/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080630.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, June 30, 2008, Vol. 12, No. 154 Headlines 7233 E. REDBIRD: Voluntary Chapter 11 Case Summary ACA REAL ESTATE: Case Summary & Two Largest Unsecured Creditors ACXIOM CORP: S&P Holds 'BB' Rating and Changes Outlook to Stable ADT CONSTRUCTION: Case Summary & 21 Largest Unsecured Creditors ALL-AMERICAN SPORT: March 31 Balance Sheet Upside-Down by $9.6MM ALLHEAR INC: Case Summary & Six Largest Unsecured Creditors ALLIANCE BANCORP: Moody's Junks Ratings of Two Tranches ALLIANCE ONE: Moody's Affirms B2 Corporate Family Rating ALTERNATIVE LOAN: Moody's Assigns Ba1 and Ba3 Ratings on Certs. AMBAC FINANCIAL: Fitch Takes Out All Outstanding Ratings AMERICAN AXLE: Moody's Cuts Corporate Family Rating to B1 AMERICAN COLOR: Notes Maturity, Interest Payment Dates Extended APPLE VALLEY: Case Summary & 20 Largest Unsecured Creditors BANC OF AMERICA: Moody's Affirms Three Low B Ratings on Certs. BANC OF AMERICA: Moody's Junks Ratings of Two Tranches BANC OF AMERICA: S&P Lowers Rating on Class K Certificate to B+ BELLA VISTA TRUST: Moody's Cuts Ratings of Seven Tranches BHM TECHNOLOGIES: Lehman Objects to Rothschild as Banker BHM TECHNOLOGIES: Court Approves July 31 as Claims Bar Date BHM TECHNOLOGIES: Files Schedules of Assets and Liabilities BOB WILSON: Court Sets July 7 as Claims Bar Date BOYD GAMING: S&P Revises Outlook to Negative from Stable CAPITAL AUTO TRUST: Moody's Cuts Ratings of Four Classes of Notes CET SERVICES: Posts $102,274 Net Loss in 2008 First Quarter CHARTER COMMS: Names Eloise Schmitz as EVP and CFO CHARTER COMMS: Names Ted Schremp as Chief Marketing Officer CHEROKEE INTERNATIONAL: David Robbins Joins Board of Directors CHESAPEAKE CORP: Completion of $250MM Credit Facility Delayed CITICORP MORTGAGE: Fitch Assigns 'B' Rating on $619,000 Certs. COATES INT'L: March 31 Balance Sheet Upside-Down by $2,611,915 COMM 2001-J2: Moody's Affirms Caa1 Rating on Class H Certificates CONEXANT SYSTEMS: Bendush, Massengill Joins Board of Directors CONGOLEUM CORP: Century Indemnity et al. Balks at Case Dismissal CREDIT SUISSE: Moody's Assigns Junk Rating on Class O Certificate DELPHI CORP: Solicits Offers for Exhaust Business DENNY'S HOLDINGS: Moody's Affirms Ratings, Changes Outlook to Neg. DEUTSCHE ALT-A TRUST: Moody's Cuts Ratings of 56 Tranches Issued DUNMORE HOMES: Court Disallows $320,648 in Claims DURA AUTOMOTIVE: Emerges from Chapter 11 Protection in Delaware EDWARD BAYER: Voluntary Chapter 11 Case Summary EPICEPT CORP: Launches Public Offering of Up to 10 Million Shares ERIK BENHAM: Voluntary Chapter 11 Case Summary ESTATE FINANCIAL: Involuntary Chapter 11 Case Summary FERRELLGAS LP: Mulls $250 Million Offering of 6-3/4% Senior Notes FORD MOTOR: Begins Plant-by-Plant Employee Buyouts to Reduce Costs FREMONT GENERAL: Selects Patton Boggs as Bankruptcy Counsel FREMONT GENERAL: Wants Stutman Treister as Co-Counsel GENTILLY RACING: Shareholders Adopt Dissolution & Liquidation Plan GLOBAL PAYMENT: Posts $1,060,000 Net Loss in Qtr. Ended March 31 GREEKTOWN CASINO: Wants to Assume NRT Corp. Contracts GREEKTOWN CASINO: U.S. Trustee Balks at Honigman Retention GREEKTOWN CASINO: Can Hire Conway Mackenzie as Financial Advisors GREENMAN TECH: Subsidiary Files Chapter 7 Petition in Georgia GREY WOLF: Board Rejects Third $10/Share Proposal from Precision GSR MORTGAGE: Moody's Junks Ratings of 3 Tranches from ARM Deals HAIGHTS CROSS: Linda Koons to Resign as EVP and Publisher HARBORVIEW: Moody's Cuts Ratings of 186 Tranches from ARM Deals HARBORVIEW: Moody's Junks Six Tranches from Alt-A Transactions HAVEN HEALTHCARE: Formation Capital Backs Out on $84MM Purchase HEXION SPECIALTY: Says Huntsman's Suit Against Apollo is Baseless HOWARD REAL ESTATE: Voluntary Chapter 11 Case Summary HUNTSMAN CORP: Suit Against Apollo is Baseless, Hexion Says IAC/INTERACTIVECORP: Taking $300MM Goodwill Writedown for Unit IAC/INTERACTIVECORP: To Get $750MM Dividend Fee from Ticketmaster IBIS TECHNOLOGY: Gets Nasdaq Notice on Bid Price Noncompliance IDLEAIRE TECHNOLOGIES: Saul Ewing Approved as Panel's Counsel IDLEAIRE TECHNOLOGIES: Mesirow Okayed as Panel's Financial Advisor IDLEAIRE TECHNOLOGIES: Files Schedules of Assets and Liabilities INDIANA HEALTH: Fitch Holds 'BB+' Rating on $35.2MM Revenue Bonds INTERSTATE BAKERIES: Must File New Chapter 11 Plan by June 30 JAMES FALK: Case Summary & Largest Unsecured Creditor JEMM WHOLESALE: Secured Parties Offer to Sell Partnership Interest JE MORROS: Case Summary & 14 Largest Unsecured Creditors KIMBALL HILL: Halts Development in Three Chicago Subdivisions LEAP WIRELESS: Posts $18.1 Million Net Loss in 2008 First Quarter LOCAL INSIGHT: S&P's Rtngs. Unmoved by Statement Filing Default LUMINENT MORTGAGE: Settles Repurchase Financing with Third Parties LUMINENT MORTGAGE TRUST: Moody's Cuts Ratings of 52 Tranches MBIA INC: Moody's Downgrade Sparks Sale of Municipal Bonds MBIA INC: Fitch Withdraws All Outstanding Ratings MEDCOM USA INC: March 31 Balance Sheet Upside-Down by $5,053,710 MERRILL LYNCH: Moody's Affirms B2 and B3 Ratings on Certificates MICHAEL REIMER: Voluntary Chapter 11 Case Summary MINNEAPOLIS STAR: Asks Forbearance from Creditors MOBILE MINI: S&P Keeps Ratings Under Neg Watch on Pending Merger NOWAUTO GROUP: March 31 Balance Sheet Upside-Down by $928,595 OSYKA CORP: Files Chapter 11 Plan and Disclosure Statement OTC INT'L: Gets Court OK to Sell Assets to Dialuck for $23 Mil. PEOPLES COMMUNITY: Donald Hawke Rejoins Board of Directors PINE CCS: Moody's Gives B2 Rating to Class B Notes Due 2014 PIONEER NATURAL: Fitch Holds BB+ Rating; Changes Outlook to Stable PROGRESSIVE MOLDED: Obtains CCAA Stay Order Through July 9 PROGRESSIVE MOLDED: CCCA Court Approves Ernst & Young as Monitor PROGRESSIVE MOLDED: Thomas H. Lee Expected to Lose $200MM PROGRESSIVE MOLDED: Organizational Meeting Scheduled for July 7 QUEBECOR WORLD: Closes Sale of European Assets for EUR135 Million RED SHIELD: Files Chapter 11 Petition in Bangor RED SHIELD: Case Summary & 40 Largest Unsecured Creditors RH DONNELLEY: Completed Exchange Offer Cues Fitch's Rating Actions RITE AID: Mulls $425MM Offering of Senior Secured Notes Due 2016 RITE AID: Posts $157 Million Net Loss in 1st Quarter Ended May 31 ROBERT DILLON: Case Summary & Six Largest Unsecured Creditors ROOM SOURCE: To Hold GOB Sales, Shutter 5 Stores & Warehouse SALOMON BROTHERS: Moody's Junks Rating of Class G-1 Certificates SECURITY CAPITAL: CreditSights Analyst Sees Bond Insurer Woes SHARPER IMAGE: Hearing on Plan Filing Date Extension Set July 16 SHARPER IMAGE: Hilco/Gordon Brothers to Market Brand Name SHARPER IMAGE: Court Approves Employee Incentive Plan SHUMATE INDUSTRIES: March 31 Balance Sheet Upside-Down by $5.7MM SOURCEGAS LLC: Moody's Cuts Debt Rating to Ba1; Outlook is Stable SUMMITT CENTRIC: Voluntary Chapter 11 Case Summary SUN COAST: Disclosure Statement OK'd; Unsec. Creditors To Get 75% TERRY COFFMAN: Restaurant Property to be Auctioned Off July 14 THAYLEA PORT: Case Summary & 5 Largest Unsecured Creditors THOMAS OWENS: Case Summary & 16 Largest Unsecured Creditors TRANS ENERGY: March 31 Balance Sheet Upside-Down by $1,681,152 TRIBUNE CO: CEO Sam Zell Looks into Real Estate to Generate Cash VANTAGE LOFTS: Section 341(a) Meeting Scheduled for July 24 VANTAGE LOFTS: Wants to Hire Matthew Johnson as Counsel WACHOVIA BANK TRUST: Moody's Affirms Low B Ratings on Certificates WACHOVIA BANK TRUST: Fitch Places Ratings Under Negative Watch WELLMAN INC: Nixes Assets Sales, Opts for Restructuring Plan WILLIAM DEL BIAGGIO: Has $2MM Loan Overdue, Pacific Capital Says WILLIAM MILLS: Case Summary & 20 Largest Unsecured Creditors WILLIAM WHITE: Says Cash Crunch in Construction Biz is Temporary WORNICK CO: Judge Aug Confirms Amended Joint Chapter 11 Plan W.R. GRACE: High Court Drops Request to Review Criminal Case XL CAPITAL: CreditSights Analyst Sees Bond Insurer Insolvencies ZAMIAS NORTH: Voluntary Chapter 11 Case Summary * Moody's Says Creditors May Recover Less than in the Past * Moody's Says Canada Has Only Two Issuer Defaults in 2007 * Fitch Says Higher Credit Enhancement Needed for New US Re-REMICs * Fitch: Economic & Credit Outlook for Emerging Markets Worsening * S&P Says Downgrades of High-Yield Bonds Accelerates This Year * BOND PRICING: For the Week of June 23 to June 27, 2008 ********* 7233 E. REDBIRD: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: 7233 E. Redbird Road, LLC 7233 E. Redbird Road Scottsdale, AZ 85266 Bankruptcy Case No.: 08-07736 Chapter 11 Petition Date: June 26, 2008 Court: District of Arizona (Phoenix) Debtor's Counsel: Kevin Lee Jensen, Esq. Email: Kevin@jensenlawaz.com 3740 E. Southern Ave. Ste. 210 Mesa, AZ 85206 Tel: (480) 632-7373 Fax: (480) 632-8383 Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $500,000 to $1,000,000 The Debtor did not file a list of its largest unsecured creditors. ACA REAL ESTATE: Case Summary & Two Largest Unsecured Creditors --------------------------------------------------------------- Debtor: ACA Real Estate, LLC 190 Charlois Blvd. Winston Salem, NC 27103 Bankruptcy Case No.: 08-51055 Chapter 11 Petition Date: June 26, 2008 Court: Middle District of North Carolina (Winston-Salem) Judge: William L. Stocks Debtor's Counsel: William P. Janvier, Esq. E-mail: bill@eghs.com Everett, Gaskins, Hancock & Stevens P.O. Box 911 Raleigh, NC 27602 Tel: (919) 755-0025 http://www.eghs.com/ Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 A copy of Debtor's petition is available for free at: http://bankrupt.com/misc/ncmb08-51055.pdf ACXIOM CORP: S&P Holds 'BB' Rating and Changes Outlook to Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Little Rock, Arkansas-based Acxiom Corp. to stable from negative. At the same time, S&P affirmed its 'BB' corporate credit rating and 'BB+' senior secured rating on the company. "The outlook revision follows our review of the business and financial strategy with Acxiom's new CEO, and our current expectation that the company will maintain a moderate financial policy in the near term following the termination of its attempted LBO," said Standard & Poor's credit analyst Molly Toll-Reed. The rating on Acxiom reflects the company's good niche market position and adequate cash flow. Business risk is tempered by Acxiom's expertise in managing its comprehensive consumer databases. More than half of its direct-marketing assignments are performed for long-term clients, and outsourcing contracts generally cover multiple years, offsetting a concentrated customer base and providing some revenue predictability. However, the company is still a relatively small participant in a growing and fragmented industry that may see the entrance of several much larger competitors. ADT CONSTRUCTION: Case Summary & 21 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: ADT Construction Group, Inc. aka Advanced Demolition Technologies 1335 E. Sunset Road, Suite J Las Vegas, NV 89119 Bankruptcy Case No.: 08-16841 Type of Business: The Debtor offers full-service contracting services. See http://www.adtconstruction.com/ Chapter 11 Petition Date: June 24, 2008 Court: District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: Lenard E. Schwartzer, Esq. Schwartzer & McPherson Law Firm 2850 S. Jones Boulevard, Suite 1 Las Vegas, NV 89146 Tel: (702) 228-7590 Fax: (702) 892-0122 bkfilings@s-mlaw.com Total Assets: $11,202,109 Total Debts: $7,411,364 Debtor's list of its 21 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sun City Electric 3380 Contract $726,965 W. Hacienda Ave., Suite 104 Las Vegas, NV 89118 Thelen Reid & Priest, LLP Contract $461,745 101 Second St., Suite 1800 San Francisco, CA 94105 Southern Nevada Paving Contract $319,454 3920 W. Hacienda Avenue Las Vegas, NV 89118 Midwest Drywall 4029 Contract $274,255 Dean Martin Drive Las Vegas, NV 89118 Freeman Carpet Service Contract $196,811 Universal Brass Contract $168,140 Laborers Joint Trust Fund Contract $158,747 Alexander Services, LLC Contract $143,883 Republic Services, Inc. Trade Debt $139,018 Isolatek International Trade Debt $87,794 Giroux Glass, Inc. Contract $80,610 Gibson Tile Co. Contract $77,942 Cement masons & Plasterers Contract $75,186 Westwood Mechanical Contract $65,533 Filedturf Builders Contract $55,184 Reliable Steel, Inc. Contract $45,459 Helix Electric of Nevada LLC Contract $44,769 Regaldo Trucking Trade Debt $43,433 Union Erectors Contract $43,035 Apex Electric Contract $41,634 Inline Distribution Co. Trade Debt $40,110 ALL-AMERICAN SPORT: March 31 Balance Sheet Upside-Down by $9.6MM ---------------------------------------------------------------- All-American SportPark Inc.'s consolidated balance sheet at March 31, 2008, showed $1,010,738 in total assets and $10,596,215 in total liabilities, resulting in a $9,585,477 total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $59,961 in total current assets available to pay $8,455,308 in total current liabilities. The company reported a net loss of $241,056 on revenues of $590,947 for the first quarter ended March 31, 2008, compared with a net loss of $176,299 on revenues of $546,908 in the same period last year. The increase in revenues is attributed to an increase in golf course green fees, the driving range and the golf club rental businesses. The increase in the net loss is primarily due to the increase in legal expenses for the Urban Land litigation. 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?2ec8 Going Concern Doubt L.L. Bradford & Company, LLC, in Las Vegas, expressed substantial doubt about All-American SportPark 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 negative working capital and recurring losses. About All-American SportPark Based in Las Vegas, All-American SportPark Inc. (OTC BB: AASP) is engaged in the management and operation of the Callaway Golf Center (CGC), a golf facility located on 42 acres of leased land in Las Vegas, Nevada. The CGC includes a two-tiered, 110-station, driving range. The company also sells golf balls under the Pro-line equipment and popular brand name. In addition to the driving range, the CGC has a lighted, nine-hole, par three golf course, named the Divine Nine. The golf course has several water features, including lakes, creeks, water rapids and waterfalls, golf cart paths, and designated practice putting and chipping areas. ALLHEAR INC: Case Summary & Six Largest Unsecured Creditors ----------------------------------------------------------- Debtor: AllHear, Inc. P.O. Box 330 Aurora, OR 97002 Bankruptcy Case No.: 08-62246 Type of Business: The Debtor designs, manufactures and sells cochlear implants. See http://www.allhear.com/ Chapter 11 Petition Date: June 26, 2008 Court: District of Oregon Judge: Frank R. Alley, III Debtor's Counsel: Albert N. Kennedy, Esq. Email: al.kennedy@tonkon.com 888 S.W. 5th Ave., Ste. 1600 Portland, OR 97204 Tel: (503) 802-2013 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1,000,000 to $10,000,000 A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/orb08-62246.pdf ALLIANCE BANCORP: Moody's Junks Ratings of Two Tranches ------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 8 tranches from one Option ARM transaction issued by Alliance Bancorp. Three 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: Alliance Securities Corp., Mortgage Backed Pass-Through Certificates, Series 2007-OA1. -- Cl. M-2, Downgraded to Aa2 from Aa1 -- Cl. M-3, Downgraded to A2 from Aa1 -- Cl. M-4, Downgraded to Baa3 from Aa2 -- Cl. M-5, Downgraded to B1 from Aa3 -- Cl. M-6, Downgraded to B1 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 Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Ca from Baa3 ALLIANCE ONE: Moody's Affirms B2 Corporate Family Rating -------------------------------------------------------- Moody's Investors Service downgraded the liquidity ratings of Alliance One International, Inc. to SGL-4 to SGL-3. Moody's also affirmed AOI's long-term ratings, including the company's B2 corporate family rating. The downgrade to SGL-4 reflects concerns related to the company's future covenant compliance and its impact on the company's liquidity as a result of AOI's announcement that it is in the process of finalizing its accounting related to reserves and financial statement presentation concerning farmer rural credit accounting. Moody's also upgraded the ratings of the company's $250 million senior secured revolving credit to Ba2 as a result of the reduction of senior secured debt. The outlook is stable. The affirmation of the company's corporate family rating reflects Moody's expectation that AOI's operating performance will not deviate significantly from plan including modest leverage reduction and further operating margin improvement. Absent the potential need to modify covenants, the company's intrinsic liquidity position remains adequate supported by strong cash balances and sufficient cash flow from operations to cover the company's basic cash needs. Should the company have difficulty resolving any future covenant issues or should a possible material financial statement restatement be required, the long-term ratings and/or outlook may come under pressure. The one notch upgrade of the company's secured bank facilities reflects the impact of AOI's prepayment of its $145 million Term Loan B facility, which enhances the relative seniority position of the existing secured revolving credit in the capital structure. Ratings of AOI downgraded include: -- Speculative Grade Liquidity rating to SGL-4 from SGL-3 Ratings of AOI upgraded include: -- $250 million senior secured revolving credit facility due 2010 to Ba2 (LGD1, 5%) from B1 (LGD3, 35%) Ratings of AOI affirmed/assessments revised include: -- Corporate family rating of B2 -- Probability of default rating of B2 -- $150 million 8 ½% senior unsecured notes due 2012 at B2 (LGD4, 55%) -- $315 million 11% senior unsecured notes due 2012 at B2 (LGD4, 55%) -- $91.4 million 12 ¾% senior subordinated notes due 2012 at Caa1 (LGD6, 95%) -- Outlook is stable Alliance One International, Inc. and Intabex Netherlands, B.V. are co-borrowers under the senior secured revolving credit facility. Headquartered in Morrisville, North Carolina, Alliance One International, Inc. is one of the largest tobacco merchants and processors. Its principal products include flue-cured, burley and oriental tobaccos, which are major ingredient in American - blend cigarettes. Total revenues for the last 12 months ending December 2007 were approximately $2.0 billion. ALTERNATIVE LOAN: Moody's Assigns Ba1 and Ba3 Ratings on Certs. --------------------------------------------------------------- Moody's Investors Service has assigned an Aaa rating to the senior certificates issued by Alternative Loan Trust 2008-OH1 and ratings ranging from Aa1 to Ba3 to the mezzanine and subordinate certificates in the deal. The securitization is backed by adjustable-rate, negative amortization, Alt-A mortgage loans acquired or originated by Countrywide Home Loans, Inc. (99.5%) and other originators (0.5%). The ratings are based primarily on the credit quality of the loans and on the protection from subordination. Moody's expects collateral losses to range from 5.70% to 5.90%. The deal trustee has committed to provide Moody's with access to a website from which certain monthly loan level performance data can be obtained. Moody's considers the amount of data currently available on the website to be acceptable for monitoring collateral performance. In the event that Moody's access to the website is curtailed or that adequate performance information is not otherwise made available to Moody's, Moody's ability to monitor the ratings may be impaired. This could negatively impact the ratings or, in some cases, Moody's ability to continue to rate the certificates. Countrywide Home Loans Servicing LP will act as master servicer. THE COMPLETE RATING ACTIONS ARE: Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2008-OH1 -- Cl. A-1, Assigned Aaa -- Cl. A-2, Assigned Aaa -- Cl. A-3, Assigned Aaa -- Cl. A-4, Assigned Aaa -- Cl. A-5, Assigned Aaa -- Cl. A-R, Assigned Aaa -- Cl. M, Assigned Aa1 -- Cl. B-1, Assigned A1 -- Cl. B-2, Assigned A3 -- Cl. B-3, Assigned Ba1 -- Cl. B-4, Assigned Ba3 AMBAC FINANCIAL: Fitch Takes Out All Outstanding Ratings -------------------------------------------------------- Fitch Ratings is withdrawing all of its outstanding ratings on MBIA Inc., MBIA Insurance Corp., and other related entities. Also, Fitch is withdrawing all of its outstanding ratings on Ambac Financial Group, Inc., Ambac Assurance Corp. and other related entities. In addition, Fitch will be withdrawing all ratings based on insurance policies from both MBIA and Ambac's insurance subsidiaries. Fitch will list ratings of primary obligors for bonds where Fitch maintain coverage. The action follows decisions by MBIA and Ambac's managements to cease providing substantive non-public portfolio information used in Fitch's capital analysis model, to discontinue previous full interactive dialogue with Fitch analysts, and to request withdrawal of Fitch's ratings. Many key credit issues have developed recently prompting Fitch's decision to withdraw MBIA and Ambac's ratings at this time. Negative rating actions by S&P and Moody's impact the companies' business prospects and the companies' reactive strategic and capital management planning creates a volatile credit variable. In addition, credit risk developments continue and Fitch's ability to analyze credit strength needs to shift to utilizing public information only. Fitch will consider reinstating coverage and assigning new ratings based only on public information if there is continuing investor interest. In the interim, Fitch may continue to offer commentary and research on developing credit events at MBIA and Ambac. These ratings are being withdrawn by Fitch: MBIA Insurance Corp. MBIA Insurance Corp. of Illinois MBIA UK Insurance Limited MBIA Assurance SA MBIA Mexico SA de CV Capital Markets Assurance Corp. -- Insurer Financial Strength 'AA'. The Rating Outlook was Negative. MBIA Insurance Corp. -- Subordinated debt rating 'A+'; -- $1 billion 14% surplus notes due Jan. 15, 2033 'A+'. MBIA Inc. -- Long-term rating 'A'; -- $75 million 7% senior unsecured debentures due Dec. 15, 2025 'A'; -- $100 million 7.17% senior unsecured debentures due July 15, 2027 'A'; -- $150 million 6.63% senior unsecured debentures due Oct.1, 2028 'A'; -- $200 million 6.40% senior unsecured debt due Aug. 15, 2022 'A'; -- $175 million 4.50% senior unsecured notes due July 15, 2010 'A'; -- $100 million 9.38% senior unsecured notes due Feb.15, 2011 'A'; -- $350 million 5.70% senior unsecured notes due Dec. 1, 2034 'A'. MBIA Mexico SA de CV -- National insurer financial strength at 'AAA (mex)'. The Rating Outlook for MBIA Mexico was Stable Ambac Assurance Corp. Ambac Assurance UK Ltd. Connie Lee Insurance Co. -- Insurer financial strength 'AA'. The Rating Outlook was Negative Ambac Financial Group, Inc. -- Long-term rating 'A'; -- $400 million 5.95% senior unsecured notes due Dec. 5, 2035 'A'; -- $142.5 million 9.375% senior unsecured debentures due Aug. 1, 2011 'A'; -- $75 million 7.5% senior unsecured debentures due May 1, 2023 'A'; -- $400 million subordinated notes due Feb. 7, 2087 'A-'. AMERICAN AXLE: Moody's Cuts Corporate Family Rating to B1 --------------------------------------------------------- Moody's Investors Service lowered American Axle & Manufacturing Holdings, Inc.'s Corporate Family Rating to B1 from Ba3, as well as the senior unsecured rating to B1 from Ba3 on American Axle & Manufacturing, Inc.'s notes and term loan. The outlook is stable. The Speculative Grade Liquidity Rating also has been lowered to SGL-3 from SGL-2. In taking the rating action, Moody's noted that American Axle's new labor agreement meaningfully improves the company's cost position and is considered a positive credit development. However, "even with the benefits of its new labor agreement, American Axle's significant exposure to declining truck/SUV volumes at Big-3 U.S. auto makers will result in near term financial metrics that are more consistent with the B1 rating category," Tim Harrod, vice-president of Moody's, said. The rating action concludes the ratings review initiated on April 2, 2008 as the company's UAW work stoppage at five facilities in Michigan and New York involving approximately 3,650 UAW employees neared its sixth week. The underlying issues involved, among other items, American Axle's goal of reducing its all-in hourly labor cost, estimated to be approximately $73.48, to levels competitive with other domestic automotive suppliers. The strike concluded with the ratification of new labor agreements on May 23, 2008 that significantly lowered the company's labor costs. According to American Axle, the new labor agreements are expected to generate over $300 million in annual cost reductions, in part due to the reduction of all-in hourly labor costs by about 50% on a blended average basis, to a range of $30 to $45 per hour. The company should also benefit from structural cost reductions stemming from a reduction of about 2,000 hourly positions over the next year through a combination of buyouts, early retirement incentives, and plant closings. The cost of implementing the workforce reduction is expected to range from $400 million to $450 million, the majority of which should be incurred during 2008. In implementing this program, American Axle will receive $215 million in financial assistance from its principal customer, General Motors. The reduced labor costs achieved with the new labor contract could mark a watershed event in American Axle's history and meaningfully enhance the company's long term competitiveness as an auto parts supplier. However, given the current market conditions, the full benefits of the new contract may not be realized for several years. American Axle's business is heavily concentrated in the supply of drivetrain components for light trucks and SUV's, particularly for North American manufacturers such as General Motors. Recent new business awards should increase diversification into passenger cars and crossover vehicles, and include important new relationships with non-US auto makers. Nevertheless, for the foreseeable future, over 60% of revenues will continue to be derived from North American light truck volumes. Given the continuing erosion of demand for SUV's and light trucks in the wake of high fuel costs, American Axle has faced, and may continue to face, large reductions in order volumes from key North American auto makers, which will continue to weigh on its financial results. In light of the potential for sustained weakness in revenues, and the likelihood that restructuring and headcount reduction initiatives will consume cash during the near term, Moody's anticipates that American Axle's financial metrics will not support maintenance of the Ba3 rating over the next 12 to 18 months resulting in the rating downgrade. The Speculative Grade Liquidity Rating to SGL-3, reflects the expectation of negative free cash flow over the next 12 months as a result of restructuring costs and the weakening automobile production in North America. At March 31, 2008 the company reported $315 million of cash and had $572 million of availability under the company's $600 million revolving credit facility. Principal financial covenants measure net debt to EBITDA and net worth. Both covenants exclude special/one-time items such as the impact of the work stoppages and costs related to restructuring under the new labor agreement. However, cushions under the financial covenants are expected to diminish over the second half of 2008 reflecting the impact of lower production in North America on the company's key platforms. Covenant cushions should improve into 2009 as the benefits of the new labor agreements more favorably impact operations. However, this improvement could be tempered if vehicle production pressure in North America persists. All of the company's bank obligations and notes are currently unsecured, which establishes some flexibility to generate alternative liquidity, subject to lien baskets and sale/leaseback limitations in the respective indentures. While near term financial metrics will remain under pressure, the rating outlook is stable at the B1 rating level reflecting Moody's expectation that with the improved cost structure provided by its new labor agreement, American Axle should be able to achieve improved financial performance during 2009. The rating anticipates that recent new business wins should enable the company to reduce its reliance on the North American light truck market and enhance its long term business position. Importantly, the rating anticipates that American Axle will maintain adequate liquidity and financial flexibility to execute the business transition that should yield improved financial metrics by 2009. Ratings lowered: American Axle & Manufacturing Holdings, Inc. -- Corporate Family, to B1 from Ba3 -- Probability of Default, to B1 from Ba3 -- Unsecured guaranteed convertible note, to B1 (LGD4, 54 %) from Ba3 (LGD4, 56%) American Axle & Manufacturing, Inc. -- Unsecured guaranteed notes, to B1 (LGD4, 54 %) from Ba3 (LGD4, 56%) -- Unsecured guaranteed term loan, to B1 (LGD4, 54 %) from Ba3 (LGD4, 56%) -- Speculative Grade Liquidity Rating to SGL-3 from SGL-2 Holdings' obligations are guaranteed by American Axle and vice versa. The last rating action was on April 2, 2008 when American Axle's ratings were placed under review and the Speculative Grade Liquidity Rating was lowered to SGL-2. American Axle & Manufacturing, Inc., headquartered in Detroit, MI, manufactures, designs, engineerings and validates driveline systems and related components and modules, chassis systems, and metal formed products for light truck, SUV's and passenger cars. The company has manufacturing locations in the USA, Mexico, the United Kingdom, Brazil, China and Poland. The company reported revenues of $3.2 billion in 2007. AMERICAN COLOR: Notes Maturity, Interest Payment Dates Extended --------------------------------------------------------------- American Color Graphics Inc. received, pursuant to its commenced consent solicitation, the requisite consents to extend the maturity date of its Non-Interest Bearing Senior Second Secured Notes due 2008 and an interest payment forbearance related to its 10% Senior Second Secured Notes due 2010. The consent solicitation expired at 5:00 p.m., New York City time, on June 12, 2008. The company disclosed that holders of $14,979,300 in aggregate principal amount of its 2008 Notes or approximately 98.5% of outstanding 2008 Notes have agreed with the company to extend the maturity date of the 2008 Notes from June 15, 2008 to Sept. 15, 2008. In addition, holders of $247,333,000 in aggregate principal amount of its 2010 Notes or approximately 88.3% of outstanding 2010 Notes have agreed with the company to be precluded through Sept. 15, 2008 from exercising, or instructing the trustee to exercise on their behalf, certain rights and remedies under Section 6.02 (Acceleration) of the Indenture that may exist in respect of an Event of Default that may occur under Section 6.01(b) of the Indenture due to the company's failure to make the interest payment on the 2010 Notes that becomes due and payable on June 15, 2008, and the continuance of such default for a period of 30 days. The consent solicitation required that at least 75.1% in aggregate principal amount of the outstanding 2010 Notes consent in order to be adopted. Accordingly, all holders of 2010 Notes are precluded from instituting any proceeding, judicial or otherwise, with respect to the Indenture or the 2010 Notes, or for the appointment of a receiver or trustee, or for any other remedy thereunder, because the Indenture requires that holders of at least 25% in aggregate principal amount of the outstanding 2010 Notes must request or direct the Trustee to pursue any remedy available to the Trustee or the holders with respect to the Indenture or the 2010 Notes or otherwise under the law. The company retained Lehman Brothers to serve as Solicitation Agent, Ipreo to serve as Information Agent and The Bank of New York Trust company, N.A. to serve as Tabulation Agent for the solicitation of consents. About American Color Graphics American Color Graphics Inc. -- http://www.americancolor.com/-- is a full service premedia and print companies, with eight print locations across the continent, a TMC facility, six regional premedia centers, photography studios nationwide and a customer managed service sites. Expert in a full range of products such as retail, newspapers, direct mail, catalog, publication, packaging, book, comic, and commercial products, ACG has been an innovative industry leader for over 80 years. The company provides solutions and services as asset management, photography, and digital workflow solutions that improve the effectiveness of advertising and drive revenues for their customers. At Dec. 31, 2007, American Color's consolidated balance sheets reveal total assets of $224,080,000 and total debts of $493,973,000 resulting in a $269,893,000 stockholders' deficit. * * * As reported in the Troubled Company Reporter on June 26, 2008, Standard & Poor's Ratings Services lowered the corporate credit rating on American Color Graphics Inc. to 'D' from 'SD', after the company's failure to make an interest payment due June 15, 2008, on its $280 million 10% senior secured second-priority notes due in 2010. APPLE VALLEY: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Apple Valley Plaza, LLC 22311 Bear Valley Rd. Apple Valley, CA 92307 Bankruptcy Case No.: 08-17740 Chapter 11 Petition Date: June 26, 2008 Court: Central District Of California (Riverside) Judge: Peter Carroll Debtor's Counsel: M. Jonathan Hayes, Esq. Email: jhayes@polarisnet.net 21800 Oxnard St. Ste. 840 Woodland Hills, CA 91367 Tel: (818) 710-3656 Fax: (818) 710-3659 Estimated Assets: Less than $50,000 Estimated Debts: $10,000,000 to $50,000,000 A copy of the Debtor's petition is available for free at: http://www.bankrupt.com/misc/ BANC OF AMERICA: Moody's Affirms Three Low B Ratings on Certs. -------------------------------------------------------------- Moody's Investors Service upgraded the ratings of three classes and affirmed 16 classes of Banc of America Commercial Mortgage Inc., Commercial Mortgage Pass-Through Certificates, Series 2004-2 as follows: -- Class A-2, $127,753,996, affirmed at Aaa -- Class A-3, $283,402,000, affirmed at Aaa -- Class A-4, $125,682,000, affirmed at Aaa -- Class A-5, $254,120,181, affirmed at Aaa -- Class XC, Notional, affirmed at Aaa -- Class XP, Notional, affirmed at Aaa -- Class B, $27,045,564, upgraded to Aaa from Aa1 -- Class C, $12,811,056, upgraded to Aaa from Aa2 -- Class D, $24,198,662, upgraded to A1 from A2 -- Class E, $11,387,606, affirmed at A3 -- Class F, $15,657,957, affirmed at Baa1 -- Class G, $9,964,155, affirmed at Baa2 -- Class H, $15,657,958, affirmed at Baa3 -- Class J, $4,270,352, affirmed at Ba1 -- Class K, $5,693,803, affirmed at Ba2 -- Class L, $5,693,803, affirmed at Ba3 -- Class M, $7,117,253, affirmed at B1 -- Class N, $2,846,901, affirmed at B2 -- Class O, $2,846,901, affirmed at B3 Moody's upgraded the ratings of Classes B, C and D due to increased defeasance and credit support and overall stable pool performance. As of the June 10, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 16.3% to $953.2 million from $1.14 billion at securitization. The certificates are collateralized by 71 mortgage loans ranging in size from less than 1.0% to 11.5% of the pool, with the top 10 non-defeased loans representing 46.7% of the pool. The pool includes two loans with underlying ratings which comprise 15.6% of the pool. Fifteen loans, representing 19.1% of the pool balance, have defeased and are collateralized by U.S. Government securities. There have been no realized losses since securitization and currently there are no loans in special servicing. Seven loans, representing 7.4% 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's 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 year-end 2006 and partial or year-end 2007 operating results for approximately 97.7% and 44.5% of the pool, respectively. Moody's loan to value ratio for the conduit component is 87.8% compared to 92.7% at Moody's last full review in December 2006 and 93.2% at securitization. The largest loan with an underlying rating is the PPG Place Loan ($110.1 million -- 11.6%), which is secured by a 1.5 million square foot office complex located in downtown Pittsburgh, Pennsylvania. The property was 89.7% occupied as of September 2007 compared to 84.9% at last review. The largest tenant is PPG Industries, Inc. (24.6% NRA; lease expiration June 2011; Moody's senior unsecured rating A3 - stable outlook). Property performance has declined since securitization due to a decline in rental revenues and increased operating expenses. Moody's current underlying rating is Baa2 compared to A3 last review. The second largest loan with an underlying rating is the Prince Kuhio Plaza Loan ($38.5 million -- 4.0%), which is secured by the borrower's interest in a 504,000 square foot regional mall located on the island of Hawaii. The mall was 89.9% occupied as of September 2007, essentially the same as at last review and securitization. The center is anchored by Sears, Macy's, Safeway and Long's Drugs. The property has experienced increased operating expenses which have been largely offset by amortization. The loan has amortized 8.3% since securitization. Moody's current underlying rating is Baa1, the same as last review. The third loan which had an underlying rating at securitization is the Inland TX-CT Retail Portfolio Loan ($19.6 million -- 2.1%), which is secured by two retail properties totaling 182,000 square feet. The Shops at Park Place (116,000 square feet) is located in Plano, Texas and is anchored by Bed Bath & Beyond, Michael's and Office Max. The Shaw's New Britain property (66,000 square feet) is located in New Britain, Connecticut and is 100.0% leased to Shaw's Supermarket through April 2016. Shaw's vacated the premises in October 2006 but has continued to make rental payments. The portfolio is 63.7% physically occupied with an economic occupancy of 96.0% compared to 100.0% at securitization. The performance of the Shops at Park Place has declined due to increased expenses. Moody's analysis of the portfolio incorporates a dark value in the analysis of the Shaw's property because of its leasing status. Due to the portfolio's decline in value, Moody's has withdrawn its underlying rating and has included the loan in the conduit component of the pool. Moody's LTV is 78.2% compared to 67.8% at last review and at securitization. The top three non-defeased conduit loans represent 16.6% of the outstanding pool balance. The largest conduit loan is the Eden Prairie Mall Loan ($81.1 million -- 8.5%), which is secured by the borrower's interest in a 1.1 million square foot regional mall located in suburban Minneapolis, Minnesota. The property was 98.1% occupied as of September 2007 compared to 96.6% at last review and is anchored by Sears, J.C. Penney, Target, Kohl's, and Von Maur. Moody's LTV is 78.7% compared to 81.8% at last review. The second largest conduit loan is the Broward Financial Loan ($46.5 million -- 4.9%), which is secured by a 325,500 square foot Class A office tower located in downtown Fort Lauderdale, Florida. The property sustained significant damage from Hurricane Wilma in 2005. The property has been fully operational since January 2006 and at this time substantially all of the building repairs have been completed. The property was 76.6% occupied as of December 2007 compared to 80.7% at last review and 87.0% at securitization. The largest tenant is Franklin Templeton (42.4% NRA; lease expiration June 2011). The loan is on the servicer's watchlist due to a decline in occupancy since securitization. The loan matures March 2009. Moody's LTV is 99.4% compared to 96.6% at last review. The third largest conduit loan is the MHC Portfolio Waterford Estates Loan ($30.4 million -- 3.2%), which is secured by a 731- pad manufactured housing community located approximately 10 miles south of Wilmington in Bear, Delaware. The property was 95.5% occupied as of September 2007, essentially the same as at last review. Moody's LTV is 94.9%, essentially the same as at last review. BANC OF AMERICA: Moody's Junks Ratings of Two Tranches ------------------------------------------------------ Moody's Investors Service has downgraded the ratings of 9 tranches from 3 Option ARM transactions issued by Banc of America. Four tranches remain on review for possible further downgrade. Additionally, 4 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: Banc of America Funding 2004-B Trust -- Cl. 6-B-1, Downgraded to Aa3 from Aa2 -- Cl. 6-B-2, Downgraded to Baa2 from A2 -- Cl. 6-B-3, Downgraded to B1 from Baa2 Issuer: Banc of America Funding Corporation, Mortgage Pass-Through Certificates, Series 2005-E -- Cl. 7-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 8-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 9-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 9-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. DB-1, Downgraded to Baa2 from Aa2 -- Cl. DB-2, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. DB-3, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade Issuer: Banc of America Funding Corporation, Mortgage Pass-Through Certificates, Series 2005-F -- Cl. 1-B-1, Downgraded to Ba1 from Aa2 -- Cl. 1-B-2, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. 1-B-3, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade BANC OF AMERICA: S&P Lowers Rating on Class K Certificate to B+ --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class K commercial mortgage pass-through certificate from Banc of America Large Loan Inc.'s series 2004-BBA4. Concurrently, S&P raised its rating on class G and affirmed its ratings on seven other classes from this series. The downgrade of the class K certificate to 'B+' from 'BB' reflects the continued poor performance of the Arapaho Business Park loan (21% of the trust balance), which is discussed below. The raised and affirmed ratings reflect Standard & Poor's analysis of the remaining loans in the pool, as well as increased credit enhancement levels resulting from loan payoffs. As of the June 16, 2008, remittance report, the trust collateral consisted of the senior participation interests in two floating- rate mortgage loans and one floating-rate whole-mortgage loan. All of the loans are indexed to one-month LIBOR. The pool balance has declined 93% to $61.8 million since issuance. Details of the three remaining loans in the pool are: -- The largest loan in the pool, Westgate Mall, has a whole- loan balance of $51.0 million that is divided into two pieces: a $31.0 million senior participation interest that makes up 50% of the trust balance and a $20.0 million subordinate junior participation interest that is held outside the trust. The collateral consists of 480,350 sq. ft. of a 607,200-sq.-ft. regional mall in Brockton, Massachusetts. The master servicer, Bank of America N.A., reported a debt service coverage of 2.62x for the year ended Dec. 31, 2007, and 80% occupancy as of April 2008, compared with a DSC of 3.17x and 95% occupancy at issuance. The drop in occupancy is due mainly to the vacancy of one of its anchor tenants in early 2008, which was paying base rent of approximately $2.12 per sq. ft. Standard & Poor's net cash flow has increased 9% since issuance, due primarily to an overall increase in average rental rates. The loan is scheduled to mature in April 2009 and has no extension options remaining. -- The second-largest loan in the pool, Heritage Square I & II, has a trust and whole-loan balance of $17.6 million (29%). Two office buildings in Farmers Branch, Texas, totaling 354,500 sq. ft. secure this loan. In addition, the borrower's equity interests in the property secure an $8.0 million mezzanine loan. Bank of America reported a 1.26x DSC as of year-end 2007 and 84% occupancy as of March 2008, compared with a 2.43x DSC and 98% occupancy at issuance. Standard & Poor's adjusted NCF has declined 12% since issuance due to higher operating expenses. The loan matures in September 2008, and has one 12-month extension option remaining. -- The smallest loan in the pool, Arapaho Business Park, has a whole-loan balance of $19.8 million that is divided into two pieces: a $13.2 million senior participation interest that makes up 21% of the trust balance and a $6.6 million junior participation interest held outside the trust. A 10-building flex (office/industrial) complex totaling 423,400 sq. ft. in Richardson, Texas, secures this loan. Sixty two percent of the complex is office space and the remainder is warehouse space. The master servicer placed this loan on the watchlist due to a low DSC. The reported DSC was 1.05x for the 12 months ended Dec. 31, 2007, and occupancy was 80% as of March 2008, compared with a DSC of 2.11x and occupancy of 89% at issuance. The borrower is actively marketing the vacant space. The borrower has exercised all of its available extension options, and Standard & Poor's adjusted NCF is 32% below its level at issuance. The loan is scheduled to mature in June 2009. Rating Lowered Banc of America Large Loan Inc. Commercial mortgage pass-through certificates series 2004-BBA4 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ K B+ BB N/A Rating Raised Banc of America Large Loan Inc. Commercial mortgage pass-through certificates series 2004-BBA4 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ G AAA AA+ 64.46% Ratings Affirmed Banc of America Large Loan Inc. Commercial mortgage pass-through certificates series 2004-BBA4 Class Rating Credit enhancement ----- ------ ------------------ F AAA 88.90% H A+ 49.32% J BBB 31.17% X-1B AAA N/A X-2 AAA N/A X-3 AAA N/A X-4 AAA N/A N/A -- Not applicable. BELLA VISTA TRUST: Moody's Cuts Ratings of Seven Tranches --------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 7 tranches from 3 Option ARM transactions issued by Bella Vista Mortgage Trust. Additionally, 4 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: Bella Vista Mortgage Trust 2004-2 -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M, Downgraded to Aa3 from Aa2 -- Cl. B-1, Downgraded to Baa1 from A2 -- Cl. B-2, Downgraded to Ba3 from Baa2 Issuer: Bella Vista Mortgage Trust 2005-1 -- Cl. B-X, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. B-4, Downgraded to B1 from Ba2 Issuer: Bella Vista Mortgage Trust 2005-2 -- Cl. B-PO, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. B-X, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. B-2, Downgraded to A3 from A2 -- Cl. B-3, Downgraded to Ba2 from Baa2 -- Cl. B-4, Downgraded to Ba3 from Baa3 BHM TECHNOLOGIES: Lehman Objects to Rothschild as Banker -------------------------------------------------------- Lehman Commercial Paper, Inc., in its capacity as administrative agent, First Lien Agent, for certain lenders under the $270,000,000 First Lien Credit Agreement, dated as of July 21, 2006, objects to the retention of Rothschild Inc. as investment banker and financial advisor of BHM Technologies, LLC, and debtor affiliates. Lehman says the services of Rothschild are unnecessary at this juncture. It notes the substantive terms and many details of the plan of reorganization have already been negotiated and have the support of all major constituencies; no constituency is known that is expected to oppose the plan. Lehman says that considering that assisting the Debtors in negotiating a plan or facilitating the sale of the Debtors' assets are the primary services contemplated in the Engagement Letter, the Debtors have not provided any compelling reason to retain Rothschild. Lehman asserts that the retention of Rothschild and the accompanying costs and expenses would create an undue burden on the Debtors' estates and their creditors. In the event the U.S. Bankruptcy Court for the Western District of Michigan approves Rothschild's retention, Lehman wants the Court to ensure that all parties-in-interest -- and particularly the holders of First Lien Debt -- have a full opportunity to review the fees and expenses requested by Rothschild and object to their reasonableness under Section 330 of the Bankruptcy Code. 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 facilities 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: Court Approves July 31 as Claims Bar Date ----------------------------------------------------------- The United States Bankruptcy Court for the Western District of Michigan approved the motion of BHM Technologies Holdings, Inc., and its debtor-subsidiaries to: (a) fix July 31, 2008, at 5:00 p.m., as the general bar date within which proofs of claim against them must be filed; (b) fix November 17, 2008, as the governmental unit bar date within which all governmental units must file proofs of claim against them; and (c) approve proposed procedures for the filing of proofs of claim. 