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/raid1/www/Hosts/bankrupt/TCR_Public/080710.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, July 10, 2008, Vol. 12, No. 163 Headlines ABROCK LLC: Ambit's Foreclosure Suit Threatens Huachuca Project ACUSPHERE INC: Amends Supply Pact to Get $750,000 from Nycomed ADELPHIA COMMS: Court Approves ART's Amended Trust Declaration ADELPHIA COMMS: Claims Objection Deadline Extended to September 12 ADELPHIA COMMS: Victims May Recover Up to $700MM Forfeited Funds AMBAC FINANCIAL: In Talks with OCI on Unit's $850MM Capitalization ARIES MARITIME: PricewaterhouseCoopers Raises Going Concern Doubt ASARCO LLC: To Appeal Asset Sale Procedures Approval ASARCO LLC: Alta Mining, et al. Tap Baker Botts as Bankr. Counsel ASARCO LLC: FCR Urges Court to Continue Estimating Asbestos Claims ASARCO LLC: Wants Pact With Oklahoma Toxic Tort Claimants Approved BANK OF AMERICA: Still to Decide on $40BB of Countrywide Debt BANK OF AMERICA: Will Rework $40 Billion in Mortgage Loans BEAR STEARNS: Fund Liquidators Amend Bear Suit, Seek $1.5 Billion BEAR STEARNS: Will Not Pursue Further Chapter 15 Appeal BEAR STEARNS: S&P Puts Default Rating on S. 2005-2 Class M-7 Certs BLUE BELL: Moody's Replaces Ratings on Notes, Junks Class B Rating BLUE SKY: Gets Court Approval to Employ D.R. Kight Jr. as Counsel BLUE WATER: Agrees to Sell Assets to Flex-N-Gate for $22.3MM BLUE WATER: GM Wants Court to Allow Set-Off & Recoupment Claims BROOKLYN NAVY: S&P Cuts Rating of $307MM Bonds to BB+ from BBB- BRUNSWICK CORP: S&P Chips Ratings to BB+ and Removes Neg. Watch CANFIELD HOUSTON: Westbrae Collateral Set for Auction July 18 CARMEL NAVARRO: Voluntary Chapter 11 Case Summary CF HOUSTON: Westbrae Collateral Set for Auction July 18 CHARMING SHOPPES: Shareholders Elect All Directors, Approve Plans CHARMING SHOPPES: Mr. Bern Resigns; Board Chair Named Interim CEO CHEMTURA CORP: S&P Puts Rating on Neg. Watch After Sale Talks End COMMUNICATIONS & POWER: S&P Holds Rating. Changes Outlook to Pos. COUNTRYWIDE FINANCIAL: BofA Still to Decide on $40BB Assumed Debt COUNTRYWIDE FINANCIAL: BofA to Rework $40 Bil. in Mortgage Loans CPI INTERNATIONAL: S&P Holds 'B+' Rating, Revises Outlook to Pos. CURRY FLOUR: Case Summary & 12 Largest Unsecured Creditors CYBER DIGITAL: Blanchfield Kober Expresses Going Concern Doubt DIABLO GRANDE: Hearing on $25 Million Sale Scheduled Today DISTRIBUTION FINANCIAL: S&P Cuts Rating on Class D Notes to B- DUNE ENERGY: To Sell Barnett Shale Properties for $41.5 Million ELECTRO-CHEMICAL: O'Shaughnessy's $5MM Bid Wins Patent Auction ELITE PHARMA: Miller Ellin Expresses Going Concern Doubt ELROY PROSCH: Voluntary Chapter 11 Case Summary ESTATE FINANCIAL: Names M.F. Reiss as CEO After Execs Left Posts FLIGHT SAFETY: Appealing AMEX' Determination to Delist Securities FRONTIER AIRLINES: Wants Lease Decision Period Extended to Nov. 6 FRONTIER AIRLINES: Wants Plan Filing Date Extended to Feb. 2009 GALAXY NUTRITIONAL: Cross Fernandez Expresses Going Concern Doubt GINN-LA CS BORROWER: Moody's Junks CFR on Loan Payment Default GMAC COMMERCIAL: Fitch Lowers Rating on $25.3MM Loan to 'CC/DR3' GOODY'S FAMILY: Taps Skadded Arps as Bankruptcy Counsel GREYSTONE ON: Wants to Employ Foley et al. as Bankuptcy Counsels HAMILTON HOLDINGS: Settles Feud with City Over Hotel Room Offering HILEX POLY: Emerges from Pre-Packaged Chapter 11 Restructuring HOME INTERIORS: Gets Final Okay to Use NexBank's Cash Collateral HOME INTERIORS: Hunton & Williams Approved as Bankruptcy Counsel IMMUNICON CORP: Creditors Committee Taps Schulte Rote as Counsel IMMUNICON CORP: 341(a) Creditors Meeting Set for July 17 IMMUNICON CORP: U.S. Trustee Names 3-Member Creditors Panel IPTIMIZE INC: Stark Winter Schenkein Expresses Going Concern Doubt JOHANNA KILA: Case Summary & Three Largest Unsecured Creditors JOHN GREANEY JR: Case Summary & 15 Largest Unsecured Creditors KARAT PLATINUM: JH Cohn Expresses Going Concern Doubt KEYSTONE AUTOMOTIVE: S&P Revises Outlook to Negative from Stable KIMBALL HILL: Panel Can Hire Garden City as Information Agent KIMBALL HILL: Wants to Employ Neal Gerber as Bankruptcy Counsel LB-UBS COMMERCIAL: S&P Junks Ratings on Four Certificate Classes LEAP WIRELESS: Has Vulnerable Business Profile, S&P Says LEVCOR INT'l: March 31 Balance Sheet Upside-Down by $7,944,000 LEVI STRAUSS: May 25 Balance Sheet Upside-Down by $387.1 Million MACTEC INC: Moody's Affirms Ratings, Changes Outlook to Negative MASTR SPECIALIZED: Fitch Affirms 'BB+' Rating on Class B-2 Certs. MEADOW VIEW: Case Summary & 20 Largest Unsecured Creditors MEMPHIS HEALTH: Moody's Cuts Rating of $7.5MM Revenue Bonds to Ca MESA AIR: District Judge Articulates Injunction in Delta Air Suit METROLOGIC INSTRUMENTS: Acquisition Cues Moody's to Remove Ratings METROPCS COMMUNICATIONS: Faces Substantial Business Risk, S&P Says MICHAEL VICK: Files Chapter 11 Petition While in Federal Prison MRS FIELDS: Plan to Restructure $195MM Debt Stalled MUHLENBERG HOSPITAL: Losses Could Cue Closure by Year-End NATIONSLINK FUNDING: Fitch Affirms 'BB' Rating on $6.6MM Certs. NBTY INC: S&P Holds 'BB' Credit Rating on Solid Credit Protection NEW LIFE CHRISTIAN: Voluntary Chapter 11 Case Summary NFG INTERNATIONAL: Case Summary & Seven Unsecured Creditors NICE ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors NORTH BAY GENERAL: Case Summary & 11 Largest Unsecured Creditors NORTHEAST BIOFUELS: S&P Keeps $140MM 'B' Loan Rating on Neg. Watch OFFICE DEPOT: Projected Sales Decline Cues S&P's Neg. Watch ONE EQUITY: Voluntary Chapter 11 Case Summary PANACEA PARTNERS: Files for Chapter 11 Protection in Illinois PANACEA PARTNERS: Voluntary Chapter 11 Case Summary PARE-1 LLC: Voluntary Chapter 11 Case Summary PAUL DUBIA: Voluntary Chapter 11 Case Summary PENN NATIONAL: S&P Cuts Credit Facilities Rating to BB+ from BBB- PRESIDENTIAL LIFE: Moody's Hikes Debt Rating to B1; Outlook Pos. PUTNAM STRUCTURED: Moody's Replaces and Affirms Ratings on Notes SALEM PLAZA: Case Summary & Two Largest Unsecured Creditors SALS 2007: Moody's Cuts Rating of $20MM Notes Due 2017 SALS B-2005: Moody's Junks Rating on Floating Rate Notes Due 2012 SHANGHAI CENTURY: Shareholders Okay Borrelli Walsh as Liquidators SIMPLON BALLPARK: Wants to File Chapter 11 Plan Until August 18 SIMPLON BALL: Unsec. Creditors to Get $2.4MM Under Proposed Loan SOUTHAVEN POWERS: Court Sets July 22 as Plan Objection Deadline SSG LLC: Chapter 11 Case Converted to Chapter 7 Liquidation STEVE & BARRY'S: Files for Chapter 11 Bankruptcy in Manhattan STEVE & BARRY'S: Case Summary & 30 Largest Unsecured Creditors ST. PAUL: Case Summary & 15 Largest Unsecured Creditors TIM JACOBI: Voluntary Chapter 11 Case Summary TRIBUNE CO: Lenders Under $8.9BB Loan Sell Stake at 74% of Face U.S. JETS: Case Summary & Five Largest Unsecured Creditors VESTA INSURANCE: Settles Unresolved Portion of $140MM Claim VESTA INSURANCE: Gains Plan Trustee Objects to $3.34MM Claim VESTA INSURANCE: Gaines Plan Trustee Wants Debt Turned into Equity WCI COMMUNITIES: Commences Offer to Exchange $125MM of 4% Notes WILSONS LEATHER: Sells Outlet and E-Commerce Assets for $22MM YOUNG BROADCASTING: March 31 Balance Sheet Upside-Down by $233MM YOUNG BROADCASTING: GAMCO Asset Discloses 9.73% Equity Stake * Fitch: Telecoms' Fin'l Flexibility Still Solid Despite Weakness * Fitch: Tex. Electricity Market Credit Holds Despite Price Hike * Fitch: High Gas Prices Affect Recovery Values of SUVs & Trucks * S&P: Tumbling Stock Market Continues to Stress Retail Spending * S&P Says Rapid Fuel Cost Hike Takes a Toll on Trucking Industry * S&P Says ABCP Paper Market Serves Vital Function in Global Econ. * Moody's: Global Speculative-Grade Default Rate Up to 2.0% * Obama Talks of Bankruptcy Reforms Affecting Military Kin, Elders * Huron Consulting Buys Assets of Stockamp & Associates for $219MM * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* ABROCK LLC: Ambit's Foreclosure Suit Threatens Huachuca Project --------------------------------------------------------------- The plan of Michael Combs and Mark Johnson to build a housing community at a 530-acre Campstone property in Huachuca City, Arizona may not push through, Christie Smythe writes for The Arizona Star. Mr. Combs filed chapter 11 petitions on behalf of their development companies, including Abrock LLC, a week ago in order to buy time to negotiate with its lender, Ambit Funding, or to find new financing. The project's site is close to the Fort Huachuca airport and is surrounded by mountains with minimal population, The Arizona Star relates. Messrs. Combs and Johnson plan to build 1,400 homes that would reportedly double the city's population without damaging the natural beauty of the area, The Arizona Star says. However, the developers' plan is threatened by a foreclosure suit filed by Ambit, The Arizona Star reports. Messrs. Combs and Johnson said they asked Ambit for an extension but failed, The Arizona Star continues. The developers said that they think the lender wants the land more than a loan repayment, The Arizona Star writes. Ambit counsel, Thomas Daniels, Esq., however, denied the developers' allegations, saying that his client wants them to succeed, The Arizona Star relates. The developers owe Ambit $11 million and also owe about $3 million to $4 million from their family members and friends, The Arizona Star quotes Debtors' counsel, Eric Slocum Sparks, Esq., as stating. Mr. Sparks referred the developers to Jack Neubeck, a consultant at The Planning Center because he is impressed with the project, The Arizona Star reports. Mr. Sparks hopes that Mr. Neubeck might help the developers realize their plan. Mr. Neubeck told The Arizona Star that he is "hopeful [the developers] can pull [the project] off." The consultant said that he is pleased with the project but commented that it's a bad timing, The Arizona Star says. David Perry, a Huachuca City councilman stated that in the long- term, the project "will be extremely beneficial" for the city, The Arizona Star notes. Mayor George Nerhan, however, appeared doubtful, pointing to the slump in the housing market, The Arizona Star says. About Abrock LLC Michael Combs, 44, lives in Sierra Vista since 1996 and used to sell mobile homes. Mark Johnson, an engineer, met Mr. Combs in Sierra Vista and became interested in environmental building projects. Tucson, Arizona-based Abrock LLC and its affiliates are site developers. The companies are owned by Michael G. Combs and Mark Johnson. Mr. Combs filed chapter 11 petitions on behalf of Abrock and three other affiliates on June 23, 2008 (Bankr. D. Ariz. Lead Case No. 08-07519). The three affiliates are Big Sky One, LLC (08-07518), Campstone Two, LLC (08-07521), and MCCP, LLC (08- 07524). Judge Eileen W. Hollowell presides over the case. Eric Slocum Sparks, Esq., represents the Debtors in their restructuring efforts. Abrock listed total assets of $25,000,400 and total debts of $12,530,088 when it filed for bankruptcy. ACUSPHERE INC: Amends Supply Pact to Get $750,000 from Nycomed -------------------------------------------------------------- Acusphere, Inc. executed a third amendment to a Collaboration, License and Supply Agreement, dated July 6, 2004, with Nycomed Danmark APS, as amended, for the European development and marketing rights to Acusphere's product candidate AI-700 or Imagify(TM). Pursuant to the Amendment, Nycomed will reimburse Acusphere for expenses arising from and after June 1, 2008, and related to Acusphere's qualification of its commercial manufacturing facility in Tewksbury, Massachusetts. Such amounts will not, in the aggregate, exceed $750,000 and are payable by Nycomed upon receipt of monthly invoices. The Amendment further provides that $750,000 will be credited against Nycomed's initial purchases of the product so that Nycomed will only pay for products delivered after such $750,000 has been fully credited. Based in Watertown, Massachussets, Acusphere, Inc. (NasdaqGM:ACUS) -- http://www.acusphere.com/-- a specialty pharmaceutical company, develops new drugs and formulations of existing drugs using its proprietary porous microparticle technology in the United States. Its porous microparticle technology enables to control the size and porosity of particles, including nanoparticles and microparticles. The company develops products in the areas of cardiology, oncology, and asthma. Its lead product candidate Imagify, a cardiovascular drug, is in Phase 3 clinical development for the detection of coronary artery disease. The company's products also include AI-850, a Phase 1 clinical trial completed product candidate that utilizes hydrophobic drug delivery system to improve the dissolution rate of a cancer drug; AI-128, a Phase 1 clinical study completed formulation of asthma drug. Acusphere was founded in 1993. * * * Deloitte & Touche LLP in Boston raised substantial doubt about the ability of Acusphere, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed to the company's recurring losses from operations, negative cash flows from operations, and the projected funding needed to sustain its operations. ADELPHIA COMMS: Court Approves ART's Amended Trust Declaration -------------------------------------------------------------- The Honorable Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York approved, and authorized the implementation of Adelphia Recovery Trust's Second Amendment and Restated Declaration of Trust. The ART Trustees are authorized to treat ART Distributions as first allocated to the payment of the Deficiency before payment of dividends. As reported in the Troubled Company Reporter on May 19, 2008, the Trust asked permission from the Court to approve: a) an amendment to a trust declaration, the document that together with the confirmed Plan of Reorganization for the Debtors governs the ART, for the purpose of ensuring that the ART is accorded pass-through treatment for income tax purposes; and b) the allocation of distributions from the ART to "deficiency" amounts with respect to a given class of Trust Interests before paying accrued dividends. Pursuant to the Plan and Confirmation Order, the ART was created for the purpose of liquidating the transferred causes of action for the benefit of holders of interests in the ART. Certain classes of creditors and the United States government, on behalf of the Restitution Fund, in exchange for their interests in the causes of action, received various series of trusts interests as part of the recoveries under the Plan. In June 2007, in response to the ART's behest, the IRS agreed that it would recognize ART as a pass-through entity if the Trust Declaration were amended to eliminate the possibility that the ART Trustees would seek to list the Trust Interests on national exchange or actively engage in other "market-making" activities. Upon further review, the ART Trustees concluded that they should certainty regarding the pass-through tax treatment of the ART. They also noted that holder of Trust Interests will benefit from the cost savings resulting from those interests not being listed on an exchange. Thus, the Trustees unanimously voted in favor of amending the Trust Declaration to conform to the IRS' comments. Accordingly, after reviewing the second amended trust declaration and further discussions with tax counsel to the ART Trustees, the IRS issued its ruling in December 2007 that the ART would be recognized as a pass-through liquidating or grantor trust. A full-text copy of the ART's Second Amended and Restated Declaration is available for free at: http://researcharchives.com/t/s?2c10 About Adelphia Comms Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates' chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. (Adelphia Bankruptcy News, Issue No. 188; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ADELPHIA COMMS: Claims Objection Deadline Extended to September 12 ------------------------------------------------------------------ The Honorable Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York extended through and including Sept. 12, 2008, the time by which Plan Administrator Quest Turnaround Advisors LLC, may object to prepetition claims, equity interests, and administrative claims pursuant to the Adelphia Communications Corp.'s First Modified Fifth Amended Joint Plan of Reorganization and the Century-TCI Debtors and Parnassos Debtors' Third Modified Fourth Amended Joint Plan of Reorganization. About Adelphia Comms Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates' chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. (Adelphia Bankruptcy News, Issue No. 188; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ADELPHIA COMMS: Victims May Recover Up to $700MM Forfeited Funds ---------------------------------------------------------------- Michael J. Garcia, Esq., U.S. Attorney for the Southern District of New York, notifies the victims of securities fraud at Adelphia Communications Corporation that they may ask the Attorney General for a recovery of a portion of their financial losses incurred as a direct result of the fraud. John Rigas and Timothy Rigas were convicted in a Manhattan federal court of conspiracy to commit securities fraud and other offenses in connection with their management and control of Adelphia. The investigation and prosecution of the Adelphia fraud by the Department of Justice resulted in criminal forfeiture to the United States of more than $700,000,000. That money will be distributed to the victims of the fraud pursuant to the Attorney General's discretionary authority to restore forfeited property to victims, Mr. Garcia notes. The U.S Securities and Exchange Commission, according to Mr. Garcia, will also be seeking authority from the U.S District Court overseeing its civil enforcement actions arising out of the Adelphia fraud, to combine the funds it has recovered in those actions with the funds forfeited by the Department of Justice for distribution to the Adelphia victims. On behalf of the DOJ, the Adelphia Victim Fund is managing the process of notifying victims, processing petitions, verifying losses and recommending a distribution of available funds to the Attorney General. The decision as to which victims will receive funds and in what amounts is within the discretion of the Attorney General. Potential victims and other interested persons may obtain petition forms, preparation and filing instructions, a copy of the applicable DOJ regulations and other information by calling the AVF hotline at 1-866-446-4884 or by logging onto the AVF Web site, http://www.AdelphiaFund.com/where the petition packet is available in a downloadable form. Potential petitioners are encouraged to contact the AVF and complete their Petition Form no later than July 16, 2008. This proceeding is independent of the Adelphia Class Action, Mr. Garcia clarifies. About Adelphia Comms Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates' chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. (Adelphia Bankruptcy News, Issue No. 188; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMBAC FINANCIAL: In Talks with OCI on Unit's $850MM Capitalization ------------------------------------------------------------------ Ambac Financial Group Inc. had positive discussions with the Office of the Commissioner of Insurance for the State of Wisconsin regarding a plan to capitalize its Connie Lee subsidiary with an $850 million contribution of capital from Ambac Assurance Corporation. Ambac intends to seek formal approval from the OCI for the capitalization of Connie Lee, and believes that it will obtain OCI's approval of the plan. A contribution of capital of $850 million to Connie Lee would bring Connie Lee's total capital to slightly over $1.0 billion. The new capital will support the claims paying resources for Connie Lee's financial guarantee business, which will focus solely on U.S. public finance and global infrastructure transactions. Ambac has been in communication with Moody's and Standard & Poor's in pursuit of Aaa/AAA ratings for Connie Lee. "Connie Lee is a licensed financial guarantee company, with access to more than 37 years of industry-leading experience in the municipal bond guarantee industry and as such, we expect that it will be received favorably by the market as it will provide much needed capacity and execution capability," Ambac President and Chief Executive Officer, Michael Callen, stated. "I am confident that the management team of Connie Lee, which will be primarily assembled from within AAC's Public Finance division, will have a level of experience unrivaled in the industry." Headquartered in New York City, Ambac Financial Group, Inc. -- http://ir.ambac.com/-- is a holding company that provides financial guarantees and financial services to clients in both the public and private sectors around the world through its principal operating subsidiary, Ambac Assurance Corporation. As an alternative to financial guarantee insurance credit protection is provided by Ambac Credit Products, a subsidiary of Ambac Assurance, in credit derivative format. * * * The Troubled Company Reporter said on June 9, 2008, that Standard & Poor's Ratings Services lowered its standard long-term ratings on 20 Ambac Assurance Corp.-backed issues listed below to 'AA' from 'AAA' and placed them on CreditWatch with negative implications. At the same time, Standard & Poor's lowered its underlying ratings on seven Ambac Assurance Corp.-backed issues listed below to 'AA' from 'AAA' and placed them on CreditWatch with negative implications. These actions follow Standard & Poor's downgrade of Ambac Assurance Corp. to 'AA' from 'AAA' and placement on CreditWatch with negative implications. Ambac Financial Group Inc. said in a statement responding to the rating actions by Standard & Poor's Rating Services that it is disappointed by the actions taken by S&P, the TCR said on June 9. The TCR related on June 30, 2008, that Fitch Ratings withdrew all of its outstanding ratings on Ambac Financial Group, Inc., Ambac Assurance Corp. and other related entities, and all ratings based on insurance policies from Ambac's insurance subsidiaries. The action followed the decision by Ambac's management 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. ARIES MARITIME: PricewaterhouseCoopers Raises Going Concern Doubt ----------------------------------------------------------------- PricewaterhouseCoopers S.A. in Athens, Greece, expressed substantial doubt about the ability of Aries Maritime Transport Limited to continue as a going concern after it audited the company and its subsidiaries� financial statements for the year ended Dec. 31, 2007. The auditing firm reported that the company has incurred a net loss, has a net working capital deficit and has not met certain of its financial covenants of debt agreements with lenders. Indebtedness The company had short-term debt outstanding of $284.8 million at Dec. 31, 2007, compared to long-term debt outstanding of $284.8 million at Dec. 31, 2006, and $183.8 million at Dec. 31, 2005. The company is obligated under the interest coverage ratio covenant relaxation granted by the company�s lenders in March 2008, which was extended in June 2008, to reduce the outstanding borrowings under the credit facility from the level of $284.8 million to $200 million, funded by entering into contracts for the sale of additional vessels by Aug. 31, 2008. In June 2008, the company completed the sale of three vessels, which reduced the company�s outstanding borrowings to $223.7 million, and expects to enter into contracts for the sale of one or more vessels by Aug. 31, 2008, and to be in compliance with the its obligation to reduce its outstanding borrowings to $200 million. As of Dec. 31, 2007, borrowings under the company�s fully revolving credit facility bore an annual interest rate, including the margin, of 6.96%. The company entered into a $360 million fully revolving credit facility in April 2006, with Bank of Scotland and Nordea Bank Finland as lead arrangers. The company used the fully revolving credit facility to refinance the company�s old $140 million drawn term loan; refinance the company�s old revolving acquisition facility, which was drawn to the extent of $43.8 million at Dec. 31, 2005, and which was further drawn in February 2006 in the amount of $50.5 million to complete the purchase of the vessel Stena Compassion; and to complete the purchase of the Stena Compassion. The fully revolving credit facility has a five-year term and is subject to fixed reductions during the five years. The fully revolving credit facility may also be used to the extent of $5.0 million for general corporate purposes. As of Dec. 31, 2007, this amount remains undrawn. Under the original terms of the fully revolving credit facility, for the first thirty months of the facility, if the total amount borrowed under the facility exceeds 65% of the fair market value of the collateral vessels, the company will be unable to borrow further amounts under the facility until the company either prepay some of the debt or the fair market value of the collateral vessels increases. The company will be able to borrow further amounts under the facility again once the total amount borrowed under the facilities no longer exceeds 65% of the fair market value of the collateral vessels. For the second thirty months of the fully revolving credit facility, if the total amount borrowed under the facility exceeds 60% of the fair market value of the collateral vessels, the company will be unable to borrow further amounts under the facility until the company either prepay some of the debt or the fair market value of the collateral vessels increases. The company will be able to borrow further amounts under the facility again once the total amount borrowed under the facilities no longer exceeds 60% of the fair market value of the collateral vessels. If a vessel becomes a total loss or is sold, no further amounts may be borrowed under this agreement, except for advances for additional ships already approved by the lenders, until the company have applied the full sale or insurance proceeds in repayment of the facility, unless the lenders otherwise agree. The company�s obligations under the fully revolving credit facility are secured by a first-priority security interest, subject to permitted liens, in all vessels in the company�s fleet and any other vessels the company subsequently acquire. In addition, the lenders will have a first-priority security interest in all earnings from and insurances on the company�s vessels, all existing and future charters relating to the company�s vessels, the company�s ship management agreements and all equity interests in the company�s subsidiaries. The company�s obligations under the fully revolving credit facility agreement are also guaranteed by all subsidiaries that have an ownership interest in any of the company�s vessels. The $327 million remaining commitment as of Dec. 31, 2007, contained in the credit agreement was subject to six scheduled semi-annual reductions of $11 million each, from April 2008, with the residual commitment of $261 million to be reduced to zero or repaid in full in one installment in April 2011. In March 2008, the commitment was reduced to $290 million and is subject to the remaining five semi-annual reductions of $11 million each and therefore the residual commitment was reduced to $235 million. Indebtedness under the fully revolving credit facility bears interest at an annual rate equal to LIBOR plus a margin equal to 1.125% if the company�s total liabilities divided by the company�s total assets, adjusting the book value of the company�s fleet to its market value, is less than 50%; 1.25% if the company�s total liabilities divided by the company�s total assets, adjusting the book value of the company�s fleet to its market value, is equal to or greater than 50% but less than 60%; 1.375% if the company�s total liabilities divided by the company�s total assets, adjusting the book value of the company�s fleet to its market value, is equal to or greater than 60% but less than 65%; and 1.5% if the company�s total liabilities divided by the company�s total assets, adjusting the book value of the company�s fleet to its market value, is equal to or greater than 65%. The interest rate on overdue sums will be equal to the applicable rate plus 2%. The company paid a one-time arrangement fee of about $2.3 million at the initial drawdown of the facility together with the first year�s agency fee of $50,000, and pay, quarterly in arrears, a commitment fee equal to 0.5% per annum of the unused commitment of each lender under the facility. The company may prepay all loans under the credit agreement without premium or penalty other than customary LIBOR breakage costs. In April 2008, the company paid a one-time fee of $362,500 for an amendment to the credit agreement. In the event that such disposal of vessels is not completed by August 31, 2008, the lenders may extend the compliance date to September 30, 2008 subject to legally binding sale contract(s) having been executed by August 31, 2008. The company has entered into agreements to sell three of its vessels for net proceeds of $61.04 million. As of June 25, 2008, the company has $223.71 million of outstanding borrowings under the fully revolving credit facility. On April 17, 2008, the lenders approved an amendment to the working capital ratio financial covenant to exclude from its calculation voluntary and mandatory prepayments. Subsequent Events Ship Management Agreements On January 9, 2008, the company�s subsidiary the vessel-owning company of the M/V Saronikos Bridge entered into an annual ship management agreement with Barber Ship Management Singapore Pte Ltd,, which is cancellable by either party with two months� notice. On January 23, 2008, the company�s subsidiary the vessel-owning company of the M/V CMA CGM Seine entered into an annual ship management agreement with Barber, which is cancellable by either party with two months� notice. Sale of Vessels On March 3, 2008, the company announced that it reached an agreement to sell the vessel Arius to an unrelated party for net proceeds of $21.8 million. The vessel was delivered to their new owners on June 10, 2008, and the company realized a gain of $10.1 million. The company paid 1% of the purchase price as sales commission to Magnus Carriers. On March 25, 2008, the company announced that it reached an agreement to sell both the MSC Oslo and its sister ship, the Energy 1, to an unrelated party for net proceeds totaling about $40 million. The vessels were delivered to their new owners on April 30, 2008, and June 2, 2008, respectively, and the company realized a gain of $5.3 million. The company paid 1% of the purchase price as sales commission to Magnus Carriers. CFO Resignation In March 2008, the company announced the resignation of Richard J.H. Coxall from his position as chief financial officer and director. In June 2008, the company announced the appointment of Ioannis Makris as the company�s chief financial officer. Credit Facility In March 2008, the company received consent from the its lenders to a further relaxation of the interest rate coverage ratio under the company�s fully revolving credit facility that imposes additional restrictions. On April 17, 2008, the lenders approved an amendment to the working capital ratio financial covenant to exclude from its calculation voluntary and mandatory prepayments. Interest Rate Hedge and Restricted Stock In April 2008, the Company cancelled two existing swap agreements and entered into two new swap agreements. On April 11, 2008, the board of directors of the company resolved to accelerate the vesting of the 100,000 shares unvested as of Dec. 31, 2007, of 200,000 restricted shares awarded during 2007 under grants of restricted stock to the company�s directors. All shares that had not vested became vested on April 11, 2008. Financials The company posted a net loss of $8,733,000 on revenues from voyages of $99,423,000 for the year ended Dec. 31, 2007, as compared with a net income of $2,199,000 on revenues from voyages of $94,199000 in the prior year. At Dec. 31, 2007, the company's consolidated balance sheet showed $425,491,000 in total assets, $318,372,000 in total liabilities, and $132,588,000 in total stockholders' equity. The company's consolidated balance sheet at Dec. 31, 2007, showed strained liquidity with $22,430,000 in total current assets available to pay $29,622,000 in total current liabilities. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2f0d About Aries Maritime Aries Maritime Transport Limited (NasdaqGS: RAMS), -- http://www.ariesmaritime.com-- through its subsidiaries, operates as a shipping company that owns and charters ocean-going vessels worldwide. It owns products tankers and container vessels that transport various refined petroleum products in segregated and coated cargo tanks. The company transports cargoes, including gasoline, jet fuel, kerosene, naphtha, heating oil, and edible oils, as well as finished and semi-finished goods from manufacturing centers to industrial and consumer end-users. The company was incorporated in 2005 and is based in Athens, Greece. Aries Maritime Transport Limited is a subsidiary of Aries Energy Corporation. ASARCO LLC: To Appeal Asset Sale Procedures Approval ---------------------------------------------------- Asarco Incorporated will take an appeal to the U.S. District Court for the Southern District of Texas from the order issued by the Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas approving bidding procedures governing the auction of substantially all of ASARCO LLC and its debtor- affiliates' assets to Sterlite Industries Ltd., or to any entity who'll submit a better or higher bid. Asarco Inc. objected to Sterlite's bid arguing that it can top Sterlite's bid by funding a plan of reorganization for the Debtors with $2,700,000,000 in cash or cash equivalents. Sterlite has offered $2,600,000,000 for the Debtors' assets. According to Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, in New York, the aggregate value of Asarco Inc.'s Full-Payment Plan is as much as $6,740,000,000. As reported by the Troubled Company Reporter on June 17, 2008, Harbinger Capital Partners Master Fund I, Ltd., and Harbinger Capital Partners Special Situations Fund, L.P., have said Sterlite's $2,600,000,000 bid is not the "best" bid for the assets of ASARCO LLC and its debtor-affiliates. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Debtors have until Aug. 1, 2008 to file a Chapter 11 plan of reorganization. (ASARCO Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Alta Mining, et al. Tap Baker Botts as Bankr. Counsel ----------------------------------------------------------------- In April 2008, six of ASARCO LLC's affiliates -- Alta Mining and Development Company, Blackhawk Mining Development Company, Limited, Green Hill Cleveland Mining Company, Tulipan Company, Inc., Peru Mining Exploration and Development Company and Wyoming Mining and Milling Company -- filed voluntary petitions under Chapter 11. In relation to the bankruptcy filing, Alta Mining, et al., seek permission from the U.S. Bankruptcy Court for the Southern District of Texas to employ Baker Botts LLP, as their bankruptcy counsel, nunc pro tunc to April 21, 2008. As the Subsidiary Debtors' counsel, Baker Botts will: (1) assist the Subsidiary Debtors in exploring restructuring alternatives and developing and implementing a reorganization strategy; (2) develop, negotiate, and promulgate a Chapter 11 plan of reorganization for the Subsidiary Debtors and prepare a disclosure statement strategy; (3) advise the Subsidiary Debtors with respect to their rights and obligations as debtors-in-possession and other areas of bankruptcy law; (4) prepare, on behalf of the Subsidiary Debtors, all necessary applications, motions, answers, orders, briefs, reports and other papers in connection with the administration of their estates; and (4) represent the Subsidiary Debtors at all hearing and proceedings. Douglas E. McAllister, ASARCO's president, says that the Subsidiary Debtors are historical non-operating entities with no assets except for immaterial real estate interests in Idaho and Utah. ASARCO will pay for Baker Botts' services. Baker Botts will be paid according to its current standard hourly rates of: Professional Hourly Rates ------------ ------------ Partner $435 to $775 Counsel $425 to $475 Associate $230 to $425 Paralegal $150 to $215 Clerk $50 to $115 Baker Botts will also be reimbursed for any necessary and reasonable out-of-pocket expenses. Jack L. Kinzie, a partner at Baker Botts L.L.P., in Dallas, Texas, assures the Court that his firm does not represent any interest adverse to the Debtors or their estates, and that his firm is "disinterested person" as the term is defined in Section 101(14) of the U.S. Bankruptcy Code. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). ASARCO and its debtor-affiliates have until Aug. 1, 2008 to file a plan of reorganization. (ASARCO Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: FCR Urges Court to Continue Estimating Asbestos Claims ------------------------------------------------------------------ The Official Committee of Unsecured Creditors for the ASARCO LLC Asbestos Subsidiary Debtors and Robert C. Pate, the Future Claims Representative, filed supplemental briefs to their responses to Asarco Incorporated's individual objections to asbestos claims. The FCR maintains that the U.S. Bankruptcy Court for the Southern District of Texas does not have jurisdiction to the asbestos claims. The FCR further maintains that the Court should proceed with the established course of estimating the asbestos claims for purposes of plan confirmation. The FCR notes that the Bankruptcy Court has held that summarily disposing of a claim related to a personal injury violates the Section 157(b0(2) of the Federal Rules of Judicial Procedure as it is tantamount to liquidating the claim to zero for purposes of distribution. The Asbestos Committee maintains that the Bankruptcy Court should dismiss Asarco Inc.'s claims objections, stay the claims objections, or indefinitely prohibit Asarco Inc. from filing any further claims objections. The Asbestos Committee agree with the FCR that it is not within the Bankruptcy Court's jurisdiction to decide matters pertaining to personal injury and wrongful death cases. The jurisdiction of the Bankruptcy Court is limited and it may not enter any decision or take any action that constitutes a final judgment of the merits of personal injury claims, the Asbestos Committee's counsel, Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, states. The jurisdiction of the Bankruptcy Code is limited when dealing with personal Injury Claims, Mr. Esserman contends. The U.S. Code requires that personal injury and wrongful death claims be liquidated by the district courts. Under Article III of the U.S. Constitution, bankruptcy courts are prohibited from exercising judicial power of the U.S. and deciding civil claims founded on state law, he points out. Moreover, Mr. Esserman says that if the Court is inclined to consider the merits of Asarco Inc.'s claims objections, the asbestos claimants must be given due notices and full opportunities to be heard in each instance. Lipitz & Ponterio, LLC, representing several asbestos personal injury claimants, concur with the Official Committee of Unsecured Creditors for the Asbestos Debtors that Asarco Incorporated's objections to the asbestos claims are premature, untimely, and designed to disrupt and retard the Debtors' bankruptcy cases. Lipitz & Ponterio maintains that the Court should convert the claims objections to adversary proceedings to give the firm time to investigate Asarco Inc.'s contentions and take discovery pursuant to Rule 9014 of the Federal Rules of Bankruptcy Procedure. In separate Court-approved stipulations, the Asbestos Committee, Mt. McKinley Insurance Company and Everest Reinsurance Company, and the Fireman's Fund Insurance Company, agreed to extend the time for the Insurance Companies to object to the Asbestos Committee's request for a protective order prohibiting the disclosure of personal information of asbestos claimants. The Asbestos Committee and the Insurance Companies agree that the confidential information of the asbestos claimants will only be disclosed to parties to the confidentiality agreement. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). ASARCO and its debtor-affiliates have until Aug. 1, 2008 to file a plan of reorganization. (ASARCO Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Wants Pact With Oklahoma Toxic Tort Claimants Approved ------------------------------------------------------------------ ASARCO LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Texas to approve a compromise and settlement with certain toxic tort claimants who have alleged claims for property damages in Ottawa County, Oklahoma, and the surrounding area. The settlement provides that the Toxic Tort Claimants will have a general unsecured claim in the aggregate amount of $7,000,000. In exchange, the Claimants agree to release ASARCO LLC and its subsidiaries from all pending and future claims relating to the Debtors' mining operations in Ottawa. The Claimants further agree to obtain dismissal with prejudice of ASARCO and any of the Debtors from all pending lawsuits any of the Claimants have against the Debtors in any court. The Debtors will withdraw their objection to late-filed claims filed by certain Claimants. Omar J. Alaniz, Esq., at Baker Botts L.L.P in Dallas, Texas, clarifies that the Debtors do not admit liability to the Claimants. He says that the settlement eliminates the risks, uncertainties and delay that are inherent in any litigation. The Claims asserted by the Claimants are contingent and unliquidated. He contends that estimation or individual adjudication of the Claims is time-consuming and complex and could unduly delay the Debtors' reorganization process. Claimants Seek Appointment of Special Master The Toxic Tort Claimants seeks the appointment of Anthony Laizure, Esq., a partner at Stipe, Harper, Laizure, Uselton, Belot, Maxcey & Thetford, in Tulsa, Oklahoma, as special master who will monitor and supervise the allocation and distribution of settlement of funds to minor toxic tort claimants. The Special Master will determine the amount of settlement monies alloted to each minor claimant and provide guidelines as to the distribution process, Dennis C. Reich, Esq., at Reich & Binstock, LLP in Houston, Texas, says. The settlement monies will be held in a Trust Account until the time the Special Master determines the distribution. In addition, the Claimants seek payment of their attorney's fees and reimbursement of their expenses from the settlement proceeds. Mr. Reich did not disclose the amount of fees and expenses requested. In a separate filing, Mr. Reich informed the Court that the Tar Creek Claimants withdrew four claims: Claimant Claim No. -------- --------- Vergie Henry 201198 Clinton W. Miller 200664 "Railroad" 200792 Terry and Carol Way 2001054 According to Mr. Reich, the four Claimants have not signed and completed proper proofs of claim forms or the settlement/release forms for ASARCO. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). ASARCO and its debtor-affiliates have until Aug. 1, 2008 to file a plan of reorganization. (ASARCO Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). BANK OF AMERICA: Still to Decide on $40BB of Countrywide Debt ------------------------------------------------------------- Bank of America Corp. still has not made any decision about whether it would guarantee Countrywide Financial Corp.'s $40 billion outstanding debt, Reuters reports. Bondholders have been expecting BofA's declaration on how it woud treat the outstanding debt after it completed its purchase of Countrywide last week for $2.5 billion. Reuters relates that BofA's regulatory filing this week did not disclose any guarantees, but the organization structure in the filing implies that these bondholders will be repaid, according to David Hendler, a CreditSights analyst. Mr. Hendler adds that Countrywide's credit facilities were already repaid and its indebtedness, including subordinated notes, preferred stock, and convertible securities, have assumed by a BofA subsidiary. "Our view continues to be that BofA will ultimately honor the outstanding indebtedness from (old) Countrywide, based on our discussion with the company following this filing, as well as our prior analysis," Reuters quotes Mr. Hendler as saying. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider and a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. * * * As reported in the Troubled Company Reporter on Jan. 15, 2008, Moody's placed the ratings of Countrywide Financial Corporation and its subsidiaries under review for upgrade. CFC and Countrywide Home Loans senior debt is rated Baa3 and short-term debt is rated Prime-3. Countrywide Bank FSB's bank financial strength rating is C-, deposits are rated Baa1 and short-term debt Prime-2. All long and short-term ratings are placed under review for possible upgrade. The company is continuing to face a barrage of lawsuits coming from disgruntled homeowners that filed for bankruptcy protection. Countrywide has been accused by these homeowners and various federal agencies of dubious and questionable lending practices, and for abusing the bankruptcy system. About Bank of America Based in Charlotte, North Carolina, Bank of America Corp. (NYSE:BAC) -- http://www.bankofamerica.com-- is a bank holding company. Bank of America provides banking and non-banking financial services and products through three business segments: global consumer and small business banking, global corporate and investment banking, and global wealth and investment management. In December 2006, the company sold its retail and commercial business in Hong Kong and Macau to China Construction Bank. In October 2006, BentleyForbes, a commercial real estate investment and operations company, acquired Bank of America plaza in Atlanta from CSC Associates, a partnership of Cousins Properties Incorporated and the company. In June 2007, the company acquired the reverse mortgage business of Seattle Mortgage Company, an indirect subsidiary of Seattle Financial Group Inc. In October 2007, ABN AMRO Holding N.V. completed the sale of its United States subsidiary, LaSalle Bank Corporation, to Bank of America. BANK OF AMERICA: Will Rework $40 Billion in Mortgage Loans ---------------------------------------------------------- Bank of America Corp. will rework $40 billion of home mortgage loans over a period of two years to keep more than 200,000 families in their homes, Bloomberg News cites BofA CEO Kenneth Lewis. Mr. Lewis said BofA will do this without resorting to cutting dividends or raising cash, Bloomberg relates. BofA completed its $2.5 billion acquisition of Countrywide Financial Corp. last week. "Our goal is to keep as many families in their homes as possible. . . . [We] see no reason to cut the dividend and no reason to raise any more capital," Bloomberg quotes Mr. Lewis as saying. As reported in the Troubled Company Reporter on July 2, 2008, BofA also intends to eliminate around 7,500 positions as part of the acquisition. The reductions will take place throughout the country within the next two years. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider and a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. * * * As reported in the Troubled Company Reporter on Jan. 15, 2008, Moody's placed the ratings of Countrywide Financial Corporation and its subsidiaries under review for upgrade. CFC and Countrywide Home Loans senior debt is rated Baa3 and short-term debt is rated Prime-3. Countrywide Bank FSB's bank financial strength rating is C-, deposits are rated Baa1 and short-term debt Prime-2. All long and short-term ratings are placed under review for possible upgrade. The company is continuing to face a barrage of lawsuits coming from disgruntled homeowners that filed for bankruptcy protection. Countrywide has been accused by these homeowners and various federal agencies of dubious and questionable lending practices, and for abusing the bankruptcy system. About Bank of America Based in Charlotte, North Carolina, Bank of America Corp. (NYSE:BAC) -- http://www.bankofamerica.com-- is a bank holding company. Bank of America provides banking and non-banking financial services and products through three business segments: global consumer and small business banking, global corporate and investment banking, and global wealth and investment management. In December 2006, the company sold its retail and commercial business in Hong Kong and Macau to China Construction Bank. In October 2006, BentleyForbes, a commercial real estate investment and operations company, acquired Bank of America plaza in Atlanta from CSC Associates, a partnership of Cousins Properties Incorporated and the company. In June 2007, the company acquired the reverse mortgage business of Seattle Mortgage Company, an indirect subsidiary of Seattle Financial Group Inc. In October 2007, ABN AMRO Holding N.V. completed the sale of its United States subsidiary, LaSalle Bank Corporation, to Bank of America. BEAR STEARNS: Fund Liquidators Amend Bear Suit, Seek $1.5 Billion ----------------------------------------------------------------- Geoffrey Varga and William Cleghorn of Kinetic Partners Cayman, LLP, joint voluntary liquidators of Bear Stearns High-Grade Structured Credit Strategies (Overseas), Ltd., and Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage (Overseas), Ltd., previously filed a lawsuit against Bear Stearns Asset Management, Inc., The Bear Stearns Companies, Inc., Bear Stearns & Co., Inc., Ralph Cioffi, Matthew Tannin, Raymond Madrigal, and Deloitte & Touche LLP, seeking $1,000,000,000 of investors losses sustained by the Overseas Funds as a result of "a sophisticated fraud perpetrated by Bear Stearns and its managers." On June 30, 2008, the Overseas Funds Liquidators amended their complaint to seek $1,500,000,000 of investor losses. Representing the Overseas Funds Liquidators, Robert A. Nicholas, Esq., at Reed Smith LLP, in New York, maintains in the Complaint that the Overseas Funds "were doomed to fail because the Bear Stearns Defendants conceived, managed, and deceptively marketed [the Funds] knowing that [the Funds] would be viable so long as the U.S. housing market continued to experience an unprecedented rise." "In short, in orchestrating this fraud, it appears that the Bear Stearns Defendants did not fail to plan, but rather, planned to fail," Mr. Nicholas said. Mr. Nicholas related that the Bear Stearns Defendants represented that the Overseas Funds would invest in broadly diversified pools of credit-related investment instruments, including, among other things, favorable risk-rated tranches of collateralized debt obligations. The Defendants further represented that at least 90% of all of the Overseas Funds' investments would have "AAA" or at worst "AA" default and valuation risk ratings conferred on them by one or more of the three primary U.S. commercial credit rating agencies, Standard & Poors, Moody's, and Fitch. In addition, Mr. Nicholas told the U.S. District Court for the Southern District of New York, where the Complaint was filed, that the Bear Stearns Defendants have said that the Overseas Funds would have minimal exposure to sub-prime residential mortgages and that the Defendants would utilize their "substantial, industry leading risk management expertise, and experience" to ensure that the Overseas Funds were relatively safe, conservative investment vehicles. Mr. Nicholas said Deloitte and its officers assured investors that they were conducting independent, thorough, and objective audits. He added that Walkers Fund Services Limited promised investors that they would independently analyze, scrutinize and ultimately approve or disapprove any insider transactions between and among the Overseas Funds and other Bear Stearns-related entities. The Overseas Funds Liquidators alleged that Deloitte and Walkers materially participated in and facilitated the Bear Stearns Defendants in the fraud. According to Mr. Nicholas, the Overseas Funds' exposure to ever- increasing concentrations of aggressive and risky investments, including collateralized debt obligations and mortgage pools, as well as multiple "CDO-squareds," caused each Fund to have disproportionate exposure to subprime residential mortgages -- far beyond the exposure that was permitted under the Funds' governing documents, or that was disclosed to, or reasonably discovered by, investors. Aside from the monetary awards, the Overseas Funds Liquidators ask the Court to find the Defendants guilty of violations of the federal securities law, fraud, breach of fiduciary duty, breach of contract, gross negligence, accounting malpractice, aiding and abetting fraud, and unjust enrichment. The Overseas Funds, which have sought liquidation proceedings under the Companies Law (2007 Revision) of the Cayman Islands, placed investors' assets into the Master Funds -- Bear Stearns High-Grade Structured Credits Strategies Master Fund, Ltd., and Bear Stearns High-Grade Structured Credits Strategies Enhanced Leverage Master Fund, Ltd. -- both of which also sought liquidation proceedings in the Cayman Islands in July 2007. The Master Funds sought protection of their U.S.-based assets by filing a petition under Chapter 15 of the U.S. Bankruptcy Code. The U.S. Bankruptcy Court, however, has denied the Chapter 15 request. The U.S. District Court affirmed the Bankruptcy Court's decision. The Master Funds' said they won't be pursuing further appeal of the Bankruptcy Court's decision. Messrs. Cioffi and Tannin are currently facing fraud charges filed by the Eastern District of New York federal prosecutors and the U.S. Securities and Exchange Commission. The federal prosecutors and the SEC found, after almost a year of investigation, that Messrs. Cioffi and Tannin misled investors by declaring that the hedge funds they managed for Bear Stearns are "healthy" when personal e-mails showed that they were worried of those funds' future. About Bear Stearns Funds Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. are open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law (2007 Revision) of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint provisional liquidators. The joint liquidators filed for Chapter 15 petitions before the U.S. Bankruptcy Court for the Southern District of New York the next day. On August 30, 2007, the Honorable Burton R. Lifland denied the Funds protection under Chapter 15 of the Bankruptcy Code. Fred S. Hodara, Esq., Lisa G. Beckerman, Esq., and David F. Staber, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the liquidators in the United States. The Funds' assets and debts are estimated to be more than $100,000,000 each. (Bear Stearns Funds Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). BEAR STEARNS: Will Not Pursue Further Chapter 15 Appeal ------------------------------------------------------- Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., and Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund, Ltd., through their joint official liquidators, Simon Lovell Clayton Whicker and Kristen Beighton, notified the U.S. Bankruptcy Court for the Southern District of New York that they will not be pursuing further appeal of U.S. Bankruptcy Judge Robert Lifland's decision denying the Funds' application under Chapter 15 of the Bankruptcy Code. To recall, in 2007, Judge Lifland denied the Funds' Chapter 15 application after finding that the Cayman Islands, where the Funds were liquidated, is not the Funds' "center of main interest." In May 2008, U.S. District Judge Robert Sweet affirmed Judge Lifland's decision and findings. According to the counsel for the Joint Liquidators, Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, the Joint Liquidators have consulted with the Funds' liquidation committees formed in connection with their Cayman Islands insolvency proceedings regarding their decision not to pursue further appeal from the U.S. Courts' decisions. In line with their decision, the Joint Liquidators notified the U.S. Bankruptcy Court that they intend to remove monies that were deposited in U.S. Accounts as required by Judge Lifland. In 2007, when Judge Lifland denied the Funds' Chapter 15 applications, he required the Joint Liquidators to deposit $4,000,000 into a Depository established for each Fund, and upon collection of any U.S. Proceeds, deposit those proceeds into each Funds' Depository. Bloomberg News said the Depositories hold a total of approximately $24,300,000. Judge Lifland's order provided that, in the event his decision is affirmed on appeal, "following 10 business days' notice to all known parties in interest, if no such party files an objection, the Foreign Representatives may remove or withdraw any funds held in the Depositories and the provisions of [the Stay Order] shall automatically terminate and be of no further force of effect." Any party who wish to object to the Joint Liquidators' intent to remove the deposits must file a written objection by no later than July 14, 2008, at 5:00 p.m. (New York Time). About Bear Stearns Funds Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. are open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law (2007 Revision) of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint provisional liquidators. The joint liquidators filed for Chapter 15 petitions before the U.S. Bankruptcy Court for the Southern District of New York the next day. On August 30, 2007, the Honorable Burton R. Lifland denied the Funds protection under Chapter 15 of the Bankruptcy Code. Fred S. Hodara, Esq., Lisa G. Beckerman, Esq., and David F. Staber, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the liquidators in the United States. The Funds' assets and debts are estimated to be more than $100,000,000 each. (Bear Stearns Funds Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). BEAR STEARNS: S&P Puts Default Rating on S. 2005-2 Class M-7 Certs ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on five classes from Bear Stearns Asset Backed Securities Trust 2005-2. In addition, S&P affirmed its ratings on four classes from this series. The lowered ratings reflect pool performance that has caused actual and projected credit support for the affected classes to decline. This transaction has experienced losses that have eroded overcollateralization to $0 from its target level of approximately $9,982,842 and has resulted in the write-down of class M-7. Therefore, S&P have lowered its rating on this class to 'D' from 'B'. As of the June 2008 remittance period, cumulative realized losses were 4.84%. Total delinquencies were 26.31% of the current pool balance, while severe delinquencies (90-plus days, foreclosures, and REOs) were 17.26%. Furthermore, delinquencies have escalated over the past six months. For Bear Stearns Asset Backed Securities Trust 2005-2, losses have, on average over the past six months, been approximately 2.16x monthly excess interest. These performance trends have caused projected credit support for the transaction to fall below the required level. Standard & Poor's will continue to closely monitor the performance of this transaction. If the transaction incurs further losses and delinquencies continue to erode projected credit support, S&P will likely take further negative rating actions. This transaction is 36 months seasoned and has a pool factor of 29.16%. Subordination, excess interest, and O/C provide credit support for this transaction. The underlying collateral backing the certificates originally consisted of a pool of scratch-and- dent fixed- and adjustable-rate mortgage loans secured by first and second liens on one- to four-family residential properties. Ratings Lowered Bear Stearns Asset Backed Securities Trust 2005-2 Asset-backed certificates Rating ------ Series Class To From ------ ----- -- ---- 2005-2 M-3 BB+ A- 2005-2 M-4 BB BBB+ 2005-2 M-5 B BBB 2005-2 M-6 CCC BBB- 2005-2 M-7 D B Ratings Affirmed Bear Stearns Asset Backed Securities Trust 2005-2 Asset-backed certificates Series Class Rating ------ ----- ------ 2005-2 A-2 AAA 2005-2 A-3 AAA 2005-2 M-1 AA 2005-2 M-2 A BLUE BELL: Moody's Replaces Ratings on Notes, Junks Class B Rating ------------------------------------------------------------------ Moody's Investors Service has withdrawn and replaced the ratings on these notes issued by Blue Bell Funding, Ltd/Blue Bell Funding Corp.: Class Description: $1,112,500,000 CP Notes -- Prior short-term Rating: P-1 -- Current short-term Rating: WR -- Prior long-term Rating: NR -- Current long-term Rating: Aa1, on review for possible downgrade According to Moody's, the Prime-1 ratings assigned to the CP Notes were based on the existence of a put agreement provided by a Prime-1 rated third party. The notes have been re-issued with the put provider as both the investor and the put counterparty. Where the put provider is also the holder of the notes, it is Moody's view that the put agreement ceases to be relevant. Accordingly, Moody's has withdrawn its short-term ratings on these notes. In place of the short-term ratings issued on these notes, Moody's has issued long-term ratings of Aa1, on review for possible downgrade In addition, Moody's also has downgraded these notes issued by Blue Bell Funding, Ltd/Blue Bell Funding Corp. and left them on review for possible downgrade: Class Description: $55,000,000 Class A-1 Notes -- Prior Rating: Aaa -- Current Rating: Baa1, on review for possible downgrade Class Description: $20,000,000 Class A-2 Notes -- Prior Rating: Aa2 -- Current Rating: Ba1, on review for possible downgrade Class Description: $37,500,000 Class B Notes -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Moody's has also downgraded these notes: Class Description: $18,750,000 Class C Notes -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: C According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. BLUE SKY: Gets Court Approval to Employ D.R. Kight Jr. as Counsel ----------------------------------------------------------------- The United States Bankruptcy Court for the Western District of North Carolina granted Bluy Sky Mountain Co., Inc. the authority to employ D. Rodney Kight, Jr., Esq., as its bankruptcy counsel. As the Debtor's bankruptcy cousel, Mr. Kight, Jr. will mainly give legal advice to the Debtor with respect to its powers and duties in the continuing operation of the Debtor's business and management of the Debtor's property. D. Rodney Kight, Jr., Esq., assured the Court that he has no connection with the Debtor or its estate in the matters upon which he has been engaged, and that he is a disinteressted person to represent the Debtor and the estate. The Debtor did not provide the Court a schedule of fees to which Mr. Kight, Jr. is entitled to as bankruptcy counsel. Based in Orlando, Fla., Blue Sky Mountain Inc. filed for Chapter 11 protection on June 4, 2008 (W.D. N.C. Case No. 08-10433). When the Debtor filed for reorganization under Chapter 11, it listed total assets of $31,095,300 and total debts of $6,171,094. BLUE WATER: Agrees to Sell Assets to Flex-N-Gate for $22.3MM ------------------------------------------------------------ Flex-N-Gate, LLC, offered to purchase substantially all of Blue Water Automotive Systems, Inc., and its debtor affiliates' assets for $22,377,000 in cash. During a July 1, 2008, auction, the Debtors determined that Flex-N-Gate offered the best bid for their assets. Previously, the Debtors entered into a stalking horse purchase agreement with NYX, Inc., under which NYX proposed to pay $28,000,000, to be funded by $7,000,000 in cash, and $21,000,000, for the Debtors' assets. After determining that Flex-N-Gate's offer is the best bid, the Debtors entered into an Asset Purchase Agreement with Flex-N-Gate, a copy of which is available for free at: http://ResearchArchives.com/t/s?2f49 Based in Urbana, Illinois, Flex-N-Gate, LLC -- http://www.flex-n- gate.com/ -- manufactures large body and chassis structural assemblies; full bumper and fascia systems, brackets, receiver hitches; interior plastic panels and pillars; exterior trim components, running board systems; scissor and screw jacks, tools, spare tire hoists, hinges, checks, pedals, parking brakes, and latch systems. It employs more than 13,000 people at 50 manufacturing and six product development and engineering facilities throughout North America, Mexico, Argentina and Spain. Flex-N-Gate has made a $1,000,000 Good Faith Deposit in accordance to the Sale Procedures Order. The Flex-N-Gate APA also provides for (i) Flex-N-Gate's assumption of certain of the Debtors' liabilities; and (ii) the delivery of an $18,377,000 letter of credit naming the Debtors and Ford Motor Company as beneficiaries. On the Sale Closing, an escrow fund will be created by U.S Bank, as the escrow agent, by the Debtors transferring Flex-N-Gate's Deposit of $3,000,000 by wire transfer of immediately available funds. Ford will be paid $1,265,361 with respect to the Ford Direct Purchase Equipment by a draw on the Pre-Closing Letter of Credit Letter. The Debtors will be paid the Cash Purchase Price less than the sum of the amount paid to Ford and $3,000,000. The Debtors will file an analysis of the purchase consideration under the Flex-N-Gate APA on July 10. The Court will convene a hearing to consider approval of the Flex-N-Gate APA on July 16. CIT Group/Equipment Financing, Inc., and CIT Capital USA, Inc., complain that the Debtors' major customers -- General Motors Corporation, Ford, and Chrysler LLC -- have not agreed that Flex- N-Gate is a Qualified Bidder. Accordingly, the CIT Entities ask the Court to deny approval of the Flex-N-Gate APA. Objections to NYX's Offer Before the July 1 Auction, several parties raised objections to the sale of the Debtors' assets to NYX: * Citizens' Bank * United Autoworkers * H.S. Die Engineering, Inc. * St. Clair Packaging, Inc. * Stephenson Electric Co. * Rieter Automotive North America, Inc. * INEOS USA LLC * Crest Mold Technology, Inc. Citizens Bank object to sale unless the sale will generate sufficient proceeds, when combined with any amounts to be paid by Ford at or before the closing of the Sale, to pay the Debtors' DIP Loans at the Sale Closing. St. Clair complained that there is insufficient information to evaluate all potential objections to the proposed sale. The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America objected to any Court order approving any sale or asset purchase agreement that purports to breach the Debtors' obligation under a labor agreement with the Union. H.S. Die said it is unclear whether any tooling it has liens on will be sold to the purchaser. Stephenson Electric asserted that the proposed sale does not meet the standards of Section 363(f) of the Bankruptcy Code. INEOS said that it does not object to the sale to the extent it is accomplished pursuant to a confirmed plan or provides for the payment of all administrative claims. To address the objections to NYX's offer, NYX terminated its APA with the Debtors and re-submitted a modified APA, which provided that NYX will have obtained financing to consummate the purchase and operate the business; and that NYX waived its right to any Termination Fee. The Debtors filed a preliminary analysis of the allocation of the purchase price under the NYX APA. The analysis contemplates total proceeds of $39,153,077, from which $18,315,700 will be paid to the CIT Entities. A full-text copy of the Preliminary Purchase Price Allocation is available for free at: http://ResearchArchives.com/t/s?2f4a About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operations in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Judy O'Neill, Esq., and Frank DiCastri, Esq., at Foley & Lardner, LLP, serves as the Debtors' bankruptcy counsel. Administar Services Group LLC acts as the Debtors' claims, noticing, and balloting agent. Blue Water's bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtors filed their Liquidation Plan on May 9, 2008. The Plan contemplates a sale of substantially all of the Debtors' assets and equity interests, except for a piece of real property located at Yankee Road, in St. Clair, Michigan, on or before June 30, 2008. The Court will hold a hearing June 18, 2008, to consider confirmation of the Plan. (Blue Water Automotive Bankruptcy News, Issue No. 22, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BLUE WATER: GM Wants Court to Allow Set-Off & Recoupment Claims -------------------------------------------------------------- General Motors Corporation asks the United States Bankruptcy Court for the Eastern District of Michigan to declare that it has "allowed set-off and recoupment claims" as defined in the joint Chapter 11 plan of liquidation of Blue Water Automotive Systems Inc. and its debtor affiliates, in an amount to be determined by the Court. As reported in the Troubled Company Reporter on May 26, 2008, The Debtors' Plan contemplates the sale of substantially all of the Debtors' assets and equity interests. The Plan will be effective when: 1. The Court approves the sale of the Business; 2. The Court enters an order confirming the Plan; and 3. The purchaser closes on the sale. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/bw_disclosurestat.pdf A full-text copy of the Plan of Liquidation is available for free at http://bankrupt.com/misc/bw_planofliquidation.pdf The Debtors and the Official Committee of Unsecured Creditors, through a Court-approved stipulation, agreed to lift the automatic stay to allow GM to file the adversary proceeding. Before the Petition Date, GM entered into various contracts and purchase orders with the Debtors for the production of component parts as well as the acquisition of tooling for GM's production of its component parts. According to Daniel W. Linna, Jr., Esq., at Honigman Miller Schwatz and Cohn, LLP, in Detroit, Michigan, the Debtors are the sole source suppliers to GM of the Component Parts. He adds that the Component Parts are essential to GM's manufacturing and assembly operations. Without sufficient quantities of the Component Parts, GM cannot maintain production and an alternate source of supply of the Component Parts is not readily available because the Debtors manufacture the Component Parts using specially manufactured, unique Tooling. The Debtors allege that GM owes them $2,584,430 for a prepetition payable out of their performance of the Purchase Orders. Immediately after the Petition Date, the Debtors were unable to perform under the Purchase Orders and thus were in breach of them, Mr. Linna contends. He adds that the Debtors further incurred breaches of the Purchase Orders when they entered into the Accommodation Agreement with Ford Motor Company. He asserts that the Debtors anticipatorily breached the Purchase Orders by, among others, advising GM that they could not or would not perform their obligations under the Purchase Orders without the financial accommodations, not shipping GM its production requirements of Component Parts, informing GM that they had stopped producing the Component Parts, and by proposing to reject the Purchaser Orders pursuant to their Amended Joint Plan of Liquidation. Mr. Linna says GM's damages to protect its supply of Component Parts and mitigate its damages exceed $4,900,000, which damages include: -- about $2,600,000 in price increases, of which about $1,865,000 has been paid to Debtors as of the date of July 2, 2008; -- about $1,874,736 in damages relating to the Inventory Bank, including $560,983 paid directly to Debtors as Incremental Bank Costs and about $1,313,753 above the applicable Purchase Order price to transport, handle, and store the Inventory Bank; -- about $78,750 of un-recovered Tooling costs paid directly to tool vendors, which amount Debtors were obligated to pay; and -- $435,379 of unrecovered legal and professional fees arising from Debtors' insolvency, bankruptcy filing, and breaches of the Purchase Orders. Mr. Linna adds that GM will incur additional damages if Debtors reject the Purchase Orders as GM will be forced to purchase Component Parts from alternate suppliers at higher prices. GM will also incur additional damages if it is compelled to fund Debtors' wind-down expenses, as provided in the GM Accommodation Agreement. Furthermore, he contends that GM's damages will likely include warranty claims and other ordinary course commercial claims that are not currently liquidated. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operations in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Judy O'Neill, Esq., and Frank DiCastri, Esq., at Foley & Lardner, LLP, serves as the Debtors' bankruptcy counsel. Administar Services Group LLC acts as the Debtors' claims, noticing, and balloting agent. Blue Water's bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtors filed their Liquidation Plan on May 9, 2008. The Plan contemplates a sale of substantially all of the Debtors' assets and equity interests, except for a piece of real property located at Yankee Road, in St. Clair, Michigan, on or before June 30, 2008. The Court will hold a hearing June 18, 2008, to consider confirmation of the Plan. (Blue Water Automotive Bankruptcy News, Issue No. 22, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BROOKLYN NAVY: S&P Cuts Rating of $307MM Bonds to BB+ from BBB- --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on power and steam producer Brooklyn Navy Yard Cogeneration Partners L.P.'s $307 million tax-exempt industrial development series 1997 bonds and $72.31 million (as of March 31, 2008) 7.42% taxable senior secured bonds due 2020 to 'BB+' from 'BBB-'. At the same time, S&P assigned a '3' recovery rating to BNYCP's senior secured bonds, indicating its expectation for a meaningful (50% to 70%) recovery in the event of a payment default. The outlook remains negative. The downgrade reflects a lower-than-expected improvement in financial metrics and a reduction in offtake levels and margins through 2007, which should continue to prevent the project from achieving the expected debt service coverage ratio range of 1.45x- 1.50x. The downgrade comes despite a recovery in operating performance, including a reduction in outages, through the first quarter of 2008. The estimated gas importation tax liability of $18.9 million and the estimated usage tax liability of more than $20 million could affect the project's liquidity. The ability to fund such potential cash outflows needs to be monitored, as does the project's claim of indemnification by Edison Mission Energy for tax payments prior to March 31, 2004. The negative outlook reflects the uncertainty surrounding the final tax liability and the extent of indemnification by Edison Mission Energy. The rating could be lowered if operating problems return, if financial performance degrades, or if final tax liabilities put excessive pressure on liquidity for the next few years. An outlook revision to stable could result from resolving the project's tax liability without negatively impacting liquidity, and a rating upgrade could be considered if BNYCP can consistently maintain a DSCR of above 1.45x and availability factors above 93%. BRUNSWICK CORP: S&P Chips Ratings to BB+ and Removes Neg. Watch --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Lake Forest, Illinois-based Brunswick Corp. At the same time, S&P removed all of the ratings from CreditWatch, where they had been placed with negative implications on June 30, 2008. Standard & Poor's lowered its long-term corporate credit rating on Brunswick to 'BB+' from 'BBB-'. The outlook is stable. The short-term corporate credit rating was lowered to 'B' from 'A-3'. S&P also lowered its issue-level rating on the company's unsecured debt to 'BB+' from 'BBB-'. S&P assigned a recovery rating of '4' on this debt, indicating its expectation for average (30% to 50%) recovery in the event of a payment default. Brunswick had $730 million in total debt outstanding as of March 29, 2008. "The downgrade is based on our concerns about cyclical and secular trends in the recreational marine industry and their effect on Brunswick's credit quality," said Standard & Poor's credit analyst Andy Liu. The ratings on Brunswick reflect S&P's concerns about the declining recreational marine industry, which is being buffeted by rising gas prices, low consumer confidence, and lower credit availability; the potential for bank covenant pressure from restructuring charges; and the effect that a steep decline in profitability is having on credit measures. These factors are offset only partially by the company's leading position in the industry and its moderate capital structure. CANFIELD HOUSTON: Westbrae Collateral Set for Auction July 18 ------------------------------------------------------------- Certain collateral held by Westbrae, LLC, a Delaware limited liability company, will be sold to the highest bidder at a public sale on July 18, 2008 at 2:00 p.m. local time at the offices of Gibson, Dunn & Crutcher LLP, 200 Park Avenue, 48th Floor, Conference Room 48B, in New York. The collateral to be sold is security for certain indebtedness owed to Westbrae by CF Houston Mez, LLC, and Canfield Houston Limited Partners, LLC, as evidenced by a Secured Promissory Note for $10,500,000, dated Oct. 8, 2004. Westbrae and the Debtors are parties to these agreements: (1) a Stock Pledge and Security Agreement (interest as Sole Stockholder of CF Houston General Partner, Inc., a Texas corporation), dated as of Oct. 8, 2004, executed by CF Houston Mez, LLC; and (2) a Partnership Pledge and Security Agreement Interest as Limited partner of Canfield Houston, LP, a Texas limited partnership) dated Oct. 8, 2004, executed by Canfield Houston Limited Partners, LLC. CF Houston and Canfield Houston are in default under the Note. As of July 1, 2008, the approximate total of all delinquent indebtedness due under the Note -- including principal, interest and other fees and charges -- is $14,839,929. The collateral to be sold at the public sale includes: (i) 100% of the stock of CF Houston General Partner, Inc. owned by CF Houston and all rights of the distributing arising therefrom and all other rights and interests of Mez in CF General; and (ii) all of the partnership interests owned by Canfield Houston. CARMEL NAVARRO: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Carmel C. Navarro 17400 A Cabrillo Hwy. So. Half Moon Bay, CA 94019 Bankruptcy Case No.: 08-31220 Chapter 11 Petition Date: July 8, 2008 Court: Northern District of California (San Francisco) Debtor's Counsel: James F. Beiden, Esq. (attyjfb@yahoo.com) Law Offices of James F. Beiden 840 Hinckley Rd. #245 Burlingame, CA 94010 Tel: (650) 697-6100 Total Assets: $10,016,350 Total Debts: $3,545,915 A list of the Debtor's unsecured creditors is available for free at http://bankrupt.com/misc/canb08-31220.pdf CF HOUSTON: Westbrae Collateral Set for Auction July 18 ------------------------------------------------------- Certain collateral held by Westbrae, LLC, a Delaware limited liability company, will be sold to the highest bidder at a public sale on July 18, 2008 at 2:00 p.m. local time at the offices of Gibson, Dunn & Crutcher LLP, 200 Park Avenue, 48th Floor, Conference Room 48B, in New York. The collateral to be sold is security for certain indebtedness owed to Westbrae by CF Houston Mez, LLC, and Canfield Houston Limited Partners, LLC, as evidenced by a Secured Promissory Note for $10,500,000, dated Oct. 8, 2004. Westbrae and the Debtors are parties to these agreements: (1) a Stock Pledge and Security Agreement (interest as Sole Stockholder of CF Houston General Partner, Inc., a Texas corporation), dated as of Oct. 8, 2004, executed by CF Houston Mez, LLC; and (2) a Partnership Pledge and Security Agreement Interest as Limited partner of Canfield Houston, LP, a Texas limited partnership) dated Oct. 8, 2004, executed by Canfield Houston Limited Partners, LLC. CF Houston and Canfield Houston are in default under the Note. As of July 1, 2008, the approximate total of all delinquent indebtedness due under the Note -- including principal, interest and other fees and charges -- is $14,839,929. The collateral to be sold at the public sale includes: (i) 100% of the stock of CF Houston General Partner, Inc. owned by CF Houston and all rights of the distributing arising therefrom and all other rights and interests of Mez in CF General; and (ii) all of the partnership interests owned by Canfield Houston. CHARMING SHOPPES: Shareholders Elect All Directors, Approve Plans ----------------------------------------------------------------- Charming Shoppes, Inc. shareholders re-elected Dorrit J. Bern, the company's President and Chief Executive Officer, and Alan Rosskamm to the Board of Directors, and elected Arnaud Ajdler, Michael C. Appel, Richard W. Bennet III and Michael Goldstein as new directors to the company during the company's Annual Meeting of Shareholders. In addition, Charming Shoppes' shareholders overwhelmingly voted in favor of all of the company's proposals for the 2008 Annual Meeting of Shareholders, which included: * approval of an amendment to the company's Restated Articles of Incorporation for the elimination of the approval requirements for business combinations with interested shareholders; * approval of an amendment to the company's Restated Articles of Incorporation and By-laws for the declassification of the Board of Directors; * re-approval of the material terms of the performance goals under the 2003 incentive compensation plan to preserve Charming Shoppes' tax deductions; and * ratification of the appointment of Ernst & Young LLP as independent auditors of Charming Shoppes to serve for the 2009 fiscal year. At the Annual Meeting of Shareholders, Dorrit J. Bern reviewed the company's leading market position in women's plus apparel, the company's performance during the previous fiscal year, and the company�s key merchandising and operational initiatives in the current fiscal year. Ms. Bern�s presentation has been posted at http://www.charmingshoppes.com/investors/manage/index.asp As disclosed on May 5, 2008, the company's Board of Directors voted to separate the duties of Chairman of the Board and Chief Executive Officer, which would result in the appointment of an independent non-executive Board member as Chairman, as well as the elimination of the position of lead independent director. Following the Annual Meeting of Shareholders, Charming Shoppes' Board of Directors reconvened and appointed Alan Rosskamm as the Company�s non-executive Chairman of the Board. Alan Rosskamm has been a member of Charming Shoppes' Board of Directors since 1992, and is Charming Shoppes' longest-standing board member. He was the Chief Executive Officer of Jo-Ann Stores, Inc., from October 1985 to August 2006, and Chairman of Jo-Ann's Board of Directors from July 1992 to August 2006. Under his leadership, Jo-Ann became the nation's leading retailer of fabrics and sewing supplies and one of the nation�s largest retailers of craft and floral products, operating 800 stores. He continues as a member of Jo-Ann�s Board of Directors, where he has served since 1985. Dorrit Bern continues in her leadership roles of President and Chief Executive Officer of Charming Shoppes, Inc. Ms. Bern joined Charming Shoppes, Inc. in 1995, and during her tenure at Charming Shoppes the company's revenues have tripled, from $1 billion to nearly $3 billion at the end of 