for restructuring. This action was necessitated when SNC Lavalin, a contractor providing environmental and engineering services, served NLRC on June 19 with notice of proceedings in the Supreme Court of Newfoundland and Labrador seeking to have NLRC adjudged a bankrupt. NLRC intends to oppose the applications of SNC Lavalin. NLRC management is working with its advisors to determine the optimum method of restructuring, which may include the sale of its assets. A further update will be provided at a later date once key decisions are made. With the exception of its dispute with SNC Lavalin, NLRC has been in discussions with its creditors to resolve and restructure its debt arising from the challenges in sourcing financing due to the deterioration of North American finance markets earlier this year. NLRC remains encouraged by the economic fundamentals of the proposed project and continues to pursue several potential alternatives to attract financing and partners. Altius' Stake Altius Minerals Corporation, a part owner in NLRC, said it will assess whether adjustments to the carrying value of this investment is warranted in light of the development. Altius owns 39.6% shares in NLRC. Altius' investment in NLRC as at June 20, 2008 totals $52.2 million, including $22.1 million in equity and a $30.1 million convertible demand debenture secured by the assets of NLRC. There can be no assurance that all or any of Altius' investment will be recovered. Altius will provide additional information as it becomes available. About NLRC and Altius Minerals Corporation Newfoundland and Labrador Refining Corporation is into feasibility study of the development of a 300,000 barrel per day advanced oil refinery in southeastern Newfoundland. Headquartered in Canada, Altius Minerals Corporation (TSX:ALS) -- http://www.altiusminerals.com/-- is engaged in the generation and acquisition of interests in projects related to natural resources opportunities in the Province of Newfoundland and Labrador. Altius holds a 10% interest in the Labrador Nickel Royalty Limited Partnership, which holds a 3% net smelter return royalty interest in the Voisey's Bay nickel-coppercobalt project in Labrador. It also holds approximately 9.9% interest in the Aurora Energy Resources Inc., and the Aurora Royalties. Altius owns an approximate 24.3% interest in Rambler Metals & Mining Plc, which is carrying out advanced exploration of the Rambler Project. It also holds an approximate 17.5% interest in Paragon Minerals Corporation, which is an exploration company. Suite 300, 53 Bond Street NITRO PETROLEUM: April 30 Balance Sheet Upside-Down by $1,508,782 ----------------------------------------------------------------- Nitro Petroleum Inc.'s balance sheet at April 30, 2008, showed $1,598,938 in total assets and $3,107,720 in total liabilities, resulting in a $1,508,782 total stockholders' deficit. At April 30, 2008, the company's balance sheet also showed strained liquidity with $733,879 in total current assets available to pay $3,107,720 in total current liabilities. The company reported a net loss of $242,189 on total revenues of $84,193 for the first quarter ended April 30, 2008, compared with a net loss of $116,532 on total revenues of $58,357 in the same period ended April 30, 2007. Full-text copies of the company's financial statements for the quarter ended April 30, 2008, are available for free at: http://researcharchives.com/t/s?2e81 Going Concern Doubt Killman, Murrell & Company, P.C., in Odessa, Texas, expressed substantial doubt about Nitro Petroleum Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Jan. 31, 2008. The auditing firm pointed to the company's significant operating losses. About Nitro Petroleum Based in Oklahoma City, Okla., Nitro Petroleum Inc. (OTC BB: NTRO) -- http://www.nitropetroleum.com/-- is an independent, energy company engaged in the acquisition, exploitation and development of oil and natural gas properties in the Southern United States. ORAGENICS INC: Closes $2.6 Mil. Equity Financing ------------------------------------------------ Oragenics Inc. closed on its equity financing of $2,600,000. As a result of the closing, the company will issue 5,777,778 shares of common stock and warrants to acquire 5,777,778 million shares of common stock at an exercise price of $1.30 per share to the purchasers. "We are very pleased that we were able to close this expected financing on a timely basis and obtain the approval from the American Stock Exchange for the listing of the additional shares," Stanley B. Stein, the company's President and CEO, stated. "With this financing we are able to continue our commitment to deliver shareholder value through the development and commercialization of our products." Headquartered in Alachua, Florida, Oragenics Inc. (AMEX: ONI) -- http://www.oragenics.com/-- operates as an early-stage biotechnology company in the United States. Founded in 1996, it primarily focuses on developing technologies associated with oral health, broad spectrum antibiotics, and other general health benefits. Going Concern Doubt As reported in the Troubled Company Reporter on April 3, 2008, Kirkland Russ Murphy & Tapp, PA, exressed substantial doubt about the Oragenics Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring operating losses, negative operating cash flows and accumulated deficit. The company's operating activities used cash of $531,881 for the three months ended March 31, 2008. OWENS CORNING: Reports NYSE Listing of Series B Warrants -------------------------------------------------------- Owens Corning disclosed that its Series B Warrants are now listed on the New York Stock Exchange under the symbol OCWSB. Owens Corning issued the Series B Warrants, along with its Series A Warrants, in October 2006 in connection with the company's emergence from asbestos-related Chapter 11. The Series B Warrants are exercisable for approximately 7.8 million shares of the company's common stock at an exercise price of $45.25 per share. The Series A Warrants are exercisable for approximately 17.5 million shares of the company's common stock at an exercise price of $43.00 per share. Because the number of holders of Series A Warrants is below the number required by the applicable NYSE listing standards, the Series A Warrants are not listed on the New York Stock Exchange. The Series A and B Warrants are exercisable at any time and will expire on Oct. 31, 2013. Headquartered in Toledo, Ohio, Owens Corning fka Owens Corning (Reorganized) Inc. (NYSE: OC) -- http://www.owenscorning.com/-- is a producer of residential and commercial building materials and glass fiber reinforcements, and other similar materials for composite systems. The company has operations in 26 countries. The company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. D. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represented the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Official Committee of Asbestos Creditors. James J. McMonagle served as the Legal Representative for Future Claimants and wass represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. On Sept. 28, 2006, the Honorable John P. Fullam, Sr., of the U.S. District Court for the Eastern District of Pennsylvania affirmed the order of Honorable Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware confirming Owens Corning's Sixth Amended Plan of Reorganization. The Plan took effect on Oct. 31, 2006, marking the company's emergence from Chapter 11. * * * As reported by the Troubled Company Reporter on Feb. 28, 2008, Moody's Investors Service downgraded the debt ratings of Owens Corning to Ba1. The ratings downgrade was prompted by the adverse effects of the homebuilding contraction on Owens Corning's financial performance and credit profile. At the same time a corporate family rating of Ba1 and a speculative grade liquidity rating of SGL-2 were assigned. The ratings outlook is negative. PATIENT SAFETY: Chief Executive William Adams Named Board Member ---------------------------------------------------------------- William M. Adams, Patient Safety Technologies Inc.'s Chief Executive Officer, was appointed to the Board of Directors of the company to replace Arnold E. Spangler, who resigned from his position as a member of the Board and all committees of the Board effective June 11, 2008. Mr. Adams will not receive any additional compensation for his service on the Board. Except for his compensation as an officer of the company, since Jan. 1, 2007, there has been no transaction or any currently proposed transaction, to which the company was or is to be a party, in which Mr. Adams had or is to have a direct or indirect material interest. There are no family relationships between Mr. Adams and any of the company's directors, executive officers or persons nominated or charged by the company to become directors or executive officers. Headquartered in Los Angeles, Patient Safety Technologies Inc. (OTC BB: PSTX.OB) -- http://www.patientsafetytechnologies.com/-- through its wholly owned subsidiary, SurgiCount Medical Inc., is a developer and manufacturer of patient safety products including the Safety-Sponge(TM) System. The system helps in reducing the number of retained sponges and towels in patients during surgical procedures ans allows for faster and more accurate counting of surgical sponges. Going Concern Doubt Squar, Milner, Peterson, Miranda & Williamson, LLP, in San Diego, expressed substantial doubt about Patient Safety Technologies 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 has reported recurring losses from operations through Dec. 31, 2007, and has a significant accumulated deficit and a significant working capital deficit at Dec. 31, 2007. PRC LLC: Court Confirms Chapter 11 Joint Plan of Reorganization --------------------------------------------------------------- The Honorable Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York confirmed PRC LLC and its debtor- affiliates' Chapter 11 Joint Plan of Reorganization. At the hearing, Judge Glenn ruled that PRC had met all of the statutory requirements to confirm its Plan. With this action, PRC is set to complete its restructuring and emerge from Chapter 11 protection in the coming weeks. Upon consummation of the Plan and PRC's emergence from Chapter 11, a significant part of PRC's debt will be converted into equity and PRC's prepetition senior and second lien secured lenders will become PRC's equity holders through a private holding company. PRC's current equity interests will be canceled and prepetition equity holders will receive no distribution under the plan. Other creditors will receive distributions as provided under the plan. "Receiving the Court's approval of our Plan of Reorganization after just five months of restructuring is a testament to the dedication of our employees and to the confidence that our clients have shown in us," said Jerry McElhatton, PRC's CEO. "By restoring PRC's stability and financial strength, we will emerge as a much healthier company poised for growth and success. I want to thank our clients for their support and commend the PRC team and our creditor groups for their efforts." Mr. McElhatton added, "We accomplished what we set out to do at the start of this process, namely making the Company cash flow positive, de-leveraging our balance sheet and improving the Company's operations and efficiency. We are now well positioned to compete effectively in the marketplace and continue to exceed the high standards of our clients and their customers." A new Board will be formed on PRC's emergence from Chapter 11 to assume responsibility for the direction and management of PRC. Mr. McElhatton and four directors chosen by the prepetition secured lenders will be the initial directors. The company noted that it expects the plan of reorganization to be consummated and for PRC to emerge from Chapter 11 in late June or early July. Objections Resolved Among the parties that filed objections to the confirmation to the PRC Plan are (i) Bank of America, N.A., (ii) IAC/InteractiveCorp, (iii) BGTX Project, L.P., (iv) A&E Partners Holding, LLC, (v) A&E Partners Holding I, LLC, (vi) and Sally Duran. The Debtors have agreed with IAC to resolve certain causes of action pursuant to Section 547 of the U.S. Bankruptcy Code, claims under the Debtors' Transition Services Agreement with IAC, and certain issues with respect to an escrow account created in connection with Purchase Agreement by Panther/DCP Acquisition, LLC, of IAC's 100% interest in PRC, LLC. IAC, accordingly, withdrew its objection to the Plan confirmation and agreed to withdraw Claim No. 372, asserting $22,742,100 with respect to the Agreements. With respect to the Confirmation Objections, the Court rules that: -- Claim No. 331 filed by Bank of America under the ISDA Master Agreement between PRC, LLC, and BofA, as amended, will have the same priority as an Allowed Prepetition First Lien Claim and will be treated as a Class 4 Claim; -- liens asserted by BGTX will be resolved by further Court order or by agreement between the Debtors or Reorganized Debtors and BGTX; -- nothing in the Plan or the Confirmation Order alters or amends the insurance policies issued by ACE American Insurance Company, ACE Property & Casualty Insurance Company, and Illinois Union Insurance Company and other members of the ACE group or the rights and obligations of ACE and the Debtors, Reorganized Debtors and the Estate Representative under applicable non-bankruptcy law; -- In full and final settlement of any causes of action against IAC, and its obligations under the Transition Services Agreement: * IAC will pay $2,500,000 to the Debtors without delay; * the Debtors are enjoined from seeking any amounts from IAC for services rendered pursuant to the Transition Services Agreement provided that, the Employee Coverage will remain in full force pursuant to the terms of the Transition Services Agreement. * the Debtors will give instructions pursuant to the terms of the Escrow Agreement to release to IAC all amounts in the Escrow Account other than $1,350,000, which will be available solely to satisfy claims made pursuant to the Purchase Agreement and the Escrow Agreement. All objections to the Plan that have not been withdrawn, waived, deferred or settled, and all reservations of rights pertaining to the confirmation of the Plan are overruled on their merits. Second Plan Supplement On June 19, 2008, the Debtors also delivered to the Court their Second Supplement to the Plan Supplement Exhibits, which include (1) an addendum to Schedule 8.01 (B) of the Plan, representing an Agreement Relating to Assumption and Cure with A&E Holdings, LLC and A&E Holdings I, LLC; (2) an amended Material Terms of the Postconfirmation Unsecured Note; and (3) a blackline of the changes made to the Material Terms of the Postconfirmation Unsecured Note following the Court's ruling at the confirmation hearing. A full-text copy of the Plan Second Supplement is available for free at http://researcharchives.com/t/s?2e8c A full-text copy of the PRC Confirmation Order is available for free at http://researcharchives.com/t/s?2e8d A full-text copy of the Findings of Fact and Conclusions of Law on the PRC Plan is available for free at: http://researcharchives.com/t/s?2e8e About PRC LLC Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC -- http://www.prcnet.com/-- is a leading provider of customer management solutions. PRC markets its services to brand-focused, Fortune 500 U.S. corporations and delivers these services through a global network of call centers in the U.S., Philippines, India, and the Dominican Republic. PRC is the sole member of each of PRC B2B, LLC, and Precision Response of Pennsylvania, LLC, and the sole shareholder of Access Direct Telemarketing, Inc., each of which is a debtor and debtor- in-possession in PRC's joint Chapter 11 cases. Panther/DCP Intermediate Holdings, LLC, is the sole member of PRC. PRC, together with its operating subsidiaries PRC B2B, Access Direct, and PRC PA, is a leading provider of complex, consultative, outsourced services in the Customer Care and Sales & Marketing segments of the business process outsourcing industry. Since 1982, the company has acquired and grown customer relationships for some of the world's largest and most brand-focused corporations in the financial services, media, telecommunications, transportation, and