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 facilities 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: Files Schedules of Assets and Liabilities ----------------------------------------------------------- BHM Technologies, LLC, and each of its debtor-affiliates filed with the United States Bankruptcy Court for the Western District of Michigan their schedules of assets and liabilities, and statement of financial affairs. BHM Technologies, LLC, and BHM Technologies Holdings, Inc., holding companies that do not have employees and are not involved in day-to-day operations each declared zero stand-alone assets, including $0 for real and personal property. Each disclosed debts totaling $336,506,519: -- a secured $264,393,980 claim owed to Lehman Commercial Paper, Inc., on account of First Lien Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing - Revolving line of credit. -- unsecured priority claim, in an undetermined amount, owed to the Internal Revenue Service on account of federal income taxes, and -- a $72,112,539 unsecured non priority claim owed to S.A.C. Domestic Investments LP pursuant to a Second Lien Deed of Trust, Security Agreement. The Debtors' operations consist of four distinct lines of business: (a) the Brown Division; (b) the Heckethorn Division;(c) Morton Division ; and (d) Midwest Division. The Brown Corporation of America says its own personal property is worth $45,946,845, and it owes $92,247,701 to creditors holding unsecured priority claims. Heckethorn Manufacturing Co., Inc., has stand-alone assets aggregating $12,930,090, but also recorded the $264,393,980 secured debt to LCPI, and $72,112,539 unsecured debt to S.A.C. It booked an additional $4,799,007 for unsecured non priority debts on account of trade claims. It added its employees may own certain unsecured priority claims in undetermined amounts. Midwest Stamping & Manufacturing Co. identified personal assets aggregating $79,054, and, the same amounts of debts owed by the other Debtors to Lehman and SAD. Morton Welding Company, Inc., says it has $12,170,652 worth of real property and $20,844,167 of personal property. Aside from debts to LCPO and S.A.C., it owes: -- a $208,407 to Tazewell County on account of an unsecured priority claim for property taxes; -- undetermined amounts, constituting unsecured priority claims, to employees and taxing authorities; and -- $4,054,417, constituting unsecured non-priority claims, to various parties, on account of trade claims. 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 facilities 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) BOB WILSON: Court Sets July 7 as Claims Bar Date ------------------------------------------------ The United States Bankruptcy Court for the Middle District of Florida fixed July 7, 2008, as the last day for parties in the bankruptcy case of Bob Wilson Dodge Chrysler Jeep LLC and its debtor-affiliates to file their proofs of claim. About Bob Wilson Headquartered in Tampa, Florida, Bob Wilson Dodge Chrysler Jeep LLC -- http://www.bobwilsondodgesuperstore.com/-- is a certified DaimlerChrysler Five Star dealership with a huge inventory of high quality new and pre-owned vehicles. The Debtors and its debtor- affiliates filed for separate Chapter 11 protection on April 25, 2008 (Bankr. M.D.Fla. Case No.: 08-05759 thru 08-05763.) Scott A. Stichter, Esq., and Harley E. Riedel, Esq. at Stichter Riedel Blain & Prosser PA represent the Debtors in their restructuring efforts. The Debtors listed $25,755,784 in assets and $20,789,595 in liabilities. BOYD GAMING: S&P Revises Outlook to Negative from Stable -------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Las Vegas-based Boyd Gaming Corp. to negative from stable. Ratings, on the company, including the 'BB' corporate credit rating, were affirmed. "The outlook revision reflects our expectation that operating lease-adjusted leverage will spike to greater than 8x in 2010, moderately higher than previously factored into the 'BB' rating," explained Standard & Poor's credit analyst Ben Bubeck. While construction of Boyd's Echelon project continues to proceed on time and on budget, many of the company's other properties, including its Las Vegas locals properties--which comprised more than 50% of property level EBITDA during the 12 months ended March 31, 2008--are underperforming, largely due to economic pressures. In addition, while financing has been secured for the $3.3 billion wholly owned portion of Echelon, Boyd has not yet arranged financing for the two joint-venture components of the project, the total costs of which are expected to approach $1.5 billion. The failure to secure financing in the near term could pressure the company's ability to meet its targeted completion for these portions of the project in the third quarter of 2010. Given the covenant structure in Boyd's credit agreement, which calls for substantial tightening beginning in 2011, a delay in the opening of parts of Echelon could strain the company's ability to generate sufficient EBITDA to maintain compliance under its bank covenants at that time. The 'BB' corporate credit rating reflects Boyd's aggressive growth strategy and heightened capital spending plans, which will drive a material weakening of credit measures. These factors are somewhat mitigated by the company's relatively diversified portfolio of gaming properties, which S&P expect to generate relatively steady cash flow over the long term despite current economic pressures. CAPITAL AUTO TRUST: Moody's Cuts Ratings of Four Classes of Notes ----------------------------------------------------------------- Moody's Investors Service has assigned ratings to Capital Auto Receivables Asset Trust 2008-A. The complete rating actions are: -- $1,979,127,000 Class A asset-backed notes, rated Aaa, final scheduled distribution date Jan. 15, 2015 -- $79,165,000 Class B asset-backed notes, rated A2, final scheduled distribution date Jan. 15, 2015 -- $31,666,000 Class C asset-backed notes, rated Baa2, final scheduled distribution date Jan. 15, 2015 -- $10,556,000 Class D asset-backed notes, rated Ba1, final scheduled distribution date Jan. 15, 2015 Capital Auto Receivables Asset Trust 2008-A has a closing date of June 12, 2008. GMAC LLC is the sponsor and servicer of this transaction backed by retail auto loans. CET SERVICES: Posts $102,274 Net Loss in 2008 First Quarter ----------------------------------------------------------- CET Services Inc. reported a net loss of $102,274 on revenue of $99,025 for the first quarter ended March 31, 2008, copmared with a net loss of $177,980 on revenue of $571,937 in the same period last year. Water services activity accounted for 100% of the revenue in the first quarter 2008. In the first quarter of the prior year, the sale of housing units accounted for 82% of revenues and water services accounted for 18% of revenues. The decrease in net loss was mainly attributable to the decrease in selling, general and administrative costs. At March 31, 2008, the company's consolidated balance sheet showed $3,957,945 in total assets, $1,954,693 in total liabilities, and $2,003,252 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?2ecc Going Concern Doubt GHP Horwath, P.C., in Denver, expressed substantial doubt about CET Services 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 company reported a net loss of $102,274 and has notes payable of $471,495 due in June 2010, and has a construction loan of $1,420,000 of which $1,261,333 had been drawn at March 31, 2008, due in July 2008. About CET Services Based in Centennial, Colo., CET Services Inc. (OTC BB: CETR) -- operates in two business segments - water/wastewater services, and residential housing development and construction. All of the company's operations and customers are located in Colorado. CHARTER COMMS: Names Eloise Schmitz as EVP and CFO -------------------------------------------------- Charter Communications, Inc. named Eloise E. Schmitz Executive Vice President and Chief Financial Officer of the company effective July 1, 2008. Ms. Schmitz served as Senior Vice President and Interim Chief Financial Officer since April 4, 2008. "Eloise has the respect and confidence of Charter's board, management and investors," Neil Smit, President and Chief Executive Officer of the company, said. "In a 10-year career with Charter, Eloise's contributions have been innumerable. It is a great pleasure to name her Chief Financial Officer." "I am pleased to accept this role, and I appreciate the efforts of the finance team in ensuring a smooth transition," Ms. Schmitz said. "I look forward to continuing our work to increase value for our shareholders, just as we work to increase the value of our services for our customers." Prior to assuming the Interim Chief Financial Officer role, Ms. Schmitz served as Senior Vice President, Strategic Planning. In her new role, Ms. Schmitz will continue to direct Charter's mergers and acquisitions, strategic planning and capital structure activities, and will add responsibility for the company's financial functions, including accounting, financial planning and analysis, tax, and treasury. Ms. Schmitz joined Charter in 1998 and has served in roles of increasing responsibility in finance and strategic planning since that time. Prior to joining Charter, Ms. Schmitz was Vice President, Group Manager, for Mercantile Bank, now US Bank, in St. Louis. Ms. Schmitz holds a bachelor's degree in finance from Tulane University. About Charter Communications Headquartered in St. Louis, Missouri, Charter Communications Inc. (Nasdaq: CHTR) -- http://www.charter.com/-- is a broadband communications company and the third-largest publicly traded cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. Possible Bankruptcy As reported in the Troubled Company Reporter on May 14, 2008, the company said that if, at any time, additional capital or borrowing capacity is required beyond amounts internally generated or available under the company's credit facilities, it would consider issuing equity, issuing convertible debt or some other securities, further reducing the company's expenses and capital expenditures, selling assets, or requesting waivers or amendments with respect to the company's credit facilities. If the above strategies were not successful, the company says it could be forced to restructure its obligations or seek protection under the bankruptcy laws. As reported in the Troubled Company Reporter on March 14, 2008, Moody's Investors Service affirmed these ratings for Charter Communications Inc.: (i) corporate family rating: Caa1; (ii) probability-of-default rating: Caa2; and (iii) senior unsecured notes: Ca (LGD5 -- 87%). CHARTER COMMS: Names Ted Schremp as Chief Marketing Officer ----------------------------------------------------------- Charter Communications, Inc. named Ted Schremp as the company's Chief Marketing Officer, effective July 1, replacing Robert Quigley, who is retiring. Mr. Quigley will remain with Charter through the end of the year in an advisory role. "I look forward to stepping into this important position at Charter," Mr. Schremp, who most recently served as the company's Senior Vice President of Product Management and Strategy, said. "[Mr. Quigley] has developed a solid strategy targeting continued growth, and I look forward to assuming leadership for this key area of the business." Mr. Schremp joined Charter in May 2005 and served as Senior Vice President and General Manager of Charter Telephone(R), where he directed the successful nationwide rollout of the company's residential and commercial telephone service. Mr. Quigley joined Charter in December 2005 to direct the Company's marketing efforts. During the past two years, Mr. Quigley implemented disciplined, data-driven marketing programs and oversaw the development of a marketing database, which together enable Charter to measure the effectiveness of the Company's marketing activities. "I couldn't resist the opportunity to come out of retirement at a time when a new management team was turning around a company of this magnitude. I'm very proud of what the marketing team has accomplished," Mr. Quigley said. "We've built a solid foundation for marketing excellence, and I'm confident Ted will take it to the next level." Mr. Quigley will remain with Charter through December 2008 on a part time basis to assist in the transition and consult on various marketing-related matters. Prior to joining Charter, Mr. Schremp was employed by Hewlett Packard, where he co-founded its Cable, Media and Entertainment organization. Mr. Schremp graduated from the University of Pittsburgh with a double-major in economics and business, and earned an MBA from Penn State University. About Charter Communications Headquartered in St. Louis, Missouri, Charter Communications Inc. (Nasdaq: CHTR) -- http://www.charter.com/-- is a broadband communications company and the third-largest publicly traded cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. Possible Bankruptcy As reported in the Troubled Company Reporter on May 14, 2008, the company said that if, at any time, additional capital or borrowing capacity is required beyond amounts internally generated or available under the company's credit facilities, it would consider issuing equity, issuing convertible debt or some other securities, further reducing the company's expenses and capital expenditures, selling assets, or requesting waivers or amendments with respect to the company's credit facilities. If the above strategies were not successful, the company says it could be forced to restructure its obligations or seek protection under the bankruptcy laws. As reported in the Troubled Company Reporter on March 14, 2008, Moody's Investors Service affirmed these ratings for Charter Communications Inc.: (i) corporate family rating: Caa1; (ii) probability-of-default rating: Caa2; and (iii) senior unsecured notes: Ca (LGD5 -- 87%). CHEROKEE INTERNATIONAL: David Robbins Joins Board of Directors -------------------------------------------------------------- Cherokee International Corp. disclosed the appointment of David H. Robbins of GSC Group to its Board of Directors effective June 25, 2008. Mr. Robbins joined GSC Group at its inception in 1999 and is responsible for sourcing, evaluating and executing control distressed debt investments. He was involved in the formation of GSC's European Mezzanine Group working in its London office for three years focused on analyzing and executing a variety of mezzanine transactions. He was previously with The Blackstone Group, in the Principal Investment and Mergers and Acquisitions Groups, where he worked on a variety of private equity and advisory transactions. Mr. Robbins is on the board of ATSI Holdings, International Wire Group, Inc., Kolmar Labs Group, and Neucel Specialty Cellulose. Mr. Robbins graduated Summa Cum Laude from the University of Pennsylvania, with a B.S. degree in Economics. "We are very fortunate to have David Robbins join our Board of Directors and continue to represent GSC Group," Jeffrey M. Frank, Cherokee's president and chief executive officer, said. "David's international experience working with GSC's European Mezzanine Group in London will be very helpful as we continue to evaluate business opportunities here and abroad. We welcome his knowledge and perspective and look forward to his advice and counsel." Mr. Lukas Resigns from Board On June 17, 2008, Daniel Lukas resigned from the board of directors of Cherokee International. Mr. Lukas' decision to resign was not the result of any disagreement relating to the Company's operations, policies or practices. About Cherokee International Based in Tustin, California, Cherokee International Corp. (NASDAQ:CHRK) -- http://www.cherokeellc.com/-- is a designer and manufacturer of a range of switch mode power supplies for original equipment manufacturers in the telecommunications, networking, high-end workstations and other electronic equipment industries. The company has offices and manufacturing plants in Tustin and Irvine, California, Wavre, Belgium, Bombay, India, Guadalajara, Mexico, and Penang, Malaysia. Going Concern Doubt Mayer Hoffman McCann P.C. in Orange County, California, expressed substantial doubt about the company's ability to continue as a going concern after auditing the consolidated financial statements of Cherokee International Corporation and subsidiaries as of Dec. 30, 2007, and Dec. 31, 2006. The company's management anticipates that there will be insufficient cash balances available to repay the outstanding debt at its maturity. CHESAPEAKE CORP: Completion of $250MM Credit Facility Delayed ------------------------------------------------------------- Chesapeake Corporation is working with a group led by GE Commercial Finance Limited and General Electric Capital Corporation on a new senior secured credit facility to provide long-term funding. The completion of the proposed new credit facility has been delayed and it will not be completed by the anticipated end of June date. In the meantime, the company will continue to rely on its existing $250 million senior credit facility established in 2004 with a group led by Wachovia Bank. The company believes that the existing credit facility, which does not expire until February 2009, provides sufficient liquidity for the company's operating requirements. The company entered into a commitment letter on May 2, 2008, with the GE entities to act as lead arranger and underwriter to provide a $250 million senior secured credit facility to refinance the outstanding borrowings under the company's 2004 senior credit facility. Late in the closing process, while the company and the GE entities were completing work to satisfy the conditions of the commitment letter, several issues arose, including an issue related to the company's entitlement to indemnification for the company's losses in the Fox River environmental matter. The Fox River indemnification issue has subsequently been resolved on a basis that is expected to continue to provide substantial funds to cover the company's reasonably probable costs related to the Fox River matter, but the issue contributed to a delay in completion of the new facility. Although the commitment letter with the GE entities expires on July 1, 2008, the company and GE are continuing to work toward a refinancing. However, the passage of time is likely to require some modification to the structure initially proposed. The intention remains to finalize a new senior credit facility that will provide a longer-term funding solution for the company well before the expiration of the 2004 senior credit facility in February 2009. The company is also pursuing options for certain of its non-core or underperforming assets and substantial progress has been made on several options that are expected to produce in excess of $75 million of cash by year-end. "We believe that the liquidity available under the current 2004 facility is adequate for our current operating requirements," said Andrew J. Kohut, Chesapeake president & chief executive officer. "In addition to working on a new credit facility and reducing debt by sales of assets, we are also reviewing our balance sheet and exploring alternatives for reducing leverage and improving our capital structure to better position the company for growth and profitability and to benefit all our stakeholders." About Chesapeake Corporation Headquartered in Richmond, Virginia, Chesapeake Corporation (NYSE:CSK) -- http://www.cskcorp.com/-- is a supplier of specialty paperboard packaging products in Europe and an international supplier of plastic packaging products to niche end-use markets. Chesapeake has 47 locations in France, Ireland, United Kingdom, North America, China, HongKong, among others and employs approximately 5,500 people. For the quarter ended March 30, 1008, the company reported $1,225,100,000 in total assets and $948,100,000 in total liabilities. As reported by the Troubled Company Reporter on May 16, 2008, Chesapeake Corporation was in compliance with all of its debt covenants as of the end of the first quarter of fiscal 2008. However, based on current projections the company may not be in compliance with the financial covenants under the senior revolving credit facility at the end of the second quarter of fiscal 2008. CITICORP MORTGAGE: Fitch Assigns 'B' Rating on $619,000 Certs. -------------------------------------------------------------- Fitch Ratings has assigned these ratings to Citicorp Mortgage Securities, Inc.'s REMIC pass-through certificates, series 2008-2: -- $195,533,747 classes IA-1, IA-2, IA-PO, IA-IO, IIA-1, IIA-2, IIA-PO and IIA-IO senior certificates 'AAA'; -- $4,123,000 class B-1 'AA'; -- $2,268,000 class B-2 'A'; -- $927,000 class B-3 'BBB'; -- $1,340,000 non-offered class B-4 'BB'; -- $619,000 non-offered class B-5 'B'. The 'AAA' rating on the senior certificates reflects the 5.15% credit enhancement provided by the 2% class B-1, 1.10% class B-2, 0.45% class B-3, 0.65% non-offered class B-4, 0.30% non-offered class B-5 and 0.65% non-offered and non-rated class B-6. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings reflect the quality of the mortgage collateral, strength of the legal and financial structures, and CitiMortgage, Inc.'s (CMI; rated 'RPS1' by Fitch) servicing capabilities as primary servicer. The certificates represent ownership in a trust fund, which consists primarily of 375 one- to four-family conventional, fixed- rate mortgage loans secured by first liens on residential mortgage properties. As of the cut-off date (June 1, 2008), the mortgage pool has an aggregate principal balance of approximately $206,151,144, a weighted average original loan-to-value ratio of 71.10%, a weighted average coupon of 6.918%, a weighted average remaining term of 342 months, and an average balance of $549,736. The mortgage loans consist of 100% fixed-rate loans. The weighted average credit score of the mortgage loans is expected to be approximately 724. The loans are primarily located in California (23.17%), New York (18.41%) and Texas (8.54%). The mortgage loans were originated or acquired by CMI and in turn sold to CMSI. CMSI, a special purpose corporation, deposited the loans into the trust, which then issued the certificates. U.S. Bank National Association (rated 'AA-/F1+' by Fitch) will serve as trustee. For federal income tax purposes, an election will be made to treat the trust fund as one or more real estate mortgage investment conduits. COATES INT'L: March 31 Balance Sheet Upside-Down by $2,611,915 -------------------------------------------------------------- Coates International Ltd.'s balance sheet at March 31, 2008, showed $2,659,611 in total assets and $5,271,526 in total liabilities, resulting in a $2,611,915 total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $920,789 in total current assets available to pay $999,919 in total current liabilities. The company reported a net loss of $581,194 for the first quarter ended March 31, 2008, compared with a net loss of $616,388 in the same period last year. No revenues were generated for the three months ended March 31, 2008 and 2007. 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?2ecd Going Concern Doubt Weiser LLP, in New York, expressed substantial doubt about Coates International Ltd.'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 auditing firm pointed to the company's recurring losses from operations, negative cash flows from operations, and stockholders' deficiency. The company has incurred recurring losses from operations, and as of March 31, 2008, had a stockholders' deficiency of approximately $2,612,000. About Coates International Based in Wall Township, N.J., Coates International Ltd. (OTC BB: COTE) -- http://www.coatesengine.com/-- has recently completed final refinements to a patented spherical rotary valve CSRV Industrial Internal Combustion Engine developed over a period of more than 6 years and other CSRV applications over 10 years. The underlying CSRV technology was invented by George J. Coates and his son Gregory. The CSRV system is adaptable to combustion engines of many types. This technology is currently adapted to a number of practical applications including industrial generators powered by engines incorporating the CSRV technology and designed to run on flare-off gas from oil wells, landfill gas and raw natural gas. The company is actively engaged in planning for production and rollout of these engines. COMM 2001-J2: Moody's Affirms Caa1 Rating on Class H Certificates ----------------------------------------------------------------- Moody's Investors Service upgraded the ratings of four classes and affirmed the ratings of 12 classes of COMM 2001-J2, Commercial Mortgage Pass-Through Certificates as: -- Class A-1, $188,611,427, affirmed at Aaa -- Class A-1F, $19,293,066, affirmed at Aaa -- Class A-2, $405,000,000, affirmed at Aaa -- Class A-2F, $420,000,000, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class XC, Notional, affirmed at Aaa -- Class XP, Notional, affirmed at Aaa -- Class B, $91,840,000, affirmed at Aaa -- Class C, $115,910,000, affirmed at Aaa -- Class D, $31,636,000, affirmed at Aaa -- Class E, $27,639,000, upgraded to Aa2 from A1 -- Class E-CS, $10,000,000, upgraded to Aa2 from A1 -- Class E-IO, Notional, upgraded to Aa2 from A1 -- Class F, $13,550,000, upgraded to Aa3 from A2 -- Class G, $33,201,000, affirmed at Baa2 -- Class H, $11,969,332, affirmed at Caa1 Moody's is upgrading Classes E, E-CS, E-IO, and F due to the overall improving financial performance of the collateralized assets associated with the certificates as well as the defeasance of two loans since last review: The Wyndham Anatole Hotel ($134,540,968 - 9.8% of the pooled balance) and Thayer Lodging Portfolio ($70,021,180 -- 5.1%). The Certificates are collateralized by seven fixed-rate mortgage loans and three defeased mortgage loans. As of the June 16, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 9.6% to $1.37 billion from $1.51 billion at securitization. The Citigroup Center Loan ($309.5 million -- 22.6%) is secured by Citigroup Center, a 59-story Class A office building containing office, retail, and church space. The collateral portion of the property is comprised of approximately 1.6 million square feet of office and retail space. Major tenants include Citibank, N.A. (Moody's Senior Unsecured or equivalent issuer rating Aa3: Outlook Stable), Kirkland & Ellis and A.T. Kearney. The property is owned and managed by affiliates of Boston Properties Inc., a publicly traded real estate investment trust (Moody's Senior Unsecured or equivalent issuer rating Baa2: Outlook Stable). The property is currently 99.6% occupied, compared to 95.0% at last review. Moody's net cash flow is $60.8 million, compared to $53.1 million at last review. Moody's loan to value ratio is 40.8%, compared to 49.3% at last review. Moody's current underlying rating is Aaa, compared to Aa2 at last review. The Willowbrook Mall Loan ($160.8 million -- 11.7%) is secured by approximately 496,600 square feet of mall shop space in Willowbrook Mall, a 1.5 million square foot super-regional mall located in Wayne, New Jersey. Willowbrook Mall, considered one of the top malls in the region, is anchored by Macy's, Bloomingdale's, Lord & Taylor and Sears. The borrower is an affiliate of General Growth Properties, Inc. (Moody's senior unsecured rating Ba2; stable outlook). As of December 2007, inline occupancy at the mall was approximately 97%. Inline tenant sales are down slightly from $569 in 2006 to $555 for 2007. However, net operating income at the property has increased 21.0% from 2005 to 2007. Moody's LTV is 49.3%, compared to 51.2% at last review. Moody's current underlying rating is Aaa, the same as last review. The Guardian Life Building Loan ($122.9 million -- 9.0%) is secured by three properties located in the financial district of New York City: Seven Hanover Square, 46 Water Street and 78 Pearl Street. As of December 2007 the properties were 100.0% leased. The largest tenant, occupying approximately 89.0% of the total area, is The Guardian Life Insurance Company of America (Moody's insurance financial strength rating Aa2; stable outlook). Guardian Life, which has its headquarters in the building, contributes approximately 92.5% of total base rental revenue with leases expiring in September 2019. The loan sponsor is the Milstein family. Moody's LTV is 76.9%, compared to 77.6% at last review. Moody's current underlying rating is Baa2, the same as at last review. CONEXANT SYSTEMS: Bendush, Massengill Joins Board of Directors -------------------------------------------------------------- William E. Bendush and Matthew E. Massengill have been appointed to Conexant Systems, Inc.'s board of directors. With the addition of Messrs. Bendush and Massengill, the company now has eight directors. "I'd like to welcome Bill and Matt to the Conexant board," Scott Mercer, Conexant's chief executive officer, said. "We are fortunate that two seasoned executives with public-company board experience have chosen to join us as our newest directors. I am confident that Bill and Matt will provide invaluable counsel and insight as we work to improve our competitive position and deliver increased value to shareholders." Mr. Bendush, 59, will serve as chairman of the board's Audit Committee and will sit on the Board Governance and Composition Committee. Most recently, he was senior vice president and chief financial officer at Applied Micro Circuits Corporation. Prior to that, he served in the same capacity at Silicon Systems, Inc. for 15 years. Previously, he held senior financial management positions at AM International, Inc. and Gulf & Western Industries, Inc. Bendush also worked in finance-related positions at certified public accounting firms Gould, Inc. and Blackman, Kallick & Company. He is currently a member of the board of directors at Microsemi Corporation and is a former director of Smartflex Systems, Inc. Mr. Bendush earned a bachelor's degree in accounting from Northern Illinois University and is a certified public accountant. Mr. Massengill, 47, will sit on the Board Governance and Composition Committee, and on the Compensation and Management Development Committee. He spent 22 years with Western Digital Corporation, serving most recently as chairman of the board and chief executive officer. Prior to joining Western Digital, Massengill spent three years with the Ford Aerospace and Communications Corporation as a research engineer. He currently serves on the boards of Western Digital and Microsemi Corporation. In addition, he is a director of the Orange County Technology Action Network, the South Coast Repertory, and THINK Together. Mr. Massengill earned a bachelor's degree in engineering from Purdue University. The other members of Conexant's board of directors are Steven J. Bilodeau, Dwight W. Decker, who serves as non-executive chairman, F. Craig Farrill, Balakrishnan S. Iyer, D. Scott Mercer, and Jerre L. Stead. About Conexant Headquartered in Newport Beach, California, Conexant Systems, Inc. (NASDAQ: CNXT) -- http://www.conexant.com/-- has a comprehensive portfolio of innovative semiconductor solutions includes products for Internet connectivity, digital imaging, and media processing applications. Conexant is a fabless semiconductor company that recorded revenues of US$809 million in fiscal year 2007. Outside the United States, the company has subsidiaries in Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore and Israel. * * * Conexant currently carries Standard & Poor's Ratings Services' B- rating with a negative outlook. Moody's Investor Service placed Conexant Systems Inc.'s long term corporate family and probability of default ratings at 'Caa1' in October 2006. The ratings still hold to date with a stable outlook. CONGOLEUM CORP: Century Indemnity et al. Balks at Case Dismissal ---------------------------------------------------------------- Century Indemnity Company and three other entities told the U.S. Bankruptcy Court for the District of New Jersey that they oppose the dismissal of the chapter 11 case of Congoleum Corporation, or in the alternative, conversion of the case to a chapter 7 liquidation proceeding, Bankruptcy Data says. Century related that, together with ACE American Insurance Company, ACE Property and Casualty Insurance Company, it entered into a settlement agreement with the Debtors in 2006, Bankruptcy Data relates. The objecting party asserted that they "sense that the Court's rulings have reinvigorated" the Debtors' counsel and bondholders, Bankruptcy Data reports. The objecting party further said that it is likely to request a resolution that is "more consistent" with the U.S. Bankruptcy Code, the report adds. Court Finds 12th Plan Unconfirmable The Troubled Company Reporter reported on June 17, 2008, that the Hon. Kathryn C. Ferguson issued a ruling stating that a joint plan of reorganization filed by the Debtors on Feb. 5, 2008, is not legally confirmable. The judge said that the plan "is the 12th plan that has been put forward in this case. Regrettably, after a dozen tries and even with a joint plan supported by the key creditor constituencies, the Debtors still cannot extricate themselves from the morass that has made all of their previous plans unconfirmable." On Jan. 26, 2007, the Court issued its opinion finding that the Debtors Tenth Modified Joint Plan of Reorganization was unconfirmable as a matter of law. "The extent to which the Joint Plan disregards that Summary Judgment Opinion is disheartening," Judge Ferguson said. "It is disheartening because it has resulted in additional wasted estate assets and wasted time. As a result, four years and five months into this Chapter 11 proceeding the Court is presented with yet another facially unconfirmable plan." Among the issues raised in these motions, the Court listed three issues as prominent barriers to confirmation: classification, releases and exculpation, and payment of claimants counsel's fees and expenses. About Congoleum Based in Mercerville, New Jersey, Congoleum Corporation (AMEX:CGM) -- http://www.congoleum.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The company filed for chapter 11 protection on Dec. 31, 2003 (Bankr. N.J. Case No. 03-51524) as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennan, Esq., at Pillsbury Winthrop Shaw Pittman LLP, and Paul S. Hollander, Esq., and James L. DeLuca, Esq., at Okin, Hollander & DeLuca, LLP, represent the Debtors. The Asbestos Claimants' Committee is represented by Peter Van N. Lockwood, Esq., and Ronald Reinsel, Esq., at Caplin & Drysdale, Chtd. The Bondholders' Committee is represented by Michael S. Stamer, Esq., and James R. Savin, Esq., at Akin Gump Strauss Hauer & Feld LLP. Nancy Isaacson, Esq., at Goldstein Isaacson, PC, represents the Official Committee of Unsecured Creditors. R. Scott Williams, Esq., of Haskell Slaughter Young & Rediker, LLC, the Court-appointed Futures Claimants Representative, is represented by Roger Frankel, Esq., Richard Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick Herrington & Sutcliffe LLP, and Stephen B. Ravin, Esq., at Forman Holt Eliades & Ravin LLC. American Biltrite, Inc. (AMEX: ABL), which owns 55% of Congoleum, is represented by Matthew Ward, Esq., Mark S. Chehi, Esq., Christopher S. Chow, Esq., and Matthew P. Ward, Esq., at Skadden Arps Slate Meagher & Flom. Going Concern Doubt As reported in the Troubled Company Reporter on April 28, 2008, in Congoleum Corp.'s 2007 annual report filed with the U.S. Securities and Exchange Commission, the company's management said there is "substantial doubt about the company's ability to continue as a going concern unless it obtains relief from its substantial asbestos liabilities through a successful reorganization under Chapter 11 of the Bankruptcy Code." Moreover, Ernst & Young LLP, the company's auditor, raised substantial doubt about the company'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. Ernst & Young related that the company "has been and continues to be named in a significant number of lawsuits stemming primarily from the company's manufacture of asbestos-containing products. The company has recorded significant charges to earnings to reflect its estimate of costs associated with this litigation. CREDIT SUISSE: Moody's Assigns Junk Rating on Class O Certificate ----------------------------------------------------------------- Moody's Investors Service upgraded the ratings of six classes, downgraded three classes and affirmed 10 classes of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass- Through Certificates, Series 2002-CKS4 as: -- Class A-1, $127,826,367, affirmed at Aaa -- Class A-2, $708,445,000, affirmed at Aaa -- Class A-X, Notional, affirmed at Aaa -- Class A-SP, Notional, affirmed at Aaa -- Class B, $46,072,000, affirmed at Aaa -- Class C, $18,429,000, affirmed at Aaa -- Class D, $30,714,000, upgraded to Aaa from Aa1 -- Class E, $16,893,000, upgraded to Aa2 from Aa3 -- Class F, $19,965,000, upgraded to A1 from A2 -- Class G, $15,357,000, upgraded to A3 from Baa1 -- Class H, $13,822,000, upgraded to Baa2 from Baa3 -- Class J, $26,107,000, affirmed at Ba1 -- Class K, $10,750,000, affirmed at Ba2 -- Class L, $7,679,000, affirmed at Ba3 -- Class M, $12,285,000, affirmed at B1 -- Class N, $6,143,000, downgraded to B3 from B2 -- Class O, $6,143,000, downgraded to Caa1 from B3 -- Class P, $6,143,000, downgraded to Caa3 from Caa2 -- Class APM, $4,442,335, upgraded to A1 from A3 Moody's upgraded the ratings of Classes D, E, F, G and H due to increased defeasance and credit support and overall stable pool performance. The upgrade of Class APM is due to improved performance of the Arbor Place Mall Loan. The downgrade of Classes N, O and P is due to increased losses from specially serviced loans and increased loan to value dispersion. As of the June 17, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 12.0% to $1.08 billion from $1.23 billion at securitization. The Certificates are collateralized by 139 loans ranging in size from less than 1.0% to 9.0% of the pool, with the top 10 non-defeased loans representing 37.4% of the pool. The pool includes two loans with investment grade underlying ratings, representing 15.2% of the outstanding pool balance. Twenty-four loans, representing 19.1% of the pool, have defeased and are collateralized with U.S. Government securities. Seven loans have been liquidated from the trust resulting in an aggregate realized loss of approximately $7.0 million. Currently seven loans, representing 2.9% of the pool, are in special servicing. Moody's has estimated an aggregate loss of approximately $3.7 million for all of the specially serviced loans. Twenty-one loans, representing 12.2% 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's 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 year-end 2007 operating results for 89.0% of the pool. Moody's weighted average LTV ratio is 86.3% compared to 85.0% at Moody's last full review in August 2007 and 87.6% at securitization. Based on Moody's analysis, approximately 23.6% of the conduit pool has an LTV in excess of 100.0% compared to 14.7% at last review. All of the loans with LTV's above 100.0% are either on the master servicer's watchlist or in special servicing. The largest loan with an underlying rating is the Crystal Mall Loan ($97.3 million -- 9.0%), which is secured by the borrower's interest in a 801,600 square foot regional mall located in Waterford, Connecticut. The center is anchored by Sears, Macy's and J.C. Penney. A fourth anchor, Filene's, closed in late 2006 and is being redeveloped into multi-tenant mall space. The in-line space was 82.6% occupied as of December 2007 compared to 84.7% at last review. The loan sponsor is Simon Property Group. Moody's current underlying rating is Baa2, the same as at last review. The second loan with an underlying rating is the Arbor Place Mall Loan ($67.7 million - 6.2%), which is the senior portion of a $72.3 million mortgage loan. An $4.5 million B-Note is included in the trust and is the security for non-pooled Class APM. The loan is secured by the borrower's interest in a 1.0 million square foot regional mall located in Douglasville, Georgia, approximately 22 miles west of Atlanta. The mall is anchored by Dillard's, Parisian, Macy's, Sears, and J.C. Penney. As of December 2007, inline occupancy was 99.4%, essentially the same as last review. The loan amortizes on a 25-year schedule and has amortized by approximately 10.8% since securitization. The loan sponsor is CBL & Associates Properties. Moody's current underlying ratings of the senior and B-Note are Aa3 and A1, respectively, compared to A2 and A3 at last review. The top three conduit loans represent 11.1% of the pool. The largest conduit loan is the SummitWoods Crossing Loan ($45.2 million - 4.2%), which is secured by the borrower's interest in a 719,600 square foot retail center located in Lee's Summit, Missouri. The property was 99.7% leased as of December 2007, essentially the same as last review. Major tenants include Target, Lowe's Home Centers and Kohl's. Moody's LTV is 91.3% compared to 93.6% at last review. The second largest conduit loan is the 1650 Arch Street Loan ($43.7 million -- 4.0%), which is secured by a 590,000 square foot Class A office building located in Philadelphia, Pennsylvania. The property was 99.1% occupied as of December 2007, essentially the same as at last review and at securitization. The largest tenants are the Environmental Protection Agency (56.3% NRA; lease expiration May 2013) and Wolf, Block, Schorr and Solis- Cohen (31.8%; lease expiration July 2011). Moody's LTV is 75.6% compared to 76.7% at last review. The third largest conduit loan is the Old Hickory Mall Loan ($31.9 million - 2.9%), which is secured by the borrower's interest in a 555,000 square foot regional mall located in Jackson, Tennessee. The anchor tenants are Macy's, Sears, Belk and J.C. Penney. The in-line shops were 92.6% occupied as of December 2007 compared to 97.7% at last review. The loan is on a 25 year amortization schedule and has amortized 10.8% since securitization. Moody's LTV is 72.9% compared to 74.6% at last review. DELPHI CORP: Solicits Offers for Exhaust Business ------------------------------------------------- Delphi Corporation said Friday that it is seeking buyers for its global exhaust business as part of the company's transformation plan. The business to be sold relates to the design and manufacture of the exhaust system front exhaust module including catalytic converters and exhaust manifolds. The business serves more than 10 major customers and includes sites in Blonie, Poland; Clayton, Australia; Gurgaon, India; and Port Elizabeth, South Africa; as well as joint venture interests in Shanghai, China; and Monterrey, Mexico; and technical centers in Auburn Hills and Flint, Michigan; and Bascharage, Luxembourg. According to Detroit Free Press, the exhaust business is part of Delphi's powertrain components business. Delphi has not yet sought the U.S. Bankruptcy Court for the Southern District of New York's approval to sell the exhaust business or hold an auction for the business. Delphi said in a news release that although it is divesting its exhaust business, it intends to continue to provide full engine management systems, including air and fuel management, and combustion and valve-train technology. Additionally, Delphi's non-equity based alliance with Belgium- based Bosal Group to offer complete exhaust systems will be terminated by mutual agreement. The alliance was announced in the spring of 2005. Delphi and Bosal together provided customized exhaust systems for automotive and commercial vehicle manufacturers worldwide to meet stringent exhaust emissions standards and reduce engine noise. Pending Court approval, Delphi will retain Lincoln International, a leading global mid-market investment bank, to explore sale opportunities. Parties interested in Delphi's exhaust business should contact Robert Satow at (+1) 212.277.8102 or rsatow@lincolninternational.com. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed $11,446,000,000 in total assets and $23,851,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide $2,550,000,000 in equity financing to Delphi. (Delphi Bankruptcy News, Issue No. 135; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DENNY'S HOLDINGS: Moody's Affirms Ratings, Changes Outlook to Neg. ------------------------------------------------------------------ Moody's Investors Service affirmed all the ratings of Denny's Holdings, Inc. and Denny's Inc. and changed the outlook for the ratings to negative from stable. At the same time, Moody's assigned a speculative grade liquidity rating of SGL-3. The change in outlook to negative from stable reflects Denny's weaker than expected operating performance and Moody's view that the challenging consumer spending environment, historically high commodity costs, wage increases, and increased competitive pressures in the breakfast and late night day parts will continue to impact operating performance over the intermediate term. The SGL-3 rating reflects adequate liquidity and the expectation that internally generated cash flow should be sufficient to fund working capital fluctuations, growth and maintenance capital expenditures and debt amortization over the next twelve months. However, Moody's believes the cushion under the company's covenants could become modest as covenants tighten in the fourth quarter of 2008. The B1 corporate family rating reflects Denny's strong brand recognition, meaningful scale, and adequate liquidity. However, the rating also incorporates the company's lower than expected operating performance, modest free cash flow generation, high adjusted financial leverage, and weak coverage. These ratings were assigned: Denny's Holdings, Inc. -- Speculative Grade Liquidity rating of SGL-3 Ratings affirmed are: Denny's Holdings, Inc. -- Corporate family rating of B1 -- Probability of default rating of B1 -- $175 million senior unsecured notes, rated B3 (LGD 5, 84%) from B3 (LGD 5, 87%) Denny's Inc. -- $50 million senior secured revolver, rated Ba2 (LGD 2, 19%) from Ba2 (LGD 2, 24%) -- $260 million senior secured term loan, rated Ba2 (LGD 2, 19%) from Ba2 (LGD 2, 24%) -- $37 million sr. secured letter of credit, rated Ba2 (LGD 2, 19%) from Ba2 (LGD 2, 24%) -- The rating outlook is negative Denny's Corporation, a family-style restaurant chain headquartered in Spartanburg, South Carolina, owned and operated 373 and franchised 1,177 full-service family dining restaurants as of March 26, 2008. Domestic locations are scattered throughout 49 states and the District of Columbia with concentrations in California, Florida, and Texas. For the last 12-month period ending March 2008, the company generated revenues of approximately $899 million. DEUTSCHE ALT-A TRUST: Moody's Cuts Ratings of 56 Tranches Issued ---------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 56 tranches from 7 Option ARM transactions issued by Deutsche Alt-A Securities Mortgage Loan Trust. Twenty 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: Deutsche Alt-A Securities Mortgage Loan Trust, Series 2007-3 -- Cl. M-2, Downgraded to Aa3 from Aa2 -- Cl. M-3, Downgraded to A1 from Aa3 -- Cl. M-4, Downgraded to Baa1 from A1 -- Cl. M-5, Downgraded to Baa3 from A2 -- Cl. M-6, Downgraded to Ba2 from A3 -- Cl. M-7, Downgraded to B1 from Baa1 -- Cl. M-8, Downgraded to B1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade Issuer: Deutsche Alt-A Securities Mortgage Loan Trust, Series 2007-OA1 -- Cl. M-1, Downgraded to Aa2 from Aaa -- Cl. M-2, Downgraded to Baa1 from Aa1 -- Cl. M-3, Downgraded to Baa3 from Aa1 -- Cl. M-4, Downgraded to Ba3 from Aa2 -- Cl. M-5, Downgraded to B1 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 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: Deutsche Alt-A Securities Mortgage Loan Trust, Series 2007-OA2 -- Cl. M-2, Downgraded to Aa2 from Aa1 -- Cl. M-3, Downgraded to Aa3 from Aa1 -- Cl. M-4, Downgraded to Baa1 from Aa2 -- Cl. M-5, Downgraded to Baa3 from Aa3 -- Cl. M-6, Downgraded to B1 from A1 -- Cl. M-7, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade Issuer: Deutsche Alt-A Securities Mortgage Loan Trust, Series 2007-OA3 -- Cl. M-3, Downgraded to Aa3 from Aa2 -- Cl. M-4, Downgraded to Aa3 from Aa2 -- Cl. M-5, Downgraded to A2 from Aa3 -- Cl. M-6, Downgraded to Baa3 from A1 -- Cl. M-7, Downgraded to Ba3 from A2 -- Cl. M-8, Downgraded to B1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to B1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-10, Downgraded to Caa1 from Ba1; Placed Under Review for further Possible Downgrade Issuer: Deutsche Alt-A Securities Mortgage Loan Trust, Series 2007-OA4 -- Cl. M-3, Downgraded to Aa2 from Aa1 -- Cl. M-4, Downgraded to Aa3 from Aa2 -- Cl. M-5, Downgraded to A1 from Aa3 -- Cl. M-6, Downgraded to Baa1 from A1 -- Cl. M-7, Downgraded to Baa3 from A2 -- Cl. M-8, Downgraded to B1 from A3 -- Cl. M-9, Downgraded to B1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-10, Downgraded to B1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-11, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade Issuer: Deutsche Alt-A Securities Mortgage Loan Trust, Series 2007-OA5 -- Cl. M-3, Downgraded to Aa2 from Aa1 -- Cl. M-4, Downgraded to A3 from Aa2 -- Cl. M-5, Downgraded to Baa3 from Aa3 -- Cl. M-6, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade Issuer: Deutsche Alt-A Securities, Mortgage Loan Trust Series 2006-OA1 -- Cl. M-1, Downgraded to Aa3 from Aa1 -- Cl. M-2, Downgraded to A1 from Aa1 -- Cl. M-3, Downgraded to A3 from Aa2 -- Cl. M-4, Downgraded to Baa3 from Aa3 -- Cl. M-5, Downgraded to B1 from A1 -- Cl. M-6, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade DUNMORE HOMES: Court Disallows $320,648 in Claims ------------------------------------------------- The Eastern District of California disallowed six claims against Dunmore Homes, Inc. on the basis that they were filed after the March 20, 2008 claims bar date: Claimant Claim No. Claim Amount -------- --------- ------------ Gibson & Skordal LLC 399 $3,627 Lewis Roca 406 6,644 Martin Munoz 411 12,799 Mary Ann Molles 409 1 Ryan Young Interiors 400 30,024 Sacramento Bee 408 267,553 The Debtor's objection with respect to Claim No. 410 filed by the Employment Development Department was withdrawn as moot. The objection with respect to Claim Nos. 403 and 404 filed by Simas Floor Company and LaVoie & Sons is continued at a later date. Based in Granite Bay, California, Dunmore Homes Inc. is a privately-owned homebuilder. The company filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. S.D.N.Y. Case No. 07-13533). Maria A. Bove, Esq., and Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors has selected Morrison & Foerster LLP as its counsel in this bankruptcy proceeding. In January 2008, the U.S. Bankruptcy Court for the Southern District of New York ordered the transfer of Debtor's Chapter 11 case to the U.S. Bankruptcy Court for the Eastern District of California, Sacramento Division. The Debtor filed its plan of liquidation and an accompanying disclosure statement on March 21, 2008. The Debtor disclosed $20,743,147 in total assets and $250,252,312 in total debts in its schedules of assets and liabilities filed with the Court. (Dunmore Bankruptcy News; Bankruptcy Creditors'Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Emerges from Chapter 11 Protection in Delaware --------------------------------------------------------------- DURA Automotive Systems, Inc. successfully emerged from Chapter 11 bankruptcy protection. The company officially concluded its Chapter 11 reorganization process after meeting all statutory requirements of its Revised Joint Plan of Reorganization, including successfully closing their exit financing facilities and filing associated documentation. In conjunction with its emergence, the Company also disclosed its new board of directors. "[The emergence] marks a fresh start for DURA," Larry Denton, Chairman and Chief Executive Officer of DURA, said. "With a strengthened balance sheet and an improved operational footprint, DURA is well positioned in the global automotive supplier market. We will now be able to operate with greater efficiency and flexibility, devoting all of the company's focus and resources to developing and delivering innovative products to the benefit of our customers and all of our stakeholders." New Board of Directors DURA's new seven-member Board of Directors represents significant international, operational, financial and automotive industry expertise: Fred Bentley is chief operating officer of Hayes Lemmerz International, Inc., a worldwide producer of aluminum and steel wheels. At Hayes Lemmerz he was instrumental in changing the company's global operational footprint and introducing lean manufacturing practices. Prior to Hayes Lemmerz, Mr. Bentley served in positions of increasing responsibility at Honeywell (formerly AlliedSignal) where he rose to the position of Managing Director, Europe, and Frito-Lay (PepsiCo). Lawrence A. Denton is former chairman of the board and has been president and chief executive officer of DURA since January 2003. He assumed the role of chairman in 2005. From 1996 to 2002, Mr. Denton was president of Dow Automotive, a $1 billion business unit of the Dow Chemical Company. Under his leadership, Dow Automotive became one of the top 100 global suppliers to the automotive industry, growing from $300 million to more than $1 billion in revenue in six years. Prior to that, he spent 24 years with Ford Motor Company, where he held a variety of senior management positions. Steven J. Gilbert is Senior Managing Director and Chairman of Sun Group (USA). He is also Chairman of the Board of Gilbert Global Equity Partners, L.P., a billion dollar private equity fund. From 1992 to 1997 he was the Founder and Managing General Partner of Soros Capital L.P. Mr. Gilbert has 35 years of experience in private equity investing, investment banking and law. He has served as a director on the boards of more than 25 companies over the span of his career, including Office Depot, Inc., Magnavox Electronic Systems Company, Affinity Financial Group, Inc., GTS- Duratek, and Parker Pen Limited. Timothy D. Leuliette is chairman of the board for DURA and is currently chairman and CEO of Leuliette Partners LLC, an investment and financial services firm. He is the former co- chairman and co-CEO of Asahi Tec and former chairman, president, and CEO of automotive supplier Metaldyne Corporation. He has also served as president & COO of privately held Penske Corporation, and prior to that president and CEO of ITT Automotive and executive vice president at ITT. Over his career he has held executive and management positions at both vehicle manufacturers and suppliers and has served on both corporate and civic boards, including as chairman of the Detroit Branch of the Federal Reserve Bank of Chicago. Andrew B. Mitchell is chief executive and chief investment officer of investment firm Pacificor LLC. Prior to joining Pacificor, Mr. Mitchell was a vice president and co-portfolio manager at ING Funds, and prior to that a vice president and senior analyst at Merrill Lynch Asset Management. Mr. Mitchell was also a senior high yield analyst and assistant vice president at Wertheim/Schroder Investment Services. Previous experience also includes operational experience in the oil refining industry with Exxon and in the mining and construction industries with Chevron Resources. Peter F. Reilly is president and chief operating officer of Strategic Industries, LLC. Strategic is a diversified holding company with subsidiaries in the Automotive and Consumer Products segments. He joined the company at its inception in 2000 as the chief financial officer. The company was created through a leveraged buyout by Citicorp Venture Capital from US Industries, Inc., a Fortune 500 conglomerate, publicly listed on the New York Stock Exchange. Mr. Reilly has significant experience repositioning portfolio companies and helping them capitalize on international opportunities. Prior to joining Strategic, he served as Treasurer for USI and various senior financial positions with its predecessor, Hanson Industries, PLC and its subsidiaries. Jeffrey M. Stafeil has strong international and financial experience and is currently chief financial officer and board member for Germany-based Klockner Pentaplast, the world's leading producer of films for the pharmaceutical, food and technology product packaging market. Formerly he was the Executive Vice President and CFO at automotive supplier Metaldyne Corporation, now Asahi Tec Corporation. Since 2006 he has served on the board of directors and is co-chairman of the audit committee for Meridian Corporation, an automotive supplier that exited bankruptcy in December 2006. Financial Information and New Capital Structure DURA's exit financing package comprises a $110 million revolving credit facility, a $50 million European first lien term loan, and an approximate $84 million U.S. second lien term loan. In addition to its exit financing facilities, DURA entered into various European accounts receivable factoring facilities totaling approximately EUR65 million. These exit financing facilities, together with cash from DURA's balance sheet, will be used in part to finance distributions under the Plan, providing cash to holders of DIP facility claims, administrative expense claims, certain priority claims, and Canadian general unsecured claims. Other creditors receiving distributions under the Plan will receive new equity in the reorganized company to satisfy claims. Effective Friday, existing DURA stock has been cancelled and will no longer have value. "This transaction has significantly strengthened DURA's capital structure by reducing total net debt from over $1.3 billion to approximately $180 million, which will significantly reduce the Company’s interest expense," Nick Preda, DURA's CFO, said. DURA was advised by AlixPartners, Kirkland & Ellis and Miller Buckfire in connection with its Chapter 11 reorganization. About DURA Rochester Hills, Michigan-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006, (Bankr. D. Del. Case No. 06-11202). Marc Kieselstein, P.C., Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., at Kirkland & Ellis LLP are lead counsels for the Debtors' bankruptcy proceedings. Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., at Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsels. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of Jan. 31, 2008, the Debtor had $1,503,682,000 in total assets and $1,623,632,000 in total liabilities. On April 3, 2008, the Court approved the Debtors' revised Disclosure Statement explaining their revised Chapter 11 plan of reorganization. (Dura Automotive Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). EDWARD BAYER: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtors: Edward A. Bayer Janine M. Bayer 9377 Hilliard Road Pittsburgh, PA 15237 Bankruptcy Case No.: 08-24148 Chapter 11 Petition Date: June 25, 2008 Court: Western District of Pennsylvania (Pittsburgh) Debtors' Counsel: Donald R. Calaiaro, Esq. Calaiaro & Corbett, P.C. Grant Building, Suite 1105 310 Grant Street Pittsburgh, PA 15219-2230 Tel: (412) 232-0930 Fax: (412) 232-3858 dcalaiaro@calaiarocorbett.com Estimated Assets: $1 million to $10 million Estimated Debts: $500,000 to $1 million The Debtor did not file a list of its largest unsecured creditors. EPICEPT CORP: Launches Public Offering of Up to 10 Million Shares ----------------------------------------------------------------- EpiCept Corporation disclosed a proposed public offering of up to 10 million shares of its common stock, par value $0.0001 per share, warrants to purchase up to 10 million shares of its common stock and the issuance of such shares upon exercise of the warrants. EpiCept intends to use the net proceeds it receives to meet its working capital needs and general corporate purposes through July 2008 and to pay certain fees owed to Hercules Technology Growth Capital, Inc. Rodman & Renshaw, LLC, a subsidiary of Rodman & Renshaw Capital Group, Inc. will act as the exclusive placement agent for the offering. The proposed public offering is being made pursuant to an effective registration statement. The proposed public offering may be made only by means of a prospectus and prospectus supplement. A copy of the preliminary prospectus supplement relating to the common stock and warrants can be obtained from Rodman & Renshaw LLC, 1270 Avenue of the Americas, New York, NY 10020, or by calling (212) 356-0549. In exchange for waiving certain prior financing requirements, EpiCept agreed to amend certain terms in its senior secured loan and to issue a warrant to purchase shares of its common stock to Hercules. Such amended terms include accelerating payment due dates, paying amendment and other fees and increasing the applicable interest rate. A copy of the Securities Purchase Agreement is available for free at http://ResearchArchives.com/t/s?2ed1 A copy of the Second Amendment to Security & Loan Agreement is available for free at http://ResearchArchives.com/t/s?2ed3 A copy of the Common Stock Warrant is available for free at http://ResearchArchives.com/t/s?2ed4 Headquartered in Tarrytown, New York, EpiCept Corporation (NASDAQ:EPCT) -- http://www.epicept.com/-- is a specialty pharmaceutical company focused on the development of pharmaceutical products for the treatment of cancer and pain. The company has a portfolio of five product candidates in active stages of development. It includes an oncology product candidate submitted for European registration, two oncology compounds, a pain product candidate for the treatment of peripheral neuropathies and another pain product candidate for the treatment of acute back pain. The two wholly owned subsidiaries of the company are Maxim, based in San Diego, California, and EpiCept GmbH, based in Munich, Germany, which are engaged in research and development activities. EpiCept Corp.'s consolidated balance sheet at March 31, 2008, showed a stockholders' deficit of $15,570,000, compared to a deficit of $14.1 million at Dec. 31, 2007. Going Concern Doubt Deloitte & Touche LLP, in Parsippany, New Jersey, expressed substantial doubt about EpiCept Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring losses from operations and stockholders' deficit. The company disclosed in its Form 10-Q for the first quarter ended March 31, 2008, that to date it has not generated any meaningful revenues from the sale of products and may not generate any such revenues for a number of years, if at all. As a result, the company has an accumulated deficit of $176,926,000 as of March 31, 2008, and may incur operating losses for a number of years. ERIK BENHAM: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Erik Benham 309 East Tunnell Street Santa Maria, CA 93454 Bankruptcy Case No.: 08-11432 Chapter 11 Petition Date: June 24, 2008 Court: Central District Of California (Santa Barbara) Judge: Robin Riblet Debtor's Counsel: Vaughn C. Taus, Esq. (tauslawyer@gmail.com) 1042 Pacific Street, Suite D San Luis Obispo, CA 93401 Estimated Assets: $10,000,000 to $50,000,000 Estimated Debts: $10,000,000 to $50,000,000 List of Unsecured Creditors: Creditor Claim Amount -------- ------------ Security Pacific Bank $25,900,000 845 North Euclid Avenue Ontario, CA 91762 Citi $6,478 Bank of America $4,896 American Express $52 Washington Mutual $5 ESTATE FINANCIAL: Involuntary Chapter 11 Case Summary ----------------------------------------------------- Alleged Debtor: Estate Financial Inc. 806 9th Street Suite 1A Paso Robles, CA 93446 Case Number: 08-11457 Involuntary Petition Date: June 25, 2008 Court: Central District Of California (Santa Barbara) Judge: Robin Riblet Petitioner's Counsel: Martin J Brill, Esq. (mjb@lnbrb.com) 10250 Constellation Blvd Ste 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 Fax: (310) 229-1244 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Steve Gardality $6,269,768 3542 Jasmine Crest Enclinitas, CA 92024 Pippin LLC management fees $305,000 Attn: Jordana Cooper POB 702 Beverly Hills, CA 90213 San Dimas 18 LLC management fees $240,000 Attn: Jordana Cooper POB 702 Beverly Hills, CA 90213 Kathleen Scott IRA loan $84,031 6528 Nancy Road Rancho Palos Verdes, CA 90275 1994 Scott Revocable Trust loan $26,897 James E. Scott Kathleen A Scott 6528 Nancy Road Rancho Palos Verdes, CA 90275 FERRELLGAS LP: Mulls $250 Million Offering of 6-3/4% Senior Notes ----------------------------------------------------------------- Ferrellgas L.P. plans to commence a private placement to eligible purchasers of $250 million in aggregate principal amount of 6-3/4% Senior Notes due 2014. The notes offered will be substantially similar to, but not part of the same series as, Ferrellgas L.P.'s outstanding $250 million aggregate principal amount of 6-3/4% Senior Notes due 2014. Ferrellgas L.P. intends to use the net proceeds from the offering to reduce outstanding indebtedness under its senior unsecured revolving credit facility. Headquartered in Overland Park, Kansas, Ferrellgas Partners L.P. NYSE:FGP) -- http://www.ferrellgas.com/-- is a holding entity that conducts no operations and has two direct subsidiaries, Ferrellgas Partners Finance Corp. and the operating partnership, Ferrellgas L.P. Ferrellgas Partners' only significant assets are its approximate 99% limited partnership interest in the operating partnership and its 100% equity interest in Ferrellgas Partners Finance Corp. Its activities are conducted through its operating partnership, Ferrellgas L.P. It is distributor of propane and related equipment and supplies to customers in the United States. Its serves more than one million residential, industrial and commercial, portable tank exchange, agricultural, and other customers in all 50 states, the District of Columbia and Puerto Rico. Its operations include the distribution and sale of propane and related equipment and supplies with concentrations in the Midwest, Southeast, Southwest and Northwest regions of the United States. * * * As reported in the Troubled Company Reporter on June 27, 2008, Standard & Poor's Ratings Services assigned its 'B+' issue credit rating to Ferrellgas L.P.'s $250 million senior unsecured notes due 2014 and, at the same time, assigned its '3' recovery rating to this debt. The '3' recovery rating indicates that lenders can expect meaningful (50%-70%) recovery in the event of a payment default. Standard & Poor's also affirmed the 'B+' corporate credit rating on Ferrellgas Partners L.P. and Ferrellgas. The offering proceeds will refinance debt on Ferrellgas's revolving credit facility. The outlook remains stable. FORD MOTOR: Begins Plant-by-Plant Employee Buyouts to Reduce Costs ------------------------------------------------------------------ Ford Motor Company has initiated hourly employee buyouts to cut costs at U.S. plants that produce sports utility vehicles and pickup trucks as sales of these products drop, reports Jeff Bennett of Dow Jones Newswires, citing Ford spokeswoman Ann Marie Gattari. The automaker has started offering incentive packages to workers at Louisville Assembly Plant, Kentucky Truck Plant, and transmission plants in Batavia and Sharonville in Ohio. The company had targeted around 8,000 employees to be bought out plant-by-plant, with around 4,200 people accepting the buyouts earlier this year, according to a report by Matthew Dolan and Neal Boudette of the Wall Street Journal, citing company executives during a meeting with United Auto Workers representatives. WSJ relates that according to people privy with Ford's plans, the automaker did not specify its target for overtime cutbacks, but additional costs related to excess capacity at more than half of its plants have pushed company officials to believe overtime control is paramount. During the meeting, Ford officials said the company would need to manufacture lesser trucks and shift production to smaller vehicles -- in response to rising demand in fuel-efficient cars. "The world has changed dramatically over the past few months for our business and our industry," Joe Hinrichs, Ford's manufacturing chief, was quoted by WSJ as saying. "We know we must move swiftly to face those challenges -- and we are." As reported in the Troubled Company Reporter on June 23, 2008, Ford announced further reductions to its North American truck production plan while adding more small cars, crossovers and fuel- efficient powertrains, as the company responds to the continued deterioration in the U.S. business environment and the accelerated shift away from large trucks and SUVs. "As gasoline prices average more than $4 a gallon and consumers worry about the weak U.S. economy, we see June industry-wide auto sales slowing further and demand for large trucks and SUVs at one of the lowest levels in decades," Ford President and CEO Alan Mulally, said. "Ford has taken decisive action to respond to this accelerating shift in customer demand away from large trucks and SUVs to smaller cars and crossovers, and we will continue to act swiftly moving forward." Ford said it will provide more details on changes to its overall plan when it announces second-quarter financial results in July. In the meantime, one shift of production will be eliminated at Louisville Assembly Plant for mid-size SUVs in the third quarter and the line speed for large pickups at Kentucky Truck Plant will be reduced in the third quarter. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on March 28, 2008, Standard & Poor's Ratings Services said that the ratings and outlook on Ford Motor Co. and Ford Motor Credit Co. (both rated B/Stable/B-3) were not affected by Ford's announcement of an agreement to sell its Jaguar and Land Rover units to Tata Motors Ltd. (BB+/Watch Neg/--) for $2.3 billion (before $600 million of pension contributions by Ford for Jaguar-Land Rover). As reported in the Troubled Company Reporter on Feb. 15, 2008, Fitch Ratings affirmed the Issuer Default Ratings of Ford Motor Company and Ford Motor Credit Company at 'B', and maintained the Rating Outlook at Negative. As reported in the Troubled Company Reporter on Nov. 19, 2007, Moody's Investors Service affirmed the long-term ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured, and B3 probability of default), but changed the rating outlook to Stable from Negative and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit Company's B1 senior unsecured rating, and changed the outlook to Stable from Negative. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the United Auto Workers. FREMONT GENERAL: Selects Patton Boggs as Bankruptcy Counsel ----------------------------------------------------------- Fremont General Corp. asked the United States Bankruptcy Court for the Central District of California for permission to employ Patton Boggs LLP as its bankruptcy counsel. The firm is expected to render legal services, including the preparation on behalf of the Debtor of all necessary applications, motions, complaints, answers, orders, reports, and other legal papers. The firm will also give general legal advice with respect to the powers and duties of the Debtor as a debtor-in-possession in the case. In addition to employing the firm, the Debtor asked the Court for permission to retain Stutman, Treister & Glatt PC as bankruptcy counsel. The firm's rates are: Professional Designation Rate ------------ ----------- ---- Robert W. Jones, Esq. Partner $620 J. Maxwell Tucker, Esq. Of counsel $500 Brent R. McIlwain, Esq. Partner $475 Mike Aiken, Esq. Associate $350 Kristen Beall, Esq. Associate $275 The firm told the Court that its members are disinterested persons and do not hold or represent an interest adverse to the Debtor or to the estate. The firm can be reached at: Robert W. Jones, Esq. 2001 Ross Avenue, Suite 3000 Dallas, TX 75201-8001 Tel: (214) 758-1500 Fax: (214) 758-1550 About Fremont General Headquartered in Brea, California, Fremont General Corp. (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. Fremont General Corp. owns 100% of the common stock of Fremon General Credit Corporation, which in turn owns 100% of the common stock of Fremont Investment & Loan Bank. The bank has 22 retail banking branches offering 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. FREMONT GENERAL: Wants Stutman Treister as Co-Counsel ----------------------------------------------------- Fremont General Corp. asked the United States Bankruptcy Court for the Central District of California for permission to employ Stutman, Treister & Glatt PC as its co-counsel. The Debtor intends to employ Theodore B. Stolman, Esq., Scott H. Yun, Esq., Whitman L. Holt, Esq., and other members, associates and of-counsel attorneys of the firm as its co-reorganization counsel in the case. The firm, among others, will advise the Debtor regarding matters of bankruptcy law and assist the Debtor in the negotiation, preparation, confirmation and implementation of a plan or plans of reorganization. In addition to employing the firm, the Debtor asked the Court for permission to retain Patton Boggs LLP as bankruptcy counsel. Stutman Treister received from the Debtor compensation in the aggregate amount of $309,264 for its prepetition services. In addition, prior to the bankruptcy filing, the firm received two retainers paid from the Debtor's operating cash -- $75,000 retainer and $200,000 retainer. Prior to the bankruptcy filing, the firm drew down on the retainer leaving a $161,313 balance. Stutman Treister's hourly rates are: Attorney $250 to $825 Paralegal $200 Law Clerk $175 to $230 Theodore B. Stolman, Esq. $695 Scott H. Yun, Esq. $510 Mark S. Wallace, Esq. $625 Whitman L. Holt, Esq. $325 The Debtor maintains that the firm is a disinterested person and does not hold or represent an interest adverse to the Debtor or to the estate. About Fremont General Headquartered in Brea, California, Fremont General Corp. (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. Fremont General Corp. owns 100% of the common stock of Fremon General Credit Corporation, which in turn owns 100% of the common stock of Fremont Investment & Loan Bank. The bank has 22 retail banking branches offering 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). Robert W. Jones, Esq., at Patton Boggs LLP, is the Debtor's bankruptcy counsel. Theodore B. Stolman, Esq., Scott H. Yun, Esq., and Whitman L. Holt, Esq., at Stutman, Treister & Glatt PC, are the Debtor's co- counsel. When the Debtor filed for protection from its creditors, its listed total assets of $643,197,000 and total debts of $320,630,000. GENTILLY RACING: Shareholders Adopt Dissolution & Liquidation Plan ------------------------------------------------------------------ Gentilly Racing Corporation disclosed that at a special meeting of shareholders held on June 26, 2008, the shareholders adopted a plan to dissolve and liquidate the corporation. Bryan G. Krantz, president of the Corporation, was appointed to act as liquidator. Mr. Krantz informed the shareholders that, after reserving funds for certain contingent liabilities, he anticipated that there would be an initial liquidating distribution of approximately $2,200 per share, after giving effect to the 200-to-1 reverse stock split which occurred in December 2000, with a final liquidating distribution of remaining funds at the conclusion of the liquidation process. The initial liquidating distribution is expected to be made in about 45 days. Gentilly Racing Corporation was known as Fair Grounds Corporation and operated the Fair Grounds Race Course in New Orleans, Louisiana prior to the sale of its racing and gaming assets to Churchill Downs Incorporated in October 2004. GLOBAL PAYMENT: Posts $1,060,000 Net Loss in Qtr. Ended March 31 ---------------------------------------------------------------- Global Payment Technologies Inc. reported a net loss of $1,060,000 on net sales of $2,921,000 for the second quarter ended March 31, 2008, compared with a net loss of $1,330,000 on net sales of $2,802,000 in the same period ended March 31, 2007. The sales increase was due to increased sales in the gaming market. At March 31, 2008, the company's consolidated balance sheet showed $6,001,000 in total assets, $3,834,000 in total liabilities, and $2,167,000 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?2ec9 Going Concern Doubt As reported in the Troubled Company Reporter on Jan. 31, 2008, New York-based Eisner LLP expressed substantial doubt about Global Payment Technologies Inc.'s ability to continue as a going concern following its audit of the company's consolidated financial statements for the year ended Sept. 30, 2007. The auditing firm pointed to Global Payment's recurring losses and deficiencies in cash flows from operations. About Global Payment Headquartered in Bohemia, New York, Global Payment Technologies Inc. (NasdaqCM: GPTX) -- http://www.gpt.com/-- is a designer, manufacturer, and marketer of automated currency acceptance and validation systems used to receive and authenticate currencies in a variety of payment applications worldwide. GREEKTOWN CASINO: Wants to Assume NRT Corp. Contracts ----------------------------------------------------- Greektown Casino LLC and its debtor-affiliates ask authority from the U.S. Bankruptcy Court for the Eastern District of Michigan to assume contracts with NRT Technology Corp. relating to the use of cash and ticketing machines. The Debtors relate that their casinos use modern slot machines and other video gaming devices that do not accept coins. Instead, those slot machines and video gaming devices accept tickets. The patrons then insert their cash into a cash and ticketing machine and receive a ticket of equal value. The Debtors are currently parties to various contracts with NRT, whereby NRT agree to supply and maintain certain cash and ticketing machines used in the Debtors' business operations. The Debtors' proposed counsel, Michael E. Baum, Esq., at Schafer and Weiner, PLLC, in Bloomfield Hills, Michigan, relates that the Debtors' contracts with NRT include: (a) A Hardware Maintenance Support Agreement dated May 10, 2005, in which NRT agrees to maintain and repair the cash and ticketing machines located at the Debtors' casino; (b) A Software License and Software Support Agreement dated May 10, 2005, in which NRT Agrees to maintain, update and support software used in the cash and ticketing machine operation; (c) A Purchase Agreement Order No. 18012 dated March 12, 2008, which was for the acquisition of eight new cash and ticketing machines; and (d) A Lease Agreement for two cash and ticketing machines, which has been extended by addendums through August 31, 2008, and requiring monthly lease payments of $1,500. Under the Contracts, the Debtors owe these amounts to NRT: Contract Amount -------- ------ Hardware & Software Agreement for 05/27/08 to 05/26/09 $169,057 for 05/26/08 to 09/06/08 3,365 Purchase Agreement 299,791 Lease Agreement 9,000 Without the use of the cash and ticketing machines, the Debtors' slot machines and video gaming devices will become practically useless and their revenue generation ability will be severely impaired, Mr. Baum contends. Accordingly, the Debtors seek the Court's authority to assume the NRT Contracts pursuant to Sections 105(a), 363, and 365 of the U.S. Bankruptcy Code. The Debtors propose to assume the Contracts under these terms: (a) NRT will accept the Debtors' offer to assume and cure the $169,057 Current Amount of the Hardware and Software Agreements; (b) The 2007 Charges of $3,365 under the Hardware and Software Agreements will remain a general unsecured claim; (c) NRT will accept the Debtors' offer to assume the Purchase Agreement and to pay 10 equal installments of $29,979 in relation to that Agreement. The Purchase Agreement will be considered assumed only after the last of the 10 monthly payments of $29,979 has been made. (d) NRT will accept the Debtors' proposal to assume the Lease Agreement, which will only be considered assumed after the last of the remaining 10 monthly payments has been made. The Debtors' assumption of the NRT Contracts is necessary and urgent because locating an alternative vendor for NRT would be a cumbersome and time consuming operation for the Debtors, Mr. Baum asserts. There would certainly be a lapse of time between when NRT would remove its machines and the new vendor would install its machines, he says. There would also be significant lost revenue during the changeover as well as the lost man hours devoted to locating and contracting with an alternative vendor of the same quality. The Debtors add that they hope to pay all vendors in full through a Chapter 11 plan and they do not want to incur the cost of rejection damages. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC and its affiliates -- http://www.greektowncasino.com/-- operate world- class casino gaming facilities located in Detroit's historic Greektown district featuring over 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC serves as the Debtors' claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. (Greektown Casino Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). GREEKTOWN CASINO: U.S. Trustee Balks at Honigman Retention ---------------------------------------------------------- Habbo G. Fokkena, the United States Trustee for Region 9, asks the U.S. Bankruptcy Court for the Eastern District of Michigan to deny Greektown Casino LLC and its debtor-affiliates' request to employ Honigman Miller Schwartz and Cohn, LLP, as their special counsel. Paul J. Randel, Esq., at Detroit, Michigan, on behalf of the U.S. Trustee, notes that the Honigman Application concedes that the firm is not disinterested and could not qualify for employment as general counsel under Section 327(a) of the Bankruptcy Code. Instead, the Honigman Application seeks the employment of Honigman under Section 327(e) as special counsel. Section 327(e) establishes a three prong test. In re Running Horse, L.L.C., 371 B.R. 446, 451 (E.D. Ca. 2007). Mr. Randal notes that under the Running Horse test, three factors are considered: (1) Specified special purpose (2) Adverse interest (3) Best interests of the estate Mr. Randel argues that: (a) The Honigman Application does not adequately limit the firm's representation to a specified special purpose. He cites that the Application: -- describes the firm's "Prepetition Legal Services" as broad and involving virtually all of the firm's practice areas, and yet the Application seeks to allow to continue the firm's "Prepetition Legal Services;" and -- as drafted, will make it appear that the firm will be the mouthpiece for the actual work it performs. (b) The Honigman Application does not demonstrate that the firm do not represent or hold any interest adverse to the Debtors with respect to the specified special purpose. Mr. Randel contends that Honigman currently holds and represents numerous interests adverse to the Debtors or their estates. Honigman is a creditor of the Debtors; it may also become a preference defendant. The firm has also represented or continues to represent the Debtors' equity holders and numerous secured creditors. Mr. Randel says there exists numerous likely conflicts in the Honigman Application: -- The Application suggests that Honigman will negotiate confidentiality agreements, which would seem likely that those agreements would keep some information confidential from some of the constituencies represented by the firm. -- The Honigman Application states that the firm will be instrumental in finding a buyer or equity investor, which implicitly impacts which of those options is more likely to be presented. -- If a sale or an equity investment is anticipated to be approved through the plan confirmation process, Honigman, as a creditor with a claim of about $500,000, would then vote on its approval. -- Honigman will be involved in the Debtors' financing matters. The Application, however, does not explain how the financing arrangements do not -- and cannot -- have disparate impacts on all the constituencies represented by Honigman. -- Litigation, standing alone, is also included in Honigman's duties. Without identifying the specific litigation Honigman will be involved, it is impossible to conclude if the firm has or represents no adverse interest. (c) Additional lawyers necessarily bring additional costs to the Debtors' estates. Nowhere does the Application specifically identify a matter that is beyond the skill a and experience of the Debtors' general counsel, Shafer & Weiner, PLLC. "It is neither asserted nor demonstrated in the [Honigman A]pplication that general counsel cannot handle most of the matters identified," Mr. Randel says. In addition, the Honigman Application asserts that the Debtors will bear a cost to bring Shafer's up to speed on matters familiar to Honigman. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC and its affiliates -- http://www.greektowncasino.com/-- operate world- class casino gaming facilities located in Detroit's historic Greektown district featuring over 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC serves as the Debtors' claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. (Greektown Casino Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). GREEKTOWN CASINO: Can Hire Conway Mackenzie as Financial Advisors ----------------------------------------------------------------- Greektown Casino LLC and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Eastern District of Michigan to employ Conway Mackenzie & Dunleavy as their financial advisors, nunc pro tunc to May 29, 2008. The United States Trustee for Region 9 also consented to the Debtors' request. "The Debtors require the immediate services of CM&D," Ryan D. Heilman, Esq., counsel to the Debtors, asserted. Without the firm's services, the Debtors would lose substantial traction in discussions regarding postpetition lending and the Debtors could well fail to obtain their postpetition credit facility, he pointed out. Furthermore, the Debtors would be unable to generate necessary cash flow analyses, budgets, projections, and other financial documents, and would be effectively financially blind through the first 20 days of the bankruptcy proceedings. As financial advisors to the Debtors, Conway Mackenzie is expected to: (a) assist in the preparation of the Debtors' cash collateral budgets; (b) assist the Debtors in developing a business plan; (c) prepare cash flow projections; (d) meet with and prepare presentations for creditors, lenders and other parties-in-interest; (e) assist the Debtors in meeting reporting requirements of the Bankruptcy Court; (f) assist in developing and preparing a plan of reorganization; (g) review and make recommendations regarding assumption or rejection of leases and contracts; and (h) perform other tasks that are agreed upon between the firm and the Debtors. The Debtors will pay for Conway Mackenzie's services according to the firm's hourly rates, which are: Senior Managing Director $495 Paraprofessional $110 The rates of these Conway Mackenzie professionals are: Professional Hourly Rate ------------ ----------- Van Conway $545 Charles Moore $450 Thomas Gordy $435 Kevin Berry $395 Michael Fixler $365 Tammy Berry $285 Jeffrey Addison $270 Alex Calderone $265 Andrea Hoffman $265 Emily McClain $215 Administrative $115 Before the bankruptcy filing, Conway Mackenzie received compensation from the Debtors totaling $569,388. The Debtors also paid the firm a $200,000 prepetition retainer, to be applied to postpetition services. Charles Moore, a senior managing director of Conway Mckenzie & Dunleavy PLLC, assureed the Court that his firm is a "disinterested person," as that term is defined in Section 101(14) of the U.S. Bankruptcy Code, as modified by Section 1107(b). About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC and its affiliates -- http://www.greektowncasino.com/-- operate world- class casino gaming facilities located in Detroit's historic Greektown district featuring over 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC serves as the Debtors' claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. (Greektown Casino Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). GREENMAN TECH: Subsidiary Files Chapter 7 Petition in Georgia ------------------------------------------------------------- GreenMan Technologies Inc. disclosed that its inactive GreenMan Technologies of Georgia Inc. subsidiary has filed a voluntary petition under Chapter 7 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Middle District of Georgia. GreenMan Technologies of Georgia Inc. disclosed that due to significant continued operating losses, it has ceased operations during early 2006 and disposed of all remaining assets in March 2006. All of the proceeds received from that disposition of assets were retained by its secured lender and GreenMan Technologies of Georgia Inc. has no assets. As a result of the filing, and the ultimate deconsolidation of the subsidiary from GreenMan Technologies Inc. for financial reporting purposes, the company anticipates recognizing a one-time, non-cash miscellaneous gain from discontinued operations of approximately $2.4 million. The company does not anticipate any additional material impact to its business. About GreenMan Technologies Based in Lynnfield, Massachusetts, GreenMan Technologies Inc. (OTCBB: GMTI) -- http://www.greenman.biz/-- together with its subsidiaries, engages in collecting, processing, and marketing scrap tires in whole, shredded, or granular form in the United States and Canada. The company recycles this material into many interesting and useful applications. The company markets its products and services through a direct sales staff. The company was founded in 1992 and currently operates processing facilities in Savage, Minnesota, and Des Moines, Iowa. The two facilities process nearly 14 million tires out of the nearly 300 million scrap tires created in the U.S. each year. At March 31, 2008, the company's balance sheet showed total assets of $15,867,782 and total liabilities of $24,766,683, resulting in a total stockholders' deficit of $8,898,901. GREY WOLF: Board Rejects Third $10/Share Proposal from Precision ---------------------------------------------------------------- Grey Wolf Inc.'s board of directors, after a review and consultation with its financial and legal advisors, determined that the third unsolicited proposal to acquire Grey Wolf by the Precision Drilling Trust is not, and is not reasonably likely to result in, a proposal superior to its pending strategic merger with Basic Energy Services Inc. As reported in the Troubled Company Reporter on June 26, 2008, Grey Wolf received a letter from the board of trustees of Precision Drilling Trust about a third unsolicited proposal to acquire Grey Wolf. The Trust's proposal is to acquire all of Grey Wolf's common stock for total consideration of $10 per share on a fully diluted basis, consisting of cash and Trust units at the election of Grey Wolf's shareholders, subject to proration so that the cash portion does not exceed 50% of the aggregate offer price. Grey Wolf's board concluded that pursuing discussions with Precision is not in the best interests of Grey Wolf stockholders, particularly in light of Precision's publicly-disclosed refusal to consider any increase in its final offer. An effort to seek clarification of Precision's proposal led Grey Wolf to conclude that Precision's third offer was truly Precision's final, non- negotiable offer. In addition to Precision's public and categorical refusal to consider an increased offer for Grey Wolf stockholders, the Grey Wolf board weighed a number of other factors, including: -- the Precision proposal undervalues Grey Wolf and offers an insufficient premium to Grey Wolf stockholders; --the considerable uncertainty in the long-term value of Precision's trust units; -- the negative outlook for the Canadian drilling and well service markets; -- the risk of substantial pressure on the market price of Precision's trust units after a Precision transaction; and -- possible future under-investment by Precision due to high debt levels and the need to distribute cash. The Grey Wolf board still believes that its merger agreement with Basic Energy Services follows Grey Wolf's long-term strategic plan and maximizes value for Grey Wolf stockholders. The board recommends that stockholders vote for the merger at its special meeting of stockholders which is scheduled for July 15, 2008. The Grey Wolf board further explained its analysis of the Precision proposal, noting that: a) Undervaluing of Grey Wolf -- Grey Wolf's board believes that Precision's proposal undervalues Grey Wolf based upon peer company comparisons and the improvements taking place in Grey Wolf's US drilling and well service markets. The $10.0 offer by Precision implies, based upon analyst consensus estimates, that Grey Wolf is valued at only a 12.0 times multiple of 2009 earnings. In stark contrast, a peer group of companies consisting of Nabors Industries Inc., Patterson-UTI Energy Inc., Helmerich and Payne Inc., Union Drilling Inc. and Pioneer Drilling Company are trading at a median of 14.0 times 2009 earnings, based on consensus analyst estimates. The Precision offer also values Grey Wolf's enterprise value at only a 5.1 times multiple of 2009 consensus EBITDA. This again compares to the same peer company median of 6.3 times. Thus, Precision's offer does not even bring Grey Wolf to the peer company medians on either metric and does not give Grey Wolf stockholders a control premium for their investment in Grey Wolf. Grey Wolf's board believes the premium stated in the latest Precision proposal is not calculated using the appropriate unaffected Grey Wolf stock price as Grey Wolf's stock price has likely been temporarily depressed due to both the premium offered to Basic Energy Services in that transaction. b) Insufficient premium to Grey Wolf shareholders -- since the day prior to the statement of the Basic Energy Services transaction until the day prior to Precision's recent proposal, the stock prices of a peer company group that includes the peer companies outlined above has appreciated by an average of 21.7%. Applying this level of stock price appreciation to Grey Wolf's stock price prior to the statement of the Basic Energy Services merger transaction results in an unaffected stock price estimate of $9.25. Based upon this analysis, the price offered by Precision gives Grey Wolf stockholders only an 8% premium, which is significantly below the median of premiums paid in comparable oilfield service transactions. c) Uncertainty in long-term value of Precision's trust units -- Half the value of Precision's proposal is in the form of its trust units. Grey Wolf's board believes that the long-term value of Precision's trust units is uncertain in light of scheduled changes in Canadian tax law that would remove Precision's tax advantaged status as an income trust and subject it to Canadian income taxes with unpredictable consequences to the value of its trust units, particularly to US investors. d) Outlook for Canadian drilling and well service markets -- Grey Wolf's board believes that the outlook for the Canadian drilling and well service markets is negative based on a structural oversupply of equipment in both the drilling and well service markets. Utilization rates for Canadian drilling rigs are the worst since 1992. Also, Grey Wolf believes that the dampening effect of recent changes to Alberta tax laws for oil and gas exploration and production companies, that are due to be effective as of Jan. 1, 2009, will further reduce demand for Canadian drilling services. In contrast, the US oilfield drilling and well service markets have been improving steadily since February 2008 as a result of commodity prices, steadily increasing permits for drilling and the lowest LNG importation in the US since 2003. Also contributing to the strength of the US drilling and well service markets are significant excitement around the burgeoning resource plays such as the Bakken in North Dakota, the Marcellus in upper Appalachia, the Piceance in Colorado, the Pinedale in Wyoming, the Woodford in Oklahoma, the Barnett in Texas and the newly-defined Haynesville in Louisiana. Basic Energy Services product lines are well placed to take advantage of these emerging opportunities with their geographic positioning and quality assets, particularly when combined with Grey Wolf's deep drilling- biased assets in the lower 48. e) Risk of substantial pressure on trust unit price -- Grey Wolf's board believes that its stockholders have different investment criteria than Precision's unitholders who own Precision's trust units to receive frequent distributions. Grey Wolf's focus has been on re-investing cash flow to drive future growth. The Grey Wolf board also believes that if a transaction with Precision were consummated, there would be substantial turnover in the ownership of Precision's trust units as former US stockholders of Grey Wolf sell the trust units, placing pressure on the trust unit price. f) Possible future under investment -- Precision's required distribution policy may result in Precision having insufficient capital to invest in growth of the post- acquisition combined company, particularly in light of the cyclicality of the oilfield service sector. Precision would significantly increase its debt load if a transaction with Grey Wolf were consummated, which coupled with the required distributions could limit the potential for future growth. A Grey Wolf and Basic Energy Services combination creates a new, stronger company with higher debt ratings, well positioned for continued growth. g) Compelling strategic benefits of the basic energy services merger -- Grey Wolf's board continues to believe that the pending strategic merger with Basic Energy Services continues to offer the best value for its stockholders for many reasons, including: -- the merger offers both near- and long-term value to Grey Wolf holders, through the immediate return of capital to stockholders and the opportunity to participate in the continued growth of the combined entity; -- the combined company will have: - a broader range of services and the opportunity through cross-selling to capture a larger share of customer expenditures over the entire life of a well; - greater size and scale and enhanced growth prospects, including a larger presence in key resource play basins; - continued financial flexibility and a solid foundation to pursue domestic and international growth opportunities in a fragmented market; -- the combined company is expected to benefit from a lower cost of capital; -- the transaction is expected to be immediately accretive to earnings and cash flow per share; and -- the merger preserves the ability to participate in future business combinations at potentially higher valuations and control premiums than offered by Precision. Grey Wolf's board has not changed its recommendation that Grey Wolf's stockholders vote FOR approval of the pending merger agreement with Basic Energy Services at Grey Wolf's special meeting of stockholders scheduled for July 15, 2008. The merger agreement with Basic Energy Services has not been amended and remains in effect. Grey Wolf urges its stockholders to deliver their proxies voting FOR the merger. Stockholders needing assistance with their proxy can contact: Georgeson Inc. Banks and brokers call: (212) 440-9800 Grey Wolf stockholders call: (800) 561-3540 About Precision Drilling Trust Precision Drilling Trust (NYSE:PDS and TSX:PD.UN) is an unincorporated open-ended investment trust established under the laws of the Province of Alberta, Canada. About Grey Wolf Headquartered in Houston, Texas, Grey Wolf Inc. (AMEX: GW) -- http://www.gwdrilling.com/-- provides turnkey and contract oil and gas land drilling services in the best natural gas producing regions in the United States with a current drilling rig fleet of 121, which will increase to 123 with the expected addition of two new rigs in 2008. * * * Grey Wolf continues to carry Moody's Investors Service Ba3 corporate family rating which was placed on July 31, 2006. The outlook is stable. GSR MORTGAGE: Moody's Junks Ratings of 3 Tranches from ARM Deals ---------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 17 tranches from 3 Option ARM transactions issued by GSR Mortgage Loan Trust. Six tranches remain on review for possible further downgrade. Additionally, 13 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: GSR Mortgage Loan Trust 2006-OA1 -- Cl. 1-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1, 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. 