2007. Ms. Bern's leadership has resulted in the repositioning of Charming Shoppes as a multi- brand, multi-channel specialty apparel retailer, and the nation's leader in women's specialty plus apparel. Katherine M. Hudson, who has served as a Director of Charming Shoppes since 2000, and as the Board's Lead Independent Director since 2003, continues in her role as an independent board member of Charming Shoppes, Inc. Headquartered in Bensalem, Pennsylvania, Charming Shoppes Inc. (Nasdaq: CHRS) -- http://www.charmingshoppes.com/ -- is a multi- brand, multi-channel specialty apparel retailer specializing in women's plus-size apparel. At May 3, 2008, the company operated 2,408 retail stores in 48 states under the names LANE BRYANT(R), FASHION BUG(R), FASHION BUG PLUS(R), CATHERINES PLUS SIZES(R), LANE BRYANT OUTLET(R), and PETITE SOPHISTICATE OUTLET(R). * * * As reported in the Troubled Company Reporter on March 25, 2008, Standard & Poor's Ratings Services lowered the corporate credit rating on Charming Shoppes Inc. to 'B+' from 'BB-.' The outlook remains negative. CHARMING SHOPPES: Mr. Bern Resigns; Board Chair Named Interim CEO ----------------------------------------------------------------- Dorrit J. Bern, President and chief executive officer and a member of the Board of Directors of Charming Shoppes, Inc., resigned, effective immediately. The company's Chairman of the Board, Alan Rosskamm, former Chairman and CEO of Jo-Ann Stores, Inc. and 15-year veteran of the Charming Shoppes' board, will serve as CEO on an interim basis. The company's Board of Directors has formed a special committee to undertake an immediate search for a permanent chief executive officer. Separately, the company disclosed that Brian P. Woolf, the former Chairman and chief executive officer of Cache, Inc., has been appointed President of the Lane Bryant brand, effective immediately, and will succeed LuAnn Via. Via has tendered her resignation in order to pursue a leadership position at another retailer and will be leaving the company after a short transition period. Brian Woolf has served in various retail-industry management and merchandising positions over the past three decades. Before joining Cache, he held senior merchandising positions at a number of well-known retailers, including Limited Stores, Marshall's, Lazarus, Bloomingdale's and Macy's. "Brian's long history of accomplishments in the women's apparel business includes the successful turnaround at Cache. We are very pleased that he has agreed to join us and lead our Lane Bryant brand," Mr. Rosskamm commented. "I am extremely pleased to be joining Charming Shoppes, and am assuming the leadership responsibility for the Lane Bryant brand with a great deal of enthusiasm. I have tremendous esteem for this market-leading brand that has been serving women's apparel needs for more than 100 years," Mr. Woolf commented. "I look forward to working closely with our talented team in Columbus, Ohio and building on the strength of this brand to ensure its future success." "Charming Shoppes has a talented management team, led by Joe Baron, chief operating officer, and Eric Specter, chief financial officer, with a proven record of navigating challenging retail and economic environments," Mr. Rosskamm commented. "Our priorities are to refocus our energies on our core brands--Lane Bryant, Fashion Bug and Catherines--and to leverage our leading market share position in women's specialty plus apparel." "With this renewed focus, I am confident that the support and commitment of our associates around the globe will enable us to build upon the strength of these brands to achieve future success. The company's balance sheet and cash flows remain strong, despite the challenging economy, and the company maintains ample liquidity through an unused $375 million committed bank revolving credit facility," Mr. Rosskam added. "[Ms. Bern] and the Board agreed that now is the appropriate time for a change in leadership of the company. Her leadership resulted in the repositioning of Charming Shoppes as a multi- brand, multi-channel specialty apparel retailer, and the nation's leader in women's specialty plus apparel," Mr. Rosskamm stated, commenting on Ms. Bern's departure from the company. During the second quarter ending Aug. 2, 2008, the company anticipates an after-tax charge in the range of $5- $6 million, or $0.04-$0.05 per diluted share, related to the terms of Ms. Bern's employment agreement. About Charming Shoppes, Inc. Headquartered in Bensalem, Pennsylvania, Charming Shoppes Inc. (Nasdaq: CHRS) -- http://www.charmingshoppes.com/ -- is a multi- brand, multi-channel specialty apparel retailer specializing in women's plus-size apparel. On May 3, 2008, the company operated 2,408 retail stores in 48 states under the names LANE BRYANT(R), FASHION BUG(R), FASHION BUG PLUS(R), CATHERINES PLUS SIZES(R), LANE BRYANT OUTLET(R), and PETITE SOPHISTICATE OUTLET(R). * * * As reported in the Troubled Company Reporter on May 30, 2008, Charming Shoppes Inc. reported a net loss of $34.5 million for the first quarter ended May 3, 2008, compared with net income of $26.3 million in the corresponding period ended May 5, 2007. CHEMTURA CORP: S&P Puts Rating on Neg. Watch After Sale Talks End ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its CreditWatch implications on Chemtura Corp.'s 'BB' corporate credit and senior unsecured debt ratings to negative from developing. The action follows the company's recent announcement that shareholders' interests will be best served by terminating discussions on a potential sale, merger, or other business combination involving the entire company and by continuing to operate Chemtura as a stand-alone entity. "The CreditWatch with negative implications reflects our concerns that cash flow protection measures will not strengthen to, and be sustained at, levels appropriate for the current ratings, given the challenging domestic economy, including elevated energy costs," said Standard & Poor's credit analyst Wesley E. Chinn. The ratings on Chemtura incorporate the vulnerability of its operating results to competitive pricing pressures, raw-material costs, and cyclical markets. They also reflect weak cash flow protection measures as a result of poor profitability in certain businesses. These factors are tempered by a diversified portfolio of specialty and industrial chemical businesses (generating annual revenues of roughly $3.7 billion), thus presenting management with a range of options regarding potential asset sales or other actions to improve the financial profile. Although the board has terminated discussions on a potential sale or merger of the entire company, management is still considering other strategic options, including business divestitures, acquisitions, joint ventures, and stock repurchases. This calls into question financial policies. S&P await 2008 second-quarter results (historically Chemtura's strongest quarter) to ascertain whether meaningful earnings progress can be achieved during this year and thus contribute to a strengthening of the financial profile, including the key funds from operations to debt ratio. S&P expect to resolve the CreditWatch listing within the next two months, following a meeting with management to review earnings and debt leverage prospects. COMMUNICATIONS & POWER: S&P Holds Rating. Changes Outlook to Pos. ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including the 'B+' corporate credit rating, on Communications & Power Industries Inc. and its parent, CPI International Inc. The outlook on both entities was revised to positive from stable. "The outlook revision reflects expectations of improving credit protection measures in 2009 because of likely debt reduction and increasing operating margins," said Standard & Poor's credit analyst Christopher DeNicolo. Debt leverage, which had been high because of the company's LBO in 2003 and subsequent debt-financed dividends, has declined to below 4x following debt reduction using the proceeds from an IPO in 2006 and internal cash flows. Excess free cash flows are likely to continue to be used for debt reduction, resulting in debt to EBITDA below 3x in fiscal 2009 (ending Sept. 30, 2009). Operating margins have deteriorated somewhat in 2008 because of delays in certain defense orders, lower margins at an acquired company, and a higher portion of development work, but are still good at about 18%. Lower debt levels and some improvement in margins in 2009 should result in funds from operations to debt of about 20% and EBITDA interest coverage of close to 5x. The ratings on CPI and CPI International reflect an aggressive financial profile and modest scope of operations, offset somewhat by leading positions in niche markets. The company is a leading provider of vacuum electron devices used in commercial and defense applications requiring high-power and/or high-frequency power generation. VEDs are used in radar, electronic warfare, satellite communications, and certain medical, industrial, and scientific applications. In 2007, the company acquired Malibu Research Associates Inc., which designs and manufactures advanced antenna systems for radars and data links. CPI is first or second in all of the markets in which it competes. Program diversity is good, with no one program accounting for more than 6% of revenue, and almost 60% of programs are sole source. A significant portion of CPI's products are consumable, resulting in a steady stream of generally higher-margin aftermarket sales, which account for approximately 50% of total revenue. The company's market segments have mixed outlooks. Growth in the medical market is likely to remain robust, but military sales will be largely flat. The long-term trends in the satellite communications markets are favorable, but demand can be uneven. Overall revenue growth is likely to be modest in the 3%-5% range. Modest earnings growth and debt repayment from excess cash flows should result in a steadily improving financial profile. S&P could raise the ratings if funds from operations to debt increases to above 20% and debt to EBITDA declines below 3x in 2009 and these improvements are likely to be maintained. If credit protection measures do not improve as expected or deteriorate because of lower cash generation, weaker profitability, or acquisitions, S&P could revise the outlook to stable. COUNTRYWIDE FINANCIAL: BofA Still to Decide on $40BB Assumed Debt ----------------------------------------------------------------- Bank of America Corp. still has not made any decision about whether it would guarantee Countrywide Financial Corp.'s $40 billion outstanding debt, Reuters reports. Bondholders have been expecting BofA's declaration on how it woud treat the outstanding debt after it completed its purchase of Countrywide last week for $2.5 billion. Reuters relates that BofA's regulatory filing this week did not disclose any guarantees, but the organization structure in the filing implies that these bondholders will be repaid, according to David Hendler, a CreditSights analyst. Mr. Hendler adds that Countrywide's credit facilities were already repaid and its indebtedness, including subordinated notes, preferred stock, and convertible securities, have assumed by a BofA subsidiary. "Our view continues to be that BofA will ultimately honor the outstanding indebtedness from (old) Countrywide, based on our discussion with the company following this filing, as well as our prior analysis," Reuters quotes Mr. Hendler as saying. About Bank of America Based in Charlotte, North Carolina, Bank of America Corp. (NYSE:BAC) -- http://www.bankofamerica.com-- is a bank holding company. Bank of America provides banking and non-banking financial services and products through three business segments: global consumer and small business banking, global corporate and investment banking, and global wealth and investment management. In December 2006, the company sold its retail and commercial business in Hong Kong and Macau to China Construction Bank. In October 2006, BentleyForbes, a commercial real estate investment and operations company, acquired Bank of America plaza in Atlanta from CSC Associates, a partnership of Cousins Properties Incorporated and the company. In June 2007, the company acquired the reverse mortgage business of Seattle Mortgage Company, an indirect subsidiary of Seattle Financial Group Inc. In October 2007, ABN AMRO Holding N.V. completed the sale of its United States subsidiary, LaSalle Bank Corporation, to Bank of America. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider and a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. * * * As reported in the Troubled Company Reporter on Jan. 15, 2008, Moody's placed the ratings of Countrywide Financial Corporation and its subsidiaries under review for upgrade. CFC and Countrywide Home Loans senior debt is rated Baa3 and short-term debt is rated Prime-3. Countrywide Bank FSB's bank financial strength rating is C-, deposits are rated Baa1 and short-term debt Prime-2. All long and short-term ratings are placed under review for possible upgrade. The company is continuing to face a barrage of lawsuits coming from disgruntled homeowners that filed for bankruptcy protection. Countrywide has been accused by these homeowners and various federal agencies of dubious and questionable lending practices, and for abusing the bankruptcy system. COUNTRYWIDE FINANCIAL: BofA to Rework $40 Bil. in Mortgage Loans ---------------------------------------------------------------- Bank of America Corp. will rework $40 billion of home mortgage loans over a period of two years to keep more than 200,000 families in their homes, Bloomberg News cites BofA CEO Kenneth Lewis. Mr. Lewis said BofA will do this without resorting to cutting dividends or raising cash, Bloomberg relates. BofA completed its $2.5 billion acquisition of Countrywide Financial Corp. last week. "Our goal is to keep as many families in their homes as possible. . . . [We] see no reason to cut the dividend and no reason to raise any more capital," Bloomberg quotes Mr. Lewis as saying. As reported in the Troubled Company Reporter on July 2, 2008, BofA also intends to eliminate around 7,500 positions as part of the acquisition. The reductions will take place throughout the country within the next two years. About Bank of America Based in Charlotte, North Carolina, Bank of America Corp. (NYSE:BAC) -- http://www.bankofamerica.com-- is a bank holding company. Bank of America provides banking and non-banking financial services and products through three business segments: global consumer and small business banking, global corporate and investment banking, and global wealth and investment management. In December 2006, the company sold its retail and commercial business in Hong Kong and Macau to China Construction Bank. In October 2006, BentleyForbes, a commercial real estate investment and operations company, acquired Bank of America plaza in Atlanta from CSC Associates, a partnership of Cousins Properties Incorporated and the company. In June 2007, the company acquired the reverse mortgage business of Seattle Mortgage Company, an indirect subsidiary of Seattle Financial Group Inc. In October 2007, ABN AMRO Holding N.V. completed the sale of its United States subsidiary, LaSalle Bank Corporation, to Bank of America. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider and a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. * * * As reported in the Troubled Company Reporter on Jan. 15, 2008, Moody's placed the ratings of Countrywide Financial Corporation and its subsidiaries under review for upgrade. CFC and Countrywide Home Loans senior debt is rated Baa3 and short-term debt is rated Prime-3. Countrywide Bank FSB's bank financial strength rating is C-, deposits are rated Baa1 and short-term debt Prime-2. All long and short-term ratings are placed under review for possible upgrade. The company is continuing to face a barrage of lawsuits coming from disgruntled homeowners that filed for bankruptcy protection. Countrywide has been accused by these homeowners and various federal agencies of dubious and questionable lending practices, and for abusing the bankruptcy system. CPI INTERNATIONAL: S&P Holds 'B+' Rating, Revises Outlook to Pos. ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including the 'B+' corporate credit rating, on Communications & Power Industries Inc. and its parent, CPI International Inc. The outlook on both entities was revised to positive from stable. "The outlook revision reflects expectations of improving credit protection measures in 2009 because of likely debt reduction and increasing operating margins," said Standard & Poor's credit analyst Christopher DeNicolo. Debt leverage, which had been high because of the company's LBO in 2003 and subsequent debt-financed dividends, has declined to below 4x following debt reduction using the proceeds from an IPO in 2006 and internal cash flows. Excess free cash flows are likely to continue to be used for debt reduction, resulting in debt to EBITDA below 3x in fiscal 2009 (ending Sept. 30, 2009). Operating margins have deteriorated somewhat in 2008 because of delays in certain defense orders, lower margins at an acquired company, and a higher portion of development work, but are still good at about 18%. Lower debt levels and some improvement in margins in 2009 should result in funds from operations to debt of about 20% and EBITDA interest coverage of close to 5x. The ratings on CPI and CPI International reflect an aggressive financial profile and modest scope of operations, offset somewhat by leading positions in niche markets. The company is a leading provider of vacuum electron devices used in commercial and defense applications requiring high-power and/or high-frequency power generation. VEDs are used in radar, electronic warfare, satellite communications, and certain medical, industrial, and scientific applications. In 2007, the company acquired Malibu Research Associates Inc., which designs and manufactures advanced antenna systems for radars and data links. CPI is first or second in all of the markets in which it competes. Program diversity is good, with no one program accounting for more than 6% of revenue, and almost 60% of programs are sole source. A significant portion of CPI's products are consumable, resulting in a steady stream of generally higher-margin aftermarket sales, which account for approximately 50% of total revenue. The company's market segments have mixed outlooks. Growth in the medical market is likely to remain robust, but military sales will be largely flat. The long-term trends in the satellite communications markets are favorable, but demand can be uneven. Overall revenue growth is likely to be modest in the 3%-5% range. Modest earnings growth and debt repayment from excess cash flows should result in a steadily improving financial profile. S&P could raise the ratings if funds from operations to debt increases to above 20% and debt to EBITDA declines below 3x in 2009 and these improvements are likely to be maintained. If credit protection measures do not improve as expected or deteriorate because of lower cash generation, weaker profitability, or acquisitions, S&P could revise the outlook to stable. CURRY FLOUR: Case Summary & 12 Largest Unsecured Creditors ---------------------------------------------------------- Lead Debtor: Curry Flour Mills, Inc. 93 Plymouth Circle Hershey, PA 17033 Bankruptcy Case No.: 08-02426 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Seavers & Seavers Partnership 08-02427 Type of Business: The Debtors manufactures grain mill products. Chapter 11 Petition Date: July 8, 2008 Court: Middle District of Pennsylvania (Harrisburg) Judge: Mary D France Debtors' Counsel: Robert E. Chernicoff, Esq. (rec@cclawpc.com) Cunningham and Chernicoff PC 2320 North Second Street Harrisburg, PA 17110 Tel: (717) 238-6570 Fax: (717) 238-4809 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A list of the Debtors' 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/pennmb08-02426.pdf CYBER DIGITAL: Blanchfield Kober Expresses Going Concern Doubt -------------------------------------------------------------- Blanchfield, Kober & Company, P.C., in Hauppauge, N.Y., raised substantial doubt about the ability of Cyber Digital, Inc., to continue as a going concern after it audited the company's financial statements for the year ended March 31, 2008. The auditor pointed to the company�s recurring losses from operations. The company posted a net loss of $1,762,446 on net sales of $3,863,840 for the year ended March 31, 2008, as compared with a net loss of $932,643 on zero sales in the prior year. At March 31, 2008, the company's consolidated balance sheet showed $3,119,407 in total assets and $6,842,680 in total liabilities, resulting in $3,723,273 stockholders' deficit. The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $1,341,815 in total current assets available to pay $5,520,610 in total current liabilities. A full-text copy of the company's 2008 annual report is available for free at http://ResearchArchives.com/t/s?2f10 About Cyber Digital Cyber Digital, Inc., (CYBD.OB)-- http://www.cyberdigitalinc.com/ -- designs, develops, manufactures, and markets digital switching, Internet, and networking systems that enable simultaneous communication of voice and data to a large number of users. It offers a range of distributed digital switching systems for digital telecommunications applications and networks, which includes Cyber Distributed Central Office (CDCO) designed to provide digital voice communications to subscribers in densely populated urban areas; and Cyber Tandem Exchange, an intercity exchange for long distance voice and data trunk services, as well as a regional trunk exchange connecting to various local CDCO exchanges. In addition, the company offers Cyber Rural Exchange, a small distributed Class 5 central office exchange, primarily intended for rural, remote, or community telephone applications; and Cyber Switch Exchange, a digital switching system designed for use as a private branch exchange for offices, universities, hospitals, and other large organizations. DIABLO GRANDE: Hearing on $25 Million Sale Scheduled Today ---------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of California is set to convene a hearing today, July 10, 2008, to consider the approval of Diablo Grande LP's sale to a real estate company in Pismo Beach, California, The Associated Press says. The undisclosed buyer offered to acquire the Debtor's $25 million, and assume debts, AP relates. The Troubled Company Reporter said on April 2, 2008, that Diablo Grande indicated plans to sell the bankrupt resort to a buyer willing to continue the development. Several parties have expressed interest in buying the resort including those from Canada, Diablo Grande vice president Dwain Sanders said. The TCR said that the property has been marketed for more than a year for at least $150 million. Two parties have abandoned their purchase deals with the Debtor after analysis of the Debtor's assets and situation. Patterson, California-based Diablo Grande LP owns 33,000-acre real property and runs a resort hotel with golf courses and convention center. Diablo Grande LP's general partner is Diablo Grande Inc. with Donald Panoz as president. It filed for chapter 11 protection on March 10, 2008 (Bankr. E.D. Calif. Case No. 08- 90365). Judge Robert S. Bardwil is presiding the case. Michael H. Ahrens, Esq., represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed asset and debts between $50 million and $100 million. The Debtor did not file a list of its largest unsecured creditors. DISTRIBUTION FINANCIAL: S&P Cuts Rating on Class D Notes to B- -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class D notes from Distribution Financial Services RV/Marine Trust 2001-1 to 'B-' from 'B'. At the same time, S&P affirmed its ratings on the class A-5, B, and C notes. The downgrade of the class D notes reflects the higher-than- expected loss level and erosion of credit enhancement. The class D notes rely on excess spread and funds from a reserve account for credit enhancement. As of the June 2008 payment date, this deal had a pool factor of 10.53% and had experienced cumulative net losses of 3.6%, which is above the original expected cumulative net losses of 2.25%. The required reserve account balance is 0.75% of the initial pool balance, but the reserve account has not been fully funded for 43 consecutive months. Currently, the reserve account balance is $1,441,612, which is slightly more than one-third of the required amount of $3,971,004. The affirmations reflect adequate credit enhancement coverage to support the ratings at their current levels. In addition, the more senior notes benefit from a sequential payment structure. As such, subordination for these notes will continue to grow as a percentage of the current pool balance as the pool amortizes. The transaction allows the payment structure to switch to pro rata at month 50 unless a trigger is breached. Because the trigger that requires the reserve account to be fully funded at its target level has been breached, the payment structure has remained sequential to date. S&P do not expect the transaction to generate enough excess cash to build the reserve account to the target level, and it is unlikely that the payment structure will switch to pro rata. Standard & Poor's expects that the remaining credit support will be sufficient to support the notes at the affirmed and lowered rating levels. Rating Lowered Distribution Financial Services RV/Marine Trust 2001-1 Rating ------ Class To From ----- -- ---- D B- B Ratings Affirmed Distribution Financial Services RV/Marine Trust 2001-1 Class Rating ----- ------ A-5 AAA B AAA C AA+ DUNE ENERGY: To Sell Barnett Shale Properties for $41.5 Million --------------------------------------------------------------- Dune Energy, Inc. signed a Purchase and Sale Agreement to sell its Barnett Shale assets located in Denton and Wise Counties, Texas, for $41.5 million. BMO Capital Markets rendered a fairness opinion to Dune's Board of Directors on this transaction. The effective date of the sale will be May 1, 2008, with the closing expected to occur on or before July 31, 2008. As of Dec. 31, 2007, Dune's Barnett Shale proved developed reserves totaled 19.3 Bcfe in 35 producing wells, plus 6 wells with behind pipe pay awaiting fracture stimulation. An additional 13 proved developed locations contained an estimated 14.1 Bcfe of net reserves. The Barnett Shale reserves represents approximately 19% of Dune's total proved reserves, but only 6.8% of Dune's year end 2007 SEC Present Value discounted at 10%. First quarter 2008 revenue attributable to Dune's Barnett Shale operations totaled $7.64 per Mcfe, while expenses were $4.36 per Mcfe. In sharp contrast, Dune's Gulf Coast operations yielded revenue of $12.14 per Mcfe, while costs totaled $4.14 per Mcfe. Reflecting the preceding, operating profit for the Barnett Shale and Gulf Coast were $3.28 and $8.00 per Mcfe, respectively. The disposition of the Barnett Shale properties will allow Dune to focus on the substantially higher rates of return generated by its Gulf Coast fields, the majority of which were acquired last year. Proceeds from the sale, after customary purchase price adjustments, will be utilized to eliminate borrowings currently outstanding under Dune's revolver, and for general working capital. Proforma for the sale, Dune's proved reserves will consist of 60% natural gas and 40% oil. For the remainder of 2008, the Company will continue its active exploitation program in its Gulf Coast fields, concentrating on numerous workovers and low to moderate risk drilling designed to ramp production and cash flow. Dune fully expects that it will replace the production lost stemming from the sale of its Barnett Shale assets, with fourth quarter volumes to exceed current levels. Therefore, Dune's annual production guidance given at the end of the first quarter of 2008 totaling approximately 15 Bcfe, remains unchanged. Second quarter production is anticipated to average approximately 40 MMcfe/day. With upgrades and repairs now completed, the company will resume its 2007 drilling program at Garden Island Bay this month. In addition, given the excellent results from an initial well at Chocolate Bayou, Dune plans to spud a second well in the field in September. Management is quite pleased with the ongoing evaluation of the depth migrated 3-D data set at our highly prospective Bayou Couba field, with a high impact exploratory well likely to spud prior to the end of this year. New and reprocessed 3-D data are in various stages of evaluation at Dune's Garden Island Bay and Leeville salt domes, with the expectation of additional high impact exploratory wells to be proposed in 2009. "The disposition of the Barnett Shale assets represents a turning point in Dune's overall corporate strategy, which is designed to enhance shareholder value via a concentrated focus on the exploration and development of our superior portfolio of Gulf Coast properties," James A. Watt, Chief Executive Officer and President, stated. "Our Gulf Coast properties, as we demonstrated during 2007, allow the Company to benefit from solid reserve replacement at a much higher rate of return and lower operating costs. This will be our focus moving forward. The management and Board of Directors are redoubling our effort to build shareholder value." Headquartered in Houston, Dune Energy Inc. (Amex: DNE) -- http://www.duneenergy.com/ -- is an independent exploration and development company, with operations focused along the Louisiana/Texas Gulf Coast and the North Texas Fort Worth Basin Barnett Shale. The company's total proved reserves as of Dec. 31, 2007 were 175.4 Bcfe, consisting of 117.6 Bcf of natural gas and 9.6 MMbbls of oil. The PV-10 of the company's proved reserves at year end was $728.6 million. Dune Energy Inc. reported its quarterly financial information ended March 31, 2008. At March 31, 2008, the company's balance sheet showed total assets of $621,145,247 and total liabilities of $441,087,901, resulting in a $42,024,799 stockholders' deficit. * * * Moody's Investor Service placed Dune Energy Inc.'s senior secured debt, probability of default and long term corporate family ratings at 'Caa2' in April 2007. The ratings still hold to date with a stable outlook. ELECTRO-CHEMICAL: O'Shaughnessy's $5MM Bid Wins Patent Auction -------------------------------------------------------------- Electro-Chemical Technologies Ltd. disclosed that the auction of nine of its United States patents in the field of "electrochemical activation of water" has been completed and approved by the U.S. Bankruptcy Court for the Eastern District of Missouri. The auction process was disclosed on May 14, 2008. The successful bidders in the auction, John and Cheryl O'Shaughnessy, submitted a final bid of $4,830,000 for the purchase of the patent portfolio. The entire amount of the $4,830,000 purchase price will be paid in cash. The bid was approved by the Bankruptcy Court, and closing of the purchase and sale of the patent portfolio is expected to occur on or prior to July 15, 2008. About Electro-Chemical Technologies Based in Saint Louis, Missouri, Electro-Chemical Technologies Ltd. (Pink Sheets: ELCHQ) -- http://www.ectltd.net/-- fka RSCECAT USA Inc. sells technologically advanced electrochemical activation devices. The Debtor filed for Chapter 11 protection on Feb. 19, 2008, (Bankr. E.D. Mo. Case No.: 08-41098) Steven Goldstein, Esq. at Goldstein & Pressman P.C. represents the Debtor in its restructuring efforts. The Debtor listed total assets of $55 and total debts of $4,023,223. ELITE PHARMA: Miller Ellin Expresses Going Concern Doubt -------------------------------------------------------- Miller, Ellin & Company, LLP raised substantial doubt about the ability of Elite Pharmaceuticals, Inc., to continue as a going concern after it audited the company's financial statements for the year ended March 31, 2008. The auditor pointed to the company�s significant losses and negative cash flows, which resulted in decreased capital and accumulated deficits. Management Statement The company continues to require additional financing to ensure that it will be able to meet its expenditures to develop and commercialize its products. As of March 31, 2008, the company had cash and cash equivalents of $3.7 million. The management believes that the company�s existing cash and cash equivalents will be sufficient to fund its anticipated operating expenses and capital requirements until Sept. 30, 2008. The company will require additional funding to continue its research and development programs, including clinical testing of its product candidates and for operating expenses and to pursue regulatory approvals for its product candidates. Other than ELI-154, which is in Phase III clinical development and ELI-216, which is in Phase III clinical development, the company�s three other product candidates are still at an early stage of development. The company does not have any products that are commercially available other than Lodrane 24(R) and Lodrane 24D(R). the company will need to perform additional development work for all of its product candidates in the pipeline before it can seek the regulatory approvals necessary to begin commercial sales. Subsequent Events On April 14, 2008, the company entered into a consulting agreement with New Castle Consulting, LLC, whereby New Castle is to provide consulting services to the company for a six-month term. For its services New Castle will receive $8,000 per month in addition to 125,000 shares of the Company's restricted Common Stock. On April 24, 2008, the Board of Directors of the Company appointed Dr. Stuart Apfel to be the company's chief scientific officer, effective immediately, and accepted the resignation of Dr. Veerappan Subramanian as the company's acting chief scientific officer. Dr. Apfel will continue his duties as the company's chief medical officer. The existing employment agreement between Dr. Apfel and the company shall continue and not be modified in any was as a result of this new appointment. On April 14, 2008, a holder of 872 shares of Series C 8% Preferred Stock converted 87 shares into 37,745 shares of common stock. The same holder converted an additional 87 shares into 38,427 shares of Common Stock on May 4, 2008. All accrued dividends were paid through dates of conversion. On June 26, 2008, at the annual meeting of the stockholders of the company, the stockholders approved an amendment to the company's Certificate of Incorporation to increase the number of authorized shares of common stock from 65,000,000 shares to 150,000,000 shares and an amendment to the company's Stock Option Plan to increase the number of shares of common stock reserved for issuance under the Stock Option Plan from 7,000,000 shares to 10,000,000 shares. Financials The company posted net loss of $13,893,060 on total revenues of $1,413,119 for the year ended March 31, 2008, as compared with a net loss of $11,803,512 on total revenues of $1,143,841 in the prior year. At March 31, 2008, the company's balance sheet showed $15,310,270 in total assets, $4,760,949 in total liabilities, and $10,549,321 in total stockholders' equity. A full-text copy of the company's 2008 annual report is available for free at http://ResearchArchives.com/t/s?2f12 About Elite Pharmaceuticals Headquartered in Northvale, New Jersey, Elite Pharmaceuticals, Inc., (AMEX: ELI) -- http://www.elitepharma.com/-- is a specialty pharmaceutical company principally engaged in the development and manufacture of oral, controlled release products. The company has two products, Lodrane 24(R) and Lodrane 24D(R), currently being sold commercially, and a pipeline of seven drug candidates under development in the therapeutic areas that include pain management, allergy and infection. ELROY PROSCH: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Elroy G. Prosch 3540 NE 119th St Portland, OR 97220 Bankruptcy Case No.: 08-33339 Chapter 11 Petition Date: July 8, 2008 Court: District of Oregon Judge: Randall L. Dunn Debtor's Counsel: Tara J. Schleicher, Esq. (tschleicher@fwwlaw.com) 121 Southwest Morrison #600 Portland, OR 97204 Tel: (503) 228-6044 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A list of the Debtor's unsecured creditors is available for free at http://bankrupt.com/misc/or08-33339.pdf ESTATE FINANCIAL: Names M.F. Reiss as CEO After Execs Left Posts ---------------------------------------------------------------- Officials of bankrupt Estate Financial Inc. left their posts a week following a filing of chapter 11 involuntary petition by investors and developers, Melanie Cleveland writes for the San Luis Obispo. M. Freddie Reiss, senior managing director of FTI Consulting was appointed as new chief executive officer, the report says. Bankruptcy attorney, David Gould, Esq. is the Debtor's new manager, the report relates, citing Bill Beall, Esq., legal counsel to the Debtor. Former president Karen Guth, who had blamed the real estate market crisis and had promised to help the company recover, refused to comment, the report states. San Luis Obispo notes that a year ago, Ms. Guth and son, former vice president Joshua Yaguda, informed about 1,600 investors that Estate Financial was financially troubled. At the investors' behest, a San Luis Obispo superior court judge directed Hanno Powell, Esq. to evaluate the Debtor's financial standing and froze most of the Debtor's operations, the report notes. On June 25, 2008, creditors filed the involuntary chapter 11 petition against the Debtor, the report relates. The report reveals that Ms. Guth and Mr. Yaguda filed a bankruptcy petition on July 1, 2008, on behalf of the Debtor. Mr. Beall said that Ms. Guth might be attempting to override the involuntary petition with a voluntary filing, the report states. The voluntary filing stops Mr. Powell from completing his probe on the Debtor's records, Mr. Beall added, the report relates. San Luis Obispo attorney, Roger Frederickson, Esq., wants to place the Debtor under receivership and might move to reinstate Mr. Powell, the report adds. About Estate Financial Five creditors of Paso Robles, California-based Estate Financial Inc. filed an involuntary chapter 11 petition against the Debtor on June 25, 2008 (Bankr. C.D. Calif. Case Number 08-11457). Judge Robin Riblet presides over the case. Martin J Brill, Esq., represents the petitioners. Petitioner Steve Gardality asserted a claim of $6,269,768. FLIGHT SAFETY: Appealing AMEX' Determination to Delist Securities ----------------------------------------------------------------- Flight Safety Technologies Inc. decided to exercise its right to appeal the Amex delisting decision and has requested a hearing before a committee of the Amex. On July 3, 2008, the company received notice from the American Stock Exchange that, based on the recent Amex status review of the company's plan to regain compliance with certain Amex continued listing standards, the Amex has determined it is appropriate for it to initiate delisting of the company's securities from the Amex. There can be no assurance the company's request for continued listing will be granted as a result of such appeal or otherwise. The company originally was notified by the Amex on Oct. 12, 2007, that the company no longer complied with the Amex's continued listing standards due to shareholder's equity of less than $4 million and net losses in three of its four most recent fiscal years as set forth in Section 1003(a)(ii) of the Amex Company Guide, and that its securities would, therefore, be delisted from the Amex if the company did not show periodic progress in performing the plan of compliance the Amex accepted from the company on Feb. 1, 2008. The company is continuing to pursue various arrangements to fund its technologies and enhance its financial condition but there can be no assurance as to whether or when the company will complete any such arrangements or the impact of such arrangements on the company. About Flight Safety Technologies Inc. Based in Mystic, Connecticut, Flight Safety Technologies Inc. -- http://www.flysafetech.com/-- (AMEX:FLT) is engaged in developing technologies that enhances aviation safety and efficiency. These technologies include Aircraft Wake Safety Management, Sensor for Optically Characterizing Ring-eddy Atmospheric Turbulence Emanating Sound, Universal Collision Obviation and Reduced Near- Miss and Tactical Integrated Illumination Countermeasure Technology. FRONTIER AIRLINES: Wants Lease Decision Period Extended to Nov. 6 ----------------------------------------------------------------- Frontier Airlines Holdings Inc. and its subsidiaries ask the U.S. Bankruptcy Court for the Southern District of New York to extend the period within which they may assume or reject unexpired non- residential real property leases to Nov. 6, 2008. Section 365(d)(4) of the Bankruptcy Code provides that if a trustee or lessor does not assume or reject an unexpired lease by the earlier of (i) 120 days after the date of the Order, or (ii) the date of the entry of an order confirming a plan, the Court may extend the period prior to the expiration of the 120-day period, for 90 days on the request of the lessor for cause. Given the size and complexity of Debtors' Chapter 11 cases, the initial 120-day period under Section 365(d)(4) of the Bankruptcy Code will not provide enough time for the Debtors to identify and consider the value of their many Leases, Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York, maintains. Mr. Huebner relates that the Debtors have a significant number of Leases throughout the United States, in Canada, and in Mexico that require a significant expenditure of capital to maintain, and are integral to their operations. Moreover, to consider the value of certain Leases is critical to the retaining of the Debtors' financial, operational and network, and fleet planning flexibility, he maintains. Therefore, Mr. Huebner continues, it is imperative to the Debtors' ability to successfully reorganize to carefully identify, analyze and evaluate each of the Leases in order to make informed decisions about whether to assume or reject them. Absent a 90-day extension of the Lease Decision Period, the Debtors could be severely prejudiced, as they might be forced to prematurely assume economically unnecessary Leases, which would lead to administrative claims against their estates when the Leases are deemed unhelpful to their reorganization, Mr. Huebner tells the Court. Conversely, if the Debtors prematurely reject Leases, or are deemed to reject Leases by operation of Section 365(d)(4) of the Bankruptcy Code, they would be relinquishing property interests that could later prove important to their reorganization, he says. Mr. Huebner notes that lessors under the Leases will not be prejudiced because the Debtors' requested extension is only for 90 days, and any additional extensions will require the consent of the Lessor pursuant to Section 365(d)(4)(B)(ii) of the Bankruptcy Code. Furthermore, any lessor under a Lease would retain the right to request the Court to set an earlier date by which the Debtors must make the decision to assume or reject the Lease, he says. About Frontier Airlines Inc. Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provide air transportation for passengers and freight. They operate jet service carriers linking their Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. As of May 18, 2007 they operated 59 jets, including 49 Airbus A319s and 10 Airbus A318s. The Debtor and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08- 11297 thru 08-11299.) Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. At Dec. 31, 2007, Frontier Airlines Holdings Inc. and its subsidiaries' total assets was $1,126,748,000 and total debts was $933,176,000. (Frontier Airlines Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Wants Plan Filing Date Extended to Feb. 2009 --------------------------------------------------------------- Frontier Airlines Holdings Inc. and its subsidiaries ask the U.S. Bankruptcy Court for the Southern District of New York to extend their Exclusive Plan Filing Period by 180 days to Feb. 4, 2009, and their Exclusive Solicitation Period to April 6, 2009. Section 1121(b) of the Bankruptcy Code provides for an initial 120-day period after the bankruptcy filing date during which the Debtors have the exclusive right to file a Chapter 11 plan. Section 1121(c)(3) provides that, if a debtor proposes a plan within the exclusive filing period, it has a period of 180 days after the bankruptcy filing to obtain acceptances of the plan. The Exclusive Periods are intended to afford Chapter 11 debtors a full and fair opportunity to propose a consensual reorganization plan and solicit acceptances of it without the deterioration and disruption of their business that might be caused by the filing of competing plans by non-debtor parties. Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York, relates that the Debtors filed for Chapter 11 protection on an expedited basis and with little time for advance preparation. Accordingly, the Debtors need more time to stabilize and lay the groundwork of an effective plan and its accompanying disclosure statement containing adequate information, he says. Allowing the Exclusive Periods to terminate at a premature point would defeat the development of a consensual plan, which is a primary purpose under Section 1121 of the Bankruptcy Code, Mr. Huebner maintains, citing In re Mid-State Raceway Inc., 323 B.R. 63, 68 (Bankr. N.D.N.Y. 2005). Since the bankruptcy filing, the Debtors have worked to stabilize their businesses and reassure customers, suppliers and employees, including, among other things: -- analyzing their fleet, preparing to make and making elections and payments with respect to Section 1110(a) of the Bankruptcy Code, for their entire fleet and spare parts credit facility; -- entering into stipulations with various aircraft counterparties; -- completing the sale of several aircraft; -- beginning the process of analyzing various leases and executory contracts to identify those that are beneficial to the Debtors' estates and seeking to reject those that are not; -- negotiating and filing stipulations and other consensual requests with respect to the Debtors' relationships with their primary depositary bank and the International Air Traffic Association, among others; -- negotiating consensual resolutions to automatic stay issues related to numerous suppliers; and -- addressing a multitude of creditor, supplier and customer inquiries. Mr. Huebner adds that although the Debtors' developing business plan is a work in progress and will continue to evolve, they have been engaged with, and have made multiple formal and informal presentations of their business plan to, the Official Committee of Unsecured Creditors and its advisors. The Debtors have sufficient liquidity to pay their bankruptcy debts; thus, warranting an extension of their Exclusive Periods that will not jeopardize the rights of bankruptcy creditors, Mr. Huebner notes. Specifically, Mr. Huebner says, an extension of the Debtors' Exclusive Periods will enable them to: (a) continue to refine their business model to deliver both a more efficient cost structure and future revenue growth so that they can compete effectively within the commercial passenger aviation industry; (b) further implement specific restructuring initiatives, including the rationalization of their route structure and aircraft fleet; (c) finalize and file their schedules of assets and liabilities, income and expenditures, and executory contracts and unexpired leases, and statements of financial affairs; (d) complete their work with various potential liquidity providers to secure adequate liquidity both during and upon emergence from Chapter 11; and (e) develop a plan of reorganization reflecting their restructuring initiatives. Rather than as a negotiation tactic or as a means of maintaining leverage over creditors whose interests may be harmed, the Debtors seek the extension of their Exclusive Periods to give themselves sufficient time to develop a plan of reorganization that maximizes creditor recoveries, Mr. Huebner assures the Court. About Frontier Airlines Inc. Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provide air transportation for passengers and freight. They operate jet service carriers linking their Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. As of May 18, 2007 they operated 59 jets, including 49 Airbus A319s and 10 Airbus A318s. The Debtor and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08- 11297 thru 08-11299.) Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. At Dec. 31, 2007, Frontier Airlines Holdings Inc. and its subsidiaries' total assets was $1,126,748,000 and total debts was $933,176,000. (Frontier Airlines Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) GALAXY NUTRITIONAL: Cross Fernandez Expresses Going Concern Doubt ----------------------------------------------------------------- Orlando-based Cross, Fernandez & Riley, LLP, raised substantial doubt about the ability of Galaxy Nutritional Foods, Inc., to continue as a going concern after it audited the company's financial statements for the year ended March 31, 2008. The auditor stated that the company may be required to pay its convertible note and accrued interest thereon on Oct. 19, 2008, which may leave it with insufficient cash funds to continue operations. Convertible Note Pursuant to a Note Purchase Agreement dated July 19, 2006, the company issued a new unsecured convertible note for $2,685,104 to Mr. Frederick DeLuca. The proceeds from the convertible note were used to repay or refinance $2,400,000 in notes that matured on June 15, 2006, and a $285,104 registration rights penalty owed to Mr. DeLuca. The convertible note accrues interest at 12.5% per annum. No interest or principal payments are required under the convertible note until its maturity. Principal, together with any accrued and unpaid interest, on the convertible note is convertible at any time prior to payment into shares of the company�s common stock at a conversion price of $0.35 per share. The closing market price of the company�s common stock as quoted on the OTC Bulletin Board on July 19, 2006, was $0.28. As additional consideration for making the loan, the company issued Mr. DeLuca a warrant to purchase up to 200,000 shares of its common stock at an exercise price equal to $0.35 per share. The warrant is fully vested and can be exercised on or before the expiration date of July 19, 2009. In July 2006, the company recorded the $18,000 fair value of the Warrant as a discount to debt that is being amortized to interest expense from July 2006 through October 2007. Pursuant to a Note Modification Agreement dated March 14, 2007, Galaxy and Mr. DeLuca agreed to extend the maturity date of the convertible note from October 19, 2007 to October 19, 2008. All other terms of the convertible note remain the same. As a result of the convertible features of the convertible note, Mr. DeLuca�s ownership in Galaxy may increase from around 23% to nearly 52% by October 2008. The calculation of ownership assumes, among other things, that Mr. DeLuca converts the entire amount of principal and all accrued interest on the convertible note through October 19, 2008, into an aggregate of 9,861,364 shares and exercises all of his currently outstanding warrants into 500,000 shares of the company�s common stock. Unless the market price of the company�s common stock increases between now and October 19, 2008, it is unlikely that Mr. DeLuca would choose to convert the convertible note and accrued interest thereon at his conversion price of $0.35 per share. If Mr. DeLuca does not choose to convert this convertible note into stock and does not extend the maturity date, the company will be required to pay principal plus accrued interest thereon in the amount of $3,451,478 on Oct. 19, 2008. Management Statement With its current cash balances and the ability to borrow additional funds on its Commercial Finance Agreement, the management believes that the company currently has the ability to repay the convertible note and the accrued interest thereon by Oct. 19, 2008. However, the payment of the entire balance would likely seriously and adversely impact its liquidity and put a cash strain on the company without additional financing. Management is currently in discussions with Mr. DeLuca regarding options to extend the maturity date, refinance and/or convert all or a portion of the convertible note and accrued interest thereon into equity at a lower conversion price on or before its maturity on October 19, 2008. Financials The company posted net income of $1,338,855 on net sales of $25,190,600 for the year ended March 31, 2008, as compared with net income of $146,498 on net sales of $27,162,110 in the prior year. At March 31, 2008, the company's balance sheet showed $4,756,863 in total assets and $5,389,562 in total liabilities, resulting in $632,699 stockholders' deficit. The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $4,622,729 in total current assets available to pay $5,389,562 in total current liabilities. A full-text copy of the company's 2008 annual report is available for free at http://ResearchArchives.com/t/s?2f0e About Galaxy Nutritional headquartered in Orlando, Florida, Galaxy Nutritional Foods, Inc. (OTCBB: GXYF) -- http://www.galaxyfoods.com/-- develops and globally markets plant-based cheese and dairy alternatives, as well as processed organic cheese and cheese food to grocery and natural foods retailers, mass merchandisers and foodservice accounts. Veggie, the leading brand in the grocery cheese alternative category and the Company's top selling product group, is primarily merchandised in the produce section and provides calcium and protein without cholesterol, saturated fat or trans- fat. Other popular brands include: Rice, Veggy, Vegan, and Wholesome Valley. Galaxy Nutritional Foods, Inc. is dedicated to developing nutritious products to meet the taste and dietary needs of today's increasingly health conscious consumer. GINN-LA CS BORROWER: Moody's Junks CFR on Loan Payment Default -------------------------------------------------------------- Moody's Investors Service lowered the corporate family rating of Ginn-LA CS Borrower, LLC to Ca from Caa3 and its probability of default rating to D from Caa3 in light of the company's failure to make its required June 30, 2008 interest and principal payments within five business days of the payment due date. Ginn has reached a 30-day forbearance agreement and is actively negotiating with lenders. These rating actions were taken: -- Probability of default rating lowered to D from Caa3; -- Corporate family rating lowered to Ca from Caa3; -- Rating on 1st lien bank credit facility lowered to Caa3 (LGD3, 39%) from Caa2 (LGD3, 40%); and -- Rating on 2nd lien bank credit facility changed to Ca (LGD6, 90%) from Ca (LGD6, 91%). Ginn-LA CS Borrower, LLC was formed in 2006 by affiliates of Lubert Adler funds and the Ginn Companies to acquire and develop four resort or private club projects in Grand Bahama Island, Naples and Port St. Lucie, Florida and Boone, North Carolina. GMAC COMMERCIAL: Fitch Lowers Rating on $25.3MM Loan to 'CC/DR3' ---------------------------------------------------------------- Fitch downgraded GMAC Commercial Mortgage Securities, Inc., series 1998-C2 as: -- $25.3 million class L to 'CC/DR3' from 'CCC/DR1'. In addition, Fitch upgraded these classes: -- $88.6 million class F to 'AAA' from 'AA+'; -- $44.3 million class G to 'A' from 'A-'. Fitch also affirmed these classes: -- $202.4 million class A-2 at 'AAA'; -- Interest Only class X at 'AAA'; -- $126.5 million class B at 'AAA'; -- $113.9 million class C at 'AAA'; -- $164.5 million class D at 'AAA'; -- $38 million class E at 'AAA'; -- $19.0 million class H at 'BBB-'; -- $19.0 million class J at 'BB+'; -- $19.0 million class K at 'BB-'; The $14.9 million class M remains at 'C/DR6'. Class A-1 has paid in full. The downgrade is the result of an increase in specially serviced assets and loss expectations since Fitch's last rating action. The upgrades of class F and class G are the result of additional credit enhancement due to significant pay down. As of the June 2008 distribution date, the transaction's principal balance decreased 65.4% to $875.1 million compared to $2.53 billion at issuance. A total of thirty-one loans (22.5%) have defeased. Fitch has identified twenty Loans of Concern (7.7%), which includes nine specially serviced assets (4.8%) with significant losses anticipated. The largest Fitch Loan of Concern (1.0%), is specially serviced, and is secured by a multifamily property in foreclosure located in Saline, Michigan. The property is currently for sale with losses expected upon liquidation. The second largest specially serviced asset (0.6%) is a retail property located in Indianapolis, Indiana. The loan is past its scheduled May 2008 maturity. As of the June remittance, two shadow rated loans (27%) remained in the pool. The largest is the largest loan in the pool, the OPERS Factory Outlet Portfolio (10.1%), which has paid in full. The second investment grade shadow rated loan, South Towne Center & Marketplace (3.7%), has shown stable since issuance. Reported YE 2007 occupancy was 99.6%. The loan has an anticipated repayment date of August 2008. Fitch continues to monitor upcoming maturities, with 33.8% of the pool with a 2008 scheduled maturity (21.5% of the non-defeased loans). These loans have a weighted average coupon of 7.23% and 8.4% are designated as Fitch Loans of Concern. GOODY'S FAMILY: Taps Skadded Arps as Bankruptcy Counsel ------------------------------------------------------- Goody's Family Clothing Inc. and its debtor-affiliates ask permission from the United States Bankruptcy Court for the District of Delaware to employ Skadden, Arps, Slate, Meagher & Flom LLP as their bankruptcy counsel. Separately, the Debtors seek the Court's authority to employ Bass, Berry & Sims PLC as bankruptcy co-counsel, and FTI Consulting Inc. as financial advisors. Skadded Arps will: a) advise the Debtors with respect to their powers and duties as debtor-in-possession in the continued management and preparations of their business and properties; b) attend meetings and negotiating with representatives of creditors and other parties in interest and advise and consult on the conduct of the cases, including all of the legal and administrative requirements of operating in Chapter 11; c) take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on behalf of the Debtor's estates, the defense of any actions commenced against those estates, negotiations concerning litigation in which the Debtors may be involved and objections to claims filed against the estates; d) prepare, on behalf of the Debtors, motions, applications, answers, orders, reports, and papers necessary to the administration of the estates; e) prepare and negotiate on the Debtors' behalf plan(s) of reorganization, disclosure statement, and all related agreements and documents and take any necessary action on behalf of the Debtors to obtain confirmation of the plan(s); f) advise the Debtors in connection with any sale of assets; g) perform other necessary legal services and provide other necessary legal advice to the Debtors in connection with these Chapter 11 cases; and h) appear before the Court, any appellate courts, and the U.S. Trustee and protecting the interest of the Debtors' estates before the Courts and the U.S. Trustee. The firms' professionals and their compensation rates are: Designations Hourly Rates ------------ ------------ Partner and Of Counsel $680-$950 Counsel/Special Counsel $640-$765 Associates $340-$625 Legal Assistants $170-$265 Gregg M. Galardi, Esq., a member of the firm assures the Court that the firm does not hold any interests adverse to the Debtors' estates and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Goody's Family Headquartered in Knoxville, Tennessee, Goody's Family Clothing Inc. -- http://www.shopgoodys.com/-- operates chains of clothing stores. The company is owned by Goody's Holdings Inc., a non- debtor entity. As of May 31, 2008, the company operates 355 stores in several states with approximately 9,868 personnel of which 170 employees are covered under a collective bargaining agreement. The company and 19 of its affiliates filed for Chapter 11 protection on June 9, 2008 (Bankr. D. Del. Lead Case No.08-11133). The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. When the Debtors filed for protection against their creditors, they listed assets and debts between $100 million and $500 million. As of May 3, 2008, the Debtors' records reflected total assets of $313,000,000 -- book value -- and total debts of $443,000,000. GREYSTONE ON: Wants to Employ Foley et al. as Bankuptcy Counsels ---------------------------------------------------------------- Greystone On Payette, LLC, asks permission from the United States Bankruptcy Court for the District of Idaho to employ Howard R. Foley, Esq., Patrick J. Geile, Esq.,and Timothy S. Callender, Esq., all of the law firm of Foley Freeman, PLLC, as its bankruptcy counsels. As the Debtor's bankruptcy counsel, Messrs. Foley, Geile, and Callender, will give legal advise to the Debtor with respect to its powers and duties in the affairs of its business and management of its property, as well as file disclosure, Plan and other documents or help in the preparation of the same and to negotiate and secure approval of a Chapter 11 Plan. To the best of the Debtor's knowledge, Mesrs. Foley, Geile, and Callender do not hold or represent any interest adverse to the Debtor or its estate, and is a "disinterested person" within the meaning of Sec. 101(14) of the Bankruptcy Code. For their services, Messrs. Foley, Geile, and Callender have agreed to be compensated at the houly rates of $200, $175, and $150, respectively. Based in Manhattan Beach, Calif., Greystone on Payette, LLC and a debtor-affiliate, Greystone Village, LLC, filed for Chapter 11 bankruptcy protection on June 5, 2008 (D. Idaho Lead Case No. 08- 01062). Whem the Debtors filed for reorganization under Chapter 11, they listed estimated assets of between $10 million and $50 million and estimated debts of between $1 million and $10 million. HAMILTON HOLDINGS: Settles Feud with City Over Hotel Room Offering ------------------------------------------------------------------ Officials at Allentown, Pennsylvania entered into a settlement agreement with Joe Clark, Hamilton Holdings L.P.'s developer and owner of the Hotel Traylor, Jarrett Renshaw of The Morning Call writes. Under the agreement, Hotel Traylor will be closely supervised by the city and is allowed to offer longer-term occupancy rooms, Morning Call says. In June 2007, Morning Call notes that zoning supervisor, Barbara Nemith issued restriction on the rental of hotel rooms for more than 30 days. Ms. Nemith's citation prohibits the use of hotels as boarding houses. A month later, former hotel owner, Harold G. Fulmer, filed a variance request asking for permission to continue existing operations of Hotel Traylor, Morning Call relates. Mr. Fulmer, according to the Morning Call, questioned the rationale of the zoning law. The hotel's new owner, Mr. Clark, and the city stipulated a resolution that was approved by the Zoning Hearing Board on July 7, 2008, Morning Call reports. The terms of the agreement are: -- only 28 of the hotel's 77 rooms can be used for more than 30 days; -- if the number of rooms is increased or decreased, only half of the rooms can be used for more than 30 days; and -- the city will conduct semi-annual inspections of the hotel starting Nov. 1, 2008. The city is permitted to review the hotel's room rental tax records and other occupancy records. Mr. Clark said he is pleased with the settlement, Morning Call reports. Mayor Ed Pawlowski said the hotel's new owner was able to show strong reason to justify longer-term stay at his hotel, Morning Call continues. Bankruptcy Puts Hotel's Future in Question The Troubled Company Reporter on June 25, 2008, said that the future of Hotel Traylor in downtown Allentown, Pennsylvania is surrounded by uncertainty after the company that bought it filed for bankruptcy. Developer Joe Clark purchased the property in November 2007 using Hamilton Holdings L.P. Mr. Clark petitioned that Hamilton Holdings be put under chapter 11 bankruptcy protection weeks after a judge upheld Mr. Clark's ownership of the hotel as long as he complies with his sales agreement with the former owner, which includes making monthly payments to that former owner. On June 6, Lehigh County Judge Michelle Varricchio ruled that Mr. Clark must, among other things, post a $225,000 bond, make monthly payments of $31,366 to Harold G. Fulmer, president of the hotel's former owner, Lehigh Development Corp., and formally place three properties totaling $750,000 up as collateral. Under the sales agreement, Mr. Clark purchased full stock ownership of the Lehigh Development Corp., which owned the 77-unit hotel. The value of the stock was $4 million, and Mr. Clarke paid $275,000 up front and agreed to make monthly payments over the course of the next 20 years to Mr. Fulmer, according to the sales agreement. About Hamilton Holdings Allentown, Pennsylvania-based Hamilton Holdings, L.P. is acquired Hotel Traylor in 2007. The company filed for chapter 11 protection on June 16, 2008 (Bankr. E.D. Pa. Case No. 08-21282). Demetrios Tsarouhis, Esq. at Law Office of Demerios Tsarouhis represents the Debtor. The Debtor listed assets and debts of $1 million to $10 million when it filed for bankruptcy. HILEX POLY: Emerges from Pre-Packaged Chapter 11 Restructuring -------------------------------------------------------------- Hilex Poly Co. LLC disclosed that it has emerged from its pre- packaged Chapter 11 restructuring as a healthy company with a solid financial structure. Hilex officially concluded its Chapter 11 reorganization after meeting all statutory requirements of the company's Plan of Reorganization. As reported in the Troubled Company Reporter on June 27, 2008, the Hon. Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware confirmed a prepackaged Chapter 11 plan of reorganization of Hilex Poly Co. LLC and Hilex Poly Holding Co. LLC, filed on May 2, 2008. TCR, citing Judge Carey, said that the disclosure statement met all of the necessary statutory requirements within the meaning of Section 1125 of the Bankruptcy Code. Under the Plan, the company has reduced its overall debt and strengthened its balance sheet to better serve its customers. In addition to a substantial reduction in outstanding debt, the Plan reduced annual interest expense and will significantly improve cash flow. "This is a significant milestone and a proud day for Hilex and all of its constituents," David Pastrich, president and chief executive officer of Hilex, said. "The approved plan provides a solid foundation for the new Hilex." The company now has a stronger balance sheet, which enables us to invest more capital back into in the business, while we continue to maintain and strengthen our market leadership position in the plastic bag industry," Mr. Pastrich added. "On behalf of our management team, I would like to thank our employees for their continued hard work and effort, which helped us to accomplish this goal,' Mr. Pastrich continued. "I would also like to recognize how quickly and efficiently this effort was handled by our team of advisors, investors, and the Hilex employees who led this process," Mr. Pastrich said. "We would also like to thank our customers and vendors for their unwavering support during this time." About Hilex Poly Headquartered in Hartsville, South Carolina, Hilex Poly Co. LLC -- http://www.hilexpoly.com/-- manufactures plastic bag and film products. The company has approximately 1,324 personnel and has 10 manufacturing facilities located in the United States. The company and its affiliates Hilex Poly Holding Co. LLC filed for Chapter 11 protection on May 6, 2008 (Bankr. D. Del. Lead Case No.08-10890). Hilex Poly is a majority-owned subsidairy of Hilex Poly Holding Co. LLC. Edmon L. Morton, Esq., and Kenneth J. Enos, Esq., at Young, Conaway, Stargatt & Taylor in Wilmington, Delaware, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims agent. The U.S. Trustee for Region 3 has not appointed creditors to serve on an Official Committee of Unsecured Creditors to date. When the Debtors filed for protection against their creditors, they listed assets and debts between $100 million and $500 million. HOME INTERIORS: Gets Final Okay to Use NexBank's Cash Collateral ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas gave Home Interiors & Gifts Inc. and its debtor-affiliates permission to access, on an final, the cash collateral of NexBank SSB, as administrative agent for itself and certain other prepetition lenders, until Aug. 31, 2008. As reported in the Troubled Company Reporter on May 9, 2008, the Debtors owed NexBank at least $380 million in loans pursuant to a credit agreement dated March 31, 2004, as amended. The Debtors' obligations under the loan are secured by their assets, which serve as collateral. The Debtors needed immediate access to NexBank's cash collateral to pay their employees, purchase product, maintain services, operate and preserve their business and prevent immediate harm to the estate. As adequate protection, NexBank will be granted liens and security interest in substantially all of the Debtors' assets -- including accounts, inventory and property. A full-text copy of the cash collateral budget is available for free at http://ResearchArchives.com/t/s?2f45 About Home Interiors Headquartered in Carrollton, Texas, Home Interiors & Gifts, Inc. -- http://www.homeinteriors.com/-- manufactures, imports and distributes indoor and outdoor home decorative accessories. It was founded by Mary Crowley in 1957. Through its affiliates, the company has a significant presence in Mexico, Puerto Rico, and Canada. Annual revenue in 2007 reached US$300 million. When Mary Crowley, died in 1986, her son, Don Carter continued the business operation nearly debt-free. In a leveraged transaction in 1998, private equity firm of Hicks, Muse, Tate, and Furst acquired 66% of the parent company, which resulted in the imposition of more than US$500 million in debt on the Debtors. In the face of decreased sales and increased debt load, bondholders canceled their debts in February 2006 in exchange for receiving most of the outstanding equity of the Debtors. About 40% of the goods the Debtors sell are now acquired from manufacturers in China. In the last decade, sales volume in the U.S. has waned, but the Debtors reported that sales in Mexico and Puerto Rico significantly increased. The company and six of its affiliates filed for Chapter 11 protection on April 29, 2008 (Bankr. N.D. Tex. Lead Case No.08- 31961). Andrew E. Jillson, Esq., Cameron W. Kinvig, Esq., Lynnette R. Warman, Esq., and Michael P. Massad, Jr., Esq., at Hunton & Williams, LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee for Region 6 has appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Richard A. Lindenmuth, at Boulder International LLC, is designated as CRO. Munsch Hardt Kopf & Harr PC represents the Committee in these cases. When the Debtors file for protection against their creditors, they listed assets and debts between $100 million and $500 million. HOME INTERIORS: Hunton & Williams Approved as Bankruptcy Counsel ---------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware gave Home Interiors & Gifts, Inc., and its debtor-affiliates permission to employ Hunton & Williams LLP as their bankruptcy counsel. The Court also authorized the Debtors to employ, among other things (i) Rochelle Hutcheson & McCullough LLP, as special counsel; (ii) PricewaterhouseCoopers LLP, as accountants and tax advisors; and (iii) FTI Consulting Inc., as financial advisor. As reported in the Troubled Company Reporter on May 15, 2008, as bankruptcy counsel, Hunton & Williams is expected to: a) advise the Debtors with respect to their powers and duties as debtor-in-possession in the continued management and operation of their business and properties; b) attend meetings and negotiate with representative of creditors and other parties in interest; c) take all necessary action to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors and representing the Debtors' interests in negotiations concerning all litigation in which the Debtors are involved, including objections to claims filed against the estates; d) prepare all motion,s applications, answers, orders, reports and papers necessary to the administration of the Debtors' estates; e) take any necessary action on behalf of the Debtors to obtain approval of a disclosure statement and confirmation of the Debtor's plan of reorganization; f) represent the Debtors in connection with obtaining the use of cash collateral and any potential postpetition financing; g) advise the Debtors in connection with any potential sale of assets; h) appear before the Court, any appellate courts and the United States Trustee and protect the interests of the Debtors' estates before those courts and the United States Trustee; i) consult with the Debtors regarding tax matters; and j) perform all other necessary legal services to the Debtors in connection with these Chapter 11 cases, including (i) the analysis of the Debtors leases and executory contracts and the assumption, rejection or assignment, (ii) the analysis of the validity of liens against the Debtors, and (iii) advice on corporate, litigation and environmental matters. The Debtors' professionals and their compensation rates are: Professionals Designation Hourly Rates ------------- ----------- ------------ Andrew E. Jillson, Esq. Partner $680 Michael P. Massad, Jr., Esq. Partner $680 Lynnette R. Warman, Esq. Partner $650 Larry Chek, Esq. Partner $630 Steven T. Holmes, Esq. Counsel $430 Cameron W. Kinvig, Esq. Associate $290 Jesse Moore, Esq. Associate $290 Designations Hourly Rates ------------ ------------ Partners $470-$850 Counsel $400 Associates $220-$450 Paraprofessionals $90-$160 Robert McCormick, Esq., and Ronald Rosener, Esq., will assist and advise the Debtors with respect to corporate, lending, securities and litigation matters. Mr. Jillson assured the Court that the firm is a "disinterested person," within the meaning of Section 101(14) of the Bankruptcy Code. Mr. Jillson can be reached at: Andrew E. Jillson, Esq. Hunton & Williams LLP 1445 Ross Avenue, Suite 3700 Dallas, Texas 75202 Tel: (214) 979-3000 Fax: (214) 880-0011 http://www.hunton.com/ About Home Interiors Headquartered in Carrollton, Texas, Home Interiors & Gifts, Inc. -- http://www.homeinteriors.com/-- manufactures, imports and distributes indoor and outdoor home decorative accessories. It was founded by Mary Crowley in 1957. Through its affiliates, the company has a significant presence in Mexico, Puerto Rico, and Canada. Annual revenue in 2007 reached US$300 million. When Mary Crowley, died in 1986, her son, Don Carter continued the business operation nearly debt-free. In a leveraged transaction in 1998, private equity firm of Hicks, Muse, Tate, and Furst acquired 66% of the parent company, which resulted in the imposition of more than US$500 million in debt on the Debtors. In the face of decreased sales and increased debt load, bondholders canceled their debts in February 2006 in exchange for receiving most of the outstanding equity of the Debtors. About 40% of the goods the Debtors sell are now acquired from manufacturers in China. In the last decade, sales volume in the U.S. has waned, but the Debtors reported that sales in Mexico and Puerto Rico significantly increased. The company and six of its affiliates filed for Chapter 11 protection on April 29, 2008 (Bankr. N.D. Tex. Lead Case No.08- 31961). Andrew E. Jillson, Esq., Cameron W. Kinvig, Esq., Lynnette R. Warman, Esq., and Michael P. Massad, Jr., Esq., at Hunton & Williams, LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee for Region 6 has appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Richard A. Lindenmuth, at Boulder International LLC, is designated as CRO. Munsch Hardt Kopf & Harr PC represents the Committee in these cases. When the Debtors file for protection against their creditors, they listed assets and debts between $100 million and $500 million. IMMUNICON CORP: Creditors Committee Taps Schulte Rote as Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Immunicon Corp.'s Chapter 11 bankruptcy case asks the U.S. Bankruptcy Court for the District of Delaware for authority to employ and retain Schulte Rote & Zabel LLP as its counsel, nunc pro tunc to June 23, 2008. Schulte Rote will mainly assist and advise the Committee in its consultations with the Debtors, any other committee, and other parties in interest relative to the overall administration of the Debtor's estate. As compensation for their services, Schulte Rote's professionals bill: Title Hourly Rate ----- ----------- Partners $695 - $895 Special Counsel $625 - $650 Associates $255 - $595 Staff Attorneys $250 - $565 Legal Assistants $105 - $295 To the best of the Committee's knowledge, the partners, counsel, and associates of Schulte Rote are disinterested persons who do not have any connection with, or any adverse interest to the Debtors or its estate. Headquartered in Huntington Valley, Pennsylvania, Immunicon Corporation -- http://www.immunicon.com/-- offers products and services for cell analysis and molecular research. The company filed for Chapter 11 protection on June 11, 2008 (Bankr. D. Del. Case No.08-11178). Sheldon K. Rennie, Esq., at Fox Rothschild LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection against its creditors, it listed total assets of $9,231,264 and total debts of $24,309,838. IMMUNICON CORP: 341(a) Creditors Meeting Set for July 17 -------------------------------------------------------- The United States Trustee for Region 3 will convene a meeting of Immunicon Corporation's creditors at 2:00 p.m., on July 17, 2008, at the Office of the U.S. Trustee, J. Caleb Boggs Federal Building, 2nd Floor, Room 2112, Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtor under oath about his financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Huntington Valley, Pennsylvania, Immunicon Corporation -- http://www.immunicon.com/-- offers products and services for cell analysis and molecular research. The company filed for Chapter 11 protection on June 11, 2008 (Bankr. D. Del. Case No.08-11178). Sheldon K. Rennie, Esq., at Fox Rothschild LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection against its creditors, it listed total assets of $9,231,264 and total debts of $24,309,838. IMMUNICON CORP: U.S. Trustee Names 3-Member Creditors Panel ----------------------------------------------------------- Pursuant to Section 1102(a)(1) of the Bankruptcy Code, Andrew R. Vara, Acting United States Trustee for Region 3, appointed three members to the Official Committee of Unsecured Creditors in Immunicon Corporation's Chapter 11 case. The Creditors Committee consists of: (1) SF Capital Partners, Ltd. Attn: Brian H. Davidson c/o Stark Offshore Management LLC 3600 South Lake Drive St. Franchis, WI Tel: (414) 294-7000 Fax: (414) 294-7700 (2) Portside Growth and Opportunity Fund Attn: Jeffrey C. Smith c/o Ramius LLC 599 Lexington Ave. 20th Floor, New York NY 10022 Tel: (212) 845-7955 Fax: (212) 201-4802 (3) Tyco Healtcare Group, L.P. (d/b/a Kendall Healthcare) Attn: Kurt E. Sagar 15 Hampshire Street Mansfield, MA Tel: (508) 261-6063 Fax: (508) 261-6274 Headquartered in Huntington Valley, Pennsylvania, Immunicon Corporation -- http://www.immunicon.com/-- offers products and services for cell analysis and molecular research. The company filed for Chapter 11 protection on June 11, 2008 (Bankr. D. Del. Case No.08-11178). Sheldon K. Rennie, Esq., at Fox Rothschild LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection against its creditors, it listed total assets of $9,231,264 and total debts of $24,309,838. IPTIMIZE INC: Stark Winter Schenkein Expresses Going Concern Doubt ------------------------------------------------------------------ Stark Winter Schenkein & Co., LLC, raised substantial doubt about IPtimize, Inc.�s ability to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed to the company�s recurring losses and working capital and stockholders� deficits. The company posted a net loss of $2,803,417 on total revenues of $1,025,152 for the year ended Dec. 31, 2007, as compared with a net loss of $2,857,535 on total revenues of $921,314 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $2,428,583 in total assets, $1,318,389 in redeemable preferred stock and $4,455,616 in total liabilities, resulting in $3,345,422 stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, showed strained liquidity with $205,324 in total current assets available to pay $4,023,171 in total current liabilities. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2f13 About IPtimize, Inc. IPtimize, Inc., (IPZI.PK) -- http://www.iptimize.com-- provides broadband voice and data services in the United States. It offers hosted voice over Internet protocol services (VoIP). The company's voice services include VoicePilot, a hosted VoIP service that allows customers to put voice traffic onto an existing data network; and VoIP Connect, a telephone line replacement service, which enables businesses to put voice traffic onto existing broadband Internet connect. IPtimize also offers consulting services, including information technology services, managed firewall, and single or multi-service provider networks and equipment. The company is based in Denver, Colorado. JOHANNA KILA: Case Summary & Three Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Johanna Kila QPRT Ste. 1 Edward Kila Court Stevensville, MD 21666 Bankruptcy Case No.: 08-18220 Chapter 11 Petition Date: June 23, 2008 Court: District of Maryland (Baltimore) Judge: Duncan W. Keir Debtor's Counsel: John C. Gordon, Esq. Email: johngordononline@yahoo.com 532 Baltimore & Annapolis Blvd. Severna Park, MD 21146 Tel: (410) 340-0808 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A copy of Johanna Kila QPRT's petition is available for free at: http://bankrupt.com/misc/mdb08-18220.pdf JOHN GREANEY JR: Case Summary & 15 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: John Edward Greaney, Jr. Cathy Ann Greaney P.O. Box 66 Flora Vista, NM 87415 Bankruptcy Case No.: 08-12011 Chapter 11 Petition Date: June 23, 2008 Court: New Mexico (Albuquerque) Judge: James S. Starzynski Debtors' Counsel: Arin Elizabeth Berkson, Esq. Email: mbglaw@swcp.com Moore, Berkson & Gandarilla, P.C. P.O. Box 216 Albuquerque, NM 87103-0216 Tel: (505) 242-1218 Fax: (505) 242-2836 Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million Debtors' 15 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Dresser Industries $1,043,000 Douglas Vadnais, Esq. P.O. Box 2168 Albuquerque, NM 87103 Internal Revenue Service $90,000 210 E. Earll Dr. MS 5014 PX Phoenix, AZ 85012 First State Bank $86,000 of Central Texas P.O. Box 6136 Temple, TX 76503 Bank of America $78,887 Martini Industries $27,500 Soldier Miller Assoc. $25,000 Chase $16,525 Citifinancial Bankruptcy Dept. $15,456 Fidelity $13,857 Citibank $12,034 Beneficial $11,987 Sears $7,449 Discover More Card $4,354 American Express $3,300 Land O Lakes Purina $1,700 KARAT PLATINUM: JH Cohn Expresses Going Concern Doubt ----------------------------------------------------- J.H. Cohn LLP in Jericho, N.Y., raised substantial doubt about the ability of Karat Platinum, Inc., formerly Sentra Consulting Corp., to continue as a going concern after it audited the company's financial statements for the year ended March 31, 2008. The auditor reported that the company has experienced recurring net losses resulting in an accumulated deficit of $7,695,387 as of March 31, 2008. In addition, the company has a working capital deficiency of $2,636,355 as of March 31, 2008. The company posted a net loss of $4,373,792 on net revenues of $294,819 for the year ended March 31, 2008, as compared with a net loss of $1,154,426 on net revenues of $634,095 in the prior year. At March 31, 2008, the company's balance sheet showed $3,101,207 in total assets and $7,177,916 in total liabilities, resulting in $4,076,709 stockholders' deficit. The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $2,737,158 in total current assets available to pay $5,373,513 in total current liabilities. A full-text copy of the company's 2008 annual report is available for free at http://ResearchArchives.com/t/s?2f0f About of Karat Platinum Karat Platinum, Inc., (OTC BB: KRAT.OB) -- http://www.karatplatinum.com-- manufactures and sells a platinum alloy and platinum jewelry in the United States. The company offers its products under the KARAT PLATINUM, 14 KARAT PLATINUM, and 14 Kt.Pt. brand names. It designs, manufactures, and sells a line of earrings and chains directly to mass and mid-market retailers, as well as to independent jewelry stores and small chain stores. The company was founded in 2003. It was formerly known as Sentra Consulting Corp. and changed its name to Karat Platinum, Inc., in April 2008. The company is based in Inwood, New York. KEYSTONE AUTOMOTIVE: S&P Revises Outlook to Negative from Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook on Exeter, Pennsylvania-based Keystone Automotive Operations, Inc. from stable to negative. "This action reflects increasingly difficult macroeconomic and industry conditions, continued weak operating performance, and poor credit metrics,' explained Standard & Poor's credit analyst Jerry Phelan. Despite its expectations for weakening performance, S&P believe liquidity should be sufficient over the next year due to modest capital expenditure requirements and approximately $94 million availability under a loosely structured revolving credit facility. KIMBALL HILL: Panel Can Hire Garden City as Information Agent ------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Kimball Hill Inc. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the District of Delaware to retain The Garden City Group as its information agent, nunc pro tunc to May 16, 2008. The Committee believes that the retention of The Garden City Group will provide it significant assistance in complying with its obligations under Section 1102(b)(3) of the U.S. Bankruptcy Code, will add to the effective administration of the Debtors' Chapter 11 cases, and will reduce the overall expense of administering these cases. The Garden City Group is expected to: (a) establish and maintain an Internet-accessed Web site that provides, without limitation: * a link or other form of access to the Web site maintained by the Debtors' notice, claims and balloting agent at www.kccllc.net/kimballhill, which will include, among other things, the case docket and claims register; * highlights of significant events in the Debtors' Chapter 11 cases; * a calendar with upcoming significant events in the Chapter 11 cases; * a general overview of the Chapter 11 process; * press releases issued by the Committee or the Debtors; * a non-public registration form of creditors to request real time updates regarding the Chapter 11 cases via electronic mail; * a non-public form to submit creditor questions, comments and requests for access to information; * responses to creditor questions, comments and requests for access to information; provided, that the Committee may privately provide responses in the exercise of its reasonable discretion, including in the light of the nature of information request and the creditor's agreement to appropriate confidentiality and trading constraints; * answers to frequently asked questions; * the names and contact information for the Debtors' counsel and restructuring advisors; and * the names and contact information for the Committee's counsel and financial advisors; (b) distribute the updates regarding the Chapter 11 cases via electronic mail for creditors that have registered for service on the Committee website; and (c) establish and maintain a telephone number and electronic mail address for creditors to submit questions and comments. The Garden City Group's professionals and their current hourly rates are: Title Hourly Rate ----- ----------- Administrative $45 to $70 Data Entry Processors $55 Mailroom and Claims Control m $55 Project Administrators $70 to $85 Quality Assurance Staff $80 to $125 Project Supervisors $95 to $110 Systems & Technology Staff $100 to $200 Graphic Support $125 Project Managers, Dept. Managers $125 to $150 Directors, Senior Consultants $175 to $250 Assistant Vice Presidents $175 to $250 Senior Management $250 to $295 Garden City will also be reimbursed for reasonable fees and expenses it incurred or will incur in the performance of its dutites. The fees and expenses to be incurred by Garden City will be administrative in nature and will not be subjected to standard fee application procedures for bankruptcy professionals. The Committee proposed that Garden City be paid for its services on a monthly basis, upon submission of monthly invoices summarizing in reasonable detail the services rendered and the expenses incurred to the Committee, the Debtors, and the United States Trustee. Parties-in-interest will have 10 days to advise Garden City any objections to the monthly invoices. Michael J. Sherin, chairman of Garden City, disclosed that to the best of his knowledge, his firm does not represent any interest adverse to the interests of the Committee or the Debtors' estates. Garden City is a disinterested person as the term is defined in Section 101(14) of the U.S. Bankruptcy Code, he assured the Court. 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. 8; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). KIMBALL HILL: Wants to Employ Neal Gerber as Bankruptcy Counsel --------------------------------------------------------------- Kimball Hill Inc. and its debtor-affiliates ask authority from the U.S. Bankruptcy Court for the Northern District of Illinois to employ Neal, Gerber & Eisenberg LLP, as their special counsel effective as of June 16, 2008. Prior to the date of bankruptcy, Neal Gerber represented the Debtors in connection with the formation of, and complex transactions involving, certain joint venture interests -- the Urban JVs. Because Neal Gerber is familiar with the Urban JVs and the complexity of the transactions at issue, the Debtors assert that hiring the firm to provide them with general corporate advice and legal services in line with their disposition of Urban JVs will allow them to save on time and the cost of educating other counsel. Obtaining a substitute counsel at this juncture would only prejudice their estates, the Debtors relate. Neal Gerber is a Chicago-based law firm with approximately 200 lawyers, many of whom specialize in real estate and corporate practice. Neal Gerber will advise and represent the Debtors in documenting the sale transactions of these joint venture equity interests affiliated with the Debtors: a) 33% membership interest in Parkside Associates, LLC, owned by Kimball Hill Urban Centers Chicago One, L.L.C., b) 23.75% membership interest in Stateway Associates, LLC, owned by Kimball Hill Stateway, Inc., and c) 49% membership interests in Mitchell Urban Partners, LLC, owned by Kimball Hill Urban Centers Chicago Two, L.L.C. The firm will be compensated for its legal services on an hourly basis pursuant to its ordinary and customary hourly rates: Professional Hourly Rate ------------ ----------- Partners $430 - $575 Associates $300 - $350 Paraprofessionals $200 - $250 The Debtors will also reimburse Neal Gerber for actual and necessary expenses incurred. Neal Gerber agrees to cooperate with other professionals employed in the Debtors' Chapter 11 cases to ensure that there is no duplication of services rendered. During the 90 days prior to the Petition Date, Neal Gerber received from the Debtors $64,455 in payment for services performed and expenses incurred in the ordinary course of business. As of the date of bankruptcy, Neal Gerber received a retainer of $6,437 as advance against expenses for services in the preparation of the Chapter 11 cases, which will be applied to postpetition compensation and expense reimbursement, as may be allowed by the Court. Thomas C. Wolford, Esq., a partner at Neal Gerber, in Chicago, Illinois, assures the Court that his firm does not hold or represent any interest adverse to the Debtors on matters for which the firm will be employed. 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. 8; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). LB-UBS COMMERCIAL: S&P Junks Ratings on Four Certificate Classes ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 10 classes of commercial mortgage pass-through certificates from LB- UBS Commercial Mortgage Trust 2006-C7. In addition, S&P affirmed its ratings on 15 classes from this series. The downgrades reflect concerns regarding the 12 loans that have reported debt service coverage below 1.0x. In addition, the lowered ratings reflect anticipated credit support erosion upon the eventual resolution of the two specially serviced assets and concerns with the eighth-largest loan. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the June 17, 2008, remittance report, the collateral pool consisted of 184 loans with an aggregate trust balance of $3.012 billion, compared with the same number of loans totaling $3.020 billion at issuance. The master servicer, Wachovia Bank N.A., reported financial information for 90% of the pool. Eighty- eight percent of the servicer-provided information was full-year 2007 data. Excluding one of the specially serviced assets, there are 12 loans in the pool totaling $81.9 million (3%) with reported DSCs lower than 1.0x. The loans are secured by various properties with an average balance of $6.8 million. These loans have seen an average decline in DSC of 32% since issuance. Standard & Poor's calculated a weighted average DSC of 1.54x for the pool, down from 1.57x at issuance. There are two loans ($17.1 million) with the special servicer, which are also the only delinquent loans in the pool. The trust has experienced no losses to date. The top 10 loans have an aggregate outstanding balance of $1.635 million (54%) and a weighted average DSC of 1.72x, down from 1.85x at issuance. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 exposures. All the properties were characterized as "good." The credit characteristics of the 520 Madison Avenue, 1211 Avenue of the Americas, Extendicare Portfolio, and Reston Town Center loans are consistent with those of investment-grade obligations. Details are: -- The 520 Madison Avenue loan is the largest loan in the pool and has a balance of $475.0 million (16%). In addition, the borrower's equity interest is secured by $125.0 million of mezzanine debt. The loan is secured by the fee interest in a 1.0 million-sq.-ft. office building in midtown Manhattan. For the year ended Dec. 31, 2007, DSC was 1.65x, and occupancy was 95%. Standard & Poor's adjusted value for this loan is comparable to its level at issuance. -- The 1211 Avenue of the Americas loan is the second-largest loan in the pool and has a trust balance of $275.0 million (9%) and a whole-loan balance of $675.0 million. The whole loan consists of two pari passu participations; one participation is securitized in the LB-UBS Commercial Mortgage Trust 2006-C6 transaction. For the year ended Dec. 31, 2007, DSC was 1.54x, and occupancy was 99%. The building serves as the world headquarters for News Corp. (BBB+/Stable/--). This company is the largest tenant and occupies 49% of the net rentable area until 2020. Standard & Poor's adjusted value for this loan is comparable to its level at issuance. -- The Extendicare Portfolio is the third-largest loan in the pool, with a trust balance of $250.0 million (8%) and a whole-loan balance of $500.0 million. The whole loan consists of three senior participations; the two participations not included in the pool are each $125.0 million and are securitized in the LB-UBS Commercial Mortgage Trust 2007-1 and LB-UBS Commercial Mortgage Trust 2007-2 transactions. The whole loan is collateralized by 80 skilled nursing facilities and two skilled nursing and assisted living facilities totaling 8,492 beds and located in 10 states. The portfolio's census mix is primarily Medicaid and Medicare patients, and for the year ended Dec. 31, 2007, DSC was 2.41x, and the portfolio was 91% occupied. Standard & Poor's adjusted value for this loan is comparable to its level at issuance. -- The Reston Town Center loan is the fourth-largest loan in the pool, with a trust balance of $121.5 million (4%) and a whole-loan balance of $211.3 million. The whole loan consists of a $121.5 million senior participation and an unsecuritized $89.75 million junior participation. The whole loan is collateralized by a 758,364-sq.-ft. office and retail mixed-use property in Reston, Virginia. Approximately 69% of the property is used as office space, while the remaining space is occupied by retailers. For the year ended Dec. 31, 2007, DSC was 2.70x, and the property was 93% occupied. Standard & Poor's adjusted value for this loan is comparable to its level at issuance. Two loans, with combined balances and additional advances totaling $17.1 million, are 90-days-plus delinquent and have been transferred to the special servicer, CWCapital Asset Management LLC. Standard & Poor's used recent appraisals and available market information to determine the potential losses and recoveries on the specially serviced assets; details are: -- Sienna Springs Apartments has a balance of $11.3 million and additional advances, including interest thereon, totaling $289,009. The loan is secured by the fee interest in a 336-unit multifamily property in Dallas, Texas. The loan was transferred to CWCapital on May 14, 2008, for monetary default. CWCapital inspected the property in June 2008 and found significant deferred maintenance. To date, the borrower has not provided a current rent roll, but the occupancy is estimated to be approximately 60%. Standard & Poor's expects the resolution of the asset to result in a moderate loss. -- The Royal Crest Apartments loan has a balance of $5.9 million and additional advances, including interest thereon, totaling $119,501. The loan is secured by a 172-unit multifamily property in Pensacola, Florida. The loan was transferred to CWCapital on Jan. 30, 2008, for monetary default. The property was appraised in February 2008 for $4.5 million, and a $1.9 million appraisal reduction amount is in effect. Standard & Poor's expects the resolution of the asset to result in a moderate loss. Wachovia reported a watchlist of 29 loans ($338.8 million, 11%). The Arizona Retail Portfolio ($86.0 million, 3%) is the largest loan on the watchlist and the eighth-largest loan in the pool. The loan is secured by 14 retail properties totaling 600,178 sq. ft. located throughout the Phoenix metropolitan statistical area. The loan appears on the watchlist because the portfolio reported a year-end 2007 DSC of 1.05x and 85% occupancy, compared with 90% at issuance. As of March 2008, the portfolio's occupancy level has declined further to 79%, and going forward, Standard & Poor's expects the DSC will decline below 1.0x. Standard & Poor's stressed the loans on the watchlist and the other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the lowered and affirmed ratings. Ratings Lowered LB-UBS Commercial Mortgage Trust 2006-C7 Commercial mortgage pass-through certificates Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ G BBB+ A- 4.89% H BBB BBB+ 3.88% J BBB- BBB 3.01% K BB- BBB- 2.13% L B BB+ 1.88% M B- BB 1.75% N CCC+ BB- 1.38% P CCC B+ 1.25% Q CCC- B 1.13% S CCC- B- 1.00% Ratings Affirmed LB-UBS Commercial Mortgage Trust 2006-C7 Commercial mortgage pass-through certificates Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 30.08% A-1A AAA 30.08% A-2 AAA 30.08% A-3 AAA 30.08% A-AB AAA 30.08% A-M AAA 20.05% A-J AAA 10.28% B AA+ 9.52% C AA 8.52% D AA- 7.52% E A+ 6.64% F A 5.76% X-CP AAA N/A X-CL AAA N/A X-W AAA N/A N/A -- Not applicable. LEAP WIRELESS: Has Vulnerable Business Profile, S&P Says -------------------------------------------------------- Although both Leap Wireless International Inc. (B/Stable/--) and MetroPCS Communications Inc. (B-/Positive/--) have established themselves as niche players in the wireless segment, they also face substantial business risk, given their late market entry versus the established national carriers, according to a new commentary by Standard & Poor's Ratings Services titled "Good Growth Prospects For Leap Wireless And MetroPCS Despite Vulnerable Business Positions," published earlier on RatingsDirect. "In addition, these companies' subscribers tend to be lower wage earners than average U.S. wireless users," explained Standard & Poor's credit analyst Catherine Cosentino, "and therefore their discretionary spending tends to be quite limited and unpredictable." Both Leap and MetroPCS, therefore, have very vulnerable business profiles. LEVCOR INT'l: March 31 Balance Sheet Upside-Down by $7,944,000 -------------------------------------------------------------- Levcor International Inc.'s consolidated balance sheet at March 31, 2008, showed $12,789,000 in total assets and $20,733,000 in total liabilities, resulting in a $7,944,000 total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $8,133,000 in total current assets available to pay $16,414,000 in total current liabilties. The company reported net income of $199,000 on total net sales of $4,634,000 for the first quarter ended March 31, 2008, compared with net income of $122,000 on net sales of $5,265,000 in the same period last year. The company attributes the decrease in sales to the cancellation of two product lines by the company's largest customer and a lower number of new product introductions in 2008. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2d0d Going Concern Doubt Friedman LLP, in New York, expressed substantial doubt about Levcor International 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 historical losses from operations. About Levcor International Based in New York, Levcor International Inc. (OTC BB: LEVC) engages in the manufacture, packaging, and distribution of buttons, embellishments, craft products, and complimentary product for the home sewing and craft retail industry. The company offers its products under the La Mode, Le Chic, Streamline, Favorite Findings, Crafter's Images, and Button Fashion trademarks; and under the Le Bouton, La Petite, Classic, Boutique Elegant, and Mill Mountain brand names. Levcor International sells its products to mass merchandisers, specialty chains, and independent retailers and wholesalers in the United States, Canada, and Europe. LEVI STRAUSS: May 25 Balance Sheet Upside-Down by $387.1 Million ---------------------------------------------------------------- Levi Strauss & Co. reported on Tuesday financial results for the second quarter ended May 25, 2008. The company's consolidated balance sheet at May 25, 2008, showed $2.9 billion in total assets, $3.2 billion in total liabilities, and $5.1 million in temporary equity, resulting in a $387.1 million total stockholders' deficit. The company recorded net income of $701,000 in the second quarter compared to net income of $45.7 million for the same period in 2007, primarily reflecting lower net sales, and higher costs related to ERP stabilization efforts and retail expansion. Lower operating income of $51.8 million was partially offset by reduced interest expense and other financing costs in the period. Net sales were $915.1 million during the three months ended May 25, 2008, compared with net sales of $997.3 million for the same period in 2007. Lower net revenues reflected reduced sales in the Americas' region, partly offset by reported net revenue increases in Europe and Asia Pacific. Net revenues in Europe and Asia Pacific were down slightly on a constant currency basis. The revenue decline in the Americas is largely attributable to the impact of the difficult U.S. economic environment, shipping issues related to the transition of the U.S. business to a new enterprise resource planning system (ERP), lower performance in the U.S. Dockers(R) business and early shipments executed in the first quarter in anticipation of the second-quarter U.S. ERP implementation. "We expected the second quarter to be tough, and it was," said John Anderson, president and chief executive officer. "The retail environment in the United States remained challenging. In addition, our transition to a new enterprise resource planning system in the United States negatively affected our results. Increasingly difficult economic conditions in many markets worldwide are impacting consumer spending, but our brands remain strong. We are pleased with the continued strong growth of our emerging markets and our retail network around the world. "Given the slowing macroeconomic indicators we are seeing globally and our continued investment to stabilize our ERP system, we expect the rest of the year to be challenging. Nonetheless, we are taking decisive actions to position the company well for when market conditions improve," added Mr. Anderson. Second Quarter 2008 Highlights Gross profit in the second quarter decreased to $437.4 million compared with $463.1 million for the same period in 2007. Gross margin increased to 46.7 percent of revenues for the quarter compared with 45.6 percent of revenues in the second quarter of 2007. Gross margin benefited from a higher-margin product mix, lower sourcing costs and increased company-operated store sales. Selling, general and administrative expenses for the second quarter increased to $385.5 million from $344.8 million in the same period of 2007. Approximately half of the increase reflects the effect of currency; the remainder of the increase reflects the substantial costs related to the ERP stabilization efforts in the United States and the company's global retail expansion compared to the prior year. Operating income for the second quarter was $51.8 million compared with $118.3 million for the same period of 2007, reflecting lower net revenues, and higher selling, general and administrative expenses. Interest expense for the second quarter decreased to $41.1 million compared to $55.8 million in the second quarter of 2007. The decrease was primarily attributable to lower average interest rates and lower debt levels during the quarter due to the company's debt refinancing actions last year. "This was clearly a difficult quarter," said Hans Ploos van Amstel, chief financial officer. "Despite the operational challenges, we continued to reduce our debt and paid a dividend to our stockholders. Our balance sheet gives us the flexibility to weather the economic cycle and invest in our brands to build our business for the long term." Balance Sheet and Cash Flow After paying the previously announced $50.0 million cash dividend to common stockholders and reducing long-term debt by $54.0 million, the company ended the second quarter with cash and cash equivalents of $123.8 million, a decrease of $32.1 million from Nov. 25, 2007. Cash provided by operating activities was $121.3 million for the first half of 2008, compared with $126.4 million for the same period in 2007, primarily reflecting lower net income offset by lower payments for interest. Total long-term and short-term debt was $1.9 billion at the end of the second quarter. Unused Availability Under Revolving Tranche of Credit Facility In 2007, the company amended and restated its senior secured revolving credit facility; the maximum availability is now $750.0 million secured by certain of the company's domestic assets and certain U.S. trademarks associated with the Levi's(R) brand and other related intellectual property. The amended facility includes a $250.0 million term loan tranche. Upon repayment of this $250.0 million term loan tranche, the secured interest in the U.S. trademarks will be released. As of May 25, 2008, the company had borrowings of $214.6 million under the term loan tranche and the company's total availability, based on other collateral levels as defined by the agreement, was approximately $319.9 million. The company had no outstanding borrowings under the revolving tranche of the credit facility, but had utilization of other credit-related instruments such as documentary and standby letters of credit. As a result, unused availability was approximately $239.6 million as of May 25, 2008. As of May 25, 2008, the company had cash and cash equivalents totaling approximately $123.8 million, resulting in a net liquidity position (unused availability and cash and cash equivalents) of $363.4 million. Full-text copies of the company's consolidated financial statements for the quarter ended May 25, 2008, are available for free at http://researcharchives.com/t/s?2f47 About Levi Strauss & Co. Headquartered in San Francisco, California, Levi Strauss & Co. -- http://www.levistrauss.com/-- is one of the world's leading branded apparel companies. The company designs and markets jeans, casual and dress pants, tops, jackets and related accessories, for men, women and children under the Levi's(R), Dockers(R) and Signature by Levi Strauss & Co.(TM). The company markets its products in three geographic regions: Americas, Europe and Asia Pacific. * * * Moody's Investors Service placed Levi Strauss & Co.'s long term corporate family and probability of default ratings at 'B1' in March 2007. The ratings still hold to date with a positive outlook. MACTEC INC: Moody's Affirms Ratings, Changes Outlook to Negative ---------------------------------------------------------------- Moody's Investors Service has affirmed the B2 corporate family and B3 probability of default ratings of MACTEC, Inc., and changed the rating outlook to negative from stable. The outlook change to negative reflects concerns that the recent bankruptcy filing of a large MACTEC customer could lead to a partial write down of a receivable; such a write down would raise the possibility of a debt covenant test ratio breach in coming periods. The negative outlook also reflects potential for weakening non residential construction end markets in 2009 that would cause lower earnings and weaker credit metrics. However, Moody's acknowledges that cash flow generation through 2007 and 2008 has been strong with material debt reductions; currently, MACTEC's leverage ratios are well-positioned for the B2 rating category. Should the potential for a debt covenant test ratio breach diminish and the company's current earnings and backlog level be sustained in 2009, the ratings outlook would likely stabilize. Although the company's corporate family and probability of default ratings have been affirmed, consistent with the application of Moody's Loss Given Default methodology and following reduction in the amount of senior unsecured non-debt liabilities within MACTEC's capital structure, mainly pension liabilities, the following rating changes have occurred: -- $35 million guaranteed first lien revolver due 2011 to B1 LGD 2, 24% from Ba3 LGD 2, 22% -- $120 million guaranteed first lien term loan due 2012 to B1 LGD 2, 24% from Ba3 LGD 2, 22% The B2 corporate family rating affirmation reflects MACTEC's good margins, moderate leverage, and adequate liquidity profile juxtaposed against the company's small size and exposure to cyclical non residential and infrastructure construction markets. Headquartered in Alpharetta, Georgia, MACTEC Inc. is a privately held provider of comprehensive environmental, design and consulting engineering, infrastructure and construction management services to governmental, commercial, and industrial entities in the United States. MASTR SPECIALIZED: Fitch Affirms 'BB+' Rating on Class B-2 Certs. ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 12 classes of mortgage pass-through certificates issued by MASTR Specialized Loan Trust 2007-2. As of the June 2008 remittance period, cumulative realized losses were 1.52% of the original pool balance. Total delinquencies were 44.08% of the current pool balance, while severe delinquencies were 35.02% of the current pool balance. The affirmations reflect S&P's analysis of the deal's performance trends. Over the past year, series 2007-2's monthly excess interest has outpaced monthly net losses in 10 out of 12 periods, or approximately 83% of the time; however, in May and June 2008, monthly net losses have exceeded monthly excess interest by an average of 3.48x. Overcollateralization for series 2007-2 is currently $5,443,588.54, compared with a target of $7,227,639.76, which represents a deficiency of approximately $1,784,051. Despite this deficiency, S&P believe that the classes with affirmed ratings currently have adequate credit support percentages to maintain the ratings at their current levels. S&P will continue to monitor the performance of this transaction. If the aforementioned loss trend continues, S&P will likely take negative rating actions. This transaction is 11 months seasoned and has an outstanding pool factor of 87.22%. O/C, excess spread, and subordination provide credit support for this series. The collateral for this transaction originally consisted of first- lien, scratch-and-dent, and reperforming fixed- and adjustable- rate mortgage loans. Ratings Affirmed MASTR Specialized Loan Trust 2007-2 Mortgage pass-through certificates Class Rating ----- ------ A AAA M-1 AA+ M-2 AA+ M-3 AA M-4 AA- M-5 A+ M-6 A M-7 A- M-8 BBB+ M-9 BBB B-1 BBB- B-2 BB+ MEADOW VIEW: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Meadow View Homes, Inc. 14621 Aberdeen St., N.E. Ham Lake, MN 55304 Bankruptcy Case No.: 08-43366 Type of Business: The Debtor provides full-service home construction, and coordinates with mortgage and title companies in selling residential units. See http://www.meadowviewhomes.com/ Chapter 11 Petition Date: July 8, 2008 Court: District of Minnesota (Minneapolis) Judge: Robert J. Kressel Debtor's Counsel: Thomas G. Wallrich, Esq. Email: twallrich@hinshawlaw.com Hinshaw & Culbertson LLP 333 South Seventh Street, Ste. 2000 Minneapolis, MN 55402 Tel: (612) 333-3434 http://www.hinshawlaw.com/ Total Assets: $4,658,700 Total Debts: $6,665,456 A copy of Meadow View Homes, Inc.'s petition is available for free at: http://bankrupt.com/misc/mnb08-43366.pdf MEMPHIS HEALTH: Moody's Cuts Rating of $7.5MM Revenue Bonds to Ca ----------------------------------------------------------------- Moody's Investors Service has downgraded to Ca from Caa3 the underlying rating on approximately $7.755 million outstanding Memphis Health, Educational, And Housing Facilities Board Multifamily Housing Revenue Bonds, Series 2000A. The outlook on the bonds remains negative. These bonds continue to be MBA insured. Moody's does not rate the Subordinate Series 2000B bonds. The downgrade on the underlying bonds is based on continued taps to the Series A Debt Service Reserve Fund and the deteriorating debt service coverage level. Unaudited financial statements annualized as of May 31, 2008 for the 240-unit garden style property demonstrate the deteriorating debt service coverage primarily due to high vacancy and concession losses. The project, located in the southeast section of Memphis, Tennessee, continues to be in need of some capital improvements, however, the Repair and Replacement fund has been fully depleted. During 2008, the borrower continued to tap the Senior 2000A Debt Service Reserve Fund to pay the debt service due on the bonds. If the property's financial condition continues to deteriorate, Moody's believes that a monetary default is probable in the near future. The negative outlook reflects the decline in the debt service coverage level, and continued taps to the Series 2000A Debt Service Reserve Fund. What could change the rating - UP -- Improved net operating revenue and debt service coverage level -- Replenishment of the Debt Service Reserve Fund and the Repair and Replacement Fund What could change the rating - DOWN -- Continued deterioration of net operating income and debt service coverage -- Continued transfers from the Debt Service Reserve Funds for debt service MESA AIR: District Judge Articulates Injunction in Delta Air Suit ----------------------------------------------------------------- U.S. District Judge Clarence E. Cooper articulated the preliminary injunction previously granted to Mesa Air Group against Delta Air Lines, Inc., blocking the carrier from terminating the regional flying agreement worth $20,000,000 a month, The Associated Press reports. Delta moved many of Mesa's flights to congested John F. Kennedy International Airport in New York and later used increased flight cancellations by Mesa subsidiary Freedom Airlines to justify its decision to end the Contract, Judge Cooper said in a 36-page decision filed June 25, 2008, with a federal court in Georgia, according to the report. Mesa was under the impression that it could exclude some flight cancellations from JFK in its official completion rate, and Delta did not inform Mesa that it would calculate completion differently, Judge Cooper said, notes to the report. Delta notified Mesa that it planned to terminate a contract as of May 3, 2008, following allegations that Mesa failed to maintain a specified completion rate -- the percentage of scheduled flights that are flown within September and February. Delta maintained it could terminate the Contract absent Mesa's maintenance of at least a 95% completion rate for three months within a six-month period. On March 28, 2008, Delta notified Mesa of its intent to terminate a connection Agreement that includes, among other arrangements, Mesa's agreement to operate 34 model ERJ-145 regional jets leased utilizing Delta's name. In fiscal 2007, the Connection Agreement accounted for approximately 20% of Mesa's 2007 total revenues. Delta sought to terminate the Connection Agreement as a result of Freedom's alleged failure to maintain a specified completion rate with respect to its ERJ-145 Delta Connection flights during three months of the six-month period ended February 2008. Mesa complained that the cancellation of the contract will force it to file for bankruptcy protection and cut 700 jobs. A Delta spokeswoman told AP that the airline is disappointed with the court's ruling and that it intends to appeal. The Troubled Company Reporter said on June 5, 2008, that Mesa Air Group Inc. won on May 29 a preliminary injunction from the United States District Court for the Northern District of Georgia in Atlanta, enjoining Delta Air Lines from terminating its Connection Agreement with Mesa, and its wholly owned subsidiary, Freedom Airlines Inc. About Mesa Air Mesa Air -- http://www.mesa-air.com-- operates 182 aircraft with over 1,000 daily system departures to 157 cities, 42 states, the District of Columbia, Canada, the Bahamas and Mexico. Mesa operates as Delta Connection, US Airways Express and United Express under contractual agreements with Delta Air Lines, US Airways and United Airlines, and independently as Mesa Airlines and go!. In June 2006 Mesa launched inter-island Hawaiian service as go! This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company, founded by Larry and Janie Risley in New Mexico in 1982, has approximately 5,000 employees and was awarded Regional Airline of the Year by Air Transport World magazine in 1992 and 2005. Mesa is a member of the Regional Airline Association and Regional Aviation Partners. Mesa has 5,000 employees overall. Freedom Airlines currently operates 34 50-seat ERJ-145 and 7 76- seat CRJ-900 aircraft for Delta Connection. On May 14, 2008, Air Midwest, Inc., a wholly owned subsidiary of Mesa Air, unveiled plans to discontinue all operations by June 30 including its current scheduled services, citing record-high fuel prices, insufficient demand and a difficult operating environment as the main factors in its decision. METROLOGIC INSTRUMENTS: Acquisition Cues Moody's to Remove Ratings ------------------------------------------------------------------ Moody's Investors Service has withdrawn all ratings of Metrologic Instruments, Inc. following its acquisition by Honeywell International (A2 senior unsecured) on July 1, 2008. As discussed in Moody's issuer comment dated April 30, 2008, in accordance with the change of control provision in the credit agreement dated April 24, 2007, all outstanding borrowings under Metrologic Instruments' $280 million senior secured credit facility have been repaid upon consummation of the transaction and the credit facility has been terminated. These ratings of Metrologic Instruments, Inc. have been withdrawn: -- Corporate Family Rating B3 -- Probability of Default Rating B3 -- $35 Million Revolving Credit Facility, rated B2 (LGD3, 36%); -- $170 Million Senior Secured First Lien Term Loan, rated B2 (LGD3, 36%); -- $75 Million Senior Secured Second Lien Term Loan, rated Caa2 (LGD5, 87%) Headquartered in Blackwood, New Jersey, Metrologic Instruments is a global vertically-integrated manufacturer of advanced bar code scanners and a provider of advanced image processing software and innovative display solutions. For the fiscal year ended Dec. 31, 2007 Metrologic Instruments reported total sales of approximately $250 million. METROPCS COMMUNICATIONS: Faces Substantial Business Risk, S&P Says ------------------------------------------------------------------ Although both Leap Wireless International Inc. (B/Stable/--) and MetroPCS Communications Inc. (B-/Positive/--) have established themselves as niche players in the wireless segment, they also face substantial business risk, given their late market entry versus the established national carriers, according to a new commentary by Standard & Poor's Ratings Services titled "Good Growth Prospects For Leap Wireless And MetroPCS Despite Vulnerable Business Positions," published earlier on RatingsDirect. "In addition, these companies' subscribers tend to be lower wage earners than average U.S. wireless users," explained Standard & Poor's credit analyst Catherine Cosentino, "and therefore their discretionary spending tends to be quite limited and unpredictable." Both Leap and MetroPCS, therefore, have very vulnerable business profiles. MICHAEL VICK: Files Chapter 11 Petition While in Federal Prison --------------------------------------------------------------- Former National Football League quarterback, Michael Dwayne Vick, filed chapter 11 petition on July 7, 2008, with the U.S. Bankruptcy Court for the Eastern District of Virginia (case number 08-50775), Bloomberg News says. Mr. Vick declared assets of between $10 million and $50 million and liabilities of between $10 million and $50 million, Bloomberg relates. Mr. Vick owes The Falcons $3.75 million; Joel Enterprises Inc. $4.5 million; and Royal Bank of Canada $2.5 million, Bloomberg says. The Debtor, who is currently in prison, was found operating a dogfighting ring and was charged with federal conspiracy in 2007, Bloomberg notes. He was subsequently suspended from the NFL without pay and dropped from corporate sponsorship, Bloomberg states. Bloomberg comments that the 28-year old former NFL star joins the list of financially ill-fated stars Mike Tyson and Riddick Bowe. According to Bloomberg, Mr. Vick's lawyers hope that their client can "rebuild his life" after the bankruptcy and probably "resume his career" at the NFL. Mr. Vick asks the Court to approve the engagement of David Talbot as his financial advisor. Career Before Indictment The Atlanta Falcons drafted Mr. Vick and he signed a six-year rookie contract worth $62 million, plus $3 million signing bonus with the team in 2001, Bloomberg notes. Shortly after his contract signing, Mr. Vick bought a property in Smithfield, Virginia, which was later used to raise pit bulls and to hold dogfights, Bloomberg says. Mr. Vick's football and dogfight careers lasted for several years, Bloomberg writes. He later earned three Pro Bowl selections, became a Madden cover athlete, his No. 7 jersey ranked second in the NFL sales, Bloomberg continues. In 2004, Mr. Vick became topped the league players after signing a 10-year extension contract of $130 million, Bloomberg relates. During a 2006 season, he became the first quarterback to run more than 1,000 yards. About Michael Dwayne Vick Michael Dwayne Vick, born June 26, 1980 in Newport News, Virginia, is a suspended National Football League quarterback under contract with the Atlanta Falcons team. In 2007, a U.S. federal district court convicted him and several co-defendants of criminal conspiracy resulting from felonious dog fighting and sentenced him to serve a 23 months in prison. He is being held in the United States Penitentiary at Leavenworth, Kansas. Mr. Vick is also under indictment for two related Virginia state felony charges for his role in the dogfighting ring and related gambling activity. His state trial has been delayed until he is released from federal prison. He faces a maximum 10-year state prison term if convicted