retail industries. The company and four of its affiliates filed for Chapter 11 protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08- 10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. The Debtors chose Stephen Dube, at CXO LLC, as their restructuring and turnaround advisor. Additionally, Evercore Group LLC provides investment and financial counsel to the Debtors. The Debtors' consolidated financial condition as of Dec. 31, 2007 showed total assets of $354,000,000 and total debts of $261,000,000. The Debtors submitted to the Court a Chapter 11 Plan of Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PROBE MFG: March 31 Balance Sheet Upside-Down by $144,004 --------------------------------------------------------- Probe Manufacturing Inc.'s balance sheet at March 31, 2008, showed $2,368,194 in total assets and $2,512,198 in total liabilities, resulting in a $144,004 total stockholders' deficit. The company reported net income of $108,065 on sales of $2,185,444 for the first quarter ended March 31, 2008, compared with net income of $38,951 on sales of $1,877,090 in the same period last year. Full-text copies of the company's financial statements for the quarter ended March 31, 2008, are available for free at: http://researcharchives.com/t/s?2e77 Going Concern Doubt Jaspers + Hall, PC, in Denver, exressed substantial doubt about Probe Manufacturing Inc.'s ability to continue as a going concern after reviewing the company's financial statements for the three month period ended March 31, 2008. The auditing firm pointed to the company's shareholders' deficit of $144,004 as of March 31, 2008. About Probe Manufacturing Headquartered in Lake Forest, Calif., Probe Manufacturing Inc. (OTC BB: PMFI) -- http://www.probemi.com/-- provides a full range of electronics manufacturing and supply chain management services to some of the world's leading aerospace, industrial, automotive, alternate energy, hybrid, and medical device manufacturing firms. QUEBECOR WORLD: Seeks to Assume Dex Media Printing Deal ------------------------------------------------------- Debtor Quebecor World (USA) Inc., and Dex Media, Inc., are parties to a master agreement for printing services, dated March 31, 2005. The printing agreement provides for QWUSA to print telephone directories for Dex through Dec. 31, 2014. Sales volume of the printing agreement was estimated at about $200,000,000, Michael J. Canning, Esq., at Arnold & Porter LLP, in New York, related. Because of significant events since the parties entered into the agreement, they have discussed and agreed to certain changes to the printing agreement to meet their business needs, correct certain errors in the initial agreement, modify the schedules to the printing agreement, and expand the scope of the business relationship. Under the amended agreement, the term of the printing agreement will be extended by one year, through Dec. 31, 2015. The amended agreement also provides for the expansion of the products to be manufactured by QWUSA. Incremental sales associated with the additional products are forecast at $25,000,000, over the term of the agreement, Mr. Canning said. The amendments also resolve certain open issues between the parties related to the timing of future scheduled work. The Debtors seek the permission of the U.S. Bankruptcy Court for the Southern District of New York to amend the agreement and assume the agreement, as amended. Mr. Canning said the Debtors do not have any cure payments or obligations to satisfy in connection with the assumption of the agreement. He contended that the amendments will provide QWUSA with substantial revenue and earnings. 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 Sept. 30, 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. 18; 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. QUEBECOR WORLD: Incurs $190 Mil. Net Loss in First Quarter 2008 --------------------------------------------------------------- The consolidated revenues of Quebecor World Inc. and its debtor- affiliates for the first quarter of 2008 were $1.26 billion, a 9.2% decrease when compared to $1.39 billion for the same period in 2007. Excluding the impact of currency translation, revenues were $1.20 billion for the quarter, down 13.6% compared to the same period in 2007. The decrease in revenues resulted from plant closures, the impact of the Insolvency Proceedings, decreased volumes and continued price pressures. In the first quarter of 2008, Adjusted EBIT decreased to $34.8 million compared to $11.2 million for the same period in 2007. Adjusted EBIT margin was negative 2.8% for the first quarter, compared to 0.8% for the same period in 2007. These results were impacted by the loss on abandonment of business and disposals of $32.0 million related to the UK subsidiary placed into administration. The Debtors incurred a net loss of $190.0 million for the first quarter ended March 31, 2008. Paper sales, excluding the effect of currency translation, decreased by 17.7% for the first quarter of 2008, compared to the same period in 2007. Although the variance in paper sales has an impact on revenues, it has little impact on operating income because the cost is generally passed on to the customer. Most of the Debtors' long-term contracts with its customers include price-adjustment clauses based on the cost of materials in order to minimize the effects of fluctuation in the price of paper. Cost of sales for the first quarter of 2008 decreased by 8.1% to $1.08 billion compared to $1.18 billion for the corresponding period in 2007. The decrease compared to the first quarter of 2007 is explained mostly by decreases in sales volume and labor costs. Gross profit margin was 14.5% in the first quarter of 2008 compared to 15.6% in 2007. Excluding the negative impact of currency, gross profit margin increased to 14.8% in the first quarter of 2008. Selling, general and administrative expenses for the first quarter of 2008 were $114.0 million compared with $113.4 million for the same period in 2007. Excluding the unfavorable impact of currency translation of $6.7 million, selling, general and administrative expenses decreased by 5.4% compared to the same period last year. Securitization fees were nil for the first quarter of 2008, compared to $5.9 million for the first quarter of 2007. The variation is explained by the termination of the North American program as of Jan. 23, 2008 as well as the termination of the European program in December 2007, which was then replaced by the European factoring program included on the Debtors' balance sheet. Depreciation and amortization expenses were $71.7 million in the first quarter of 2008, compared with $75.2 million for the same period in 2007. Loss on abandonment of business and disposals for the first quarter of 2008 was $32.0 million and related to the abandonment of its UK subsidiary placed into administration. The loss of $11.0 million in 2007 was attributable to the disposal of the Lille, France facility. During the first quarter of 2008, the Debtors recorded impairment of assets, restructuring and other charges of $39.4 million, compared to $29.5 million for the same period in 2007. The charge for the quarter was mainly related to the closure and consolidation of facilities in North America as well as the impairment of long-lived assets in North America and Europe. Financial expenses were $82.0 million in the first quarter of 2008, compared to $33.9 million for the same period in 2007. The increase is mainly due to the amortization of financing costs of $53.9 million and by the effect of higher interest rates on the DIP facility and a higher level of debt, partially offset by net gains on foreign exchange. The Debtors recorded Reorganization items which represent post-filing expenses, gains and losses, and provisions for losses that can be directly associated with the reorganization and restructuring of the Applicants. The total expense for the first quarter of 2008 is $14.2 million. The cash flow usage amounts to $3.9 million and relates primarily to professional fees. Income tax expense was $17.2 million in the first quarter of 2008, compared to a recovery $14.1 million for the same period in 2007. Income tax expense before IAROC was $15.8 million in the first quarter of 2008, compared to a recovery of $7.7 million for the same period last year. For the first quarter ended March 31, 2008, the Debtors reported a loss per share of $1.29 compared to a loss per share of $0.34 for the same period in 2007. These results incorporated IAROC, net of income taxes, of $38.0 million or $0.26 per share compared with $23.1 million or $0.17 per share for the same period in 2007. Adjusted loss per share was $1.03 in the first quarter of 2008 compared to $0.17 in the same period of 2007. The Debtors' consolidated balance sheet showed total assets of $4.2 billion, total liabilities of $4.7 billion, and total stockholders' deficit of $508.7 million as of March 31, 2008. Long-Term Debt Default On Jan. 16, 2008, since the Debtors have not obtained the $125.0 million of new financing, as had been required under the terms of the revolving bank facility and North American securitization program waivers, the Debtors became in default under its revolving bank facility, its Equipment financing facility and its North American securitization program. Upon filing for creditor protection in the Insolvency Proceedings on Jan. 21, 2008, the Debtors became in default under substantially all of its other debt agreements and instruments. Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due or the risk that these financial obligations be met at excessive cost. The Debtors is under creditor protection as of Jan. 21, 2008. A full-text copy of the Debtors' first quarter 2008 press release and financial highlights is available for free at: http://ResearchArchives.com/t/s?2e64 A full-text copy of the Debtors' first quarter 2008 financial statements is available for free at: http://ResearchArchives.com/t/s?2e65 A full-text copy of the Debtors' first quarter 2008 management discussion and analysis is available for free at: http://ResearchArchives.com/t/s?2e66 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 Sept. 30, 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. 18; 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. REATA PETROLEUM: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: The Reata Petroleum Corporation 21804 US Highway 6 Sterling, CO 80751 Bankruptcy Case No.: 08-18564 Description: Kathy Sanger, president, filed the petition on the Debtor's behalf. Chapter 11 Petition Date: June 18, 2008 Court: District of Colorado (Denver) Judge: Elizabeth E. Brown Debtor's Counsel: Jeffrey Weinman , Esq. (jweinman@epitrustee.com) 730 17th Street, Suite 240 Denver, CO 80202 Tel: (303) 572-1010 Estimated Assets: $1,937,578 Estimated Debts: $4,863,067 A copy of the Debtor's petition with list of unsecured creditors is available for free at http://bankrupt.com/misc/cob08-18564.pdf REMGRIT REALTY: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Remgrit Realty, Inc. 323 North Avenue Bridgeport, CT 06606 Bankruptcy Case No.: 08-50515 Type of Business: The Debtor operates a real estate company. Chapter 11 Petition Date: June 16, 2008 Court: District of Connecticut (Bridgeport) Debtor's Counsel: Matthew K. Beatman (MBeatman@zeislaw.com) Zeisler and Zeisler 558 Clinton Avenue P.O. Box 3186 Bridgeport, CT 06605 Telephone (203) 368-4234 Estimated Assets: $500,001 to $1 million Estimated Debts: $10,000,001 to $50 million A copy of Debtor's petition and a list of 13 of its largest unsecured creditors is available for free at: http://bankrupt.com/misc/ctb08-50515.pdf RESIDENTIAL CAPITAL: DBRS Assigns 'CCC' Rating on 8.500% Sr. Notes ------------------------------------------------------------------ DBRS has downgraded the Issuer Rating of Residential Capital, LLC to CCC from B(low). Concurrently, DBRS has downgraded the existing senior unsecured notes to CC(high) from CCC and the existing subordinate unsecured notes to CC(high) from CCC(low). Further, DBRS has assigned a CCC rating to the newly issued 8.500% Senior Secured Guaranteed Notes due 2010 and has assigned CC (high) to the 9.625% Junior Secured Guaranteed Notes due 2015. The trend on all ratings is Negative. Finally, the existing ratings have been removed from Under Review with Negative Implications. The rating actions follow DBRS's review of ResCap's new debt and balance sheet structure and its maturity profile, which is the result of the recent debt tender and exchange offer and the addition of the $3.5 billion secured credit facility provided to ResCap by its ultimate parent, GMAC, LLC. While DBRS recognizes that the aforementioned transactions and the other liquidity initiatives combined with support gained from GMAC and its shareholders have improved ResCap's near-term liquidity profile, in DBRS's opinion, the company still faces significant medium-term liquidity pressures. ResCap is reliant on asset sales to meet its debt maturities and, given the current difficult market conditions, DBRS is concerned that proceeds from the assets sales may not be sufficient to satisfy its longer-dated obligations. Furthermore, these transactions have encumbered the vast majority of the Company's assets, removing financial flexibility. The Issuer Rating factors in the selective default by ResCap, which was the result of the debt exchange. The notching between the Issuer Rating, the Junior Secured Guaranteed Note due 2015 rating and the outstanding unsecured rated debt reflects DBRS policy. Given the current environment, DBRS views ResCap's ongoing business fundamentals as weak, as ResCap continues to face pressures from the slowed U.S. housing market which has lowered already depressed origination volume, thereby pressuring margins and reducing earnings potential. ResCap's new senior secured notes due in 2010 have been assigned Recovery Ratings of RR4. The RR4 reflects DBRS's expectations that debtholders would experience an average recovery in the event of default as GMAC has a priority lien to secure the revolving facility. Furthermore, the new Junior Secured Guaranteed Notes due in 2015 and the legacy existing ResCap unsecured notes carry a recovery rating of RR6, reflecting their poor recovery prospects given the extent of the assets that have been pledged to the GMAC facility and the new senior secured notes. As a result, DBRS has assigned these notes a rating of CC (high), two notches below ResCap's Issuer Rating of CCC. The trend remains Negative, reflecting the continued and intensifying cash flow and balance sheet pressure ResCap is under as its manages legacy portfolios and liquidates its assets. REVE SPC: Moody's to Review 11 Classes of Notes for Possible Cut ---------------------------------------------------------------- Moody's Investors Service placed its ratings of these notes issued by REVE SPC Series 2007 on review for possible downgrade: Class Description: Segregated Portfolio Series 10, $25,000,000 Dryden XVII Notes of Series 2007-1, Class B-2 due Sept. 20, 2014 -- Prior Rating: Aa3 -- Current Rating: Aa3, on review for possible downgrade Class Description: Segregated Portfolio Series 11, EUR 10,000,000 Dryden XVII Notes of Series 2007-1, Class B-2 due Sept. 20, 2014 -- Prior Rating: Aa3 -- Current Rating: Aa3, on review for possible downgrade Class Description: Segregated Portfolio Series 12, EUR 5,000,000 Dryden XVII Notes of Series 2007-2, Class C-2 due Sept. 20, 2014 -- Prior Rating: A3 -- Current Rating: A3, on review for possible downgrade Class Description: Segregated Portfolio Series 13, $20,000,000 Dryden XVII Notes of Series 2007-1, Class C-2 due Sept. 20, 2014 -- Prior Rating: A3 -- Current Rating: A3, on review for possible downgrade Class Description: Segregated Portfolio Series 14, JPY 1,000,000,000 Dryden XVII Notes of Series 2007-2, Class D due Sept. 20, 2014 -- Prior Rating: Baa2 -- Current Rating: Baa2, on review for possible downgrade Class Description: Segregated Portfolio Series 15, $10,000,000 Dryden XVII Notes of Series 2007-1, Class E due Sept. 20, 2014 -- Prior Rating: Ba2 -- Current Rating: Ba2, on review for possible downgrade Class Description: Segregated Portfolio Series 21, $90,000,000 Dryden XVII Notes of Series 2007-1, Class B-2 due March 20, 2017 -- Prior Rating: Aa3 -- Current