3-A-1, 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 A3 from Aa1 -- Cl. M-2, Downgraded to Baa3 from Aa2 -- Cl. M-3, Downgraded to Ba2 from Aa2 -- 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 B3 from Baa1; 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 Baa3 Issuer: GSR Mortgage Loan Trust 2007-OA1 -- Cl. M-2, Downgraded to A1 from Aa1 -- Cl. M-3, Downgraded to A2 from Aa1 -- Cl. M-4, Downgraded to Baa1 from Aa2 -- Cl. M-5, Downgraded to Baa3 from Aa3 -- Cl. M-6, Downgraded to Ba2 from A1 -- Cl. M-7, Downgraded to B1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to B2 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-10, Downgraded to Ca from Ba2 Issuer: GSR Mortgage Loan Trust 2007-OA2 -- Cl. B-1, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. B-2, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. B-3, Placed on Review for Possible Downgrade, currently Aa3 -- Cl. B-4, Placed on Review for Possible Downgrade, currently A2 -- Cl. B-5, Placed on Review for Possible Downgrade, currently Baa1 -- Cl. B-6, Placed on Review for Possible Downgrade, currently Ba2 -- Cl. B-7, Placed on Review for Possible Downgrade, currently B2 HAIGHTS CROSS: Linda Koons to Resign as EVP and Publisher --------------------------------------------------------- Linda Koons, the Executive Vice President and Publisher of Haights Cross Communications, Inc., will be leaving the company effective June 30, 2008 in order to pursue other interests. Ms. Koons has served as Executive Vice President and Publisher since March 2004. Prior to that Ms. Koons was a private consultant to major publishers and national education organizations. From 1990 – 2002, Ms. Koons held various senior management positions at Scholastic Inc., as Senior Vice President & Publisher of the Education Group with responsibility for publishing, marketing, and sales of core and supplementary products; Vice President of the Supplementary Publishing Division, Vice President of the Early Childhood Division, and Editor-in- Chief of Reading. She was also Director of School Product Development for the Walt Disney Company. From 1981 – 1990, Ms. Koons held numerous editorial management positions at Silver Burdett & Ginn and before that was a senior editor with Charles E. Merrill Publishing Company. Ms. Koons has a Masters degree in Education from Bowling Green State University and a Bachelor of Arts degree from Wittenberg University. About Haights Cross Founded in 1997 and based in White Plains, New York, Haights Cross Communications Inc. -- http://www.haightscross.com/-- is an educational and library publisher dedicated to creating the finest books, audio products, periodicals, software and online services, serving the following markets: K-12 supplemental education, public library and school publishing, audio books, and medical continuing education publishing. Haights Cross companies include: Sundance/Newbridge Educational Publishing, Triumph Learning, Buckle Down/Options Publishing, Recorded Books, and Oakstone Publishing. Haights Cross Communications Inc.'s consolidated balance sheet at March 31, 2008, showed $331.0 million in total assets and $487.6 million in total liabilities, resulting in a $156.6 million total stockholders' deficit. Going Concern Doubt Ernst & Young, LLP, in New York, expressed substantial doubt about Haights Cross Communications Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm said that the company has substantial debt maturing in August 2008 and there is no certainty that the company will be able to repay or refinance this debt. HARBORVIEW: Moody's Cuts Ratings of 186 Tranches from ARM Deals --------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 186 tranches from 32 Option ARM transactions issued by Harborview. Forty four tranches remain on review for possible further downgrade. Additionally, 56 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: HarborView Mortgage Loan Trust 2004-10 -- Cl. B-3, Downgraded to Baa3 from Baa2 Issuer: HarborView Mortgage Loan Trust 2004-11 -- Cl. X-B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to A1 from Aa2 -- Cl. B-2, Downgraded to Baa2 from A2 -- Cl. B-3, Downgraded to B1 from Baa2 -- Cl. B-4, Downgraded to Ca from Ba2 Issuer: HarborView Mortgage Loan Trust 2004-8 -- Cl. B-4, Downgraded to Ba3 from Ba2 Issuer: HarborView Mortgage Loan Trust 2005-1 -- X-PO-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-PO-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-IO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-2, Downgraded to A3 from A2 -- Cl. B-3, Downgraded to Ba1 from Baa2 Issuer: HarborView Mortgage Loan Trust 2005-10 -- Cl. B-2, Downgraded to A1 from Aa2 -- Cl. B-3, Downgraded to A3 from Aa3 -- Cl. B-4, Downgraded to Baa2 from A1 -- Cl. B-5, Downgraded to Ba1 from A2 -- Cl. B-6, Downgraded to Ba3 from A3 -- Cl. B-7, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-8, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-9, Downgraded to Caa2 from Baa3 Issuer: HarborView Mortgage Loan Trust 2005-11 -- Cl. PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-2, Downgraded to Baa1 from A2 -- Cl. B-3, Downgraded to B3 from Baa2 Issuer: HarborView Mortgage Loan Trust 2005-12 -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-B, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. PO-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. PO-B, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. X-2A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-2B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. PO-2A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. PO-2B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Baa3 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 -- Cl. B-4, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade Issuer: HarborView Mortgage Loan Trust 2005-13 -- Cl. PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X, 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 B2 from Baa1 -- Cl. B-4, Downgraded to Caa2 from Baa2 -- Cl. B-5, Downgraded to Ca from Ba2 Issuer: HarborView Mortgage Loan Trust 2005-14 -- Cl. B-1, Downgraded to A3 from Aa2 -- Cl. B-2, Downgraded to Ba3 from A2 -- Cl. B-3, Downgraded to B2 from Baa2 -- Cl. B-4, Downgraded to Ca from Ba3 Issuer: HarborView Mortgage Loan Trust 2005-15 -- Cl. PO-B, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. X-B, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. B-1, Downgraded to Aa2 from Aa1 -- Cl. B-2, Downgraded to A2 from Aa2 -- Cl. B-3, Downgraded to Baa1 from Aa3 -- Cl. B-4, Downgraded to Baa3 from A1 -- Cl. B-5, Downgraded to Ba3 from A2 -- Cl. B-6, Downgraded to B2 from A3 -- Cl. B-7, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-8, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-9, Downgraded to Caa1 from Baa3 -- Cl. B-10, Downgraded to Ca from Ba2 Issuer: HarborView Mortgage Loan Trust 2005-16 -- Cl. PO-B, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. X-B, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. B-1, Downgraded to A1 from Aa1 -- Cl. B-2, Downgraded to Baa1 from Aa2 -- Cl. B-3, Downgraded to Baa3 from Aa3 -- Cl. B-4, Downgraded to Ba3 from A1 -- Cl. B-5, Downgraded to B1 from A2 -- Cl. B-6, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-8, Downgraded to Caa1 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. B-9, Downgraded to Ca from Ba3 -- Cl. B-10, Downgraded to Ca from B3 Issuer: HarborView Mortgage Loan Trust 2005-2 -- Cl. PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Aa3 from Aa2 -- Cl. B-2, Downgraded to Baa2 from A2 -- Cl. B-3, Downgraded to B1 from Baa2 Issuer: HarborView Mortgage Loan Trust 2005-5 -- Cl. PO-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Aa3 from Aa2 -- Cl. B-2, Downgraded to Baa2 from A2 -- Cl. B-3, Downgraded to B1 from Baa2 Issuer: HarborView Mortgage Loan Trust 2005-7 -- Cl. 1-A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A2B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-PO, 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. 1-B1, Downgraded to Baa1 from Aa2 -- Cl. 1-B2, Downgraded to Ba3 from A2 -- Cl. 1-B3, Downgraded to Caa2 from Baa2 -- Cl. 2-B1, Downgraded to A3 from Aa2 -- Cl. 2-B2, Downgraded to Ba1 from A2 -- Cl. 2-B3, Downgraded to Caa1 from Baa2 Issuer: HarborView Mortgage Loan Trust 2005-8 -- Cl. 2-POB, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-XB, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-B1, Downgraded to Aa2 from Aa1 -- Cl. 1-B2, Downgraded to A1 from Aa2 -- Cl. 1-B3, Downgraded to A3 from Aa3 -- Cl. 1-B4, Downgraded to Baa2 from A1 -- Cl. 1-B5, Downgraded to Ba1 from A2 -- Cl. 1-B6, Downgraded to B1 from A3 -- Cl. 1-B7, Downgraded to B2 from Baa1 -- Cl. 1-B8, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. 1-B9, Downgraded to Caa1 from Baa3 -- Cl. 2-B1, Downgraded to A2 from Aa2 -- Cl. 2-B2, Downgraded to Ba2 from A2 -- Cl. 2-B3, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- l. 2-B4, Downgraded to Caa1 from Baa3 Issuer: HarborView Mortgage Loan Trust 2006-1 -- Cl. 2-A1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. PO-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Baa3 from Aa1 -- Cl. B-2, Downgraded to Ba1 from Aa2 -- Cl. B-3, Downgraded to Ba3 from Aa3 -- 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 B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to Ca from Ba2 -- Cl. B-8, Downgraded to Ca from B2 -- Cl. B-9, Downgraded to Ca from B3 -- Cl. B-10, Downgraded to Ca from Caa1 Issuer: HarborView Mortgage Loan Trust 2006-10 -- Cl. B-2, Downgraded to A1 from Aa1 -- Cl. B-3, Downgraded to A3 from Aa1 -- Cl. B-4, Downgraded to Ba2 from Aa2 -- Cl. B-5, Downgraded to B1 from A1 -- Cl. B-6, Downgraded to Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to Ca from Ba1 Issuer: HarborView Mortgage Loan Trust 2006-12 -- Cl. B-2, Downgraded to Aa3 from Aa1 -- Cl. B-3, Downgraded to Baa1 from Aa2 -- Cl. B-4, Downgraded to Ba3 from Aa3 -- Cl. B-5, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to Ca from Baa3 Issuer: HarborView Mortgage Loan Trust 2006-4 -- Cl. 1-A1B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A2B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. PO-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. PO-B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. PO-3A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-3A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Baa2 from Aa1 -- Cl. B-2, Downgraded to Ba3 from Aa2 -- 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 A3; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-8, Downgraded to Ca from Ba2 -- Cl. B-9, Downgraded to Ca from B3 -- Cl. B-10, Downgraded to Ca from Caa1 Issuer: HarborView Mortgage Loan Trust 2006-5 -- Cl. 2-A1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. PO-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. PO-B, 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-B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. PO-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Ba3 from Aa1 -- Cl. B-2, Downgraded to Caa1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Caa1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-4, Downgraded to Ca from Baa2 -- Cl. B-5, Downgraded to Ca from Ba1 -- Cl. B-6, Downgraded to Ca from Ba2 -- Cl. B-7, Downgraded to Ca from B1 -- Cl. B-8, Downgraded to Ca from B2 -- Cl. B-9, Downgraded to Ca from B3 Issuer: HarborView Mortgage Loan Trust 2006-7 -- Cl. B-1, Downgraded to A2 from Aa1 -- Cl. B-2, Downgraded to Ba1 from Aa2 -- Cl. B-3, Downgraded to Ba3 from Aa3 -- Cl. B-4, Downgraded to B2 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; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to Ca from Baa3 Issuer: HarborView Mortgage Loan Trust 2006-8 -- Cl. B-2, Downgraded to Aa3 from Aa2 -- Cl. B-3, Downgraded to A1 from Aa2 -- Cl. B-4, Downgraded to Ba3 from A1 -- Cl. B-5, Downgraded to B2 from A2 -- Cl. B-6, Downgraded to B2 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 Ba2 Issuer: HarborView Mortgage Loan Trust 2006-9 -- Cl. B-2, Downgraded to Baa1 from Aa1 -- Cl. B-3, Downgraded to Baa3 from Aa1 -- Cl. B-4, Downgraded to B2 from Aa2; 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; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to Ca from Ba2 Issuer: HarborView Mortgage Loan Trust 2006-BU1 -- Cl. M-7, Downgraded to Ba1 from Baa1 -- Cl. M-8, Downgraded to B1 from Baa2 -- Cl. M-9, Downgraded to Ca from Ba2 Issuer: HarborView Mortgage Loan Trust 2006-CB1 -- Cl. 2-PO, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. 2-X, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. 2-B1, Downgraded to Ba3 from Aa2 -- Cl. 2-B2, Downgraded to Ca from Ba2 -- Cl. 2-B3, Downgraded to Ca from Caa1 -- Cl. 2-B4, Downgraded to Ca from Caa2 Issuer: HarborView Mortgage Loan Trust 2006-SB1 -- Cl. M-1, Downgraded to Aa3 from Aa1 -- Cl. M-2, Downgraded to Baa2 from Aa1 -- Cl. M-3, Downgraded to Ba1 from Aa2 -- Cl. M-4, Downgraded to B1 from A1 -- Cl. M-5, Downgraded to Caa1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Ca from Baa2 -- Cl. M-7, Downgraded to Ca from Ba1 Issuer: HarborView Mortgage Loan Trust 2007-1 -- Cl. B-3, Downgraded to Aa2 from Aa1 -- Cl. B-4, Downgraded to A1 from Aa1 -- Cl. B-5, Downgraded to Ba2 from Aa2 -- Cl. B-6, Downgraded to B1 from Aa3; 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 Ca from Baa3 Issuer: HarborView Mortgage Loan Trust 2007-2 -- Cl. 1A-1A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Baa3 from Aa1 -- Cl. B-2, Downgraded to B2 from Aa2 -- Cl. B-3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-4, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-5, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to Ca from Ba3 -- Cl. B-8, Downgraded to Ca from B3 Issuer: HarborView Mortgage Loan Trust 2007-3 -- Cl. B-3, Downgraded to A1 from Aa2 -- Cl. B-4, Downgraded to Baa3 from Aa3 -- Cl. B-5, Downgraded to Ba3 from A1 -- Cl. B-6, Downgraded to B1 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 B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-9, Downgraded to Ca from Ba2 Issuer: HarborView Mortgage Loan Trust 2007-4 -- Cl. 1A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Baa3 from Aa1 -- Cl. B-2, Downgraded to Ba2 from Aa2 -- Cl. B-3, Downgraded to Ba3 from Aa3 -- Cl. B-4, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade -- Cl. B-5, Downgraded to B2 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 Issuer: HarborView Mortgage Loan Trust 2007-5 -- Cl. B-6, Downgraded to Baa3 from Baa1 -- Cl. B-7, Downgraded to B2 from Baa3 -- Cl. B-8, Downgraded to Ca from Ba2 Issuer: HarborView Mortgage Loan Trust 2007-6 -- Cl. B-7, Downgraded to Baa2 from A2 -- Cl. B-8, Downgraded to B1 from A3 -- Cl. B-9, Downgraded to Ca from Baa3 HARBORVIEW: Moody's Junks Six Tranches from Alt-A Transactions -------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 17 tranches from 4 Alt-A transactions issued by Harborview. Six tranches remain on review for possible further downgrade. Additionally, 4 tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, adjustable-rate, Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described are a result of Moody's on-going review process. Complete rating actions are: Issuer: HarborView Mortgage Loan Trust 2005-14 -- Cl. B-1, Downgraded to A3 from Aa2 -- Cl. B-2, Downgraded to Ba3 from A2 -- Cl. B-3, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-4, Downgraded to Ca from Ba3 Issuer: HarborView Mortgage Loan Trust 2006-11 -- Cl. A-1B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Ba1 from Aa1 -- Cl. B-2, Downgraded to B1 from Aa2 -- Cl. B-3, Downgraded to B2 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 Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-6, Downgraded to Ca from Ba1 Issuer: HarborView Mortgage Loan Trust 2006-14 -- Cl. B-4, Downgraded to A2 from Aa2 -- Cl. B-5, Downgraded to Ba3 from A1 -- Cl. B-6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-7, Downgraded to Ca from Baa3 Issuer: HarborView Mortgage Loan Trust 2006-3 -- Cl. 1A-1B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2A-1B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to B1 from Aa2 -- Cl. B-2, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from B3 HAVEN HEALTHCARE: Formation Capital Backs Out on $84MM Purchase --------------------------------------------------------------- Christopher Scinta of Bloomberg News reports that Georgia-based investment firm, Formation Capital LLC, withdrew its $84.75 million offer to acquire Haven Healthcare Management LLC. Haven Healthcare and Formation Capital have reached a sale agreement, wherein Genesis Healthcare, who provide long-term care services in New England, will assume management and operational responsibilities for Haven Healthcare's facilities on behalf of Formation Capital. The agreement was expected to complete on Aug. 1, 2008. "The parties were unable to resolve a number of outstanding issues," Mr. Scinta quotes a Formation Capital spokeswoman. In May 2008, LifeHouse Retirement Properties Inc. expressed its willingness to buy Haven Healthcare for $105 million of which all proceeds of the sale would be paid to creditors. But pulled out its bid later, according to Bloomberg. Several parties filed objections to the sale including Daina G. Adams, the U.S. Trustee for Region 2, and the Official Committee of Unsecured Creditors, saying the proposed sale would fail to provide a return to the unsecured creditors of Haven Healthcare. According to papers filed with the Court, Haven Healthcare's DIP lender, CapitalSource Finance LLC, which provided $50 million in postpetition financing, will not continue to finance the Debtors to consummate the sale of their assets beyond the end of July 2008. About Haven Healthcare Headquartered in Middletown, Connecticut, Haven Healthcare Management LLC -- http://www.havenhealthcare.com/-- provide nursing care to the elderly in New England, Connecticut. The company operates health centers and assisted living facilities. In addition, the company specializes in short-term rehabilitative care and long-term care. The company and 46 of its affiliates filed for Chapter 11 protection on November 22, 2007 (Bankr. D. Conn. Lead Case No. 07-32719). Moses and Singer LLP serves as the Debtors' counsel. Kurtzman Carson Consultants LLC is the Debtors' claims and noticing agent. The U.S. Trustee for Region 2 appointed nine creditors to serve on an Official Committee of Unsecured Creditors in this case. Pepper Hamilton LLP is counsel and Neubert Pepe & Monteith P.C. as its co-counsel to the Creditors Committee. When the Debtors sought protection from their creditors, they listed assets and debts between $1 million to $100 million. The Debtors' consolidated list of 50 largest unsecured creditors showed total claims of more than $20 million. * * * As of Feb. 29, 2008, the Debtors' balance sheet showed total assets of $25,965,631 and total liabilities of $38,597,720 resulting in a $12,632,089 stockholders' deficit. HEXION SPECIALTY: Says Huntsman's Suit Against Apollo is Baseless ----------------------------------------------------------------- Hexion Specialty Chemicals Inc. issued a statement in response to a suit filed by Huntsman Corp. in Texas: "It is unfortunate that Huntsman has chosen to file a baseless lawsuit against Apollo and to personally sue two of its principals. Huntsman's Texas suit violates a clear provision of the merger agreement which requires that any litigation be brought exclusively in the State of Delaware. As we alleged in our suit, primarily due to Huntsman's underperformance, we believe that consummating the merger on the basis of the capital structure agreed to with Huntsman would render the combined company insolvent. In fact, Huntsman's suit does not dispute that the combined company would be insolvent. We believe Huntsman's lawsuit is wholly without merit." As reported in the Troubled Company Reporter on June 24, 2008, Huntsman Corp. 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. The TCR disclosed on June 20, 2008, that 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, which includes the assumption of debt, with Huntsman. 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. 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. 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. Hexion Specialty Chemicals Inc.'s balance sheet at March 31, 2008, showed the company had total assets of $4.2 billion and total liabilities of $5.5 billion, resulting in a shareholders' deficit of $1.3 billion. HOWARD REAL ESTATE: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Howard Real Estate Investments, LLC 142 Stewart Street Waynesburg, PA 15370 Bankruptcy Case No.: 08-24160 Related Information: John W. Howard, managing member, filed the petition on the Debtor's behalf. Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- John Howard Chrysler Jeep Dodge Inc. 08-20777 Feb. 7, 2008 (common ownership with Debtor) John Howard Pontiac-Buick-GMC Inc. 08-22223 Apr. 4, 2008 (common ownership with Debtor) John W. Howard 08-22224 Apr. 4, 2008 (owner) Judge Jeffrey A. Deller presides over the cases. Chapter 11 Petition Date: June 25, 2008 Court: Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Robert O. Lampl, Esq. (rol@lampllaw.com) 960 Penn Avenue, Suite 1200 Pittsburgh, PA 15222 Tel: (412) 392-0330 Fax: (412) 392-0335 Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 The Debtor did not file a list of unsecured creditors. HUNTSMAN CORP: Suit Against Apollo is Baseless, Hexion Says ----------------------------------------------------------- Hexion Specialty Chemicals Inc. issued a statement in response to a suit filed by Huntsman Corp. in Texas: "It is unfortunate that Huntsman has chosen to file a baseless lawsuit against Apollo and to personally sue two of its principals. Huntsman's Texas suit violates a clear provision of the merger agreement which requires that any litigation be brought exclusively in the State of Delaware. As we alleged in our suit, primarily due to Huntsman's underperformance, we believe that consummating the merger on the basis of the capital structure agreed to with Huntsman would render the combined company insolvent. In fact, Huntsman's suit does not dispute that the combined company would be insolvent. We believe Huntsman's lawsuit is wholly without merit." As reported in the Troubled Company Reporter on June 24, 2008, Huntsman Corp. 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. The TCR disclosed on June 20, 2008, that 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, which includes the assumption of debt, with Huntsman. 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. 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. IAC/INTERACTIVECORP: Taking $300MM Goodwill Writedown for Unit -------------------------------------------------------------- IAC/InterActiveCorp will take an estimated $300 million charge to write down the goodwill value of its Cornerstone Brands catalog business, reflecting in part significant deterioration in the macro economic environment for retailers. IAC performed a test of the goodwill of its Retailing reporting units, HSN and Cornerstone Brands, during June 2008. The timing of IAC's second quarter goodwill impairment test was accelerated, in part, due to the filing of an amendment, on June 26, 2008, to the Form 10 of HSN Inc., which was initially filed in connection with the planned spin-off of HSNi. HSNi is a newly formed subsidiary of IAC which will hold HSN and Cornerstone upon the consummation the spin-off. IAC prepared discounted cash flow analyses and reviewed the resulting valuations in the context of implied valuations based upon market multiples of EBITDA and the expected trading range of value of HSNi after the spin-off. Based upon these analyses, IAC believes that the goodwill of its HSN reporting unit is not impaired. However, IAC believes that the goodwill of Cornerstone is impaired. This impairment is due, in part, to the significant deterioration in the macro economic environment for retailers, particularly in the home and apparel categories, and the negative impact of these markets on Cornerstone's performance and the related reduction in market valuations for retailers. The effect of these market conditions has been exacerbated by execution issues and turnover of management of certain catalogs within Cornerstone. Cornerstone is expected to incur an operating loss for the first six months of 2008 compared to operating income of $13.7 million in the comparable year ago period. While IAC expects full year profitability for Cornerstone, its results are expected to be significantly lower than 2007. IAC said that the aforementioned charge is an estimate and IAC does not expect the final analysis to be materially different. About IAC IAC/InterActiveCorp (Nasdaq: IACI) -- http://iac.com/-- operates a portfolio of specialized and global brands in the sectors: Retailing, which includes the United States and International segments; Services, which includes the Ticketing, Lending, Real Estate, Teleservices and Home Services reporting segments; Media & Advertising, and Membership & Subscriptions, which includes the Vacations, Personals and Discounts reporting segments. * * * As reported in the Troubled Company Reporter on June 16, 2008, Standard & Poor's Ratings Services said that its ratings on IAC/InterActiveCorp, including the 'BB' corporate credit rating, remain on CreditWatch with negative implications, where they were initially placed on Nov. 5, 2007, following IAC's announcement that it planned to divide itself into five publicly traded companies. IAC/INTERACTIVECORP: To Get $750MM Dividend Fee from Ticketmaster ----------------------------------------------------------------- Ticketmaster will likely take on about $750 million in debt and have $450 million in cash as it is spun off from parent IAC/InterActiveCorp, various reports say. Reports, citing IAC chief financial officer Thomas McInerney, said that Ticketmaster and sibling units HSN and Interval International would initially be capitalized with net debt as they are spun off. The $750 million will be used to pay a dividend to its former parent, Mr. Tom McInerney said, according to Bloomberg News. The units will also make dividend payments. The Wall Street Journal reports that the size of the Ticketmaster payment means IAC is likely to get more than $1 billion from the payments. WSJ says that the mortgage-loan service Lending Tree, is exempted from paying a dividend because it was troubled by the housing- market slump. According to WSJ, dividend payments are a common way for conglomerates spinning off units to transfer cash to the parent company from the unit. It is most useful when the conglomerate is carrying a heavy debt load and can use the cash to pay down debt, WSJ relates. The dividends are a way for the parent company to transfer debt to its newly independent units, WSJ adds. In IAC's case, the New York company has a significant amount of cash -- $1.2 billion as of March 31 -- and less than that in debt, WSJ says. The payments will strengthen the company's balance sheet, WSJ sates. WSJ indicates that once the split is completed, IAC chairman and CEO Barry Diller will have to decide what to do with the dividend windfall. About IAC IAC/InterActiveCorp (Nasdaq: IACI) -- http://iac.com/-- operates a portfolio of specialized and global brands in the sectors: Retailing, which includes the United States and International segments; Services, which includes the Ticketing, Lending, Real Estate, Teleservices and Home Services reporting segments; Media & Advertising, and Membership & Subscriptions, which includes the Vacations, Personals and Discounts reporting segments. * * * As reported in the Troubled Company Reporter on June 16, 2008, Standard & Poor's Ratings Services said that its ratings on IAC/InterActiveCorp, including the 'BB' corporate credit rating, remain on CreditWatch with negative implications, where they were initially placed on Nov. 5, 2007, after IAC's statement that it planned to divide itself into five publicly traded companies. IBIS TECHNOLOGY: Gets Nasdaq Notice on Bid Price Noncompliance -------------------------------------------------------------- Ibis Technology Corporation (Nasdaq GM: IBIS) received an additional letter from the Nasdaq Stock Market dated June 11, 2008 notifying the Company that the bid price of the Company's Common Stock had closed less than $1.000 per share over the previous 30 consecutive business days, and as a result, the Company does not comply with Nasdaq Marketplace Rule 4450(a)(5). The Company previously announced that it received a letter on December 10, 2007 from Nasdaq advising that, for the previous 30 consecutive business days, the bid price of the Common Stock had closed below the minimum $1.00 per share requirement. The Company was provided 180 calendar days from the letter date, or until June 9, 2008, to regain compliance. In its most recent letter, Nasdaq provided formal notification that, because the Company had not regained compliance with the rule, the Nasdaq Listing Qualifications Panel will consider the matter in rendering a determination regarding the Company's continued listing on the Nasdaq Global Market. The Company participated in a Panel hearing on June 5, 2008 to address the delayed filing of the Company's Form 10-K and the Form 10-Q, as well as additional compliance concerns. The Panel is currently considering the Company's request for continued listing. The Company had until June 18, 2008 to present its views to the Panel in writing with respect to minimum bid price deficiency. There can be no assurance the Panel will grant the Company's request for continued listing. On April 22, 2008, the Company announced that it received a Nasdaq letter dated April 16, 2008 advising that Nasdaq had not received the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2007, as required by Nasdaq Marketplace Rule 4310(c)(14). On May 23, 2008, the Company announced that it received a letter from Nasdaq dated May 19, 2008 informing the Company that Nasdaq had not received the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, as required by Nasdaq Marketplace Rule 4310(c)(14). On May 28, 2008, the Company filed its Form 10-K for the year ended December 31, 2008 and, on June 2, 2008, filed Amendment No. 1 to correct certain inadvertent omissions. The Company intends to file the Form 10-Q as soon as reasonably practicable. On June 3, 2008, the Company announced that it received a letter from Nasdaq dated May 29, 2008 informing the Company that it does not comply does not comply with the minimum $10,000,000 stockholders' equity requirement, as required by Marketplace Rule 4450(a)(3). On April 28, 2008, the Company announced that it had received a Nasdaq letter dated April 23, 2008 notifying the Company that for the last 30 consecutive trading days, the Company's Common Stock had not maintained the minimum market value of publicly held shares of $5,000,000, as required for continued inclusion by Nasdaq Marketplace Rule 4450(a)(2). The Company has been provided 90 calendar days, or until July 22, 2008, to regain compliance. The MVPHS of Common Stock must be $5,000,000 or greater for a minimum of 10 consecutive trading days to comply. If compliance with Nasdaq Marketplace Rule 4450(a)(2) cannot be demonstrated by July 22, 2008, the Nasdaq Staff will provide written notification that the matter is an additional basis for delisting. About Ibis Technology Ibis Technology Corporation (Nasdaq GM: IBIS) -- http://www.ibis.com/-- is a provider of oxygen implanters for the production of SIMOX-SOI (Separation-by-Implantation-of-Oxygen Silicon-On-Insulator) wafers for the worldwide semiconductor industry. Headquartered in Danvers, Massachusetts, Ibis Technology is traded on Nasdaq under the symbol IBIS. Going Concern Doubt In a letter dated May 22, 2008, KPMG LLP raised substantial doubt on the ability of Ibis Technology Corporation to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring losses from operations. The company posted a net loss of $8,539,812 on total net sales and revenues of $951,191 for the year ended Dec. 31, 2007, as compared with a net income of $404,885 on total net sales and revenues of $13,987,419 in the prior year. IDLEAIRE TECHNOLOGIES: Saul Ewing Approved as Panel's Counsel ------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors of IdleAire Technologies Corporation to retain Saul Ewing LLP as its counsel. As reported in the Troubled Company Reporter on June 12, 2008, Saul Ewing is expected to: a) advise the Committee with respect to its rights, duties and powers in this Chapter 11 case; b) assist and advise the Committee in its consultations with the Debtor relative to the administration of this Chapter 11 case; c) assist the Committee in analyzing the claims of the Debtor's creditors and its capital structure and in negotiating with holders of claims and equity interest; d) assist the Committee in its investigation of the acts, conduct, assets, liabilities and financial condition oft he Debtor and of the operation of the Debtor's business; e) assist the Committee in its investigation of the liens and claims of the Debtor's prepetition lenders and the prosecution of any claims or causes of action revealed by such investigation; f) assist the Committee in its analysis of, and negotiations with, the Debtor or any third party concerning matters related to, among the assumption or rejection of certain leases of nonresidential real property and executory contracts, asset dispositions, financing of other transactions and the terms of one or more plans of reorganization for the Debtor and accompanying disclosure statements and related plan documents; g) assist and advise the Committee as to its communications to unsecured creditors regarding significant matters in this Chapter 11 case; h) represent the Committee at hearings and other proceedings; i) review and analyze applications, orders, statements of operations and schedules filed with the Court and advise the Committee as to their propriety; j) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interest and objectives; k) prepare, on behalf of the Committee, any pleadings, including without limitation, motions, memoranda, complaints, adversary complaints or comments in connection with any of the foregoing; and l) perform other legal services as may be required or are otherwise deemed to be in the interests of the Committee in accordance with the Committee's powers and duties as set forth in the Bankruptcy Code, Bankruptcy Rules or other applicable law. The firm's professionals and their compensation rates are: Professionals Designations Hourly Rates ------------- ------------ ------------ Mark Minuti, Esq. Partner $510 Henry Abrams, Esq. Partner $510 Adam H. Isenberg, Esq. Partner $460 Jeremy W. Ryan, Esq. Partner $390 Robyn F. Pollack, Esq. Associate $360 Ryan Murphy, Esq. Associate $195 Monica A. Molitor Paralegal $180 Designations Hourly Rates ------------ ------------ Partners $335-$650 Special Counsel $250-$440 Associates $175-$330 Paraprofessionals $95-$215 Jeremy W. Ryan, Esq., a partner of the firm, assured the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About IdleAire Knoxville, Tennessee-based IdleAire Technologies Corp. -- http://www.idleaire.com/-- is a privately held corporation founded in June 2000. It manufactures and services an advanced travel center electrification system providing heating, ventilation & air conditioning, Internet and other services to truck drivers parked at rest stops. The company delivers its services to long-haul drivers through its patented Advanced Travel Center Electrification(R) system, or ATE system, comprised of an in-cab service module connected to an external heating, ventilation and air conditioning unit, or HVAC unit, mounted on a truss structure above parking spaces. IdleAire has 131 locations in 34 states and employs about 1,200 people. The company filed chapter 11 petition on May 12, 2008 (Bankr. D. Del. Case No. 08-10960). Judge Kevin Gross presides over the case. Elihu Ezekiel Allinson, III, Esq., William A. Hazeltine, Esq., and William David Sullivan, Esq., at Sullivan Hazeltine Allinson, LLC represent the Debtor in its restructuring efforts. The Debtor selected Kurtzman Carson Consultants LLC as claim, noticing and balloting agent. The U.S. Trustee for Region 3 appointed three creditors to serve on an Official Committee of Unsecured Creditors. IDLEAIRE TECHNOLOGIES: Mesirow Okayed as Panel's Financial Advisor ------------------------------------------------------------------ The United States Bankruptcy Court for the District of Delaware gave the Official Committee of Unsecured Creditor of IdleAire Technologies Corporation permission to retain Mesirow Financial Consulting LLC as its financial advisor. As reported in the Troubled Company Reporter on June 12, 2008, Mesirow Financial is expected to: a) assess the bid procedures and review and advice to the Committee with respect to proposed asset dispositions; b) assist in the review of financial information of the Debtor and analysis of motions for which court approval is sought by the Debtor; c) assist in meetings and discussions with other professionals and the Debtors including other classes of creditors; d) review financial disclosures of the Debtor including the statement of financial affairs, schedules of assets and liabilities and monthly operating reports; e) analyze and assist the Committee with regard to the Debtors' financing, cash collateral and other liquidity measures; f) review and assist the Committee in evaluating any employee related programs; g) assist with the review and affirmation or rejection on various executory contracts and leases; h) assist in the evaluation and analysis of the avoidance actions, including fraudulent conveyances and preferential transfers; i) provide litigation advisory services and expert testimony on case related issues; and j) other consulting services as the Committee of its counsel may deem necessary; The firm's professionals and other compensation rates are: Designations Hourly Rates ------------ ------------ Senior Managing Directors $670-$710 Managing Director and Directors $580-$640 Vice President $470-$540 Senior Associate $370-$440 Associate $220-$320 Paraprofessionals $90-$190 Larry H. Lattig, a senior managing director of the firm, assured the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About IdleAire Knoxville, Tennessee-based IdleAire Technologies Corp. -- http://www.idleaire.com/-- is a privately held corporation founded in June 2000. It manufactures and services an advanced travel center electrification system providing heating, ventilation & air conditioning, Internet and other services to truck drivers parked at rest stops. The company delivers its services to long-haul drivers through its patented Advanced Travel Center Electrification(R) system, or ATE system, comprised of an in-cab service module connected to an external heating, ventilation and air conditioning unit, or HVAC unit, mounted on a truss structure above parking spaces. IdleAire has 131 locations in 34 states and employs about 1,200 people. The company filed chapter 11 petition on May 12, 2008 (Bankr. D. Del. Case No. 08-10960). Judge Kevin Gross presides over the case. Elihu Ezekiel Allinson, III, Esq., William A. Hazeltine, Esq., and William David Sullivan, Esq., at Sullivan Hazeltine Allinson, LLC represent the Debtor in its restructuring efforts. The Debtor selected Kurtzman Carson Consultants LLC as claim, noticing and balloting agent. The U.S. Trustee for Region 3 appointed three creditors to serve on an Official Committee of Unsecured Creditors. IDLEAIRE TECHNOLOGIES: Files Schedules of Assets and Liabilities ---------------------------------------------------------------- IdleAire Technologies Corporation delivered to the United States Bankruptcy Court for the District of Delaware its schedules of assets and liabilities disclosing: Name of Schedule Assets Liabilities ---------------- ------------ ----------- A. Real Property B. Personal Property $152,398,370 C. Property Claimed as Exempt D. Creditors Holding $324,371,898 Secured Claims E. Creditors Holding 4,678,012 Unsecured Priority Claims F. Creditors Holding 44,170,459 Unsecured Nonpriority Claims ------------ ----------- TOTAL $152,398,370 $373,220,369 About IdleAire Knoxville, Tennessee-based IdleAire Technologies Corp. -- http://www.idleaire.com/-- is a privately held corporation founded in June 2000. It manufactures and services an advanced travel center electrification system providing heating, ventilation & air conditioning, Internet and other services to truck drivers parked at rest stops. The company delivers its services to long-haul drivers through its patented Advanced Travel Center Electrification(R) system, or ATE system, comprised of an in-cab service module connected to an external heating, ventilation and air conditioning unit, or HVAC unit, mounted on a truss structure above parking spaces. IdleAire has 131 locations in 34 states and employs about 1,200 people. The company filed chapter 11 petition on May 12, 2008 (Bankr. D. Del. Case No. 08-10960). Judge Kevin Gross presides over the case. Elihu Ezekiel Allinson, III, Esq., William A. Hazeltine, Esq., and William David Sullivan, Esq., at Sullivan Hazeltine Allinson, LLC represent the Debtor in its restructuring efforts. The Debtor selected Kurtzman Carson Consultants LLC as claim, noticing and balloting agent. The U.S. Trustee for Region 3 appointed three creditors to serve on an Official Committee of Unsecured Creditors. INDIANA HEALTH: Fitch Holds 'BB+' Rating on $35.2MM Revenue Bonds ----------------------------------------------------------------- Fitch Ratings has affirmed the Indiana Health Facilities Financing Authority's outstanding $35.2 million revenue bonds at 'BB+'. The bonds are issued on behalf of Greenwood Village South. The Rating Outlook is Stable. Primary rating drivers behind the affirmation and Stable Outlook are based on the successful completion of GVS' independent living unit expansion project and its improved operating performance, which has lead to stronger balance sheet indicators since Fitch's downgrade of February 2006. The 2006 bond issuance principally funded the Arms Building Addition Project, which included a 26- unit, 42,900 square foot Independent Living Unit building and two covered parking structures. The project opened on-time and on- budget in the fall of 2007. The opening and occupancy of the addition and the subsequent receipt of advanced fees has rebuilt the balance sheet more in line with Fitch's 'BBB' category, reflected in stronger liquidity measures. One of the principle factors contributing to the downgrade in February 2006 was GVS' weak liquidity relative to expenses (93 days), which has dramatically improved to 238 days at April 30, 2007. Fitch expects GVS' liquidity indicators will continue to strengthen especially relative to Fitch's 'BBB' medians. Weak capital related ratios present some credit concern and were especially relevant to the downgrade. Although still light, GVS' debt service coverage has improved to 1.2 times through the 10-month interim period ending April 30, 2007, which is double the coverage demonstrated in fiscal 2007. Fitch expects the coverage to meet or exceed Fitch's 'BBB' median of 2.0x over the coming 12 months and sustain coverage in excess of 2.0x over the medium term. Another concern leading to the downgrade was weaker occupancy in the skilled nursing facility and assisted living units. At April 30, 2008, the occupancy in the SNF improved to 88% from 83% in FY 2006. Furthermore, the occupancy of the ALU's improved to 81% from 67% over the same time period. The occupancy in the ILU's has dipped some to 88% from 93%, which is an effect of the opening of the new addition and is expected to rise to historical levels over the near to medium term. The Stable Outlook is predicated on GVS continuing to have a high level of occupancy that will lead to continued improved operating performance thus further strengthening its balance indicators in- line with Fitch's 'BBB' medians over the near term. Positive rating pressure would be in order if GVS' liquidity indicators, its operating ratio, and its debt service coverage improve to and are maintained at levels equal to or better than Fitch's 'BBB' medians. GVS' credit strengths remain the solid occupancy in the independent living units, the presence of a reputable management company, and GVS' low cost positioning in a stable market. Occupancy rates of the independent living apartments have remained high, averaging 93.4% over the last four fiscal years and through April 30, 2008. The presence of Life Care Service Corp. as the facility's manager allows GVS access to a unique array of in-depth services that provide a significant value-added benefit to GVS and a distinct competitive advantage in the marketplace. Operating in a market with limited competition that exhibits sound socioeconomic characteristics, GVS' positioning as an affordable provider of senior housing lends support to future occupancy stability. Located in Greenwood, Indiana, approximately 11 miles south of downtown Indianapolis, GVS is a not-for-profit Type-B continuing care retirement community consisting of 261 independent living units, 658 assisted living units, and 137 skilled nursing beds. In fiscal 2007, GVS had total revenues of $16 million. GVS has covenanted to provide to the trustee and directly to bondholders unaudited quarterly financial statements within 45 days of each quarter-end and audited financial statements with 120 days of each fiscal year-end. Outstanding Debt: Indiana Health Facilities Financing Authority -- $22,552,255 variable-rate demand revenue bonds, series 2006A; -- $12,707,325 revenue refunding bonds, series 1998. INTERSTATE BAKERIES: Must File New Chapter 11 Plan by June 30 ------------------------------------------------------------- Interstate Bakeries Corp. and its debtor-affiliates have until June 30, 2008, to deliver a new reorganization plan to the U.S. Bankruptcy Court for the Western District of Missouri that should: (i) have the publicly announced support of its two primary unions -- the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and the International Brotherhood of Teamsters; and (ii) provide for the refinancing of the Second Amended and Restated Revolving Credit Agreement in full. Under IBC's Second Amended and Restated Credit Agreement, if IBC fails to file a new plan by the June 30 deadline, it must deliver to JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for the lenders, a schedule of proposed asset sales pursuant to Section 363 of the Bankruptcy Code. Jennifer Mann of The Kansas City Star says IBC and parties interested in investing in the company are continuing talks to iron out issues that would allow the bankruptcy process to move forward. To recall, entities that have expressed interest in IBC are Silver Point Financing LLC, Ripplewood Holdings, Yucaipa Cos. and Grupo Bimbo. Yucaipa and Grupo Bimbo have dropped out of the talks, says Ms. Mann, while talks between IBC and the Teamsters stopped in October and have not resumed. IBC filed a plan of reorganization in November 2007, which never moved forward due to the Teamsters' refusal to support the Plan. "[I]f IBC doesn't meet the stipulations of filing a plan of reorganization and garnering public support from its unions by Monday -- which is unlikely -- it's prepared to share a schedule with its lenders that lays out its assets, estimated sales dates and sales proceeds from proposals it solicited in April from interested parties," said IBC Spokeswoman Maya Pogoda, according to reports. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04 45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. Their exclusive period to file a chapter 11 plan expired on November 8. On Jan. 25, 2008, the Debtors filed their First Amended Plan and Disclosure Statement. On Jan. 30, 2008, the Debtors received Court approval of the First Amended Disclosure Statement. IBC confirmed that it has not received any qualifying alternative proposals for funding its plan of reorganization in accordance with the Court-approved alternative proposal procedures. As a result, no auction was held on Jan. 22, 2008, as would have been required under those procedures. The deadline for submission of alternative proposals was Jan. 15, 2008. (Interstate Bakeries Bankruptcy News, Issue No. 101; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/OR 215/945-7000). JAMES FALK: Case Summary & Largest Unsecured Creditor ----------------------------------------------------- Debtor: James Stewart Falk 235 Las Quebradas Lane Alamo, CA 94507 Bankruptcy Case No.: 08-43223 Chapter 11 Petition Date: June 23, 2008 Court: Northern District of California (Oakland) Judge: Randall J. Newsome Debtor's Counsel: Marc Voisenat, Esq. Law Offices of Marc Voisenat 1330 Broadway, Suite 1035 Oakland, CA 94612 Tel: (510) 272-9710 voisenat@msn.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Chase Credit Card Purchases $10,000 JEMM WHOLESALE: Secured Parties Offer to Sell Partnership Interest ------------------------------------------------------------------ Murray S. Peretz, as Trustee of the Murray S. Peretz Revocable Trust, and Monarch Construction Company, will offer by sale all right, title and interest of Daniel Goldman, in and to a one-third general interest in an oral partnership known as 373 Hazel Building Partnership. The Partnership owns a parcel of real estate commonly known as No. 3628, 4204 Palm Beach Boulevard, Fort Myers, Florida. However, the secured parties explain that the auction is not a sale of the premises but, rather, a sale of the pledged interest in the partnership. The secured parties relate that the pledged interest and other collateral was pledged pursuant to a certain May 11, 2007 security agreement by and among Goldman, JEMM Wholesale Meat Co. Inc., and the secured parties as security for the payment of amounts due from the Debtors pursuant to a series of promissory notes aggregating $1,050,000. Additional information can be found at: Joseph E. Cohen, Esq. Cohen & Krol Counsel for M. Peretz 105 West Madison Street Suite 1100 Chicago, IL 60602 Tel: (312) 368-0300 Fax: (312) 368-4559 JEMM Wholesale Meat Co. Inc. has been in the business of processing meat products for sale to wholesalers and retailers since 1959. JE MORROS: Case Summary & 14 Largest Unsecured Creditors ------------------------------------------------------- Debtor: J.E. Morros Construction and Development P.O. Box 799 Sparks, NV 89432 Bankruptcy Case No.: 08-51016 Type of Business: The Debtor is a construction company. Chapter 11 Petition Date: June 23, 2008 Court: District of Nevada (Reno) Judge: Gregg W. Zive Debtor's Counsel: Stephen R. Harris, Esq. Belding, Harris & Petroni, Ltd 417 W. Plumb Lane Reno, NV 89509 Tel: (775) 786-7600 Fax: (775) 786-7764 steve@renolaw.biz Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's list of its 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Citibank Goods/Services $28,260 P.O. Box 6417 The Lakes, NV 88901-6417 Fleet Heating & Air, Inc. Goods/Services $27,871 P.O. Box 51300 Sparks, NV 89435 Citibank Business Goods/Services $27,856 P.O. Box 44180 Jacksonville, FL 32231-4180 Precision Plumbing Goods/Services $25,112 Cemex Goods/Services $22,278 Young's Flooring Goods/Services $20,628 Laufen Tile Goods/Services $19,783 American Express Goods/Services $17,620 Creative Touch Interior Goods/Services $16,785 Valley Concrete Co. Goods/Services $15,750 J & L Windows Goods/Services $15,255 Gale Building Goods/Services $13,291 Spanish Springs Valley Goods/Services $12,149 Cashman Equipment Goods/Services $8,802 KIMBALL HILL: Halts Development in Three Chicago Subdivisions ------------------------------------------------------------- Kimball Hill Inc. and its debtor-affiliates have discontinued development works at three Chicago subdivisions in Shelburne Farms, Winfield; Settlers Ridge, Sugar Grove; and Ingham Park, Aurora, according to a report by Chicago Tribune. The company, though, intends to complete work on units that are already ordered by buyers, Chicago Tribune said. Town homes and condominiums sprawl over Shelburne Farm's 30 acres, while estate-style homes abound on Ingham Park' 875 acres. Settlers Ridge is a single family development with 542 acres still undeveloped, the newspaper related. About Kimball Hill Based in Rolling Meadow, Illinois, Kimball Hill Inc. -- http://www.kimballhillhomes.com/-- is one of the largest privately-owned homebuilders and one of the 30 largest homebuilders in the United States, as measured by home deliveries and revenues. The company designs, builds and markets single- family detached, single-family attached and multi-family homes. The company currently operate within 12 markets, including, among others, Chicago, Dallas, Ft. Worth, Houston, Las Vegas, Sacramento and Tampa, in five regions: Florida, the Midwest, Nevada, the Pacific Coast and Texas. Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11 protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08- 10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring efforts. The Debtors' consolidated financial condition as of Dec. 31, 2007 reflected total assets of $795,473,000 and total debts $631,867,000. (Kimball Hill Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). LEAP WIRELESS: Posts $18.1 Million Net Loss in 2008 First Quarter ----------------------------------------------------------------- Leap Wireless International Inc. reported a net loss of $18.1 million on total revenues of $468.4 million for the first quarter ended March 31, 2008, compared with a net loss of $24.2 million on total revenues of $393.4 million in the same period last year. "The company had a successful first quarter as the momentum in customer growth we experienced in the fourth quarter continued into 2008 and helped deliver 230,000 net customer additions spread broadly across our business," said Doug Hutcheson, Leap's chief executive officer, president and acting chief financial officer. "We are also pleased with the $135.0 million of adjusted OIBDA generated by our existing markets in the first quarter, an increase of 80 percent over the prior year quarter, even while we continued to absorb costs associated with our expansion activities. "Our consolidated adjusted OIBDA results reflect $16.3 million of spending for our new initiatives, including our plans to launch approximately 8 million additional covered population and potential customers (POPs) by mid-2008, which includes the markets we recently launched in Oklahoma and Texas, and our plans to expand our mobile broadband product offering following the successful introduction of our EvDO Rev A tri-band USB broadband device. We are pleased with the significant progress we are making with both of these new initiatives." Adjusted OIBDA is a non-GAAP financial measure defined as operating income (loss) before depreciation and amortization, adjusted to exclude the effects of: gain/loss on sale/disposal of assets; impairment of assets; and share-based compensation expense (benefit). Service revenues increased $77.2 million, or 24.0%, to $398.9 million for the three months ended March 31, 2008 compared to the corresponding period of the prior year. This increase resulted primarily from a 23.5% increase in average total customers and a 0.4% increase in average monthly revenues per customer. Equipment revenues decreased $2.3 million, or 3.2%, for the three months ended March 31, 2008, compared to the corresponding period of the prior year. Total operating expenses increased from $395.9 million for the three months ended March 31, 2007 to $442.0 million for the three months ended March 31, 2008. Interest expense increased from $26.5 million for the three months ended March 31, 2007, to $33.4 million for the three months ended March 31, 2008. Also, in September 2007, the compnya changed its tax accounting method for amortizing wireless licenses, contributing substantially to its income tax expense of $9.7 million for the three months ended March 31, 2008, compared to $2.4 million for the three months ended March 31, 2007. Liquidity and Capital Resources At March 31, 2008, the company had a total of $508.7 million in unrestricted cash, cash equivalents and short-term investments. In addition, $70.0 million in deposits that were held by the Federal Communications Commission (FCC) as of March 31, 2008, were returned to the company in April 2008. The company generated $135.7 million of net cash from operating activities during the three months ended March 31, 2008, compared with $5.1 million during the three months ended March 31, 2007. The company's outstanding indebtedness under its senior secured credit agreement, or the Credit Agreement, was $884.3 million as of March 31, 2008. In addition to the Credit Agreement, the company also had $1.1 billion in unsecured senior notes due 2014 outstanding as of March 31, 2008. The Credit Agreement includes a $200 million revolving credit facility, which was undrawn as of March 31, 2008. Balance Sheet At March 31, 2008, the company's consolidated balance sheet showed $4.5 billion in total assets, $2.7 billion in total liabilities, $51.5 million in minority interests, and $1.7 billion 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?2ece About Leap Wireless Based in San Diego, Leap Wireless International Inc. (Nasdaq: LEAP) -- http://www.leapwireless.com/-- is a leading provider of innovative and value-driven wireless communications services. With the value of unlimited wireless services as the foundation of its business, Leap pioneered its Cricket(R) service. The company and its joint ventures now operate in 23 states and hold licenses in 35 of the top 50 U.S. markets. Through its affordable, flat- rate service plans, Cricket offers customers a choice of unlimited voice, text, data and mobile Web services. * * * As reported in the Troubled Company Reporter on June 24, 2008, Moody's Investors Service assigned a Caa1 rating to Leap Wireless International Inc.'s $200 million convertible notes, due 2014. Moody's also assigned a B2 corporate family rating to Leap Wireless International Inc. Rating outlook is Stable. LOCAL INSIGHT: S&P's Rtngs. Unmoved by Statement Filing Default --------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Local Insight Regatta Holdings Inc. (B/Stable/--) are not currently affected by the company's notification to its banks that it does not anticipate filing audited financial statements for the Berry Co.'s Independent Line of Business in the time frame required under the credit agreement. While the failure to file audited financials could result in a technical default under Local Insight Regatta's credit agreement, S&P expect the issue to be resolved in a timely manner such that a technical default will not be triggered. Over the next few weeks, S&P will reach out to management to monitor the status of the company's progress toward filing the statements. If it does not appear that the company is making sufficient progress toward avoiding a technical default, ratings will likely be placed on CreditWatch with negative implications. LUMINENT MORTGAGE: Settles Repurchase Financing with Third Parties ------------------------------------------------------------------ Luminent Mortgage Capital, Inc. eliminated all of its repurchase agreement financing with non-related third-parties. The balance of repurchase agreement financing with non-related third-parties was $2.8 billion at July 31, 2007. "Although we still have work to do to improve our liquidity, the settlement of our repurchase agreement financing with non-related parties is a significant milestone for Luminent," Zachary H Pashel, Chief Executive Officer, said. "We continue to work toward resolution of the liquidity issues that resulted from the effects of the credit markets over the past year and the reduction in the value of our mortgage asset portfolio. As we move forward, we are focused on our fee-based asset management initiatives to take advantage of the opportunities the mortgage market is presenting." During the second quarter of fiscal 2008, Luminent settled $182.3 million of repurchase agreement financing with parties other than Arco Capital Corporation or its affiliates. Luminent accomplished the settlements by selling $66.9 million of mortgage- backed securities and used the proceeds from the sales to settle obligations. In addition, Luminent transferred $25.5 million of mortgage-backed securities to repurchase agreement counterparties to settle obligations, paid $19.1 million in cash and entered into term note agreements totaling $37.0 million to repay the remaining repurchase agreement obligations. The term notes are to be repaid in periods ranging from six months to five years commencing June 2008. The attached schedule of Supplemental Financial Information contains information on the repayment requirements of the term notes. The settlements of the repurchase agreement obligations included the sale or transfer of bonds Luminent had retained from its own securitizations. The attached schedule of Supplemental Financial Information contains information on the bonds Luminent continues to retain from its own securitizations and bonds that were purchased from third parties that Luminent continues to hold in its portfolio as of June 16, 2008. As of June 16, 2008, Luminent had $182.6 million of repurchase agreement financing with an affiliate of Arco Capital Corporation Ltd. The indenture applicable to Luminent's 8.125% Convertible Senior Notes due 2027, obligated Luminent to make a semi-annual interest payment of approximately $3.9 million to note holders on June 2, 2008. Luminent did not make this payment and a payment default under the indenture has occurred. If Luminent is unable to meet the obligation before July 2, 2008 an event of default under the indenture may be declared. Luminent previously disclosed its intention to convert its corporate structure from a real estate investment trust, or REIT, to a publicly traded partnership, or PTP. The PTP structure will provide more flexibility for the company to earn fee-based income by providing investment advisory and investment management services to others, which was not available to it under the restrictive REIT tax rules. "Luminent has been working hard over the past year to address business and liquidity issues created by the state of the credit markets that affected the majority of companies in the mortgage industry," Karen Chang, Chief Financial Officer, said. "We are pleased to report our progress to date and we plan to make additional interim reports to investors as significant events occur." Headquartered in San Francisco, Luminent Mortgage Capital Inc. (OTC: LUMC) -- http://www.luminentcapital.com/-- is a real estate investment trust or REIT, which, together with its subsidiaries, has invested in two core mortgage investment strategies. Under its Residential Mortgage Credit strategy, the company invests in mortgage loans purchased from selected high-quality providers within certain established criteria as well as subordinated mortgage-backed securities and other asset-backed securities that have credit ratings below AAA. Under its Spread strategy, the company invests primarily in U.S. agency and other highly-rated single-family, adjustable-rate and hybrid adjustable-rate mortgage-backed securities. On March 28, 2008, the company disclosed its intention, subject to shareholder approval, to restructure the company from a REIT to a publicly-traded partnership or PTP. Going Concern Doubt Grant Thornton LLP, in Philadelphia, expressed substantial doubt about Luminent Mortgage Capital Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. Grant Thornton said Luminent Mortgage has lost $721.0 million for the year ended Dec. 31, 2007, which included $481.7 million in impairment losses on mortgage-backed securities. The company also recorded $21.3 million in corporate, state and U.S. federal income taxes due to its inability to meet the threshold for tax benefit recognition as it related to its qualification as a REIT. As a result of these losses the company had a stockholders' deficit of $223.2 million at March 31, 2008. LUMINENT MORTGAGE TRUST: Moody's Cuts Ratings of 52 Tranches ------------------------------------------------------------ Moody's Investors Service has downgraded the ratings of 52 tranches from 9 transactions issued by Luminent Mortgage Trust. Seventeen tranches remain on review for possible further downgrade. Additionally, 16 tranches were placed on review for possible downgrade The collateral backing these transactions consists primarily of first-lien, adjustable-rate, negatively amortizing, and hybrid 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: Luminent Mortgage Trust 2006-1 -- 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 B2 Issuer: Luminent Mortgage Trust 2006-2 -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to B2 from Aa2 -- Cl. B-2, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from B1 Issuer: Luminent Mortgage Trust 2006-3 -- Cl. II-1A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. II-1X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. II-2X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-3A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. II-3X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-M-1, Downgraded to Aa2 from Aa1 -- Cl. I-M-2, Downgraded to Ba1 from Aa1 -- Cl. I-M-3, Downgraded to B2 from Aa1 -- Cl. I-B-1, Downgraded to B3 from Aa2; 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 Ca from Baa3 -- Cl. I-B-4, Downgraded to Ca from Ba2 Issuer: Luminent Mortgage Trust 2006-4 -- Cl. A-1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Ba1 from Aa2 -- Cl. B-2, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from Ba1 -- Cl. B-4, Downgraded to Ca from B3 Issuer: Luminent Mortgage Trust 2006-5 -- Cl. A1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to B2 from Aa1 -- 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: Luminent Mortgage Trust 2006-6 -- Cl. B-1, Downgraded to A1 from Aa1 -- Cl. B-2, Downgraded to Ba1 from Aa1 -- Cl. B-3, Downgraded to B1 from Aa2 -- Cl. B-4, Downgraded to B2 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 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 Ca from Ba1 Issuer: Luminent Mortgage Trust 2006-7 -- Cl. II-B-5, Downgraded to A2 from A1 -- Cl. II-B-6, Downgraded to Baa3 from A2 -- Cl. II-B-7, Downgraded to Ba3 from Baa1 -- Cl. II-B-8, Downgraded to B1 from Baa2; Placed Under Review for further Possible Downgrade Issuer: Luminent Mortgage Trust 2007-1 -- Cl. I-B-1, Downgraded to A3 from Aa2 -- Cl. I-B-2, Downgraded to Ba3 from A2 -- Cl. I-B-3, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. I-B-4, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. II-B-2, Downgraded to Aa2 from Aa1 -- Cl. II-B-3, Downgraded to A2 from Aa2 -- Cl. II-B-4, Downgraded to Ba3 from A3 -- Cl. II-B-5, Downgraded to B1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. II-B-6, Downgraded to Ca from Ba1 Issuer: Luminent Mortgage Trust 2007-2 -- Cl. I-B-1, Downgraded to Aa3 from Aa2 -- Cl. I-B-2, Downgraded to Baa1 from A1 -- Cl. I-B-3, Downgraded to Ba3 from A3 -- Cl. I-B-4, Downgraded to B2 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. II-B-2, Downgraded to A1 from Aa1 -- Cl. II-B-3, Downgraded to Baa2 from Aa2 -- Cl. II-B-4, Downgraded to Ba3 from Aa3 -- Cl. II-B-5, Downgraded to B1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. II-B-6, Downgraded to Caa1 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. II-B-7, Downgraded to Ca from Ba3 MBIA INC: Moody's Downgrade Sparks Sale of Municipal Bonds ---------------------------------------------------------- MBIA Inc. plans to sell municipal bonds to raise cash following the downgrade by Moody's Investors Service of the financial strength rating of MBIA Insurance Corporation, The Wall Street Journal, citing an unnamed source, reports. As disclosed in the Troubled Company Reporter on June 20, 2008, Moody's downgraded to A2, from Aaa, the insurance financial strength ratings of MBIA Insurance Corporation and its affiliated insurance operating companies. In the same rating action, Moody's also downgraded the surplus note rating of MBIA Insurance Corporation to Baa1, from Aa2, and the senior debt rating of the holding company, MBIA, Inc. to Baa2, from Aa3. According to Moody's, the rating action reflects MBIA's limited financial flexibility and impaired franchise, as well as the substantial risk within its portfolio of insured exposures and a movement toward more aggressive capital management within the group. The rating agency said that while the group remains strongly capitalized, estimated to be consistent with a Aa level rating, and benefits from substantial embedded earnings in its existing insurance portfolio, these other business factors led to the lower rating outcome. WSJ relates that due to the recent downgrade, MBIA is expecting $2.9 billion in termination payments, and will likely to post an additional $4.5 billion in collateral under Guaranteed Investment Contracts. MBIA, however, assures that it has $4 billion in cash and liquid short-term investments, and $10.2 billion in other securities, according to WSJ. It also has $1 billion of "eligible collateral" on hand. WSJ observes that MBIA shares was down 22 cents, or 5%, at $4.17 on Friday on the New York Stock Exchange. Headquartered in Armonk, New York, MBIA Inc. (NYSE:MBI) -- http://www.mbia.com-- provides financial guarantee insurance, investment management services, and municipal and other servicesto public finance and structured finance clients on a globalbasis. The company conducts its financial guarantee business through its wholly owned subsidiary, MBIA Insurance Corporation and provides investment management products and financial services through its wholly owned subsidiary MBIA Asset Management, LLC. MBIA manages its activities primarily through two principal business operations: insurance and investment management services. In February 2007, MBIA Corp. formed a new subsidiary, MBIA Mexico, S.A. de C.V. During the year ended Dec. 31, 2006, MBIA discontinued its municipal services operations. These operations included MBIA MuniServices Company. On Dec. 5, 2006, the company completed the sale of MBIA MuniServices Company. MBIA INC: Fitch Withdraws All Outstanding Ratings ------------------------------------------------- Fitch Ratings is withdrawing all of its outstanding ratings on MBIA Inc., MBIA Insurance Corp., and other related entities. Also, Fitch is withdrawing all of its outstanding ratings on Ambac Financial Group, Inc., Ambac Assurance Corp. and other related entities. In addition, Fitch will be withdrawing all ratings based on insurance policies from both MBIA and Ambac's insurance subsidiaries. Fitch will list ratings of primary obligors for bonds where Fitch maintain coverage. The action follows decisions by MBIA and Ambac's managements to cease providing substantive non-public portfolio information used in Fitch's capital analysis model, to discontinue previous full interactive dialogue with Fitch analysts, and to request withdrawal of Fitch's ratings. Many key credit issues have developed recently prompting Fitch's decision to withdraw MBIA and Ambac's ratings at this time. Negative rating actions by S&P and Moody's impact the companies' business prospects and the companies' reactive strategic and capital management planning creates a volatile credit variable. In addition, credit risk developments continue and Fitch's ability to analyze credit strength needs to shift to utilizing public information only. Fitch will consider reinstating coverage and assigning new ratings based only on public information if there is continuing investor interest. In the interim, Fitch may continue to offer commentary and research on developing credit events at MBIA and Ambac. These ratings are being withdrawn by Fitch: MBIA Insurance Corp. MBIA Insurance Corp. of Illinois MBIA UK Insurance Limited MBIA Assurance SA MBIA Mexico SA de CV Capital Markets Assurance Corp. -- Insurer Financial Strength 'AA'. The Rating Outlook was Negative. MBIA Insurance Corp. -- Subordinated debt rating 'A+'; -- $1 billion 14% surplus notes due Jan. 15, 2033 'A+'. MBIA Inc. -- Long-term rating 'A'; -- $75 million 7% senior unsecured debentures due Dec. 15, 2025 'A'; -- $100 million 7.17% senior unsecured debentures due July 15, 2027 'A'; -- $150 million 6.63% senior unsecured debentures due Oct.1, 2028 'A'; -- $200 million 6.40% senior unsecured debt due Aug. 15, 2022 'A'; -- $175 million 4.50% senior unsecured notes due July 15, 2010 'A'; -- $100 million 9.38% senior unsecured notes due Feb.15, 2011 'A'; -- $350 million 5.70% senior unsecured notes due Dec. 1, 2034 'A'. MBIA Mexico SA de CV -- National insurer financial strength at 'AAA (mex)'. The Rating Outlook for MBIA Mexico was Stable Ambac Assurance Corp. Ambac Assurance UK Ltd. Connie Lee Insurance Co. -- Insurer financial strength 'AA'. The Rating Outlook was Negative Ambac Financial Group, Inc. -- Long-term rating 'A'; -- $400 million 5.95% senior unsecured notes due Dec. 5, 2035 'A'; -- $142.5 million 9.375% senior unsecured debentures due Aug. 1, 2011 'A'; -- $75 million 7.5% senior unsecured debentures due May 1, 2023 'A'; -- $400 million subordinated notes due Feb. 7, 2087 'A-'. MEDCOM USA INC: March 31 Balance Sheet Upside-Down by $5,053,710 ---------------------------------------------------------------- MedCom USA Inc.'s consolidated balance sheet at March 31, 2008, showed $1,702,274 in total assets and $6,755,984 in total liabilities, resulting in a $5,053,710 total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $774,648 in total current assets available to pay $3,473,365 in total current liabilities. The company reported a net loss of $92,890 on revenues of $679,326 for the third quarter ended March 31, 2008, compared with a net loss of $645,677 on revenues of $704,545 in the same period ended March 31, 2007. The decrease in net loss is due to the reduction in revenue, sales force, royalty expense, commissions, and reduction in operations in the company's New York facility. 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?2ec4 Going Concern Doubt Jewett, Schwartz, Wolfe & Associates, in Hollywood, Florida., expressed substantial doubt about MedCom USA 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. During the three months ended March 31, 2008, the company incurred a net loss of $92,890 and has an accumulated deficit of $90,551,493. Further, the company has inadequate working capital to maintain or develop its operations, and is dependent upon funds from private investors and the support of certain stockholders. About MedCom USA Based in Scottsdale, Ariz., MedCom USA Inc. (OTC BB: EMED) -- http://www.medcomusa.com/-- provides technology-based solutions for the healthcare industry in the United States. Its solutions enable the users to collect, use, analyze, and disseminate data from payers, healthcare providers, and patients. The company offers MedCom system that operates through a point-of-sale terminal or Web portal, which consolidates insurance eligibility verification; processes medical claims; and monitors referrals. This system also allows customers to process their medical claims through an online portal. In addition, Medcom USA offers a combination of services for the collection and approval of credit/debit card payments along with the personal check guarantee from financial institutions. The company was founded in 1991 as Sims Communications Inc. and changed its name to Medcom USA Incorporated in 1999. MERRILL LYNCH: Moody's Affirms B2 and B3 Ratings on Certificates ---------------------------------------------------------------- Moody's Investors Service upgraded the ratings of four classes and affirmed seven classes of Merrill Lynch Mortgage Loans, Inc., Commercial Mortgage Pass-Through Certificates, Series 2000-CANADA 4 as: -- Class A-1, $19,063,714, affirmed at Aaa -- Class A-2, $149,624,000, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $8,628,000, affirmed at Aaa -- Class C, $8,629,000, upgraded to Aaa from Aa2 -- Class D, $12,224,000, upgraded to A2 from Baa1 -- Class E, $1,438,000, upgraded to A3 from Baa2 -- Class F, $6,471,000, upgraded to Ba1 from Ba2 -- Class G, $2,158,000, affirmed at Ba3 -- Class H, $3,595,000, affirmed at B2 -- Class J, $2,157,000, affirmed at B3 Moody's upgraded the ratings of Classes C, D, E and F due to increased defeasance and credit support and overall stable pool performance. As of the June 15, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 24.4% to $217.6 million from $287.6 million at securitization. The Certificates are collateralized by 55 mortgage loans ranging in size from less than 1.0% to 11.9% of the pool, with the top 10 non-defeased loans representing 42.2% of the pool. Fourteen loans, representing 17.5% of the pool, have defeased and are collateralized with Canadian Government securities. There have been no losses since securitization and currently there are no loans in special servicing. Five loans, representing 14.2% 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's 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 54.0% of the pool. Moody's weighted average loan to value ratio is 66.4% compared to 66.2% at Moody's last full review in August 2006 and 76.8% at securitization. The three largest loan exposures represent 25.3% of the pool. The largest exposure is the Royal Host Portfolio Loan ($25.9 million -- 11.9%), which is secured by 11 limited service hotels located in six provinces. The portfolio totals 999 rooms. Seven of the hotels operate under the Comfort Inn & Suites franchise and the remaining four hotels operate as Travelodge. The loan is full recourse and amortizes on a 20-year schedule. Moody's LTV is 54.5% compared to 55.6% at last review. The second largest loan is the Charlottetown Mall Loan ($17.0 million - 7.8%), which is secured by a 389,000 square foot regional mall located in Charlottetown, Prince Edward Island. The property was 99.3% occupied as of December 2007 compared to 97.0% at last review. The property is anchored by Zellers, which occupies approximately 32.0% of the property through June 2019. The loan is full recourse to RioCan Holdings Inc., Canada's largest REIT. Moody's LTV is 53.6% compared to 55.2% at last review. The third largest loan is the Airport Place Loan ($12.2 million -- 5.6%), which is secured by a 679,000 square foot industrial property located in Winnipeg, Manitoba. The property was 86.4% leased as of March 2008 compared to 97.0% at securitization. The largest tenant is Bison Transport Inc., which occupies 35.0% of the premises through July 2013. Property performance has improved since last review but is lower than at securitization. The loan is on the master servicer's watchlist due to a low debt service coverage ratio. Moody's LTV is 89.1% compared to 94.2% at last review. MICHAEL REIMER: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Michael Reimer 11890 Haegers Bend Road Barrington Hills, IL 60010 Bankruptcy Case No.: 08-71988 Chapter 11 Petition Date: June 24, 2008 Court: Northern District of Illinois (Rockford) Judge: Manuel Barbosa Debtor's Counsel: Karen J. Porter, Esq. (kjplawnet@aol.com) Porter Law Network 11 East Adams St Ste 906 Chicago, IL 60603 Tel: (312) 675-0665 Fax: (312) 893-7370 Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 List of Creditors: Creditor Nature of Claim Claim Amount -------- --------------- ------------ Eastern Savings Bank Secured $780,000 11350 McCormick Road Suite 200 Hunt Valley MD 21031 Kallahan Marketing Group Secured $430,000 Fisher & Shapiro, LLC 4201 Lake Cook Road Northbrook Il 60062 Capital Providers, LLC Secured $240,000 c/o David Dordek 8424 Skokie Blvd, Suite 200 Skokie, Il 60077 Internal Revenue Service Unsecured $390,000 P.O. Box 21126 Philadelphia PA 19114 John J. Bohntinsky Unsecured $3,500 355 Willowbrook Lane Willowbrook Il 60527 MINNEAPOLIS STAR: Asks Forbearance from Creditors ------------------------------------------------- Zachery Kouwe of the New York Post reports that Minneapolis Star Tribune, known locally as The Strib, has asked creditors to delay its debt payments for six months. Its owner Avista Capital Partners has hired the Blackstone Group to negotiate with creditors, the report said. Sources say creditors want the owners to inject $50 million of new equity into the company before it agrees on anything, according to the report. The Strib is planning to save $20 million in expenses by June 30, partly by cutting $2.5 million of its newsroom budget. The amount is 10 percent of the newsroom budget. Avista Capital bought The Strib for $530 million about 15 months ago. Avista told its investors last month it has written down its $100 million equity investment in The Strib by 75 percent. The Strib has disputed published reports that it is near bankruptcy. The Star Tribune Company -- http://www.startribune.com/-- is a newspaper company serving the Minneapolis-St. Paul area and readers around the state of Minnesota. Its Star Tribune newspaper boasts a weekday circulation of about 320,000 and is one of the nation's top 20 daily metropolitan newspapers. The company also publishes news on its Web site. In addition to its news operations, Star Tribune Company provides direct marketing services and publishes niche publications. MOBILE MINI: S&P Keeps Ratings Under Neg Watch on Pending Merger ---------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Mobile Mini Inc. remain on CreditWatch with negative implications, where they were placed on Feb. 22, 2008. The CreditWatch placement was based on the Phoenix-based company's pending acquisition merger with its major competitor, Mobile Storage Group Inc. (B+/Watch Pos/--). Upon completion of the merger, S&P expect to lower the corporate credit rating on Mobile Mini to 'BB-' from 'BB' and assign a stable outlook. The unsecured debt rating will be lowered to either 'B+' or 'B' from 'BB-'. The merger was expected to occur on June 27, 2008, following the shareholder vote. Mobile Mini would assume approximately $535 million of Mobile Storage debt and acquire all the outstanding shares of Mobile Storage for $12.5 million of cash and shares of newly issued convertible preferred stock with a liquidation preference of $154 million, for a total consideration of approximately $701.5 million. Mobile Mini would finance the merger with approximately $602 million of borrowings under a new $1 billion secured asset-based loan revolving credit facility. "The $559 million of incremental debt will result in a weaker financial profile for Mobile Mini, which has historically had a very strong financial profile for its rating," said Standard & Poor's credit analyst Betsy Snyder. S&P expect its credit ratios to weaken significantly: EBITDA interest coverage would decline to about 3x from 5x, funds from operations to debt would decline to the low-teen percent area from the mid-20% area, debt to capital would increase to the high-60% area from the high-40% area, and debt to EBITDA would increase to the mid-5x area from about 3x. However, the merger would solidify the company's leading market position in portable storage containers in the U.S. and U.K. In addition, the combination of the two fleets should result in operating synergies of approximately $25 million. The combined entity also leases mobile offices, although its market position is substantially less than that of its major competitors in this segment. Although the leasing of portable storage units and mobile offices is a narrow business segment, it is relatively recession-resistant and typically generates a stable and predictable stream of revenues and cash flow. The company will also benefit from relatively strong liquidity, with no debt maturities through 2012. Most capital spending is discretionary, with free cash flow available for debt reduction. NOWAUTO GROUP: March 31 Balance Sheet Upside-Down by $928,595 ------------------------------------------------------------- NowAuto Group Inc.'s consolidated balance sheet at March 31, 2008, showed $7,559,489 in total assets and $8,488,084 in total liabilities, resulting in a $928,595 total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $3,373,924 in total current assets available to pay $3,611,848 in total current liabilities. The company reported a net loss of $344,482 on revenue of $1,300,443 for the third quarter ended March 31, 2008, compared with a net loss of $747,121 on revenue of $1,662,846 in the same period ended March 31, 2007. The switch from sales to leases adversely impacted reported revenue as an increased portion of lease revenue is recorded as deferred revenue. In addition, the company experienced lower volume during the quarter due to significantly lower contract purchases, caused by lower credit quality and sales volume. 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?2e73 Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 5, 2007, Moore & Associates Chartered, in Las Vegas, Nevada, expressed substantial doubt about NowAuto Group Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended June 30, 2007, and 2006. The auditing firm pointed to the company's recurring losses. About NowAuto Group Based in Tempe, Ariz., NowAuto Group Inc. (OTC BB: NAUG) -- http://www.nowauto.com/-- operates three buy-here-pay-here used vehicle dealerships in Arizona. The company manages all of its installment finance contracts and purchases installment finance contracts from a select number of other independent used vehicle dealerships. Through its subsidiary, NavicomGPS Inc., the company markets GPS tracking devices, primarily to independent used vehicle dealerships. OSYKA CORP: Files Chapter 11 Plan and Disclosure Statement ---------------------------------------------------------- Osyka Corporation and Osyka Permian LLC delivered to the United States Bankruptcy Court for the Southern District of Texas, Houston Division, a joint Chapter 11 plan and disclosure statement explaining that plan. A hearing is set for July 17, 2008, at 1:30 p.m., to consider the adequacy of the Debtors' disclosure statement. Overview of the Plan The plan contemplates the reduction of the Debtors' overall debt and payment obligations by at least $82 million associated with corporate liabilities in order to realign their capital structure. The plan further provides more liquidity to the Debtors to continue to operate their business as a viable economic entity. Moreover, the plan is proposed in connection to a settlement agreement with J. Aron & Company and Texas Capital Bank, which provides the allocation of a minimum "purchase price" of at least $67,000,000. As reported in the Troubled Company Reporter on April 28, 2008, the Court approved bid procedures for the sale of all of the Debtors' assets. All bids are required to be delivered by July 3, 2008, followed by an auction on July 10, 2008. A sale hearing is set for July 17, 2008. A full-text copy of the Settlement Agreement is available for free at http://ResearchArchives.com/t/s?2a74 The plan classifies claims against and interest in the Debtors in nine classes. The classification of treatments of claims and interests are: Treatment of Claims and Interests Type Estimated Estimated Class of Claims Treatment Amount Recovery ----- --------- --------- --------- --------- unclassified administrative $986,425 100% claims unclassified priority tax $1,148 100% claims A allowed other unimpaired $0 100% priority claims B other secured impaired $0 100% claims C allowed unimpaired $1,000,000 100% prepetition bank credit agreement claims D allowed impaired $61,246,978 100% prepetition junior credit agreement claims E allowed ISDA impaired $21,113,672 100% claims F warrants impaired $722,104 0% G allowed impaired $972,120 100% general unsecured claims H allowed impaired $1,500,000 0% intercompany claims I allowed equity unimpaired 100% interests The plan indicates that each estimated recovery is projected on assumption that the Debtors' total cash balances and cash collateral account on the plan's effective date exceeds $3,800,000, and that Class G claims do not surpass the Debtors' estimated amount of $974,120. As of June 13, 2008, the Debtors have $4,719,873 in cash. Class A allowed other priority claims will be paid in full in cash in an amount equal to the allowed priority claims after the distribution date. All allowed other priority claims, which are not due and payable by the plan's effective date, will be paid by the Debtors in the ordinary course of business. Unless agreed to a different treatment, each holder of Class B other secured claims will be paid in full, either (i) cash in the amount equal to 100% of the unpaid amount of the allowed other secured claim, (ii) the proceeds oft he sale of the collateral securing the claim, (iii) the collateral securing claim, (iv) a note with annual periodic cash payments of at least four years, (v) treatment that leaves unaltered the legal, equitable, and contractual rights to the holder is entitled, or (vi) other distribution as necessary to satisfy the requirements of the U.S. Bankruptcy Code. Holders of class E ISDA and class D allowed prepetition junior credit agreement claims are entitled to get their pro rata share of (i) 100% of equity in the reorganized Debtors and (ii) all of the excess cash collateral at least $200,000. However, in the event the Debtor consummate a sale to another party, holders will receive a pro rata share of (i) the applicable portion of the purchase price, (ii) 50% of excess cash collateral from $500,000 to $1,000,000, if any, and (iii) 10% of excess cash collateral at least $1 million, if any. The ISDA claim arose under a certain agreement dated May 10, 2006, entered between the Debtors' and J. Aron. Each holder of class G allowed general unsecured claims will get its pro rata share of (i) $200,000 in excess cash collateral and (ii) 50% of the net recovery, receive from the BIP Holdings LLC litigation, if any, after all allowed claims are paid. The BIP litigation is the causes of action arose out of the assignment of two sale and conveyance in 2006, between the Debtors and BIP, with respect to the sale of certain oil and gas leases and real property. Holders of class H allowed intercompany claims and class F warrant will not receive any distribution under the plan. All warrants will be extinguished as of the plan's effective date. Class I allowed equity interests of the Debtors will not be modified or impaired, unless Debtors and any interest holder agreed to in writing. A full-text copy of the disclosure statement is available for free at http://ResearchArchives.com/t/s?2eca A full-text copy of the Chapter 11 plan of reorganization is available for free at http://ResearchArchives.com/t/s?2ecb About Osyka Corporation Headquartered in Houston, Texas, Osyka Corporation -- http://www.osyka.com/-- is an oil and gas company. The company filed for Chapter 11 protection on March 3, 2008 (Bankr. S.D. Tex. Case No.08-31467). H. Rey Stroube, III, Esq., represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case to date. As reported in the Troubled Company Reporter on June 18, 2008, the Debtors' summary of schedules showed total assets of $109,754,313 and total debts of $83,792,755. OTC INT'L: Gets Court OK to Sell Assets to Dialuck for $23 Mil. --------------------------------------------------------------- The Hon. Arthur J. Gonzalez of the United States Bankruptcy Court for the Southern District of New York approved the sale of substantially all of the assets of OTC International, Ltd. to Dialuck Corporation for $23,000,000, free and clear of liens and interests, pursuant to an asset purchase agreement dated May 1, 2008. After due deliberation, Judge Gonzalez held that the sale is in the best interests of the Debtor and its creditors as well as other parties-in-interest. The assets is comprised of the Debtor's (i) business operations, active inventory and memo goods, (ii) all jewelry inventory including any related intellectual property specific to certain branded inventory, (iii) loose diamond inventory, (iv) business operations of Netaya Corporation, an affiliate of the Debtor, (v) all general accounts receivable, (vi) all leases and executory contracts. The sale is expected to close by July 15, 2008. A full-text copy of the asset purchase agreement is available for free at http://ResearchArchives.com/t/s?2ecf About OTC International Long Island City, New York, OTC International, Ltd. -- http://www.otcinternational.com/-- manufactures jewelry and precious metal, specializing in diamonds, gold, silver, gemstones, cameos, and watches. The company filed for Chapter 11 protection on April 3, 2008 (Bankr. S.D.N.Y. Case No. 08-11181). Ian R. Winters, Esq., and Patrick J. Orr, Esq., at Klestadt & Winters LLP, represent the Debtor in its restructuring efforts. The Debtor selected The Garden City Group Inc. as claims and noticing agent. The U.S. Trustee for Region 2 appointed creditors to serve on an Official Committee of Unsecured Creditors. Silverman Perlstein & Acampora LLP represents the Committee as its counsel in this case. Howard Fielstein, CPA, a member of Margolin Winer & Evens LLP, will serve as Chapter 11 examiner of the Debtor's case. The Debtor's summary of schedules listed total assets of $16,362,907 and total debts of $74,024,680. All assets are listed at net book value excluding metal inventory on consigment of $29,261,970. PEOPLES COMMUNITY: Donald Hawke Rejoins Board of Directors ---------------------------------------------------------- Peoples Community Bancorp, Inc. disclosed that Mr. Donald L. Hawke has been reappointed to serve on the board of directors. He will join the board of directors as a member of the class of directors whose terms expire in 2010. On June 16, 2008, the company received notification from the Nasdaq Listings Qualifications Department indicating that the company was not in compliance with Nasdaq's independent director requirement as set forth in Marketplace Rule 4350 due to the expiration of Mr. Hawke's term as a director at the company's annual meeting held on May 28, 2008. Based upon Mr. Hawke's reappointment to serve on the board of directors, Nasdaq confirmed in a letter dated June 19, 2008 that the company was now in compliance with all Nasdaq Marketplace Rules. Headquartered in West Chester, Ohio, Peoples Community Bancorp Inc. (NasdaqGM: PCBI) -- http://www.pcbionline.com/-- is the holding company for Peoples Community Bank, a federally chartered savings bank with 19 full service offices in Butler, Warren and Hamilton counties in southwestern Ohio and Dearborn and Ohio counties in southeastern Indiana. Going Concern Doubt As reported in the Troubled Company Reporter on May 9, 2008, Cincinnati-based BKD, LLP, expressed substantial doubt about Peoples Community Bancorp Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The report of the company's independent registered public accounting firm contained an explanatory paragraph as to the company's ability to continue as a going concern primarily due to the company's current lack of liquidity to repay its $17.5 million obligation under an outstanding line of credit due June 30, 2008. On April 2, 2008, the company and Peoples Community Bank each consented to the terms of Cease and Desist Orders issued by the Office of Thrift Supervision (OTS). The Orders prohibit Peoples Community Bank from paying cash dividends to the company without the prior consent of the OTS and the company will only be able to rely upon existing cash and cash equivalents as sources of its liquidity. Without the ability to rely on dividends from Peoples Community Bank, the company will require funds from other capital sources to meet its obligations such as restructuring the current line of credit or replacing the current line of credit. The company was not in compliance with one of the loan covenants at Dec. 31, 2007, and at March 31, 2008, and the lender has the ability to accelerate all outstanding amounts upon notice and the passage of 30 days. The company said it is currently negotiating resolution of these issues with the current lender and other parties. PINE CCS: Moody's Gives B2 Rating to Class B Notes Due 2014 ----------------------------------------------------------- Moody's Investors Service has assigned these ratings to Notes issued by Pine CCS, Ltd. -- A3 to the $1,025,000,000 Class A-1 Notes due 2014; -- A3 to the $488,600,000 Class A-2 Notes due 2014; -- B2 to the $132,400,000 Class B Notes due 2014 The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio of senior loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. The transaction is a balance sheet CLO sponsored and arranged by Lehman Brothers Inc. PIONEER NATURAL: Fitch Holds BB+ Rating; Changes Outlook to Stable ------------------------------------------------------------------ Fitch Ratings has revised the Rating Outlook for Pioneer Natural Resources' debt ratings to