on both counts. MRS FIELDS: Plan to Restructure $195MM Debt Stalled --------------------------------------------------- Mrs. Fields Famous Brands, LLC, disclosed in a regulatory filing with the Securities and Exchange Commission that it was not able to commence an exchange offer on June 30, 2008, as originally anticipated, as part of its plan to reorganize its business. Mrs. Fields expects to commence the Exchange Offer "within the next few weeks." Mrs. Fields announced on June 5 a plan of reorganization through an out-of-court exchange offer or a "pre-packaged" Chapter 11 filing and a plan of reorganization confirmed under the United States Bankruptcy Code, as amended. As reported by the Troubled Company Reporter on June 6, Mrs. Fields reached agreement with the holders of more than 78% of its 9% and 11-1/2% Senior Secured Notes due 2011, issued in the aggregate principal amount of $195,700,000, on the terms and conditions of a consensual financial restructuring that would reduce the company's debt obligations on account of the Senior Notes by approximately $145,700,000. Mrs. Fields, along with Mrs. Fields Financing Company, Inc., and Mrs. Fields' Original Cookies, Inc., and certain members of a committee of unaffiliated investors holding Notes have entered into restructuring support agreements, pursuant to which the parties have agreed to consummate the restructuring through an out-of-court exchange offer and a solicitation of consents to remove certain covenants from the indenture under which the Senior Notes were issued. To facilitate the consensual implementation of the restructuring, the Restructuring Support Agreements contemplate that Mrs. Fields and the Supporting noteholders would negotiate and enter into definitive documentation and commence the Exchange Offer and Consent Solicitation not later than June 30, 2008. According to the TCR report, in the event that Mrs. Fields does not receive tenders into the Exchange Offer from holders of 98% or more of the aggregate principal amount of Senior Notes, but does receive tenders from the holders of two-thirds in aggregate principal amount of the Senior Notes and one-half in number of the noteholders, the company will file voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code and seek confirmation of a pre-packaged plan of reorganization not later than Aug. 15, 2008. The company will include materials as part of the Exchange Offer requesting support of the Bankruptcy Cases, if necessary. The Restructuring Support Agreements provide for the following treatment of claims and interests through the Exchange Offer or Bankruptcy Cases, as applicable: * In exchange for tendering into the exchange offer, the Noteholders will receive a pro rata share of: (i) $90 million in cash, subject to specified downward adjustments; (ii) new senior secured notes in an aggregate principal amount of $50 million plus the amount of any cash shortfall below $90 million; and (iii) 87.5% of the new common equity to be issued on the effective date of the Exchange Offer or Bankruptcy Cases. * Holders of all other claims against Mrs. Fields will receive full payment in the ordinary course of business. * Holders of Mrs. Fields' existing common equity will be entitled to retain or receive 12.5% of the new common equity to be issued on the effective date and warrants to increase its ownership to up to a 30% stake in restructured Mrs. Fields pursuant to a pricing formula set forth in the Restructuring Support Agreements. The indicated levels of equity ownership in restructured Mrs. Fields, for both the Noteholders and Mrs. Fields' existing common equity, will be subject to dilution by a new management incentive plan and future issuances of equity. Mrs. Fields, the members of the Committee and their advisors are continuing to work together to complete the definitive documentation needed to proceed with the Exchange Offer. The members of the Committee, through their counsel, have advised Mrs. Fields that they are reserving their right to terminate their obligations under the Term Sheet by reason of the Exchange Offer not having been commenced on June 30, 2008. About Mrs. Fields Famous Brands Headquartered in Salt Lake City, Utah, Mrs. Fields Famous Brands, LLC -- http://www.mrsfields.com/-- develops and franchises retail stores which sell core products including cookies, brownies and frozen yogurt through three specialty branded concepts: Mrs. Fields, Great American Cookie company. The company has more than 1,200 franchised and licensed concept locations worldwide. At March 29, 2008, the company's balance sheet showed total assets of $147.2 million and total liabilities of $247.2 million, resulting in a total shareholders' deficit of approximately $100.0 million. Going Concern Doubt As reported in the Troubled company Reporter on April 18, 2008, KPMG LLP raised substantial doubt about the ability of Mrs. Fields Famous Brands LLC to continue as a going concern after it audited the company's financial statements for the year ended Dec. 29, 2007. The auditing firm reported that the company has suffered recurring net losses and negative cash flows from operations and has a net member's deficit at Dec. 29, 2007. * * * The Troubled Company Reporter said on June 16, 2008, that Moody's Investors Service downgraded the Probability of Default rating of Mrs. Fields Famous Brands to C from Caa2 in view of the company's entry into a binding restructuring term sheet with a majority of its senior secured notes creditors to restructure obligations under its 9% and 11-1/2% Senior Secured Notes due 2011, issued in the aggregate principal amount of $195,700,000. Subsequent to Mrs. Fields' completion of the proposed notes exchange or a filing for a Chapter 11, its PDR could likely be downgraded to "D", Moody's said. MUHLENBERG HOSPITAL: Losses Could Cue Closure by Year-End --------------------------------------------------------- The state of New Jersey is in a "gravely critical" condition as it is about to lose Muhlenberg Regional Medical Center late this year, Keith B. Richburg writes for the Washington Post. The 130- year old hospital incurred a $16.8 million loss in 2007 and is expected to incur an $18 million loss in 2008, Washington Post says. The hospital's obstetrics and pediatrics wards have been closed and the related equipment have been removed, Washington Post relates. Several elder patients will then have to travel 10 miles to get treatment, Washington Post states. Washington Post notes that 1.3 million people in New Jersey don't have health insurance. The state orders hospitals to treat anyone and get reimbursement from the state after. However, Washington Post says that New Jersey is running low on its budget and may have to reduce health care subsidies. Without the promised reimbursements, hospitals in turn have to shoulder their patients' medical expenses. Washington Post reports that six hospitals in New Jersey have shut down in the last 18 months and three hospitals that are open are financially struggling. Washington notes that according to The New Jersey Hospital Association, 77 hospitals were reimbursed with only $716 million of the $1.3 billion in medical expenses they incurred. For 15 years, hospitals absorbed a total of $6 billion in losses owed to charity-care cases, Washington Post relates. Like most hospitals, Muhlenberg's financial problems stem from the surge of uninsured patients and budget cuts for Medicaid and Medicare. Governor Signs $32.9 Billion Budget New Jersey Governor Jon S. Corzine signed an unprecedented, fiscally responsible $32.9 billion state budget for FY 2009 that prioritizes the core functions of government -- education, public safety and protection -- while also providing substantial property tax relief to homeowners. "This budget takes us through a turning point and confirms our commitment to a common sense principle of finance, often ignored, that we should spend no more than we take in," Governor Corzine said. "Make no mistake, the spending cuts are painful and bring no pleasure of applause. They didn't in February and they don't [now]. The cuts do, however, make clear that fiscal and tax stability for New Jersey's citizens is possible." The budget represents a $2.9 billion reduction in spending; reduces the size of government by 3,000 workers through early retirement and attrition; cuts the operating budgets of every state department by an average of five percent and eliminates altogether the Department of Personnel and the Commerce Commission. This budget pays down the state debt by $650 million and uses $261 million in unexpected surplus revenues to replenish the Unemployment Insurance fund, thereby avoiding a $350 million increase in business taxes. The budget provides nearly $600 million more for public education through a new, fairer funding formula that is based on students, not zip codes. It also maintains the property tax rebate program, dedicating $1.5 billion to direct tax relief for property owners with incomes up to $150,000 a year. The budget cuts $600 million from last year's spending plan, only the sixth time since 1951 the state budget has spent fewer actual dollars than in the previous year. It is far and away the largest actual dollar, year-to-year reduction in state history. In addition to the budget, Governor Corzine issued Executive Order No. 103, which requires that in all future budgets, recurring expenses by the state must match recurring revenues. "This hard fought for budget confirms the Legislature's and my commitment to resetting New Jersey's fiscal affairs. Let me be clear, the debate on this budget was challenging and we would not be taking the path we are without the cooperation, leadership and the discipline of the individuals standing with me," Governor Corzine said. A full-text copy of the release on the budget signing is available for free at http://ResearchArchives.com/t/s?2f46 About Muhlenberg Regional Medical Center Muhlenberg Regional Medical Center -- http://www.muhlenberg.com/ -- owned by Solaris Health System, is a 396-bed acute care that provides inpatient and outpatient services in all major medical specialties. Other specialized services include a complete array of cardiac services (including emergency angioplasty), a Bariatric Surgery Center, Vein Center, Lithotripsy Center,Wound Care Center, hemodialysis, home care, hospice and adult medical day care. The Medical Center also shares a collaborative relationship with the Plainfield Health Center, a federally qualified community health center serving the greater Union County area. NATIONSLINK FUNDING: Fitch Affirms 'BB' Rating on $6.6MM Certs. --------------------------------------------------------------- Fitch Ratings upgraded NationsLink Funding Corporation's commercial mortgage pass-through certificates, series 1999-SL, as: -- $7.7 million class E to 'AAA' from 'AA-'. Fitch also affirmed these classes: -- $11.6 million class C to 'AAA'; -- $14.3 million class D at 'AAA'; -- $17.6 million class F at 'BB+'; -- $6.6 million class G at 'BB'. Fitch does not rate the notional $70.9 million class X. Classes A-1, A-2, A-3, A-4, A-5, A-6, A-IV and B have paid in full. The upgrade is a result of additional paydown (29%) since Fitch's last rating action. As of the June 2008 distribution date, the pool's collateral balance has been reduced 95.1%, to $57.9 million from $1.18 billion at issuance. Although, the transaction has paid down significantly, the pool still remains diverse by property type with 278 loans of the original 2,755 remaining. The transaction's structure has reverted to standard sequential pay. The deal includes an overcollateralization feature which creates a first loss piece that absorbs any losses that otherwise would result in principal loss to the trust. The current overcollateralization amount is equal to $12.9 million (22% of the pool). To date, the overcollateralization structure of the pool has prevented any principal losses to the trust. The transaction continues to have stable performance with a history of low delinquencies. 28% of the transaction is expected to mature in 2008. The weighted average mortgage coupon for the pool is 8.26%. There are currently three (0.7%) loans in special servicing due to maturity defaults. The loans are expected to be paid in full. NBTY INC: S&P Holds 'BB' Credit Rating on Solid Credit Protection ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' long-term corporate credit rating on Ronkonkoma, New York-based NBTY Inc. In addition, S&P assigned bank loan and recovery ratings to the company's $625 million senior secured credit facility that includes a proposed $300 million first-lien term loan A due 2013, which will be added on to the company's existing $325 million revolver due 2011. The $625 million senior secured facility is rated 'BBB-', two notches above the corporate credit rating, with a recovery rating of '1', indicating an expectation of very high (90%-100%) recovery in the event of a payment default. In addition, the rating on the subordinated debt, which consists of $200 million 7.125% senior subordinated notes due 2015, remains 'BB', the same level as the corporate credit rating on NBTY. The recovery rating on these notes has been revised to '3' from '4', indicating that lenders can expect meaningful (50%-70%) recovery in the event of a payment default. The outlook remains stable. Approximately $910 million of lease- adjusted debt will be outstanding pro forma for the transaction. The ratings on the new bank facility are based on preliminary terms, subject to review upon final documentation. "The ratings affirmation takes into account NBTY's solid credit protection measures, leading market position in the vitamin, mineral, and supplement industry, diverse distribution channels, record of effectively integrating acquisitions, and opportunities to strengthen its core VMS business with the Leiner Health Products Inc. asset purchase," said Standard & Poor's credit analyst Bea Chiem. The $300 million proposed bank proceeds, along with about $75 million of cash, will be applied to purchase Leiner Health assets for about $375 million, including fees. Although somewhat weakened pro forma for the acquisition, NBTY's above-average credit protection measures provide some cushion for potential moderate sales declines that could arise from negative publicity or product liabilities or delays associated with integrating the Leiner Health assets. S&P would consider an outlook revision to positive if NBTY maintains leverage in the 2x area and funds from operations to total debt in the 30% area and does not increase leverage significantly with another large acquisition, more aggressive share-repurchase program, or a dividend payout. Alternatively, S&P would consider an outlook revision to negative if the company's financial policy becomes more aggressive, including a significant increase in leverage, or if operating performance were to weaken and leverage increased to the 3x area. Factors contributing to this scenario could include operating weakness because of negative publicity, deteriorating margins from high raw material costs, legal fees, and/or operating inefficiencies. Although highly unlikely over the near term, S&P estimate that EBITDA margins would have to decline by 300 basis points and sales decline by 29%, in order to breach a financial covenant, and cause constrained liquidity. NEW LIFE CHRISTIAN: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: New Life Christian Ministry, Inc. 3099 Humphries Dr. S.E. Atlanta, GA 30354 Bankruptcy Case No.: 08-72348 Type of business: The Debtor administers to a religious organization. Chapter 11 Petition Date: June 30, 2008 Court: Northern District of Georgia (Atlanta) Judge: Mary Grace Diehl Debtor's Counsel: Nathaniel H. Blackmon, Esq. The Blackmon Law Firm, LLC 1785 Park Place Blvd., Ste. 209 Stone Mountain, GA 30087 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 its largest unsecured creditors. NFG INTERNATIONAL: Case Summary & Seven Unsecured Creditors ----------------------------------------------------------- Debtor: NFG International, LLC 19205 Sixpenny Lane Monument, CO 80132 Bankruptcy Case No.: 08-19772 Chapter 11 Petition Date: July 8, 2008 Court: District of Colorado (Denver) Judge: Howard R. Tallman Debtor's Counsel: Jeffrey S. Brinen, Esq. Email: jsb@kutnerlaw.com 303 E. 17th Ave., Ste. 500 Denver, CO 80203 Tel: (303) 832-2400 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A copy of NFG International, LLC's list of seven largest unsecured creditors is available for free at: http://bankrupt.com/misc/cob08-19772.pdf NICE ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Nice Associates, LLC dba Nice Homes 549 Reedy Road New Bern, NC 28562 Bankruptcy Case No.: 08-04559 Type of Business: The Debtor is engaged in the construction of residential units. Chapter 11 Petition Date: July 8, 2008 Court: Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Debtor's Counsel: Trawick H. Stubbs, Jr., Esq. Email: efile@stubbsperdue.com Stubbs & Perdue, P.A. P.O. Drawer 1654 New Bern, NC 28563 Tel: (252) 633-2700 Fax: (252) 633-9600 http://www.stubbsperdue.com/ Total Assets: $5,503,092 Total Debts: $4,748,766 A copy of Nice Associates, LLC's petition is available for free at: http://bankrupt.com/misc/nceb08-04559.pdf NORTH BAY GENERAL: Case Summary & 11 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: North Bay General Hospital, Inc. 1711 W. Wheeler Ave. Aransas Pass, TX 78336 Tel: (361) 758-0503 Bankruptcy Case No.: 08-20368 Type of Business: The Debtor owns and operates a hospital. Chapter 11 Petition Date: July 8, 2008 Court: Southern District of Texas (Corpus Christi) Debtor's Counsel: Michael J Durrschmidt, Esq. Email: mdurrschmidt@hirschwest.com Hirsch & Westheimer 700 Louisiana, 25th Fl. Houston, TX 77002-2728 Tel: (713) 220-9165 Fax: (713) 223-9319 Estimated Assets: $10,000,000 to $50,000,000 Estimated Debts: $10,000,000 to $50,000,000 Debtor's 11 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Reliant Energy $360,000 P.O. Box 120954 Dallas, TX 75312-0954 McClain, Maney & Patchin, P.C. $338,426 711 Louisiana, Ste. 3100 Houston, TX 77002 Internal Medicine Associates $335,568 160 S. 13th St., Ste. B. Aransas Pass, TX 78336 Corpus Christi Medical Center $326,828 (Lab) 3315 S. Alameda Corpus Christi, TX 78411 HCA $309,802 One Park Plaza Nashville, TN 37203 Alliance Imaging, Inc. $255,840 File 55826 Los Angeles, CA 90074-5826 Constellation New Energy, Inc. $253,946 P.O. Box 840159 Dallas, TX 75284-0159 Sunstone Behavioral Health $250,722 Serv., LLC P.O. Box 415000 Nashville, TN 37241-5000 San Patricio County Tax $242,182 Assessor-Coll. Hewlett-Packard Financial $114,199 Services Specialcare Hospital $114,199 Management Corp. NORTHEAST BIOFUELS: S&P Keeps $140MM 'B' Loan Rating on Neg. Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services said that its 'B' rating on Northeast Biofuels LLC's $140 million senior secured term loan remains on CreditWatch with negative implications, pending further review. On July 2, 2008, the lenders approved a second waiver and consent agreement following further delays in construction of a dry-mill ethanol facility in Fulton, New York. Construction is now nine months delayed, and increased refinancing risk, as well as additional concerns regarding liquidity prior to, and following construction completion, could put further downward pressure on the rating. S&P expect to resolve the CreditWatch listing after a more extensive review of documents and financial analysis. OFFICE DEPOT: Projected Sales Decline Cues S&P's Neg. Watch ----------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB+' corporate credit and other issue ratings on Delray Beach, Florida-based Office Depot Inc. on CreditWatch with negative implications. "This action follows the announcement that the company projects a continued decline of sales and earnings in the second quarter of 2008," said Standard & Poor's credit analyst Mark Salierno, "driven by weakness in the company's North American Retail segment." Office Depot indicated that same-store sales during the quarter declined 10% from the prior year, and that EBIT margins were 200 to 250 basis points weaker than anticipated. ONE EQUITY: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: One Equity, LLC 412 E. Sixth Ave. Altoona, PA 16602 Bankruptcy Case No.: 08-70750 Chapter 11 Petition Date: July 8, 2008 Court: Western District of Pennsylvania (Johnstown) Debtor's Counsel: John M. Haschak, Esq. Email: jhaschak@lhrklaw.com Leventry and Haschak, LLC Richland Square III Ste. 202 1397 Eisenhower Blvd. Johnstown, PA 15904 Tel: (814) 266-1799 http://lhrklaw.com/index2.html Estimated Assets: $500,000 to $1 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of its largest unsecured creditors. PANACEA PARTNERS: Files for Chapter 11 Protection in Illinois ------------------------------------------------------------- Panacea Partners LLC filed a voluntary Chapter 11 petition with the United States Bankruptcy for the Northern District of Illinois, Lorene Yue of Chicago Business reports. "[The company] needs to reorganize its financial affairs . . . it wasn't profitable enough," the report quoted Panacea's counsel Michael Collins as saying. "The whole point of this proceeding is to keep it going," Mr. Collins adds. Ms. Yue citing papers filed with the Court, says the company owed at least $750,000 in claims to the Internal Revenue Service. In April, the Securities and Exchange Commission accused Jason Hyatt, a principal in Panacea, for swindling at least $5.4 million in funds, wherein $2 million of which was used to open the company, while the remaining balance was paid to mortgages and to buy personal property, Ms Yue says. The SEC complaint, reports relates, also accused BCI Aircraft Leasing Inc. and its owner, Brian Hollnagel. The SEC asserted that some of the money Mr. Hyatt took was invested into BCI Aircraft. Panacea Partners LLC operates a restaurant at 465 E. Illinois street. PANACEA PARTNERS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Panacea Partners, LLC 465 East Illinois Street Chicago, IL 60611 Bankruptcy Case No.: 08-17391 Related Information: Michael Demnicki, member and manager, filed the petition on the Debtor's behalf. Chapter 11 Petition Date: July 7, 2008 Court: Northern District of Illinois (Chicago) Judge: Eugene R. Wedoff Debtor's Counsel: Michael R. Collins, Esq. (michael.collins@collinsandcollins.com) Collins & Collins 8 South Michigan Ave., Suite 1414 Chicago, IL 60603 Tel: (312) 201-8700 Ext. 18 Fax : 312 606-0234 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A list of the Debtor's unsecured creditors is available for free at http://bankrupt.com/misc/ilnb08-17391.pdf PARE-1 LLC: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Pare-1, LLC 5100 Corporate Drive Pittsburgh, PA 15237 Bankruptcy Case No.: 08-24463 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- FD PA 1, LLC 08-24466 FD PA 2, LLC 08-24134 Debtor-affiliate that filed separate Chapter 11 petitions on June 24, 2008: Entity Case No. ------ -------- Pare-2, LLC 08-24126 Chapter 11 Petition Date: July 8, 2008 Court: Western District of Pennsylvania (Pittsburgh) Debtors' 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 Debtors did not file a list of their 20 largest unsecured creditors. PAUL DUBIA: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Paul Alan Dubia Angela Marie Dubia 12408 Del Vino Court San Diego, CA 92130 Bankruptcy Case No.: 08-06227 Chapter 11 Petition Date: July 7, 2008 Court: Southern District of California (San Diego) Debtor's Counsel: John L. Smaha, Esq. (jsmaha@smaha.com) Smaha Law Group, APC 7860 Mission Center Court, Suite 100 San Diego, CA 92108 Tel: (619) 688-1557 Fax : (619) 688-1558 Estimated Assets: $1,647,000 Estimated Debts: $5,080,023 A list of the Debtor's unsecured creditors is available for free at http://bankrupt.com/misc/casb08-06227.pdf PENN NATIONAL: S&P Cuts Credit Facilities Rating to BB+ from BBB- ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its issue-level rating on Penn National Gaming Inc.'s senior secured credit facilities to 'BB+' from 'BBB-'. The recovery rating on these loans remains unchanged at '1', indicating that lenders can expect very high (90% to 100%) recovery in the event of a payment default. At the same time, Standard & Poor's raised its issue-level rating on Penn National's subordinated debt to 'BB-' from 'B+'. A recovery rating of '3' was assigned to these securities, indicating that lenders can expect meaningful (50% to 70%) recovery in the event of a payment default. All of Penn National's issue-level ratings were removed from CreditWatch, where they were placed on June 15, 2007, following the company's agreement to be acquired. The issue-level rating actions were made in conjunction with the affirmation and removal from CreditWatch of the corporate credit rating on the company. At the time of its CreditWatch listing, S&P lowered its corporate credit rating on the company to 'BB-' from 'BB', but did not lower the issue-level ratings on the individual debt instruments. The absence of a rating downgrade reflected the planned repayment of Penn National's outstanding debt. Now that the transaction has been terminated, the lower issue-level rating on the secured credit facilities reflects the standard notching criteria based on its recovery rating scale and issue-level rating framework, while the higher subordinated debt issue-level rating reflects the extension of this criteria to speculative-grade unsecured debt issues. Ratings List Penn National Gaming Inc. Corporate Credit Rating BB-/Negative/-- Issue-Level Rating Actions To From -- ---- Penn National Gaming Inc. Senior Secured BB+ BBB-/Watch Neg Recovery Rating 1 1 Subordinated BB- B+/Watch Neg Recovery Rating 3 NR NR -- Not rated. PRESIDENTIAL LIFE: Moody's Hikes Debt Rating to B1; Outlook Pos. ---------------------------------------------------------------- Moody's Investors Service has upgraded the senior debt rating of Presidential Life Corporation to B1 from B2. Moody's has also raised the insurance financial strength rating of its subsidiary, Presidential Life Insurance Company, to Ba1 from Ba2. All the ratings have a positive outlook. These actions conclude the review for possible upgrade that was initiated on April 17, 2008. "This rating action is primarily based upon an improvement in PLFE's corporate governance profile as well as in its financial reporting capabilities, capital adequacy, and financial flexibility," Arthur Fliegelman, vice president and senior credit officer, said. Moody's said that PLFE has made recent improvements in its corporate governance profile, including the addition of three new directors to the PLFE board. These corporate governance initiatives are expected to be ongoing, but the transition to a new president and chief executive officer of PLFE are not expected to be fully completed until May 2009. The rating agency noted that it expects that the implementation of these management changes will be relatively smooth and non- disruptive to the company's operations. According to the rating agency, improvements in PLFE's credit profile have included the availability of additional internal and external accounting expertise; substantial increases in Presidential Life's reported statutory capital; paydowns of outstanding PLFE debt; and the ongoing implementation of a more robust asset/liability management program, as well as the introduction of an early-stage enterprise risk management framework to the organization. "Despite these improvements," Mr. Fliegelman said. "PLFE faces intense competition in its core business where it faces larger competitors benefiting from more favorable name recognition and sale advantages." PLFE also remains challenged by the relatively modest scale of its product lines in a consolidating industry. Additionally, a significant majority of PLFE's sales take place in a single state, New York, and they are heavily weighted to a single product, fixed annuities. Moody's noted that the positive outlook for PLFE and Presidential Life is based primarily on the expected implementation of additional corporate governance improvements over the next 12 to 18 months, which would put upward pressure on the ratings. These expected changes include: (1) the execution of the above discussed executive management changes at PLFE and Presidential Life; (2) the addition of new independent PLFE directors with meaningful senior leadership experience; (3) the eventual succession of the PLFE chief executive officer title from the current incumbent; and (4) the continued development of an ongoing management succession plan. The rating agency also explained that the ratings could be changed back to stable if these occurred: (a) the above enumerated corporate governance changes do not take place on the expect timeframe; (b) loss of a significant number of independent distribution agents; (c) Presidential Life's NAIC RBC falling below 300% of its company action level; (d) cash flow coverage of holding company interest expense below two times; or (e) adjusted financial leverage above 35%. These ratings were upgraded, with a positive outlook: -- Presidential Life Corporation -- senior unsecured debt, to B1 from B2. -- Presidential Life Insurance Company -- insurance financial strength, to Ba1 from Ba2. Headquartered in Nyack, New York, PLFE is an insurance organization. As of March 31, 2008, PLFE reported total assets of approximately $4.1 billion and stockholders' equity of approximately $646 million. Moody's insurance financial strength ratings are opinions of the ability of insurance companies to punctually repay senior policyholder claims and obligations. PUTNAM STRUCTURED: Moody's Replaces and Affirms Ratings on Notes ---------------------------------------------------------------- Moody's Investors Service has withdrawn and replaced the ratings on these notes issued by Putnam Structured Product Funding 2003-1 Ltd: Class Description: $363,000,000 Class A1 Floating Rate Notes Due October 2038 -- Prior Short-term Rating: P-1 -- Current Short-term Rating: WR Class Description: Class A-1ST-a Notes -- Prior Short-term Rating: P-1 -- Current Short-term Rating: WR -- Prior Long-term Rating: NR -- Current Long-term Rating: Aaa Class Description: Class A-1ST-b Notes -- Prior Short-term Rating: P-1 -- Current Short-term Rating: WR -- Prior Long-term Rating: NR -- Current Long-term Rating: Aaa Class Description: Class A-1ST-c Notes -- Prior Short-term Rating: P-1 -- Current Short-term Rating: WR -- Prior Long-term Rating: NR -- Current Long-term Rating: Aaa In addition Moody's has confirmed its rating on these notes: Class Description: $22,000,000 Class C Notes Due October 2035 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ba2 According to Moody's, the Prime-1 ratings assigned to the Class A1, A-1ST-a, A-1ST-b and A-1ST-c Notes were based on the existence of a put agreement provided by a Prime-1 rated third party. The notes have been re-issued with the put provider as both the investor and the put counterparty. Where the put provider is also the holder of the notes, it is Moody's view that the put agreement ceases to be relevant. Accordingly, Moody's has withdrawn its short-term ratings on these notes. In place of the short-term ratings issued on these notes, Moody's has issued long-term ratings of Aaa. SALEM PLAZA: Case Summary & Two Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Salem Plaza, LLC 2105 Michael Sterling Heights, MI 48310 Bankruptcy Case No.: 08-56415 Chapter 11 Petition Date: July 8, 2008 Court: Eastern District of Michigan (Detroit) Judge: Phillip J. Shefferly Debtor's Counsel: Martin P. Krall, Jr., Esq. Email: mpkrall@kralllaw.com 25235 Gratiot Ave. Roseville, MI 48066 Tel: (586) 779-8900 http://kralllaw.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A copy of Salem Plaza, L.L.C.'s petition is available for free at: http://bankrupt.com/misc/mieb08-56415.pdf SALS 2007: Moody's Cuts Rating of $20MM Notes Due 2017 ------------------------------------------------------ Moody's Investors Service has downgraded the rating on these notes issued by SALS 2007-3 (Series 4657): Class Description: $20,000,000 SALS 2007-3 Notes due June 20, 2017 -- Prior Rating: A3, on watch for possible downgrade -- Current Rating: Ba2 According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of corporate securities. SALS B-2005: Moody's Junks Rating on Floating Rate Notes Due 2012 ----------------------------------------------------------------- Moody's Investors Service has downgraded the rating on these notes issued by SALS B-2005-1: Class Description: $9,000,000 Floating Rate Notes due June 20, 2012 -- Prior Rating: Ba2, on watch for possible downgrade -- Current Rating: Caa2 According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of corporate securities. SHANGHAI CENTURY: Shareholders Okay Borrelli Walsh as Liquidators ----------------------------------------------------------------- Shanghai Century Acquisition Corporation disclosed that the proposal to appoint Cosimo Borrelli and Jacqueline Walsh, both of Borrelli Walsh Limited, to act as liquidators of the company was approved by the shareholders of Shanghai Century at its general and extraordinary meeting held on July 8, 2008. On May 28, 2008, the Shanghai Century board of directors filed a Notice of Dissolution and a Declaration of Solvency with the Cayman Islands' Registrar of Companies, in addition to publishing in the Cayman Islands' Gazette, a notice to all possible creditors of the company's voluntary winding-up and distribution of assets. The liquidators will undertake their own independent assessment of the company's creditors and evaluation of claims. The board considered it advisable for an independent liquidator to be appointed, which under Cayman Islands' law requires shareholder approval. The Liquidators' responsibilities include, but are not limited to, undertaking an independent assessment, evaluation and settlement of the company's creditors; and making pro rata distributions to the holders of securities from the trust account of the company into which the net proceeds of the company's initial public offering were deposited plus: (i) one-half of the interest earned on the Trust Account and (ii) any remaining net assets. The per share distribution amount will not be determined until after the Liquidators have evaluated and paid the creditors' claims and may be less than the initial public offering price of $8.00 per unit, assuming the entire amount of the Trust Account is available for distribution. No payments will be made in respect of the outstanding warrants or to any of its initial shareholders with respect to the shares owned by them prior to the initial public offering. Mr. Borrelli is a chartered accountant with over 20 years of experience in formal and informal corporate restructuring, insolvency, forensic accounting and financial investigations. Ms. Walsh is a qualified lawyer in Hong Kong and the United States with over 14 years of experience in formal and informal corporate restructuring, insolvency, court and private receiverships and financial investigations. Shanghai Century Acquisition Corporation was formed for the purpose of acquiring, through a share exchange, asset acquisition or other similar business combination, or control through contractual arrangements, an operating business having its primary operations in China. Shanghai Century Acquisition Corporation's principal offices are in Hong Kong. About Shanghai Century Acquisition Corporation Headquartered in Hong Kong, Shanghai Century Acquisition Corporation (AMEX: SHA) -- http://www.shanghaicenturyacquisiti... -- is a blank check company formed to serve as a vehicle for the acquisition of an operating business that has its primary operating facilities in the People's Republic of China, including the Hong Kong Special Administrative Region and the Macau Special Administrative Region, but excluding Taiwan. It was formed to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition or other similar business combination with an operating business. SIMPLON BALLPARK: Wants to File Chapter 11 Plan Until August 18 --------------------------------------------------------------- Simplon Ball Park, LLC asks the Hon. James W. Meyers of the U.S. Bankruptcy Court for the Southern District of California to extend its exclusive periods to file a Chapter 11 plan and solicit acceptances of that plan until Aug. 18, 2008. The Debtor tells the Court that it has not proposed a Chapter 11 plan since it filed for bankruptcy on March 4, 2008. The requested extension of time will allow the Debtor to propose and file a Chapter 11 plan in the event its proposed refinancing is not approved by the Court, the Debtor explains. The Debtor's exclusive period to file a Chapter 11 plan expired on July 3, 2008. A hearing is set for Aug. 13, 2008, at 2:30 p.m., to consider the Debtor's request. About Simplon Ballpark Headquartered in San Diego, California, Simplon Ballpark, LLC is a real estate developer. The company filed for Chapter 11 protection on March 4, 2008 (Bankr. S.D. Calif. Case No. 08- 01803). Hanno T. Powell, Esq. at Powell & Pool represents the Debtor. The U.S. Trustee for Region 16 has not appointed creditors to serve on an Official Committee of Unsecured Creditors. When it filed for protection from its creditors, the company listed assets of between $100 million and $500 million and debts of between $100 million and $500 million. SIMPLON BALL: Unsec. Creditors to Get $2.4MM Under Proposed Loan ---------------------------------------------------------------- Simplon Ballpark LLC asks the Hon. James W. Meyers of the United States Bankruptcy Court for the Southern District of California to: a) approve a proposed refinancing of the Debtor's real property located in downtown Sand Diego adjacent to Petco Park; and b) conditionally dismiss its Chapter 11 proceeding upon the funding and payment in full of the secured lien held by SDG-Left Field, LLC, and the Debtor's unsecured creditors owed $2,400,000 in claims. The Debtor says it has a new $40 million loan from Providence Funding Inc., as lender, secured by a new first trust deed to the property, pursuant to a commitment letter dated April 30, 2008. The proceeds of the loan will be used to: -- pay the existing $15,000,000 first deed of trust to the Debtor's property owed to SDG-Left; -- reduce the $13,500,000 second deed of trust to the property owed to Scripps Investment & Loan Inc. secured by its second trust deed; -- pay certain accrued interest to junior lienholders; and -- pay unsecured creditors. The Debtor's property is encumbered by a $37,000,000 in deeds of trust securing loans and a $1,500,000 in mechanic's liens. The loan agreement provides, among other things: (i) payment of a $1,000,000 commitment fee, and (ii) payment of a $20,000 deposit to Providence Funding's legal fees in the transaction. The Debtor assures the Court that SDG-Left's claims is adequately protected. SDG-Left's claims will be paid in full from the proceeds of the loan. A hearing is set for July 16, 2008, to consider the Debtor's requests. About Simplon Ballpark Headquartered in San Diego, California, Simplon Ballpark, LLC is a real estate developer. The company filed for Chapter 11 protection on March 4, 2008 (Bankr. S.D. Calif. Case No. 08- 01803). Hanno T. Powell, Esq. at Powell & Pool represents the Debtor. The U.S. Trustee for Region 16 has not appointed creditors to serve on an Official Committee of Unsecured Creditors. When it filed for protection from its creditors, the company listed assets and debts both between $100 million to $500 million. SOUTHAVEN POWERS: Court Sets July 22 as Plan Objection Deadline --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of North Carolina set July 22, 2008, 4:00 p.m., Eastern Time, as deadline to file objections to the confirmation of Southaven Powers LLC's Chapter 11 Plan of Reorganization. On June 26, 2008, the Debtor delivered to the Court its Chapter 11 plan of reorganization. Overview of the Plan The Debtor's proposed plan contemplates that all property of the Debtor will be free and clear of all claims, equity interest, liens, charges or other encumbrances. Separately, the Court has extended to Dec. 10, 2008, the exclusive period within which the Debtor may file a plan of reorganization. The Court also extended the plan solicitation period until Feb. 11, 2009. The plan deems a claim or equity interest be classified in classes to the extent that the claim or equity interest is allowed in that class and has not been paid or otherwise settled prior to the effective date. The Debtor says that it will assume executory contracts and unexpired leases and any monetary amounts in connection with these contracts and leases will be satisfied. The Debtor will make the distribution of claims on the effective date of the plan. Treatment of Claims Administrative claims will be paid full in cash. Each holder of an allowed general unsecured claims unsecured claim will receive, in full and final satisfaction of the claim, cash in full amount plus accrued interest on account of the claim. All equity interest will be reinstated in their entirety on the effective date of the plan. A full-text copy of the Debtors' Chapter 11 Plan of Reorganization is available for free at: http://ResearchArchives.com/t/s?2f4b The Honorable George R. Hodges will convene a hearing to consider the plan on Wednesday, July 30, 2008, 9:30 a.m., Eastern Time at 401 West Trade street, Charlotte, North Carolina. For information on the filing of objections, you may contact: Moore & Van Allen PLLC Attn: Ben Hawfield Hillary B. Crabtree Jeremy Dunn 100 North Tryon Street, Suite 4700 Charlotte, NC 28202 Tel (704) 331-1000 Fax (704) 