Rating: Aa3, on review for possible downgrade Class Description: Segregated Portfolio Series 22, $30,000,000 Dryden XVII Notes of Series 2007-1, Class B-2 due March 20, 2017 -- Prior Rating: Aa3 -- Current Rating: Aa3, on review for possible downgrade Class Description: Segregated Portfolio Series 24, $15,000,000 Dryden XVII Notes of Series 2007-2, Class E due March 20, 2017 -- Prior Rating: Ba2 -- Current Rating: Ba2, on review for possible downgrade Class Description: Segregated Portfolio Series 25, $30,000,000 Dryden XVII Notes of Series 2007-1, Class B-2 due March 20, 2017 -- Prior Rating: Aa3 -- Current Rating: Aa3, on review for possible downgrade Class Description: Segregated Portfolio Series 41, JPY 1,000,000,000 Dryden XVII Notes of Series 2007-1, Class B-2 due Sept. 20, 2014 -- Prior Rating: Aa3 -- Current Rating: Aa3, on review for possible downgrade Moody's explained that the rating action reflects deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of corporate securities. RHODE ISLAND HEALTH: S&P Chips Rating on $10.6MM 1994 Bonds to BB- ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating to 'BB-' from 'BB' on Rhode Island Health and Educational Facilities Building Corp.'s $10.6 million series 1994 bonds, issued for Westerly Hospital. The downgrade reflects extremely high operating loss in 2007, coupled with continued losses year to date, although management has made progress in reducing the deficits, coverage is light and the balance sheet continues to weaken in terms of declining liquidity and an aging physical plant. At the same time, the outlook remains negative since the overall audited trend of operational and financial performance remains depressed. The 'BB-' rating reflects a significant operating loss again in 2007, and although fiscal-year-to-date 2008 performance looks more promising with diminished losses, projected losses are still more consistent with a 'BB-' rating. In addition, the continued weakening of the balance sheet in terms of a high-average age of plant, and decreasing liquidity, with many years of negative operations supported by a line of credit and operating reserves, although debt remains moderate, are additional credit concerns. Even though there is minimal direct competition, there is outmigration, and the hospital has experienced a three-year general decline across the board in volume indicators. "While Westerly has some remaining balance sheet strength and is showing signs of diminished losses year to date, the overall trend has been negative for an extended period," said Standard & Poor's credit analyst Cynthia Keller Macdonald. "At this rating level, we expect Westerly to post modest operating losses and to retain liquidity without significantly increased reliance on short-term financing" added Ms. Keller Macdonald. A lower rating would likely be driven by acceleration of operating losses, a significant drop in liquidity, or increase in debt. A return to a stable outlook is premised on sustained operating improvement beyond the interim period, combined with maintenance of liquidity while making appropriate investments in plant. Westerly Hospital is located in the city of Westerly ('AA-') in the state of Rhode Island ('AA') where there are also several other financially troubled stand-alone hospitals. Westerly admitted 4,199 inpatients in 2007, which was down almost 5% from 2006 levels. Overall, the hospital has lost about 700 admissions since 2005 when admissions almost reached 5,000. Year to date through April 30, 2008, Westerly has admitted 2,538 inpatients, which is 3.6% above previous-year levels and above budget. RIVIERA HOLDINGS: S&P Holds Rating; Changes Outlook to Developing ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Las Vegas-based Riviera Holdings Corp. to negative from developing. Ratings on Riviera, including the 'B' corporate credit rating, were affirmed. Total debt outstanding at March 31, 2008 was $225 million. "The outlook revision reflects continuing softness in the Las Vegas and Black Hawk, Colorado gaming markets through the first quarter of 2008, and our expectation that these trends will continue during the next few quarters as consumer spending is negatively affected by the weak economy," noted Standard & Poor's credit analyst Melissa Long. "Riviera's operating performance has been meaningfully affected by this softness, and we believe its credit measures will weaken materially this year. In addition, Riviera is in the midst of a heightened capital spending program aimed at renovating its Las Vegas- and, to a lesser extent, Black Hawk-based properties." S&P believe that the renovation investment makes sense for the long term; however, the incremental spending is likely to result in the need for revolver borrowings in 2008, as funding needs are expected to exceed internally generated cash and the excess cash that Riviera has on its balance sheet. Thus, the capital spending program will contribute to weaker credit measures in the short term. Riviera's bank credit agreement includes a leverage covenant that would be violated if revolver borrowings exceed $2.5 million and if total debt to EBITDA exceeds 6.5x. A violation of this covenant is possible, given ongoing capital spending, if operating trends weaken modestly from the first quarter pace and persist for a few quarters. While S&P would expect that the banks would amend the covenant in the event of a violation given their adequate collateral protection and because the weak performance is expected to be temporary, financing costs for Riviera would likely rise meaningfully under this scenario. This would result in thinner cash flow coverage of debt service, and availability under the revolver could be limited, at least temporarily. The 'B' rating reflects Riviera's high debt leverage, its small portfolio of two casinos, the highly competitive markets in which it operates, and the relatively newer and higher-quality resorts of many of its competitors. ROGERS COMMS: Fitch Lifts Sr. Sub. Notes Rating to BBB- from BB+ ---------------------------------------------------------------- Fitch Ratings has upgraded the ratings for Rogers Communications Inc. as: Rogers -- Issuer Default Rating to 'BBB' from 'BBB-'; -- Senior unsecured notes to 'BBB' from 'BBB-'; -- Senior subordinated notes at 'BBB-' from 'BB+'. The Rating Outlook is Stable. Approximately C$4.9 billion of debt securities are affected by these actions. The ratings upgrade reflects Rogers' continued strong financial performance that has led to a strengthening of its credit measures driven by greater revenues and increased profitability with the wireless operations. Fitch believes Rogers' mix of cable and wireless assets competitively positions the company and allows for revenue diversification through its robust bundled service offer. As a result, Fitch expects Rogers to continue its positive operating momentum and sustain growth over the longer-term. Past deleveraging achieved through cash flow growth and debt reduction efforts coupled with increased free cash flow has significantly enhanced Rogers' financial flexibility. Accordingly, Rogers has increased the cash returned to common shareholders through higher dividends. In addition, the company has announced a stock repurchase program. While Rogers management has not provided specific guidance for financial policy targets, with current expectations for growth, Fitch expects the company will have material flexibility in maintaining leverage consistent with a 'BBB' entity over the rating horizon. Rogers leverage at the end of the first quarter was 2.1 times. The ratings upgrade also considers the large commitment the company will likely make in the current Advanced Wireless Services spectrum auction. Total auction bidding is in the range of C$3.9 billion with Rogers current aggregate bid in excess of C$800 million primarily for 20 MHz spectrum licenses covering a national footprint. While the auction has not yet closed, bidding has progressed where final auction results are not expected to vary significantly. As a result, Rogers should continue to realize a competitive advantage in its spectrum position compared to Bell Mobility and TELUS thus enabling Rogers to have a significant amount of bandwidth and capacity for the longer-term growth in wireless broadband data. Leverage is expected to rise modestly from the spectrum purchase, although by the end of 2008, Fitch expects improvement back to 2x range due to growth in the company's operating cash flow. The current auction spectrum price of over C$1.20 per MHz POP is considerably higher than the $0.54 per MHz POP that U.S. carriers paid for comparable AWS spectrum in 2006 and much closer to the average per MHz POP price paid for the most recent 700 MHz spectrum auction of $1.28. In Fitch's opinion, the company's liquidity position is strong and is supported by the stable free cash flow generation and the availability under its C$2.4 billion unsecured credit facility. FCF for the last twelve months was approximately C$1.1 billion. Consequently, over the past several quarters, Rogers has significantly increased its dividend to C$1.00 or approximately C$600 million annually. In addition, Rogers announced a Normal Course Issuer Bid to repurchase approximately C$300 million of the company shares. Rogers will also begin to pay a materially higher level of cash taxes over the next couple of years as the benefit from available net operating losses lessen over time. In July of last year, Rogers entered into a new C$2.4 billion credit facility maturing in July 2013 as part of the intracompany amalgamation of Rogers and its wholly owned subsidiaries Cable and Wireless. Availability under the facility at the end of the first quarter 2008 was approximately C$1.3 billion. Fitch expects the company to use the availability on its revolver to fund its expected purchase in the AWS spectrum auction. Over the next year, Fitch anticipates Rogers will refinance a significant portion of the credit facility with longer term financing. Scheduled maturities over the next several years are minimal until 2011 when approximately C$1.1 billion of debt becomes due. SAINT MICHAEL MOTOR: Files Schedules of Assets and Liabilities -------------------------------------------------------------- Saint Michael Motor Express submitted to the U.S. Bankruptcy Court for the Western District of Tennessee its schedules of assets and liabilities, disclosing: Schedule Assets Liabilities -------- ---------- ----------- A. Real Property B. Personal Property $11,211,255 C. Property Claimed as Exempt D. Creditors Holding $11,250,242 Secured Claims E. Creditors Holding Unsec. $278,176 Priority Claims F. Creditors Holding Unsec. $879,492 Nonpriority Claims ---------- ----------- TOTAL $11,211,255 $12,407,911 Jackson, Tennessee-based Saint Michael Motor Express provides refrigerated trucking services. It filed its chapter 11 petition on May 22, 2008 (Bankr. W.D. Tenn. Case No. 08-11838). Henry C. Shelton, Esq., at Adams and Reese LLP, represents the Debtor in its restructuring efforts. SAINT MICHAEL MOTOR: Taps Adams and Reese as Counsel ---------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Tennessee gave Saint Michael Motor Express authority to employ Henry C. Shelton, III, Esq., at Adams and Reese LLP as its counsel. As of the bankruptcy filing, Adam and Reese was owed about $3,000 for work performed for the Debtor. The Debtor told the Court that Mr. Shelton and Adam and Reese hold no interest adverse to the Debtor, which would impact their representation of the Debtor. Adam and Reese does represent Altec Capital Services LLC, H&P Leasing and Southern States Utility Trailer Sales Inc., but the Debtor said the firm will not represent these parties-in-interest in the bankruptcy case. The firm can be reached at: Adams and Reese LLP 80 Monroe Avenue, Suite 700 Memphis, TN 38103 Telephone: (901) 524-5271 Facsimile: (901) 524-5371 Jackson, Tennessee-based Saint Michael Motor Express provides refrigerated trucking services. It filed its chapter 11 petition on May 22, 2008 (Bankr. W.D. Tenn. Case No. 08-11838). Henry C. Shelton, Esq., at Adams and Reese LLP, represents the Debtor in its restructuring efforts. The Debtor listed $11,211,255 in assets and $12,407,911 in liabilities in its schedules. SAINT MICHAEL MOTOR: Creditors 341(a) Meeting Set June 25 --------------------------------------------------------- The U.S. Trustee for Region 8 will convene a meeting of creditors in the case of Saint Michael Motor Express at 1:30 p.m., on June 25, 2008, at 109 South Highland, Room 102 in Jackson, Tennessee. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Jackson, Tennessee-based Saint Michael Motor Express provides refrigerated trucking services. It filed its chapter 11 petition on May 22, 2008 (Bankr. W.D. Tenn. Case No. 08-11838). Henry C. Shelton, Esq., at Adams and Reese LLP, represents the Debtor in its restructuring efforts. The Debtor listed $11,211,255 in assets and $12,407,911 in liabilities in its schedules. SAINT MICHAEL MOTOR: Gets Interim OK to Use DIP Financing --------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Tennessee gave Saint Michael Motor Express interim permission to access debtor-in-possession financing from Transportation Alliance Bank. The Debtor related that its financial results have suffered principally due to a downturn in the trucking business, the cost of fuel, and its debt structure. The Debtor said its cash collections fell short of target during the first week of the case, leaving the Debtor unable to meet essential administrative expenses like fuel and payroll. The Debtor said its primary source of funds for its daily operations is TAB, which allows the Debtor to use cash collateral pursuant to an interim order of the Court. TAB, the Debtor said, agreed to extend an immediate loan of $200,000. The terms and conditions of the DIP loan agreement are: a. the Court will grant the Debtor's motion, authorize the loan and grant an administrative superpriority claim for the loan and its expenses; b. Ann M. Saia, Louis P. Saia and wife Cindy Saia will execute TAB's standard form guaranties for $200,000; c. the loan will bear interest at prime plus 5% and will become due in 180 days; d. Ann M. Saia will provide TAB with updated financial statement; and e. the loan will be paid and the $200,000 guaranties will be released upon receipt of $500,000 of proceeds from the sale of Louis Saia'a property, and will be pro rata released after TAB receives $300,000 in proceeds on its pre-existing $800,000 mortgage. About Saint Michael Jackson, Tennessee-based Saint Michael Motor Express provides refrigerated trucking services through its 100 employees. It currently owns about 89 trucks with 140 refrigerated trailers, both van and flat-bed. All of the Debtor's shares is owned by Louis P. Saia. It filed its chapter 11 petition on May 22, 2008 (Bankr. W.D. Tenn. Case No. 08-11838). Henry C. Shelton, Esq., at Adams and Reese LLP, represents the Debtor in its restructuring efforts. The Debtor listed $11,211,255 in assets and $12,407,911 in liabilities when it filed for bankruptcy. SCO GROUP: Exclusive Plan Filing Period Extended Through Aug. 11 ---------------------------------------------------------------- The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware extended the period at which The S.C.O. Group Inc. and S.C.O. Operations Inc. can exclusively file their chapter 11 plan through Aug. 11, 2008. The Debtors' exclusive period for soliciting acceptances of the plan was also extended through Oct. 13, 2008. The Troubled Company Reporter related on May 21, 2008, that this is the Debtors' second extension request. As reported in the TCR on Feb. 12, 2008, the Bankruptcy Court extended the Debtors' exclusive periods to file a chapter 11 plan until May 11, 2008; and solicit acceptances of that plan until July 11, 2008. The Debtors believe that cause exists to have their deadlines extended, because, among other things, the ruling of the District Court of Utah will resolve a substantial unresolved contingency, regarding the amount, if any, of the Debtors' liability to Novell, Inc. The ruling will, therefore, help all parties complete the final negotiations and documentation for their deal. The Deal reports that the Debtors' needed time to discuss and formulate an investment scheme with