Stable from Negative. Fitch affirmed Pioneer's ratings as: -- Issuer Default Rating 'BB+'; -- Sr. Unsecured 'BB+'. Pioneer's ratings continue to be supported by the company's long- lived onshore reserve base, modest debt levels relative to its peers, and the outlook for the company to begin generating positive free cash flows. Offsetting factors include the high levels of share repurchases during the past three years, weak three-year average organic reserve replacement rates, and the high levels of negative free cash flows. The change in the Rating Outlook to Stable reflects expectations for higher operating cash flows which should result in the company generating positive free cash flows in 2008 and 2009. Improved operating cash flows are being driven by significant production growth rates combined with increased realizations on commodity sales. Higher realizations stem from the significant run-up in commodity prices, expiration of historical out-of-the-money hedges and reduced VPP obligations in the coming years. Pioneer is a large independent oil & gas exploration and production company with operations in the U.S. (Permian Basin, Mid-Continent, Rockies, Gulf Coast & Alaska) and Africa (Tunisa and South Africa). At year-end 2007, the company had approximately 964 MMBOE of proven reserves. Pioneer is headquartered in Irving, Texas. PROGRESSIVE MOLDED: Obtains CCAA Stay Order Through July 9 ---------------------------------------------------------- Progressive Molded Products, Inc., Progressive Marketing, Inc., THL-PMPL Holding Corp., and Progressive Moulded Products Limited, sought and obtained an order for creditor protection under the Companies' Creditors Arrangement Act before the Honorable Mr. Justice Geoffrey B. Morawetz of the Ontario Superior Court of Justice (Commercial List), in Ontario, Canada. Until and including July 9, 2008, creditors and parties-in- interest are prohibited from commencing or continuing any action against the Applicants, their directors and officers, or Ernst & Young, Inc., as the proposed CCAA Monitor, except with the written consent of the Applicants and the Monitor, or with leave of the Canadian Court. The Applicants will remain in possession and control of their current and future assets, undertakings, and properties, including all their proceeds. The Applicants will continue to hire employees, consultants, and other professionals they deem necessary in the ordinary course of business, to assist the Applicants in their restructuring. The Applicants will continue to pay these employees and professionals in the ordinary course of business. The Canadian Court prohibits the Applicants from making any payments other than ordinary payroll amounts and related remittances and deductions without the prior consent of the Prepetition Agents or further Court order. The Applicants are also authorized to continue utilize their existing bank accounts and that all banks in which the Applicants maintain any bank accounts are authorized to continue to maintain, service, and administer the Bank Accounts. The Applicants are further authorized to continue to manage their cash and cash equivalents and transfer funds pursuant to the central cash management system currently in place. The Applicants are given the right to: (a) permanently or temporarily cease, downsize, or shut down any of their business or operations and to dispose of redundant or non-material assets not exceeding $500,000, in any one transaction, or $1,000,000 in the aggregate; (b) terminate the employment of employees or temporarily lay off employees as the Applicants may deem appropriate; (c) vacate, abandon, or quit any leased premises or repudiate any real property lease and any ancillary agreements relating to any leased premises; (d) pursue all avenues of refinancing and offers for material parts of the Applicants' business or property, in whole or in part; and (e) effect a continuance of the transfer of THL-PMPL from New Brunswick to Ontario, if considered necessary or appropriate. The Applicants will indemnify their directors and officers from all costs and expenses except to the extent of a director's or officer's breach of fiduciary duties or gross negligence. The directors and officers of THL-PMPL and PMPL will be entitled to a director's charge not exceeding $7,000,000, as security for the indemnity. The D&O will only be entitled to the Director's Charge to the extent they do not have coverage under by D&O's insurance policy. The Canadian Court directed the Applicants to provide funds to their insurance brokers by no later than June 27, 2008, to purchase an extension on their currently existing D&O liability policy for a period of up to 12 months, and tail insurance for a period of six years. However, the Applicants will not purchase the Insurance Extension and Tail if they are not available after making reasonable efforts and the cost of purchasing them will be more than $150,000 in the aggregate. About Progressive Molded Ontario, Canada-based Progressive Molded Products Inc. -- designs and manufactures component parts for General Motors Corp., Ford Motor Company and Chrysler, LLC. Its interior automotive subsystems are used for the "Big Three" automakers' top-selling platforms, including lightweight trucks, SUVs, mini-vans, cross- over vehicles, and passenger cars. The company and three of its affiliates filed for creditor protection under Chapter 11 of the U.S. Bankruptcy Code before the United States Bankruptcy Court for the District of Delaware on June 20, 2008 (Lead Case No. 08-11253). Kelley A. Cornish, Esq. and Brian S. Hermann, Esq. at Paul, Weiss, Rifkind Wharton & Garrison LLP and Pauline K. Morgan, Esq., Joseph M. Barry, Esq., and Donald J. Bowman, Jr., Esq. at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. The Progressive Molded Products entities also commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Ontario Superior Court of Justice (Commercial List) on June 20. Sheryl E. Seigel, Esq. and Alex A. Ilchenko, Esq. at Lang Michener LLP are their solicitors. Alex F. Morrison at Ernst & Young, Inc., has been appointed CCAA monitor and Kevin J. Zych, Esq. at Bennett Jones LLP serves as his solicitor. PROGRESSIVE MOLDED: CCCA Court Approves Ernst & Young as Monitor ---------------------------------------------------------------- Progressive Molded Products, Inc., Progressive Marketing, Inc., THL-PMPL Holding Corp., and Progressive Moulded Products Limited, sought and obtained authority from the Honorable Mr. Justice Morawetz to appoint Ernst & Young, Inc., as the Applicants' monitor in their insolvency proceedings under the Canadian Companies' Creditors Arrangement Act. As an officer of the Canadian Court, E&Y will monitor the property and the Applicants' conduct of business. Specifically, E&Y will: (a) report to the Canadian Court matters relating to the property, the business, the restructuring and other matters as may be relevant to the Applicants' insolvency proceedings; (b) monitor and review receipts, disbursements and reconciliations within the Cash Management System and Bank Accounts and in relation to intercompany transactions and obligations; (c) assist the Applicants in preparing the cash flow projections, budgets, and any other reporting or information they may require, which information will be reviewed with the Monitor; (d) assist the Applicants in their dissemination of financial and other information as requested by the Prepetition Agents and as otherwise required by the Applicants; (e) assist the Applicants in dealing with creditors, customers, vendors and other interested persons; (f) advise the Applicants in their development of the plan of arrangement and any amendments to the Plan and in their negotiations with creditors, customers, vendors and other interested persons; (g) assist the Applicants with their restructuring activities; (h) given any consent or approval as contemplated by the Canadian Court order; (i) assist the Applicants with the holding and administering of creditors' or shareholder' meetings for voting on the Plan; (j) have full and complete access to the books, records and management, employees and advisors of the Applicants; (k) be at liberty to engage independent legal counsel or other professional the Monitor deems necessary with respect to the exercise of its powers and performance of its obligations under the Canadian Court order; (l) serve as a "foreign representative" of any of the Applicants in any proceeding outside of Canada and to assist the Applicants in the coordination of the CCAA proceedings with the Chapter 11 cases; and (m) consider, and if deemed advisable by the Monitor, prepare a report and assessment of the Plan. The Monitor and its counsel will be paid their reasonable fees and disbursements by the Applicants as part of the costs of their Canadian insolvency proceedings. The Monitor, its Canadian and U.S. counsel, the Applicants' Canadian and U.S. counsel, and any other professionals currently engaged by the Applicants will be entitled to an administration charge not exceeding an aggregate amount of $3,600,000, as security for their unpaid professional fees and disbursements. The Administration Charge will be allocated as: Monitor and its Canadian and U.S. Counsel $1,500,000 Applicants' Canadian Counsel 1,500,000 Applicants' U.S. Counsel 600,000 All other professionals 1,500,000 To the extent that any of the beneficiaries of the Administration Charge have received payment of their fees and expenses incurred on or after the Termination Date pursuant to the Applicants' use of their cash collateral through the administration of the Carve- Out, the amount of the Administration Charge available to them will be reduced dollar-for-dollar. About Progressive Molded Ontario, Canada-based Progressive Molded Products Inc. -- designs and manufactures component parts for General Motors Corp., Ford Motor Company and Chrysler, LLC. Its interior automotive subsystems are used for the "Big Three" automakers' top-selling platforms, including lightweight trucks, SUVs, mini-vans, cross- over vehicles, and passenger cars. The company and three of its affiliates filed for creditor protection under Chapter 11 of the U.S. Bankruptcy Code before the United States Bankruptcy Court for the District of Delaware on June 20, 2008 (Lead Case No. 08-11253). Kelley A. Cornish, Esq. and Brian S. Hermann, Esq. at Paul, Weiss, Rifkind Wharton & Garrison LLP and Pauline K. Morgan, Esq., Joseph M. Barry, Esq., and Donald J. Bowman, Jr., Esq. at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. The Progressive Molded Products entities also commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Ontario Superior Court of Justice (Commercial List) on June 20. Sheryl E. Seigel, Esq. and Alex A. Ilchenko, Esq. at Lang Michener LLP are their solicitors. Alex F. Morrison at Ernst & Young, Inc., has been appointed CCAA monitor and Kevin J. Zych, Esq. at Bennett Jones LLP serves as his solicitor. PROGRESSIVE MOLDED: Thomas H. Lee Expected to Lose $200MM --------------------------------------------------------- The Financial Times reports that private equity firm Thomas H. Lee Partners is expected to lose its entire $200,000,000 investment in Progressive Moulded Products, following the plastic injection moulding systems supplier's petition for creditor protection under Chapter 11 of the Bankruptcy Code and the Canadian Companies' Creditors Arrangement Act. FT also says Goldman Sachs is also likely to lose everything. According to documents submitted by the Debtors to the Bankruptcy Court, funds associated with Goldman Sachs also hold 5.2% of the company's common shares and 10.1% of its preferred shares. Under the absolute priority rule under the Bankruptcy Code, administrative claims during the bankruptcy cases and claims secured by collateral are prioritized over unsecured claims and equity interests. Equity holders won't recover anything unless the unsecured creditors, and other debt holders receive recovery on account of their claims. Progressive's bankruptcy petition did not give insight whether the company was still solvent or whether it still has money for equity holders. Progressive gave estimates that it had $500,000,000 to $1,000,000,000 each in debts and assets. Guy P. Prentice, the company's chief financial officer, however, said in an affidavit that the company has at least $550,000,000 in debt. According to FT, in recent weeks, banks and bondholders had agreed to recapitalize Progressive and reduce its debt burden. But the agreement fell apart when the auto makers refused to pay in advance for parts because they, too, are in trouble, people familiar with the matter say, the report said. Progressive failed to obtained support from lenders after the company's major customers were reluctant to make additional concessions. Thomas H. Lee acquired Progressive from Oak Hill Capital Partners in 2004. About Progressive Molded Ontario, Canada-based Progressive Molded Products Inc. -- designs and manufactures component parts for General Motors Corp., Ford Motor Company and Chrysler, LLC. Its interior automotive subsystems are used for the "Big Three" automakers' top-selling platforms, including lightweight trucks, SUVs, mini-vans, cross- over vehicles, and passenger cars. The company and three of its affiliates filed for creditor protection under Chapter 11 of the U.S. Bankruptcy Code before the United States Bankruptcy Court for the District of Delaware on June 20, 2008 (Lead Case No. 08-11253). Kelley A. Cornish, Esq. and Brian S. Hermann, Esq. at Paul, Weiss, Rifkind Wharton & Garrison LLP and Pauline K. Morgan, Esq., Joseph M. Barry, Esq., and Donald J. Bowman, Jr., Esq. at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. The Progressive Molded Products entities also commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Ontario Superior Court of Justice (Commercial List) on June 20. Sheryl E. Seigel, Esq. and Alex A. Ilchenko, Esq. at Lang Michener LLP are their solicitors. Alex F. Morrison at Ernst & Young, Inc., has been appointed CCAA monitor and Kevin J. Zych, Esq. at Bennett Jones LLP serves as his solicitor. PROGRESSIVE MOLDED: Organizational Meeting Scheduled for July 7 --------------------------------------------------------------- An organizational meeting in the Chapter 11 cases of Progressive Molded Products, Inc., et al. will be held on July 7, 2008 at 2:00 p.m. at the J. Caleb Boggs Federal Building, 844 King Street, Room 2112, in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. About Progressive Molded Ontario, Canada-based Progressive Molded Products Inc. -- designs and manufactures component parts for General Motors Corp., Ford Motor Company and Chrysler, LLC. Its interior automotive subsystems are used for the "Big Three" automakers' top-selling platforms, including lightweight trucks, SUVs, mini-vans, cross- over vehicles, and passenger cars. The company and three of its affiliates filed for creditor protection under Chapter 11 of the U.S. Bankruptcy Code before the United States Bankruptcy Court for the District of Delaware on June 20, 2008 (Lead Case No. 08-11253). Kelley A. Cornish, Esq. and Brian S. Hermann, Esq. at Paul, Weiss, Rifkind Wharton & Garrison LLP and Pauline K. Morgan, Esq., Joseph M. Barry, Esq., and Donald J. Bowman, Jr., Esq. at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. The Progressive Molded Products entities also commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Ontario Superior Court of Justice (Commercial List) on June 20. Sheryl E. Seigel, Esq. and Alex A. Ilchenko, Esq. at Lang Michener LLP are their solicitors. Alex F. Morrison at Ernst & Young, Inc., has been appointed CCAA monitor and Kevin J. Zych, Esq. at Bennett Jones LLP serves as his solicitor. QUEBECOR WORLD: Closes Sale of European Assets for EUR135 Million ----------------------------------------------------------------- Quebecor World Inc. has completed the previously announced sale of its European operations to Hombergh/De Pundert Group (HHBV), a Netherlands based investment group. The transaction is valued at approximately EUR135 million. Under the agreement, Quebecor World received EUR52 million in cash. HHBV will assume about EUR61 million of net debt, and a EUR21.5 million five-year note bearing interest at 7% per year payable to Quebecor World. The sale was made substantially on an "as is, where is" basis and was not subject to the approval of either Quebecor World's or HHBV's shareholders. "We are pleased to conclude this transaction which will allow us to focus on our business in the Americas and which should enable us to exit creditor protection in North America as a stronger player in our industry," said Jacques Mallette, President and CEO of Quebecor World. "I thank our European employees for their support and would like to ensure our European customers we will continue to provide them with a full-service offering to grow their businesses in North America and Latin America." Quebecor World's European operations consisted of 16 printing and related facilities employing approximately 3,500 people in Austria, Belgium, Finland, France, Spain and Sweden producing magazines, catalogs, retail inserts, direct mail products, book and directories. As reported in the Troubled Company Reporter on June 19, 2008, The U.S. Bankruptcy Court for the Southern District of New York approved a purchase agreement between Quebecor World Inc. and its debtor-affiliates and Hombergh Holdings BV's affiliate, Vadeho II, B.V., under which HHBV will pay EUR133,000,000, for the Debtors' European assets, and assume certain liabilities. The sale agreement requires Vadeho to acquire all of the issued and outstanding shares of non-debtor Quebecor World European Holding S.A., from QWI; and non-debtor 4434889 Canada Inc.'s membership interest in QW SPV (USA) LLC. The agreement contemplates for the assignment of intercompany loans, totaling EUR515,000,000 as of May 28, 2008, advanced by the Debtors to the European affiliates to Vadeho. 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; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) RED SHIELD: Files Chapter 11 Petition in Bangor ----------------------------------------------- Red Shield Environmental LLC and RSE Pulp & Chemical LLC filed chapter 11 petition with the U.S. Bankruptcy Court for the District of Maine, Bangor Division on Friday, June 27, 2008. The rise in chip and oil prices has placed Red Shield "in a temporary cash flow bind," The Associated Press quoted owner Ed Paslawski, as stating. Red Shield is currently in talks with investors and banks regarding the reopening of the mill, Mr. Paslawski disclosed, AP said. Red Shield obtained a $30 million grant from the U.S. Department of Energy, but it wasn't enough to solve the company's financial concerns, AP revealed. A day before the filing, AP reported that the company planned to seek bankruptcy protection in order to "clear the way" to pay 145 workers who haven't received their salaries for almost three weeks, Rober Keach, Esq., Debtors' counsel said. Mr. Keach added that the Debtors experienced cash flow problems, however, their mill will soon be reopened, AP said. In June 18, McClatchy-Tribune Information Services said that at least 160 Red Shield workers were forced to remain at home when the Debtors' facility was temporarily shut down in June 6. Some 30 workers were already terminated. Red Shield acquired the facility in 2006 from Georgia-Pacific Corp. That acquisition brought new hope for the community, according to a report by the Polar Bear and Co.'s Ramona du Houx. The mill was used by Red Shield to produce ethanol, an alternative fuel. Gov. John Baldacci said that they will prioritize the reopening of the mill, Bangalore News said. Amid the bankruptcy, Bangalore News said, that the Debtors will continue partnership with University of Maine and American Process Inc. in the production of pulp. About Red Shield Red Shield Environmental LLC -- http://www.redshieldenv.com/-- is an investment group focused on the refinancing and start up of Maine businesses. The company provides an energy related campus located in Old Town, Maine with an overall focus on renewable energy development. Prospective projects include production and design of cellulosic ethanol and other commercialized technologies. During 2006 and 2007 Red Shield Environmental accomplished manufacturing objectives for energy and pulp production. This allows the company to provide continued employment for many in the Old Town area with the potential for increased future employment in areas devoted to renewable energy and manufacturing. The Red Shield Environmental campus currently consists of Red Shield Environmental and RSE Pulp & Chemical. RED SHIELD: Case Summary & 40 Largest Unsecured Creditors --------------------------------------------------------- Lead Debtor: Red Shield Environmental, LLC 1 Portland St. Old Town, ME 04468-0564 Tel: (207) 827-4692 Bankruptcy Case No.: 08-10633 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- RSE Pulp & Chemical, LLC 08-10634 Type of Business: The Debtors are investors focused on the refinancing and start up of businesses. They have an energy-related campus located in Old Town, Maine in the US with an overall focus on renewable energy development. Their prospective projects include production and design of cellulosic ethanol and other commercialized technologies. See http://www.redshieldenv.com/ Chapter 11 Petition Date: June 27, 2008 Court: District of Maine (Bangor) Debtors' Counsel: Robert J. Keach, Esq. Email: rkeach@bernsteinshur.com Bernstein, Shur, Sawyer & Nelson 100 Middle St., 6th Fl. P.O. Box 9729 Portland, ME 04104-5029 Tel: (207) 774-1200 http://www.bernsteinshur.com/ Estimated Assets: $50,000,000 to $100,000,000 Estimated Debts: $1,000,000 to $10,000,000 A. Red Shield Environmental, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Nalco Co. trade debt $338,838 P.O. Box 640863 Pittsburgh, PA 15264-0863 Tel: (412) 278-8600 Fax: (630) 305-2844 Anthem Blue Cross/Blue Shield insurance $124,603 P.O. Box 591 Lewiston, ME 04243-0591 Tel: (800) 322-9808 Fax: (207) 822-7526 Old Town Water trade debt $117,673 150 Brunswick St. Old Town, ME 04468 Bangor Hydro Electric Co. trade debt $96,492 New Age Fastening Systems, trade debt $76,800 Inc. Berry Dunn McNeil & Parker accounting services $70,255 Thompson Enterprises trade debt $61,885 Thornton Construction, Inc. trade debt $61,678 PPL EnergyPlus, LLC trade debt $51,222 EMR, Inc. trade debt $37,459 NEWSME, LLC trade debt $31,165 Precision Emissions, Inc. trade debt $30,000 Foresight Engineering, PC trade debt $25,020 Vanamee, Barbara trade debt $25,000 J.D. Raymond Transportation, trade debt $23,473 Inc. Maine Employers Mutual trade debt $20,129 Insurance, Inc. Maine Energy, Inc. trade debt $19,458 Monson Cos, Inc. trade debt $15,528 Waste Management trade debt $15,286 Marshall Specialty Grinding trade debt $14,427 B. RSE Pulp & Chemical, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ EKA Chemical, Inc. trade debt $780,137 1775 W. Oak Commons Ct. Marletta, GA 30060 Fax: (770) 321-5877 Milo Chip, LLC trade debt $626,864 P.O. Box 489 Jackman, ME 04945 Tel: (207) 688-4457 Fax: (207) 943-2734 Costigan Chip, LLC trade debt $435,091 P.O. Box 489 Jackman, ME 04945 Tel: (207) 688-4457 Fax: (207) 827-5986 International Paper trade debt $311,800 Cogeneration of Maine, Inc. Attn: International Paper Co. 6400 Poiplar Ave. Memphis, TN 38197 Tel: (901) 419-9000 Fax: (901) 419-1436 William T. Gardner & Sons, trade debt $296,229 Inc. I-95 Access Rd. Lincoln, ME 04457-0189 Tel: (207) 794-2303 Fax: (207) 794-2275 F.W. Webb. Co. trade debt $286,294 67 Target Industrial Circle Bangor, ME 04401 PPG Industries, Inc. trade debt $240,801 Nalco Co. trade debt $178,697 AH Lundberg trade debt $148,044 Kemira Chemicals, Inc. trade debt $146,866 KA Steel Chemicals, Inc. trade debt $145,307 Sprague Energy Corp. trade debt $143,346 Ovalstrapping, Inc. trade debt $109,905 Bluewater Energy Solutions, trade debt $108,505 Inc. GAC Chemical trade debt $84,663 Chemtrade Logistics (U.S.), trade debt $75,760 Inc. Skills, Inc./Sebasticook trade debt $70,061 Lumber Foresight Engineering, PC trade debt $67,181 Graymount (Qc), Inc. trade debt $63,475 Johnston Dandy Co. trade debt $58,014 RH DONNELLEY: Completed Exchange Offer Cues Fitch's Rating Actions ------------------------------------------------------------------ Fitch Ratings has taken these rating actions on the Issuer Default Ratings and outstanding debt ratings of R.H. Donnelley Corp. and subsidiaries: RHD (Holding Company) -- IDR affirmed at 'B+'; -- Senior unsecured notes downgraded to 'B-/RR6' from 'B/RR5'; R.H. Donnelley, Inc. (RHDI; Operating Company; Subsidiary of RHD) -- IDR affirmed at 'B+'; -- Bank facility affirmed at 'BB+/RR1'; -- New senior unsecured notes rated 'BB-/RR3'. Dex Media, Inc. (DXI; Holding Company; Subsidiary of RHD) -- IDR affirmed at 'B+'; -- Senior unsecured notes downgraded to 'B-/RR6' from 'B/RR5'. Dex Media East (DXE; Operating Company; Subsidiary of DXI) -- IDR affirmed at 'B+'; -- Bank facility affirmed at 'BB+/RR1'. Dex Media West (DXW; Operating Company; Subsidiary of DXI) -- IDR affirmed at 'B+'; -- Bank facility affirmed at 'BB+/RR1'; -- Senior unsecured affirmed at 'BB+/RR1'; -- Senior subordinated affirmed at 'B/RR5'. The Rating Outlook remains Negative. The rating actions reflect the completion of the exchange offer and a reduction in the distressed EBITDA multiple used in Fitch's recovery rating analysis. On May 8, RHD disclosed that it had launched a series of financing activities to reduce near term mandatory debt repayments, provide additional covenant flexibility and extend its maturity profile. On June 6, the second amendment to the RHDI credit facility and its new DXW credit facility closed. The amendment and new facility provided the sought after covenant flexibility, maturity extension and permitted RHDI to pursue the note exchange. These enhancements were offset by higher interest rates. Fitch rates each of these facilities 'BB+/RR1', reflecting their priority in the capital structure and its expectation that more than 90% recovery is achievable. Also on May 8, RHD initiated an offer to exchange approximately $700 million in lower interest rate senior unsecured notes outstanding at RHD for $488 million of higher interest rate notes at RHDI. On June 23rd, RHD announced that approximately $600 million in RHD notes were tendered and would be exchanged for $412.9 million in RHDI notes. This action is a credit negative for RHD bonds as their Recovery Ratings had been dependent on residual asset value from RHDI, resulting in the downgrade of the RHD senior unsecured notes to 'B-/RR6', reflecting negligible recovery prospects. The new bonds that are at RHDI will have a higher claim on RHDI asset value than the RHD bonds, resulting in a 'BB-/RR3' (51%-70% recovery) rating assigned to the RHDI notes. The ratings incorporate Fitch's lowering of the distressed EBITDA multiple used in its RR analysis from 6.0 times to 5.5x. The lower multiple reflects operating performance pressures and related contraction in market multiples. Future reductions in Fitch's distressed multiple are possible and could negatively impact RRs. Fitch views the recent exchange as largely neutral to the consolidated credit profile; headline leverage is marginally lower, but the capacity to service its obligations is relatively unchanged. Fitch acknowledges that these actions remove several near-term overhangs. However, the Negative Outlook reflects that sustained top line pressure, the limited scalability of the cost structure and increased interest costs could make it difficult to meet Fitch's prior deleveraging expectations. Fitch will continue to monitor operating performance closely for more evidence regarding the cyclical and secular components of revenue deterioration. Acceleration of revenue declines that are sustained beyond mid- single digits and not offset by cost cuts could weigh negatively on the rating. Fitch estimates RHD can endure low-to-mid single digit revenue declines and still de-lever the balance sheet, albeit slower than previously anticipated. Going forward, Fitch expects management will be exclusively focused on paying down debt under the secured facilities, however, Fitch continue to expect consolidated leverage levels to remain above management's stated target of 6.0x (or below) in the intermediate term. RITE AID: Mulls $425MM Offering of Senior Secured Notes Due 2016 ---------------------------------------------------------------- Rite Aid Corporation intends to offer $425 million in aggregate principal amount of senior secured notes due 2016, pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission. Rite Aid intends to use the net proceeds from the offering and borrowings under a new $350 million senior secured term loan, which is permitted under the accordion feature in Rite Aid's existing senior secured credit facility to: -- fund the purchase price, accrued interest, consent payment and related fees and expenses with respect to its tender offers and consent solicitations for any and all of its 8.125% Senior Secured Notes due 2010, 9.25% Senior Notes due 2013 and 7.5% Senior Secured Notes due 2015; and -- redeem any 2015 Notes that remain outstanding after the completion of the Tender Offers. The Tender Offers are scheduled to expire at midnight, New York City time, on July 1, 2008, unless extended. Settlement of the Tender Offers is expected to occur concurrently with the closing of this offering and Rite Aid's Tranche 3 Term Loan. Citi is acting as sole book-running manager for the Notes offering. Banc of America Securities LLC is acting as co-manager for the offering. Copies of the prospectus and prospectus supplements related to the offering may be obtained from: Citi's Prospectus Department 8th Floor, Brooklyn Army Terminal, 140 58th Street Brooklyn, NY 11220 Tel (718) 765-6732 About Rite Aid Corporation Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- is a drugstore chain with more than 5,000 stores in 31 states and the District of Columbia. * * * As reported in the Troubled Company Reporter on Jun 10, 2008, Moody's Investors Service assigned a Caa2 (LGD6, 95%) rating to Rite Aid Corporation's new $158 million 8.5% convertible notes and affirmed the company's existing long-term debt rating. At the same time, the company's outlook was revised to negative and its speculative grade liquidity rating was lowered to SGL-4 from SGL-3. RITE AID: Posts $157 Million Net Loss in 1st Quarter Ended May 31 ----------------------------------------------------------------- Rite Aid Corp., in a press statement, reported $156.6 million net loss for the first quarter compared to $27.6 million net income in last year's first quarter ended May 31, 2008. The Wall Street Journal indicated that higher expenses and disappointing sales at the Brooks and Eckerd stores that Rite Aid purchased in 2007 continue to hurt its results. WSJ said that during the quarter, Rite Aid discounted heavily to try to fend off competitors but the markdowns eroded profits so much that Rite Aid had to ease up on the discounts. According to WSJ, the loss was roughly twice as large as analysts were expecting, mainly because operating expenses came in higher than their forecasts. Revenue rose 49% to $6.61 billion, WSJ adds. Rite Aid shares fell 40 cents, or 23%, to $1.35 in June 25 composite trading on the New York Stock Exchange, WSJ Stated. Shares of Rite Aid Corp. fell to an all-time low as the company swung to a loss for its fiscal first quarter, WSJ noted. At May 31, 2008, the company's balance sheet showed total assets of $11.4 billion, total liabilities of $9.8 billion and total stockholders' equity of about $1.6 billion. WSJ, citing chief executive Mary Sammons, said that the company's forecasts include an expectation that the economy will continue to be weak. If the situation worsens Rite Aid will further cut inventories and expenses, WSJ citing Ms. Sammons pointed out. About Rite Aid Corporation Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- is a drugstore chain with more than 5,000 stores in 31 states and the District of Columbia. * * * As reported in the Troubled Company Reporter on Jun 10, 2008, Moody's Investors Service assigned a Caa2 (LGD6, 95%) rating to Rite Aid Corporation's new $158 million 8.5% convertible notes and affirmed the company's existing long-term debt rating. At the same time, the company's outlook was revised to negative and its speculative grade liquidity rating was lowered to SGL-4 from SGL-3. ROBERT DILLON: Case Summary & Six Largest Unsecured Creditors ------------------------------------------------------------- Debtors: Robert W. Dillon Roberta S. Dillon 119 Carthage Road Scarsdale, NY 10583 Bankruptcy Case No.: 08-22865 Chapter 11 Petition Date: June 22, 2008 Court: Southern District of New York (White Plains) Debtors' Counsel: Bruce R. Alter, Esq. Alter & Goldman 550 Mamaroneck Avenue Suite 510 Harrison, NY 10528 Tel: (914) 670-0030 Fax: (914) 670-0031 altergold@aol.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtors list of their Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service $1,605,557 P.O. Box 21126 Philadelphia, PA 19114 *Value $1,400,000 Net Unsecured $475,008 *Prior Liens Exit NYC Department of Finance Taxes $155,000 345 Adams Street, 3rd Floor Attn: Leg Affairs-Devora Cohen Brooklyn, NY 11201 Washington Mutual Credit Card Purchases $8,048 1301 Second Avenue Seattle, WA 98101 Capital One Credit Card Purchases $3,240 Mercedes Lease $2,869 Washington Mutual Credit Card Purchases $2,280 ROOM SOURCE: To Hold GOB Sales, Shutter 5 Stores & Warehouse ------------------------------------------------------------ KCRA 3 reports that furniture chain The RoomSource is planning a "high-impact" floor sample sale, which will be held over the next two to three weeks, and, once that sale concludes, will hold a store-closing going out of business sale. According to KCRA 3, Room Source will close its five stores in Modesto, Stockton, Rocklin, Sacramento and Rancho Cordova, in California. The warehouse on North 10th Street in Sacramento will also shut down, the report says. Room Source LLC, aka The RoomSource and RoomSource, of Sacramento, California, filed for chapter 11 protection before the U.S. Bankruptcy Court for the Eastern District of California on June 25, 2008 (Case No. 08-28487). RoomSource blamed the downturn in the local economy, KCRA 3 says. Sarah M. Stuppi, Esq., at Law Offices of Stuppi & Stuppi, in Walnut Creek, California, represents the Debtor. Room Source disclosed $1,000,000 to $10,000,000 in estimated assets, and $10,000,000 to $50,000,000 in estimated debts when it filed for bankruptcy. SALOMON BROTHERS: Moody's Junks Rating of Class G-1 Certificates ---------------------------------------------------------------- Moody's Investors Service upgraded the ratings of nine classes, downgraded one class and affirmed 16 classes of Salomon Brothers Commercial Mortgage Trust 2001-MM, Commercial Mortgage Pass- Through Certificates, Series 2001-MM as: -- Class A-3, $44,447,038, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $19,311,544, affirmed at Aaa -- Class C, $24,129,605, upgraded to Aa1 from A1 -- Class D, $10,591,148, affirmed at Baa2 -- Class E-1, $6,380,190, upgraded to A1 from A2 -- Class F-1, $7,600,000, affirmed at Ba1 -- Class G-1, $3,212,914, downgraded to Caa1 from B3 -- Class E-2, $12,215,443, upgraded to A1 from A3 -- Class F-2, $5,000,000, affirmed at Ba1 -- Class G-2, $2,211,964, affirmed at B2 -- Class E-3, $12,800,000, upgraded to A2 from A3 -- Class F-3, $6,100,000, upgraded to Baa2 from Ba1 -- Class G-3, $6,211,964, upgraded to Ba3 from B1 -- Class E-4, $11,400,000, upgraded to A3 from Baa1 -- Class F-4, $2,800,000, upgraded to Baa3 from Ba1 -- Class G-4, $511,964, affirmed at Ba3 -- Class E-5, $14,400,000, affirmed at Baa1 -- Class F-5, $5,900,000, affirmed at Ba1 -- Class G-5, $511,964, affirmed at B2 -- Class E-6, $7,900,000, affirmed at Ba3 -- Class F-6, $1,200,000, affirmed at B3 -- Class G-6, $511,964, affirmed at Caa2 -- Class E-8, $15,000,000, affirmed at Baa1 -- Class F-8, $5,500,000, affirmed at Ba1 -- Class G-8, $3,811,964, upgraded to B1 from B2 Moody's upgraded the rating of Class C due to increased subordination levels due to loan payoffs and amortization. The upgrade of Classes E-1, E-2, E-3, F-3, G-3, E-4, F-4 and G-8 is due to the improved overall performance of the associated loan group while the downgrade of Class G-1 is due to a decline in performance of the largest loan in its loan group. As of the June 19, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 68.3% to $213.9 million from $674.4 million at securitization. The Certificates are collateralized by 12 mortgage loans ranging in size from 2.8% to 14.3% of the pool, with the top 3 loans representing 41.0% of the pool. There have been no losses since securitization and currently there are no loans in special servicing. This transaction has some unique features in terms of certificate structure, loan grouping, payment priority and loss allocation. The trust consists of five senior certificates (Classes A-3, X, B, C and D) and 21 junior certificates. The junior certificates are divided into seven series corresponding to specific loan groups. Each loan group supports three certificates (E, F and G). The aggregate principal balance of each loan group is divided into a senior portion and a junior portion. After the principal balance of the related senior portion has been reduced to zero, principal payments are then applied to the junior certificates on a senior/sequential basis within each respective loan group. Based on the payment priority and the certificate structure of this transaction, it is possible that a junior certificate holder may receive principal payments before the principal balance of a higher-rated certificate from a different loan group is reduced to zero. At securitization there were eight loan groups but one group, corresponding to Classes E-7, F-7 and G-7, has been repaid in full. Moody's was provided with year-end 2006 operating results for 100.0% of the pool. Moody's loan to value ratio for the overall pool is 67.0% compared to 64.7% at Moody's last full review in November 2006 and 72.8% at securitization. The LTV of each loan group is discussed below. Loan Group A consists of two loans totaling $18.0 million and is the collateral for Classes E-1, F-1 and G-1. Loan Group A's certificate balance has declined by approximately 79.1% since securitization due to amortization and the payoff of two loans. The loans in this group are no longer making principal payments to the senior pooled classes. The largest loan in this loan group is the 2777 East Camelback Road Loan ($10.1 million), which is secured by an 111,000 square foot office building located in Phoenix, Arizona. The weighted average LTV for Loan Group A is 77.0% compared to 72.2% at last review. Moody's is upgrading Class E-1 due increased credit support. Moody's is downgrading Class G-1 due to the decline in performance of the Camelback Road Loan, which has a current LTV of 102.0% compared to 88.0% at last review. Loan Group B consists of one loan and is the collateral for Classes E-2, F-2 and G-2. Loan Group B's certificate balance has declined by approximately 87.6% since securitization due to amortization and the payoff of three loans. The loan in this group is no longer making principal payments to the senior pooled classes. The remaining loan in Loan Group B is the Mercy West Medical Center Loan ($10.4 million), which is secured by a 142,000 square foot medical office building in Clive, Iowa. Moody's LTV for Loan Group B is 75.8% compared to 68.2% at last review. Despite the increase in LTV, Moody's is upgrading Class E-2 due to increased credit support due to loan payoffs. Loan Group C consists of two loans totaling $31.8 million and is the collateral for Classes E-3, F-3 and G-3. Loan Group C's certificate balance has declined by approximately 63.1% since securitization due to amortization and the payoff of two loans. The largest loan in Loan Group C is the Trails Village Center Loan ($16.3 million), which is secured by 134,000 square foot retail center located in Las Vegas, Nevada. Moody's LTV for Loan Group C is 52.4% compared to 56.1% at last review. Moody's is upgrading Classes E-3, F-3 and G-3 due to increased credit support and overall improved loan performance. Loan Group D consists of two loans totaling $37.3 million and is the collateral for Classes E-4, F-4 and G-4. Loan Group D's certificate balance has declined by approximately 53.9% since securitization due to amortization and the payoff of one loan. The largest loan in Loan Group D is the Richmond Square Loan ($23.2 million), which is secured by a 360-unit luxury high rise apartment building located in Arlington, Virginia. Moody's LTV for Loan Group D is 51.9% compared to 54.8% at last review. Moody's is upgrading Classes E-4 and F-4 due to increased credit support and overall improved performance. Loan Group E consists of two loans totaling $36.7 million and is the collateral for Classes E-5, F-5 and G-5. Loan Group E's certificate balance has declined by approximately 57.1% since securitization due to the loan payoffs and amortization. The largest loan in Group E is the Glenpointe Center East Loan ($30.7 million), which is secured by a 319,000 square foot office building located in Teaneck, New Jersey. Property performance has declined since last review due to the softening of the Teaneck office market. Moody's LTV for Loan Group E is 68.4% compared to 65.4% at last review. Despite the decline in performance, Moody's is affirming the ratings due to increased credit support. Loan Group F consists of one loan totaling $27.2 million and is the collateral for Classes E-6, F-6 and G-6. Loan Group F's certificate balance has declined by approximately 66.0% since securitization due to amortization and the payoff of three loans. The remaining loan in Loan Group F is the SouthPark Towers Loan ($27.2 million), which is secured by a 292,000 square foot office building located in Charlotte, North Carolina. Property performance has declined since last review due to a decline in rents and increased operating expenses. Moody's LTV for Loan Group F is 91.5% compared to 84.9% at last review. Despite the increase in LTV, Moody's is affirming the ratings due to increased credit support. Loan Group G has paid off in full. Loan Group H consists of two loans totaling $52.4 million and is the collateral for Classes E-8, F-8 and G-8. Loan Group H's certificate balance has declined by approximately 38.9% since securitization due to amortization and the payoff of two loans. The largest loan in Loan Group H is the Stamford Square Loan ($30.0 million), which is secured by a 275,000 square foot Class A office building located in Stamford, Connecticut. The property is 100.0% occupied, the same as at last review and securitization. Moody's LTV for Loan Group H is 66.0% compared to 65.1% at last review. Moody's is upgrading G-8 due to increased credit support and overall stable performance. SECURITY CAPITAL: CreditSights Analyst Sees Bond Insurer Woes ------------------------------------------------------------- CreditSights analyst Rob Haines said in a report issued early this month that bond insurers like CIFG Guaranty Ltd., Financial Guaranty Insurance Company, and XL Capital Assurance Inc. are likely to violate capital requirements in the second quarter of 2008, Reuters notes. The breach of capital requirement would lead to "a chain of events" driving the insurers to insolvency, Reuters quotes the analyst's report as stating. Mr. Haines said that regulatory agencies would have to intervene should bond insurers become unable to raise fund and their capital drop below the established level, Reuters says. This could result in excessive payouts on derivatives depleting the insurers' funds, Mr. Haines' report continued, Reuters relates. Reuters notes that the Insurance Department of New York has set the capital requirement for bond insurers at $65 million, and allows a 90-day cure period for those that can't meet with the requirement. According to Mr. Haines, CIFG, FGIC, and XLCA are expected to breach statutory requirements during the present quarter over further write-downs on mortgage-backed loans, Reuters reports. Mr. Haines pointed to CIFG's $15 million in equity above the requirement cap, which is reportedly the lowest "cushion among the bond insurers," Reuters relates. FGIC still has in excess of $300 million of capital cushion and XLCA has about $102 million, Reuters quotes Mr. Haines as stating. MBIA Insurance Corp. has about $3.9 billion in capital cushion and Ambac Assurance Corp. has about $3.5 billion owed to recent capital infusion, Mr. Haines said, Reuters relates. About SCA Security Capital Assurance Ltd (SCA) -- http://www.scafg.com/-- through its subsidiaries -- XL Capital Assurance Inc., (XLCA) a monoline financial guarantee insurance provider, and XL Financial Assurance Ltd. (XLFA), a monoline provider of reinsurance to financial guarantee insurers -- provides credit enhancement for the obligations of debt issuers worldwide. As reported by the Troubled Company Reporter on June 23, 2008, Moody's Investors Service downgraded to B2, from A3, the insurance financial strength ratings of XL Capital Assurance Inc., XL Capital Assurance (U.K.) Limited and XL Financial Assurance Ltd. In the same rating action, Moody's also downgraded the debt ratings of Security Capital Assurance Ltd (NYSE: SCA -- preference shares to Ca from B3) and a related financing trust. About XLCA XL Capital Assurance Inc. (XLCA) delivers credit enhancement for the obligations of debt issuers worldwide. It guarantees US municipal bonds; asset-backed securities; debt backed by utilities and selected infrastructure projects; specialized risks, including future flow securitizations and bank deposit insurance; and collateralized debt obligations (CDOs). It provides financial guarantee that is unconditional and irrevocable and, in the process, help clients overcome a broad spectrum of strategic, competitive and financial challenges. About CreditSights CreditSights -- https://www.creditsights.com/ -- is one of the first research providers to integrate debt and equity research into a single view across a company's entire capital structure. Its team of more than 50 analysts look to identify the best investment opportunity in each of the companies and sectors that they cover, bringing over 15 years average experience to their analysis of debt and equity. Its research team, led by Glenn Reynolds and Peter Petas, has both buy-side and sell-side experience in the U.S. and overseas. Among its staff are five former heads of research as well as multiple past recipients of awards from Institutional Investor in their annual polls of the best debt and equity analysts. SHARPER IMAGE: Hearing on Plan Filing Date Extension Set July 16 ---------------------------------------------------------------- Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware will convene a hearing on July 16, 2008, at 11:00 a.m., to consider approval of the request of The Sharper Image Corp. to extend its exclusive plan proposal period. Objections were due June 23, however, no parties filed objections to the extension request as of the Objection Deadline. By application of Rule 9006-2 of the Local Rules of Bankruptcy Practice and Procedures of the United States Bankruptcy Court for the District of Delaware, the Exclusive Plan Proposal Period is automatically extended until the conclusion of the hearing. About Sharper Image Based in San Francisco, California, Sharper Image Corp. -- http://www.sharperimage.com/-- is a multi-channel specialty retailer. It operates in three principal selling channels: the Sharper Image specialty stores throughout the U.S., the Sharper Image catalog and the Internet. The company has operations in Australia, Brazil and Mexico. In addition, through its Brand Licensing Division, it is also licensing the Sharper Image brand to select third parties to allow them to sell Sharper Image branded products in other channels of distribution. The company filed for Chapter 11 protection on Feb. 19, 2008 (Bankr. D.D., Case No. 08-10322). Steven K. Kortanek, Esq. at Womble, Carlyle, Sandridge & Rice, P.L.L.C. represents the Debtor in its restructuring efforts. An Official Committee of UnsecuredCreditors has been appointed in the case. Whiteford Taylor Preston LLC is the Committee's Delaware counsel When the Debtor filed for bankruptcy, it listed total assets of US$251,500,000 and total debts of US$199,000,000. (Sharper Image Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SHARPER IMAGE: Hilco/Gordon Brothers to Market Brand Name --------------------------------------------------------- The joint venture between Hilco Organization and Gordon Brothers Group, LLC, will market Sharper Image Corporation's brand name, Sharper Image(R), to retailers, The Wall Street Journal reports. James Salter, Hilco Consumer Capital's chief executive officer, told the Journal that "he envisions Sharper Image products being marketed worldwide through infomercials, Web sites and catalogs, as well as in the aisles of stores such as Target or Best Buy." "[Sharper Image] always generated a lot of foot traffic. But some brands are retailers, and some are better as wholesalers. Sharper Image is better as a wholesaler," the Journal quotes Mr. Salter, as saying. A $5,000,000 investment is needed to analyze new products and to market the Sharper Image trademark, the Journal said. According to Mr. Salter, the Sharper Image brand name can generate $1,000,000,000 in annual retail sales per year, the Journal quoted. The Hilco/GB joint venture previously purchased substantially all of Sharper Image's assets for $49,000,000, including $33,000,000 for the company's brand name. Committee Agrees not to Impede Sale; Hilco/GB Funds Unsecured Creditors' Trust The Official Committee of Unsecured Creditors seeks the approval of the U.S. Bankruptcy Court for the District of Delaware of a letter agreement it entered into with the Joint Venture, which memorializes the Committee's agreement to: (a) refrain from taking action to impede the consummation of the sale transaction, including, without limitation, the filing or prosecution of its objection to the sale transaction and the filing or prosecution of an appeal or motion to reconsider the Sale Order; and (b) waive the right to challenge the Joint Venture's conduct during the auction process or the change of its bid. In exchange for the Committee's agreement not to impede the sale transaction, the Joint Venture agreed to fund a trust account for the Debtor's general unsecured creditors. The Joint Venture will transfer an amount equal to the lesser of $500,000, and 10% of the gross royalties paid for the period of January 1, 2009, through December 31, 2009, from the intellectual property acquired by Joint Venture. According to the Committee's counsel, Margaret M. Manning, Esq., at Whiteford Taylor & Preston, LLP, in Wilmington, Delaware, the settlement funds contemplated in the Letter Agreement represents a bargained-for, guaranteed recovery for general unsecured creditors, and is not part of the purchase price under the asset purchase agreement entered into between the Debtor and the Joint Venture. A copy of the Letter Agreement between the Committee and the Joint Venture is available for free at: http://bankrupt.com/misc/SharperCommitteeLetterAgreement.pdf About Sharper Image Based in San Francisco, California, Sharper Image Corp. -- http://www.sharperimage.com/-- is a multi-channel specialty retailer. It operates in three principal selling channels: the Sharper Image specialty stores throughout the U.S., the Sharper Image catalog and the Internet. The company has operations in Australia, Brazil and Mexico. In addition, through its Brand Licensing Division, it is also licensing the Sharper Image brand to select third parties to allow them to sell Sharper Image branded products in other channels of distribution. The company filed for Chapter 11 protection on Feb. 19, 2008 (Bankr. D.D., Case No. 08-10322). Steven K. Kortanek, Esq. at Womble, Carlyle, Sandridge & Rice, P.L.L.C. represents the Debtor in its restructuring efforts. An Official Committee of UnsecuredCreditors has been appointed in the case. Whiteford Taylor Preston LLC is the Committee's Delaware counsel When the Debtor filed for bankruptcy, it listed total assets of US$251,500,000 and total debts of US$199,000,000. Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware will convene a hearing on July 16, 2008, at 11:00 a.m., to consider approval of the request of The Sharper Image Corp. to extend its exclusive plan proposal period. (Sharper Image Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SHARPER IMAGE: Court Approves Employee Incentive Plan ----------------------------------------------------- Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware approves the Incentive Plan in the bankruptcy case of The Sharper Image Corp. and authorizes the Debtor to implement it. Judge Gross, however, limits the payments to: -- $617,000 in the aggregate as payments to the Debtor's going-out-of-business Administrative Employees as incentive pay for work performed in connection with the Second Wave Store Closings; and -- $435,000 in the aggregate as payments to the members of the Debtor's Wind-Down Team as incentive pay. U.S. Trustee Slams Employee Incentive Plan Roberta A. DeAngelis, Acting United States Trustee for Region 3, asked the Court to deny approval of the Incentive Plan in the bankruptcy case of Debtor because it is a disguised retention plan, thus violating Section 503(c)(1) of the Bankruptcy Code. The Incentive Plan applies to a number of persons with an "officer" status and a level of responsibility consistent with the designation, the U.S. Trustee's counsel, Joseph J. McMahon, Jr., Esq., trial attorney for the U.S. Department of Justice, noted. Those persons are called "officers" for the purpose of determining whether the restrictions on retention payments are being honored. However, Mr. McMahon, pointed out that the Incentive Plan is designed not to induce employees to achieve performance goals but to keep the employees around until their tasks are completed. In addition, Mr. McMahon noted that the Incentive Plan proposes transfers that are outside of the ordinary course of the Debtor's business. The transfers are not justified by the facts and circumstances of the Debtor's case, in violation of Section 503(c)(3), he argued. The Incentive Plan does not represent the actual, necessary costs of preserving the estate as required by Section 503(b)(1)(A), and the amounts to be paid to certain employees are unreasonable, he added. The Debtor proposed to pay several employees excessive amounts to remain with the company for a limited period of time, in addition to paying base salaries for doing less ordinary course work, the U.S. complains. Furthermore, the Plan contains provisions, which give the Debtor excessive discretion. In light of this, the U.S. Trustee asked the Court to deny approval of the Incentive Plan. The U.S. Trustee also asked the Court not to allow the Debtor to file certain exhibits related to the Incentive Plan under seal to the extent that the Debtor seeks to protect information relating to its "named executive officers." "There is a strong, compelling presumption of open access to judicial records and proceedings in civil matters," the U.S. Trustee argued. The Debtor is a public company and is obligated under federal securities laws to file reports with the Securities and Exchange Commission, which includes the compensation paid and payable to its executive officers, she contended. About Sharper Image Based in San Francisco, California, Sharper Image Corp. -- http://www.sharperimage.com/-- is a multi-channel specialty retailer. It operates in three principal selling channels: the Sharper Image specialty stores throughout the U.S., the Sharper Image catalog and the Internet. The company has operations in Australia, Brazil and Mexico. In addition, through its Brand Licensing Division, it is also licensing the Sharper Image brand to select third parties to allow them to sell Sharper Image branded products in other channels of distribution. The company filed for Chapter 11 protection on Feb. 19, 2008 (Bankr. D.D., Case No. 08-10322). Steven K. Kortanek, Esq. at Womble, Carlyle, Sandridge & Rice, P.L.L.C. represents the Debtor in its restructuring efforts. An Official Committee of UnsecuredCreditors has been appointed in the case. Whiteford Taylor Preston LLC is the Committee's Delaware counsel When the Debtor filed for bankruptcy, it listed total assets of US$251,500,000 and total debts of US$199,000,000. Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware will convene a hearing on July 16, 2008, at 11:00 a.m., to consider approval of the request of The Sharper Image Corp. to extend its exclusive plan proposal period. (Sharper Image Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SHUMATE INDUSTRIES: March 31 Balance Sheet Upside-Down by $5.7MM ----------------------------------------------------------------- Shumate Industries Inc.'s consolidated balance sheet at March 31, 2008, showed $5,066,475 in total assets and $10,788,782 in total liabilities, resulting in a $5,722,307 total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $2,418,516 in total current assets available to pay $7,826,593 in total current liabilities. The company reported a net loss of $1,444,778 on revenues of $1,454,436 for the first quarter ended March 31, 2008, compared with a net loss of $909,175 on revenues of $2,448,488 in the same period last year. Shumate Machine Works sales decreased by $354,671, or a decrease of 20%, to $1,431,861 for the three months ended March 31, 2008, compared to $1,786,532 for the three months ended March 31, 2007. The decrease in sales was attributed to lack of working capital that caused delays in procuring raw materials and delays in sub- contract outside services. Hemiwedge Valve Corporation sales decreased by $639,381, or a decrease of 97%, to $22,575 for the three months ended March 31, 2008, compared to $661,956 for the three months ended March 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?2ec5 Going Concern Doubt As reported in the Troubled Company Reporter on June 13, 2008, Houston-based Malone & Bailey, PC, expressed substantial doubt on Shumate Industries 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 stated that Shumate requires significant amount of cash in its operations and does not have sufficient cash to fund its operations for the next twelve months. About Shumate Industries Based in Conroe, Texas, Shumate Industries Inc. (OTC BB: SHMT) -- http://www.shumateinc.com/-- is an energy field services company. The company operates through two wholly owned subsidiaries, Shumate Machine Works, a contract machining and manufacturing division, and Hemiwedge Valve Corporation, a proprietary new valve technology that targets mid-stream process and flow control markets with its Hemiwedge(R) Cartridge valve product line, sub-sea via a pending licensing deal for Hemiwedge(R) sub-sea high pressure valve product line, and Hemiwedge(R) down-hole valves under development for drilling applications. SOURCEGAS LLC: Moody's Cuts Debt Rating to Ba1; Outlook is Stable ----------------------------------------------------------------- Moody's Investors Service downgraded the debt of SourceGas LLC to Ba1 (LGD2, 25%) from Baa3 and assigned a Corporate Family Rating of Ba2 to the SourceGas family. The rating outlook is stable. This rating action concludes the review for possible downgrade that was initiated on May 30, 2008. The downgrade adjusts SourceGas's credit rating to reflect the company's growth-oriented strategy via acquisitions, which will likely raise business, event, refinancing, and integration risk, and stress financial metrics. The review of SourceGas's credit follows the natural gas distribution company's announcement that it will acquire Arkansas Western Gas Company, and will consider other opportunistic acquisitions as well. While acquiring AWG will expand the company's service area and is expected to be earnings accretive, this purchase and the growth strategy will expose SourceGas to the aforementioned future risks. In addition to incremental debt, SourceGas's financial performance could experience further stress from the regulatory lag typical in this industry, and it is also likely to file additional post acquisition rate cases after the appropriate rate-freeze period. Finally, additional acquisitions will bring on more goodwill, which regulated companies are generally not allowed to pass along to ratepayers in the form of expanded base rates. This will restrict returns while raising leverage under Moody's gas LDC rating methodology. Moody's considers the profile of the consolidated SourceGas entity in analyzing the credit since a holding company exists above SourceGas LLC which carries debt that is serviced wholly by the subsidiary. SourceGas's Ba2 CFR reflects the company's weak first 12 months of operations (1Q08LTM), which map to a high single B credit, but also improved proforma metrics for the first full year of AWG included operations (2009), which map to a Ba1. The downgrade of SourceGas's debt reflects an expectation of a weakening financial profile over the intermediate term horizon for the entire SourceGas corporate structure, as compared to that of a company focused strictly on organic growth. The Ba1 debt rating was determined using Moody's Loss Given Default model, based on SourceGas's Ba2 CFR and Probability of Default Ratings of Ba3. The stable outlook for SourceGas incorporates expectations that the company will continue to pursue an acquisitions strategy within the rate regulated domain and expand into somewhat familiar service territories where it could develop constructive relationships with regulatory regimes. The stable outlook reflects the greater leeway afforded to the company with a Ba2 CFR to pursue an active growth strategy and also assumes that existing experienced operating personnel will accompany the acquired companies being integrated into SourceGas. Ratings Downgraded/ Assessments Assigned: -- $325MM senior unsecured notes of 5.90% due in 2017 to Ba1 (LGD 2, 25%) from Baa3. -- Corporate Family Rating -- Ba2 -- Probability of Default Rating -- Ba3 Source Gas LLC is a limited liability company headquartered in Lakewood, Colorado, whose operating subsidiaries are largely retail gas distributors serving over 266,000 customers in Colorado, Nebraska, Wyoming and Hermosillo, Mexico. Other regulated intra-state pipeline business contributes 22% of gross margin. Non-regulated operations comprise the remaining consolidated gross margin of approximately 14% which consists of non-regulated pipeline and storage facility leasing activity, participation in Choice Gas commodity sales programs in Nebraska and Wyoming and a household appliance service business. Its owners are a subsidiary of the General Electric Company (50%), and affiliates of Alinda Investments LLC(50%). SUMMITT CENTRIC: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Summitt Centric Partners, Inc. 1625 Candler Road Gainesville, GA 30507 dba Maintenance-Free Building Products Bankruptcy Case No.: 08-21660 Type of Business: The Debtor is into whole lumber/plywood/millwork Ret lumber/building materials building and construction and maintenance services. Chapter 11 Petition Date: June 25, 2008 Court: Northern District of Georgia (Gainesville) Judge:Robert Brizendine Debtor's Counsel: Paul Reece Marr, Esq. Paul Reece Marr, P.C. 300 Galleria Parkway, N.W. Suite 960 Atlanta, GA 30339 Phone: 770-984-2255 E-mail: pmarr@mindspring.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Debtor's petition with a list of largest unsecured creditors is available at http://bankrupt.com/misc/gnd08-21660.pdf SUN COAST: Disclosure Statement OK'd; Unsec. Creditors To Get 75% ----------------------------------------------------------------- The Hon. Michael G. Williamson of the United States Bankruptcy Court for the Middle District of Florida conditionally approved a joint disclosure statement explaining a joint Chapter 11 plan of liquidation, dated June 6, 2008, of Sun Coast Hospital and Sun Coast Imaging Center LLC, filed on June 18, 2008. Judge Williamson held that the joint disclosure statement contains adequate information within the meaning of Section 1125 of the U.S. Bankruptcy Code. He will convene a hearing on Aug. 12, 2008, at 10:00 a.m., to consider the confirmation of the Debtors' plan. The hearing will take place at 801 N. Florida Avenue, Courtroom 8A in Tampa, Florida. Separately, the Court extended the exclusive periods to solicit acceptances of that plan until Aug. 5, 2008. The joint plan contemplates the liquidation of substantially all of the Debtors' assets. On the Plan's effective date, all properties of the Debtors will be consolidated into one estate and all interests in the Debtors will be canceled and extinguished. The joint plan provides for cash payments to creditors by the liquidating agent from the distribution reserve account on the distribution date. According to Bill Rochelle of Bloomberg News, unsecured creditors holding $10 million in claims is expected to get between 0% to 75% recovery. However, if the Court found that security interest of bondholders is legitimate, unsecured creditors may recover between 0% to 30% instead. As of June 18, 2008, the Debtors have $17.4 million cash. They are presently seeking to recover additional assets valued between $1.2 million to $4.8 million, excluding recoveries for causes of actions under Chapter 5 of the Bankruptcy Code. On Feb. 29, 2008, Largo Medical Center Inc., an affiliate of HCA Inc., completed the purchase of all of the Debtors' assets for $19.8 million in cash including the assumption of liabilities, pursuant to an agreement dated Dec. 28, 2007, entered between the Debtors and Largo Medical. In effect, the sale made Largo Medical the largest hospital in Pinellas County in Florida, with 456-bed acute care facility. A full-text copy of the Joint Disclosure Statement is available for free at http://ResearchArchives.com/t/s?2e5b A full-text copy of the Joint Chapter 11 Plan of Liquidation is available for free at http://bankrupt.com/misc/SunCoastPlan.pdf About Sun Coast Hospital Headquartered in Largo, Florida, Sun Coast Hospital Inc. -- http://www.suncoasthospital.net/-- is a 200-bed acute care hospital that was initially established in 1957 by Dr. Alan J. Snider as an 18-bed acute care hospital. The company and its debtor-affiliate, Sun Coast Imaging Center, LLC, filed for Chapter 11 protection on Dec. 28, 2007 (Bankr. M.D. Fla. Case Nos. 07-12926 and 07-12928). Charles A. Postler, Esq., at Stichter, Riedel, Blain & Prosser, P.A., in Tampa, Florida, represent the Debtors. The U.S. Trustee for Region 21 appointed creditors to serve on an Official Committee of Unsecured Creditors. Adam L. Alpert, Esq., and H. Bradley Staggs, Esq., at Bush Ross, P.A., represent the Committee in this cases. As reported by the Troubled Company Reporter on March 6, 2008, the Debtor listed total assets of $44.9 million and total debts of $40.2 million. TERRY COFFMAN: Restaurant Property to be Auctioned Off July 14 -------------------------------------------------------------- Terry L. Coffman II LLC's Velleggia's Italian Seafood Restaurant is set to be auctioned off on July 14, 2004, Maryland's The Daily Record reports. Anne Riley at Daily Record says Terry L. Coffman II, a real estate developer, bought the building in 2006 for $1,800,000 from the Velleggia family. The Debtor initially planned to knock the building down and build a new complex with retail stores on the bottom and apartments on the top. The report says local restaurant owners are concerned about what might happen in Little Italy, where the restaurant is located, if the Velleggia's property goes to auction. The local restaurateurs said the closure of one eatery could affect them all, the report adds. Terry Lee Coffman, II, filed for Chapter 11 bankruptcy protection, pro se, on May 12, 2008 (Bankr. D. Md. Case No. 08-16549). The Debtor disclosed total assets and liabilities below $1,000,000. THAYLEA PORT: Case Summary & 5 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Thaylea Port 5217 Terreno Drive Mission Viejo, CA 92691 Bankruptcy Case No.: 08-13472 Chapter 11 Petition Date: June 20, 2008 Court: Central District Of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: Robert J. Curtis Curtis Law Group 19700 Fairchild Rd., Ste. 380 Irvine, CA 92612 Tel (949) 955-2211 Fax (949) 955-2217 Email rcurtis@curtislawgroup.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Debtor's List of Largest Unsecured Creditors is available for free at http://bankrupt.com/misc/cacb08-13472.pdf THOMAS OWENS: Case Summary & 16 Largest Unsecured Creditors ----------------------------------------------------------- Debtors: Thomas Oliver Owens Patricia Lynn Owens 7451 S. Dayton Point Lecanto, FL 34461 Bankruptcy Case No.: 08-09221 Chapter 11 Petition Date: June 24, 2008 Court: Middle District of Florida (Tampa) Judge: Catherine Peek McEwen Debtors' Counsel: Buddy D. Ford, Esq. Buddy D. Ford P.A. 115 N. MacDill Avenue Tampa, FL 33609-1521 Tel: (813) 877-4669 Fax: (813) 877-5543 Buddy@tampaesq.com Total Assets: $4,850,798 Total Debts: $1,761,391 Debtors' list of their 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ford Motor Credit Corp 2004 Ford Expedition $10,668 National Bankruptcy Center - Repossessed PO Box 537901 Livonia, MI 48153 Guarantor Lake Truss $9,600 - 2002 F150 Lake County Tax Collector Real Estate taxes $16,000 PO Box 327 Tavares, FL 32778 Green Tree $12,729 Mailstop L800C 800 Landmark Towers 345 St Peter Street Saint Paul, MN 55102 Washington Mutual/Providian CreditCard $12,092 Hernando County Tax Real Estate Taxes $11,446 Citrus County Tax Collector Real Estate taxes $10,000 Hudson & Keyse LLC Collection Attorney $8,949 Washington Mutual Bank Cap One - Virginia CreditCard $7,511 Capital One Auto Finance 2002 F150 Pick Up $16,074 ($10,000 secured) Presidio/cm CreditCard $4,555 Harley Davidson Financial 1979 Cessna 337 $49,404 ($45,000 secured) Cap One - Georgia CreditCard $3,277 Midland Credit Management First North $3,240 American National eMerge CreditCard $3,174 Bank of America CreditCard $2,856 Applied Bank CreditCard $2,154 TRANS ENERGY: March 31 Balance Sheet Upside-Down by $1,681,152 -------------------------------------------------------------- Trans Energy Inc.'s consolidated balance sheet at March 31, 2008, showed $18,987,258 in total assets and $20,668,410 in total liabilities, resulting in a $1,681,152 total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $1,812,689 in total current assets available to pay $3,108,023 in total current liabilities. The company reported a net loss of $1,213,709 for the first quarter ended March 31, 2008, compared with a net loss of $577,594 in the same period a year ago. Total revenues of $427,646 for the three months ended March 31, 2008, increased 50% compared to $285,520 for the three months ended March 31, 2007, primarily due to new drilling, acquisitions, and increased production from the efforts of the work over program. Loss from operations for the first quarter of 2008 was $677,142 compared to a loss from operations of $528,318 for the first quarter of 2007. The increase is primarily due to an increase in selling, general and administrative expenses. The increase in selling, general and administrative expenses is related to the value of shares issued as part of the companny's Long-term Incentive Bonus Program for its officers, directors, and senior managers during the quarter and employee stock compensation under employment agreements. Interest expense increased to $476,193 in the three months ended March 31, 2008, as compared to $95,059 in the same period for 2007, primarily due to increased borrowings for the company's drilling program. Liquidity and Capital Resources At March 31, 2008, the company had a working capital deficit of $1,295,334 compared to a deficit of $686,549 at Dec. 31, 2007. During the first three months of 2008, net cash provided by financing activities was $3,265,135 compared to $73,629 in the same period of 2007. On June 22, 2007, Trans Energy finalized a financing agreement with CIT Capital USA Inc. Under the terms of the agreement, CIT will lend up to $18,000,000 to Trans Energy in the form of a senior secured revolving credit facility. Trans Energy has the ability, at additional cost, to increase the credit facility to $30,000,000 in the future, with increases in its reserves. For the three months ended March 31, 2008, Trans Energy borrowed an additional $3,286,852 from CIT which increased the total outstanding credit balance to $18,000,000, leaving no unused available credit facility. 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?2ec6 Going Concern Doubt GBH CPAs, PC, in Houston, expressed substantial doubt about Trans Energy 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 significant losses from operations and working capital deficit. About Trans Energy Based St. Marys, W. Va., Trans Energy Inc. (OTC BB: TENG) -- http://www.transenergyinc/-- is engaged in the exploration, development and production of natural gas and oil, and the marketing and transportation of natural gas. The company owns interests in and operate approximately 271 oil and gas wells in West Virginia. It also owns and operates an aggregate of over 24 miles of four-inch, six-inch and eight-inch gas transmission lines located within West Virginia in the counties of Marion, Doddridge, Ritchie, Wetzel and Tyler. It also has approximately 25,638 gross acres under lease in West Virginia primarily in the counties of Wetzel, Marion and Doddridge. TRIBUNE CO: CEO Sam Zell Looks into Real Estate to Generate Cash ---------------------------------------------------------------- Tribune Company stated in a press statement that it will explore strategic options for maximizing the value of Tribune Tower, located in downtown Chicago, and Times Mirror Square, located in downtown Los Angeles. The company has issued requests for proposals to several of the country's real estate firms. Tribune is seeking assistance in identifying various structures, development opportunities, and occupancy strategies for both properties. The company intends to maintain an ongoing ownership position in the Tower and in Times Mirror Square. The Wall Street Journal stated that Tribune could fetch hundreds of millions of dollars from a sale of the buildings that house the Chicago Tribune and Los Angeles Times newsrooms. But a more likely outcome are moves that would allow Tribune to wring revenue out of the properties without selling them, WSJ adds. WSJ, citing real-estate experts, said that Tribune could generate cash short of outright sales by moving staffers to less-expensive locations and find tenants for the resulting free space. Or the company could reap a windfall by selling the buildings and then leasing office space from the new owners, WSJ indicated. "Both Tribune Tower and Times Mirror Square are iconic structures, deeply intertwined with the history of this company," Sam Zell, Tribune chairman and chief executive officer, said in an e-mail to employees. "But they are also under-utilized, and as employee- owners, it's in our best interests to maximize the value of all our assets." Property Overviews Tribune Tower is 40-stories tall and has 940,000 square feet of usable space. The property also includes an adjacent parcel of land, approximately one acre in size being used as a surface parking lot. Times Mirror Square is a complex of five buildings with 750,000 square feet of usable space, located on one city block. The property also includes an adjacent parcel of vacant land, approximately two acres in size and a parking garage. About Tribune Company Headquartered in Chicago, Tribune Company (NYSE: TRB) -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting. It reaches more than 80% of U.S. households and is the only media organization with newspapers, television stations and websites in the nation's top three markets. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, Newsday (Long Island, New York), The Sun (Baltimore), South Florida Sun-Sentinel, Orlando Sentinel and Hartford Courant. The company's broadcasting group operates 23 television stations, Superstation WGN on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. * * * As reported in the Troubled Company Reporter on March 20, 2008, Standard & Poor's Ratings Services lowered its ratings on the class A and B units from the $79.795 million Structured Asset Trust Unit Repackaging Tribune Co. Debenture Backed Series 2006-1 to 'CCC' from 'CCC+' and removed them from CreditWatch with negative implications. VANTAGE LOFTS: Section 341(a) Meeting Scheduled for July 24 ----------------------------------------------------------- The U.S. Trustee for Region 17 will convene a meeting of creditors of Vantage Lofts LLC on July 24, 2008, at 4:00 p.m., at 341s Foley Building, Room 1500 in Las Vegas, Nevada. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Las Vegas, Nevada, Vantage Lofts LLC -- http://www.vantagelofts.com/-- builds and develops property. The company file for Chapter 11 protection on June 20, 2008 (Bankr. D. Nev. Case No.08-16586). When the Debtor filed for protection against its creditors, it listed total assets of $45,100,104 and total debts of $72,459,622. VANTAGE LOFTS: Wants to Hire Matthew Johnson as Counsel ------------------------------------------------------- Vantage Lofts LLC asks the United States Bankruptcy Court for the District of Nevada for permission to employ Matthew L. Johnson & Associates P.C. as its counsel. The firm will: a) prosecute or defend any lawsuits, adversary proceedings and contested matters arising out of this bankruptcy proceeding in which the Debtor may be a party; b) assist in the recovery and obtaining necessary court approval for recovery and liquidation of estate assets, and assist in protecting and preserve the same where necessary; c) assist in determining the priorities and status of claims and file objections thereto where necessary; d) assist in the preparation of a disclosure statement and Chapter 11 plan; and e) advise the Debtor and perform all other legal services for the Debtor which may be or become necessary in this bankruptcy proceeding. The firm's professionals and their compensation rates are: Designations Hourly Rates ------------ ------------ Partners $300 Associates $195 Law Clerks $135 To the best of the Debtor's knowledge, the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Headquartered in Las Vegas, Nevada, Vantage Lofts LLC -- http://www.vantagelofts.com/-- builds and develops property. The company file for Chapter 11 protection on June 20, 2008 (Bankr. D. Nev. Case No.08-16586). When the Debtor filed for protection against its creditors, it listed total assets of $45,100,104 and total debts of $72,459,622. WACHOVIA BANK TRUST: Moody's Affirms Low B Ratings on Certificates ------------------------------------------------------------------ Moody's Investors Service upgraded the ratings of three classes and affirmed 18 classes of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2005- C16 as: -- Class A-2, $491,331,162, affirmed at Aaa -- Class A-3, $67,687,000, affirmed at Aaa -- Class A-PB, $109,727,000, affirmed at Aaa -- Class A-4, $569,152,000, affirmed at Aaa -- Class A-1A, $205,108,998, affirmed at Aaa -- Class A-J, $131,545,000, affirmed at Aaa -- Class X-P, Notional, affirmed at Aaa -- Class X-C, Notional, affirmed at Aaa -- Class B, $56,744,000, upgraded to Aaa from Aa2 -- Class C, $25,793,000, upgraded to Aa2 from Aa3 -- Class D, $33,531,000, upgraded to A1 from A2 -- Class E, $20,635,000, affirmed at A3 -- Class F, $25,793,000, affirmed at Baa1 -- Class G, $20,634,000, affirmed at Baa2 -- Class H, $28,373,000, affirmed at Baa3 -- Class J, $2,579,000, affirmed at Ba1 -- Class K, $7,738,000, affirmed at Ba2 -- Class L, $10,317,000, affirmed at Ba3 -- Class M, $5,159,000, affirmed at B1 -- Class N, $5,158,000, affirmed at B2 -- Class O, $5,159,000, affirmed at B3 Moody's upgraded the ratings of Classes B, C and D due to increased defeasance and credit support and overall stable pool performance. As of the June 16, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 10.1% to $1.86 billion from $2.06 billion at securitization. The Certificates are collateralized by 180 mortgage loans ranging in size from less than 0.1% to 6.1% of the pool, with the top 10 non- defeased loans representing 29.6% of the pool. The pool contains three loans with underlying ratings, representing 13.6% of the pool. Twenty-six loans, representing 25.1% of the pool, have defeased and are collateralized with U.S. Government securities. There have been no realized losses since securitization and currently there are no loans in special serving. Eleven loans, representing 4.2% of the pool, are on the master servicer's watchlist. Moody's was provided with partial or year-end 2007 operating results for 85.8% of the pool. Moody's loan to value ratio for the conduit component is 92.7% compared to 95.1% at Moody's last review in April 2007 and 95.2% at securitization. The largest loan with an underlying rating is the 175 West Jackson Loan ($111.5 million -- 6.0%), which represents a participation interest in a $223.0 million first mortgage loan. The loan is secured by 1.5 million square foot Class A office building located in downtown Chicago. The property was 95.4% occupied as of August 2007, essentially the same as at last review. Moody's current underlying rating is Ba1, the same as last review. The second loan with an underlying rating is the 180 Maiden Lane Loan ($93.0 million -- 5.0%), which represents a participation interest in a $186.0 million first mortgage loan. The loan is secured by a 1.1 million square foot Class A office building located in the Financial District of New York City. The property has been 100.0% occupied since securitization. The major tenant is Goldman Sachs Group, Inc. (Moody's senior unsecured rating Aa3 - stable outlook; 73.8% NRA; lease expiration April 2014). Goldman's lease included a termination option for 100.0% of its premises effective November 2009 but Goldman did not give the required notice in May 2008 to exercise the option. Moody's current underlying rating is Baa1, the same as last review. The third loan with an underlying rating is the Cameron Village Loan ($47.3 million -- 2.5%), which is secured by a 630,000 square foot retail center located in Raleigh, North Carolina. The center was 91.7% occupied as of December 2007 compared to 88.4% at last review. The largest tenants are Harris Teeter and the Wake County Library. Moody's current underlying rating is Baa3, the same as last review. The top three non-defeased conduit loans represent 9.0% of the outstanding pool balance. The largest conduit loan is the AON Office Building Loan ($64.2 million -- 3.5%), which is secured by a 412,000 square foot office building located in Glenview, Illinois. The property has been 100.0% occupied since securitization. The primary tenant is the AON Corporation (Moody's senior unsecured rating Baa2; 98.2% NRA; lease expiration April 2017). Financial performance has improved due to AON's scheduled rental increases. Moody's LTV is 93.9% compared to 111.4% at last review. The second largest conduit loan is the 17 Battery Place North Loan ($53.0 million -- 2.9%), which is secured by a 398,000 square foot office building located in downtown Manhattan. The property has been 100.0% occupied since securitization. The largest tenant is the City of New York Department of Cultural Affairs (63.2% NRA; lease expiration December 2012). Moody's LTV is 95.4% compared to 96.2% at last review. The third largest conduit loan is the Gilroy Crossing Shopping Center Loan ($49.0 million -- 2.6%), which is secured by a 333,000 square foot retail center located in Santa Clara, California. The property was 100.0% leased as of August 2007. The largest tenants are Kohl's, Sportsmart Stores and Ross Dress for Less. Moody's LTV is 94.0% compared to 102.0% at last review. WACHOVIA BANK TRUST: Fitch Places Ratings Under Negative Watch -------------------------------------------------------------- Fitch Ratings places these classes of Wachovia Bank Commercial Mortgage Trust, 2005-C20 on Rating Watch Negative: -- $41.2 million class F at 'BBB+'; -- $32.1 million class G at 'BBB'; -- $41.2 million class H at 'BBB-'; -- $22.9 million class J at 'BB+'; -- $13.7 million class K at 'BB'; -- $13.7 million class L at 'BB-'; -- $9.1 million class M at 'B+'; -- $9.1 million class N at 'B'; -- $9.1 million class O at 'B-'. The Rating Watch Negative placements are due to concerns with the declining value of the Macon and Burlington Malls (4.1%) due to lower occupancy levels. The loan is currently in special servicing. Fitch will evaluate the updated appraised values as well as workout strategies, when they become available. The specially serviced loan is backed by two cross-collateralized regional malls located in Macon, Georgia and Burlington, North Carolina. The trust portion of the loan is $137.9 million and began amortizing on a 30 year schedule in July 2006. The total debt on the properties totals $165.1 million and includes $27.2 million in subordinate debt held outside the trust. WELLMAN INC: Nixes Assets Sales, Opts for Restructuring Plan ------------------------------------------------------------ Wellman, Inc., and its debtors subsidiaries filed a joint plan of reorganization with the United States Bankruptcy Court for the Southern District of New York. According to Bloomberg News, Wellman was unable to work out a sale acceptable to first- and second-lienholders, thus resorted to filing of a Chapter 11 plan to give the two groups most of the value in the reorganized company. Deutsche Bank Securities, which arranged the $225,000,000 postpetition loan package for the Debtors, required Wellman to obtain the Bankruptcy Court's proposal to come up with procedures for the sale of substantially all its assets within 90 days after its its bankruptcy filing. The deadline was extended thrice and stakeholders later abandoned the proposed assets sale as initial bids from potential buyers were below expectations. According to the company's news release, the Plan is consistent with its goal to successfully emerge from Chapter 11 as a stand- alone company with improved liquidity and substantially less debt. Further, the Plan reflects the support of certain of the Company's second lien term loan lenders, who have committed to backstop a rights offering for $80,000,000 of new convertible notes. "Filing the Plan is a significant step in completing our plan of reorganization and emerging from bankruptcy as a strong, profitable and more competitive company," said Mark Ruday, Wellman's Chief Executive Officer. Hearings to consider adequacy of the information in the disclosure statement explaining the terms of the Plan, and the confirmation of the Plan have not yet been scheduled. The company plans to ask the Bankruptcy Court to confirm the Plan before September 16, 2008 and to emerge from bankruptcy shortly thereafter. Headquartered in Fort Mill, South Carolina, Wellman Inc. ([OTC]: WMANQ.OB) -- http://www.wellmaninc.com/-- manufactures and markets packaging and engineering resins used in food and beverage packaging, apparel, home furnishings and automobiles. They manufacture resins and polyester staple fiber a three major production facilities. The company and its debtor-affiliates filed for Chapter 11 protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08- 10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York City, represents the Debtors. Wellman Inc., in its bankruptcy petition, listed total assets of $124,277,177 and total liabilities of $600,084,885, as of Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG, Inc., listed assets between $500 million and $1 billion on a stand-alone basis at the time of the bankruptcy filing. Debtor-affiliates Fiber Industries Inc., Prince Inc., and Wellman of Mississippi Inc., listed assets between $100 million and $500 million at the time of their bankruptcy filings. On a consolidated basis, Wellman Inc., and its debtor-affiliates listed $498,867,323 in assets and $684,221,655 in liabilities as of Jan. 31, 2008. (Wellman Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) WILLIAM DEL BIAGGIO: Has $2MM Loan Overdue, Pacific Capital Says ---------------------------------------------------------------- The San Jose Business Journal (N.C.) reports that Pacific Capital Bank is claiming that William "Boots" Del Biaggio III hasn't paid a $2 million loan he took in 2006 with retired hockey star Luc Robitaille. The loan was due in March. The report said Mr. Del Biaggio puts up as security 200,000 shares of Heritage Bank of Commerce stock for a separate 2004 loan of $1.92 million. This loan is due in November and didn't involve Mr. Robitaille. According to the report, the bank wasn't able to verify whether Mr. Del Biaggio actually owned such shares, and so it wants the bankruptcy court to review records relating to the stock at two San Francisco brokerages, Shemano Group and Merriman Curhan Ford. The Shemano Group came into picture because the bank said Mr. Del Biaggio used statements signed by Scott Cacchione, then president of Shemano, to prove he owned the Heritage stock. Mr. Del Biaggio and his father founded Heritage Bank in the 1990s. Messrs. Cacchione and Del Biaggio, and Merriman Curhan Ford are also being sued over loans allegedly made with bogus collateral. The suits were filed by Heritage Bank, Valley Community Bank, Private Bank of the Peninsula, Modern Bank, AEG Facilities, DGB Investments and Security Pacific Bank. They claim that Mr. Del Biaggio got more than $33 million in loans in late 2007 and 2008, when financing his purchase of the Nashville Predators hockey team. As reported by the Troubled Company Reporter on June 9, 2008, Mr. Del Biaggio filed a petition for chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the Northern District of California on June 7, 2008. BDB Management LLC, BDB Management III, LLC, of which Mr. Del Biaggio owned interests, also filed for Chapter 11 protection on the same day. The Debtors have an affiliate, Sand Hill Capital Partners III LLC, which filed for Chapter 7 bankruptcy on June 5, 2008 (Bankr. N.D. Calif. Case No. 08-30989). The AP, citing court documents, says Mr. Del Biaggio, has at least $57,000,000 in unpaid personal and business loans, credit card bills and other financial obligations. Mr. Del Biaggio stepped down from Sand Hill Capital late in May. According to the reports, Mr. Del Biaggio is facing charges for roughly $17,000,000 in the aggregate from lenders. Established in 1996, Sand Hill Capital has four debt funds under management, of which two are actively investing. Sand Hill has provided debt financing and equity co-investing in multiple portfolio companies of top-tier venture capital firms, including Broadcom, a semiconductor company specializing in VoIP, wireless networking, and broadband communications solutions; Commerce One, a provider of On-Demand Supplier Relationship Management solutions and The Open Supplier Network; IBahn, a provider of secure broadband-to-go at premium hospitality locations; and Odwalla, maker of fruit drinks and snacks. Menlo Park, California-based BDB Management LLC, BDB Management III, LLC and William J. Del Biaggio, III filed for Chapter 11 protection on June 7, 2008 (Bankr. N.D. Calif. Lead Case No. 08- 31001). William J. del Biaggio, III, an interest holder of the companies, concurrently filed for bankruptcy. The Debtors have an affiliate, Sand Hill Capital Partners III LLC, which filed for Chapter 7 bankruptcy on June 5, 2008 (Bankr. N.D. Calif. Case No. 08-30989). Judith Whitman, Esq., at Diemer Whitman and Cardosi LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $50 million to $100 million. In his bankruptcy filing, Mr. Del Biaggio listed estimated assets estimated debts of both $50 million to $100 million. WILLIAM MILLS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: William E. Mills, Jr. 34 Hawley Avenue Milford, CT 06460 Bankruptcy Case No.: 08-32003 Chapter 11 Petition Date: June 20, 2008 Court: District of Connecticut (New Haven) Judge: Lorraine Murphy Weil Debtor's Counsel: Peter L. Ressler Groob Ressler & Mulqueen 123 York Street, Ste 1B New Haven, CT 06511-0001 Tel (203) 777-5741 Fax 203-777-4206 Email ressmul@yahoo.