331-1159 or Latham & Watkins LLP Attn: Mark A. Broude Caroline A. Reckler 85 Third Avenue, Suite 1000 New York, NY 10022-4834 Tel (212) 906-1200 Fax (212) 751-4864 About Southaven Power LLC Headquartered in Charlotte, North Carolina, Southaven Power LLC operates an 810-megawatt, natural gas-fired electric power plant located in Southaven, Mississippi. The company filed for chapter 11 protection on May 20, 2005 (Bankr. W.D.N.C. Case No. 05-32141). Mark A. Broude, Esq., at Latham & Watkins LLP represents the Debtor in its restructuring efforts, and Hillary B. Crabtree, Esq., at Moore & Van Allen, PLLC, represents the Debtor in litigation against PG&E Energy Trading-Power L.P, now known as NEGT Energy Trading - Power L.P. No official committee of unsecured creditors has been appointed in the Debtor's case. When the Debtor filed for protection from its creditors, it estimated assets and debts of more than $100 million. SSG LLC: Chapter 11 Case Converted to Chapter 7 Liquidation ----------------------------------------------------------- Parties with claims against the assets of the St. Stephen the Great Ltd., aka SSG LLC, will meet on July 22, 2008, at the U.S. Bankruptcy Court for the Southern District of Texas (Houston), The Bookseller says. SSG LLC owners, Philip and Mark Brewer, filed for chapter 11 reorganization three weeks ago, The Bookseller notes. But that case was subsequently converted to a chapter 7 liquidation proceeding, The Bookseller quotes Bankruptcy Court clerk Verlie Rios as saying. The Debtor's employees have not received their salaries for June, shopworkers union Usdaw said, according to The Bookseller. The union is posed to file 30 tribunal claims over contract changes, The Bookseller notes. Usdaw spokesperson said their legal advisors are contacting the Brewers and probing "the legality of the bankruptcy" petition, The Bookseller writes. Steve Jeynes, former SSG LLC manager, allegedly committed suicide and was found dead this week, The Bookseller reveals. Mr. Jeynes used to handle the Worcester branch until he was fired two weeks ago, The Bookseller adds. St. Stephen the Great Ltd., aka SSG LLC, is a Christian charity and bookseller. A blog by Dave Walker at wordpress -- http://cartoonchurch.wordpress.com/2008/06/10/who-are-the-enc- management-company/ -- reveals that the Philip and Mark Brewer, together with Sandra and Karen Ellen Brewer, are the same people composing the management of several other entities including the Durham Cathedral Shop Management Co., Chichester Shop Management Co., and ENC Shop Management Co., a European company that operates most SPCK bookshops. SSG LLC's site at -- http://www.spckbookshops.org/-- is no longer accessible. STEVE & BARRY'S: Files for Chapter 11 Bankruptcy in Manhattan ------------------------------------------------------------- Steve & Barry's LLC and 63 of its affiliates disclosed that they have initiated cases under Chapter 11 of the U.S. Bankruptcy Code before the United States Bankruptcy Court for the Southern District of New York, to address the company's financial challenges. Steve & Barry's stores and operations across the nation, including its 276 retail locations, are open and conducting business as usual. The company's gift cards and store credits will continue to be honored as always, and its return policies will remain in place. The company said that the commencement of the Chapter 11 cases was based on a combination of factors, including a liquidity shortfall as a result of credit market volatility and general economic conditions, which, in turn, have impacted the company's store opening plans and borrowing capacity. The company stated it has performed very well from a sales perspective, with total sales in the first five months of 2008 up 70%, average store sales up 25%, and comparable store sales up 15%. In particular, its exclusive branded lines of merchandise created with high-profile entertainers and athletes have performed exceptionally well. As part of the Chapter 11 process, the company is moving forward with operational improvements in tandem with exploring a potential sale of the company and its assets, to repay outstanding debt. The operational improvements include taking immediate steps to reduce expenses through staff reductions, office consolidations, and other actions. Steve & Barry's began this initiative with the reduction of 172 corporate and field staff positions. The company also filed customary "First Day" motions to support its employees, customers and suppliers by providing for the company's corporate and field associates to continue to be paid in the usual manner, and for their medical, dental, life insurance, disability and other benefits to continue without disruption. Suppliers will be paid under normal terms for goods and services provided after the filing date of July 9, 2008. The company has obtained an agreement from its secured lenders to use cash collateral for its operating needs. "Steve & Barry's opened its first store 23 years ago with the mission of providing affordable, quality clothing to everyone," Steve & Barry's founders and co-CEOs Steve Shore and Barry Prevor commented. "This mission has grown beyond our wildest dreams, providing our customers with 80 million units of affordable clothing and accessories during the past year alone - including products designed and endorsed by celebrities who have believed in our vision." "Every one of these lines has met with great success," they added. "BITTEN(TM), by Sarah Jessica Parker, transformed our stores overnight into a destination for women shoppers and has grown at an unprecedented pace since its launch in June 2007." "Unfortunately, in the current credit and economic environment, this has not been enough, they said. "High costs of materials and fuel prices have increased our cost of goods and cost of operating." "Our customers are feeling the pain of high food and gas prices and declining home values, and many of them are being forced to shop closer to their homes and cut back on discretionary purchases, they stated. "The generally poor environment for apparel retailers has reduced funding to our suppliers, landlords, and to our company. It has become increasingly difficult for us to continue operating normally under these circumstances. "Every member of our management team has been devastated by these events and is deeply sorry to all of our employees and partners who have been affected by the Chapter 11 filing," they ended. About Steve and Barry LLC Headquartered in Port Washington, New York, Steve and Barry LLC -- http://www.steveandbarrys.com/-- is a national casual apparel retailer that offers high quality merchandise at low prices for men, women and children. Founded in 1985, the company operates 276 anchor and junior anchor shopping center and mall-based locations throughout the U.S. At STEVE & BARRY'S (R) stores, shoppers will find brands they can't find anywhere else, including the BITTEN(TM) collection, the first-ever apparel line created by actress and global fashion icon Sarah Jessica Parker, and the STARBURY(TM) collection of athletic and lifestyle apparel and sneakers created with NBA (R) star Stephon Marbury. STEVE & BARRY'S: Case Summary & 30 Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: Steve & Barry's Manhattan,, LLC 131 W. 33rd St. 15th Fl. New York, NY 10001 Bankruptcy Case No.: 08-12579 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- 4004, Inc. 08-12580 4004, LLC 08-12581 Baller Brands, LLC 08-12582 Favored Brands, LLC 08-12583 Pro Air, LLC 08-12584 S&B Industries Inc. 08-12585 S&B Retail China, LLC 08-12586 S&B Retail India, LLC 08-12587 Star Band, LLC 08-12589 Steel Bolt Construction, LLC 08-12590 Stellar Brands, LLC 08-12591 Steve & Barry's Alabama, LLC 08-12592 Steve & Barry's Arizona, LLC 08-12593 Steve & Barry's Arkansas, LLC 08-12594 Steve & Barry's California, LLC 08-12595 Steve & Barry's Colorado, LLC 08-12596 Steve & Barry's Connecticut, LLC 08-12599 Steve & Barry's CP, LLC 08-12600 Steve & Barry's Florida, LLC 08-12601 Steve & Barry's Georgia, LLC 08-12602 Steve & Barry's GLC, LLC 08-12603 Steve & Barry's Hawaii, LLC 08-12604 Steve & Barry's Idaho, LLC 08-12605 Steve & Barry's Illinois, LLC 08-12607 Steve & Barry's Indiana, LLC 08-12609 Steve & Barry's International, LLC 08-12610 Steve & Barry's Iowa, LLC 08-12611 Steve & Barry's Kansas, LLC 08-12612 Steve & Barry's Kentucky, LLC 08-12613 Steve & Barry's, LLC 08-12615 Steve & Barry's Louisiana, LLC 08-12616 Steve & Barry's Maine, LLC 08-12617 Steve & Barry's Maryland, LLC 08-12618 Steve & Barry's Massachusetts, LLC 08-12619 Steve & Barry's Michigan, LLC 08-12620 Steve & Barry's Midwest, LLC 08-12621 Steve & Barry's Minnesota, LLC 08-12622 Steve & Barry's Mississippi, LLC 08-12623 Steve & Barry's Missouri, LLC 08-12624 Steve & Barry's Nebraska, LLC 08-12625 Steve & Barry's Nevada, LLC 08-12626 Steve & Barry's New Jersey, LLC 08-12627 Steve & Barry's New Mexico, LLC 08-12628 Steve & Barry's New York, LLC 08-12629 Steve & Barry's North Carolina, LLC 08-12630 Steve & Barry's Oakland, LLC 08-12631 Steve & Barry's Ohio, LLC 08-12632 Steve & Barry's Oklahoma, LLC 08-12633 Steve & Barry's Pennsylvania, LLC 08-12634 Steve & Barry's South Carolina, LLC 08-12635 Steve & Barry's South Michigan, LLC 08-12637 Steve & Barry's Tennessee, LLC 08-12638 Steve & Barry's Texas, LLC 08-12639 Steve & Barry's Utah, LLC 08-12640 Steve & Barry's Virginia, LLC 08-12641 Steve & Barry's Washington, LLC 08-12642 Steve & Barry's West Virginia, LLC 08-12643 Steve & Barry's Wisconsin, LLC 08-12644 Stone Barn, LLC 08-12645 Stone Barn Trading, LLC 08-12646 Striking Brands, LLC 08-12647 Swift Building, LLC 08-12648 Symbolic Brands, LLC 08-12649 Type of Business: The Debtors operate a retail clothing chain, featuring casual apparel. As of 2007, they operate more than 200 stores in more than 30 U.S. states. See http://www.steveandbarrys.com/ Chapter 11 Petition Date: July 9, 2008 Court: Southern District of New York (Manhattan) Judge: Allan L. Gropper Debtors' Counsel: Lori R. Fife, Esq. Email: lori.fife@weil.com Shai Waisman, Esq. Email: shai.waisman@weil.com Weil, Gotshal & Manges, LLP 767 5th Ave. New York, NY 10153 Tel: (212) 310-8318, (212) 310-8274 Fax: (212) 310-8007 http://www.weil.com/ Financial advisors: Conway, Del Genio, Gries & Co., LLC Investment bankers: Goldman Sachs Group, Inc. Claims agent: Epiq Bankruptcy Solutions, LLC Attn: Steve and Barry's Claims Processing 757 3rd Ave., 3rd Fl. New York, NY 10017 Debtors' Consolidated Financial Condition: Total Assets: $693,492,000 Total Debts: $638,086,000 Debtors' Consolidated List of 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Zheng Yong Trade Debt $3,919,404 Attn: Debbie P.O. Box 337, Gege Rd. Nhlangano, Kingdom of Swaziland Tel: 002682077659 Fax: 002682077582 Texport Syndicate Trade Debt $3,258,030 Attn: Anuj Goenka Sub Plot No. 6., Plot No. F11/F12, Western Ind. CO-OP Estate, Midc., Andheri (E), Mumbai-400 093. Tel: 91-22-28395601 Fax: 91-22-28368728 Yixing City (J.J.Garments) Trade Debt $2,535,507 Attn: Joanna Rm. 801, 251 Xiaomuqiao Rd., Shanghai, China Tel: 0086-021-64438227-806 Fax: 0086-021-64436030 Gildan Active Wear Srl Trade Debt $2,488,722 Attn: Asha Weeks 600 de Maissonneuve W. Quebec, H3A, 3J2 Canada Tel: 514-735-2023 Fax: 514-735-6810 Simon Property Group Leases $2,153,712 Attn: Jackie S. Mason, General Counsel 225 W. Washington Indianapolis, Indiana 46204 Tel: (317) 263-7620 Fax: (317) 263-7038 Atraco Inds.�Ashton Trade Debt $2,140,676 Attn: Manan Kapasi Atraco Industrial Enterprise P.O. Box 16798 Jebel Ali, Dubai, UAE Tel: 0097148812686 Fax: 0097148818042 Agi Logistics Trade Debt $2,085,624 Attn: James Minutello P.O. Box 3203 Buffalo, NY 14240-3203 Tel: (718) 656-5500 Fax: (718) 947-0164 B&B Contractors, Inc. Trade Debt $1,796,091 dba The Bergman Companies Attn: Bill Bohn, Vice-President of Construction 4300 Edison Ave. Chino, CA 91710 Tel: (830) 899-3348 Fax: (830) 899-3358 Alstyle Apparel Trade Debt $1,722,547 Attn: Tod Scarborough, President 1501 East Cerritos Ave. Anaheim, CA 92805 Tel: (714) 765-0400 Fax: (714) 765-0450 Destination Apparel Trade Debt $1,367,830 Attn: Arun Shakti Vinayak Marg, Gairi Gaoun-9-Kathmandu-Bagmati Zone-148-977-0 Tel: 977-1-4220073 Fax: 00977-1-4226021 Weihai Jucheng Trade Debt $1,344,189 Attn: Susan/Susansui No. 105 Hengtai St., Hi-Tech Zone, Weihai, China Tel: 0631-5696001 Fax: 0631-5606010 Sonal Garments Trade Debt $1,222,385 Attn: Pravin Agarwal/Sapna 134-A, Mittal Ct., 224 Nariman Pt., Mumbai-400 021 Tel: 30414014, 30913459 Fax: 91-22-56308276 CBL & Associates Management, Leases $1,202,546 Inc. Attn: Victoria Berghel, General Counsel, & Howard Grody, Vice-President of Mall Leasing CBL Ctr., Ste. 500 2030 Hamilton Place Blvd. Chattanooga, Tennessee 37421-6000 Tel: (423) 490-8684, (423) 490-8317 Fax: (423) 893-4388, (423) 490-8629 General Growth Management, Leases $1,196,266 Inc. Attn: Thomas K. Hornacek, General Counsel Re: Centerpointe Mall 110 N. Wacker Dr. Chicago, IL 60606 Tel: (312) 960-2741 Fax: (312) 960-5476 Bombay Rayon Fashion Trade Debt $1,183,477 Attn: Prashant/Nazim D-1st Flr., Oberoi Garden Estate, Chandivali, Andheri (East), Mumbi 40059 Tel: 91-22-56955566 Fax: 91-22-28476992 Kaytee Corp. Trade Debt $1,174,298 Attn: Premal 51, Sakhar Bhavan, 5th Mumbai-400 021, India Floor, Nariman Point, Tel: (0091-22) 22837123, (0091-22) 22837124 (0091-22) 56308934 (0091-22) 56308938 Fax: 0091-22-22842243 Ami Apparels Trade Debt $1,145,877 Attn: Arun P.O. Box 3263, 2nd Flr., 'Y' Block, 380-381, Kathmandu Plaza Kamaladi, Kathmandu, Nepal Tel: 4241437, 4255956 Fax: 227538, 249392 Zhuhai Wintop Trade Debt $1,141,710 Attn: Michael 1-3-601 No. 372 Qinglu South Rd., Jida, Zhuhai Tel: 0086-756-3328546 Fax: 0086-756-8895372 International British Trade Debt $970,714 Garments Co. Ltd. (Mft.) Attn: Sudhir P.O. Box 96, Ad Dulayl, Amman Tel: 962-5-3825114 Fax: 962-5-3824270 American Express Corporate Trade Debt $944,045 Green Card Attn: Toni Specht American Express Corporate Services Director, Account Development 2965 W. Corporate Lakes Weston, FL 33331-3626 Tel: (623) 581-7203 Fax: (480) 837-2112 Yixing City Huachuang Trade Debt $925,605 Attn: Joanna Imp. & Exp. Co. Ltd. Room 801, 251 Xiaomuqiao Rd., Shanghai, China Tel: 0086-021-64438227-806 Fax: 0086-021-64436030 Excel Apparels Trade Debt $912,668 Attn: Deepak/Vincy/Bhaskar Menon 6, Sri Kanchi Kamatchi Nagar, K.P. Pudur (Opp;Velan Hotel), Kangayam Rd., Tirupur-641604 India Tel: 24216211, 24216213 Fax: 91-022-24370968 Rolex Garments Epz., Ltd. Trade Debt $863,600 Attn: Mr. Moti Karnani, Director, & Rajesh Gehani P.O. Box No 10, Athi- River, Kenya Tel: 2544522039, 2544522162, 2544522031 Fax: 2544522139 Samrat Gems Trade Debt $862,911 Attn: Rajeev Patel Engg. Co. Compound, Patel Estate, Off. S.V. Rd., Jogeshwari (W) Tel: 91-22-26788741, 91-22-26788742 Fax: 91-22-26788680, 91-22-26040038 Seven Seas Furniture Trade Debt $853,772 Industrial Attn: Felix No.38, Xinchang Rd. Xinyang Industrial, Haicang, Xiamen Tel: 86-592-6513817 Fax: 86-592-6513820 Sinomax International Trade Debt $842,217 (Hongkong) Ltd. (Wanda) Attn: Swan/Pratik B26-Binh Tan Dist.,- Hochiminh City,-231-84-0 Tel: 84-8-8275758 Fax: 852-27578705 S.M. Traders Trade Debt $820,939 Attn: Irfan Merchant D-11, S. Ave. S.I.T.E., Karachi-75700 Pakistan Tel: 0092-21-2562310-2011 Fax: 0092-21-2570130 Westfield Corp., Inc. Leases $812,030 Attn: Rory Packer, Office of the Legal Cousel 11601 Wilshire Blvd. Los Angeles, CA 90025-1748 Tel: (310) 445-2425 Fax: (310) 478-8776 United Garment Mnf. Co. Trade Debt $792,428 Attn: Mr. Karim Saifi St. No.16, Bldg., No:(e) Al-tajamaout Industrial City, Amman, Amman Tel: (962) 06 4020512 Fax: (219) 6249065 Putian Ala Footwear & Clothing Trade Debt $783,388 Attn: Cindy Zhou Hushi Quanguan Industrial Area, Xiuyu County, Putian, Fujian, China Tel: 0086-0594-5878888 Fax: 0086-0594-5859333 ST. PAUL: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------- Debtor: St. Paul at Chapelwood, L.P. 5817 Allentown Way Temple Hills, MD 20748 Bankruptcy Case No.: 08-18848 Chapter 11 Petition Date: July 8, 2008 Court: District of Maryland (Greenbelt) Judge: Wendelin I. Lipp Debtors' Counsel: Stanton J. Levinson, Esq. (tiger110@earthlink.net) 2730 University Boulevard West, Suite 201 Silver Spring, MD 20902 Tel: (301) 949-0039 Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million A list of 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/mdb08-18848.pdf TIM JACOBI: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Tim Jacobi 2210 Oakland Bend San Antonio, TX 78258 Bankruptcy Case No.: 08-51951 Chapter 11 Petition Date: July 7, 2008 Court: Western District of Texas (San Antonio) Debtor's Counsel: Jesse Blanco, Jr., Esq. (jesseblanco@sbcglobal.net) P.O. Box 680875 San Antonio, TX 78268 Tel: (210) 509-6925 Estimated Assets: $1 million to $10 million Estimated Debts: $500,000 to $1 million The Debtor did not file a list of unsecured creditors. TRIBUNE CO: Lenders Under $8.9BB Loan Sell Stake at 74% of Face --------------------------------------------------------------- One or more former members of the lending syndicate under Tribune Co.'s $8,983,000,000 senior secured credit agreement dated May 17, 2007, as amended on June 4, 2007, sold their participations for 74 cents-on-the-dollar last week, according to syndicated loan pricing data compiled by The Wall Street Journal. JPMorgan Chase Bank, N.A., serves as administrative agent, and Merrill Lynch Capital Corporation acts as syndication agent under the credit agreement. Citicorp North America, Inc., Bank of America, N.A. and Barclays Bank PLC, serve as co-documentation agents, and J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and Banc of America Securities LLC, act as joint lead arrangers and joint bookrunners. Tribune's $8.9-Bil. Credit Facility The loan consists of these facilities: (a) a $1,500,000,000 Senior Tranche X Term Loan Facility; (b) a $5,515,000,000 Senior Tranche B Term Loan Facility; (c) a $263,000,000 Delayed Draw Senior Tranche B Term Loan Facility; and (d) a $750,000,000 Revolving Credit Facility. The Credit Agreement also provided a commitment for an additional $2,105,000,000 in new incremental term loans under the Tranche B Facility. The aggregate amount of the facilities under the Credit Agreement equals $10,133,000,000. The loan matures May 17, 2014, according to data obtained from Bloomberg. The loan carries a B2 rating from Moody's Investors Service and a B rating from Standard & Poor's Ratings Services, according to Wall Street Journal data. Tribune, in a regulatory filing with the Securities and Exchange Commission in March 2008, disclosed that on June 4, 2007, proceeds from the Tranche X Facility and the Tranche B Facility were used by the Company in connection with the consummation of a share repurchase program and to refinance the Company's former five-year credit agreement and former bridge credit agreement. The Revolving Credit Facility includes a letter of credit subfacility of up to $250,000,000 and a swingline facility of to $100,000,000. Borrowings under the Revolving Credit Facility may be used for working capital and general corporate purposes, Tribune said. The Company also said it intends to use the Delayed Draw Facility to refinance roughly $263,000,000 of its medium-term notes as they mature during 2008. In February 2008, the Company refinanced $25,000,000 of the medium-term notes with borrowings under the Delayed Draw Facility. On Dec. 20, 2007, Tribune entered into: (i) a $1,600,000,000 senior unsecured interim loan agreement; and (ii) a number of increase joinders pursuant to which the Incremental Facility became a part of the Tranche B Facility under the Credit Agreement. The Interim Credit Agreement contains a $1,600,000,000 12-month bridge facility. Tribune used the total proceeds of $3,705,000,000 from the Bridge Facility and the Incremental Facility, among other ways, in connection with the consummation of its April 2007 merger and for general corporate purposes. Tribune entered into an Agreement and Plan of Merger in April 2007 with GreatBanc Trust Company, solely as trustee of the Tribune Employee Stock Ownership Trust, a separate trust which forms a part of the ESOP; Tesop Corporation, a Delaware corporation wholly owned by the ESOP; and the Zell Entity providing for Merger Sub to be merged with and into the Company, and following the merger, the Company to continue as the surviving corporation wholly owned by the ESOP. $650,000,000 Due in December 2008 Tribune repaid in June 2007 $100,000,000 of the $1,500,000,000 of borrowings under the Tranche X Facility. The remaining principal balance of the Tranche X Facility must be repaid in an aggregate amount of $650,000,000 on Dec. 4, 2008, and the remaining outstanding amount of the Tranche X Facility, if any, must be repaid on June 4, 2009. The Tranche B Facility is a seven-year facility which matures on June 4, 2014, and amortizes at a rate of 1.0% per annum (payable quarterly). The Delayed Draw Facility automatically becomes part of the Tranche B Facility as amounts are borrowed and amortizes based upon the Tranche B Facility amortization schedule. The Revolving Facility is a six-year facility and matures on June 4, 2013. Tribune said, prior to June 4, 2008, optional prepayments on the Tranche X Facility and the Tranche B Facility with the proceeds of a substantially concurrent issuance of loans under any senior secured credit facilities pursuant to the Credit Agreement must be accompanied by a prepayment fee equal to 1.0% of the aggregate amount of the prepayments if the interest rate spread applicable to the new loans is less than the interest rate applicable to the Tranche X Facility or the Tranche B Facility. Tribune said borrowings under the Credit Agreement are prepayable at any time prior to maturity without penalty, and the unutilized portion of the commitments under the Revolving Credit Facility or the Delayed Draw Facility may be reduced at the option of the Company without penalty. Subject to certain prepayment restrictions contained in the Credit Agreement, the Bridge Facility is prepayable at any time prior to maturity without penalty, including in connection with the issuance of up to $1,600,000,000 of high-yield notes. If any loans under the Bridge Facility remain outstanding on Dec. 20, 2008, the lenders will have the option to exchange the initial loans for senior exchange notes that the Company will issue under a senior indenture. The maturity date of any initial loans that are not exchanged for senior exchange notes will -- unless a bankruptcy event of default has occurred and is continuing on that date -- automatically be extended to Dec. 20, 2015. The senior exchange notes will also mature on the Final Interim Credit Agreement Maturity Date. Holders of the senior exchange notes will have registration rights. Borrowings under the Credit Agreement are guaranteed on a senior basis by certain of Tribune's direct and indirect U.S. subsidiaries and secured by a pledge of the equity interests of Tribune Broadcasting Holdco, LLC and Tribune Finance, LLC, two Tribune subsidiaries. Tribune's other senior notes and senior debentures are secured on an equal and ratable basis with the borrowings under the Credit Agreement as required by the terms of the indentures governing the notes and debentures. Borrowings under the Interim Credit Agreement are unsecured, but are guaranteed on a senior subordinated basis by certain of Tribune's U.S. subsidiaries. About Tribune Co. Headquartered in Chicago, Illinois, 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. Tribune, like other newspaper outlets, is suffering a decline in publishing revenues due to online competition. Chicago Tribune media columnist Phil Rosenthal says the newspaper industry troubles are compounded at Tribune by the debt load Tribune took on late 2007 in going private -- an $8,200,000,000 transaction engineered by Sam Zell, who became the company's chairman and chief executive. Mr. Rosenthal says Tribue has major payment obligations due in 2008 and 2009. Mr. Zell, according to Mr. Rosenthal, has said the 2008 obligations should be covered through Cablevision Systems Corp.'s $650,000,000 deal to acquire control of Newsday, Tribune's paper in Long Island, as well as through a $300,000,000 asset- backed commercial paper facility with Barclays Bank PLC. Mr. Rosenthal says the planned sale of the Chicago Cubs and Wrigley Field is expected to help cover 2009 obligation. U.S. JETS: Case Summary & Five Largest Unsecured Creditors ---------------------------------------------------------- Debtor: U.S. Jets, Inc. 1080 Ben Epps Drive Athens, GA 30605 Bankruptcy Case No.: 08-30797 Chapter 11 Petition Date: July 8, 2008 Court: Middle District of Georgia (Athens) Debtor's Counsel: Ernest V. Harris, Esq. (ehlaw@bellsouth.net) Harris & Liken LLP P.O. Box 1586 Athens, GA 30603 Tel: (706) 613-1953 Fax: (706) 613-0053 Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $100,000 to $500,000 Debtor's list of its five largest unsecured creditors: Entity Claim Amount ------ ------------ Leone Halpin LLP $40,000 521 West Colfax Southbend, IN 46601 AT&T BellSouth Advertising and $18,000 Publishing P.O. Box 105024 Atlanta, GA 30348-5024 Standard Aero $14,000 1550 Hangar Road Augusta, GA 30906 First Insurance Funding Corp. $8,129 Corporate Jets Inc. $1,900 VESTA INSURANCE: Settles Unresolved Portion of $140MM Claim ----------------------------------------------------------- Kevin O'Halloran, in his capacity as Plan Trustee for J. Gordon Gaines, Inc., filed Claim No. 73 against Vesta Insurance Group, Inc., asserting more than $140,000,000, including: * $94,926,029 for outstanding intercompany balances; * $16,046,237 for contract and tort claims; and * $29,273,410 for avoidance actions plus interest, fees, expenses and other contingent and unliquidated damages. Lloyd T. Whitaker, Plan Trustee for Vesta, and the Gaines Plan Trustee entered into a settlement in January 2008 with Vesta Fire Insurance Corporation, Vesta Insurance Corporation, Shelby Casualty Insurance Company, The Shelby Insurance Company, Texas Select Lloyds Insurance Company and Select Insurance Services, Inc., under which Gaines transferred its interest in Claim No. 73 to Vesta Fire, except for the $29,273,410 avoidance claims. The parties also reached another settlement under which Vesta Fire agreed to release the portions of Claim No. 73 transferred by Gaines to Vesta, and withdraw the Claim with prejudice. The Vesta Plan Trustee finds that Claim No. 73 is unclear whether any portion, other than the claims for avoidance of the preferential transfers, remains pending and unresolved. The Vesta Plan Trustee also compels Gaines to supplement its Claim to the extent that it asserts that its right of set-off was not transferred to Vesta Fire. The Vesta Plan Trustee asserted that any unreleased, overstated portion of Claim No. 73 should be reduced to an amount to be proven at a Court trial or hearing. To resolve their dispute and avoid the risks and expenses of a possible litigation relating to, among others, Claim No. 73, the Vesta and Gaines Plan Trustees stipulate that: -- they will mutually release each other of claims and essentially eliminate Claim No. 73; -- the Gaines Plan Trustee will promptly withdraw its request for the Court to estimate Claim No. 149 filed by VIG and dismiss the adversary proceeding commenced by the Gaines Plan Trustee against VIG seeking equitable subordination some of VIG's claims; and -- there are no payments being made by Gaines to VIG or VIG to Gaines, in connection with the Settlement Agreement. A full-text copy of the Settlement Agreement is available for free at http://bankrupt.com/misc/VIG&GainesSettlementPact.pdf The Plan Trustees contend that the Settlement limits their liability to each other without further expense, removes any uncertainty and delay regarding the potential litigation between the parties, and eliminates the substantial costs of litigation. Accordingly, the Plan Trustees ask the U.S. Bankruptcy Court for the Northern District of Alabama to approve the settlement. About Vesta Insurance Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc. (Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding company for a group of insurance companies that primarily offer property insurance in targeted states. Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership III, L.P., filed an involuntary chapter 7 petition against the company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517). The case was converted to a voluntary chapter 11 case on Aug. 8, 2006 (Bankr. N.D. Ala. Case No. 06-02517). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, represents the petitioning creditors. In its schedules of assets and liabilities, Vesta listed $14,919,938 in total assets and $214,278,847 in total liabilities. J. Gordon Gaines Inc. is a Vesta Insurance-owned unit that manages the company's numerous insurance subsidiaries and employs the headquarters workers. The company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represent the Debtor in its restructuring efforts. In its schedules of assets and liabilities, Gaines listed $19,818,094 in total assets and $16,046,237 in total liabilities. On Aug. 1, 2006, the District Court of Travis County, Texas entered an order appointing the Texas Commissioner of Insurance as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries: Vesta Fire Insurance Corporation; The Shelby Insurance Company; Shelby Casualty Insurance Corporation; Texas Select Lloyds Insurance Company; and Select Insurance Services, Inc. Florida Select Insurance Agency Inc., an affiliate, filed for chapter 11 protection on April 24, 2007 (Bankr. N.D. Ala. Case No. 07-01849). Rufus Dorsey, IV, Esq., at Parker Hudson Rainer & Dobbs LLP, represents Florida Select. The Court confirmed FSIA's plan on March 24, 2008. (Vesta Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) VESTA INSURANCE: Gains Plan Trustee Objects to $3.34MM Claim ------------------------------------------------------------ Kevin O'Halloran, his capacity as the Plan Trustee under the Third Amended Chapter 11 Plan of Liquidation of J. Gordon Gaines, Inc., objects to, and asks the U.S. Bankruptcy Court for the Northern District of Alabama to estimate, Claim No. 149 filed by Vesta Insurance Group, Inc. Claim No. 149 seeks an estimate of $3,341,531 for potential preferential transfers and fraudulent conveyance under Sections 544, 547 and 548 of the Bankruptcy Code. The Claim states that there were substantial transfers of funds made by VIG to Gaines during the one year period prior to VIG's Petition Date. VIG adds that, assuming that it was insolvent at the time of each transfer in question, these transfers to the Debtor may be recoverable "to the extent that they are preferential or fraudulent transfers." The Gaines Plan Trustee asserts that the Claim does not hold merit. Rufus T. Dorsey, Esq., at Parker Hudson Rainer & Dobbs LLP, in Atlanta, Georgia, on behalf of the Gaines Plan Trustee, notes that none of the alleged substantial transfers made by VIG to Gaines one year prior to VIG's Petition Date constitute a preference or a fraudulent conveyance, and that those transfers are unavoidable. Even assuming otherwise, Mr. Dorsey asserts that the amount of any avoidable transfer would be substantially less than the amount owed by VIG to Gaines, and Gaines is entitled to set off or recoup the amounts from any indebtedness owing to VIG. Mr. Dorsey adds that Claim No. 149, on its face, is an estimation and a generalized statement and does not provide specific information regarding the alleged transfers by VIG to Gaines. He asserts that VIG received preferential payments or fraudulent transfers from Gaines, and, pursuant to Section 502(d), until those transfers are returned to Gaines, any claim asserted by VIG against J. Gaines should be disallowed. Furthermore, Mr. Dorsey relates that VIG and its subsidiaries were part of an insurance business enterprise, under which Gaines was the "management" subsidiary for the other entities within VIG. Pursuant to the enterprise, Gaines provided management services to VIG at cost, plus 10% from some of its affiliates. He says all obligations incurred by Gaines should have been reconciled by VIG on a monthly basis but VIG failed to comply with the arrangement, thereby conflicting with the proper functioning of Gaines and resulting to Gaines' unpaid obligations. According to Mr. Dorsey, an estimation by the Court of VIG's Claim is important, as the Gaines Plan Trustee will deduct from the final distribution to creditors the estimated amount to be sufficient to cover VIG's share of the distribution. "Without knowing the proper amount to reserve for the VIG Claim, the [Gaines] Plan Trustee cannot make a final distribution to creditors and likewise cannot close this case," he maintains. About Vesta Insurance Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc. (Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding company for a group of insurance companies that primarily offer property insurance in targeted states. Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership III, L.P., filed an involuntary chapter 7 petition against the company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517). The case was converted to a voluntary chapter 11 case on Aug. 8, 2006 (Bankr. N.D. Ala. Case No. 06-02517). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, represents the petitioning creditors. In its schedules of assets and liabilities, Vesta listed $14,919,938 in total assets and $214,278,847 in total liabilities. J. Gordon Gaines Inc. is a Vesta Insurance-owned unit that manages the company's numerous insurance subsidiaries and employs the headquarters workers. The company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represent the Debtor in its restructuring efforts. In its schedules of assets and liabilities, Gaines listed $19,818,094 in total assets and $16,046,237 in total liabilities. On Aug. 1, 2006, the District Court of Travis County, Texas entered an order appointing the Texas Commissioner of Insurance as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries: Vesta Fire Insurance Corporation; The Shelby Insurance Company; Shelby Casualty Insurance Corporation; Texas Select Lloyds Insurance Company; and Select Insurance Services, Inc. Florida Select Insurance Agency Inc., an affiliate, filed for chapter 11 protection on April 24, 2007 (Bankr. N.D. Ala. Case No. 07-01849). Rufus Dorsey, IV, Esq., at Parker Hudson Rainer & Dobbs LLP, represents Florida Select. The Court confirmed FSIA's plan on March 24, 2008. (Vesta Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) VESTA INSURANCE: Gaines Plan Trustee Wants Debt Turned into Equity ------------------------------------------------------------------ Kevin O'Halloran, in his capacity as Plan Trustee for J. Gordon Gaines, Inc., asks the U.S. Bankruptcy Court for the Northern District of Alabama to equitably subordinate any and all claims asserted by Vesta Insurance Group, Inc., against Gaines, and recharacterize as equity any indebtedness owed by Gaines to VIG. VIG filed Claim No. 149 against Gaines seeking an estimated amount of $3,341,539 for potential preferences and fraudulent conveyance claims. According to Rufus T. Dorsey, Esq., at Parker, Hudson, Rainer & Dobbs LLP, in Atlanta, Georgia, relates that VIG failed to pay Gaines for Gaines' provision of personnel, infrastructure and services to VIG. VIG's failure to pay resulted to Gaines incurring liabilities for the services. He says that VIG allowed the "failure" to occur while simultaneously reaping the benefits of (i) Gaines' services, and (ii) the transfers of substantial funds from Gaines over a five year period, which transfers in excess of $90,000,000 remained on the Petition Date as an obligation owing by VIG to Gaines. The non-insider creditors are the victims of the election by VIG to decline to make payments in amounts sufficient to cover the obligations incurred by Gaines for VIG's benefit, Mr. Dorsey tells Judge Thomas B. Bennett. VIG's actions have caused "substantial injury" to, and obtained "an unfair advantage" over Gaines and its non-insider creditors through its inequitable conduct, he asserts. Mr. Dorsey contends that VIG was an insider of Gaines by virtue of its affiliation with Gaines. VIG was the sole shareholder of Gaines. He asserts that equitable subordination of any claims of VIG against Gaines is not inconsistent with the Bankruptcy Code, hence, any and all claims of VIG against Gaines should be subordinated to all other unsecured claims of creditors of Gaines and all of Gaines' indebtedness to VIG should be re-characterized as equity in Gaines. About Vesta Insurance Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc. (Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding company for a group of insurance companies that primarily offer property insurance in targeted states. Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership III, L.P., filed an involuntary chapter 7 petition against the company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517). The case was converted to a voluntary chapter 11 case on Aug. 8, 2006 (Bankr. N.D. Ala. Case No. 06-02517). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, represents the petitioning creditors. In its schedules of assets and liabilities, Vesta listed $14,919,938 in total assets and $214,278,847 in total liabilities. J. Gordon Gaines Inc. is a Vesta Insurance-owned unit that manages the company's numerous insurance subsidiaries and employs the headquarters workers. The company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represent the Debtor in its restructuring efforts. In its schedules of assets and liabilities, Gaines listed $19,818,094 in total assets and $16,046,237 in total liabilities. On Aug. 1, 2006, the District Court of Travis County, Texas entered an order appointing the Texas Commissioner of Insurance as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries: Vesta Fire Insurance Corporation; The Shelby Insurance Company; Shelby Casualty Insurance Corporation; Texas Select Lloyds Insurance Company; and Select Insurance Services, Inc. Florida Select Insurance Agency Inc., an affiliate, filed for chapter 11 protection on April 24, 2007 (Bankr. N.D. Ala. Case No. 07-01849). Rufus Dorsey, IV, Esq., at Parker Hudson Rainer & Dobbs LLP, represents Florida Select. The Court confirmed FSIA's plan on March 24, 2008. (Vesta Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WCI COMMUNITIES: Commences Offer to Exchange $125MM of 4% Notes --------------------------------------------------------------- WCI Communities Inc. commenced an exchange offer for all of its outstanding $125 million 4% Contingent Convertible Senior Subordinated Notes due 2023. WCI is offering to exchange $1,000 principal amount of new 16% senior secured notes due 2013 for each $1,000 principal amount of the Outstanding Notes. The exchange offer will expire at 12:00 midnight EDT on Aug. 4, 2008, unless extended or terminated by the Company. Tendered notes may be withdrawn at any time prior to 12:00 midnight on the expiration date. Investors and security holders may obtain the offering memorandum and related materials through the exchange agent for the exchange offer, The Bank of New York Mellon Trust Company, N.A., at: The Bank of New York Mellon Trust Company N.A. Attention: David Mauer 101 Barclay Street - 7 East New York, NY 10286 Tel (212) 815-3687 Fax (212) 298-1915 The consummation of the exchange offer is subject to certain customary conditions, including a 95% minimum tender condition, which means that at least 95% of the aggregate principal amount outstanding of the notes must have been validly tendered and not withdrawn. The exchange offer is also conditioned on the amendment and restatement of the company's existing credit facilities and issuance of new second lien notes. No assurances can be given that the company will be successful in entering into an amendment and restatement of the company's existing credit facilities or issuing new second lien notes, in each case on satisfactory terms or at all. Subject to applicable law, WCI may, in its sole discretion, waive any condition applicable to the exchange offer or extend or terminate or otherwise amend the exchange offer. WCI filed with Securities and Exchange Commission a Tender Offer Statement under Section 14(d)(1) or 13(e)(1) of the Securities Exchange Act of 1934, a full text copy is available for free at: http://ResearchArchives.com/t/s?2f50 WCI also filed with SEC a Form of Indenture dated Aug. 5, 2008, a full text copy is available for free at: http://ResearchArchives.com/t/s?2f4f About WCI Communities Inc. WCI Communities Inc. (NYSE: WCI) -- http://www.wcicommunities.com/ -- named America's Best Builder in 2004 by the National Association of Home Builders and Builder Magazine, has been creating amenity-rich, master-planned lifestyle communities since 1946. Florida-based WCI caters to primary, retirement, and second-home buyers in Florida, New York, New Jersey, Connecticut, Maryland and Virginia. The company offers traditional and tower home choices with prices from the high-$100,000s to more than $10.0 million and features a wide array of recreational amenities in its communities. In addition to homebuilding, WCI generates revenues from its Prudential Florida WCI Realty Division, and title businesses, and its recreational amenities, as well as through land sales and joint ventures. The company currently owns and controls developable land on which the company plans to build over 15,000 traditional and tower homes. The company operates in three principal business segments: Tower Homebuilding, Traditional Homebuilding, which includes sales of lots, and Real Estate Services, which includes real estate brokerage and title operations. * * * As disclosed in the Troubled Company Reporter on May 23, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating on WCI Communities to 'CC' from 'CCC'. Concurrently, S&P lowered its ratings on $650 million of subordinated notes to 'C' from 'CC'. The outlook remains negative. WCI Communities Inc. still carries Moody's Investors Service's Caa2 corporate family and Caa3 senior subordinate ratings. Outlook is negative. Going Concern Doubt Ernst & Young LLP, in Miami, Florida, expressed substantial doubt about WCI Communities Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. Holders of the company's $125.0 million, 4.0% Contingent Convertible Senior Subordinated Notes due 2023 have an option of requiring the company to repurchase the convertible notes at a price of 100.0% of the principal amount on Aug. 5, 2008. Pursuant to certain amendments in the company's revolving credit facility and Senior Term Loan Agreement, the company will need to have sufficient liquidity after giving effect to, on a pro forma basis, the repurchase of the convertible notes. The company does not anticipate having sufficient liquidity to satisfy bank covenant liquidity tests. If the company is unable to obtain an amendment or waiver, issue exchange securities, or otherwise satisfy its obligations to repurchase the convertible notes, the convertible note holders would have the right to exercise remedies specified in the Indenture, including accelerating the maturity of the convertible notes, which would result in the acceleration of substantially all of the company's other outstanding indebtedness. In addition, if the company is determined to be in default on the convertible notes, it may be prohibited from drawing additional funds under the revolving credit facility, which could impair its ability to maintain sufficient working capital. WILSONS LEATHER: Sells Outlet and E-Commerce Assets for $22MM ------------------------------------------------------------- Wilsons The Leather Experts Inc. sold its outlet store and e-commerce assets to AM Retail Group Inc. for a total purchase price of approximately $22.3 million. Under the terms of the agreement, AM Retail purchased all inventory, fixed assets and intellectual property principally related to Wilsons Leather's outlet store and e-commerce divisions. The leases associated with Wilsons Leather's 116 outlet stores were assigned to AM Retail. The sale is part of Wilsons Leather's strategy to obtain capital to be used in the launch of its new mall accessories store concept. In connection with these actions, Wilsons Leather will change its name to PreVu Incorporated. About AM Retail Group Inc. AM Retail Group Inc. is a wholly owned subsidiary of G-III Apparel Group Ltd. (NasdaqGSM: GIII), a New York based apparel company. About Wilsons The Leather Experts Inc. Headquartered in Brooklyn Park, Minnesota, Wilsons The Leather Experts Inc. (NASDAQ:WLSN) -- http://www.wilsonsleather.com/-- is a specialty retailer of leather outerwear, accessories and apparel in the United States. As of May 3, 2008, Wilsons Leather operated 228 stores located in 39 states, including 100 mall stores, 114 outlet stores and 14 airport stores. As of May 3, 2008, the company's balance sheet showed total assets of $64.7 million, total liabilities of $43.2 million, preferred stock of $40.2 million, and total common shareholders' deficit of $18.7 million. YOUNG BROADCASTING: March 31 Balance Sheet Upside-Down by $233MM ---------------------------------------------------------------- Young Broadcasting Inc.'s consolidated balance sheet at March 31, 2008, showed $695.4 million in total assets and $928.5 million in total liabilities, resulting in a $233.1 million total stockholders' deficit. The company reported a net loss of $15.0 million for the first quarter ended March 31, 2008, versus a net loss $25.4 million in the same period last year. Results for the 2007 first quarter included a loss from discontinued operations of the company's San Francisco station, KRON-TV, of $8.7 million, compared with a loss of $618,000 for the three months ended March 31, 2008. Net Revenue Net revenue for the three months ended March 31, 2008, was $35.0 million, as compared to $35.6 million for the three months ended March 31, 2007, a decrease of $648,000 or 1.8%. The company's gross local revenues for the three months ended March 31, 2008, was approximately $26.6 million as compared to $28.1 million for the three months ended March 31, 2007, a decrease of approximately $1.5 million or 5.4%. Additionally, gross national revenues for the three months ended March 31, 2008, were approximately $8.9 million as compared to $9.5 million for the three months ended March 31, 2007, a decrease of approximately $567,000 or 6.0% compared to the prior year. Local revenues were negatively impacted by decreased local spending and soft market conditions across various major categories. National revenues were also negatively impacted by decreased national spending in top revenue categories. Gross political revenue for the three months ended March 31, 2008, was $1.8 million, as compared to $497,000 for the three months ended March 31, 2007, an increase of approximately $1.3 million. Eight of the company's stations noted increased political revenue year over year, due to the fact that 2008 is political year with a presidential primarie taking place during the first quarter. Other revenue decreased approximately $194,000 or 8.5% year over year. This decrease was primarily due to a reduction in trade revenue at one of the Company's stations as a result of lower attendance at the annual trade shows. Total Costs and Expenses Operating expenses, including selling, general and administrative expenses, for the three months ended March 31, 2008, were $23.8 million as compared to $24.9 million for the three months ended March 31, 2007, a decrease of $1.1 million, or 4.4%. Amortization of program license rights was $2.2 million for the three months ended March 31, 2008, and March 31, 2007. Depreciation of property and equipment and amortization of intangible assets was $3.5 million for the three months ended March 31, 2008, and March 31, 2007. Corporate overhead for the three months ended March 31, 2008, was $3.6 million as compared to $3.7 million for the three months ended March 31, 2007, a decrease of $39,000, or 1.1%. Operating Income Operating income increased 40.6% to $1.8 million over the first quarter of 2008 resulting in a 4.6% increase in station operating performance over the prior year first quarter. Vincent Young, Chairman of Young Broadcasting Inc. stated, "Our results for the quarter were superior to other companies in broadcasting. We believe the company's financial performance is turning the corner based on our stringent cost reduction and revenue enhancement programs." He added, "We anticipate benefiting from increased political revenue later this year and retransmission fees in future periods. Political revenue is already contributing significantly to our bottom line and we are still only in the primary portion of the presidential race. Our cable retransmission negotiations are proceeding in a direction which also makes us optimistic about our company's future." Interest Expense Interest expense decreased to $16.7 million for the three months ended March 31, 2008, to $17.0 million for the same period in 2007, mainly due to lower interest rates year over year. Other Expense Other expense for the three months ended March 31, 2008, was $223,000 as compared to income of $206,000 for the three months ended March 31, 2007, an increase of $429,000 or 208%. Income Tax Benefit The company recorded an income tax benefit of approximately $732,000 and an income tax provision of $1.1 million for the three months ended March 31, 2008, and 2007, respectively. Discontinued Operations On Nov. 7, 2007, the Board of Directors of the company approved a process which is expected to lead to the eventual sale of the company's San Francisco station, KRON-TV. Accordingly, the results of KRON-TV have been recorded as a discontinued operation and assets and liabilities are classified as "held for sale." The company recorded a loss from discontinued operations of $618,000 and $8.7 million for the three months ended March 31, 2008, and 2007, respectively, a decrease of approximately $8.1 million or 92.9%. The decrease in the loss from discontinued operations was mainly due to a deferred income tax provision of $6.6 million which KRON-TV recorded for the three months ended March 31, 2007, with no such provision recorded for the three months ended March 31, 2008. Liquidity and Capital Resources At March 31, 2008, the company had outstanding cash and cash equivalents of $15.8 million, outstanding short-term commercial paper of $23.8 million, and had the full $20.0 million available under its revolving credit facility. At March 31, 2008, the company had outstanding long-term debt, including current portion, of $826.7 million: Senior Credit Facility $340,750,000 8 3/4% Senior Subordinated Notes due 2014 140,000,000 10% Senior Subordinated Notes due 2011 345,988,000 ------------ Total Debt (excluding capital leases) $826,738,000 ============ 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?2f3d About Young Broadcasting Headquartered in New York City, Young Broadcasting Inc. -- http://www.youngbroadcasting.com/ -- owns ten television stations and the national television representation firm, Adam Young Inc. Five stations are affiliated with the ABC Television Network, three are affiliated with the CBS Television Network, one is affiliated with the NBC Television Network, and one is affiliated with MyNetwork TV. * * * As reported in the Troubled Company Reporter on June 16, 2008, Standard & Poor's Ratings Services affirmed the ratings on Young Broadcasting Inc., including the 'CCC+' corporate credit rating, and revised the outlook to negative from developing. The outlook change reflects S&P's concern about the company's lengthening search for a buyer for KRON-TV, its underperforming MyNetworkTV affiliate in San Francisco, and the company's dwindling cash balances in the backdrop of a soft economy. YOUNG BROADCASTING: GAMCO Asset Discloses 9.73% Equity Stake ------------------------------------------------------------ Young Broadcasting Inc.'s Schedule 13D discloses the ownership of 3,151,479 shares -- representing 14.81% of the 21,274,597 shares outstanding as reported by the company in its most recently filed Form 10-Q for the quarterly period ended March 31, 2008 -- by these entities: Shares of % of Class Name Common Stock of Common ---- ------------ ------ Gabelli Funds LLC 1,040,000 4.89% GAMCO Asset Management Inc. 2,069,479 9.73% Gabelli Securities Inc. 7,000 0.03% Teton Advisors Inc. 35,000 0.16% Headquartered in New York City, Young Broadcasting Inc. -- http://www.youngbroadcasting.com/-- owns ten television stations and the national television representation firm, Adam Young Inc. Five stations are affiliated with the ABC Television Network, three are affiliated with the CBS Television Network, one is affiliated with the NBC Television Network, and one is affiliated with MyNetwork. In addition, KELO-TV-Sioux Falls, SD is also the MyNetwork affiliate in that market through the use of its digital channel capacity. * * * As disclosed in the Troubled Company Reporter on June 16, 2008, Standard & Poor's Ratings Services affirmed the ratings on Young Broadcasting Inc., including the 'CCC+' corporate credit rating, and revised the outlook to negative from developing. * Fitch: Telecoms' Fin'l Flexibility Still Solid Despite Weakness ----------------------------------------------------------------- Financial flexibility and liquidity for the U.S. telecommunications sector generally remains solid despite general weakness in the credit and economic markets, according to Fitch Ratings. Fitch reviewed 20 rated entities in the U.S. telecommunications sector with an Issuer Default Rating between 'BBB+' and 'CCC'. Fitch's analysis found that these companies produced last 12-month free cash flow (as of March 31, 2008) of approximately $11 billion and maintained a balance sheet cash level of $15 billion. This level of internal liquidity compares to a 2008 and 2009 debt maturity schedule of approximately $8.2 billion and $7.3 billion, respectively. Similarly, revolving credit capacity for the sector remains strong with an average availability of 70% or approximately $22 billion. While liquidity concerns are less pronounced compared with the general credit and macroeconomic environment, Fitch believes it is appropriate to review how well the sector is positioned to weather future liquidity issues, should existing market conditions persist. Telecom operators have taken advantage of consolidation to capture scale synergies and expand financial flexibility. As a result competitive overlap of the industry has risen, increasing the effects of company operating mistakes on financial prospects and flexibility. This growing competitive environment has heightened the need for strong liquidity among companies. Fitch believes that refinancing risks for the industry are relatively minor, even if credit market conditions remain tight for the remainder of 2008 into 2009. Telecom issuers have done a good job over the past several years refinancing debt maturities to later years and increasing liquidity. The report, 'U.S. Telecom Liquidity Strength Remains Solid', addresses the relative positioning of each of the 20 companies in this study with respect to key liquidity considerations such as free cash flow, cash, revolving credit facilities and refinancing risk. * Fitch: Tex. Electricity Market Credit Holds Despite Price Hike ---------------------------------------------------------------- Fitch Ratings does not foresee any adverse credit effects for the four principal Texas electricity market participants as a result of recent price spikes, as discussed in a special report. The four market participants defined by Fitch are generators, electric transmission and distribution companies, utility tariff bonds and regional electric providers. Following the recent record high prices experienced when the market-clearing prices for energy in the balancing energy segment of the market rose above the Public Utility Commission of Texas' previously approved offer cap of $2,250 per megawatt-hour, four small REPs filed for bankruptcy and defaulted on their payments to the Electric Reliability Council of Texas. 'Should ERCOT's precautionary actions fail to eliminate price volatility, future credit rating implications resulting from price spikes would vary by type of market participant,' said Karen Anderson, Senior Director, Fitch Ratings. Fitch views REPs to have the most exposure to high power prices and are the most at risk for default or bankruptcy from power spikes. This is specifically true for small REPs that purchase much of their energy needs on the spot market due to lack of sufficient hedging or liquidity support. Larger REPs that have effectively managed their liquidity position to hedge power supply are currently not at material risk from spiking spot power prices. Fitch believes the credit risk to generators is neutral due to their significant hedged position. In the short term, generators will experience an increase in cash flow from their unhedged capacity sold into the balancing energy segment of the market. This is also true for the T&D companies, which have counterparty risk to REPs that collect customer revenues for the utilities. T&D companies have the ability to seek recovery of uncollected receivables from defaulted REPs through a regulatory rate filing, which limits credit exposure. Utility tariff bond ratings are not at risk from market price swings. All of these entities are rated 'AAA' by Fitch and are secured by transition property that represents the irrevocable right to collect a tariff from electric customers. * Fitch: High Gas Prices Affect Recovery Values of SUVs & Trucks ---------------------------------------------------------------- High gas prices are taking their toll on the recovery values of sport utility vehicles and trucks, leading to higher loss severity on defaulted loans in many U.S. auto loan asset-backed securities, according to Fitch Ratings. Already eroding wholesale values on larger vehicles appear to have been pushed over the edge by the practical and psychological impact of $4 gas. The resulting increase in loss severity, along with the present economic pressures on consumers already driving default rates higher, will place negative pressure on the subordinate bonds of certain auto ABS transactions. Most at risk are those transactions originated since mid-2006 that also have large exposures to the SUV and truck segments. Many of the 'Big- Three' U.S. captive finance companies transactions fall into this category. U.S. auto manufacturers' vehicle sales in particular, are heavily weighted towards SUVs and trucks. A typical domestic auto ABS transaction has an average SUV and truck concentration of 60-75% of the pool, exposing those pools to a higher impact from the decline in vehicle values. Non-U.S. manufacturers such as Honda, Hyundai, and Nissan, on the other hand, tend to have lower concentrations of these vehicle types, typically less than 50% and in some cases as low as 20% reflecting their differing product mix. The Manheim Used Vehicle Value Index, which Fitch uses as a gauge of health of the wholesale or used car market exhibited a 21% drop in the value of large-pickup trucks and a staggering 24% decline in large-SUVs on a year-over-year basis. With trends already negative, historically high gas prices appear to be causing an accelerated decline in these vehicle values. 'The $4 gas threshold is likely the primary culprit in the one-month drop of 10% in used SUV and truck values witnessed this month, one of the largest monthly declines ever,' said Managing Director John Bella. The combined impact of moderately increasing defaults and rapidly increasing loss severity, with recent trends in loss severity moving from an historical average of 50% to nearly 60%, has driven Fitch's ANL index up by 78% over the same time last year. Despite the dramatic drop in SUV and truck values, Fitch has not yet seen any evidence that default frequency has been directly impacted as some had feared. The 'walk-away' behavior demonstrated by subprime mortgage borrowers does not appear to be driving defaults in US auto ABS. In its rating analysis of auto ABS transactions, Fitch has and continues to take into account the negative trend in wholesale vehicle values, particularly for SUVs and trucks. Base case loss proxies are derived on a pool specific basis in order to reflect the differing collateral mix from transaction to transaction. Fitch forecasts loss proxies by SUVs/truck and car segments in addition to separately considering other stratifications including credit tier and loan structure. In its analysis, Fitch stresses recovery rates for the overall pool as well as increasing loss severities for the SUV and truck segments. While Fitch applies significant stress to defaults and recoveries, the unprecedented drop in vehicle values over the past three months could cause actual net losses to be in excess of Fitch's initial expectations for certain pools. In these cases, negative rating actions on certain subordinate bonds become more likely. Fitch is in the process of reanalyzing transactions with higher exposure to declining SUV and truck values. As a result certain transactions have been placed 'Under Analysis' on Fitch's SMARTView pages or on Rating Watch Negative. Further analysis may lead to additional rating actions, including Rating Watches and downgrades. * S&P: Tumbling Stock Market Continues to Stress Retail Spending ---------------------------------------------------------------- The significant slowdown in housing turnover, soaring energy costs, a tumbling stock market, and plunging consumer confidence will continue to pressure retail spending in the second half of 2008, according to "U.S. Retail Sector Feeling The Full Punch Of The Weak Economy; Downgrades Still Outpacing Upgrades In 2008," an industry report card published earlier today by Standard & Poor's Ratings Services. "Operating results for specialty apparel retailers remain weak for the first quarter of 2008," said Standard & Poor's credit analyst Gerald A. Hirschberg, "and we expect ratings to be pressured by poor economic conditions over the near term." Meanwhile, the department store sector is feeling the full brunt of the soft economy and weakening consumer confidence. Same-store sales have been mostly negative for the group thus far in 2008. "However," added Mr. Hirschberg, "the discount department store sector should outperform other retailers in an economic slowdown due to their value proposition and emphasis on basics and consumables." * S&P Says Rapid Fuel Cost Hike Takes a Toll on Trucking Industry ----------------------------------------------------------------- Weak tonnage volumes, industry overcapacity, rapidly rising fuel costs, and pricing pressure have taken a toll on the U.S. trucking industry and will continue to cloud the sector until at least 2009, according to a report published by Standard & Poor's Ratings Services. Compounding these industry-specific problems are macroeconomic variables such as weak domestic spending levels, and the housing slowdown in the U.S. Standard & Poor's expects consumer spending to rise only 1.5% this year, down from 2.9% in 2007. Given that a significant portion of consumer discretionary goods are transported via truck, this sector ties closely with domestic GDP and consumer spending levels, according to the report. The report, "An Uphill Climb For U.S. Trucking Companies," notes that these weak economic conditions and escalating commodity prices in the U.S. have translated into depressed consumer spending levels and soft tonnage levels for truckers. "We expect the slow U.S. economy and the rapidly rising cost of fuel to result in weak earnings and limited free cash flow for the trucking sector in 2008," said Standard & Poor's credit analyst Anita Ogbara. Assuming fuel prices do not moderate, we expect capacity reduction to, over time, address the supply-and-demand imbalance, providing better equilibrium. A sustained improvement in the tonnage trend and better freight volumes should also support meaningful recovery. "Given this combination of factors, we believe a turnaround is unlikely until some time in 2009," the analyst noted. * S&P Says ABCP Paper Market Serves Vital Function in Global Econ. ------------------------------------------------------------------ The U.S. asset-backed commercial paper market serves an important and viable commercial function in the global economy, according to a new report published by Standard & Poor's Ratings Services. U.S. ABCP outstandings doubled to $1.2 trillion between 2004 and 2007 before abruptly reversing course last September, leading some market observers to conclude that this market had strayed too far from its original purpose-that is, to provide commercial banks with an alternative, capital markets-based funding source for their core corporate borrowers. "We are seeing signs that the market has begun to take steps toward a relaunch-an ABCP 2.0, so to speak, sparked by investor demand for greater clarity from both the ABCP issuers and the rating agencies," the report notes. In particular, investors are seeking increased details about the nature of specific conduits' assets and any associated risk factors. In addition, they are looking for more specificity regarding the varying structural mechanics that are relied upon to provide for the timely repayment of outstanding ABCP. "Armed with this information, investors have become more discerning between ABCP programs, as well as their sponsors," said credit analyst Scott Sehnert, a director at Standard & Poor's. "They are demanding a greater risk premium from programs where they perceive greater asset credit or liquidity risk, and are staying away from programs where the reporting does not meet the new market expectations for increased transparency." * Moody's: Global Speculative-Grade Default Rate Up to 2.0% ----------------------------------------------------------- Moody's global speculative-grade default rate finished at 2.0% in June for the 12-month period ending the second quarter 2008, up from 1.5% at the end of the first quarter and unchanged from May, Moody's Investors Service reported. A year ago, the global speculative-grade default rate stood at 1.4%. The U.S. speculative-grade default rate ended the second quarter at 2.4%, up from 1.8% in the first quarter. Last year, the U.S. default rate stood at 1.5% at the end of the second quarter. "While the pace of corporate defaults has increased in recent months, that pace would have been even faster were it not for loose loan covenants and the lack of issuers with maturing debt that are allowing many distressed issuers the ability to avoid default," Kenneth Emery, Moody's director of corporate default research, said. "However, deteriorating economic conditions and continued tough credit market conditions signal that distressed issuers will face building pressures over the next year and that default rates will move up sharply." Moody's default rate forecasting model now predicts that the global speculative-grade default rate will rise sharply to 4.6% by the end of this year. It is expected to increase further to 6.1% a year from now. For U.S. speculative grade issuers, Moody's forecasting model foresees default rates increasing to 5.4% by the end of this year. Across industries over the coming year, Moody's default rate forecasting model indicates that the Consumer Transportation sector will be the most troubled industry in the U.S. and the Durable Consumer Goods sector will have the highest default rate in Europe. Moody's speculative-grade corporate distress index- which measures the percentage of rated issuers that have debt trading at distressed levels- edged lower to 17.9% at the end of the second quarter, down from 24.4% at the end of the previous quarter. However, it is still significantly higher than last year's level of 1.3%. There were a total of 20 rated defaults in the second quarter, among which four were recorded in June. The second quarter's default count is up from 15 in the first quarter. In 2007, there were four and five defaults in the first and second quarter respectively. Measured on a dollar volume basis, the global speculative-grade bond default rate rose to 1.2% at the end of the second quarter, up from 0.9% the previous quarter. The current dollar-weighted global bond default rate was slightly higher than the 1.1% level recorded a year ago. Among U.S. speculative-grade issuers, the dollar-weighted bond default rate edged higher to 1.3% at the end of the second quarter from 1.0% in the first quarter. At this time last year, the U.S. dollar-weighted bond default rate closed at 1.0%. In the leveraged loan market, a total of six Moody's-rated loan issuers defaulted in the second quarter, down from 10 in the first quarter. In 2007, no Moody's-rated loan issuers have defaulted in the first half. Among the 35 companies that defaulted in 2008, 31 were from the U.S. and three were based in Canada. The only defaulter outside of North America was Kremikovtzi AD, which headquarters in Bulgaria. Residential Capital, LLC, who completed a distressed exchange on $8.6 billion of bonds in June is the largest--and only investment-grade defaulter--so far this year. The trailing 12 month U.S. leveraged loan default rate rose to 1.9% at the end of the second quarter from 1.5% at the end of the first quarter. A year ago, the leveraged loan default rate was much lower at 0.3%. * Obama Talks of Bankruptcy Reforms Affecting Military Kin, Elders ------------------------------------------------------------------ At a school visit in Powder Springs, Georgia, presumptive Democratic presidential candidate and current senator Barack Obama revealed two new proposals to amend bankruptcy laws that would help military families and senior citizens, the Atlanta Journal- Constitution reports. In a speech before McEachern High School students, Sen. Obama said that, first, he will deploy a "fast-track bankruptcy practice" for families with members serving in the army, relates the AJC. The expedited system will enable these families to move through the bankruptcy process unhampered with minimum restrictions, less paperwork, and provide them with a "greater share" of their home value at the end of the process. Secondly, Senator Obama proposed to enlarge the homestead exemption for senior citizens who are undergoing bankruptcy, reasoning that elderly peoples' homes are the "cornerstone of a secure retirement", the AJC says. "If you're protecting America, America should be protecting you from unfair bankruptcy laws," Sen. Obama asserted, addressing particularly the military families. According to Sen. Obama, he sees his proposals not only as benefits to a particular electorate, but as a curative reaction to the real economic condition of the country, says AJC. * Huron Consulting Buys Assets of Stockamp & Associates for $219MM ------------------------------------------------------------------ Huron Consulting Group Inc. acquired the assets of Stockamp & Associates Stockamp & Associates Inc. for approximately $219 million, consisting of $169 million in cash and $50 million in stock, subject to adjustment. Additional purchase consideration will be payable if specific performance targets are met. In the 12 months ended March 31, 2008, Stockamp had cash basis revenues of approximately $94 million. On a GAAP basis, including after the amortization of intangibles, the acquisition is expected to be dilutive to Huron's earnings per share in 2008 and accretive in 2009. Huron will provide 2008 guidance updates when it releases results for the second quarter of 2008. "Huron aims to become the best health and education consulting firm globally, serving the highest levels of healthcare companies and research institutions," Gary E. Holdren, chairman and chief executive officer, Huron Consulting Group, said. "Joining the Huron and Stockamp teams will create a real powerhouse by serving multiple segments of the industry, including major health systems, academic medical centers and community hospitals." "The healthcare industry is growing at an unprecedented rate, and we are very excited about the opportunity to combine Stockamp's forces with ours to help clients deal with the many challenges facing this vital segment of our economy," Mr. Holdren said. "Uniting Stockamp with Huron's existing Health and Education Consulting business enhances our position as a premier healthcare and education services provider," Mr. Holdren added. "The addition of Stockamp allows us to continue to expand our footprint in the hospital consulting space. In particular, academic medical centers will be a major target of our new combined Health and Education Consulting business." "Stockamp's people are also excited about the synergies and opportunities that will come from the Huron and Stockamp combination," Paul A. Kohlheim, president, Stockamp & Associates, said. "Stockamp and Huron have very similar corporate cultures, and we believe that our people will quickly form a strong team that will provide unmatched services in the health and education consulting space to help our clients achieve their business objectives." "The breadth of our service offerings and the depth of experience in our combined healthcare practices should further solidify Huron's leadership in providing consulting services to hospitals, health systems and academic medical centers," David Shade, vice president, Huron Consulting Group's Healthcare practice, said. "Healthcare demographics in the next 30 years point to increased pressures and opportunities at hospitals and research organizations. We believe Huron is well positioned to help these institutions achieve their important societal mission." With the acquisition, Dale Stockamp, the founder of Stockamp & Associates, will join Huron as a consultant and assist with transition and integration matters. He will also assist with major client development opportunities. Paul Kohlheim, president of Stockamp, will join Huron as a vice president and report to David Shade, who will continue to lead Huron's expanded Healthcare practice. In addition to the Stockamp employees who will join Huron, these individuals will be managing directors with the Company: Shelly A. Anderson, James R. Dail, Douglas W. Fenstermaker, Andrew L. Grobmyer, John M. Hutchens, Norman W. Johnson, Jeffrey D. Jones, Annette E. Kirby, Bruce G. Lemon, Timothy P. Miller, Gregory P. Morgan, Steven J. Norris, Michael F. Puffe, and Kenneth M. Saitow. In connection with this acquisition, Huron amended its credit agreement effective July 8, 2008. The amended credit agreement consists of a $220 million senior secured term loan and a $240 million senior secured revolving credit facility, both maturing in February 2012. On July 8, 2008, Huron borrowed $164 million under this credit agreement to fund the acquisition of Stockamp. The balance of the credit facility will remain available for future working capital requirements and other corporate purposes. Also in connection with the acquisition, Huron amended its 2006 agreement for the acquisition of Wellspring Partners LTD to modify the terms of the Wellspring earn-out related to the revenue cycle business. Consideration for the amendment consisted of $20 million of stock, subject to adjustment. About Stockamp & Associates Based in Portland, Oregon, Stockamp & Associates Inc. is a management consulting firm specializing in helping high-performing hospitals and health systems optimize their financial and operational performance. The firm services around performance improvement, revenue cycle improvement, patient flow and capacity improvement and supporting information technology solutions. The firm was founded in 1990. About Huron Consulting Group Huron Consulting Group -- http://www.huronconsultinggroup.com/-- helps clients effectively address complex challenges that arise in litigation, disputes, investigations, regulatory compliance, procurement, financial distress, and other sources of significant conflict or change. The company also helps clients deliver superior customer and capital market performance through integrated strategic, operational, and organizational change. Huron provides services to a wide variety of both financially sound and distressed organizations, including Fortune 500 companies, medium-sized businesses, leading academic institutions, healthcare organizations, and the law firms that represent these various organizations. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent Chapter 11 cases filed with assets and liabilities below $1,000,000: In Re Eidu Barnes dba Image Makers Hair Gallery, LLC Bankr. D. Md. Case No. 08-18521 Chapter 11 Petition filed June 29, 2008 See http://bankrupt.com/misc/mdb08-18521.pdf In Re Ronald L. Beasley & Carol L. Beasley Bankr. D. Ariz. Case No. 08-08080 Chapter 11 Petition filed July 1, 2008 See http://bankrupt.com/misc/azb08-08080.pdf In Re Darrell Diggs & Betty Jean Diggs aka Alexis Cartier Bankr. E.D. Calif. Case No. 08-28910 Chapter 11 Petition filed July 1, 2008 See http://bankrupt.com/misc/caeb08-28910.pdf In Re Bistro Garden at Coldwater, Inc. Bankr. C.D. Calif. Case No. 08-14546 Chapter 11 Petition filed July 2, 2008 See http://bankrupt.com/misc/cacb08-14546.pdf In Re Farm Fresh Ranch Market Bankr. C.D. Calif. Case No. 08-19738 Chapter 11 Petition filed July 2, 2008 See http://bankrupt.com/misc/cacb08-19738.pdf In Re Guarantee Chevrolet dba Century Chevrolet Bankr. N.D. Calif. Case No. 08-53502 Chapter 11 Petition filed July 2, 2008 See http://bankrupt.com/misc/canb08-53502.pdf In Re Mar Foods dba Andiamo Cafe Bankr. N.D. Calif. Case No. 08-53518 Chapter 11 Petition filed July 2, 2008 See http://bankrupt.com/misc/canb08-53518.pdf In Re Boyd & Dreith, LLC Bankr. D. Colo. Case No. 08-19535 Chapter 11 Petition filed July 2, 2008 See http://bankrupt.com/misc/cob08-19535.pdf In Re First Centurion Receivables Management, Inc. Bankr. N.D. Ga. Case No. 08-72770 Chapter 11 Petition filed July 2, 2008 See http://bankrupt.com/misc/ganb08-72770.pdf In Re Mark Alan Grooms & Carol Ann Grooms fka Carol Ann DeFazio Bankr. N.D. Ind. Case No. 08-12108 Chapter 11 Petition filed July 2, 2008 See http://bankrupt.com/misc/innb08-12108.pdf In Re Star Printing Co. aka Star Printing Bankr. M.D. Penn. Case No. 08-02371 Chapter 11 Petition filed July 2, 2008 See http://bankrupt.com/misc/pamb08-02371.pdf In Re Elizabeth A. Boden aka Chapter 11 Petition filed Junebugs Restaurant & Bar Bankr. W.D. Penn. Case No. 08-24341 Chapter 11 Petition filed July 2, 2008 See http://bankrupt.com/misc/pawb08-24341.pdf In Re Ricky Hank Williams aka Hank Williams Trailers Bankr. E.D. Tenn. Case No. 08-13239 Chapter 11 Petition filed July 2, 2008 See http://bankrupt.com/misc/tneb08-13239.pdf In Re BLT Steak Dallas, LLC Bankr. N.D. Tex. Case No. 08-33283 Chapter 11 Petition filed July 2, 2008 See http://bankrupt.com/misc/txnb08-33283.pdf In Re Beverly Glace Woolley Bankr. C.D. Calif. Case No. 08-13835 Chapter 11 Petition filed July 3, 2008 See http://bankrupt.com/misc/cacb08-13835.pdf In Re Horizons 2000, LLC Bankr. E.D. Calif. Case No. 08-29002 Chapter 11 Petition filed July 3, 2008 See http://bankrupt.com/misc/caeb08-29002.pdf In Re Paradiso Automotive Service dba Harry Marx Chevrolet, Cadillac, Buick, Pontiac, GMC Bankr. N.D. Calif. Case No. 08-53539 Chapter 11 Petition filed July 3, 2008 See http://bankrupt.com/misc/canb08-53539.pdf In Re Robert Oregon Long, IV & Janice Gendusa Long Bankr. E.D. La. Case No. 08-11555 Chapter 11 Petition filed July 3, 2008 See http://bankrupt.com/misc/laeb08-11555.pdf In Re Stephen John DeFronzo & Ann DeFronzo Bankr. D. Mass. Case No. 08-42167 Chapter 11 Petition filed July 3, 2008 See http://bankrupt.com/misc/mab08-42167.pdf In Re First Hudson Hot Dogs, LLC dba Nathan's Famous/Arthur Treachers Bankr. D. N.J. Case No. 08-22637 Chapter 11 Petition filed July 3, 2008 See http://bankrupt.com/misc/njb08-22637.pdf In Re NICJO, Inc. aka McGrath's Pub at 202 Locust aka McGrath's Pub Bankr. M.D. Penn. Case No. 08-02377 Chapter 11 Petition filed July 3, 2008 See http://bankrupt.com/misc/pamb08-02377.pdf In Re Desia A. Wilson Ritson Bankr. D. P.R. Case No. 08-04336 Chapter 11 Petition filed July 3, 2008 See http://bankrupt.com/misc/prb08-04336.pdf In Re Eugenia Belle Simpson Bankr. D.C. Case No. 08-00469 Chapter 11 Petition filed July 3, 2008 Filed as Pro Se In Re David William Devin dba Harbor Glen Condominiums, Inc. dba DWD & Associates Property Management dba DWD & Associates Construction Management Bankr. W.D. Wash. Case No. 08-43223 Chapter 11 Petition filed July 3, 2008 Filed as Pro Se In Re Andrew Urista & Ana Reynoso Bankr. E.D. Calif. Case No. 08-29016 Chapter 11 Petition filed July 3, 2008 Filed as Pro Se In Re Sgt. Clutch Discount Transmission & Automotive, Inc. dba Discount Transmission & Automotive dba Sgt. Clutch Transmission Bankr. W.D. Tex. Case No. 08-51946 Chapter 11 Petition filed July 3, 2008 See http://bankrupt.com/misc/txwb08-51946.pdf In Re Flexible Tooling Solutions Bankr. W.D. Wash. Case No. 08-14199 Chapter 11 Petition filed July 3, 2008 See http://bankrupt.com/misc/wawb08-14199.pdf In Re Shane's Barataria, LLC Bankr. E.D. La. Case No. 08-11567 Chapter 11 Petition filed July 5, 2008 See http://bankrupt.com/misc/laeb08-11567.pdf In Re Fashion Chateau, Inc. Bankr. S.D. Calif. Case No. 08-06223 Chapter 11 Petition filed July 7, 2008 See http://bankrupt.com/misc/casb08-06223.pdf In Re Willingboro RV Center, Inc. Bankr. D. N.J. Case No. 08-22689 Chapter 11 Petition filed July 7, 2008 See http://bankrupt.com/misc/njb08-22689.pdf In Re Gardner Plumbing & Heating Corp. Bankr. S.D. N.Y. Case No. 08-36450 Chapter 11 Petition filed July 7, 2008 See http://bankrupt.com/misc/nysb08-36450.pdf In Re CMR Property Group Bankr. E.D. N.Y. Case No. 08-44283 Chapter 11 Petition filed July 7, 2008 Filed as Pro Se In Re Courtney Ritchie, RN aka Lessons aka Twins Construction aka Nellyville Bankr. E.D. Mich. Case No. 08-56278 Chapter 11 Petition filed July 7, 2008 Filed as Pro Se In Re London J. Farley Bankr. N.D. Okla. Case No. 08-11540 Chapter 11 Petition filed July 7, 2008 Filed as Pro Se In Re Robert B. Mixson Bankr. D. S.C. Case No. 08-04034 Chapter 11 Petition filed July 7, 2008 See http://bankrupt.com/misc/scb08-04034.pdf In Re White Nile Software, Inc. Bankr. N.D. Tex. Case No. 08-33325 Chapter 11 Petition filed July 7, 2008 See http://bankrupt.com/misc/txnb08-33325.pdf In Re Mark F.L. Silverstein Bankr. D. Vt. Case No. 08-10625 Chapter 11 Petition filed July 7, 2008 See http://bankrupt.com/misc/vtb08-10625.pdf In Re Ever Green, Inc. Bankr. C.D. Calif. Case No. 08-13914 Chapter 11 Petition filed July 8, 2008 See http://bankrupt.com/misc/cacb08-13914.pdf In Re Hoffman Family Trust Bankr. D. Mass. Case No. 08-42179 Chapter 11 Petition filed July 8, 2008 See http://bankrupt.com/misc/mab08-42179.pdf In Re Searise, Inc. Bankr. D. Md. Case No. 08-18863 Chapter 11 Petition filed July 8, 2008 See http://bankrupt.com/misc/mdb08-18863.pdf In Re Fulton Street Holding Corp. Bankr. E.D. N.Y. Case No. 08-44322 Chapter 11 Petition filed July 8, 2008 See http://bankrupt.com/misc/nyeb08-44322.pdf In Re 916 Nepperhan, LLC Bankr. S.D. N.Y. Case No. 08-22959 Chapter 11 Petition filed July 8, 2008 See http://bankrupt.com/misc/nysb08-22959.pdf ********* 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 ***