Stephen Norris & Co. Capital Partners LLP, a privately held equity firm. Judge Gross trashed the only objection to the Debtor's plan filing period extension motion filed by Novell Inc., The Deal says. Novell told the Bankruptcy Court that the August 11 extension would allow little time before a district court could rule on a dispute against the Debtors, The Deal notes. Novell, The Deal relates, said that should the Bankruptcy Court grant the second extension, it should be the Debtors' last chance. Background to the Novell Suit The TCR - Intellectual Property Dispute reported on April 4, 2008, that the U.S. District Court for the District of Utah was set to commence trial on April 28, 2008 in The SCO Group Inc.'s copyright infringement suit against Novell Inc. On Jan. 20, 2004, SCO filed suit against the Company in the Third Judicial District Court of Salt Lake County, State of Utah. The company later removed the action to the Utah District Court. SCO's original complaint alleged that the company's public statements and filings regarding the ownership of the copyrights in UNIX and UnixWare have harmed SCO's business reputation and affected its efforts to protect its ownership interest in UNIX and UnixWare. The Utah District Court dismissed the original complaint, but allowed SCO to file an amended complaint, which SCO did on July 9, 2004. On July 29, 2005, the company filed an answer to the amended complaint alleging slander of title and breach of contract, and seeking declaratory actions and actual, special and punitive damages. On Feb. 3, 2006, SCO filed a second amended complaint alleging violation of the non-competition provisions of the agreement under which the company sold its Unix business to SCO, failure to transfer all of the Unix business, copyright infringement, and unfair competition. SCO seeks to require Novell to assign all copyrights that it has registered in UNIX and UnixWare to SCO, to prevent it from representing that it has any ownership interest in the UNIX and UnixWare copyrights, to require it to withdraw all representations made regarding its ownership of the UNIX and UnixWare copyrights, and to cause it to pay actual, special and punitive damages in an amount to be proven at trial. On March 10, 2006, the company moved to stay the case pending the outcome of arbitration between the Company and SuSE Linux GmbH in the International Court of Arbitration in France. On Aug. 21, 2006, the District Court ordered that claims related to the SuSE arbitration should be stayed but the case should proceed with the rest of the claims. The company has also moved for summary judgment asking the District Court to rule that: (1) it retained the UNIX and UnixWare copyrights; (2. SCO has not met its burden of establishing special damages on its slander of title claim; (3) the company retained broad rights to waive SCO's contract claims against International Business Machines Corp., and; (4) the portion of SCO's contract and unfair competition claims based on non-competition provisions should not proceed to a jury trial. SCO has filed its own motions for summary judgment seeking a ruling that it owns the UNIX and UnixWare copyrights, and that the company's retained rights are much narrower than claimed. The District Court heard the foregoing motions on May 31, 2007 and June 4, 2007, and took all motions under advisement. (Intellectual Property Reporter, July 9, 2007) On Aug. 10, 2007, the District Court granted summary judgment determining that the company owns the UNIX copyrights. The District Court also ruled that the company is entitled to certain royalties SCO received from Sun Microsystems Inc. and Microsoft Corp. through their licenses. The Debtors' chapter 11 petition filing on Sept. 14, 2007, automatically stayed the action in the Utah Court. On Oct. 4, 2007, the company moved to lift the automatic stay of the suit. (Intellectual Property Reporter, Oct. 11, 2007) The Bankruptcy Court has allowed the company to proceed with the trial for the purpose of determining how much is owed to the company from the license royalties. About Novell Based in Waltham, Mass., Novell Inc. (NASDAQ: NOVL) -- http://www.novell.com/-- develops, implements, and supports mixed source and open source software for use in business solutions. Its business units segments include: Open Platform Solutions, Identity and Security Management, Systems and Resource Management, and Workgroup. Pursuant to an agreement and plan of merger, dated Aug. 1, 2007, Novell acquired 100% of Senforce Technologies, Inc. In March 2008, the company completed the acquisition of PlateSpin Ltd. About The S.C.O. Group Headquartered in Lindon, Utah, The S.C.O. Group Inc. (Nasdaq: SCOX) fka Caldera International Inc. -- http://www.sco.com/-- provides software technology for distributed, embedded and network-based systems, offering SCO OpenServer for small to medium business and UnixWare for enterprise applications and digital network services. The company has office locations in Australia, Austria, Argentina, Brazil, China, Japan, Poland, Russia, the United Kingdom, among others. The company and its affiliate, SCO Operations Inc., filed for Chapter 11 protection on Sept. 14, 2007, (Bankr. D. Del. Lead Case No. 07-11337). Paul Steven Singerman, Esq., and Arthur Spector, Esq., at Berger Singerman P.A., represent the Debtors in their restructuring efforts. James O'Neill, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, are the Debtors' Delaware and conflicts counsels. Epiq Bankruptcy Solutions LLC, acts as the Debtors' claims and noticing agent. The United States Trustee failed to form an Official Committee of Unsecured Creditors in these cases due to insufficient response from creditors. The Debtors' schedules showed total assets of $9,549,519 and total liabilities of $3,018,489. SILVA BOWLING: Case Summary & 34 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Silva Bowling Inc. dba Silva Lanes 1352 Rufina Circle Santa Fe, NM 87505 Bankruptcy Case No.: 08-11994 Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. ------ -------- ADS Bowling LLC 08-11998 Type of Business: The Debtors operate a bowling sports center. Chapter 11 Petition Date: June 20, 2008 Court: District of New Mexico (Albuquerque) Judge: James S. Starzynski Debtors' Counsel: Daniel J. Behles, Esq. (dan@behles.com) 226-A Cynthia Loop, Northwest Albuquerque, NM 87114-1100 Tel: (505) 217-2764 Fax: (505) 217-2766 Total Assets Total Debts ------------ ----------- Silva Bowling Inc. $553,000 $4,058,852 ADS Bowling LLC $0 $5,882,896 A. A copy of Silva Bowling Inc.'s petition is available for free at http://bankrupt.com/misc/nmb08-11994.pdf B. A copy of ADS Bowling LLC's petition is available for free at http://bankrupt.com/misc/nmb08-11998.pdf SORIN CDO: Moody's Cuts Rating on $402MM Notes from Baa3 to Ba2 --------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of four classes of notes issued by Sorin CDO V Ltd., and left on review for possible further downgrade two of these ratings: Class Description: $402,000,000 Class A-1S Senior Secured Floating Rate Notes Due 2051 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $66,000,000 Class A-1J Senior Secured Floating Rate Notes Due 2051 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Class Description: $60,000,000 Class A-2 Senior Secured Floating Rate Notes Due 2051 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: Ca Class Description: $27,000,000 Class A-3 Deferrable Secured Floating Rate Notes Due 2051 -- Prior Rating: Ca -- Current Rating: C Sorin CDO V Ltd. is a collateralized debt obligation backed primarily by a portfolio of structured finance securities. The rating actions taken today reflect continuing deterioration in the credit quality of the underlying portfolio and the occurrence as reported by the Trustee of an event of default that took place on June 4, 2008. The event of default was caused by a Class A-1 Overcollateralization Failure, as set forth in Section 5.1(i) of the Indenture dated as of Nov. 21, 2006. That event of default is continuing. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, certain parties to the transaction may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating actions taken reflect the increased expected loss associated with tranches of the transaction. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued following the default event. Because of this uncertainty, the ratings assigned to Class A-1S and Class A-1J Notes remain on review for possible further action. SPANISH BROADCASTING: Fails to Sustain Moody's B2 Ratings --------------------------------------------------------- Moody's Investors Service downgraded the corporate family and probability of default ratings for Spanish Broadcasting System, Inc., both to B3 from B2. Spanish Broadcasting's radio segment faces secular, cyclical, and company specific operating challenges, and its startup television business continues to consume cash. The downgrade reflects ongoing deterioration since Moody's last lowered ratings in October 2007, and a consequent view that weakness in radio operations and the delay in profitability of the television operations has resulted in an inability to achieve the necessary improvement in credit profile to sustain the former B2 rating. Moody's also downgraded instrument ratings as shown below. The rating outlook is stable. Spanish Broadcasting System, Inc. -- Corporate Family Rating, Downgraded to B3 from B2 -- Probability of Default Rating, Downgraded to B3 from B2 -- Senior Secured Bank Credit Facility, Downgraded to B3 from B2, LGD3, 49% -- 10 3/4% Series B Preferred Stock, Downgraded to Caa2 from Caa1, LGD6, 99% Outlook: Stable Spanish Broadcasting's B3 rating reflects high leverage, risk related to its 2006 launch of MEGA TV, recent weakness in operating performance of its radio segment, lack of scale and significant revenue concentration in the New York, Los Angeles, and Miami markets. The TV launch creates execution risk and has resulted in a material increase in leverage as the company strives to achieve positive EBITDA from this still new initiative. Spanish Broadcasting's large market presence, good liquidity, and favorable growth rates for the Hispanic media market and positive Hispanic demographic trends support the rating. Spanish Broadcasting System, Inc., headquartered in Coconut Grove, Florida, owns and operates 21 radio stations and two television stations targeting the Hispanic audience. Its annual revenue is approximately $180 million. STRIKEFORCE TECH: March 31 Balance Sheet Upside-Down by $5,235,404 ------------------------------------------------------------------ StrikeForce Technologies Inc.'s balance sheet at March 31, 2008, showed $2,758,503 in total assets and $7,993,907 in total liabilities, resulting in a $5,235,404 total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $1,377,622 in total current assets available to pay $5,897,516 in total current liabilities. The company reported net income of $271,289 on revenues of $50,235 for the first quarter ended March 31, 2008, compared with a net loss of $504,411 on revenues of $498,400 in the same period last year. The decrease in revenues was primarily due to the amount of one- time sales of the company's newly developed GuardedID(R) keyboard encryption and anti-keylogger technology that occurred in the first quarter of 2007. The increase in net income was primarily due to net mark to market changes in the fair value of derivative financial instruments relating to the convertible secured promissory notes. Loss from operations before other income/expense increased to $545,024 during the three months ended March 31, 2008, compared to $158,627 in the same period last year, primarily due to the decrease in revenues. Full-text copies of the company's financial statements for the quarter ended March 31, 2008, are available for free at: http://researcharchives.com/t/s?2e72 Going Concern Doubt As reported in the Troubled Company Reporter on May 14, 2008, Skillman, N.J.-based Li & Company, PC, expressed substantial doubt about StrikeForce Technologies Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2007, and 2006. The auditor reported that the company had an accumulated deficit and a working capital deficiency at Dec. 31, 2007, and had a net loss and cash used in operations for the year ended Dec. 31, 2007. About StrikeForce Technologies Headquartered in Edison, N.J., StrikeForce Technologies Inc. (OTC BB: SKFT) -- http://www.strikeforcetech.com/-- helps to prevent identity theft online. Its products protect consumers, and businesses in "real time" against identity theft. STRUCTURED ASSET: Moody's Cuts Ratings of 148 Tranches ------------------------------------------------------ Moody's Investors Service downgraded the ratings of 148 tranches from 19 Option ARM transactions issued by Structured Asset Mortgage Investments II Trust. Forty one tranches remain on review for possible further downgrade. Additionally, 47 tranches were placed on review for possible downgrade and 3 tranches were confirmed. The collateral backing these transactions consists primarily of first-lien, adjustable-rate, negatively amortizing Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going review process. Issuer: Structured Asset Mortgage Investments II Trust 2005-AR2 -- Cl. M-1, Downgraded to Aa2 from Aa1 -- Cl. M-2, Downgraded to A2 from Aa2 -- Cl. M-3, Downgraded to A3 from Aa3 -- Cl. M-4, Downgraded to Baa3 from A2 -- Cl. M-5, Downgraded to Ba1 from A3 -- Cl. M-6, Downgraded to Ba3 from A3 -- Cl. M-7, Downgraded to B3 from Baa1 -- Cl. M-X, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. B-1, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade Issuer: Structured Asset Mortgage Investments II Trust 2005-AR3 -- Cl. M-1, Downgraded to Aa3 from Aa1 -- Cl. M-2, Downgraded to A3 from Aa2 -- Cl. M-3, Downgraded to Baa1 from Aa3 -- Cl. M-4, Downgraded to Ba1 from A1 -- Cl. M-5, Downgraded to Ba2 from A2 -- Cl. M-6, Downgraded to B3 from A3 -- Cl. M-X, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. B-1, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade Issuer: Structured Asset Mortgage Investments II Trust 2005- AR4 -- Cl. M-1, Downgraded to Aa2 from Aa1 -- Cl. M-2, Downgraded to A3 from Aa2 -- Cl. M-3, Downgraded to Baa1 from Aa3 -- Cl. M-4, Downgraded to Ba2 from A1 -- Cl. M-5, Downgraded to B2 from A2 -- Cl. M-6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-X, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. B-1, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Caa2 from Baa3; Placed Under Review for further Possible Downgrade Issuer: Structured Asset Mortgage Investments II Trust 2005- AR5 -- Cl. B-4, Downgraded to Ba2 from Ba1 -- Cl. B-5, Downgraded to Caa3 from B2 Issuer: Structured Asset Mortgage Investments II Trust 2005-AR6 -- Cl. I-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to A2 from Aa1 -- Cl. M-2, Downgraded to Baa2 from Aa2 -- Cl. M-3, Downgraded to Ba1 from Aa3 -- Cl. M-4, Downgraded to B1 from A1 -- Cl. M-5, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-X, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. B-1, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from Ba2 Issuer: Structured Asset Mortgage Investments II Trust 2005- AR7 -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5-X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 6-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 6-X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-X, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 1-M-X, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. B-1, Downgraded to A3 from Aa1 -- Cl. B-2, Downgraded to Ba2 from Aa1 -- Cl. B-3, Downgraded to B2 from Aa2 -- Cl. B-4, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-5, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to Ca from B3 -- Cl. 1-B-2, Downgraded to Aa3 from Aa2 -- Cl. 1-B-3, Downgraded to Baa2 from A1 -- Cl. 1-B-4, Downgraded to B1 from Baa1 -- Cl. 1-B-5, Downgraded to Ca from Ba2 Issuer: Structured Asset Mortgage Investments II Trust 2005-AR8 -- Cl. A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Baa2 from Aa1 -- Cl. B-2, Downgraded to B2 from Aa2 -- Cl. B-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-4, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-5, Downgraded to Ca from Ba2 Issuer: Structured Asset Mortgage