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Debtor's petition is available for free at http://bankrupt.com/misc/ctb08-32003.pdf WILLIAM WHITE: Says Cash Crunch in Construction Biz is Temporary ---------------------------------------------------------------- William Alexander White, commander of the Roanoke-based American National Socialist Workers Party, said his fall into Chapter 11 bankruptcy should have no effect on his home construction business or on his role as leader of his neo-Nazi organization. Mr. White said he is just reorganizing some debt, and what he experienced is only a temporary cash crunch. According to the report, Mr. White said he has been planning for some time to sell his rental homes. Mr. White filed for Chapter 11 bankruptcy on June 13, 2008 in the U.S. Bankruptcy Court for the Western District of Virginia (Roanoke) (Case No.: 08-71107). Harry Wayne Brown, Esq. represents him in his restructuring effort. When he filed for bankruptcy, he listed total assets of $1,926,569 and total debts of $1,404,664. Reports by WJZ (Md.) and Roanoke Times (Va.) of Mr. White's bankruptcy highlighted his involvement in the white supremacy movement and his postings he made about his tenants at the Web site Overthrow.com. He is the owner of White Homes and Land LLC. Laurence Hammack of Roanoke Times reported he used up several credit cards to raise capital to purchase the first of about 20 homes he currently maintains as rental properties. The same report says Mr. White denied his financial difficulties were related to the credit cards, rather it was due to medical bills of more than $130,000 from the hospitalization of his wife and newborn daughter. His bankruptcy filing, though, includes more than $52,000 in credit card debt. WORNICK CO: Judge Aug Confirms Amended Joint Chapter 11 Plan ------------------------------------------------------------ The Hon. J. Vincent Aug, Jr., of the United States Bankruptcy Court for the Southern District of Ohio confirmed an amended joint Chapter 11 plan of liquidation of Wornick Co. and its debtor- affiliates filed on April 4, 2008. "Upon our emergence from Chapter 11, Wornick will have a much stronger balance sheet," Joel Rosenblatt quotes Wornick President and Chief Executive Officer Jon Geisler said in the statement. As reported in the Troubled Company Reporter on April 15, 2008, Judge Aug approved the adequacy of the Debtors' amended disclosure statement explaining the plan. He held that the amended disclosure statement contains adequate information within the meaning of Section 1125 of the Bankruptcy Code. Overview of the Plan Pursuant to the provisions of the U.S. Bankruptcy Code, only holders of allowed claims or equity interests in classes of claims or equity interests that are impaired and that are not deemed to have rejected a proposed chapter 11 plan are entitled to vote to accept or reject such plan. Classes of claims or equity interests in which the holders of claims or equity interests are unimpaired under a Chapter 11 plan are deemed to have accepted the plan and are not entitled to vote to accept or reject the plan. Classes of claims or equity interests in which the holders of claims or equity interests will receive no recovery under a Chapter 11 plan are deemed to have rejected the plan and are not entitled to vote to accept or reject the plan. Pursuant to the Plan, holders of Allowed Claims in Classes 1, 2, 5, 6, and 7 and Equity Interests in Class 10 will either receive distributions equal to the total amount of their Claims or retain their Equity Interests, as applicable, will be Unimpaired and will be deemed to have accepted the Plan. Holders of Allowed Claims in Classes 3 and 4 of the Plan will be entitled to partial distribution on account of their Claims and are Impaired. As a result, holders of Allowed Claims in Classes 3 and 4 are entitled to vote to accept or reject the Plan. Holders of Allowed Claims in Classes 8 and 9 and Equity Interests in Class 11 of the Plan, consisting of holders of TWC Note Claims, Subordinated Securities Claims and Equity Interests in the Non- Surviving Debtors and Wornick, respectively, will not receive any distributions under the Plan. As a result, holders of Allowed Claims in Classes 8 and 9 and Equity Interests in Class 11 are conclusively presumed to have rejected the Plan. The amended plan classifies claims against and interests in the Debtors in 11 classes. The classification of interests and claims are: Treatment of Interests and Claims Type of Allowed Estimated Claim Treatment Claims Recovery ------- --------- ------- --------- Priority Unimpaired $100,000 100% Tax Claims DIP Financing Unimpaired $35,000,000 100% Claims Other Priority Unimpaired $1,700,000 100% Claims Other Secured Unimpaired -- 100% Claims Prepetition Impaired -- -- Secured Loan Agreement Claims Senior Secured Impaired $140,219,335; 36% Note Claims $125,000,000 in accrued principal plus and $14,219,335 in unpaid prepetition interest accrued interest General Unsec. Unimpaired $1,000,000 100% Claims Unliquidated Unimpaired -- N/A Claims Intercompany Unimpaired -- N/A Claims TWC Note Claims Impaired $38,000,000 0% Subordinated Impaired -- 0% Securities Claims Equity Interests Unimpaired 100% in Surviving Debtors other than Wornick Equity Interests Impaired 0% of Non-Surviving Debtors and Wornick Equity Sale Pursuant to Plan On Feb. 12, 2008, the Debtors entered into an Purchase Agreement with Viren Acquisition Corp. The Purchase Agreement provides for the sale of 100% of the equity of Reorganized Wornick, or substantially all of the Debtors' assets to the Purchaser as well the assumption by the Purchaser of certain of the Debtors' liabilities pursuant to section 363 of the U.S. Bankruptcy Code. The Debtors, in the exercise of their business judgment, believe the Purchase Agreement is the best way to maximize the value of the estates for creditors. The Purchase Price is subject to higher and better offers and the Purchase Price far exceeds the projected recoveries under the Debtors' liquidation analysis. The Debtors intend to address the issue of whether the Purchase Agreement, or a Modified Purchase Agreement, as the case may be, maximizes value at a transaction approval hearing. Following the occurrence of certain events, the Purchaser may elect, by providing written notice to the Debtors, that the Transaction be effected outside a Chapter 11 plan, in the form of a sale of all or substantially all of the Debtors' assets, in which case the Debtors and the Purchaser will seek Court approval of the Asset Sale at the transaction approval hearing. A full-text copy of the Amended Disclosure Statement is available for free at http://ResearchArchives.com/t/s?2a80 A full-text copy of the Amended Joint Chapter 11 Plan of Liquidation is available for free at http://ResearchArchives.com/t/s?2a81 Based in Cincinnati, The Wornick Company -- http://www.wornick.com/-- is a leading supplier of individual and group military field rations to the Department of Defense. In addition the company continues to extend its core capabilities to commercial markets where its customers include, but are not limited to, Kraft Foods, Inc., Gerber Products Company, as well as retail and grocery outlets including Walgreens Co., 7-Eleven, The Kroger Co., Publix Super Markets and Meijer. Wornick specializes in the production, packaging, and distribution of shelf-life, shelf-stable, and frozen foods in flexible pouches and semi-rigid products. The firm's two main lines of business are military rations (approximately 70% of revenues) and co- manufacturing for leading food brands (30%). The company produces both individual (including MRE) and group rations (including Unitized Group Rations-A or UGR-A) for the U.S. military. MREs comprise about 65% of military revenues. The company and and five of its affiliates filed for Chapter 11 protection on Feb. 14, 2008 (Bankr. S.D. Ohio, Case No. 08-10654). Donald W. Mallory, Esq., Kim Martin Lewis , Esq., and Patrick Burns, Esq. at Dinsmore & Shohl LLP represent the Debtors in their restructuring efforts. The Debtor selected Kurtzman Carson Consultants LLC as claims, noticing and balloting agent. An official committee of unsecured creditors has not been appointed in these cases. The company listed between $100 million and $500 million assets and between $100 million and $500 million in debts in its bankruptcy filing. W.R. GRACE: High Court Drops Request to Review Criminal Case ------------------------------------------------------------ The U.S. Supreme Court rejected W.R. Grace & Co.'s request for a review of the criminal charges filed by the U.S. Government against the company and seven of its former executives involving the release of asbestos from the Libby, Montana, vermiculite mine. Grace has operated and mined vermiculite ore in the Libby mine from 1963 to 1992. Libby residents complained of serious health problems as a result of the release of asbestos from the mine. In response, the Government obtained an indictment in 2005 charging Grace and its officers of conspiracy to violate environmental laws and obstruct federal agency proceedings, violations of the federal Clean Air Act, and obstruction of justice. A trial, which has been originally scheduled in September 2006, was indefinitely delayed as a result of further appeals by the Government and Grace. The Government has opposed Grace's request for a Supreme Court review of the criminal charges arguing that further review will further delay the trial. According to the Government, "[s]ome witnesses and many victims . . . are dying from mesothelioma, asbestosis, and other asbestos-related diseases . . . As time passes, more witnesses will be unavailable to testify, and fewer victims will be able to attend the trial." The U.S. District Court for the District of Montana, in 2006, preliminarily dismissed as time barred the "knowing endangerment object in the indictment. In October 2007, at the Government's behest, the U.S. Court of Appeals in the Ninth Circuit reinstated the conspiracy charges. Grace appealed the Appellate Court's ruling and asked for Supreme Court intervention. According to the Seattle Post Intelligencer, Grace argued over the scientific definition of the type of asbestos that contaminated the vermiculite and insisted that the Environmental Protection Agency's definition of "asbestos" doesn't cover most of the fibers identified in the vermiculite ore mined in Libby. Grace has said in a regulatory filing with the U.S. Securities and Exchange Commission in September 2007 that it may pay as much as $280 million in fines if convicted in the criminal case. Grace added that its former officers may face up to 15 years of imprisonment, if convicted. In another regulatory filing with the SEC in March 2007, Grace said it expects that legal fees for its defense in the indictment and that of its current and former employees could range from $3 million to $4 million per quarter. About W.R. Grace Headquartered in Columbia, Md., W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Debtors' Disclosure Statement began on Jan. 21, 2005. The Debtors' exclusive period to file a chapter 11 plan expired on July 23, 2007. Estimation of W.R. Grace's asbestos personal injury liabilities commenced on January 14, 2008. At Dec. 31, 2006, the W.R. Grace's balance sheet showed total assets of $3,620,400,000 and total debts of $4,189,100,000. As of November 30, 2007, W.R. Grace's balance sheet showed total assets of $3,335,000,000, and total debts of $3,712,000,000. XL CAPITAL: CreditSights Analyst Sees Bond Insurer Insolvencies --------------------------------------------------------------- A story in our June 25 newsletter, about CreditSights analyst Rob Haines' report on bond insurers and the possibility of insolvencies, incorrectly mentioned "XL Capital" (also known as XL Capital Ltd. or "XL") in the headline and in the article. It also falsely reported that XL Capital is a subsidiary of Security Capital Assurance Ltd. (SCA). Rob Haines' report was referring to XL Capital Assurance Inc. (also known as XLCA) which is a subsidiary of SCA. XLCA is a provider of monoline financial guarantee insurance. While XL Capital has a minority ownership stake in SCA, they are separate companies with separate management and separate Boards of Directors. Also XLCA is NOT a subsidiary of XL Capital Ltd and XL Capital Ltd is NOT a bond insurer. XL Capital Ltd. is the holding company for the XL Capital group of companies. XL Capital Ltd., through its operating subsidiaries, is a leading provider of global insurance and reinsurance coverages to industrial, commercial and professional service firms, insurance companies and other enterprises on a worldwide basis. More information about XL Capital Ltd. is available at http://www.xlcapital.com. ZAMIAS NORTH: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Zamias North Fork Inc. 424 Country Club Road Johnstown, PA 15905 Bankruptcy Case No.: 08-70687 Related Information: Maurice R. Strawn, Jr., secretary, filed the petition on the Debtor's behalf. Chapter 11 Petition Date: June 25, 2008 Court: Western District of Pennsylvania (Johnstown) Debtor's Counsel: James R. Walsh, Esq. (jwalsh@spencecuster.com) Spence Custer Saylor Wolfe & Rose 400 U.S. Bank Building P.O. Box 280 Johnstown, PA 15907 Tel: (814) 536-0735 Fax: (814) 539-1423 Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,000 to $10,000,000 List of Unsecured Creditors: Creditor Nature of Claim Claim Amount -------- --------------- ------------ VGM Financial Services disputed $150,000 Capital One line of credit $65,000 First Commonwealth Bank $6,547 Susquehanna Patriot $24,570 Commercial Leasing * Moody's Says Creditors May Recover Less than in the Past ---------------------------------------------------------- Holders of bank loans and bonds from US corporate issuers in default can expect to recover less of their investment than in past years, says Moody's Investors Service. The ratings agency attributes the lower expected recovery rate to the increase in issuance of secured bank loans over the past several years, which has created top-heavy capital structures for many spec-grade issuers. "The substantial increase in bank loans' average share of total debt will reduce average recoveries for both loans and bonds," Kenneth Emery, Moody's Director of corporate default research said. "Loans have less junior debt below them which will serve as a drag on recovery rates, while bond recovery rates will suffer from being in a more subordinated position relative to loans." Moody's recovery outlook is based on its Loss Given Default assessments, which it has published for non-financial speculative- grade corporate issues since 2006. The LGD assessments signal that the average expected ultimate recovery rate on US 1st lien senior secured bank loans is 68%, which compares with an actual historical average recovery rate of 87%, said Moody's. Moody's expects recovery rates on US 2nd lien loans to be only 21%, compared to the historical average of 61%. Most of these loans have been made to 'loan only' issuers with only bank debt—no bonds—so that they sit at the bottom of the capital structure. For senior unsecured bonds of US speculative-grade issuers, Moody's expects an average ultimate recovery rate of 32%, which is below its historical average of 40%. Subordinated bonds are expected to recover 18%, which is also below their 28% historical average. The number of speculative-grade issuers relying solely on bank loans has risen from about 10% of all speculative-grade U.S. issuers in 2004 to 34% today. Of speculative grade issuers with bank loans, nearly 60% are loan-only issuers, compared to under 30% in 2004. "The rapid growth of issuers having only rated loans, without any bonds outstanding, has played a substantial role in increasing loans' share of total debt across rated issuers," Mr. Emery said. "It will reduce recovery rates on both bank loans and bonds." Moody's LGD assessments are calibrated to a large extent on the experience of the 1990-91 and 2001-02 recessions, and therefore already largely incorporate downturn economic conditions, says Emery. However, if the US economy were to experience a recession that was more severe than the past two US recessions, debt recovery rates could be even lower than currently given by Moody's LGD assessments. The upside risk to the outlook is if creditors are able to minimize declines in issuers' enterprise values at the time of default resolution by, for example, forcing distressed issuers into bankruptcy at a relatively early stage of distress. While large loan shares imply that loan holders have an incentive to be more vigilant in maintaining issuers' enterprise values, weak or no loan maintenance covenants will likely prevent such an outcome, says Moody's. * Moody's Says Canada Has Only Two Issuer Defaults in 2007 ---------------------------------------------------------- Despite the turmoil in global credit markets, the Canadian corporate default environment remained benign in 2007 with only two Canadian corporate issuers defaulting, Moody's Investors Service reported in its sixth annual review of corporate defaults, recovery rates, and credit losses among Canadian corporate bond issuers. The two Canadian corporate issuers (one rated and the other un- rated) defaulted on a total of C$229 million of bonds and C$310 million of loans in 2007. "Compared to the historical average of four defaults per year, 2007's default count of two was relatively low. Total default volume for rated and unrated issuers was C$539 million in 2007, which was also well below the long-term average of C$2,455 million between 1989 and 2006," Sharon Ou, Moody's AVP/Analyst and author of the report, said. "Although defaults have been pretty low in the last couple of years, we believe those lows likely mark the bottom of the current credit cycle. In fact, three Canadian issuers have already defaulted on a total of C$1,645 million of debt in the first five months of 2008. This year's default count and volume will undoubtedly exceed those in 2004-2006," Miss Ou added. >From a broader credit prospective, Moody's report shows that Canadian issuers' overall credit quality deteriorated in 2007. The upgrade-to-downgrade ratio fell from 0.9 in 2006 to 0.4 in 2007, the latter of which is below the long-term average of 0.7 since 1989. Among speculative-grade issuers, the sole 2007 rated defaulter lifted the default rate to 1.2% from zero percent from 2004 to 2006 as there were no Moody's-rated Canadian defaults in those three years. Looking ahead, Moody's Credit Transition Model predicts that the Canadian speculative-grade default rate will rise sharply to 7.2% by the end of 2008 then decline to 6.1% by the end of April 2009, both levels are well above the average rate of 3.6% over the last 19 years, but also well below the peak of 13.8% in September 2001. "The primary factors putting upward pressure on default rates are deteriorated credit quality, a weak US housing market, weakening US consumer demand, and increasing energy prices. Weaker global economic conditions, widening credit spreads and tougher corporate underwriting standards will together hinder the ability of many speculative-grade issuers to make debt service payments and re- finance maturing debt," Miss Ou said. For investment-grade issuers, Moody's CTM forecasts that 3.7% of Canadian issuers will become fallen angels in the coming 12 months, which is above the average of 2.4% since 1989. Overall, between 1989 and 2007, 73 rated and unrated Canadian issuers defaulted on a total of C$44.7 billion in debt (both bonds and loans). "Of these 73 defaulters, thirty-four issuers have been rated by Moody's, with affected debt totaling C$39.2 billion," Donald Carter, managing director of Moody's Canada said. "26% of the 73 defaulters were by issuers from Canada's basic industries such as metal/mining and forest/paper products. Measured by default volume, however, nearly half of the defaulted debt was contributed by telecom issuers, led by AT&T Canada, which defaulted on C$5.5 billion of debt in September 2002." The average default rate across all Canadian issuers, both investment grade and speculative grade, has been 1.4% over a one- year horizon and 5.8% over a five-year horizon, says Moody's. "The fact that multi-year average default rates for Canadian issuers have been lower than comparable rates for U.S. borrower is in large part due to relatively higher average credit rating among Canadian issuers than the U.S. counterparts," Mr. Carter said. Defaulted bond recovery rates by lien position have been similar for Canadian and U.S.-based defaulters, reports Moody's. For example, the senior unsecured bond recovery rate for Canadian issuers has averaged 35.2% of par, compared to 38.7% in the U.S. * Fitch Says Higher Credit Enhancement Needed for New US Re-REMICs ------------------------------------------------------------------ Though re-securitization of existing U.S. residential mortgage- backed securities, or re-REMICs, are experiencing a boom, investors should take care when reviewing re-REMIC offerings, according to Fitch Ratings. RE-REMIC issuance has increased as new security issuances backed by residential mortgage loans have been scarce in recent months. However, some recently issued re-REMICs, in Fitch's opinion, have had insufficient credit enhancement to support AAA ratings, given their collateral and structural features. Most re-REMIC transactions have a subordinate tranche that provides credit support to the senior tranche. The subordination structure mitigates some of the concerns that investors have if they forecast that the underlying bond may experience losses or be downgraded in the future. However, the size of the credit enhancement a senior bond needs in a re-REMIC is highly dependent on the pay structures. Fitch has reviewed re-REMICs with variations of traditional sequential and pro rata pay structures. Fitch's analysis of transactions to date shows that a pro rata pay structure may need 2-3 times as much credit support from the subordinate bond as a sequential pay structure. In a sequential pay structure, the subordinate bond is locked-out until the senior bond is paid off, and as a result, credit support will continue to build as the senior bond is reduced in size. For transactions using a pro rata structure, principal on the subordinated bond is paid down concurrently with the senior bond, which may cause insufficient support remaining when losses come through later. 'In order to provide sufficient credit enhancement in the re- REMIC, the subordinate bond generally needs to be much larger in a pro rata structure compared to a sequential structure, with Fitch's analysis showing that roughly 2-3 times were needed in some cases,' said Group Managing Director and U.S. RMBS group head Huxley Somerville. 'In addition, the pro rata structure is highly sensitive to the prepayment and loss assumptions used in modeling because principal payments to the subordinate bond will also erode the credit protection to the senior bond.' In a slower prepay environment compared to a faster one; the subordinate bond will have a higher balance outstanding to take losses. In addition, the earlier a deal experiences losses, the higher subordinate balance will be available to cover the losses. Fitch uses Intex software in order to accurately assess the impact of losses on the underlying groups Fitch is preparing a report to highlight to investors the various re-REMIC pay structures and their impact on credit support to the senior bond within the re-REMIC. The special report providing further detail relating to Fitch's analysis of the pro rata and sequential structures of re-REMICs is expected to be published in July 2008. * Fitch: Economic & Credit Outlook for Emerging Markets Worsening ----------------------------------------------------------------- Fitch Ratings says in its semi-annual Sovereign Review that the economic and credit outlook for emerging market economies is deteriorating, driven primarily by rapidly rising inflation. "It is the surge in inflation, rather than the direct consequences of the global credit crunch, that is the principal threat to macroeconomic and financial stability in many emerging markets," says David Riley, Group Managing Director in Fitch's Sovereigns team. "The risk faced by several central banks is that the failure to contain inflationary pressures will result in downward pressure on exchange rates - especially if the Fed surprises with earlier rises in US interest rates - leaving policymakers with the unenviable choice of either allowing currencies to depreciate, which in turn will stoke inflation further, or intervening in support of their currencies and raising interest rates much more aggressively with negative consequences for growth." While economic growth and exports in Latin America have been buoyed by high and rising commodity prices, the terms of trade for commodity-consuming emerging Asia and Europe have worsened. Inflation in Asia, in particular, has accelerated sharply as policymakers have been reluctant to raise interest rates, while much of emerging Europe remains exposed to a reversal of private capital flows due to large current account deficits and external borrowing. Economic activity has continued to be robust in most emerging markets despite the slowdown in the G7 economies. Fitch predicts that emerging markets will grow 6.2% in 2008, compared to 7.2% last year. However, inflation has accelerated at an alarming pace in many emerging markets to multi-year highs. The monetary policy response to rising inflation has been disappointing, with several central banks apparently reluctant to raise interest rates and allow their currencies to appreciate in response to what is perceived as external and temporary price shocks. However, with consumer price inflation in several emerging market economies now significantly above official targets and accommodated by wage increases, including by hikes in public-sector salaries, the risk of a wage-price spiral as inflation expectations shift upwards is increasing. Inflation can have an insidious impact on sovereign creditworthiness by heightening the incidence of macroeconomic volatility, not least by encouraging a flight into foreign currency assets, and increases the risk of exchange rate and banking crises. Rising fuel and food prices are also placing government budgets under pressure as subsidies become more expensive. These concerns have been at the forefront of several negative rating actions by Fitch in recent months and the net balance of Positive to Negative rating Outlooks has fallen to just 3 (12 Positives/9 Negatives) from 16 (19 Positive/3 Negative) less than a year ago, suggesting that the positive rating momentum of recent years is dissipating despite recent high profile rating upgrades, notably of Brazil to investment-grade. Fitch notes that the global credit crunch has so far not had a noticeable impact on private sector credit growth which remains strong, while rising commodity prices have boosted incomes in resource-rich emerging economies. But it warns that the full impact of the downturn in the US and other advanced economies is yet to be fully felt in terms of reduced export demand. The agency further warns that commodity prices are expected to moderate from current levels and central banks are being forced to tighten monetary policies in response to the upsurge in inflationary pressures. * S&P Says Downgrades of High-Yield Bonds Accelerates This Year --------------------------------------------------------------- After a two-month rally, the high-yield bond market has moved sideways in June, said an article published by Standard & Poor's. The article, which is titled "U.S. High-Yield Prospects: High- Yield Market Unlikely To Be Hot This Summer," says that spreads on S&P's high-yield composite index are currently at the 640-basis point level, more in line with default expectations of 4%-6% one year forward. The rate of downgrades has accelerated this year, with 186 downgrades through June 11 versus 151 in the second half of 2007. The trailing-12-month downgrade ratio (the percentage of downgrades to total rating actions during a 12-month period) moved to 71% at the beginning of June, its highest level since March 2004. Forward-looking credit metrics based on outlook and CreditWatch status also project significant downgrade risk, with net negative bias at 23.46%, its highest level since the end of 2003. Deal flow into the high-yield primary market remains relatively slow, though May showed signs of life with $12.6 billion in new issuance. Through June 20, there has been approximately $25 billion in high-yield new debt issuance, well behind the $100 billion market reached at the end of June in 2007 and $65 billion through the first half of 2006. "The market usually enters a lull in the summer months, so we expect supply conditions to remain relatively tepid," noted Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. The trailing-12 month speculative-grade default rate accelerated to 1.89%, with six (including three confidentially rated issuers) U.S.-based companies defaulting in May. S&P project the trailing- 12-month speculative-grade default rate to climb to 4.7% four quarters out. * BOND PRICING: For the Week of June 23 to June 27, 2008 -------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- ABC RAIL PRODUCT 10.500% 01/15/04 0 ABC RAIL PRODUCT 10.500% 12/31/04 100 ABITIBI-CONS FIN 7.875% 08/01/09 75 ADVANTA CAP TR 8.990% 12/17/26 68 AIRTRAN HOLDINGS 7.000% 07/01/23 71 ALERIS INTL INC 10.000% 12/15/16 73 ALESCO FINANCIAL 7.625% 05/15/27 59 ALION SCIENCE 10.250% 02/01/15 71 ALLEGIANCE TEL 11.750% 02/15/08 7 ALLEGIANCE TEL 12.875% 05/15/08 7 AM AIRLN EQ TRST 10.680% 03/04/13 65 AM AIRLN PT TRST 7.377% 05/23/19 69 AM AIRLN PT TRST 8.390% 01/02/17 73 AM AIRLN PT TRST 9.730% 09/29/14 72 AMBAC INC 5.950% 12/05/35 49 AMBAC INC 6.150% 02/07/87 26 AMBAC INC 7.500% 05/01/23 66 AMBASSADORS INTL 3.750% 04/15/27 53 AMD 6.000% 05/01/15 71 AMD 6.000% 05/01/15 N.A. AMER & FORGN PWR 5.000% 03/01/30 52 AMER COLOR GRAPH 10.000% 06/15/10 35 AMER TISSUE INC 12.500% 07/15/06 0 AMERICREDIT CORP 0.750% 09/15/11 71 AMERICREDIT CORP 2.125% 09/15/13 67 AMES TRUE TEMPER 10.000% 07/15/12 69 AMR CORP 9.000% 08/01/12 72 AMR CORP 9.000% 09/15/16 67 AMR CORP 9.750% 08/15/21 70 AMR CORP 9.880% 06/15/20 61 AMR CORP 10.000% 04/15/21 65 AMR CORP 10.150% 05/15/20 68 AMR CORP 10.200% 03/15/20 74 ANTIGENICS 5.250% 02/01/25 45 ASHTON WOODS USA 9.500% 10/01/15 57 ASPECT MEDICAL 2.500% 06/15/14 57 ASPECT MEDICAL 2.500% 06/15/14 N.A. ASSURED GUARANTY 6.400% 12/15/66 74 AT HOME CORP 4.750% 12/15/06 0 ATHEROGENICS INC 1.500% 02/01/12 10 ATHEROGENICS INC 4.500% 03/01/11 11 AVENTINE RENEW 10.000% 04/01/17 73 BALLY TOTAL FITN 13.000% 07/15/11 68 BANK NEW ENGLAND 8.750% 04/01/99 7 BANK NEW ENGLAND 9.500% 02/15/96 100 BANK NEW ENGLAND 9.875% 09/15/99 7 BANKUNITED CAP 3.125% 03/01/34 42 BBN CORP 6.000% 04/01/12 0 BEARINGPOINT INC 3.100% 12/15/24 41 BEARINGPOINT INC 4.100% 12/15/24 38 BELL MICROPRODUC 3.750% 03/05/24 70 BON-TON DEPT STR 10.250% 03/15/14 75 BORDEN INC 7.875% 02/15/23 47 BORDEN INC 8.375% 04/15/16 56 BORDEN INC 9.200% 03/15/21 57 BORLAND SOFTWARE 2.750% 02/15/12 69 BOWATER INC 6.500% 06/15/13 66 BOWATER INC 9.375% 12/15/21 69 BOWATER INC 9.500% 10/15/12 63 BRODER BROS CO 11.250% 10/15/10 68 BUDGET GROUP INC 9.125% 04/01/06 0 BUFFALO THUNDER 9.375% 12/15/14 N.A. BUFFETS INC 12.500% 11/01/14 3 BURLINGTON NORTH 3.200% 01/01/45 50 CAPITALSOURCE 3.500% 07/15/34 70 CAPMARK FINL GRP 6.300% 05/10/17 73 CCH I LLC 9.920% 04/01/14 72 CCH I LLC 10.000% 05/15/14 70 CCH I LLC 11.125% 01/15/14 72 CD RADIO INC 8.750% 09/29/09 5 CHARMING SHOPPES 1.125% 05/01/14 64 CHARTER COMM HLD 10.000% 05/15/11 70 CHARTER COMM HLD 11.125% 01/15/11 70 CHARTER COMM HLD 11.750% 05/15/11 67 CHARTER COMM LP 6.500% 10/01/27 60 CHENIERE ENERGY 2.250% 08/01/12 54 CHIC EAST ILL RR 5.000% 01/01/54 61 CHS ELECTRONICS 9.875% 04/15/05 100 CIT GROUP INC 4.950% 02/15/15 70 CIT GROUP INC 5.050% 09/15/14 68 CIT GROUP INC 5.500% 08/15/13 71 CIT GROUP INC 5.800% 12/15/16 68 CIT GROUP INC 5.900% 03/15/22 70 CIT GROUP INC 5.950% 02/15/22 69 CIT GROUP INC 5.950% 09/15/16 69 CIT GROUP INC 6.000% 05/15/22 69 CIT GROUP INC 6.000% 11/15/16 70 CIT GROUP INC 6.050% 09/15/16 70 CIT GROUP INC 6.100% 03/15/67 55 CIT GROUP INC 6.150% 05/15/16 72 CIT GROUP INC 6.150% 09/15/21 68 CIT GROUP INC 6.250% 01/15/13 72 CIT GROUP INC 6.250% 01/15/13 75 CIT GROUP INC 6.250% 09/15/21 68 CIT GROUP INC 6.250% 11/15/17 74 CIT GROUP INC 6.250% 11/15/21 73 CIT GROUP INC 6.500% 03/15/11 72 CITIZENS UTIL CO 7.000% 11/01/25 77 CLAIRE'S STORES 9.250% 06/01/15 68 CLAIRE'S STORES 9.625% 06/01/15 59 CLAIRE'S STORES 10.500% 06/01/17 54 CLEAR CHANNEL 4.900% 05/15/15 63 CLEAR CHANNEL 5.000% 03/15/12 76 CLEAR CHANNEL 5.500% 09/15/14 66 CLEAR CHANNEL 5.500% 12/15/16 60 CLEAR CHANNEL 5.750% 01/15/13 72 CLEAR CHANNEL 6.875% 06/15/18 64 CLEAR CHANNEL 7.250% 10/15/27 59 CMP SUSQUEHANNA 9.875% 05/15/14 72 COGENT COMMUNICA 1.000% 06/15/27 67 COLLINS & AIKMAN 10.750% 12/31/11 0 COLOR TILE INC 10.750% 12/15/01 100 COLUMBIA/HCA 7.050% 12/01/27 78 COLUMBIA/HCA 7.500% 11/15/95 71 COMERICA CAP TR 6.576% 02/20/37 69 COMPUCREDIT 3.625% 05/30/25 50 COMPUCREDIT 5.875% 11/30/35 43 CONEXANT SYSTEMS 4.000% 03/01/26 76 CONSTAR INTL 11.000% 12/01/12 56 CONTL AIRLINES 8.750% 12/01/11 70 COUNTRYWIDE FINL 5.250% 05/11/20 64 COUNTRYWIDE FINL 5.250% 05/27/20 67 COUNTRYWIDE FINL 5.750% 01/24/31 64 COUNTRYWIDE FINL 5.800% 01/27/31 64 COUNTRYWIDE FINL 6.000% 02/08/36 65 COUNTRYWIDE FINL 6.000% 03/16/26 67 COUNTRYWIDE FINL 6.000% 03/23/21 68 COUNTRYWIDE FINL 6.000% 04/06/21 72 COUNTRYWIDE FINL 6.000% 04/13/21 66 COUNTRYWIDE FINL 6.000% 11/14/35 65 COUNTRYWIDE FINL 6.000% 11/22/30 66 COUNTRYWIDE FINL 6.000% 12/14/35 66 COUNTRYWIDE FINL 6.125% 04/26/21 69 COUNTRYWIDE FINL 6.300% 04/28/36 67 COUNTRYWIDE HOME 5.000% 05/16/13 75 COUNTRYWIDE HOME 5.500% 05/16/18 68 COUNTRYWIDE HOME 5.900% 01/24/18 72 COUNTRYWIDE HOME 6.000% 01/24/18 74 COUNTRYWIDE HOME 6.000% 05/16/23 65 COUNTRYWIDE HOME 6.000% 07/23/29 68 COUNTRYWIDE HOME 6.150% 06/25/29 71 COUNTRYWIDE HOME 6.200% 07/16/29 66 CV THERAPEUTICS 3.250% 08/16/13 75 DECODE GENETICS 3.500% 04/15/11 39 DELPHI CORP 6.500% 08/15/13 42 DELPHI CORP 8.250% 10/15/33 10 DELTA AIR LINES 8.000% 12/01/15 57 DELTA AIR LINES 9.875% 04/30/08 N.A. DELTA AIR LINES 10.500% 04/30/16 N.A. DELTA MILLS INC 9.625% 09/01/07 10 DENDREON CORP 4.750% 06/15/14 73 DILLARD DEPT STR 7.750% 05/15/27 80 DILLARD DEPT STR 7.750% 07/15/26 75 DILLARDS INC 7.000% 12/01/28 71 DOWNEY FINANCIAL 6.500% 07/01/14 69 DURA OPERATING 8.625% 04/15/12 11 DURA OPERATING 9.000% 05/01/09 0 EDDIE BAUER HLDG 5.250% 04/01/14 71 EPIX MEDICAL INC 3.000% 06/15/24 61 EQUISTAR CHEMICA 7.550% 02/15/26 71 EVEREST RE HLDGS 6.600% 05/15/37 75 EXODUS COMM INC 4.750% 07/15/08 0 FAMILY GOLF CTRS 5.750% 10/15/04 0 FEDDERS NORTH AM 9.875% 03/01/14 5 FIN SEC ASSUR 6.400% 12/15/66 74 FINLAY FINE JWLY 8.375% 06/01/12 41 FINOVA GROUP 7.500% 11/15/09 12 FIRST DATA CORP 4.500% 06/15/10 74 FIRST DATA CORP 4.700% 08/01/13 50 FIRST DATA CORP 4.850% 10/01/14 48 FIRST DATA CORP 4.950% 06/15/15 49 FIRST DATA CORP 5.625% 11/01/11 74 FIVE STAR QUALIT 3.750% 10/15/26 73 FONTAINEBLEAU LA 10.250% 06/15/15 71 FORD HOLDINGS 9.300% 03/01/30 78 FORD HOLDINGS 9.375% 03/01/20 81 FORD MOTOR CO 6.375% 02/01/29 60 FORD MOTOR CO 6.500% 08/01/18 66 FORD MOTOR CO 6.625% 02/15/28 58 FORD MOTOR CO 6.625% 10/01/28 59 FORD MOTOR CO 7.125% 11/15/25 60 FORD MOTOR CO 7.400% 11/01/46 60 FORD MOTOR CO 7.450% 07/16/31 67 FORD MOTOR CO 7.500% 08/01/26 63 FORD MOTOR CO 7.700% 05/15/97 65 FORD MOTOR CO 7.750% 06/15/43 59 FORD MOTOR CO 8.875% 01/15/22 70 FORD MOTOR CO 8.900% 01/15/32 73 FORD MOTOR CRED 5.650% 01/21/14 74 FORD MOTOR CRED 5.750% 01/21/14 72 FORD MOTOR CRED 5.750% 02/20/14 74 FORD MOTOR CRED 5.750% 02/20/14 75 FORD MOTOR CRED 5.900% 02/20/14 74 FORD MOTOR CRED 6.000% 01/20/15 72 FORD MOTOR CRED 6.000% 01/21/14 73 FORD MOTOR CRED 6.000% 03/20/14 71 FORD MOTOR CRED 6.000% 03/20/14 72 FORD MOTOR CRED 6.000% 03/20/14 74 FORD MOTOR CRED 6.000% 11/20/14 73 FORD MOTOR CRED 6.000% 11/20/14 74 FORD MOTOR CRED 6.050% 02/20/14 76 FORD MOTOR CRED 6.050% 02/20/15 70 FORD MOTOR CRED 6.050% 03/20/14 74 FORD MOTOR CRED 6.050% 04/21/14 70 FORD MOTOR CRED 6.050% 12/22/14 71 FORD MOTOR CRED 6.050% 12/22/14 75 FORD MOTOR CRED 6.100% 02/20/15 71 FORD MOTOR CRED 6.150% 01/20/15 73 FORD MOTOR CRED 6.150% 12/22/14 72 FORD MOTOR CRED 6.200% 03/20/15 69 FORD MOTOR CRED 6.250% 01/20/15 70 FORD MOTOR CRED 6.250% 03/20/15 74 FORD MOTOR CRED 6.250% 04/21/14 68 FORD MOTOR CRED 6.250% 12/20/13 74 FORD MOTOR CRED 6.250% 12/20/13 75 FORD MOTOR CRED 6.300% 05/20/14 73 FORD MOTOR CRED 6.300% 05/20/14 73 FORD MOTOR CRED 6.350% 04/21/14 74 FORD MOTOR CRED 6.500% 03/20/15 71 FORD MOTOR CRED 6.500% 12/20/13 74 FORD MOTOR CRED 6.650% 06/20/14 75 FORD MOTOR CRED 6.650% 10/21/13 75 FORD MOTOR CRED 6.750% 06/20/14 75 FORD MOTOR CRED 6.800% 03/20/15 74 FORD MOTOR CRED 6.800% 06/20/14 71 FORD MOTOR CRED 7.250% 07/20/17 68 FORD MOTOR CRED 7.250% 07/20/17 72 FORD MOTOR CRED 7.350% 09/15/15 75 FORD MOTOR CRED 7.400% 08/21/17 73 FORD MOTOR CRED 7.500% 08/20/32 68 FRANKLIN BANK 4.000% 05/01/27 33 FRONTIER AIRLINE 5.000% 12/15/25 23 GENERAL MOTORS 6.750% 05/01/28 53 GENERAL MOTORS 7.375% 05/23/48 62 GENERAL MOTORS 7.400% 09/01/25 61 GENERAL MOTORS 7.700% 04/15/16 73 GENERAL MOTORS 8.100% 06/15/24 65 GENERAL MOTORS 8.250% 07/15/23 71 GENERAL MOTORS 8.375% 07/15/33 67 GENERAL MOTORS 8.800% 03/01/21 76 GENERAL MOTORS 9.400% 07/15/21 77 GEORGIA GULF CRP 10.750% 10/15/16 70 GLOBAL HEALTH SC 11.000% 05/01/08 0 GLOBALSTAR INC 5.750% 04/01/28 72 GMAC 5.250% 01/15/14 66 GMAC 5.350% 01/15/14 71 GMAC 5.700% 06/15/13 68 GMAC 5.700% 10/15/13 70 GMAC 5.700% 12/15/13 68 GMAC 5.750% 01/15/14 69 GMAC 5.850% 05/15/13 73 GMAC 5.850% 06/15/13 67 GMAC 5.850% 06/15/13 69 GMAC 5.850% 06/15/13 73 GMAC 5.900% 01/15/19 55 GMAC 5.900% 01/15/19 57 GMAC 5.900% 02/15/19 59 GMAC 5.900% 10/15/19 63 GMAC 5.900% 12/15/13 66 GMAC 5.900% 12/15/13 66 GMAC 6.000% 02/15/19 56 GMAC 6.000% 02/15/19 58 GMAC 6.000% 02/15/19 62 GMAC 6.000% 03/15/19 56 GMAC 6.000% 03/15/19 56 GMAC 6.000% 03/15/19 58 GMAC 6.000% 03/15/19 59 GMAC 6.000% 03/15/19 59 GMAC 6.000% 04/15/19 58 GMAC 6.000% 07/15/13 73 GMAC 6.000% 09/15/19 56 GMAC 6.000% 09/15/19 57 GMAC 6.000% 11/15/13 68 GMAC 6.000% 12/15/13 71 GMAC 6.050% 08/15/19 56 GMAC 6.050% 08/15/19 60 GMAC 6.050% 10/15/19 56 GMAC 6.100% 05/15/13 72 GMAC 6.100% 09/15/19 56 GMAC 6.100% 11/15/13 70 GMAC 6.125% 10/15/19 57 GMAC 6.150% 08/15/19 64 GMAC 6.150% 09/15/13 67 GMAC 6.150% 09/15/19 57 GMAC 6.150% 10/15/19 57 GMAC 6.150% 11/15/13 73 GMAC 6.150% 12/15/13 69 GMAC 6.200% 04/15/19 60 GMAC 6.200% 11/15/13 71 GMAC 6.250% 01/15/19 60 GMAC 6.250% 03/15/13 74 GMAC 6.250% 04/15/19 60 GMAC 6.250% 05/15/19 57 GMAC 6.250% 07/15/13 70 GMAC 6.250% 07/15/19 57 GMAC 6.250% 10/15/13 71 GMAC 6.250% 11/15/13 71 GMAC 6.250% 12/15/18 65 GMAC 6.300% 08/15/19 60 GMAC 6.300% 08/15/19 61 GMAC 6.300% 10/15/13 74 GMAC 6.300% 11/15/13 68 GMAC 6.350% 04/15/19 57 GMAC 6.350% 05/15/13 69 GMAC 6.350% 07/15/19 59 GMAC 6.350% 07/15/19 60 GMAC 6.375% 01/15/14 66 GMAC 6.375% 08/01/13 74 GMAC 6.400% 11/15/19 57 GMAC 6.400% 11/15/19 59 GMAC 6.400% 12/15/18 58 GMAC 6.450% 02/15/13 72 GMAC 6.500% 01/15/20 58 GMAC 6.500% 02/15/20 66 GMAC 6.500% 03/15/13 72 GMAC 6.500% 05/15/13 73 GMAC 6.500% 05/15/19 58 GMAC 6.500% 06/15/13 77 GMAC 6.500% 06/15/18 59 GMAC 6.500% 08/15/13 72 GMAC 6.500% 11/15/13 73 GMAC 6.500% 11/15/18 60 GMAC 6.500% 12/15/18 62 GMAC 6.500% 12/15/18 62 GMAC 6.550% 12/15/19 63 GMAC 6.600% 05/15/18 59 GMAC 6.600% 06/15/19 58 GMAC 6.600% 06/15/19 59 GMAC 6.600% 08/15/16 60 GMAC 6.650% 02/15/20 61 GMAC 6.650% 06/15/18 58 GMAC 6.650% 10/15/18 59 GMAC 6.650% 10/15/18 59 GMAC 6.700% 05/15/14 70 GMAC 6.700% 05/15/14 73 GMAC 6.700% 06/15/14 74 GMAC 6.700% 06/15/18 56 GMAC 6.700% 06/15/18 59 GMAC 6.700% 06/15/19 65 GMAC 6.700% 08/15/16 65 GMAC 6.700% 11/15/18 58 GMAC 6.700% 12/15/19 61 GMAC 6.750% 03/15/18 61 GMAC 6.750% 03/15/20 65 GMAC 6.750% 04/15/13 74 GMAC 6.750% 05/15/19 56 GMAC 6.750% 05/15/19 63 GMAC 6.750% 06/15/14 67 GMAC 6.750% 06/15/17 63 GMAC 6.750% 06/15/19 61 GMAC 6.750% 06/15/19 62 GMAC 6.750% 07/15/16 67 GMAC 6.750% 07/15/18 60 GMAC 6.750% 08/15/16 71 GMAC 6.750% 09/15/16 69 GMAC 6.750% 09/15/18 61 GMAC 6.750% 10/15/18 59 GMAC 6.750% 11/15/18 63 GMAC 6.750% 12/01/14 77 GMAC 6.800% 02/15/13 72 GMAC 6.800% 04/15/13 75 GMAC 6.800% 09/15/18 60 GMAC 6.800% 10/15/18 66 GMAC 6.850% 05/15/18 60 GMAC 6.875% 04/15/13 71 GMAC 6.875% 07/15/18 67 GMAC 6.875% 08/15/16 64 GMAC 6.900% 06/15/17 60 GMAC 6.900% 07/15/18 64 GMAC 6.900% 08/15/18 61 GMAC 6.950% 06/15/17 60 GMAC 7.000% 01/15/13 74 GMAC 7.000% 02/15/18 60 GMAC 7.000% 02/15/18 60 GMAC 7.000% 02/15/18 64 GMAC 7.000% 02/15/21 63 GMAC 7.000% 03/15/18 65 GMAC 7.000% 05/15/18 61 GMAC 7.000% 06/15/17 65 GMAC 7.000% 06/15/22 64 GMAC 7.000% 07/15/17 61 GMAC 7.000% 08/15/18 65 GMAC 7.000% 09/15/18 62 GMAC 7.000% 09/15/21 60 GMAC 7.000% 09/15/21 67 GMAC 7.000% 11/15/23 64 GMAC 7.000% 11/15/24 58 GMAC 7.000% 11/15/24 60 GMAC 7.000% 11/15/24 62 GMAC 7.050% 03/15/18 60 GMAC 7.050% 03/15/18 63 GMAC 7.050% 04/15/18 59 GMAC 7.125% 10/15/17 62 GMAC 7.150% 01/15/25 65 GMAC 7.150% 03/15/25 67 GMAC 7.150% 09/15/18 65 GMAC 7.200% 10/15/17 60 GMAC 7.200% 10/15/17 67 GMAC 7.250% 01/15/18 63 GMAC 7.250% 01/15/25 56 GMAC 7.250% 02/15/25 64 GMAC 7.250% 03/15/25 60 GMAC 7.250% 04/15/18 62 GMAC 7.250% 04/15/18 63 GMAC 7.250% 08/15/18 62 GMAC 7.250% 08/15/18 70 GMAC 7.250% 09/15/17 60 GMAC 7.250% 09/15/17 62 GMAC 7.250% 09/15/17 64 GMAC 7.250% 09/15/17 66 GMAC 7.250% 09/15/18 65 GMAC 7.300% 01/15/18 66 GMAC 7.300% 01/15/18 71 GMAC 7.300% 12/15/17 62 GMAC 7.350% 04/15/18 62 GMAC 7.375% 04/15/18 66 GMAC 7.375% 11/15/16 64 GMAC 7.400% 12/15/17 63 GMAC 7.500% 03/15/25 67 GMAC 7.500% 08/15/17 66 GMAC 7.500% 11/15/16 69 GMAC 7.500% 11/15/17 68 GMAC 7.500% 11/15/17 69 GMAC 7.500% 12/15/17 67 GMAC 7.500% 12/15/17 74 GMAC 7.750% 10/15/17 66 GMAC 8.000% 03/15/25 71 GMAC 8.000% 10/15/17 70 GMAC 8.000% 11/15/17 69 GMAC 9.000% 07/15/20 77 GOLDEN BOOKS PUB 10.750% 12/31/04 0 GRANCARE INC 9.375% 09/15/05 0 GULF STATES STL 13.500% 04/15/03 100 HARRAHS OPER CO 5.375% 12/15/13 65 HARRAHS OPER CO 5.625% 06/01/15 58 HARRAHS OPER CO 5.750% 10/01/17 55 HARRAHS OPER CO 6.500% 06/01/16 60 HAWAIIAN TELCOM 9.750% 05/01/13 40 HAWAIIAN TELCOM 12.500% 05/01/15 26 HEADWATERS INC 2.500% 02/01/14 68 HEADWATERS INC 2.500% 02/01/14 71 HERBST GAMING 7.000% 11/15/14 22 HERBST GAMING 8.125% 06/01/12 24 HERCULES INC 6.500% 06/30/29 75 HERTZ CORP 7.000% 01/15/28 75 HILTON HOTELS 7.500% 12/15/17 74 HINES NURSERIES 10.250% 10/01/11 58 HUB INTL HOLDING 10.250% 06/15/15 75 HUMAN GENOME 2.250% 08/15/12 74 HUNTINGTON CAPIT 6.650% 05/15/37 69 IDEARC INC 8.000% 11/15/16 72 INDALEX HOLD 11.500% 02/01/14 55 ION MEDIA 11.000% 07/31/13 24 IRIDIUM LLC/CAP 10.875% 07/15/05 0 IRIDIUM LLC/CAP 11.250% 07/15/05 1 IRIDIUM LLC/CAP 13.000% 07/15/05 1 IRIDIUM LLC/CAP 14.000% 07/15/05 0 ISOLAGEN INC 3.500% 11/01/24 15 JAZZ TECHNOLOGIE 8.000% 12/31/11 69 JB POINDEXTER 8.750% 03/15/14 73 JETBLUE AIRWAYS 3.750% 03/15/35 70 JONES APPAREL 6.125% 11/15/34 70 JPMORGAN CHASE 9.500% 09/29/08 70 JPMORGAN CHASE 10.000% 07/31/08 70 JPMORGAN CHASE 12.000% 07/31/08 36 K HOVNANIAN ENTR 6.250% 01/15/15 69 K HOVNANIAN ENTR 6.250% 01/15/16 68 K HOVNANIAN ENTR 6.375% 12/15/14 69 K HOVNANIAN ENTR 6.500% 01/15/14 69 K HOVNANIAN ENTR 7.500% 05/15/16 69 K HOVNANIAN ENTR 7.750% 05/15/13 67 K HOVNANIAN ENTR 8.875% 04/01/12 76 K MART FUNDING 8.800% 07/01/10 1 KAISER ALUMINUM 12.750% 02/01/03 5 KELLSTROM INDS 5.750% 10/15/02 0 KELLWOOD CO 7.625% 10/15/17 66 KEMET CORP 2.250% 11/15/26 69 KEMET CORP 2.250% 11/15/26 70 KEYSTONE AUTO OP 9.750% 11/01/13 64 KIMBALL HILL INC 10.500% 12/15/12 2 KMART 95-K1 PT 8.990% 07/05/10 N.A. KMART 95-K2 PT 9.780% 01/05/20 N.A. KMART 95-K4 PT 9.350% 01/02/20 0 KNIGHT RIDDER 4.625% 11/01/14 70 KNIGHT RIDDER 5.750% 09/01/17 69 KNIGHT RIDDER 6.875% 03/15/29 64 KNIGHT RIDDER 7.150% 11/01/27 66 KRATON POLYMERS 8.125% 01/15/14 64 LAZYDAYS RV 11.750% 05/15/12 73 LEHMAN BROS HLDG 4.800% 06/24/23 72 LEHMAN BROS HLDG 5.000% 05/28/23 78 LEHMAN BROS HLDG 5.450% 02/22/30 72 LEHMAN BROS HLDG 5.500% 04/15/23 79 LEHMAN BROS HLDG 5.500% 08/02/30 73 LEHMAN BROS HLDG 5.550% 01/25/30 75 LEHMAN BROS HLDG 5.600% 03/02/29 76 LEHMAN BROS HLDG 5.625% 03/15/30 73 LEHMAN BROS HLDG 5.700% 04/13/29 77 LEHMAN BROS HLDG 5.750% 12/16/28 70 LEHMAN BROS HLDG 5.750% 12/23/28 77 LEHMAN CAP VII 5.857% N.A. 72 LEINER HEALTH 11.000% 06/01/12 2 LIBERTY MEDIA 3.250% 03/15/31 67 LIBERTY MEDIA 3.500% 01/15/31 54 LIBERTY MEDIA 3.750% 02/15/30 56 LIBERTY MEDIA 4.000% 11/15/29 56 LIFECARE HOLDING 9.250% 08/15/13 61 LIFETIME BRANDS 4.750% 07/15/11 72 LUCENT TECH 6.500% 01/15/28 76 MAGNA ENTERTAINM 7.250% 12/15/09 51 MAGNA ENTERTAINM 8.550% 06/15/10 53 MAJESTIC STAR 9.750% 01/15/11 34 MANNKIND CORP 3.750% 12/15/13 53 MASONITE CORP 11.000% 04/06/15 67 MBIA INC 6.625% 10/01/28 68 MBIA INC 7.000% 12/15/25 77 MEDIANEWS GROUP 6.375% 04/01/14 46 MEDIANEWS GROUP 6.875% 10/01/13 48 MERIX CORP 4.000% 05/15/13 53 MERRILL LYNCH 8.100% 06/04/09 N.A. MERRILL LYNCH 10.000% 03/06/09 N.A. MERRILL LYNCH 11.000% 04/28/09 N.A. MERRILL LYNCH 12.000% 03/26/10 N.A. METALDYNE CORP 10.000% 11/01/13 56 METALDYNE CORP 11.000% 06/15/12 27 MILLENNIUM AMER 7.625% 11/15/26 58 MISSOURI PAC RR 5.000% 01/01/45 68 MOA HOSPITALITY 8.000% 10/15/07 75 MOMENTIVE PERFOR 11.500% 12/01/16 75 MORGAN STANLEY 10.000% 04/20/09 N.A. MORGAN STANLEY 10.000% 05/20/09 N.A. MORRIS PUBLISH 7.000% 08/01/13 60 MOTOROLA INC 5.220% 10/01/97 54 MOVIE GALLERY 11.000% 05/01/12 30 MRS FIELDS 9.000% 03/15/11 62 NATL FINANCIAL 0.750% 02/01/12 71 NATL STEEL CORP 8.375% 08/01/06 0 NEFF CORP 10.000% 06/01/15 45 NEKTAR THERAPEUT 3.250% 09/28/12 74 NELNET INC 7.400% 09/29/36 67 NETWORK EQUIPMNT 3.750% 12/15/14 66 NEW ORL GRT N RR 5.000% 07/01/32 60 NEW PLAN EXCEL 7.500% 07/30/29 67 NEW PLAN REALTY 6.900% 02/15/28 68 NEW PLAN REALTY 6.900% 02/15/28 68 NEW PLAN REALTY 7.650% 11/02/26 69 NEW PLAN REALTY 7.680% 11/02/26 65 NEW PLAN REALTY 7.970% 08/14/26 68 NEWARK GROUP INC 9.750% 03/15/14 75 NORTEK INC 8.500% 09/01/14 70 NORTH ATL TRADNG 9.250% 03/01/12 62 NORTHERN PAC RY 3.000% 01/01/47 54 NORTHERN PAC RY 3.000% 01/01/47 75 NORTHERN TEL CAP 7.875% 06/15/26 70 NORTHWESTERN CRP 7.960% 12/21/26 4 NORTHWST STL&WIR 9.500% 06/15/01 0 NTK HOLDINGS INC 0.000% 03/01/14 53 NUTRITIONAL SRC 10.125% 08/01/09 13 NUVEEN INVEST 5.500% 09/15/15 73 OAKWOOD HOMES 7.875% 03/01/04 0 OAKWOOD HOMES 8.125% 03/01/09 0 OMNICARE INC 3.250% 12/15/35 72 OSCIENT PHARM 3.500% 04/15/11 41 OSI RESTAURANT 10.000% 06/15/15 70 OUTBOARD MARINE 9.125% 04/15/17 7 OUTBOARD MARINE 10.750% 06/01/08 10 PAC-WEST TELECOM 13.500% 02/01/09 2 PACKAGING DYNAMI 10.000% 05/01/16 67 PALM HARBOR 3.250% 05/15/24 59 PANTRY INC 3.000% 11/15/12 70 PEGASUS SATELLIT 9.750% 12/01/06 0 PEGASUS SATELLIT 12.500% 08/01/07 0 PENHALL INTL 12.000% 08/01/14 75 PIERRE FOODS INC 9.875% 07/15/12 29 PIXELWORKS INC 1.750% 05/15/24 70 PLY GEM INDS 9.000% 02/15/12 66 POPE & TALBOT 8.375% 06/01/13 4 POPE & TALBOT 8.375% 06/01/13 14 PORTOLA PACKAGIN 8.250% 02/01/12 58 POWERWAVE TECH 1.875% 11/15/24 71 POWERWAVE TECH 3.875% 10/01/27 73 POWERWAVE TECH 3.875% 10/01/27 74 PRIMUS TELECOM 3.750% 09/15/10 45 PRIMUS TELECOM 5.000% 06/30/09 61 PRIMUS TELECOM 8.000% 01/15/14 37 PROPEX FABRICS 10.000% 12/01/12 1 QUALITY DISTRIBU 9.000% 11/15/10 65 RADIAN GROUP 5.375% 06/15/15 78 RADIAN GROUP 5.625% 02/15/13 77 RAFAELLA APPAREL 11.250% 06/15/11 53 RAIT FINANCIAL 6.875% 04/15/27 55 REALOGY CORP 10.500% 04/15/14 76 REALOGY CORP 12.375% 04/15/15 55 REALTY INCOME 5.875% 03/15/35 71 REGIONS FIN TR 6.625% 05/15/47 73 RENTECH INC 4.000% 04/15/13 51 RESIDENTIAL CAP 8.000% 02/22/11 48 RESIDENTIAL CAP 8.375% 06/30/10 53 RESIDENTIAL CAP 8.500% 04/17/13 50 RESIDENTIAL CAP 8.500% 06/01/12 54 RESIDENTIAL CAP 8.875% 06/30/15 50 RESTAURANT CO 10.000% 10/01/13 67 RH DONNELLEY 6.875% 01/15/13 67 RH DONNELLEY 6.875% 01/15/13 67 RH DONNELLEY 6.875% 01/15/13 67 RH DONNELLEY 8.875% 01/15/16 65 RH DONNELLEY 8.875% 10/15/17 67 RICKEL HOME CNTR 13.500% 12/15/01 0 RITE AID CORP 6.875% 08/15/13 70 RITE AID CORP 6.875% 12/15/28 53 RITE AID CORP 7.700% 02/15/27 59 RJ TOWER CORP 12.000% 06/01/13 1 ROTECH HEALTHCA 9.500% 04/01/12 78 SEARS ROEBUCK AC 6.500% 12/01/28 75 SEARS ROEBUCK AC 6.750% 01/15/28 77 SEARS ROEBUCK AC 7.000% 06/01/32 68 SEARS ROEBUCK AC 7.500% 10/15/27 71 SERVICEMASTER CO 7.100% 03/01/18 54 SERVICEMASTER CO 7.250% 03/01/38 57 SERVICEMASTER CO 7.450% 08/15/27 48 SIX FLAGS INC 4.500% 05/15/15 56 SIX FLAGS INC 8.875% 02/01/10 88 SIX FLAGS INC 9.625% 06/01/14 60 SIX FLAGS INC 9.750% 04/15/13 65 SLM CORP 4.800% 12/15/28 65 SLM CORP 5.000% 06/15/19 66 SLM CORP 5.000% 06/15/28 74 SLM CORP 5.000% 09/15/15 72 SLM CORP 5.000% 12/15/28 54 SLM CORP 5.050% 03/15/23 59 SLM CORP 5.150% 06/15/19 69 SLM CORP 5.150% 12/15/28 69 SLM CORP 5.190% 04/24/19 68 SLM CORP 5.200% 03/15/28 62 SLM CORP 5.200% 12/15/20 N.A. SLM CORP 5.250% 03/15/19 73 SLM CORP 5.250% 03/15/28 70 SLM CORP 5.250% 06/15/20 66 SLM CORP 5.250% 06/15/28 57 SLM CORP 5.250% 12/15/28 69 SLM CORP 5.300% 09/15/30 63 SLM CORP 5.350% 06/15/25 63 SLM CORP 5.400% 03/15/19 74 SLM CORP 5.400% 03/15/23 73 SLM CORP 5.400% 06/15/30 60 SLM CORP 5.450% 03/15/23 58 SLM CORP 5.450% 03/15/28 72 SLM CORP 5.450% 06/15/28 65 SLM CORP 5.450% 06/15/28 67 SLM CORP 5.450% 12/15/20 72 SLM CORP 5.500% 03/15/19 74 SLM CORP 5.500% 03/15/30 62 SLM CORP 5.500% 03/15/30 64 SLM CORP 5.500% 06/15/19 74 SLM CORP 5.500% 06/15/28 62 SLM CORP 5.500% 06/15/29 63 SLM CORP 5.500% 06/15/29 63 SLM CORP 5.500% 06/15/29 63 SLM CORP 5.500% 09/15/19 62 SLM CORP 5.500% 12/15/30 64 SLM CORP 5.550% 03/15/18 72 SLM CORP 5.550% 06/15/25 65 SLM CORP 5.550% 06/15/28 72 SLM CORP 5.600% 03/15/18 72 SLM CORP 5.600% 03/15/22 68 SLM CORP 5.600% 03/15/24 62 SLM CORP 5.600% 03/15/29 59 SLM CORP 5.600% 03/15/29 64 SLM CORP 5.600% 06/15/18 72 SLM CORP 5.600% 12/15/28 70 SLM CORP 5.600% 12/15/29 57 SLM CORP 5.600% 12/15/29 63 SLM CORP 5.625% 01/25/25 65 SLM CORP 5.625% 08/01/33 73 SLM CORP 5.650% 03/15/18 70 SLM CORP 5.650% 03/15/29 65 SLM CORP 5.650% 03/15/29 74 SLM CORP 5.650% 03/15/30 64 SLM CORP 5.650% 03/15/32 62 SLM CORP 5.650% 06/15/22 69 SLM CORP 5.650% 06/15/22 70 SLM CORP 5.650% 06/15/30 59 SLM CORP 5.650% 09/15/30 65 SLM CORP 5.650% 12/15/29 63 SLM CORP 5.650% 12/15/29 64 SLM CORP 5.650% 12/15/29 66 SLM CORP 5.700% 03/15/29 61 SLM CORP 5.700% 03/15/29 65 SLM CORP 5.700% 03/15/29 66 SLM CORP 5.700% 03/15/30 66 SLM CORP 5.700% 03/15/32 65 SLM CORP 5.700% 06/15/30 63 SLM CORP 5.700% 12/15/29 62 SLM CORP 5.750% 03/15/29 63 SLM CORP 5.750% 03/15/29 65 SLM CORP 5.750% 03/15/29 67 SLM CORP 5.750% 03/15/29 72 SLM CORP 5.750% 03/15/30 64 SLM CORP 5.750% 03/15/30 67 SLM CORP 5.750% 06/15/29 58 SLM CORP 5.750% 06/15/29 65 SLM CORP 5.750% 06/15/32 64 SLM CORP 5.750% 06/15/32 64 SLM CORP 5.750% 09/15/29 63 SLM CORP 5.750% 12/15/29 62 SLM CORP 5.750% 12/15/29 64 SLM CORP 5.750% 12/15/29 64 SLM CORP 5.750% 12/15/29 65 SLM CORP 5.800% 03/15/32 64 SLM CORP 5.800% 03/15/32 66 SLM CORP 5.800% 03/15/32 66 SLM CORP 5.800% 12/15/28 64 SLM CORP 5.850% 03/15/32 58 SLM CORP 5.850% 03/15/32 59 SLM CORP 5.850% 03/15/32 66 SLM CORP 5.850% 06/15/32 66 SLM CORP 5.850% 06/15/32 66 SLM CORP 5.850% 09/15/29 64 SLM CORP 5.850% 09/15/29 66 SLM CORP 5.850% 12/15/31 63 SLM CORP 5.900% 09/15/19 73 SLM CORP 6.000% 03/15/27 68 SLM CORP 6.000% 03/15/29 67 SLM CORP 6.000% 03/15/37 62 SLM CORP 6.000% 03/15/37 66 SLM CORP 6.000% 03/15/37 66 SLM CORP 6.000% 06/15/19 73 SLM CORP 6.000% 06/15/21 69 SLM CORP 6.000% 06/15/21 70 SLM CORP 6.000% 06/15/26 66 SLM CORP 6.000% 06/15/26 68 SLM CORP 6.000% 06/15/29 60 SLM CORP 6.000% 06/15/29 62 SLM CORP 6.000% 06/15/29 67 SLM CORP 6.000% 06/15/31 65 SLM CORP 6.000% 06/15/31 67 SLM CORP 6.000% 09/15/19 74 SLM CORP 6.000% 09/15/19 75 SLM CORP 6.000% 09/15/29 65 SLM CORP 6.000% 09/15/29 66 SLM CORP 6.000% 09/15/29 66 SLM CORP 6.000% 09/15/29 67 SLM CORP 6.000% 09/15/29 67 SLM CORP 6.000% 12/15/26 68 SLM CORP 6.000% 12/15/26 68 SLM CORP 6.000% 12/15/26 75 SLM CORP 6.000% 12/15/28 61 SLM CORP 6.000% 12/15/28 65 SLM CORP 6.000% 12/15/28 70 SLM CORP 6.000% 12/15/31 65 SLM CORP 6.000% 12/15/31 67 SLM CORP 6.000% 12/15/31 67 SLM CORP 6.000% 12/15/31 68 SLM CORP 6.050% 12/15/26 67 SLM CORP 6.050% 12/15/31 67 SLM CORP 6.100% 12/15/31 66 SLM CORP 6.150% 03/10/21 75 SLM CORP 6.150% 06/15/21 68 SLM CORP 6.150% 06/15/21 71 SLM CORP 6.150% 09/15/29 66 SLM CORP 6.150% 09/15/29 68 SLM CORP 6.200% 12/15/31 67 SLM CORP 6.250% 06/15/29 68 SLM CORP 6.250% 06/15/29 68 SLM CORP 6.250% 09/15/29 67 SLM CORP 6.250% 09/15/29 68 SLM CORP 6.250% 09/15/31 68 SLM CORP 6.350% 09/15/31 67 SLM CORP 6.350% 09/15/31 68 SLM CORP 6.400% 09/15/31 62 SLM CORP 6.450% 09/15/31 69 SLM CORP 6.500% 09/15/31 69 SLM CORP 6.850% 07/07/36 73 SPANSION LLC 2.250% 06/15/16 49 SPANSION LLC 11.250% 01/15/16 66 SPECIAL DEVICES 11.375% 12/15/08 N.A. SPECTRUM BRANDS 7.375% 02/01/15 73 SPHERIS INC 11.000% 12/15/12 83 SPINNAKER INDS 10.750% 10/15/06 0 STANDARD PACIFIC 9.250% 04/15/12 78 STANDRD PAC CORP 6.000% 10/01/12 71 STANLEY-MARTIN 9.750% 08/15/15 45 STATION CASINOS 6.500% 02/01/14 63 STATION CASINOS 6.625% 03/15/18 59 STATION CASINOS 6.875% 03/01/16 60 SUNTRUST PFD CAP 5.853% N.A. 74 SWIFT TRANS CO 12.500% 05/15/17 41 TELIGENT INC 11.500% 03/01/08 0 TELIGENT INC 11.500% 12/01/07 0 TENET HEALTHCARE 6.875% 11/15/31 75 THERAVANCE INC 3.000% 01/15/15 76 TIMES MIRROR CO 6.610% 09/15/27 37 TIMES MIRROR CO 7.250% 03/01/13 39 TIMES MIRROR CO 7.250% 11/15/96 32 TIMES MIRROR CO 7.500% 07/01/23 41 TOUSA INC 7.500% 01/15/15 10 TOUSA INC 7.500% 03/15/11 9 TOUSA INC 9.000% 07/01/10 55 TOUSA INC 9.000% 07/01/10 62 TOUSA INC 10.375% 07/01/12 11 TOYS R US 7.375% 10/15/18 78 TRANS-LUX CORP 8.250% 03/01/12 56 TRANSMERIDIAN EX 12.000% 12/15/10 61 TRIBUNE CO 4.875% 08/15/10 62 TRIBUNE CO 5.250% 08/15/15 44 TRUE TEMPER 8.375% 09/15/11 65 TRUMP ENTERTNMNT 8.500% 06/01/15 68 TXU CORP 6.500% 11/15/24 77 TXU CORP 6.550% 11/15/34 75 UAL 1991 TRUST 10.020% 03/22/14 48 UAL 1995 TRUST 9.020% 04/19/12 40 UAL 1995 TRUST 9.560% 10/19/18 45 UAL CORP 4.500% 06/30/21 52 UAL CORP 4.500% 06/30/21 56 UAL CORP 5.000% 02/01/21 50 UNIVERSAL STAND 8.250% 02/01/06 0 US AIR INC 10.750% 01/15/49 0 US AIR INC 10.900% 01/01/49 0 US AIRWAYS GROUP 7.000% 09/30/20 70 VENTURE HLDGS 9.500% 07/01/05 0 VENTURE HLDGS 11.000% 06/01/07 0 VERASUN ENERGY 9.375% 06/01/17 68 VERENIUM CORP 5.500% 04/01/27 41 VERTIS INC 10.875% 06/15/09 46 VESTA INSUR GRP 8.750% 07/15/25 2 VICORP RESTAURNT 10.500% 04/15/11 15 VION PHARM INC 7.750% 02/15/12 53 VIRGIN RIVER CAS 9.000% 01/15/12 72 VISTEON CORP 7.000% 03/10/14 66 WASH MUTUAL PFD 6.534% N.A. 59 WASH MUTUAL PFD 6.665% N.A. 62 WASH MUTUAL PFD 6.895% N.A. 60 WCI COMMUNITIES 4.000% 08/05/23 63 WCI COMMUNITIES 6.625% 03/15/15 41 WCI COMMUNITIES 7.875% 10/01/13 40 WCI COMMUNITIES 9.125% 05/01/12 44 WCI STEEL ACQUIS 8.000% 05/01/16 64 WEBSTER CAPITAL 7.650% 06/15/37 67 WERNER HOLDINGS 10.000% 11/15/07 0 WILLIAM LYON 7.500% 02/15/14 61 WILLIAM LYON 7.625% 12/15/12 57 WILLIAM LYON 10.750% 04/01/13 68 WIMAR OP LLC/FIN 9.625% 12/15/14 56 WINSTAR COMM INC 10.000% 03/15/08 0 WINSTAR COMM INC 14.750% 04/15/10 0 WITCO CORP 6.875% 02/01/26 70 YOUNG BROADCSTNG 8.750% 01/15/14 58 YOUNG BROADCSTNG 10.000% 03/01/11 67 ********* 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 ***