Investments II Trust 2006-AR1 -- Cl. B-2, Downgraded to Baa1 from Aa2 -- Cl. B-3, Downgraded to Ba2 from Aa3 -- Cl. B-4, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. B-5, Downgraded to Caa2 from Baa1 -- Cl. B-6, Downgraded to Ca from Ba1 -- Cl. B-7, Downgraded to Ca from Ba2 Issuer: Structured Asset Mortgage Investments II Trust 2006-AR2 -- Cl. B-1, Downgraded to A2 from Aa1 -- Cl. B-2, Downgraded to B1 from Aa2 -- Cl. B-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-4, Downgraded to Caa2 from A3 -- Cl. B-5, Downgraded to Caa3 from Baa1 -- Cl. B-6, Downgraded to Ca from Ba2 -- Cl. B-7, Downgraded to Ca from B3 Issuer: Structured Asset Mortgage Investments II Trust 2006-AR3 -- Cl. I-B-1, Downgraded to A1 from Aa1 -- Cl. I-B-2, Downgraded to Ba3 from Aa1 -- Cl. I-B-3, Downgraded to B2 from Aa2 -- Cl. I-B-4, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. I-B-5, Downgraded to Caa2 from Baa1 -- Cl. I-B-6, Downgraded to Ca from Ba1 -- Cl. I-B-7, Downgraded to Ca from Ba3 -- Cl. II-1A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-4A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-4X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-B-1, Downgraded to B1 from Aa2 -- Cl. II-B-2, Downgraded to Caa3 from Baa1 -- Cl. II-B-3, Downgraded to Ca from B1 -- Cl. III-MX, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. III-B-1, Downgraded to Baa3 from Aa2 -- Cl. III-B-2, Downgraded to B2 from A3 -- Cl. III-B-3, Downgraded to Ca from Ba1 Issuer: Structured Asset Mortgage Investments II Trust 2006-AR4 -- Cl. B-1, Downgraded to A1 from Aa1 -- Cl. B-2, Downgraded to Ba3 from Aa2 -- Cl. B-3, Downgraded to B2 from Aa3 -- Cl. B-4, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. B-5, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to Caa1 from Baa1 -- Cl. B-7, Downgraded to Caa3 from Baa3 -- Cl. B-8, Downgraded to Ca from Ba1 Issuer: Structured Asset Mortgage Investments II Trust 2006-AR5 -- Cl. 1-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-X, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. B-1, Downgraded to Baa2 from Aa1 -- Cl. B-2, Downgraded to Ba3 from Aa2 -- Cl. B-3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-4, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. B-5, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to Caa1 from Baa3 -- Cl. B-7, Downgraded to Ca from Ba2 -- Cl. B-8, Downgraded to Ca from B1 Issuer: Structured Asset Mortgage Investments II Trust 2006-AR6 -- Cl. B-2, Downgraded to Aa3 from Aa1 -- Cl. B-3, Downgraded to A2 from Aa1 -- Cl. B-4, Downgraded to B1 from A1 -- Cl. B-5, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-8, Downgraded to Caa2 from Baa3 Issuer: Structured Asset Mortgage Investments II Trust 2006-AR7 -- Cl. B-1, Downgraded to Aa2 from Aaa -- Cl. B-2, Downgraded to Baa1 from Aa1 -- Cl. B-3, Downgraded to Ba1 from Aa1 -- Cl. B-4, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-5, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to Caa1 from Baa2 -- Cl. B-7, Downgraded to Ca from Baa3 Issuer: Structured Asset Mortgage Investments II Trust 2006-AR8 -- Cl. B-1, Downgraded to Aa1 from Aaa -- Cl. B-2, Downgraded to A3 from Aa1 -- Cl. B-3, Downgraded to Ba2 from Aa2 -- Cl. B-4, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-5, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-8, Downgraded to Caa1 from Baa1 -- Cl. B-9, Downgraded to Ca from Baa3 Issuer: Structured Asset Mortgage Investments II Trust 2007-AR1 -- Cl. II-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-B-1, Downgraded to Aa2 from Aaa -- Cl. I-B-2, Downgraded to Ba1 from Aa1 -- Cl. I-B-3, Downgraded to Ba3 from Aa1 -- Cl. I-B-4, Downgraded to B1 from Aa2 -- Cl. I-B-5, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. I-B-6, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. I-B-7, Downgraded to Caa1 from Baa3 -- Cl. I-B-8, Downgraded to Ca from Ba2 -- Cl. I-B-9, Downgraded to Ca from Ba3 -- Cl. II-B-1, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. II-B-2, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. II-B-3, Downgraded to Caa3 from Ba1 -- Cl. II-B-4, Downgraded to Ca from Ba3 -- Cl. II-B-5, Downgraded to Ca from Caa2 Issuer: Structured Asset Mortgage Investments II Trust 2007-AR2 -- Cl. I-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-B-1, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. I-B-2, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. I-B-3, Downgraded to Caa2 from Baa2 -- Cl. I-B-4, Downgraded to Ca from Ba1 -- Cl. I-B-5, Downgraded to Ca from B3 -- Cl. II-MX, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. II-B-2, Downgraded to A1 from Aa3 -- Cl. II-B-3, Downgraded to Baa3 from A3 Issuer: Structured Asset Mortgage Investments II Trust 2007-AR3 -- Cl. II-A-3A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. Underlying II-A-3B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-B-3, Confirmed at Aa1 -- Cl. I-B-4, Confirmed at Aa2 -- Cl. I-B-5, Confirmed at Aa3 -- Cl. I-B-8, Downgraded to Ba2 from Ba1 -- Cl. I-B-9, Downgraded to Ca from Ba2 -- Cl. II-B-1, Downgraded to Baa3 from Aa1 -- Cl. II-B-2, Downgraded to Ba3 from Aa3 -- Cl. II-B-3, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. II-B-4, Downgraded to Ca from Ba2 -- Cl. II-B-5, Downgraded to Ca from Ba3 -- Cl. II-B-6, Downgraded to Ca from Caa2 Issuer: Structured Asset Mortgage Investments II Trust 2007-AR6 -- Cl. B-4, Placed on Review for Possible Downgrade, currently A1 -- Cl. B-5, Placed on Review for Possible Downgrade, currently A2 -- Cl. B-6, Placed on Review for Possible Downgrade, currently A3 -- Cl. B-7, Placed on Review for Possible Downgrade, currently Baa1 -- Cl. B-8, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. B-9, Placed on Review for Possible Downgrade, currently Baa3 STUDIO THEATRE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Studio Theatre School dba Studio Arena Theatre 710 Main Street Buffalo, NY 14202 Telephone (716) 856-8025 Bankruptcy Case No.: 08-12680 Type of Business: The Debtor is a not-for-profit theater school and production company. Chapter 11 Petition Date: June 18, 2008 Court: Western District of New York (Buffalo) Debtor's Counsel: Garry M. Graber (ggraber@hodgsonruss.com) Hodgson Russ LLP The Guaranty Building, Suite 100 140 Pearl Street Buffalo, NY 14202-4040 Telephone (716) 856-4000 Estimated Assets: $1,000,001 to $50 million Estimated Debts: $1,000,001 to $50 million A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/nywb08-12680.pdf TALECRIS BIOTHERAPEUTICS: Moody's Confirms Caa1 CFR, Outlook Pos ---------------------------------------------------------------- Moody's Investors Service confirmed the ratings of Talecris Biotherapeutics, Inc. (Corporate Family Rating at Caa1 and PDR of Caa1) and assigned a positive outlook. At the same time, due to updates in our assumptions using the Loss Given Default Methodology, LGD assessments have been changed. This concludes the rating review that was initiated on Feb. 15, 2008. The confirmation and positive outlook reflect our expectation that the likelihood of a covenant default over the near-term is diminished by the presence of a commitment from the sponsors to provide equity to prevent a default. The positive outlook also considers better than anticipated first quarter EBITDA due in part to price increases as well as improvement in licensing pace and progress made in center development. A successful ramp-up of internal plasma collection capability is critical in light of the pending termination of a large third-party plasma contract. Diana Lee, a Senior Credit Officer at Moody's said, "Although Talecris's liquidity remains weak, the probability that cash flow will improve is rising." Ratings confirmed (with changes to LGD assessments): Talecris Biotherapeutics, Inc. -- Caa1 Corporate Family Rating -- Caa1, LGD3, 45% First lien term loan -- Caa2, LGD5, 80% Second lien term loan -- Caa1 PDR Talecris Biotherapeutics, Inc. is a leading global manufacturer of plasma-derived, protein-based products for individuals suffering from life-threatening diseases. Talecris began operations on April 1, 2005, when the US assets of Bayer AG's worldwide plasma derived products business were acquired by financial sponsors, Cerberus Capital Management and Ampersand Ventures. TRINITY CARPET: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Trinity Carpet Brokers, Inc. dba Trinity Carpet & Flooring fdba Trinity Carpet USA, Inc. fdba Trinity Carpet Brokers of Beaverton, Inc. 2690 S.E. Mailwell Drive Milwaukie, Oregon 97222 Bankruptcy Case No.: 08-33007 Type of Business: The Debtor offers flooring services in the Pacific Northwest States of Oregon, Washington and California. See: http://www.trinitycarpet.com/ Chapter 11 Petition Date: June 20, 2008 Court: District of Oregon Judge:Randall L. Dunn Debtors' Counsel: Barry P. Caplan, Esq. (barry@sussmanshank.com) Sussman Shank LLP 1000 S.W. Broadway #1400 Portland, Oregon 97205 Tel: (503) 227-1111 Fax: (503) 248-0130 http://www.sussmanshank.com/ Total Assets: $5,718,053 Total Debts: $9,738,730 A copy of the Debtor's petition together with a list of 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/oreb08-33007.pdf VALLEY HEALTH: Fitch Assigns 'CC' Rating to $79.5 Million Bonds --------------------------------------------------------------- Fitch Ratings has assigned a 'CC' rating to approximately $79.5 million of bonds issued by Valley Health System, California. Fitch's 'CC' rating indicates that payment default to bondholders appears probable. Although payments to bondholders are current, the rating reflects VHS' board filing for Chapter 9 bankruptcy on Dec. 13, 2007, as well as the ongoing deterioration of VHS' financial position. According to the bond trustee, VHS has suspended its monthly debt service payments. A scheduled interest payment to bondholders was made from debt service reserve funds in May 2008. As part of its reorganization plan, VHS will sell one of its three facilities, the 101-bed Moreno Valley Community Hospital, to Kaiser Permanente for approximately $47.0 million. Proceeds will be used to pay off a portion of VHS' outstanding debt and replenish debt service reserves. The sale of this unprofitable facility is scheduled to close escrow on June 19, 2008, immediately reducing VHS' operating losses. However, it is not clear how quickly the divestiture and other initiatives being implemented by the hospital's Quorum management team will stabilize the hospital's financial profile and allow the resumption of monthly debt service payments to the trustee. While the expected replenishment of the debt service reserve should ensure funding for November's payment to bondholders, VHS' ability to meet subsequent debt service requirements hinges on the success of its efforts to restructure payer contracts, stabilize volumes, and reduce expenses. Fitch will closely monitor VHS' progress in meeting these challenges. Outstanding debt: -- $34.4 million Valley Health System hospital revenue bonds (refunding and improvements project), 1996 series A. -- $45.1 million Valley Health System certificates of participation (refunding project), series 1993. VANTAGE LOFTS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Vantage Lofts, LLC 3300 Pollux Ave. Las Vegas, NV 89102 Bankruptcy Case No.: 08-16586 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: June 20, 2008 Court: District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: Matthew L. Johnson, Esq. Email: bankruptcy@mjohnsonlaw.com 8831 W. Sahara Ave. Las Vegas, NV 89117 Tel: (702) 471-0065 Fax: (702) 471-0075 http://www.mjohnsonlaw.com/ Total Assets: $45,100,104 Total Debts: $72,459,622 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Scripps Investments & Loans, 201 S. Gibson, $32,400,000 Inc. Henderson, Nevada 484 Prospect St. 89015; value of La Jolla, CA 92037-4261 security: $40,000,000; value of senior lien: $35,000,000 Slade Development construction services $1,087,029 3300 Pollux Ave. & supplies Las Vegas, NV 89102 Slade Development Reimbursement for $600,408 3300 Pollux Ave. development expenses Las Vegas, NV 89102 and costs The Plumber, Inc. plumbing services $364,396 59 N. 30th St. Las Vegas, NV 89101 Bombard Mechanical construction services $319,382 3933 W. Ali Baba & supplies Las Vegas, NV 89118 D.A. Whitacre framing construction- $295,074 1108 Greenfield Dr. retention El Cajon, CA 92021 Rebel Builders construction services $257,149 9165 S. Jones Blvd. & supplies Las Vegas, NV 89139 Nevada Gypsum Floors, Inc. construction services $180,754 & supplies Slaton Bros. SW, LLC construction services $154,926 & supplies Simplexgrinnell construction services $136,896 Nuco Plastering & Stucco, Inc. construction services $122,453 America Nevada Corp. office lease $120,000 Clark County Treasurer taxes $108,613 Insulpro Projects construction services $89,133 & supplies City of Henderson building permits $76,146 GRG, Inc. construction services $74,801 & supplies Black Mountain Engineering, construction services $68,653 Inc. A.W. Farrel & Son, Inc. construction services $60,471 Philadelphia Insurance Co. insurance $75,736 R&J Steel construction supplies $82,134 VIASPACE INC: Posts $2,326,000 Net Loss in 2008 First Quarter ------------------------------------------------------------- VIASPACE Inc. reported a net loss of $2,326,000 on total revenues of $123,000 for the first quarter ended March 31, 2008, compared with a net loss of $3,919,000 on total revenues of $239,000 in the same period a year ago. Gross profit for the first quarter of 2008 was $63,000 compared with $36,000 for the comparable quarter of 2007. Operating expenses for the first quarter of 2008 were $2,403,000 compared to $2,057,000 in the same quarter of 2007. Included in operating expenses for the first quarter of 2008 was $793,000 of stock option, warrant and restricted stock compensation expense compared with $673,000 for the same period in 2007. Loss from operations for the first quarter of 2008 was $2,340,000 compared to $2,021,000 in the same quarter of 2007. Other income/expense including minority interest in consolidated subsidiaries was income of $14,000 for the first quarter of 2008 compared to a loss of $1,898,000 for the same period in 2007. The first quarter of 2007 included other expenses, net, of $2,070,000 representing adjustments related to the derivative nature and restructuring of convertible debentures during the quarter. The first quarter of 2007 also included a gain on the sale of marketable securities of $219,000 and other expenses, net of $47,000. Balance Sheet At March 31, 2008, the company's consolidated balance sheet showed $5,359,000 in total assets, $1,137,000 in total liabilities, $553,000 in minority interest in consolidated subsidiaries, and $3,669,000 in total stockholders' equity. Full-text copies of the company's consolidated financials statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2e69 Going Concern Doubt Goldman Parks Kurland Mohidin LLP, in Encino, California, expressed substantial doubt about VIASPACE Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring losses from operations, accumulated deficit and shareholders' deficit at Dec. 31, 2007. About Viaspace Inc. Based in Pasadena, California, VIASPACE Inc. (OTC BB: VSPC) -- http://www.VIASPACE.com/-- founded in 1998 with the objective of transforming proven space and defense technologies from NASA and the Department of Defense into hardware and software solutions that solve today's complex problems, Viaspace benefits from important patent and software licenses from Caltech, which manages NASA's Jet Propulsion Laboratory. WACHOVIA BANK: Moody's Affirms Ratings of Class P Trust at B3 ------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Wachovia Bank Commercial Mortgage Trust, Series 2006-C27 as: -- Class A-1, $36,520,974, affirmed at Aaa -- Class A-2, $265,958,000, affirmed at Aaa -- Class A-PB, $111,316,000, affirmed at Aaa -- Class A-3, $1,087,613,000, affirmed at Aaa -- Class A-1A, $639,712,487, affirmed at Aaa -- Class A-M, $307,991,000, affirmed at Aaa -- Class A-J, $223,293,000, affirmed at Aaa -- Class X-C, Notional, affirmed at Aaa -- Class X-P, Notional, affirmed at Aaa -- Class B, $69,298,000, affirmed at Aa2 -- Class C, $30,799,000, affirmed at Aa3 -- Class D, $7,700,000, affirmed at A1 -- Class E, $38,499,000, affirmed at A2 -- Class F, $26,949,000, affirmed at A3 -- Class G, $38,499,000, affirmed at Baa1 -- Class H, $34,649,000, affirmed at Baa2 -- Class J, $34,649,000, affirmed at Baa3 -- Class K, $19,249,000 affirmed at Ba1 -- Class L, $7,700,000, affirmed at Ba2 -- Class M, $15,400,000, affirmed at Ba3 -- Class N, $3,850,000, affirmed at B1 -- Class O, $11,550,000, affirmed at B2 -- Class P, $7,700,000, affirmed at B3 Moody's affirmed the ratings due to overall stable pool performance. As of the June 17, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 0.5% to $3.07 billion from $3.08 billion at securitization. The Certificates are collateralized by 161 mortgage loans ranging in size from less than 1.0% to 5.3% of the pool, with the top 10 loans representing 39.6% of the pool. One loan has been liquidated from the pool resulting in a minimal realized loss and currently there are no loans in special servicing. Twenty loans, representing 17.4% of the pool, are on the master servicer's watchlist. The watchlist includes loans which meet certain portfolio review guidelines established as part of the Commercial Mortgage Securities Association monthly reporting package. As part of our ongoing monitoring of a transaction, Moody's reviews the watchlist to assess which loans have material issues that could impact performance. Not all loans on the watchlist are delinquent or have significant issues. Moody's was provided with year-end 2007 operating results for 93.8% of the pool. Moody's loan to value ratio is 107.1% compared to 105.7% at securitization. The top three loans represent 15.1% of the pool. The largest loan is the One Financial Place Loan ($168.6 million -- 5.3%), which is secured by a 1.1 million square foot office building located in downtown Chicago, Illinois. The property was 91.9% occupied as of December 2007 compared to 88.3% at securitization. The largest tenants include The Goldman Sachs Group, Inc. (Moody's senior unsecured rating Aa3, stable outlook; 16.2% NRA; lease expiration April 2011), the Chicago Stock Exchange (14.9%; lease expiration June 2015) and Merrill Lynch & Co., Inc. (Moody's senior unsecured rating A1, on watch for possible downgrade; 12.3%; lease expiration January 2014). Moody's LTV is 78.9%, the same as at securitization. The second largest loan is the Prime Outlets Pool Loan ($149.7 million -- 4.9%), which represents a 50.0% pari passu interest in a first mortgage loan. The loan is secured by three factory outlet centers totaling 1.5 million square feet. The centers are located in Williamsburg, Virginia, Hagerstown, Maryland and Birch Run, Michigan. The portfolio was 94.0% occupied as of September 2007 compared to 92.1% at securitization. Moody's LTV is 113.0% compared to 118.2% at securitization. The third largest loan is the One Illinois Center Loan ($148.5 million -- 4.8%), which is secured by a 1.0 million square foot office building located in downtown Chicago, Illinois. The property is 100.0% leased, the same as at securitization. Major tenants include Blue Cross (20.1% NRA; lease expiration March 2017), Federal Home Loan Bank (13.2%; lease expiration July 2011) and Shefsy & Froelich (6.8%; lease expiration May 2015). Moody's LTV is 127.9% compared to 134.5% at securitization. WAVE SYSTEMS: Pays Shares to Agent as Part of $1.7MM Financing -------------------------------------------------------------- Security Research Associates, Inc., the placement agent in connection with a financing transaction of Wave Systems Corp., received a warrant to purchase up to 129,075 shares of Wave's Class A Common Stock as part of its compensation. The company disclosed in a May 23 regulatory filing that it is entering into Subscription Agreements with certain purchasers pursuant to which Wave will sell a total of 2,151,250 shares of Class A Common Stock, par value $.01 per share, for an aggregate purchase price of approximately $1,721,000. The Common Shares are priced at $.80 per share. The Purchasers will also receive warrants to purchase 537,812 shares of Common Stock at an exercise price of $.85. The warrants are exercisable for three years beginning on the date of the initial issuance of the warrants. The Common Shares (including the shares issuable upon exercise of the warrants) are to be drawn-down off of a shelf registration statement declared effective by the Securities and Exchange Commission on April 27, 2007. On May 23, 2008, Security Research entered into a placement agency agreement with Wave in which they agreed to act as placement agent in connection with this offering. In connection with this offering, Wave agreed to pay the Placement Agent a cash fee of $103,260 (6% of the gross proceeds paid to Wave in connection with this offering) and will issue to the Placement Agent a warrant to purchase up to 129,075 shares of Class A Common Stock at an exercise price of $.85 per share. The warrant is exercisable for 12 months beginning on the 180th day after the issuance of the warrant. Headquartered in Lee, Mass., Wave Systems Corp. (Nasdaq : WAVX) -- http://www.wave.com/-- provides software to help solve critical enterprise PC security challenges such as strong authentication, data protection, network access control and the management of these enterprise functions. * * * As reported in the Troubled Company Reporter on March 28, 2008, KPMG LLP, in Boston, expressed substantial doubt about Wave Systems Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring losses from operations and accumulated deficit. As reported by the TCR on June 13, Wave Systems Corp. reported a net loss of $6,010,048 on total net revenues of $1,699,079 for the first quarter ended March 31, 2008, compared with a net loss of $5,045,560 on total net revenues of $1,287,040 in the same period last year. At March 31, 2008, the company's consolidated balance sheet showed $4,139,175 in total assets, $3,817,032 in total liabilities, and $322,143 in total stockholders' equity. The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $3,312,935 in total current assets available to pay $3,817,032 in total current liabilities. WAVE SYSTEMS: Regains Compliance with Nasdaq Marketplace Rules -------------------------------------------------------------- Wave Systems Corp. received notice from the Nasdaq Listing Qualifications Hearings department that it has regained compliance with the Nasdaq Marketplace Rules 4450(b)(1)(A) and 4450 relating to the market value and minimum bid price of the company's Class A Common Stock. Because the company has regained compliance with these rules, a previously scheduled hearing with the Listing Qualifications Panel has been deemed moot and will not be held. Headquartered in Lee, Massachusetts, Wave Systems Corp. (Nasdaq : WAVX) -- http://www.wave.com/-- provides software to help solve critical enterprise PC security challenges such as strong authentication, data protection, network access control and the management of these enterprise functions. * * * As reported in the Troubled Company Reporter on March 28, 2008, KPMG LLP, in Boston, expressed substantial doubt about Wave Systems Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring losses from operations and accumulated deficit. As reported by the TCR on June 13, Wave Systems Corp. reported a net loss of $6,010,048 on total net revenues of $1,699,079 for the first quarter ended March 31, 2008, compared with a net loss of $5,045,560 on total net revenues of $1,287,040 in the same period last year. At March 31, 2008, the company's consolidated balance sheet showed $4,139,175 in total assets, $3,817,032 in total liabilities, and $322,143 in total stockholders' equity. The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $3,312,935 in total current assets available to pay $3,817,032 in total current liabilities. WHITEHALL JEWELERS: Files for Ch.11 Protection; Selling All Assets ------------------------------------------------------------------ Whitehall Jewelers Holdings Inc. and its operating subsidiary Whitehall Jewelers Inc. filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code before the U.S. Bankruptcy Court for the District of Delaware. The Debtors will continue to conduct business while they develop a reorganization plan. To fund their continuing operations during the reorganization process, the companies have negotiated an $80 million debtor-in- possession financing from a consortium of banks including Bank of America, N.A., Wells Fargo Retail Finance, LLC, and GMAC Commercial Finance, LLC. The DIP credit facility would replace the companies' previous $125 million revolving credit facility, subject to court approval, to fund their working capital requirements, including employee wages and benefits, certain supplier payments and other operating expenses during the reorganization process. According to Dow Jones Newswires, Whitehall Jewelers and its subsidiary ask the Court for authority to conduct an auction for the sale of all their assets on July 16, 2008. Bidders are requested to submit their offers by July 15, 2008, report says. Defaults After it postponed its annual meeting of stockholders on June 11, 2008, Whitehall Jewelers Inc. received a default notice from: a) Fabrikant Receivables, LLC with respect to an unsecured term promissory note dated April 20, 2007, issued by the subsidiary to M. Fabrikant & Sons, Inc. in the aggregate principal amount of $3,061,726 and additional unsecured trade debt in the aggregate principal amount of $1,561,810 arising from WJI's failure to pay the principal and interest owing under the Fabrikant Note and the Fabrikant Debt at maturity. b) Rosy Blue, Inc. with respect to an unsecured term promissory note dated April 20, 2007 issued by its subsidiary to Rosy Blue in the principal amount of $2,073,346, which relates to the subsidiary's failure to pay when due certain invoices of Rosy Blue in an aggregate amount of $81,405. These invoices were due in late May 2008 and early June 2008. As of June 13, 2008, WJI had an aggregate principal amount of $13.5 million of trade debt evidenced by other unsecured term promissory notes that have been amended by a note extension agreement between WJI and its other inventory suppliers. Under the terms of the other extended notes limit the aggregate principal amount that the subsidiary is permitted to repay to holders of unsecured term promissory notes prior to March 31, 2009, to the extent such payments are not made on a pro-rata basis to the holders of the Other Extended Notes. If WJI pays any amount in excess of such limit, it would constitute an event of default. WJI could not pay in full the principal amount outstanding under the Fabrikant Note, the Fabrikant Debt and the Rosy Blue Note prior to March 31, 2009, without triggering this type of event of default under the other extended notes. The principal amount of these notes and all accrued and unpaid interest will bear interest at a rate per annum of 8% instead of 6%. WJI's failure to pay at maturity give rise to an event of default under: a) the Third Amended and Restated Credit Agreement, dated Feb. 20, 2007, by and among WJI, LaSalle Bank National Association, as administrative and collateral agent for the banks including the Banks, Bank of America N.A. and Wells Fargo Retail Finance, LLC, as managing agents, as amended. b) the Term Loan Credit Agreement, dated as of Jan. 18, 2008, as amended, by and among WJI, financial institutions led by PWJ Lending II LLC, as administrative agent and collateral agent. As a result of this cross-default provision, an event of default would arise under the Loan and Senior Credit Agreement if WJI fails to cure its defaults with respect to the Fabrikant Note, the Fabrikant Debt and the Rosy Blue Note or any events defaults that may arise with respect to the Other Extended Notes. On June 13, 2008, WJI had approximately $64.5 million of outstanding borrowings under the Senior Credit Agreement and $40 million of outstanding borrowings under the Term Loan Credit Agreement, which are guaranteed by the Whitehall Jewelers Holding Inc. secured by a lien on substantially all of their assets. If the event of default arises under these agreements, PWJ Lending may exercise the remedies available under the agreements, including causing all outstanding indebtedness thereunder to accelerate and become due. Additionally, PWJ Lending could proceed against the collateral securing WJI's indebtedness, which includes substantially all of its assets. About Whitehall Jewelers Whitehall Jewelers Holdings Inc. (OTC BB: WHJH) through its subsidiary, Whitehall Jewelers Inc., is a retailer of fine jewelry in the United States. WHITEHALL JEWELERS: Case Summary & 30 Largest Unsecured Creditors ----------------------------------------------------------------- Lead Debtor: Whitehall Jewelers Holdings, Inc. 125 South Wacker Dr., Ste. 2600 Chicago, IL 60606 aka Lundstrom Jewelers aka Cresent Jewelers aka Marks Bros. Jewelers aka Whitehall Jewellers, Inc. aka Whitehall Co. aka Friedman's Inc. aka The Whitehall Co. Jewellers Bankruptcy Case No.: 08-11261 Debtor-affiliate filing a separate Chapter 11 petitions: Entity Case No. ------ -------- Whitehall Jewelers, Inc. 08-11262 Type of Business: The Debtors own and operate a jewelry business. They have been a national specialty retailer of fine jewelry, offering a selection of merchandise in the categories, such as diamonds, gold, precious and semi-precious jewelry and watches. As of April 30, 2008, they operated 375 stores in 39 states. They operate stores in regional and super regional shopping malls under the names Whitehall and Lundstrom. See http://www.whitehalljewellers.com/ Chapter 11 Petition Date: June 23, 2008 Court: District of Delaware (Delaware) Judge: Kevin Gross Debtors' Counsel: James E. O'Neill, Esq. Email: jo'neill@pszyj.com Kathleen P. Makowski, Esq. Email: kmakowski@pszjlaw.com Laura Davis Jones, Esq. Email: ljones@pszyj.com Pachulski Stang Ziehl & Jones, LLP 919 N. Market St., 17th Fl. P.O. Box 8705 Wilmington, DE 19899-8705 Tel: (302) 652-4100 Fax: (302) 652-4400 http://www.pszyj.com/ Debtors' Unaudited, Consolidated Financial Condition as of May 3, 2008: Total Assets: $207,100,000 Total Debts: $185,400,000 Debtors' Consolidated List of 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ S.D.C. (Sangam Diamonds Corp.) trade $11,327,506 529 5th Ave., 16th Fl. New York, NY 10017 Tel: (212) 599-4240, 314 (ext.) Fax: (212) 599-4237 Kiran Jewels, Inc. trade $9,414,536 521 5th Ave. Ste. 610 New York, NY 10175 Tel: (917) 361-7252 Fax: (212) 819-0443 Combin International trade $7,050,894 354 Indusco Ct. Troy, MI 48083 Tel: (248) 585-9900 Fax: (248) 585-8641 Rosy Blue trade $6,904,241 529 5th Ave., 15th Fl. New York, NY 10017 Tel: (212) 687-8838 Fax: (212) 856-9835 Envisions, LLC trade $4,518,172 529 5th Ave., 19th Fl. New York, NY 10017 Tel: (212) 888-5001 Fax: (212) 888-5465 Leo Schachter Diamonds, LP trade $4,065,363 579 5th Ave. New York, NY 10017 Tel: (800) 223-2082 Fax: (212) 935-5875 Continental Jewellery Mfg., trade $3,740,192 Ltd. Kaiser Estate, Phase 3, 1/F., Flats M & N 11 Hok Yuen St. Hunghom, Kowloon Tel: 11 8521309 11 85227657516 Fax: (212) 695-0997 (212) 695-3303 M. Fabrikant & Sons, Inc. trade $3,576,616 P.O. Box 13813 Newark, NJ 07188-3813 Tel: (212) 757-0790 Fax: (212) 664-1995 Rosy Blue Jewelry, Inc. trade $3,214,243 529 5th Ave. New York, NY 10017 Tel: (212) 471-2222 Fax: (212) 471-2223 Jewelex, Ltd. trade $2,916,663 529 5th Ave., 18th Fl. New York, NY 10017 Tel: (800) 208-9999 Fax: (212) 840-6971 Sumit Diamond Corp. trade $2,747,964 592 5th Ave., 4th Fl. New York, NY 10036 Tel: (800) 522-0890 Fax: (212) 921-8638 United Brothers Jewelry trade $2,621,814 48 W. 48th St., 7th Fl. New York, NY 10036 Tel: (212) 921-2558 Fax: (212) 398-9482 B.H. Multi Com Corp. trade $2,281,677 15 W. 46th St. New York, NY 10036 Tel: (212) 944-0020 Fax: (212) 382-2448 Sierra Diamonds, Ltd. trade $2,118,110 1 Bridge Plaza N., Ste. 100 Fort Lee, NJ 07024 Tel: (212) 302-0231 Fax: (212) 302-0232 Kristall, Inc. trade $1,725,871 611 W. 6th St., Ste. 1800 Los Angeles, CA 90017 Tel: (213) 624-4000 Fax: (213) 624-1450 Fabrikant-Leer International, trade $1,646,227 Ltd. P.O. Box 13544 Newark, NJ 07188-3544 Tel: (212) 664-1995 Fax: (212) 757-0790 Antwerp Sales International, trade $1,588,010 Inc. 576 5th Ave. New York, NY 10036 Tel: (904) 273-8663 Fax: (904) 273-8664 K.J. Miran Construction Co., contract $1,510,301 Inc. P.O. Box 13143 3501 Embassy Pkwy. Akon, OH 44334 Tel: (330) 666-5656 Fax: (330) 666-6272 Steora USA trade $1,488,565 580 5th Ave., Ste. 417 New York, NY 10036 Tel: (212) 398-1399 Fax: (212) 302-2613 Legend Jewelry Co. Ltd. trade $1,452,838 (Macao Commercial Offshore) Avenida Xian Xing Hai S/N Edf. Zhu Kuan C.C. 13 Andar K, NAPE, Macau NAPE Tel: 853750369 Fax: 853750321 Seiko Corp. of America trade $1,417,709 Attn: Darlene Lembo, Credit Dept. 1111 MacArthur Blvd. Mahwah, NJ 07430 Tel: (800) 346-5402, 22475 (ext.) Fax: (201) 529-5985 Orli Diamonds trade $1,360,681 67 E. Madison St., Ste. 1606 Chicago, IL 60603 Tel: (312) 332-0990 Fax: (312) 332-2914 Uni Design USA trade $1,352,797 592 5th Ave., 11th Fl. New York, NY 10036 Tel: (212) 282-1112 Fax: (212) 282-1122 Frederick Goldman, Inc. trade $1,286,894 P.O. Box 5869 Hicksvile, NY 11802-5869 Tel: (212) 807-2029 Fax: (212) 807-2220 Amikam trade $1,221,748 592 5th Ave., 3rd Flr. New York, NY 10036 Diamond Direct, LLC trade $1,177,388 145 W. 45th St., 5th Fl. New York, NY 10036 Tel: (888) 349-4383 Fax: (212) 564-9012 Merit Diamond Corp. trade $1,162,803 1900 Tyler St., 3rd Fl. Hollywood, FL 33020 Tel: (212) 398-5853, (800) 289-6374, l05 (ext.) Fax: (954) 925-4523, (954) 883-3660 Maxmark, Inc. trade $1,105,666 5 South Wabash, Ste. 1500 Chicago, IL 60603 Tel: (312) 201-1001 Fax: (312) 201-1008 Bulova Corp. trade $1,080,046 1 Bulova Ave. Woodside, NY 11377 Tel: (949) 360-8491 Fax: (949) 360-8497 Benchmark trade $1,024,474 1023 15th St. Tuscaloosa, AL 35401 Tel: (205) 464-4255 Fax: (205) 464-0410 WHX CORP: Board Approves Executives' Performance Cash Bonuses ------------------------------------------------------------- The Compensation Committee of the Board of Directors of WHX Corporation approved cash bonuses to Glen M. Kassan, chief executive officer of the company, and Daniel P. Murphy, Jr., director and senior vice president of Corporate Development of the company, in the amounts of $100,000 and $140,000, respectively, on account of Messrs. Kassan's and Murphy's performance in 2007. The 2007 Bonuses brought the total amount of compensation paid to Messrs. Kassan and Murphy for fiscal year 2007 to $800,208 and $888,167, respectively. Based in White Plains, New York, WHX Corporation (Pink Sheets: WXCP) -- http://www.whxcorp.com/-- is a holding company that invests in and manages a group of businesses on a decentralized basis. Apart from owning Handy & Harman, WHX acquired in April 2007 Bairnco Corporation, which is a diversified multinational company that operates business units in three reportable segments: Arlon electronic materials, Arlon coated materials and Kasco replacement products and services. Handy & Harman is a diversified manufacturer and the "parent" of a family of materials engineering and specialty manufacturing companies. Its products include electronic components, specialty fasteners, engineered materials, stainless steel tubing, specialty tubing and fabricated precious metals, brazing soldering fluxes and alloys of precious and non-precious metals. Handy & Harman's strategic business units encompass three reportable segments: precious metal, tubing and engineered materials. WHX Corp.'s consolidated balance sheet at March 31, 2008, showed $461.2 million in total assets and $536.1 million in total liabilities, resulting in a $74.9 million total stockholders' deficit. WMALT: Moody's Cuts Ratings on 169 Tranches; Reviews 61 ------------------------------------------------------- Moody's Investors Service downgraded the ratings of 169 tranches from 15 Option ARM transactions issued by WMALT. Fifty five tranches remain on review for possible further downgrade. Additionally, 61 tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, adjustable-rate, negatively amortizing Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going review process. Complete rating actions are: Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2005-AR1 Trust -- Cl. A-1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Baa2 from Aa2 -- Cl. B-2, Downgraded to B2 from A2 -- Cl. B-3, Downgraded to Ca from Ba1 Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-AR1 Trust -- Cl. A-1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Ba3 from Aa2 -- Cl. B-2, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from Ba2 -- Cl. B-4, Downgraded to Ca from Caa1 Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-AR2 Trust -- Cl. A-1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Ba1 from Aa1 -- Cl. B-2, Downgraded to Ba3 from Aa2 -- Cl. B-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-4, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-5, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to Ca from B1 -- Cl. B-8, Downgraded to Ca from B2 -- Cl. B-9, Downgraded to Ca from B3 -- Cl. B-10, Downgraded to Ca from Caa1 -- Cl. B-11, Downgraded to Ca from Caa3 Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-AR3 Trust -- Cl. A-1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Baa3 from Aa1 -- Cl. B-2, Downgraded to Ba3 from Aa2 -- Cl. B-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-4, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. B-5, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to Ca from Ba2 -- Cl. B-8, Downgraded to Ca from B1 -- Cl. B-9, Downgraded to Ca from B2 -- Cl. B-10, Downgraded to Ca from B3 -- Cl. B-11, Downgraded to Ca from Caa1 -- Cl. B-12, Downgraded to Ca from Caa3 Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-AR4 Trust -- Cl. CA-1B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. DA-1B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Ba3 from Aa1 -- Cl. B-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-4, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-5, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to Ca from Ba1 -- Cl. B-7, Downgraded to Ca from B1 -- Cl. B-8, Downgraded to Ca from B2 -- Cl. B-9, Downgraded to Ca from B3 -- Cl. B-10, Downgraded to Ca from Caa1 -- Cl. B-11, Downgraded to Ca from Caa3 Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-AR5 Trust -- Cl. 4A-1B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5A-1B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5X-PPP, Placed on Review for Possible Downgrade, currently Aaa -- Cl. DX-PPP Group 1 Component, Placed on Review for Possible Downgrade, currently Aaa -- Cl. CA-1B Group 1 Component, Placed on Review for Possible Downgrade, currently Aaa -- Cl. CA-1B Group 2 Component, Placed on Review for Possible Downgrade, currently Aaa -- Cl. CA-1B Group 3 Component, Placed on Review for Possible Downgrade, currently Aaa -- Cl. DX-PPP Group 2 PO Component, Placed on Review for Possible Downgrade, currently Aaa -- Cl. DX-PPP Group 3 PO Component, Placed on Review for Possible Downgrade, currently Aaa -- Cl. DX-PPP Group 4 PO Component, Placed on Review for Possible Downgrade, currently Aaa -- Cl. L-B-1, Downgraded to Ba3 from Aa1 -- Cl. L-B-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. L-B-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. L-B-4, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. L-B-5, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. L-B-6, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. L-B-7, Downgraded to Ca from Ba1 -- Cl. L-B-8, Downgraded to Ca from B1 -- Cl. L-B-9, Downgraded to Ca from B2 -- Cl. L-B-10, Downgraded to Ca from B3 -- Cl. L-B-11, Downgraded to Ca from Caa1 -- Cl. L-B-12, Downgraded to Ca from Caa3 Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-AR6 Trust -- Cl. CA-1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Ba1 from Aa1 -- Cl. B-2, Downgraded to Ba2 from Aa1 -- Cl. B-3, Downgraded to Ba3 from Aa1 -- Cl. B-4, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-5, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-8, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-9, Downgraded to Ca from Ba1 -- Cl. B-10, Downgraded to Ca from B2 -- Cl. B-11, Downgraded to Ca from B3 -- Cl. B-12, Downgraded to Ca from Caa1 Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-AR7 Trust -- Cl. A-1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-2-PPP, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Ba2 from Aa1 -- Cl. B-2, Downgraded to Ba3 from Aa1 -- Cl. B-3, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. B-4, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-5, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-8, Downgraded to Ca from Ba1 -- Cl. B-9, Downgraded to Ca from Ba3 -- Cl. B-10, Downgraded to Ca from B3 -- Cl. B-11, Downgraded to Ca from Caa1 -- Cl. B-12, Downgraded to Ca from Caa3 Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-AR8 -- Cl. CX-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. CX-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. CA-1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. CX-2-PPP, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3A-1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. L-B-1, Downgraded to Ba1 from Aa1 -- Cl. L-B-2, Downgraded to Ba2 from Aa1 -- Cl. L-B-3, Downgraded to Ba3 from Aa1 -- Cl. L-B-4, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. L-B-5, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. L-B-6, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. L-B-7, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. L-B-8, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. L-B-9, Downgraded to Ca from Ba3 -- Cl. L-B-10, Downgraded to Ca from B2 -- Cl. L-B-11, Downgraded to Ca from B3 -- Cl. L-B-12, Downgraded to Ca from Caa1 -- Cl. 3-B-1, Downgraded to Caa1 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. 3-B-2, Downgraded to Ca from B2 -- Cl. 3-B-3, Downgraded to Ca from Caa3 Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-AR9 Trust -- Cl. CX-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. CA-1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Ba2 from Aa1 -- Cl. B-2, Downgraded to Ba3 from Aa1 -- Cl. B-3, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. B-4, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. B-5, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-8, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-9, Downgraded to Ca from Ba2 -- Cl. B-10, Downgraded to Ca from B3 -- Cl. B-11, Downgraded to Ca from Caa1 -- Cl. B-12, Downgraded to Ca from Caa3 Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2007-OA1 Trust -- Cl. CX-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. CA-1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Baa3 from Aa1 -- Cl. B-2, Downgraded to Ba1 from Aa1 -- Cl. B-3, Downgraded to Ba2 from Aa1 -- Cl. B-4, Downgraded to Ba3 from Aa1 -- Cl. B-5, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-8, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-9, Downgraded to Ca from Ba2 -- Cl. B-10, Downgraded to Ca from B2 -- Cl. B-11, Downgraded to Ca from B3 -- Cl. B-12, Downgraded to Ca from Caa1 Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2007-OA2 Trust -- Cl. CX-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. CA-1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Ba1 from Aa1 -- Cl. B-2, Downgraded to Ba2 from Aa1 -- Cl. B-3, Downgraded to Ba3 from Aa1 -- Cl. B-4, Downgraded to B2 from Aa1 -- Cl. B-5, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-8, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-9, Downgraded to Ca from Ba2 -- Cl. B-10, Downgraded to Ca from B2 -- Cl. B-11, Downgraded to Ca from B3 -- Cl. B-12, Downgraded to Ca from Caa1 Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2007-OA3 Trust -- Cl. FX, Placed on Review for Possible Downgrade, currently Aaa -- Cl. CX-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. CA-1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. DA-1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5X-PPP, Placed on Review for Possible Downgrade, currently Aaa -- Cl. EX-PPP, Placed on Review for Possible Downgrade, currently Aaa -- Cl. CX-2-PPP, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-B-1, Downgraded to Baa2 from Aa1 -- Cl. M-B-2, Downgraded to Ba1 from Aa1 -- Cl. M-B-3, Downgraded to Ba2 from Aa1 -- Cl. M-B-4, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-B-5, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-B-6, Downgraded to Ca from Ba3 -- Cl. M-B-7, Downgraded to Ca from B3 -- Cl. M-B-8, Downgraded to Ca from B3 -- Cl. M-B-9, Downgraded to Ca from Caa1 -- Cl. L-B-1, Downgraded to Baa3 from Aa1 -- Cl. L-B-2, Downgraded to Ba1 from Aa1 -- Cl. L-B-3, Downgraded to Ba2 from Aa1 -- Cl. L-B-4, Downgraded to Ba3 from Aa1 -- Cl. L-B-5, Downgraded to B2 from Aa2 -- Cl. L-B-6, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. L-B-7, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. L-B-8, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. L-B-9, Downgraded to Ca from Ba1 -- Cl. L-B-10, Downgraded to Ca from B2 -- Cl. L-B-11, Downgraded to Ca from B3 -- Cl. L-B-12, Downgraded to Ca from Caa1 Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2007-OA4 Trust -- Cl. A-1D, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-PPP, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Baa3 from Aa1 -- Cl. B-2, Downgraded to Ba1 from Aa1 -- Cl. B-3, Downgraded to Ba2 from Aa1 -- Cl. B-4, Downgraded to Ba3 from Aa1 -- Cl. B-5, Downgraded to B1 from Aa2 -- Cl. B-6, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to Ca from B3 -- Cl. B-8, Downgraded to Ca from B3 -- Cl. B-9, Downgraded to Ca from Caa1 -- Cl. B-10, Downgraded to Ca from Caa2 Issuer: Washington Mutual Mortgage Pass-Through Certificates, WMALT Series 2007-OA5 -- Cl. X-PPP, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-1D, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Baa2 from Aa1 -- Cl. B-2, Downgraded to Ba1 from Aa1 -- Cl. B-3, Downgraded to Ba2 from Aa1 -- Cl. B-4, Downgraded to Ba3 from Aa1 -- Cl. B-5, Downgraded to B1 from Aa2 -- Cl. B-6, Downgraded to B3 from Ba2; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to Ca from B3 -- Cl. B-8, Downgraded to Ca from B3 -- Cl. B-9, Downgraded to Ca from Caa1 -- Cl. B-10, Downgraded to Ca from Caa3 WORLDSPACE INC: Inks Amendment & Exchange Pact with Four Lenders ---------------------------------------------------------------- WorldSpace, Inc. entered into an Amendment and Exchange Agreement with each of the four holders of its existing 8% convertible notes due May 31, 2010, and senior first lien bridge notes due May 31, 2010. Pursuant to the Exchange Agreements, effective June 13, 2008, the company: (a) amended and restated its senior first lien notes in the aggregate principal amount of approximately $36.1 million, (b) amended and restated its convertible notes in the aggregate principal amount of $53.6 million, and (c) granted the Investors warrants to acquire an aggregate amount of 5,000,000 shares of Class A Common Stock of the company. The aggregate amounts of the Amended and Restated Bridge Loan Notes, the Second Amended and Restated Convertible Notes and the New Warrants were allocated among the Investors on a pro rata basis in accordance with their percentage ownership interest of the existing first lien bridge notes. a) Investor: Highbridge International LLC Aggregate Principal Amount of Second Amended and Restated Convertible Notes: $21,365,641.10 Aggregate Principal Amount of Amended and Restated Bridge Notes: $12,826,032.59 Number of Warrant Shares: 1,774,229 b) Investor: OZ Master Fund, Ltd. Aggregate Principal Amount of Second Amended and Restated Convertible Notes: $5,939,617.53 Aggregate Principal Amount of Amended and Restated Bridge Notes: $3,497,497.71 Number of Warrant Shares: 483,810 c) AG Offshore Convertibles, Ltd. Aggregate Principal Amount of Second Amended and Restated Convertible Notes: $864,446.58 Aggregate Principal Amount of Amended and Restated Bridge Notes: $2,797,837.51 Number of Warrant Shares: 387,026 D) Citadel Equity Fund Ltd. Aggregate Principal Amount of Second Amended and Restated Convertible Notes: $25,430,074.52 Aggregate Principal Amount of Amended and Restated Bridge Notes: $17,023,993.78 Number of Warrant Shares: 2,354,935 Amended and Restated Bridge Loan Notes The Amended and Restated Bridge Loan Notes bear interest at LIBOR plus 6.5%, per annum payable quarterly and are repayable in the aggregate principal amounts of approximately $18.65 million on June 30, 2008 (together with all accrued and unpaid interest through the day of payment) and the remaining principal amount on July 31, 2008 (together with all accrued and unpaid interest through the day of payment). The company is required to prepay the Amended and Restated Bridge Loan Notes from any new equity or debt financing, certain excess cash flow or the cash proceeds of asset sales and casualty events, subject to stipulated exceptions. The Company may redeem the Amended and Restated Bridge Loan Notes at any time prior to the repayment dates. The Amended and Restated Bridge Loan Notes remain secured by a first priority security interest in the assets of the Company and its subsidiaries. As part of the transaction, the First Lien Pledge and Security Agreement between the company, the Guarantors, the Investors and The Bank of New York, as the First Lien Collateral Agent was amended by the First Amendment to the First Lien Collateral Agent. The Amended and Restated Bridge Loan Notes remain guaranteed by WorldSpace Systems Corporation, WorldSpace Satellite Company Ltd., AsiaSpace Limited and AfriSpace, Inc., each a direct subsidiary of the company, pursuant to an Amended and Restated First Lien Guaranty between the Guarantors, the Investors and the First Lien Collateral Agent. The Amended and Restated Bridge Loan Notes are subject to events of default customary for a secured financing. Second Amended and Restated Convertible Notes The Second Amended and Restated Convertible Notes bear interest at 8.0%, per annum payable quarterly. The Second Amended and Restated Convertible Notes are repayable on Sept. 30, 2008, or such earlier date as the company may elect upon 5 business days written notice to each of the holders of the Convertible Notes, subject to the company having obtained the stockholder approval for certain conversions and exercises of warrants. The Second Amended and Restated Convertible Notes are repayable at a price equal to the sum of the outstanding principal and accrued but unpaid interest on such notes plus a prepayment fee equal to 1.5% of such outstanding principal and interest. They are convertible into shares of Class A Common Stock at a conversion price of $2.00 per share, subject to customary anti-dilution adjustments. The Second Amended and Restated Convertible Notes are secured by a second priority security interest in the assets of the company and its subsidiaries pursuant to a Second Lien Pledge and Security Agreement between the company, the Guarantors, the Investors and The Bank of New York, as the Second Lien Collateral Agent which was amended. The Second Amended and Restated Convertible Notes are guaranteed by the Guarantors pursuant to an Amended and Restated Second Lien Guaranty between the Guarantors, the Investors and the Second Lien Collateral Agent. The Second Amended and Restated Convertible Notes are subject to events of default customary for convertible securities and for a secured financing. The company has also agreed to pay, by June 30, 2008, an interest payment on the Second Amended and Restated Convertible Notes that was originally scheduled to have been paid on May 31, 2008. The relative rights and responsibilities of the first lien secured party and the first lien collateral agent, on one hand, and the second lien secured parties and the second lien collateral agent, on the other hand, are set out in an Intercreditor Agreement among the company, the Guarantors and The Bank of New York, as First Lien Collateral Agent and Second Lien Collateral Agent, as amended by the First Amendment to Intercreditor Agreement. The company may not grant a lien on its assets with respect to any indebtedness other than the Amended and Restated Bridge Loan Notes and the Second Amended and Restated Convertible Notes while such notes are outstanding. The company may borrow unlimited unsecured debt, as long as such debt has a maturity date that is at least 91 days after the maturity date of the Amended and Restated Convertible Notes and pays cash interest at a rate of no more than 12% per annum. Once the Amended and Restated Bridge Loan Notes are repaid, the Second Amended and Restated Convertible Notes automatically gain a first priority position as to all of the collateral. The company is not permitted to make any mandatory or optional prepayment on debt (other than permitted first priority secured debt) while either the Amended and Restated Bridge Loan Notes or the Second Amended and Restated Convertible Notes are outstanding. New Warrants The New Warrants grant the holders the right to acquire shares of Class A Common Stock at $1.55 per share, subject to certain anti- dilution adjustments. The New Warrants have a five-year term. In accordance with applicable rules of The Nasdaq Global Market, the Second Amended and Restated Convertible Notes and the New Warrants contain a cap on the exercise of conversion or exercise rights, such that no more than an aggregate of 19.9% of the company's outstanding shares may be issued pursuant to conversions of the amended and restated convertible notes or exercises of the warrants until the stockholder approval required by The Nasdaq Global Market has been obtained. The company has agreed to solicit the requisite stockholder approval for the issuance of the shares pursuant to the Second Amended and Restated Convertibles Notes and the New Warrants at a special meeting of stockholders to be held not later than August 15, 2008. Pursuant to a Voting Agreement among the company, Noah Samara, the Chairman and Chief Executive Officer of the Company, Yenura and TelUs Communications Inc., each of Mr. Samara, Yenura and TelUS Communications have agreed to vote his shares, constituting in the aggregate approximately 47.6% of the outstanding Class A Common Stock in favor of the issuances. About WorldSpace Inc. Based in the Washington, DC metropolitan area, WorldSpace Inc. (Nasdaq: WRSP) -- http://www.worldspace.com/-- is a media and entertainment company that offers a satellite radio to consumers in more than 130 countries with five billion people, driving 300 million cars. It operates WORLDSPACE Satellite Radio, which delivers the latest tunes, trends and information from around the world and around the corner. WORLDSPACE offers a combination of local programming, original WORLDSPACE content and content from brands around the globe including the BBC, CNN International, Virgin Radio UK, NDTV and RFI. WORLDSPACE's satellites cover two-thirds of the earth's population with six beams. WorldSpace has offices in Australia and France. The company's balance sheet at March 31, 2008, showed total assets of $323.7 million and total liabilities of $2.1 billion and minority interest of $608,000, resulting in total shareholders' deficit of $1.7 billion. Going Concern Doubt As reported in the The Troubled company Reporter on May 1, 2008, Grant Thornton LLP in McLean, Virginia, raised substantial doubt about WorldSpace Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's net loss, negative working capital, and shareholders' deficit. Grant Thornton also cited that the company's management does not believe its cash on hand and cash available is sufficient to meet its operating needs during the coming year. * A.M. Best Takes Rating Actions on Various Canadian Companies -------------------------------------------------------------- A.M. Best Co. has affirmed the financial strength ratings and issuer credit ratings of 30 Canadian property/casualty companies; upgraded seven FSRs and ICRs; upgraded seven ICRs (with no change to the FSRs); assigned four FSRs and ICRs; and downgraded five FSRs and ICRs. These ratings are based solely upon public information and present the most informed view A.M. Best can offer, short of an insurer participating in the full interactive rating process. A.M. Best uses the same rating scale and definitions as it does for its long-term financial strength interactive ratings, but applies a pd modifier to ensure the user is aware of the more limited information basis for the rating. A.M. Best has affirmed the FSRs and ICRs of these Canadian property/casualty companies: Company Name FSR ICR -- Algoma Mutual Insurance Company B+ (Good) "bbb-" -- Allstate Insurance Company of Canada A- (Excellent) "a-" -- Antigonish Farmers Mutual Insurance Company B+ (Good) "bbb-" -- Aviva Insurance Company of Canada A- (Excellent) "a-" -- BCAA Insurance Corporation B+ (Good) "bbb-" -- Canadian Direct Insurance Inc. B+ (Good) "bbb-" -- La Capitale, Compagnie D'Assurance Generale A-(Excellent) "a-" -- Certas Direct Insurance Company B++ (Good) "bbb" -- Clare Mutual Insurance Company B+ (Good) "bbb-" -- The Dominion of Canada General Insurance Company A-(Excellent) "a-" -- Economical Mutual Insurance Company B++ (Good) "bbb" -- Federation Insurance Company of Canada B+ (Good) "bbb-" -- Fenchurch General Insurance Company B++ (Good) "bbb" -- First North American Insurance Company B++ (Good) "bbb" -- Glengarry Mutual Insurance Company B++ (Good) "bbb" -- The Kings Mutual Insurance Company B+ (Good) "bbb-" -- Legacy General Insurance Company A- (Excellent) "a-" -- London and Midland General Insurance Company A-(Excellent) "a-" -- The Missisquoi Insurance Company B++ (Good) "bbb" -- The Mutual Fire Insurance Company of B.C. B++ (Good) "bbb+" -- North Waterloo Farmers Mutual Insurance Company B++ (Good) "bbb" -- Pacific Coast Fishermens Mutual Marine Insurance Company B++(Good) "bbb" -- The Personal Insurance Company B+ (Good) "bbb-" -- Perth Insurance Company B+ (Good) "bbb-" -- Pool Insurance Company B+ (Good) "bbb-" -- The Portage La Prairie Mutual Insurance Company B++ (Good) "bbb" -- Promutuel Reassurance B++ (Good) "bbb" -- Saskatchewan Mutual Insurance Company A- (Excellent) "a-" -- Traders General Insurance Company B+ (Good) "bbb-" -- Waterloo Insurance Company B++ (Good) "bbb" A.M. Best has upgraded the FSRs and ICRs of these Canadian property/casualty companies: Company Name FSR ICR -- CUMIS General Insurance Company B+ (Good) "bbb-" -- Grain Insurance and Guarantee Company A- (Excellent) "a-" -- Pembridge Insurance Company A- (Excellent) "a-" -- RBC Insurance Company of Canada A- (Excellent) "a-" -- RBC General Insurance Company B++ (Good) "bbb" -- Red River Valley Mutual Insurance Company A- (Excellent) "a-" -- L'Unique Compagnie D'Assurances Generales A- (Excellent) "a-" A.M. Best has affirmed the FSRs and upgraded ICRs of these Canadian property/casualty companies: Company Name FSR ICR -- Farmers' Mutual Insurance Company (Lindsay) B++ (Good) "bbb+" -- Gore Mutual Insurance Company B++ (Good) "bbb+" -- Green Shield Canada B++ (Good) "bbb+" -- Industrial-Alliance General Insurance Company C++ (Marginal) "b+" -- Pictou County Farmers Mutual Fire Insurance Company B++(Good) "bbb+" -- Prince Edward Island Mutual Insurance Company B++ (Good) "bbb+" -- Western Surety Company B++ (Good) "bbb+" A.M. Best has assigned FSRs and ICRs to these Canadian property/casualty companies: Company Name FSR ICR -- Alpha Assurance Company A- (Excellent) "a-" -- Desjardins Assurances Generales Inc B (Fair) "bb+" -- Personal General Insurance Inc. C+ (Marginal) "b-" -- TD Home and Auto Insurance Company B+ (Good) "bbb-" A.M. Best has downgraded the FSRs and ICRs of these Canadian property/casualty companies: Company Name FSR ICR -- Alberta Motor Association Insurance Company B++ (Good) "bbb" -- Elite Insurance Company B (Fair) "bb" -- Primmum Insurance Company B (Fair) "bb" -- Security National Insurance Company B+ (Good) "bbb-" -- TD General Insurance Company B (Fair) "bb+" * Magazine Names Skadden Arps America's Best Corporate Law Firm --------------------------------------------------------------- For the eighth straight year, Skadden Arps Slate Meagher & Flom LLP was named the best corporate law firm in the United States in Corporate Board Member magazine's 2008 survey of "America's Best Corporate Law Firms," which asked more than 424 directors of publicly traded companies to identify the firms they most admire. Skadden also ranked first in a separate survey conducted by the magazine that asked 217 general counsel which law firms they would most want to represent their companies on national matters. In the 2008 edition of Chambers USA: America's Leading Lawyers For Business, Skadden attorneys received a total of 236 individual rankings as leading lawyers in their practices -- more than any other firm, and the firm was recognized in 85 of Chambers' rankings by practice and jurisdiction -- 28 of which were top- tier. In addition, Skadden received two special awards from Chambers: A recognition for increasing diversity in the profession through the newly created Legal Honors Program at CCNY; and an award to New York securities litigation partner Jay Kasner for being "business trial lawyer of the year." New York-based Skadden Arps Slate Meagher & Flom LLP -- http://www.skadden.com/-- founded in 1948, is a prominent law firm based in New York City. With over 2,000 attorneys, it is one of the largest and highest-grossing law firms in the world. In most jurisdictions, the firm is organized as a limited liability partnership. The firm's better-known alumni include former New York State Governor Elliot Spitzer. Among Skadden's main practice areas are mergers and acquisitions, litigation, securities law, taxation, and bankruptcy representation. The firm has counted a majority of the Fortune 500's top 50 companies as clients. Skadden has been selected for each of the past six years as the best corporate law firm in the U.S. according to a survey of 1,390 directors and 279 general counsel of publicly traded companies by Corporate Board Member magazine and FTI Consulting. Skadden's domestic practice is particularly renowned in its Los Angeles, Chicago, Boston[20] and Washington, D.C., offices. Internationally, the firm also has particularly high-profile overseas practices in London, Frankfurt, Munich, Tokyo, and Hong Kong. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------ ------- Absolute Software ABT (3) 89 30 AFC Enterprises AFCE (40) 155 (20) APP Pharmaceutic APPX (73) 1,077 227 Ariad Pham ARIA (8) 101 65 Bare Escentuals BARE (76) 236 99 Blount Intl BLT (44) 407 138 CableVision System CVC (5,114) 9,180 (476) Centennial Comm CYCL (1,063) 1,343 14 Cheniere Energy CQP (228) 1,905 146 Cheniere Energy LNG (16) 2,962 428 Choice Hotels CHH (157) 328 (42) Cincinnati Bell CBB (668) 2,020 0 Claymont Stell PLTE (40) 158 80 Compass Minerals CMP (5) 820 201 Corel Corp. CRE (14) 266 (15) Crown Media HL CRWN (684) 676 4 CV Therapheutics CVTX (185) 259 177 Cyberonics CYBX (15) 136 (15) Cytori Therapeut CYTX (11) 18 2 Deltek Inc PROJ (86) 166 (28) Denny's Corp DENN (179) 381 74 Domino's Pizza DPZ (1,450) 473 51 Dun & Bradstreet DNB (437) 1,659 (192) Einstein Noah Re BACL (34) 149 4 Extendicare Real EXE-U (32) 1,440 (15) Gencorp Inc. GY (52) 995 77 General Motors GM (35,480) 148,883 (9,720) Healthsouth Corp. HLS (1,070) 2,051 (331) Human Genome Sci HGSI (12) 949 47 ICO Global C-New ICOG (131) 602 101 IDEARC Inc IAR (8,600) 1,667 205 IMAX Corp IMAX (85) 208 (8) IMAX Corp IMX (85) 208 (8) Incyte Corp INCY (160) 276 228 Indevus Pharma IDEV (86) 199 40 Intermune Inc ITMN (31) 262 209 IPCS Inc IPCS (40) 547 76 Knology Inc KNOL (35) 619 7 Life Sciences Re LSR (29) 502 1 Linear Tech Corp LLTC (564) 1,410 912 Lodgenet Interac LNET (48) 694 8 Maxxam Inc MXM (242) 544 120 Mediacom Comm-A MCCC (253) 3,615 (268) Moody's Corp MCO (784) 1,715 (360) National Cinemed NCMI (572) 464 67 Navistar Intl NAVZ (1,699) 10,786 164 Nexstar Broadcasting NXST (89) 709 (11) NPS Pharm Inc NPSP (188) 231 107 Primedia Inc PRM (129) 282 6 Protection One PONE (23) 673 6 Radnet Inc RDNT (53) 434 41 Regal Entertai-A RGC (119) 2,635 (2) Riviera Holdings RIV (48) 218 14 RSC Holdings Inc RRR (44) 3,460 (128) Rural Cellular-A RCCC (590) 1,350 110 Sally Beauty Hol SBH (745) 1,440 414 Sealy Corp. ZZ (113) 1,025 22 Sonic Corp SONC (102) 765 (27) Spectrum Brands SPC (141) 3,265 828 Theravance THRX (66) 162 101 Tribune Co TRB (3,514) 13,150 (805) UST Inc UST (292) 1,487 446 Valence Tech VLNC (61) 20 8 Virgin Mobile-A VM (410) 259 (173) Voyager Learning VLCY (53) 917 (637) Warner Music Gro WMG (47) 4,599 (764) Weight Watchers WTW (926) 1,046 (172) Westmoreland Coal WLB (178) 783 (85) WR Grace & Co. GRA (285) 3,927 (1,091) XM Satellite-A XMSR (1,038) 1,662 (293) ********* 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. Raphael M. Palomino, 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 ***